<PAGE> 1
ANCHOR
SERIES
TRUST
SEMIANNUAL
REPORT
JUNE 30, 1999
<PAGE> 2
DEAR ANCHOR SERIES TRUST INVESTOR:
We are pleased to present our semiannual report for the Anchor Series Trust,
the underlying investment for the ICAP II Variable Annuity from Anchor National
Life Insurance Company and First SunAmerica Life Insurance Company.
The following information is from Wellington Management Company, LLP
("Wellington"), the investment subadviser for the Anchor Series Trust
portfolios. Wellington provides this material to give you insight into how
market conditions and behavior over the past six months have affected the
performance of your underlying investments.
FINANCIAL MARKETS
U.S. equities performed well during the first half of 1999, with large-cap
stocks up 12.4% as measured by the S&P 500 Index. Emerging markets were
exuberant, particularly in Asia (MSCI Emerging Market Index +39.9%), as
investors became increasingly hopeful about global economic acceleration.
Smaller stocks outperformed during April and May, with the small stock Russell
2000 Index returning 15.6% during the second quarter and 9.3% year-to-date.
Value stocks outpaced growth stocks by 2.4% during the first half of the year.
The U.S. Federal Reserve Bank raised interest rates by 25 basis points on June
30, but the fixed income market had for the most part already discounted the
increase. Growing investor concern about stronger-than-expected growth in the
U.S. and abroad placed increasing upward pressure on yields. Core inflation
statistics remain benign, although May's surprising oil price-induced spike in
consumer prices captured headlines.
GLOBAL ECONOMIC OVERVIEW
Economic conditions around the world continued to improve. First-quarter GDP
results were strong, with the U.S. recording an impressive 4.3% annualized
growth rate following a 6% gain in the last quarter of 1998. Japan's economy,
the world's second largest, emerged from recession and registered positive
growth for the first time since 1997. The Japanese market was up 30.8% during
the first half of the year. Europe recorded a slow first quarter, growing at a
2% annualized rate. We believe that the first quarter marked the low point in
European growth, and look for sequential improvement through the rest of the
year. The pick-up in worldwide growth is unfolding against a backdrop of
continued low inflation. Globalization, deregulation, and strong productivity
gains have all been instrumental in keeping inflation in check. In 2000, we
expect the combination of strong growth and low inflation to continue.
OUTLOOK FOR THE SECOND HALF OF 1999
The U.S. economy continues to move ahead at an impressive pace. We expect GDP
growth to average 4.1% in 1999 and 3.6% next year. Free-spending consumers,
spurred by strong job growth and enormous wealth creation, remain the mainstay
of the economy. This trend will likely continue, albeit at a slightly slower
rate. Strong growth in the U.S. has been accompanied by an equally impressive
inflation performance. U.S. inflation is expected to average 2% this year and
moderate to 1.5% next year as the impact of higher oil prices fades and
continued strong productivity keeps labor costs in check. We expect a modest
upward adjustment of about 50 basis points in short-term interest rates over the
next 18 months.
Within this market context, we provide the following investment comments for
each of the eleven Anchor Series Trust portfolios for the six months ended June
30, 1999.
EQUITY PORTFOLIOS
The Growth and Income Portfolio seeks high current income and long-term
capital appreciation through investment in common stocks. The portfolio returned
10.9% during the first half of 1999, slightly lagging the
---------------------
1
<PAGE> 3
Lipper Growth and Income variable annuity funds' average return of 11.7%, and
the S&P 500's return of 12.4%. Relative to the S&P 500, the portfolio's
investments in the finance sector hurt returns. As of June 30, the portfolio's
largest sector positions were as follows: information technology, 21% of assets;
finance, 16%; health care, 13%; and utilities, 11%. The portfolio was 95%
invested in stocks of companies with a market capitalization of $10 billion or
more.
The Growth Portfolio seeks capital appreciation through investment in
large-and medium-sized companies with records of above average growth and
continued prospects for solid growth in the future. The portfolio invests in
high quality companies across a wide range of market capitalizations. The Growth
Portfolio provided a 13.3% return in the first six months of 1999, ahead of the
Lipper Growth variable annuity funds category, which returned 12.6% on average
over the period. The Growth Portfolio also outperformed the S&P 500's gross
level return of 12.4% for the period. Major sector concentrations as of June 30,
1998, included information technology, 26% of assets; finance, 14%; health care,
13%; and industrial & commercial, 10%. With respect to market capitalizations,
the portfolio was invested as follows: over $50 billion, 50% of assets; $10-50
billion, 27%; $3-10 billion, 9%; and below $3 billion, 14%.
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 generally comprise smaller companies that
may be newer and less seasoned, or that represent new or changing industries.
The Capital Appreciation Portfolio provided investors with a 22.6% return for
the first six months of 1999, outperforming the Lipper Capital Appreciation
variable annuity funds' average return of 13.7% and the S&P 500 Index return of
12.4% for the same period. The portfolio benefited from strong returns among
small companies, value stocks and cyclical issues. Portfolio assets at the end
of June were invested primarily in information technology, 27% of assets;
information & entertainment, 21%; healthcare, 14%; and industrial and
commercial, 9%. In terms of market capitalizations, the portfolio was invested,
over $10 billion, 43% of assets; $5-10 billion, 16%; $3-5 billion, 20%; and
below $3 billion, 21%.
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 12.2% return for the first six months of
1999, outperforming the Lipper International variable annuity funds' category
average return of 8.1% and the MSCI All Country World Free (ex-U.S.) Index
return of 7.1%. Major contributors to the portfolio's performance were stock
selection in Japan and Australia, and stock selection in the wireless, drugs,
and metals & minerals industry groups.
Note: The Anchor Series Strategic Multi-Asset Portfolio has been substituted
for the Anchor Series Foreign Securities Portfolio. In the latter part of June,
in preparation for this substitution, portfolio construction significantly
changed in order to position it to fit more easily with the Strategic
Multi-Asset Portfolio. Please see the Strategic Multi-Asset section for more
information.
The Natural Resources Portfolio seeks to outpace inflation through investments
in natural resource companies around the world. The portfolio provided investors
with a 30.5% return for the first six months of 1999, well ahead of the Lipper
Natural Resources variable annuity funds' category average of 21.5%. Among the
various portfolio sectors, domestic oil and gas producers provided the best
returns and refining and marketing the worst. The portfolio's exposure to gold
has been reduced since the 25% minimum gold-weighting guideline was removed in
January, 1999. As of June 30, primary portfolio sectors included: energy, 55% of
assets; metals and minerals, 29%; forest products & paper, 8%; precious metals,
6%; and cash and cash equivalents, 2%.
FIXED INCOME PORTFOLIOS
The Money Market Portfolio provided a 2.23% return, ahead of the 2.21% average
return for Lipper Money Market variable annuity funds and the IBC All Taxable
return of 2.18%. We believe that the 25 basis point increase in interest rates
at the end of June was a preemptive effort to slow the economy. We also believe
that another 50 basis point hike in interest rates is possible over the next 18
months. There has recently been growing concern in the markets about the effect
that Y2K issues will have on funding near year-end.
- ---------------------
2
<PAGE> 4
In this environment, we continue to favor floating-rate securities indexed to
LIBOR, a market-determined rate, which we feel incorporates year-end market
fears and could provide superior returns in the months ahead compared to other
indices. On June 30, 1999, the portfolio had a weighted average maturity of 39
days and was composed of commercial paper, 71% of assets; floating rate notes,
15%; and bank product cash equivalents, 14%.
The Government and Quality Bond Portfolio seeks to provide relatively high
current income, liquidity and security of principal. The Government and Quality
Bond Portfolio recorded a -2.0% return for the six months ended June 30, 1999,
outperforming the Lipper category of General U.S. Government variable annuity
funds which returned -2.4% on average, but lagging the Lehman Aggregate Index
return of -1.4%. The portfolio and the Lehman Aggregate at the end of June had
an effective duration of 4.9 years. Portfolio holdings included U.S. government
and agency securities, 23% of assets; mortgage-backed securities, 38%;
investment grade corporate bonds, 27%; and cash equivalents, 12%.
The Fixed Income Portfolio seeks to generate a high level of current income
consistent with preservation of principal through investments in corporate bonds
and U.S. government securities. For the six months ended June 30, 1999, the
Fixed Income Portfolio returned -2.7%, behind the Lipper category of Corporate
Debt A-Rated variable annuity funds, which returned -2.2% on average, and behind
the Lehman Government/ Corporate Index's gross level return of -2.3%. As of June
30, 1999 the portfolio was invested U.S. government and agency securities, 47%
of assets; mortgage-backed securities, 26%; investment grade corporate bonds,
16%; non-investment grade securities, 0%; and cash and cash equivalents, 11%.
Note: The Anchor Series Government and Quality Bond Portfolio has been
substituted for the Anchor Series Fixed Income Portfolio. In the latter part of
June, in preparation for this substitution, portfolio construction significantly
changed in order to position the portfolio to fit more easily with the
Government and Quality Portfolio. Please refer to the Government and Quality
Bond paragraph for more information.
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 4.7% return on a net basis for the
first six months of 1999, ahead of both the Lehman High Yield Index gross level
return of 2.2% and the Lipper category of High Yield variable annuity funds
average return of 2.9%. Strong consumer confidence, continuing U.S. economic
strength, and improving Asian economies created a favorable economic backdrop
for many high yield issuers. In general, high yield securities have outperformed
high-grade instruments for the year to date. The Lehman Aggregate returned -1.4%
for the six months ended June 30, while the Lehman HY Index returned 2.2%. The
portfolio's outperformance can be attributed to solid credit work. On June 30,
the portfolio's fixed income holdings included BB-rated securities, 20% of
assets; B-rated securities, 64%; and below B-rated or unrated securities, 16%.
In terms of sector weightings, primary areas of investment were
telecommunications, 14%; media & entertainment, 8%; technology and related, 8%;
and paper products, 10%.
BALANCED PORTFOLIOS
The Multi-Asset Portfolio seeks to provide investors with long-term total
investment return consistent with moderate investment risk. The portfolio
presently aims to achieve this through a weighting of approximately 60% in U.S.
core equities and 40% in U.S. investment grade bonds. The Multi-Asset Portfolio
returned 7.2% for the first six months of 1999, outperforming the Lipper
category of Flexible variable annuity funds, which returned 5.9% on average for
the period. Strong overall security selection helped boost returns during the
first quarter. A sharp rebound in small-cap and value stocks detracted from
performance in the second quarter as the stocks held in this portfolio are large
cap core equities. The portfolio's effective asset class exposure at the end of
June was composed of equities, 63% of assets; fixed-income securities, 31%; and
cash equivalents, 6%.
The Strategic Multi-Asset Portfolio seeks to obtain high long-term total
returns through investment in core global stocks, aggressive stocks, and global
fixed income securities including high yield securities. The Strategic
Multi-Asset Portfolio provided investors a 10.6% return for the six months ended
June 30, 1999. These results were well ahead of the Lipper category of Global
Flexible variable annuity funds' average
---------------------
3
<PAGE> 5
return of 4.6% for the period, and placed the portfolio in the first quartile in
this category for the six-month period. Strong overall security selection and
asset allocation strategy were beneficial. With significant exposure to
commodity currencies and markets, the portfolio was well positioned for the
resurgence in global economic expectations. Low exposure to investment grade
bonds enhanced performance, given the second-quarter global bond sell-off. The
portfolio's asset class exposure at the end of June included capital
appreciation, 18% of assets; core equity, 16%; global core equity, 28%; global
fixed income including high yield securities, 33%; and cash equivalents, 5%.
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 19, 1999
- ---------------
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> 6
- ---------------------
ANCHOR SERIES TRUST
MONEY MARKET PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM SECURITIES -- 96.2% AMOUNT VALUE
<S> <C> <C>
---------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ASSET BACKED SECURITIES -- 2.4%
Strategic Money Market Trust 5.41% due 12/15/99(1) (cost
$1,500,000)............................................... $1,500,000 $ 1,500,000
------------
BANK NOTES -- 9.6%
Bayerische Hypotheken Union 4.91% due 5/15/00(1)............ 1,500,000 1,499,353
Chase Manhattan Bank 5.70% due 7/02/99...................... 1,000,000 999,998
Harris Trust & Savings Bank 5.00% due 2/04/00............... 2,000,000 2,000,000
National Bank Of Canada 5.17% due 4/10/00................... 1,500,000 1,499,551
------------
TOTAL BANK NOTES (cost $5,998,902).......................... 5,998,902
------------
COMMERCIAL PAPER -- 71.3%
Aesop Funding Corp. 5.08% due 7/12/99....................... 2,000,000 1,996,895
American Express Credit Corp. 4.80% due 10/07/99............ 2,000,000 1,973,867
AON Corp. 5.17% due 7/12/99................................. 1,720,000 1,717,283
APRECO, Inc. 4.82% due 8/16/99.............................. 2,200,000 2,186,450
Avon Capital Corp. 5.80% due 7/01/99........................ 2,000,000 2,000,000
BP America, Inc. 5.70% due 7/01/99.......................... 2,000,000 2,000,000
Corporate Receivables Corp. 5.80% due 7/01/99............... 2,000,000 2,000,000
Dean Foods Co. 4.82% due 7/15/99............................ 2,000,000 1,996,251
Diageo Capital PLC 4.82% due 9/13/99........................ 2,400,000 2,376,221
Electricite de France 5.75% due 7/01/99..................... 2,000,000 2,000,000
Fina Oil & Chemical Co. 4.84% due 7/26/99................... 585,000 583,034
Fortune Brands, Inc. 4.84% due 8/31/99...................... 1,635,000 1,621,591
General Motors Acceptance Corp. 4.84% due 7/09/99........... 2,000,000 1,997,849
Gillette Co. 5.70% due 7/01/99.............................. 2,000,000 2,000,000
Hubbell, Inc. 5.55% due 7/01/99............................. 2,000,000 2,000,000
KfW International Finance, Inc. 4.79% due 7/22/99........... 965,000 962,303
Merrill Lynch & Co., Inc. 4.80% due 7/14/99................. 1,935,000 1,931,646
Morgan Stanley Group, Inc. 5.75% due 7/01/99................ 2,000,000 2,000,000
National Fuel Gas Co. 5.10% due 7/09/99..................... 2,020,000 2,017,711
Park Avenue Receivables Corp. 4.82% due 10/18/99............ 1,270,000 1,251,466
Pfizer, Inc. 5.80% due 7/01/99.............................. 2,000,000 2,000,000
Province of Quebec 4.82% due 8/30/99........................ 1,540,000 1,527,629
Shell Oil Co. 5.70% due 7/01/99............................. 2,000,000 2,000,000
Variable Funding Capital Corp. 4.81% due 7/20/99............ 2,200,000 2,194,415
------------
TOTAL COMMERCIAL PAPER (cost $44,334,611)................... 44,334,611
------------
CORPORATE SHORT-TERM NOTES -- 12.9%
General Electric Capital Corp. 4.95% due 5/03/00(1)......... 2,000,000 2,000,000
KeyBank NA 5.14% due 9/16/99................................ 2,000,000 1,999,837
Monumental Life Insurance Co. 5.10% due 8/09/99(1).......... 2,000,000 2,000,000
National Rural Utilities Cooperative Finance Corp. 5.18% due
6/26/00(1)................................................ 1,000,000 1,000,061
Unum Corp. 5.14% due 6/19/00(1)............................. 1,000,000 1,000,440
------------
TOTAL CORPORATE SHORT-TERM NOTES (cost $8,000,338).......... 8,000,338
------------
TOTAL SHORT-TERM SECURITIES (cost $59,833,851).............. 59,833,851
------------
</TABLE>
---------------------
5
<PAGE> 7
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 6.2% AMOUNT VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (See Note 3) (cost
$3,825,000)............................................... $3,825,000 $ 3,825,000
------------
TOTAL INVESTMENTS -- (cost $63,658,851) 102.4% 63,658,851
Liabilities in excess of other
assets -- (2.4) (1,512,415)
------ ------------
NET ASSETS -- 100.0% $62,146,436
====== ============
</TABLE>
-----------------------------
(1) Variable rate security -- the rate reflected is as of June 30,
1999; maturity date reflects next reset date.
See Notes to Financial Statements
- ---------------------
6
<PAGE> 8
- ---------------------
ANCHOR SERIES TRUST
FIXED INCOME PORTFOLIO+ INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 88.2% AMOUNT VALUE
<S> <C> <C>
---------------------------------------------------------------------------------------
<CAPTION>
AUTOMOTIVE -- 1.7%
Ford Motor Co. 9.00% 2001................................... $ 250,000 $ 263,935
------------
CABLE -- 1.1%
Tele-Communications, Inc. 9.25% 2002........................ 150,000 161,397
------------
FINANCE -- 12.7%
Abbey National First Capital 8.20% 2004..................... 250,000 264,273
Equitable Cos., Inc. 7.00% 2028............................. 180,000 168,136
Japan Finance Corp. Municipal Enterprises 9.13% 2000........ 400,000 414,664
KFW International Finance, Inc. 9.13% 2001.................. 400,000 421,172
Ohio National Life Insurance Co. 8.50% 2026*................ 200,000 213,602
United States Bancorp 7.50% 2026............................ 400,000 417,484
------------
1,899,331
------------
U.S. GOVERNMENT & AGENCIES -- 72.7%
Federal Home Loan Mortgage Corp. 5.75% 2008................. 500,000 476,330
Federal Home Loan Mortgage Participation 6.00% 2013......... 487,295 471,151
Federal Home Loan Mortgage Participation 7.50% 2027......... 283,486 286,585
Federal Home Loan Participation 11.00% 2000................. 1,763 1,804
Federal National Mortgage Association 5.75% 2008............ 750,000 717,067
Federal National Mortgage Association 6.00% 2028............ 498,636 468,404
Government National Mortgage Association 7.00%
2012 - 2023............................................... 847,320 846,873
Government National Mortgage Association 7.50%
2022 - 2023............................................... 505,271 510,925
Government National Mortgage Association 10.00% 2000........ 4,650 4,750
United States Treasury Bonds 8.88% 2019..................... 250,000 322,227
United States Treasury Bonds 12.00% 2013.................... 4,310,000 6,051,499
United States Treasury Notes 6.88% 2006..................... 700,000 736,967
------------
10,894,582
------------
TOTAL INVESTMENT SECURITIES (cost $13,546,306).............. 13,219,245
------------
REPURCHASE AGREEMENT -- 10.0%
---------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (See Note 3) (cost
$1,500,000)............................................... 1,500,000 1,500,000
------------
TOTAL INVESTMENTS -- (cost $15,046,306) 98.2% 14,719,245
Other assets less liabilities -- 1.8 263,343
------ ------------
NET ASSETS -- 100.0% $14,982,588
====== ============
</TABLE>
-----------------------------
* Resale restricted to qualified institutional buyers
+ See Note 8 to Financial Statements
See Notes to Financial Statements
---------------------
7
<PAGE> 9
- ---------------------
ANCHOR SERIES TRUST
GOVERNMENT & QUALITY BOND
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 88.0% AMOUNT VALUE
<S> <C> <C>
-----------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 2.4%
J.C. Penney Co., Inc. 7.40% 2037............................ $ 5,000,000 $ 5,103,550
Wal-Mart Stores, Inc. 6.75% 2023............................ 5,000,000 4,849,750
-------------
9,953,300
-------------
FINANCE -- 9.4%
Associates Corp. North America 6.00% 2005................... 5,000,000 4,830,500
Citicorp 6.75% 2007......................................... 5,000,000 4,910,500
CS First Boston Mortgage Securities Corp. 7.24% 2029........ 5,000,000 5,009,300
Ford Motor Credit Co. 7.20% 2007............................ 5,000,000 5,068,100
General Electric Capital Corp. 7.50% 2035................... 5,000,000 5,038,150
General Reinsurance Corp. 9.00% 2009........................ 5,000,000 5,755,900
Morgan (J.P.) & Co., Inc. 6.25% 2005........................ 5,000,000 4,868,750
Toyota Motor Credit Corp. 5.50% 2008........................ 5,000,000 4,568,050
-------------
40,049,250
-------------
INDUSTRIAL & COMMERCIAL -- 5.8%
Diageo Capital PLC 6.13% 2005............................... 5,000,000 4,844,500
Motorola Inc. 5.80% 2008.................................... 5,000,000 4,647,050
Postal Square L.P. 8.95% 2022............................... 4,670,400 5,567,444
SCL Terminal Aereo Santiago SA 6.95% 2012*.................. 5,000,000 4,655,850
Stanford University 6.88% 2024(1)........................... 5,000,000 5,027,840
-------------
24,742,684
-------------
INFORMATION & ENTERTAINMENT -- 2.5%
Continental Airlines 6.32% 2008............................. 5,000,000 4,782,300
Disney (Walt) Co. 5.80% 2008................................ 6,000,000 5,606,700
-------------
10,389,000
-------------
INFORMATION TECHNOLOGY -- 1.1%
Pitney Bowes, Inc. 5.50% 2004............................... 5,000,000 4,826,350
-------------
TRANSPORTATION -- 2.4%
Federal Express Corp. 6.72% 2022............................ 4,998,563 4,770,678
United Parcel Service of America, Inc. 8.38% 2020........... 5,000,000 5,521,550
-------------
10,292,228
-------------
U.S. GOVERNMENT & AGENCIES -- 60.9%
Federal Home Loan Banks 5.13% 2003.......................... 34,785,000 33,502,129
Federal Home Loan Mortgage Corp. 5.75% 2003................. 20,000,000 19,746,800
Federal Home Loan Mortgage Corp. 6.00% 2008 - 2013.......... 15,456,535 14,969,776
Federal Home Loan Mortgage Corp. 7.00% 2010 - 2011.......... 10,242,142 10,299,130
Federal Home Loan Mortgage Corp. 14.75% 2010................ 84,632 95,818
Federal National Mortgage Association 6.00% 2009 - 2028..... 34,641,449 34,048,888
Federal National Mortgage Association 6.50% 2012 - 2028..... 9,509,568 9,354,082
Federal National Mortgage Association 7.00% 2010 - 2011..... 3,997,227 4,011,125
Government National Mortgage Association 6.50% TBA.......... 6,545,318 6,293,716
Government National Mortgage Association 6.50%
2023 - 2029............................................... 54,692,472 46,301,294
Government National Mortgage Association 7.00%
2009 - 2012............................................... 7,100,893 7,158,552
Government National Mortgage Association 7.50%
2022 - 2023............................................... 8,587,034 8,680,904
Government National Mortgage Association 10.00%
2013 - 2017............................................... 1,204,050 1,285,339
</TABLE>
- ---------------------
8
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCIES (continued)
Government National Mortgage Association 11.50% 2014........ $ 8,196 $ 9,020
Government National Mortgage Association 12.00% 2016........ 5,387 6,034
Government National Mortgage Association 12.75% 2014........ 44,758 50,647
Government National Mortgage Association 13.25% 2014........ 16,890 19,154
Government National Mortgage Association 13.50% 2014........ 5,340 6,189
Government National Mortgage Association 13.75% 2014........ 589 667
United States Treasury Bonds 5.25% 2029..................... 30,000,000 26,953,200
United States Treasury Notes 5.50% 2000..................... 10,000,000 10,006,200
United States Treasury Notes 5.63% 2002..................... 27,000,000 26,970,570
-------------
259,769,234
-------------
UTILITIES -- 3.5%
AT&T Corp. 6.00% 2009....................................... 5,000,000 4,698,950
Hydro-Quebec 8.40% 2022..................................... 5,000,000 5,588,050
United States West Capital Funding, Inc. 6.38% 2008......... 5,000,000 4,704,400
-------------
14,991,400
-------------
TOTAL INVESTMENT SECURITIES (cost $385,670,503)............. 375,013,446
-------------
<CAPTION>
SHORT TERM SECURITIES -- 5.8%
-----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT -- 5.8%
Government National Mortgage Association 12.00% due
12/20/99.................................................. 286 294
Government National Mortgage Association 12.00% due
4/20/00................................................... 13,662 14,050
United States Treasury Bills 4.24% due 7/22/99.............. 25,000,000 24,938,167
-------------
TOTAL SHORT-TERM SECURITIES (cost $24,953,195).............. 24,952,511
-------------
REPURCHASE AGREEMENT -- 5.0%
-----------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (See Note 3) (cost
$21,125,000).............................................. 21,125,000 21,125,000
TOTAL INVESTMENTS -- (cost $431,748,698) 98.8% 421,090,957
Other assets less liabilities -- 1.2 5,269,820
------ -------------
NET ASSETS -- 100.0% $426,360,777
====== =============
</TABLE>
-----------------------------
* Resale restricted to qualified institutional buyers
(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
---------------------
9
<PAGE> 11
- ---------------------
ANCHOR SERIES TRUST
HIGH YIELD PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 87.0% AMOUNT VALUE
<S> <C> <C>
---------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
AEROSPACE & MILITARY TECHNOLOGY -- 2.3%
L-3 Communications Corp. 8.50% 2008......................... $ 250,000 $ 244,375
Loral Space & Communications Ltd. 9.50% 2006................ 150,000 130,875
Moog, Inc., Series B 10.00% 2006............................ 150,000 156,000
------------
531,250
------------
AUTOMOTIVE -- 4.4%
Accuride Corp., Series B 9.25% 2008......................... 220,000 213,950
Exide Corp. 10.00% 2005..................................... 100,000 99,500
Federal Mogul Corp. 8.80% 2007.............................. 220,000 221,115
Hayes Wheels International, Inc., Series B 9.13% 2007....... 100,000 100,250
Johnstown America Industries, Inc., Series C 11.75% 2005.... 250,000 266,250
LDM Technologies, Inc., Series B 10.75% 2007................ 115,000 113,850
------------
1,014,915
------------
CABLE -- 3.6%
Adelphia Communications Corp., Series B 9.88% 2007.......... 250,000 261,250
Cablevision SA 13.75% 2009*................................. 75,000 69,188
Charter Communications Holdings 8.25% 2007*................. 100,000 95,750
Multicanal 13.13% 2009*..................................... 60,000 55,200
Multicanal SA 10.50% 2007................................... 100,000 81,000
Optel, Inc. 11.50% 2008..................................... 150,000 105,750
Rogers Communications, Inc. 8.88% 2007...................... 150,000 151,500
------------
819,638
------------
CHEMICALS -- 3.8%
Acetex Corp. 9.75% 2003..................................... 150,000 140,625
ARCO Chemical Co. 9.80% 2020................................ 250,000 239,200
Lyondell Chemical Co. 10.88% 2009*.......................... 80,000 83,200
Phillipp Brothers Chemicals, Inc. 9.88% 2008................ 150,000 140,625
Pioneer Americas Acquisition Corp., Series B 9.25% 2007..... 100,000 85,750
Royster Clark, Inc. 10.25% 2009*............................ 60,000 60,150
Sovereign Speciality Chemicals Corp., Series B 9.50% 2007... 100,000 100,250
Sterling Chemicals, Inc. 11.75% 2006........................ 15,000 11,475
------------
861,275
------------
COMMUNICATIONS & MEDIA -- 7.9%
Allbritton Communications Co., Series B 8.88% 2008.......... 100,000 96,250
Big Flower Press Holdings, Inc. 8.63% 2008*................. 165,000 153,037
Carmike Cinemas, Inc. 9.38% 2009*........................... 150,000 145,500
EchoStar DBS Corp. 9.25% 2006*.............................. 150,000 152,625
Fox Liberty Networks LLC 8.88% 2007......................... 150,000 156,000
Globo Comunicacoes E Participating 10.50% 2006*............. 250,000 178,125
Innova S. de R.L. 12.88% 2007............................... 250,000 200,000
LIN Holdings Corp. zero coupon 2008(1)...................... 100,000 66,000
Loews Cineplex Entertainment Corp. 8.88% 2008............... 50,000 47,750
Sullivan Graphics, Inc. 12.75% 2005......................... 150,000 154,500
Tevecap SA, Series B 12.63% 2004............................ 150,000 91,500
TV Azteca SA de CV, Series B 10.50% 2007.................... 300,000 222,000
World Color Press, Inc. 8.38% 2008*......................... 150,000 146,250
------------
1,809,537
------------
</TABLE>
- ---------------------
10
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES -- 4.1%
Corning Consumer Products Co. 9.63% 2008.................... $ 100,000 $ 89,000
Iron Mountain, Inc. 8.75% 2009.............................. 150,000 148,125
Pierce Leahy Corp. 9.13% 2007............................... 150,000 152,250
Polaroid Corp. 11.50% 2006.................................. 100,000 104,750
Rayovac Corp. 10.25% 2006................................... 150,000 163,125
Simmons Co. 10.25% 2009*.................................... 65,000 66,138
True Temper Sports, Inc. 10.88% 2008*....................... 150,000 127,875
Westpoint Stevens, Inc. 7.88% 2008.......................... 95,000 91,912
------------
943,175
------------
ENERGY -- 3.3%
Abraxas Petroleum Corp. 11.50% 2004......................... 250,000 158,750
Costilla Energy, Inc. 10.25% 2006........................... 370,000 110,075
P&L Coal Holdings Corp. 8.88% 2008.......................... 160,000 160,400
Ram Energy, Inc. 11.50% 2008................................ 500,000 258,750
RBF Finance Co. 11.00% 2006*................................ 60,000 61,050
------------
749,025
------------
FINANCE -- 1.4%
Thai Farmers Bank Ltd. 8.25% 2016*.......................... 150,000 117,000
Western Financial Savings Bank 8.88% 2007................... 250,000 205,000
------------
322,000
------------
FOOD & LODGING -- 2.6%
Delaware Monte Foods Co., Series B zero coupon 2007(1)...... 325,000 243,344
Hammons (John Q.) Hotels L.P. 8.88% 2004.................... 150,000 139,125
Purina Mills Inc. 9.00% 2010................................ 150,000 118,125
Vlasic Foods International, Inc. 10.25% 2009*............... 100,000 98,500
------------
599,094
------------
GAMING -- 0.9%
Hollywood Casino Corp. 11.25% 2007*......................... 100,000 100,250
Lady Luck Gaming Finance Corp. 11.88% 2001.................. 100,000 101,500
------------
201,750
------------
GROCERY -- 0.6%
Homeland Stores, Inc. 10.00% 2003........................... 150,000 128,813
------------
HEALTHCARE -- 6.4%
Alaris Medical Systems, Inc. 9.75% 2006..................... 150,000 148,500
Alaris Medical, Inc. zero coupon 2008(1).................... 100,000 54,875
Beverly Enterprises, Inc. 9.00% 2006........................ 250,000 247,500
Columbia/HCA Healthcare Corp. 7.25% 2008.................... 250,000 226,568
DJ Orthopedics LLC 12.63% 2009*............................. 100,000 98,000
Mediq/Life Support Services, Inc. 11.00% 2008............... 150,000 118,875
Tenet Healthcare Corp. 8.13% 2008*.......................... 250,000 240,547
Triad Hospitals Holdings, Inc. 11.00% 2009*................. 105,000 106,838
Universal Hospital Services, Inc. 10.25% 2008............... 250,000 221,875
------------
1,463,578
------------
INDUSTRIAL & COMMERCIAL -- 5.6%
Clark Material Handling Co. 10.75% 2006..................... 100,000 88,750
Grove Worldwide LLC, Inc. 9.25% 2008........................ 80,000 72,000
Henry Co., Series B 10.00% 2008............................. 150,000 142,125
International Wire Group, Inc. 11.75% 2005.................. 250,000 260,000
Neenah Corp., Series B 11.13% 2007.......................... 150,000 148,312
Numatics, Inc., Series B 9.63% 2008......................... 75,000 67,969
United Rentals, Inc. 9.00% 2009*............................ 250,000 246,875
WESCO Distribution, Inc., Series B 9.13% 2008............... 250,000 242,500
------------
1,268,531
------------
</TABLE>
---------------------
11
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY -- 8.2%
Advanced Micro Devices, Inc. 11.00% 2003.................... $ 135,000 $ 136,350
Amkor Technology, Inc. 9.25% 2006*.......................... 250,000 242,812
DecisionOne Corp. zero coupon 2008(1)....................... 500,000 6,250
Exodus Communications, Inc. 11.25% 2008..................... 100,000 104,000
Fairchild Semiconductor Corp. 10.38% 2007*.................. 225,000 222,750
Fisher Scientific International, Inc. 9.00% 2008............ 250,000 237,500
Integrated Circuit Systems, Inc. 11.50% 2009*............... 95,000 95,000
Samsung Electronics America, Inc. 9.75% 2003*............... 150,000 153,098
Unisys Corp. 7.88% 2008..................................... 100,000 101,500
Verio, Inc. 10.38% 2005..................................... 100,000 101,000
Verio, Inc. 11.25% 2008*.................................... 250,000 261,875
Zilog, Inc., Series B 9.50% 2005............................ 250,000 219,375
------------
1,881,510
------------
METALS & MINERALS -- 4.7%
AK Steel Holding Corp. 9.13% 2006........................... 100,000 102,500
Ameristeel Corp. 8.75% 2008................................. 100,000 100,250
Bayou Steel Corp. 9.50% 2008................................ 150,000 146,625
CSN Iron SA 9.13% 2007*..................................... 100,000 77,000
National Steel Corp. 9.88% 2009............................. 50,000 50,750
Nortek, Inc., Series B 9.25% 2007........................... 250,000 250,625
Weirton Steel Corp. 11.38% 2004............................. 250,000 245,000
Wells Aluminum Corp., Series B 10.13% 2005.................. 94,000 93,060
------------
1,065,810
------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 0.4%
Federal Republic of Brazil 11.63% 2004...................... 100,000 92,500
------------
PAPER PRODUCTS -- 9.6%
APP Finance (VII) Mauritius Ltd. 3.50% 2003*................ 100,000 74,504
APP International Finance Co. 11.75% 2005................... 100,000 76,500
Aracruz Celulose SA 10.38% 2002*............................ 255,000 247,350
Bahia Sul Celulose SA 10.63% 2004........................... 150,000 126,750
BWAY Corp., Series B 10.25% 2007............................ 150,000 157,500
Consumers Packaging, Inc. 9.75% 2007*....................... 150,000 146,250
Container Corp. of America 9.75% 2003....................... 150,000 155,250
Doman Industries Ltd. 12.00% 2004*.......................... 250,000 240,625
Pacifica Papers, Inc. 10.00% 2009*.......................... 30,000 30,900
Packaging Corp. of America 9.63% 2009*...................... 145,000 146,088
Pindo Deli Finance Mauritius Ltd. 10.75% 2007............... 355,000 249,387
Repap New Brunswick, Inc. 10.63% 2005....................... 150,000 114,750
Silgan Holdings Corp. 9.00% 2009............................ 250,000 247,500
Silgan Holdings Corp. 13.25% 2006(3)........................ 80,000 89,300
Tembec Industries, Inc. 8.63% 2009.......................... 100,000 99,500
------------
2,202,154
------------
REAL ESTATE -- 3.9%
Beazer Homes USA, Inc. 8.88% 2008........................... 250,000 238,750
Dr. Horton, Inc. 8.00% 2009................................. 100,000 94,500
Ryland Group, Inc. 8.25% 2008............................... 100,000 95,500
Standard Pacific Corp. 8.50% 2009........................... 75,000 73,875
US Home Corp. 8.88% 2007.................................... 150,000 147,750
Webb Delaware Corp. 10.25% 2010............................. 250,000 251,250
------------
901,625
------------
TELECOMMUNICATIONS -- 11.7%
AMSC Acquisition, Inc. 12.25% 2008.......................... 150,000 116,625
Concentric Network Corp. 12.75% 2007........................ 170,000 175,525
Covad Communications Group, Inc. zero coupon 2008(1)........ 250,000 135,937
E. Spire Communications, Inc. zero coupon 2006(1)........... 150,000 78,000
GST Telecommunications, Inc. zero coupon 2008*(1)........... 350,000 197,750
</TABLE>
- ---------------------
12
<PAGE> 14
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS (continued)
GST Telecommunications, Inc. 12.75% 2007.................... $ 100,000 $ 108,125
Hyperion Telecommunications, Inc., Series B 12.25% 2004..... 240,000 252,000
ICO Global Commerce 15.00% 2005............................. 105,000 43,050
Intermedia Communications, Inc. 8.60% 2008.................. 100,000 92,000
Iridium LLC 10.88% 2005..................................... 150,000 29,250
Iridium Capital Corp. 14.00% 2005........................... 100,000 19,500
IXC Communications, Inc. 9.00% 2008......................... 100,000 95,750
McLeod USA, Inc. 9.25% 2007................................. 100,000 99,250
Paging Network, Inc. 8.88% 2006............................. 100,000 68,000
PSINet, Inc. 10.00% 2005.................................... 100,000 99,500
PSINet, Inc. 11.50% 2008*................................... 150,000 157,125
RSL Communications PLC 9.88% 2009*.......................... 150,000 142,125
Time Warner Telecom, Inc. 9.75% 2008........................ 100,000 102,500
Viatel, Inc. 11.50% 2009*................................... 100,000 103,500
Winstar Communications, Inc. zero coupon 2005(1)............ 650,000 570,375
------------
2,685,887
------------
TRANSPORTATION -- 1.6%
Hermes Europe Railtel BV 11.50% 2007........................ 145,000 152,250
Valujet, Inc. 10.25% 2001................................... 250,000 211,250
------------
363,500
------------
TOTAL BONDS & NOTES (cost $22,047,049)...................... 19,905,567
------------
<CAPTION>
COMMON STOCK -- 0.0% SHARES
---------------------------------------------------------------------------------------
<S> <C> <C>
GAMING -- 0.0%
Fitzgeralds Gaming Corp.(2)................................. 3,762 1,881
------------
MULTI-INDUSTRY -- 0.0%
Sinking Fund Holding Group, Inc., Class C*+(2).............. 629 6
------------
TOTAL COMMON STOCK (cost $282).............................. 1,887
------------
PREFERRED STOCK -- 5.1%
---------------------------------------------------------------------------------------
COMMUNICATIONS & MEDIA -- 0.5%
Granite Broadcasting Corp. 12.75%(3)........................ 113 114,448
------------
ENERGY -- 0.4%
R & B Falcon Corp. 13.88%................................... 100 103,000
------------
FINANCE -- 1.0%
Superior National Capital Trust I 10.75%(2)................. 250 240,000
------------
GAMING -- 0.0%
Fitzgeralds Gaming Corp. 15.00%(2)*......................... 3,000 9,000
------------
INDUSTRIAL & COMMERCIAL -- 1.6%
Fairfield Manufacturing, Inc. 11.25%(3)..................... 350 359,188
------------
MULTI-INDUSTRY -- 0.2%
Sinking Fund Holdings Group, Inc., Series B 13.75%(2)(3).... 17 37,400
------------
</TABLE>
---------------------
13
<PAGE> 15
<TABLE>
<CAPTION>
PREFERRED STOCK (CONTINUED) SHARES VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS -- 1.4%
Concentric Network Corp. Delaware 13.50%(3)................. 192 $ 184,661
IXC Communications, Inc. 6.75%*............................. 3,500 128,187
------------
312,848
------------
TOTAL PREFERRED STOCK (cost $1,391,798)..................... 1,175,884
------------
WARRANTS -- 0.4%+
---------------------------------------------------------------------------------------
COMMUNICATIONS & MEDIA -- 0.0%
Benedek Communications Corp. 07/01/07*(2)................... 2,000 4,000
------------
TELECOMMUNICATIONS -- 0.4%
Concentric Network Corp. Delaware 12/15/07*(2).............. 130 45,500
MGC Communications, Inc. 10/01/04*.......................... 250 31,250
------------
76,750
------------
TOTAL WARRANTS (cost $22,550)............................... 80,750
------------
TOTAL INVESTMENT SECURITIES (cost $23,461,679).............. 21,164,088
------------
PRINCIPAL
REPURCHASE AGREEMENT -- 0.7% AMOUNT
---------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (See Note 3)
(cost $160,000)........................................... $ 160,000 160,000
------------
TOTAL INVESTMENTS -- (cost $23,621,679) 93.2% 21,324,088
Other assets less liabilities -- 6.8 1,565,857
------ ------------
NET ASSETS -- 100.0% $22,889,945
====== ============
</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) PIK ("Payment-in-Kind") payment made with additional security
in lieu of cash
See Notes to Financial Statements.
- ---------------------
14
<PAGE> 16
- ---------------------
ANCHOR SERIES TRUST
GROWTH AND INCOME
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 99.8% SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 6.9%
Automotive -- 0.3%
Ford Motor Co. ............................................. 3,300 $ 186,244
Retail -- 6.6%
CVS Corp.................................................... 10,000 507,500
Gap, Inc. .................................................. 20,550 1,035,206
May Department Stores Co. .................................. 12,900 527,288
Wal-Mart Stores, Inc. ...................................... 29,000 1,399,250
------------
3,655,488
------------
CONSUMER STAPLES -- 7.3%
Food, Beverage & Tobacco -- 3.9%
Anheuser-Busch Cos., Inc. .................................. 8,000 567,500
Coca Cola Co................................................ 4,600 287,500
PepsiCo, Inc................................................ 12,100 468,119
Philip Morris Cos., Inc..................................... 12,000 482,250
Sara Lee Corp. ............................................. 11,000 249,562
Household Products -- 3.4%
Colgate-Palmolive Co. ...................................... 1,700 167,875
Gillette Co. ............................................... 10,000 410,000
Kimberly-Clark Corp. ....................................... 8,200 467,400
Procter & Gamble Co......................................... 8,900 794,325
------------
3,894,531
------------
ENERGY -- 7.5%
Energy Services -- 1.2%
Schlumberger Ltd. .......................................... 10,000 636,875
Energy Sources -- 6.3%
Chevron Corp. .............................................. 8,300 790,056
Exxon Corp.................................................. 16,800 1,295,700
Royal Dutch Petroleum Co.................................... 16,200 976,050
Unocal Corp................................................. 6,400 253,600
------------
3,952,281
------------
FINANCE -- 15.9%
Banks -- 7.2%
Chase Manhattan Corp. ...................................... 3,900 337,838
Citigroup, Inc.............................................. 29,925 1,421,437
First Union Corp............................................ 14,100 662,700
U.S. Bancorp................................................ 16,500 561,000
Wachovia Corp. ............................................. 9,300 795,731
Financial Services -- 3.9%
Associates First Capital Corp., Class A..................... 19,000 841,938
Federal National Mortgage Association....................... 11,200 765,800
Merrill Lynch & Co., Inc.................................... 5,900 471,631
Insurance -- 4.8%
Ace Ltd. ................................................... 16,400 463,300
</TABLE>
---------------------
15
<PAGE> 17
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Insurance (continued)
American International Group, Inc.* ........................ 9,000 $ 1,053,563
Marsh & McLennan Cos., Inc.................................. 13,700 1,034,350
------------
8,409,288
------------
HEALTHCARE -- 13.3%
Drugs -- 9.3%
American Home Products Corp................................. 16,800 966,000
Bristol-Myers Squibb Co. ................................... 10,000 704,375
Johnson & Johnson Co. ...................................... 6,800 666,400
Merck & Co., Inc............................................ 8,400 621,600
Pfizer, Inc. ............................................... 5,100 559,725
Pharmacia & Upjohn, Inc. ................................... 14,000 795,375
Warner-Lambert Co. ......................................... 9,000 624,375
Health Services -- 1.4%
Cardinal Health, Inc., Class A.............................. 4,300 275,738
Columbia/HCA Healthcare Corp. .............................. 20,800 474,500
Lifepoint Hospitals, Inc. .................................. 1 13
Medical Products -- 2.6%
Abbott Laboratories, Inc.................................... 16,000 728,000
Baxter International, Inc................................... 10,300 624,437
------------
7,040,538
------------
INDUSTRIAL & COMMERCIAL -- 7.6%
Aerospace & Military Technology -- 1.2%
Boeing Co................................................... 6,600 291,637
General Motors Corp., Class H+.............................. 3,500 196,875
United Technologies Corp.................................... 2,000 143,375
Electrical Equipment -- 3.7%
General Electric Co......................................... 17,100 1,932,300
Machinery -- 2.3%
Deere & Co.................................................. 5,600 221,900
Eaton Corp.................................................. 1,800 165,600
Illinois Tool Works, Inc. .................................. 3,300 270,600
Tyco International Ltd. .................................... 6,000 568,500
Transportation -- 0.4%
CSX Corp. .................................................. 5,000 226,563
------------
4,017,350
------------
INFORMATION & ENTERTAINMENT -- 5.9%
Broadcasting & Media -- 3.2%
AT&T Corp.-Liberty Media Group, Inc., Class A+.............. 6,000 220,500
Cox Communications, Inc., Class A+.......................... 5,400 198,788
Disney (Walt) Co............................................ 17,000 523,813
Gannett, Inc. .............................................. 10,500 749,437
Leisure & Tourism -- 2.7%
AMR Corp.+ ................................................. 8,200 559,650
McDonald's Corp. ........................................... 21,200 875,825
------------
3,128,013
------------
INFORMATION TECHNOLOGY -- 21.2%
Communication Equipment -- 4.2%
Cisco Systems, Inc.+........................................ 18,900 1,219,050
Lucent Technologies, Inc.................................... 8,500 573,219
Motorola, Inc. ............................................. 4,900 464,275
</TABLE>
- ---------------------
16
<PAGE> 18
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY (continued)
Computers & Business Equipment -- 5.5%
EMC Corp.+.................................................. 6,200 $ 341,000
Hewlett-Packard Co.......................................... 3,900 391,950
International Business Machines Corp. ...................... 10,500 1,357,125
Xerox Corp.................................................. 14,000 826,875
Electronics -- 4.1%
Analog Devices, Inc.+....................................... 6,800 341,275
Intel Corp.................................................. 16,600 987,700
Micron Technology, Inc.+.................................... 7,400 298,312
Texas Instruments, Inc...................................... 3,700 536,500
Software -- 7.4%
Automatic Data Processing, Inc. ............................ 15,400 677,600
Computer Sciences Corp.+.................................... 8,100 560,419
First Data Corp. ........................................... 12,800 626,400
Microsoft Corp.+............................................ 22,600 2,038,237
------------
11,239,937
------------
MATERIALS -- 3.1%
Chemicals -- 2.0%
Dow Chemical Co............................................. 1,000 126,875
du Pont (E. I.) de Nemours & Co. ........................... 10,300 703,619
Monsanto Co. ............................................... 5,600 224,700
Forest Products -- 0.8%
International Paper Co. .................................... 8,400 424,200
Metals & Minerals -- 0.3%
Alcoa, Inc. ................................................ 2,400 148,500
------------
1,627,894
------------
UTILITIES -- 11.1%
Electric Utilities -- 2.3%
DPL, Inc. .................................................. 12,800 235,200
Enron Corp. ................................................ 2,700 220,725
GPU, Inc. .................................................. 6,700 282,656
Pinnacle West Capital Corp. ................................ 6,000 241,500
Texas Utilities Co. ........................................ 5,700 235,125
Gas & Pipeline Utilities -- 0.4%
National Fuel Gas Co. ...................................... 4,600 223,100
Telephone -- 8.4%
AT&T Corp................................................... 11,700 653,006
Bell Atlantic Corp. ........................................ 18,700 1,222,513
MCI WorldCom, Inc.+......................................... 12,900 1,110,206
SBC Communications, Inc. ................................... 20,000 1,160,000
U.S. West, Inc.............................................. 4,900 287,875
------------
5,871,906
------------
TOTAL INVESTMENT SECURITIES (cost $33,401,633).............. 52,837,226
------------
</TABLE>
---------------------
17
<PAGE> 19
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 0.4% AMOUNT VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (See Note 3) (cost
$220,000)................................................. $ 220,000 $ 220,000
------------
TOTAL INVESTMENTS -- (cost $33,621,633) 100.2% 53,057,226
Liabilities in excess of other
assets -- (0.2) (122,047)
------ ------------
NET ASSETS -- 100.0% $52,935,179
====== ============
</TABLE>
-----------------------------
+ Non-income producing securities
* Security represents an investment in an affiliated company
See Notes to Financial Statements
- ---------------------
18
<PAGE> 20
- ---------------------
ANCHOR SERIES TRUST
FOREIGN SECURITIES
PORTFOLIO# INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 44.5% SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
AUSTRALIA -- 1.2%
Australia & New Zealand Banking Group Ltd. (Finance)........ 12,290 $ 90,253
Broken Hill Proprietary Co., Ltd. (Materials)............... 8,935 103,363
News Corp., Ltd. (Information & Entertainment).............. 9,501 80,957
Pasminco Ltd. (Materials)................................... 55,086 60,740
------------
335,313
------------
BRAZIL -- 0.4%
Embratel Participacoes SA ADR (Utilities)................... 2,400 33,300
Telecomunicacoes de Brasileiras SA ADR (Utilities)+......... 1,100 69
Telecomunicacoes de Brasileiras (Utilities)................. 600 54,112
Telesp Participacoes SA ADR (Utilities)..................... 1,100 25,163
------------
112,644
------------
CANADA -- 0.7%
Alcan Aluminum Ltd. (Materials)............................. 2,500 79,372
Canadian Imperial Bank (Finance)............................ 4,800 114,417
------------
193,789
------------
CHINA -- 0.3%
China Telecom (Hong Kong) Ltd. ADR (Information
Technology)+.............................................. 1,400 79,800
------------
DENMARK -- 0.2%
Unidanmark A/S, Class A (Finance)........................... 900 59,899
------------
FINLAND -- 0.7%
Nokia AB Oy, Series A (Information Technology).............. 1,781 156,055
Upm Kymmene Oy (Materials).................................. 1,900 54,450
------------
210,505
------------
FRANCE -- 4.5%
Accor SA (Information & Entertainment)...................... 800 200,810
Alcatel Alsthom, Inc. (Information Technology).............. 540 75,984
AXA SA de CV (Finance)...................................... 580 70,731
Banque Nationale de Paris (Finance)......................... 761 63,386
Compagnie de St. Gobain (Materials)......................... 600 95,560
Compagnie Financiere de Paribas SA (Finance)................ 1,860 208,419
Establissements Economiques du Casino Guichard-Perrachon SA
(Consumer Discretionary).................................. 430 37,677
Michelin SA, Class B (Consumer Discretionary)............... 1,600 65,430
STMicroelectronics NV (Information Technology)+............. 1,400 97,125
Suez Lyonnaise des Eaux (Utilities)......................... 850 153,251
Total SA, Class B (Energy).................................. 1,136 146,498
Vivendi SA (Utilities)...................................... 950 76,925
------------
1,291,796
------------
GERMANY -- 2.5%
Bayer AG (Healthcare)....................................... 3,170 132,019
DaimlerChrysler AG (Consumer Discretionary)................. 750 64,944
Mannesmann AG (Information & Entertainment)................. 930 138,722
Munchener Ruckversicherungs AG (Finance)+................... 800 148,030
</TABLE>
---------------------
19
<PAGE> 21
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY (continued)
Siemens AG (Industrial & Commercial)........................ 2,440 $ 188,142
Veba AG (Utilities)......................................... 900 52,883
------------
724,740
------------
HONG KONG -- 0.6%
Cheung Kong Holdings Ltd. (Industrial & Commercial)+........ 13,000 115,614
New World Development Co., Ltd. (Real Estate)............... 17,000 50,943
------------
166,557
------------
INDONESIA -- 0.2%
Asia Pulp & Paper Ltd. ADR (Materials)+..................... 6,400 61,600
------------
IRELAND -- 0.3%
Allied Irish Banks PLC (Finance)............................ 7,652 101,316
------------
ITALY -- 0.4%
Telecom Italia SpA (Utilities).............................. 7,000 72,737
Unicredito Italiano SpA (Finance)........................... 10,100 44,353
------------
117,090
------------
JAPAN -- 6.1%
Bank of Tokyo-Mitsubishi Ltd. (Finance)..................... 8,000 113,946
Eisai Co., Ltd. (Healthcare)................................ 5,000 98,578
Fuji Machine Manufacturing Co. (Industrial & Commercial).... 1,000 30,834
Fujisawa Pharmaceutical Co. (Healthcare).................... 4,000 65,140
Hitachi Ltd. (Information Technology)+...................... 10,000 93,825
Ito Yokado Co. (Consumer Discretionary)..................... 1,000 66,959
Mabuchi Motor Co., Ltd. (Industrial & Commercial)........... 400 37,199
Matsumotokiyoshi (Consumer Discretionary)................... 2,400 143,837
Matsushita Electric Industrial Co., Ltd. (Information &
Entertainment)+........................................... 2,000 38,853
Nippon Telegraph & Telephone Corp. (Utilities).............. 7 81,591
NTT Mobile Communications Network, Inc. (Information &
Entertainment)............................................ 2 27,114
NTT Mobile Communications Network, Inc. (Information &
Entertainment)............................................ 8 107,134
Olympus Optical Co. (Healthcare)............................ 9,000 133,099
Rohm Co. Ltd. (Information Technology)...................... 1,000 156,651
Sony Corp. (Information & Entertainment).................... 1,800 194,180
Takefuji Corp. (Finance).................................... 2,300 237,852
Toshiba Corp. (Information Technology)...................... 16,000 114,144
------------
1,740,936
------------
MEXICO -- 0.3%
Fomento Economico Mexicano SA, Class B ADR (Consumer
Staples).................................................. 1,300 51,837
Panamerican Beverages, Inc., Class A ADR (Consumer
Staples).................................................. 1,400 33,338
------------
85,175
------------
NETHERLANDS -- 2.7%
Gucci Group NV (Consumer Discretionary)..................... 1,700 119,000
ING Groep NV (Finance)...................................... 1,109 60,019
Koninklijke Ahold NV (Consumer Discretionary)............... 2,218 76,366
Philips Electronics NV (Information Technology)+............ 1,084 106,883
Royal Dutch Petroleum Co. (Energy).......................... 2,200 128,815
Royal Koninklijke KPN NV (Utilities)........................ 1,551 72,748
Unilever NV (Consumer Staples).............................. 2,914 196,305
------------
760,136
------------
SINGAPORE -- 0.3%
Overseas Chinese Banking Corp. Ltd. (Finance)............... 4,000 33,373
Overseas Union Bank (Finance)............................... 12,000 57,814
------------
91,187
------------
</TABLE>
- ---------------------
20
<PAGE> 22
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH KOREA -- 0.0%
SK Telecom Co., Ltd ADR (Information Technology)............ 173 $ 2,943
------------
SPAIN -- 1.8%
Banco de Santander SA (Finance)............................. 9,400 97,869
Banco Popular Esp (Finance)................................. 1,100 79,092
Endesa SA (Utilities)....................................... 3,500 74,613
Repsol SA (Energy).......................................... 4,200 86,375
Telefonica SA (Utilities)................................... 3,276 158,148
Telefonica SA ADR (Utilities)............................... 95 13,977
------------
510,074
------------
SWEDEN -- 1.0%
Ericsson L.M. Telecommunications Co., Class B (Information
Technology)............................................... 5,310 170,453
Hennes & Mauritz AB, Class B (Consumer Discretionary)+...... 2,300 56,897
Nordbanken AB (Finance)..................................... 12,450 72,890
------------
300,240
------------
SWITZERLAND -- 1.3%
Alusuisse Lonza Gr (Materials).............................. 30 34,956
Credit Suisse Group (Finance)............................... 750 129,735
Nestle SA (Consumer Staples)+............................... 59 106,269
Swisscom AG (Utilities)+.................................... 250 94,045
------------
365,005
------------
UNITED KINGDOM -- 3.4%
British Petroleum Co. PLC (Energy).......................... 12,106 216,772
Cadbury Schweppes (Consumer Staples)+....................... 380 2,425
Imperial Chemical Industries PLC (Materials)................ 3,500 34,563
National Westminster Bank PLC (Finance)..................... 9,100 192,925
Prudential Corp. PLC (Finance).............................. 4,500 66,321
Reckitt & Colman PLC (Consumer Staples)..................... 4,500 46,992
SmithKline Beecham PLC (Healthcare)......................... 20,067 260,953
South African Brew (Consumer Staples)+*..................... 1,400 12,292
Vodafone Group PLC (Information & Entertainment)............ 6,716 132,114
------------
965,357
------------
UNITED STATES -- 15.6%
Adaptec, Inc. (Information Technology)+..................... 4,000 141,250
American General Corp. (Finance)............................ 2,000 150,750
American Tower Corp., Class A (Information &
Entertainment)+........................................... 2,000 48,000
Analog Devices, Inc. (Information Technology)+.............. 2,000 100,375
Associates First Capital Corp. (Finance).................... 3,000 132,937
Atlas Air, Inc. (Industrial & Commercial)+.................. 3,200 103,200
Avant Corp. (Information Technology)+....................... 2,500 31,562
Bed Bath & Beyond, Inc. (Consumer Discretionary)+........... 1,000 38,500
BellSouth Corp. (Utilities)................................. 5,400 253,125
BMC Software, Inc. (Information Technology)+................ 1,000 54,000
Boston Scientific Corp. (Healthcare)+....................... 1,500 65,906
Caterpillar, Inc. (Industrial & Commercial)................. 4,600 276,000
Citigroup, Inc. (Finance)................................... 3,800 180,500
Corning, Inc. (Industrial & Commercial)..................... 1,700 119,213
Covance, Inc. (Healthcare)+................................. 1,000 23,938
Delphi Automotive Systems Corp. (Consumer Discretionary).... 12,500 232,031
First Data Corp. (Information Technology)................... 2,000 97,875
Gannett, Inc. (Information & Entertainment)................. 1,700 121,337
Gap, Inc. (Consumer Discretionary).......................... 4,200 211,575
Heller Financial, Inc. (Finance)............................ 2,000 55,625
Hewlett Packard Co. (Information Technology)................ 600 60,300
Intel Corp. (Information Technology)........................ 2,200 130,900
Intermedia Communications, Inc. (Utilities)+................ 2,000 60,000
</TABLE>
---------------------
21
<PAGE> 23
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (continued)
International Business Machines (Information Technology).... 900 $ 116,325
Kimberly Clark Corp. (Consumer Staples)..................... 2,100 119,700
MBNA Corp. (Finance)........................................ 1,800 55,125
McLeod USA, Inc. (Utilities)+............................... 2,500 137,500
Metzler Group, Inc. (Industrial & Commercial)+.............. 2,000 55,250
Motorola, Inc. (Information Technology)..................... 1,000 94,750
National City Corp. (Finance)............................... 1,000 65,500
NCO Group, Inc. (Industrial & Commercial)+.................. 2,000 76,000
Pegasus Systems, Inc. (Industrial & Commercial)+............ 2,000 74,875
Pharmacia & Upjohn, Inc. (SEK) (Healthcare)................. 1,990 110,178
Pierce Leahy Corp. (Industrial & Commercial)+............... 2,500 61,719
QUALCOMM, Inc. (Information Technology)+.................... 500 71,750
Sprint Corp. (Utilities).................................... 5,300 279,906
Texas Instruments, Inc. (Information Technology)............ 400 58,000
The Hartford Financial Services Group, Inc. (Finance)....... 2,300 134,119
United Technologies Corp. (Industrial & Commercial)......... 2,200 157,712
Wal-Mart Stores, Inc. (Consumer Discretionary).............. 1,900 91,675
------------
4,448,983
------------
TOTAL COMMON STOCK (cost $11,410,254)....................... 12,725,085
------------
PREFERRED STOCK -- 0.1%
-----------------------------------------------------------------------------------------
GERMANY -- 0.0%
ProSieben Media AG (Information & Entertainment)*........... 10 454
------------
NETHERLANDS -- 0.1%
Unilever NV (Consumer Staples)+............................. 6,400 34,307
------------
TOTAL PREFERRED STOCK (cost $45,924)........................ 34,761
------------
PRINCIPAL
AMOUNT
(DENOMINATED
IN LOCAL
BONDS & NOTES -- 14.6% CURRENCY)
-----------------------------------------------------------------------------------------
CANADA -- 1.6%
Government of Canada 8.50% 2002............................. 640,000 468,719
------------
FRANCE -- 0.9%
French Treasury Note B.T.A.N. 3.50% 2004.................... 250,000 256,476
------------
GERMANY -- 2.8%
Federal Republic of Germany 6.25% 2024...................... 695,000 802,271
------------
JAPAN -- 2.4%
European Investment Bank 3.00% 2006......................... 75,000,000 680,313
------------
SINGAPORE -- 1.8%
Singapore Government 3.50% 2004............................. 890,000 517,058
------------
SWEDEN -- 0.9%
Kingdom of Sweden 9.00% 2009................................ 1,600,000 244,659
------------
</TABLE>
- ---------------------
22
<PAGE> 24
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM -- 1.1%
United Kingdom Treasury 7.75% 2006.......................... $ 175,000 $ 313,496
------------
UNITED STATES -- 3.1%
United States Treasury Bonds 6.25% 2023..................... 750,000 753,517
United States Treasury Bonds 12.00% 2013.................... 100,000 140,406
------------
893,923
------------
TOTAL BONDS & NOTES (cost $4,201,591)....................... 4,176,915
------------
WARRANTS -- 0.3%+ SHARES
-----------------------------------------------------------------------------------------
INDONESIA -- 0.0%
Asia Pulp & Paper Ltd. 7/27/00 (Materials).................. 2,160 5,670
------------
THAILAND -- 0.3%
Siam Commercial Bank 5/31/02 (Finance)...................... 126,300 81,346
------------
TOTAL WARRANTS (cost $0).................................... 87,016
------------
TOTAL INVESTMENT SECURITIES (cost $15,657,769).............. 17,023,777
------------
<CAPTION>
PRINCIPAL
SHORT-TERM SECURITIES -- 1.2% AMOUNT
-----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT -- 1.2%
United States Treasury Bills 4.20% due 8/05/99.............. $ 300,000 298,775
United States Treasury Bills 4.46% due 8/05/99.............. 50,000 49,783
------------
TOTAL SHORT-TERM SECURITIES (cost $348,558)................. 348,558
------------
REPURCHASE AGREEMENTS -- 38.3%@
-----------------------------------------------------------------------------------------
Agreement with Paine Webber, Inc., bearing interest at
4.85%, dated 6/30/99, to be repurchased 7/01/99 in the
amount of $5,000,674 and collateralized by $4,970,000 of
U.S. Treasury Notes, bearing interest at 6.00%, due
8/15/00 and having an approximate aggregate value of
$5,104,504 (cost $5,000,000).............................. 5,000,000 5,000,000
Joint Repurchase Agreement Account (See Note 3) (cost
$5,940,000)............................................... 5,940,000 5,940,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $10,940,000).............. 10,940,000
------------
TOTAL INVESTMENTS -- (cost $26,946,327) 99.0% 28,312,335
Other assets less liabilities -- 1.0 281,764
------ ------------
NET ASSETS -- 100.0% $28,594,099
====== ============
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR -- American Depository Receipt
# See Note 8 to Financial Statements
@ The security or a portion thereof represents collateral for the
following open future contracts:
---------------------
23
<PAGE> 25
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
----------------------------------------------------------------------------------------------------------
VALUE AS OF UNREALIZED
NUMBER OF EXPIRATION VALUE AT JUNE 30, APPRECIATION/
CONTRACTS DESCRIPTION DATE TRADE DATE 1999 (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
9 Long OMX Index Future -- The London July 1999 $ 87,147 $ 87,597 $ 450
Securities Derivatives Exchange....
2 Long IBEX Plus Index Future -- Meff July 1999 209,747 210,128 381
Renta Variable Exchange (Madrid)...
2 Long Euro-Bund Future -- Eurex September 1999 229,118 227,732 (1,386)
Deutschland........................
4 Long SPI Futures -- Sydney Futures September 1999 196,478 197,047 569
Exchange...........................
1 Long S&P 500 Index Future -- Chicago September 1999 328,381 345,425 17,044
Mercantile Exchange................
5 Long Topix Index Future -- Tokyo Stock September 1999 573,034 581,213 8,179
Exchange...........................
1 Long Toronto 35 Index -- Toronto Futures September 1999 136,148 137,237 1,089
Exchange...........................
10 Long Russell 2000 Future -- Chicago September 1999 2,239,820 2,310,000 70,180
Mercantile Exchange................
1 Long MIB 30 Index Future -- Milan Stock September 1999 182,213 180,441 (1,772)
Exchange...........................
5 Long FTSE 100 Index Future -- London September 1999 515,253 500,278 (14,975)
International Futures Exchange.....
2 Long DAX Index Future -- Eurex September 1999 275,210 277,858 2,648
Deutschland........................
11 Long Marche A Terme International de September 1999 500,171 517,585 17,414
France -- CAC 40 Stock Index
Future.............................
---------
$ 99,821
Net Unrealized Appreciation..................................................
=========
</TABLE>
<TABLE>
<CAPTION>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
-------------------------------------------------------------
CONTRACT IN DELIVERY GROSS UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CAD 690,000 USD 473,154 07/06/99 $ 4,524
EUR 1,030,000 USD 1,077,565 07/28/99 13,636
GBP 200,000 USD 322,000 07/15/99 6,722
JPY 87,394,000 USD 744,412 07/15/99 20,427
JPY 84,000,000 USD 700,584 07/15/99 4,714
SEK 2,100,000 USD 247,846 07/23/99 125
--------
50,148
--------
</TABLE>
<TABLE>
<CAPTION>
GROSS UNREALIZED
DEPRECIATION
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SGD 877,000 USD 512,866 07/12/99 (3,021)
--------
Net Unrealized Appreciation....... $47,127
========
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAD -- Canadian Dollar JPY -- Japanese Yen SGD -- Singapore Dollar
EUR -- Euro Currency SEK -- Swedish Krona USD -- United States Dollar
GBP -- Pound Sterling
</TABLE>
See Notes to Financial Statements.
- ---------------------
24
<PAGE> 26
- ---------------------
ANCHOR SERIES TRUST
GROWTH PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 97.5% SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 8.5%
Retail -- 8.5%
Bed Bath & Beyond, Inc.+.................................... 15,800 $ 608,300
CVS Corp. .................................................. 145,102 7,363,927
Dayton Hudson Corp. ........................................ 190,000 12,350,000
Dollar General Corp. ....................................... 152,275 4,415,975
Ethan Allen Interiors, Inc. ................................ 73,500 2,774,625
Home Depot, Inc. ........................................... 217,100 13,989,381
Staples, Inc.+.............................................. 155,100 4,798,406
Wal-Mart Stores, Inc. ...................................... 320,000 15,440,000
Whole Foods Market, Inc.+................................... 54,300 2,609,794
-------------
64,350,408
-------------
CONSUMER STAPLES -- 4.5%
Food, Beverage & Tobacco -- 2.1%
Beringer Wine Estates Holdings, Inc., Class B+.............. 68,500 2,862,016
Coca-Cola Co. .............................................. 41,600 2,600,000
PepsiCo, Inc. .............................................. 100,000 3,868,750
Philip Morris Cos., Inc. ................................... 154,000 6,188,875
Household Products -- 2.4%
Bush Boake Allen, Inc.+..................................... 43,200 1,263,600
Colgate-Palmolive Co. ...................................... 59,600 5,885,500
Gillette Co. ............................................... 64,000 2,624,000
Procter & Gamble Co. ....................................... 98,000 8,746,500
-------------
34,039,241
-------------
ENERGY -- 4.0%
Energy Services -- 1.0%
Hanover Compressor Co. ..................................... 3,000 96,375
Schlumberger Ltd. .......................................... 112,600 7,171,213
Energy Sources -- 3.0%
Barrett Resources Corp.+.................................... 18,800 721,450
Chevron Corp. .............................................. 75,000 7,139,063
Exxon Corp. ................................................ 98,500 7,596,812
Royal Dutch Petroleum Co.................................... 122,700 7,392,675
-------------
30,117,588
-------------
FINANCE -- 14.1%
Banks -- 5.6%
Citigroup, Inc. ............................................ 355,050 16,864,875
First Union Corp. .......................................... 150,000 7,050,000
Mercantile Bankshares Corp. ................................ 73,000 2,582,375
National Commerce Bancorp................................... 17,600 385,000
State Street Corp. ......................................... 69,700 5,950,637
U.S. Bancorp................................................ 130,000 4,420,000
WestAmerica Bancorp......................................... 49,900 1,821,350
Wilmington Trust Corp. ..................................... 50,000 2,868,750
</TABLE>
---------------------
25
<PAGE> 27
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Financial Services -- 4.4%
Associates First Capital Corp. ............................. 285,900 $ 12,668,944
Federal National Mortgage Association....................... 123,100 8,416,963
FINOVA Group, Inc. ......................................... 41,200 2,168,150
Franklin Resources, Inc. ................................... 70,000 2,843,750
Merrill Lynch & Co., Inc. .................................. 93,500 7,474,156
Insurance -- 4.1%
Ace Ltd..................................................... 171,000 4,830,750
American International Group, Inc.*......................... 102,375 11,984,274
Frontier Insurance Group, Inc. ............................. 120,400 1,851,150
Marsh & McLennan Cos., Inc. ................................ 129,150 9,750,825
Reinsurance Group America, Inc. ............................ 72,325 2,549,456
-------------
106,481,405
-------------
HEALTHCARE -- 13.1%
Drugs -- 7.1%
American Home Products Corp. ............................... 181,000 10,407,500
Astrazeneca PLC ADR......................................... 102,000 3,997,125
Genzyme Surgical Products+ ................................. 11,779 51,901
Genzyme Corp.+.............................................. 65,800 3,191,300
Johnson & Johnson Co........................................ 74,700 7,320,600
Merck & Co., Inc. .......................................... 102,800 7,607,200
Pfizer, Inc. ............................................... 65,500 7,188,625
Pharmacia & Upjohn, Inc. ................................... 142,000 8,067,375
Warner-Lambert Co. ......................................... 88,100 6,111,937
Health Services -- 2.5%
Cardinal Health, Inc., Class A.............................. 104,000 6,669,000
Columbia/HCA Healthcare Corp. .............................. 182,800 4,170,125
Covance, Inc.+.............................................. 145,700 3,487,694
Shared Medical Systems Corp. ............................... 64,200 4,189,050
Medical Products -- 3.5%
Abbott Laboratories, Inc. .................................. 180,000 8,190,000
Baxter International, Inc. ................................. 91,400 5,541,125
Boston Scientific Corp.+.................................... 99,800 4,384,962
Henry Schein, Inc.+......................................... 99,400 3,149,737
PE Corp. ................................................... 37,900 4,349,025
Waters Corp. ............................................... 15,700 834,063
-------------
98,908,344
-------------
INDUSTRIAL & COMMERCIAL -- 10.2%
Aerospace & Military Technology -- 1.1%
General Motors Corp., Class H+.............................. 63,800 3,588,750
United Technologies Corp. .................................. 70,000 5,018,125
Business Services -- 2.3%
Barnett, Inc.+.............................................. 37,600 282,000
G & K Services, Inc., Class A............................... 80,000 4,190,000
Ionics, Inc.+............................................... 71,900 2,624,350
Lason Holdings, Inc. ....................................... 8,100 401,962
Manpower, Inc............................................... 108,000 2,443,500
Miller (Herman), Inc. ...................................... 91,100 1,913,100
Robert Half International, Inc.+............................ 29,600 769,600
Tetra Tech, Inc.+........................................... 77,844 1,284,422
United Rentals, Inc.+....................................... 112,922 3,331,199
Electrical Equipment -- 2.8%
General Electric Co. ....................................... 165,000 18,645,000
Littelfuse, Inc.+........................................... 114,000 2,194,500
</TABLE>
- ---------------------
26
<PAGE> 28
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL & COMMERCIAL (continued)
Machinery -- 3.3%
Corning, Inc. .............................................. 55,500 $ 3,891,937
Donaldson Co., Inc. ........................................ 104,000 2,548,000
Eaton Corp. ................................................ 35,200 3,238,400
Illinois Tool Works, Inc. .................................. 50,000 4,100,000
Macdermid, Inc. ............................................ 12,100 562,650
MSC Industrial Direct Co., Inc., Class A+................... 88,800 910,200
Nordson Corp. .............................................. 23,000 1,408,750
Tyco International Ltd New.................................. 90,600 8,584,350
Transportation -- 0.7%
Air Express International Corp. ............................ 72,700 1,844,763
C.H. Robinson Worldwide, Inc. .............................. 93,700 3,443,475
-------------
77,219,033
-------------
INFORMATION & ENTERTAINMENT -- 9.2%
Broadcasting & Media -- 6.6%
Acxiom Corp.+............................................... 70,000 1,745,625
ADVO, Inc.+................................................. 16,400 340,300
American Tower Corp., Class A............................... 235,200 5,644,800
AT&T Corp.-Liberty Media Group, Inc., Class A+.............. 214,400 7,879,200
Catalina Marketing Corp.+................................... 34,000 3,128,000
CBS Corp.+.................................................. 98,400 4,274,250
Cox Communications, Inc. New................................ 183,200 6,744,050
Disney (Walt) Co. .......................................... 198,900 6,128,606
Gannett, Inc. .............................................. 110,000 7,851,250
Time Warner, Inc. .......................................... 67,800 4,983,300
Univision Communications, Inc., Class A+.................... 23,200 1,531,200
Entertainment Products -- 0.4%
Speedway Motorsports, Inc.+................................. 84,700 3,329,769
Leisure & Tourism -- 2.2%
McDonald's Corp. ........................................... 196,000 8,097,250
Southwest Airlines Co. ..................................... 267,850 8,336,831
-------------
70,014,431
-------------
INFORMATION TECHNOLOGY -- 25.9%
Communication Equipment -- 5.5%
Black Box Corp.+............................................ 42,300 2,120,287
Cisco Systems, Inc.+........................................ 270,600 17,453,700
Lucent Technologies, Inc. .................................. 155,668 10,497,861
Motorola, Inc. ............................................. 57,700 5,467,075
Nokia Corp., Class A ADR.................................... 72,300 6,619,969
Computers & Business Equipment -- 5.2%
EMC Corp.+.................................................. 159,800 8,789,000
Hewlett Packard Co. ........................................ 77,000 7,738,500
International Business Machines Corp. ...................... 122,900 15,884,825
Symbol Technologies, Inc. .................................. 32,050 1,181,844
Xerox Corp. ................................................ 95,000 5,610,937
Electronics -- 5.2%
Analog Devices, Inc. ....................................... 164,500 8,255,844
Applied Materials, Inc.+.................................... 72,000 5,319,000
Dallas Semiconductor Corp. ................................. 74,700 3,772,350
Intel Corp. ................................................ 189,600 11,281,200
Micron Technology, Inc. .................................... 27,300 1,100,531
Texas Instruments, Inc. .................................... 48,900 7,090,500
Xilinx, Inc.+............................................... 46,200 2,644,950
</TABLE>
---------------------
27
<PAGE> 29
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY (continued)
Software -- 10.0%
America Online, Inc.+....................................... 48,800 $ 5,392,400
American Management Systems, Inc.+.......................... 61,200 1,962,225
Automatic Data Processing, Inc. ............................ 200,800 8,835,200
BISYS Group, Inc.+.......................................... 57,600 3,369,600
Cognos, Inc.+............................................... 76,100 1,655,175
Computer Sciences Corp.+.................................... 90,000 6,226,875
DST Systems, Inc.+.......................................... 65,000 4,086,875
First Data Corp. ........................................... 130,000 6,361,875
Juniper Networks, Inc. ..................................... 6,200 923,800
Microsoft Corp.+ ........................................... 258,000 23,268,375
Policy Management Systems Corp.+............................ 99,700 2,991,000
Sterling Commerce, Inc.+.................................... 58,600 2,138,900
Sterling Software, Inc.+.................................... 165,000 4,403,437
Synopsys, Inc.+............................................. 45,800 2,527,588
Systems & Computer Technology Corp.+........................ 89,700 1,306,256
-------------
196,277,954
-------------
MATERIALS -- 2.7%
Chemicals -- 2.4%
du Pont (E. I.) de Nemours & Co. ........................... 96,300 6,578,494
Minerals Technologies, Inc. ................................ 80,700 4,504,069
Praxair, Inc. .............................................. 153,300 7,502,118
Forest Products -- 0.3%
Bemis Co., Inc. ............................................ 49,000 1,947,750
-------------
20,532,431
-------------
UTILITIES -- 5.3%
Gas & Pipeline Utilities -- 0.0%
American Water Works, Inc. ................................. 7,000 215,250
Telephone -- 5.3%
AT&T Corp. ................................................. 98,100 5,475,206
Bell Atlantic, Corp. ....................................... 147,500 9,642,813
MCI Worldcom, Inc.+......................................... 130,000 11,188,125
McLeodUSA, Inc. ............................................ 40,600 2,233,000
SBC Communications, Inc. ................................... 196,800 11,414,400
-------------
40,168,794
-------------
TOTAL INVESTMENT SECURITIES (cost $423,046,064)............. 738,109,629
-------------
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 1.4% AMOUNT
-----------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (See Note 3) (cost
$10,330,000).............................................. $10,330,000 10,330,000
-------------
TOTAL INVESTMENTS -- (cost $433,376,064) 98.9% 748,439,629
Other assets less liabilities -- 1.1 8,108,822
----- -------------
NET ASSETS -- 100.0% $756,548,451
===== =============
</TABLE>
-----------------------------
+ Non-income producing securities
* Security represents an investment in an affiliated company
ADR -- American Depository Receipt
See Notes to Financial Statements
- ---------------------
28
<PAGE> 30
- ---------------------
ANCHOR SERIES TRUST
CAPITAL APPRECIATION
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 92.3% SHARES VALUE
<S> <C> <C>
-------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 5.6%
Retail -- 5.6%
Bed Bath & Beyond, Inc.+.................................... 800,000 $ 30,800,000
Gap, Inc. .................................................. 675,000 34,003,125
Home Depot, Inc. ........................................... 170,000 10,954,375
---------------
75,757,500
---------------
CONSUMER STAPLES -- 0.7%
Food, Beverage & Tobacco -- 0.7%
McCormick & Co., Inc. ...................................... 160,000 5,050,000
United Natural Foods, Inc.+................................. 210,000 5,197,500
---------------
10,247,500
---------------
ENERGY -- 2.0%
Energy Services -- 1.7%
Santa Fe International Corp. ............................... 477,600 10,984,800
Transocean Offshore, Inc. .................................. 435,000 11,418,750
Energy Sources -- 0.3%
Pennzoil Quaker State Co. .................................. 290,000 4,350,000
---------------
26,753,550
---------------
FINANCE -- 7.5%
Banks -- 0.6%
City National Corp. ........................................ 68,300 2,556,981
Cullen/Frost Bankers, Inc. ................................. 188,400 5,192,775
Financial Services -- 3.9%
Associates First Capital Corp., Class A .................... 471,400 20,888,913
Heller Financial, Inc., Class A ............................ 504,500 14,031,406
Jefferies Group, Inc. ...................................... 115,000 3,450,000
MBNA Corp. ................................................. 150,000 4,593,750
Legg Mason, Inc. ........................................... 250,000 9,625,000
Morgan Keegan, Inc. ........................................ 70,500 1,335,094
Insurance -- 3.0%
Ace Ltd..................................................... 774,900 21,890,925
American General Corp. ..................................... 190,000 14,321,250
Transatlantic Holdings, Inc. ............................... 67,500 5,058,281
---------------
102,944,375
---------------
HEALTHCARE -- 14.0%
Drugs -- 8.8%
Astrazeneca PLC............................................. 685,000 26,843,438
Genset Sa................................................... 180,000 2,812,500
Genzyme Corp.+.............................................. 586,800 28,459,800
Gilead Sciences, Inc.+...................................... 145,000 7,576,250
Human Genome Sciences, Inc.+................................ 139,900 5,526,050
Immunex Corp.+.............................................. 226,600 28,877,337
Millennium Pharmaceuticals.................................. 158,500 5,706,000
Pharmacia & Upjohn, Inc. ................................... 250,000 14,203,125
</TABLE>
---------------------
29
<PAGE> 31
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE (continued)
Health Services -- 1.1%
Covance, Inc.+.............................................. 280,300 $ 6,709,681
Stewart Enterprises, Inc., Class A.......................... 549,600 8,003,550
Medical Products -- 4.1%
Baxter International, Inc. ................................. 255,000 15,459,375
Boston Scientific Corp.+.................................... 254,700 11,190,881
Ocular Sciences, Inc.+...................................... 117,500 2,041,563
PE Corp. ................................................... 170,000 19,507,500
Varian Medical Systems, Inc. ............................... 287,800 7,266,950
---------------
190,184,000
---------------
INDUSTRIAL & COMMERCIAL -- 8.8%
Aerospace & Military Technology -- 0.3%
General Motors Corp., Class A+.............................. 75,000 4,218,750
Business Services -- 5.0%
Comfort Systems USA, Inc.+.................................. 280,000 5,040,000
Group Maintenance America Corp.+............................ 170,000 2,199,375
Iron Mountain, Inc.+........................................ 372,100 10,651,362
Korn/Ferry International.................................... 231,800 3,940,600
Metzler Group, Inc.+........................................ 335,700 9,273,712
NCO Group, Inc.+............................................ 318,800 12,114,400
Pegasus Systems, Inc. ...................................... 280,000 10,482,500
Pierce Leahy Corp.+......................................... 205,000 5,060,938
Select Appointments Holdings PLC ADR........................ 182,000 4,368,000
Service Experts, Inc.+...................................... 210,000 4,606,875
Electrical Equipment -- 0.6%
General Cable Corp.+........................................ 487,100 7,793,600
Machinery -- 1.7%
Corning, Inc. .............................................. 325,000 22,790,625
Transportation -- 1.2%
Atlas Air, Inc.+............................................ 230,000 7,417,500
Werner Enterprises, Inc. ................................... 475,000 9,856,250
---------------
119,814,487
---------------
INFORMATION & ENTERTAINMENT -- 21.2%
Broadcasting & Media -- 18.8%
American Tower Corp., Class A+.............................. 853,400 20,481,600
AT&T Corp.-Liberty Media Group, Inc., Class A+.............. 2,006,800 73,749,900
Capstar Broadcasting Corp., Class A+........................ 160,000 4,380,000
Central Newspapers, Inc., Class A........................... 115,000 4,326,875
Chancellor Media Corp.+..................................... 185,000 10,198,125
Clear Channel Communications, Inc.+......................... 200,000 13,787,500
Crown Castle International Corp.+ .......................... 670,100 13,946,456
EchoStar Communications Corp., Class A+..................... 154,400 23,690,750
Getty Images, Inc.+......................................... 380,500 7,181,938
Metro Networks, Inc.+....................................... 110,000 5,871,250
Outdoor Systems, Inc.+...................................... 570,000 20,805,000
Pegasus Communications Corp. ............................... 223,300 8,806,394
Primacom AG ADR............................................. 100,000 2,212,500
Scripps (E.W) Co., Class A.................................. 240,100 11,419,756
SFX Entertainment, Inc., Class A+........................... 80,000 5,120,000
TV Guide, Inc. ............................................. 139,000 5,090,875
United International Holdings, Inc. ........................ 75,000 5,071,875
United Pan Europe ADR....................................... 50,000 2,762,500
Univision Communications, Inc., Class A+.................... 260,000 17,160,000
</TABLE>
- ---------------------
30
<PAGE> 32
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION & ENTERTAINMENT (continued)
Entertainment Products -- 1.7%
Koninklijke Philips Electrs Nv ADR.......................... 230,000 $ 23,201,250
Leisure & Tourism -- 0.7%
Ryanair Holdings PLC ADR+................................... 175,800 9,317,400
---------------
288,581,944
---------------
INFORMATION TECHNOLOGY -- 27.2%
Communication Equipment -- 8.3%
ADC Telecommunications, Inc.+............................... 323,800 14,753,138
Alcatel Alsthom ADR......................................... 360,000 10,215,000
Gilat Satellite Networks Ltd.+.............................. 205,000 10,762,500
Lucent Technologies, Inc. .................................. 272,250 18,359,859
Motorola, Inc. ............................................. 235,000 22,266,250
Nokia Corp., Class A ADR.................................... 150,000 13,734,375
Qualcomm, Inc. ............................................. 160,300 23,003,050
Computers & Business Equipment -- 1.6%
Verisign, Inc.+............................................. 200,000 17,250,000
Adaptec, Inc. .............................................. 100,000 3,531,250
Electronics -- 5.6%
Analog Devices, Inc.+....................................... 525,000 26,348,437
Flextronics International Ltd.+............................. 190,000 10,545,000
ST Microelectronics NV+ -- N.Y. Registry Shares............. 100,000 6,937,500
Texas Instruments, Inc. .................................... 225,000 32,625,000
Software -- 11.7%
America Online, Inc.+....................................... 125,000 13,812,500
Avant Corp.+................................................ 658,400 8,312,300
BISYS Group, Inc.+.......................................... 375,900 21,990,150
BMC Software, Inc.+......................................... 290,000 15,660,000
Ceridian Corp.+............................................. 300,000 9,806,250
Computer Sciences Corp.+.................................... 90,000 6,226,875
Electronic Arts, Inc.+...................................... 85,000 4,611,250
First Data Corp. ........................................... 530,000 25,936,875
Flextech PLC................................................ 121,911 1,979,521
Fundtech Ltd................................................ 110,000 2,853,125
Infoseek Corp. ............................................. 80,000 3,835,000
Policy Management Systems Corp.+............................ 185,000 5,550,000
Rational Software Corp.+.................................... 570,000 18,774,375
Segue Software, Inc.+....................................... 170,500 1,236,125
Sterling Software, Inc.+.................................... 720,000 19,215,000
---------------
370,130,705
---------------
REAL ESTATE -- 0.3%
Real Estate Companies -- 0.3%
Security Capital Group, Inc., Class B+...................... 330,000 4,805,625
---------------
UTILITIES -- 5.0%
Telephone -- 5.0%
Allegiance Telecommunications, Inc.+........................ 140,000 7,682,500
Colt Telecom Group PLC+..................................... 600,000 12,559,563
Intermedia Communications, Inc.+............................ 743,700 22,311,000
MCI Worldcom, Inc.+......................................... 90,000 7,745,625
McLeodUSA, Inc. ............................................ 117,600 6,468,000
</TABLE>
---------------------
31
<PAGE> 33
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (continued)
Telephone (continued)
NTL, Inc.+.................................................. 80,000 $ 6,895,000
Swisscom AG ADR............................................. 105,000 4,029,375
---------------
67,691,063
---------------
TOTAL COMMON STOCK (cost $793,540,975)...................... 1,256,910,749
---------------
PREFERRED STOCK -- 0.4%
-------------------------------------------------------------------------------------------
INFORMATION & ENTERTAINMENT -- 0.4%
Broadcasting & Media -- 0.4%
News Corp. Ltd. ADR
(cost $2,501,047)......................................... 160,000 5,050,000
---------------
TOTAL INVESTMENT SECURITIES (cost $796,042,022)............. 1,261,960,749
---------------
PRINCIPAL
REPURCHASE AGREEMENT -- 6.3% AMOUNT
-------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (See Note 3)
(cost $84,910,000)........................................ $84,910,000 84,910,000
---------------
TOTAL INVESTMENTS -- (cost $880,952,022) 99.0% 1,346,870,749
Other assets less liabilities -- 1.0 13,895,836
----- ---------------
NET ASSETS -- 100.0% $1,360,766,585
===== ===============
</TABLE>
-----------------------------
+ Non-income producing securities
ADR -- American Depository Receipt
See Notes to Financial Statements
- ---------------------
32
<PAGE> 34
- ---------------------
ANCHOR SERIES TRUST
NATURAL RESOURCES
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 97.6% SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ENERGY -- 55.1%
Energy Services -- 6.4%
Baker Hughes, Inc........................................... 37,700 $ 1,262,950
BJ Services Co.+............................................ 25,300 744,769
Rowan Cos., Inc.+........................................... 50,000 921,875
Weatherford International, Inc.+............................ 18,200 666,575
Energy Sources -- 48.7%
Alberta Energy Co., Ltd..................................... 20,000 642,445
Canadian Natural Resources Ltd. ADR+........................ 77,300 1,522,377
Canadian Occidental Petroleum Ltd........................... 90,000 1,451,613
Chevron Corp. .............................................. 20,000 1,903,750
ENI SpA..................................................... 12,400 744,000
Enron Oil & Gas Co.......................................... 29,250 592,312
Evergreen Resources, Inc.+.................................. 5,000 125,938
Imperial Oil Ltd............................................ 54,000 1,026,825
Mobil Corp.................................................. 22,100 2,187,900
Norsk Hydro ASA ADR......................................... 28,800 1,101,600
Ocean Energy, Inc.+......................................... 61,000 587,125
PanCanadian Petroleum Ltd................................... 38,800 579,694
Petro Canada................................................ 130,000 1,774,533
Poco Petroleum Ltd.+........................................ 170,000 1,373,854
Repsol SA ADR............................................... 30,000 609,375
Shell Transport & Trading Co. PLC........................... 52,500 2,434,687
Suncor Energy, Inc. ........................................ 41,700 1,709,063
Sunoco, Inc. ............................................... 18,300 552,431
Talisman Energy, Inc.+...................................... 31,000 843,158
Total SA ADR................................................ 30,393 1,958,449
Ultramar Diamond Shamrock Corp. ............................ 53,500 1,166,969
Unocal Corp................................................. 21,320 844,805
USX-Marathon Group, Inc. ................................... 30,000 976,875
Vastar Resources, Inc. ..................................... 10,100 529,619
------------
30,835,566
------------
MATERIALS -- 42.5%
Metals & Minerals -- 34.7%
Alcoa, Inc. ................................................ 34,454 2,131,841
Ashanti Goldfields Co., Ltd. GDR............................ 97,583 676,982
Barrick Gold Corp........................................... 72,200 1,398,875
Billiton PLC*............................................... 504,600 1,765,735
British Steel PLC ADR....................................... 49,700 1,295,306
Cleveland-Cliffs, Inc....................................... 49,800 1,612,275
Companhia Vale do Rio Doce ADR.............................. 61,200 1,215,059
Compania de Minas Buenaventura SA, Series B ADR............. 30,800 471,625
DeBeers Consolidated Mines Ltd. ADR......................... 82,300 1,964,912
Euro Nevada Mining Ltd...................................... 49,100 586,866
Freeport-McMoRan Copper & Gold, Inc., Class A............... 72,900 1,221,075
Freeport-McMoRan Copper & Gold, Inc., Class B............... 110,700 1,985,681
Rio Tinto PLC............................................... 70,883 1,187,683
</TABLE>
---------------------
33
<PAGE> 35
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
---------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Metals & Minerals (continued)
Stillwater Mining Co.+...................................... 57,425 $ 1,877,080
Paper Products -- 7.8%
Weyerhaeuser Co............................................. 31,700 2,179,375
Willamette Industries, Inc.................................. 47,500 2,187,969
------------
23,758,339
------------
TOTAL INVESTMENT SECURITIES (cost $46,074,020).............. .......... 54,593,905
------------
PRINCIPAL
REPURCHASE AGREEMENT -- 2.5% AMOUNT
---------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (See Note 3) (cost
$1,405,000)............................................... $1,405,000 1,405,000
------------
TOTAL INVESTMENTS -- (cost $47,479,020) 100.1% 55,998,905
Liabilities in excess of
other assets (0.1) (35,914)
----- -----------
NET ASSETS -- 100.0% $55,962,991
----- ============
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
See Notes to Financial Statements
- ---------------------
34
<PAGE> 36
- ---------------------
ANCHOR SERIES TRUST
MULTI-ASSET PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 63.1% SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION -- 0.6%
Broadcasting & Media -- 0.2%
American Tower Corp., Class A............................... 13,900 $ 333,600
Software -- 0.4%
First Data Corp. ........................................... 12,500 611,719
-------------
945,319
-------------
CORE EQUITY -- 62.5%
Aerospace & Military Technology -- 1.6%
Allied Signal, Inc. ........................................ 15,600 982,800
United Technologies Corp. .................................. 17,800 1,276,038
Automotive -- 0.5%
Ford Motor Co. ............................................. 11,800 665,963
Banks -- 2.6%
Citigroup, Inc. ............................................ 36,950 1,755,125
State Street Corp. ......................................... 6,500 554,937
U.S. Bancorp................................................ 37,200 1,264,800
Broadcasting & Media -- 3.0%
AT&T Corp. -- Liberty Media Group, Inc., Class A+........... 35,800 1,315,650
Disney (Walt) Co. .......................................... 40,500 1,247,906
Gannett, Inc. .............................................. 23,200 1,655,900
Chemicals -- 1.5%
du Pont (E.I.) de Nemours & Co. ............................ 15,800 1,079,337
Praxair, Inc. .............................................. 20,500 1,003,219
Communication Equipment -- 3.1%
Cisco Systems, Inc.+........................................ 31,000 1,999,500
Lucent Technologies, Inc. .................................. 20,500 1,382,469
Tellabs, Inc.+.............................................. 14,400 972,900
Computers & Business Equipment -- 2.8%
International Business Machines Corp. ...................... 15,800 2,042,150
Xerox Corp.................................................. 32,000 1,890,000
Drugs -- 5.7%
American Home Products Corp. ............................... 30,300 1,742,250
Bristol-Myers Squibb Co. ................................... 17,800 1,253,787
Johnson & Johnson Co. ...................................... 14,900 1,460,200
Merck & Co., Inc. ......................................... 24,400 1,805,600
Monsanto Co. ............................................... 16,500 650,719
Warner-Lambert Co. ......................................... 15,300 1,061,437
Electrical Equipment -- 2.6%
General Electric Co. ....................................... 31,700 3,582,100
Electronics -- 3.0%
Intel Corp. ................................................ 29,000 1,725,500
Micron Technology Inc. ..................................... 24,600 991,688
Texas Instruments, Inc. .................................... 10,100 1,464,500
</TABLE>
---------------------
35
<PAGE> 37
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
CORE EQUITY (continued)
Energy Services -- 0.8%
Schlumberger Ltd. .......................................... 18,800 $ 1,197,325
Energy Sources -- 3.4%
Anadarko Petroleum Corp. ................................... 23,000 846,688
Chevron Corp. .............................................. 10,200 970,912
Exxon Corp. ................................................ 26,800 2,066,950
Unocal Corp. ............................................... 21,000 832,125
Financial Services -- 2.4%
Associates First Capital Corp., Class A..................... 31,800 1,409,138
Franklin Resources, Inc. ................................... 17,200 698,750
Merrill Lynch & Co., Inc. .................................. 16,300 1,302,981
Food, Beverage & Tobacco -- 0.8%
Philip Morris Cos, Inc. .................................... 26,300 1,056,931
Forest Products & Paper -- 1.4%
Sealed Air Corp.+........................................... 12,300 797,963
Weyerhaeuser Co. ........................................... 16,000 1,100,000
Health Services -- 0.5%
Cardinal Health, Inc., Class A.............................. 9,700 622,012
Household Products -- 1.0%
Procter & Gamble Co. ....................................... 16,100 1,436,925
Insurance -- 3.2%
American General Corp. ..................................... 9,600 723,600
American International Group, Inc.@......................... 16,250 1,902,266
Marsh & McLennan Cos, Inc. ................................. 24,000 1,812,000
Leisure & Tourism -- 1.8%
AMR Corp.+.................................................. 12,400 846,300
McDonald's Corp. ........................................... 41,300 1,706,206
Machinery -- 1.7%
Corning, Inc. .............................................. 10,000 701,250
Illinois Tool Works, Inc. .................................. 11,800 967,600
Tyco International Ltd. .................................... 8,000 758,000
Medical Products -- 3.1%
Abbott Laboratories, Inc. .................................. 34,400 1,565,200
Baxter International, Inc................................... 16,300 988,187
Boston Scientific Corp.+.................................... 21,400 940,263
Guidant Corp. .............................................. 17,200 884,725
Metals & Minerals -- 0.8%
Alcoa, Inc. ................................................ 19,100 1,181,813
Retail -- 5.2%
Gap, Inc.................................................... 43,125 2,172,422
Home Depot, Inc. ........................................... 23,000 1,482,062
Safeway, Inc.+.............................................. 15,300 757,350
Staples, Inc.+.............................................. 19,500 603,281
Wal-Mart Stores, Inc. ...................................... 47,200 2,277,400
Software -- 4.5%
Automatic Data Processing, Inc. ............................ 30,400 1,337,600
Computer Sciences Corp.+.................................... 16,900 1,169,269
Electronic Data Systems Corp.+.............................. 7,400 418,562
Microsoft Corp.+............................................ 37,900 3,418,106
</TABLE>
- ---------------------
36
<PAGE> 38
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
CORE EQUITY (continued)
Telephone -- 4.9%
AT&T Corp. ................................................. 15,200 $ 848,350
Bell Atlantic Corp. ........................................ 14,900 974,088
MCI WorldCom, Inc.+......................................... 28,500 2,452,781
SBC Communications, Inc. ................................... 45,200 2,621,600
Transportation -- 0.6%
CSX Corp. .................................................. 17,500 792,969
-------------
87,468,425
-------------
TOTAL COMMON STOCK (cost $50,930,588)....................... 88,413,744
-------------
PRINCIPAL
BONDS & NOTES -- 31.0% AMOUNT
-----------------------------------------------------------------------------------------
CORE BONDS -- 31.0%
AEROSPACE & MILITARY TECHNOLOGY -- 0.8%
Northrop Grumman Corp. 8.63% 2004........................... $ 1,000,000 1,064,320
ASSET-BACKED SECURITIES -- 1.7%
Aesop Funding II LLC 6.22% 2001*............................ 1,000,000 997,360
Chase Manhattan Auto Owner Trust 5.70% 2001................. 700,000 700,644
Honda Auto Receivables Trust 5.95% 2003..................... 380,389 379,940
Nissan Auto Receivables Grantor 6.15% 2003.................. 340,491 340,596
CONSUMER DISCRETIONARY -- 0.7%
CVS Corp. 5.50% 2004........................................ 1,000,000 971,690
CONSUMER STAPLES -- 0.5%
Coca-Cola Bottling Co. 6.38% 2004........................... 680,000 645,157
ENERGY -- 0.7%
Husky Oil Ltd. 7.13% 2006................................... 1,000,000 941,460
FINANCE -- 5.7%
Bankers Trust New York Corp. 8.25% 2005..................... 1,000,000 1,052,444
Cit Group, Inc. 5.50% 2004.................................. 1,000,000 954,320
First Financial Caribbean Corp. 7.84% 2006.................. 1,000,000 977,870
General Electric Capital Corp. 6.50% 2006................... 1,000,000 985,950
General Motors Acceptance Corp. 5.63% 2001.................. 1,000,000 990,300
Lumbermans Mutual Casualty Co. 9.15% 2026................... 1,000,000 1,084,180
Security Benefit Life Co. 8.75% 2016........................ 1,000,000 993,800
Sprint Capital Corp. 6.88% 2028............................. 1,000,000 906,620
INDUSTRIAL & COMMERCIAL -- 2.1%
Cummins Engine Co., Inc. 6.25% 2003......................... 1,000,000 967,980
Diageo Capital PLC 6.13% 2005............................... 1,000,000 968,900
Federal Express Corp. 6.72% 2022............................ 999,713 954,135
MORTGAGE-RELATED SECURITIES -- 1.5%
CS First Boston Mortgage Securities Corp. 6.40% 2035........ 363,199 362,128
CS First Boston Mortgage Securities Corp. 7.24% 2029........ 1,000,000 1,001,860
Morgan Stanley Capital I, Inc. 6.25% 2007................... 791,918 776,864
NON-U.S. GOVERNMENT OBLIGATIONS -- 0.7%
Quebec Province Canada 8.80% 2003........................... 1,000,000 1,075,660
U.S. GOVERNMENT & AGENCIES -- 13.8%#
Federal Home Loan Bank 5.13% 2003........................... 4,000,000 3,852,480
Federal Home Loan Mortgage Corp. 6.50% 2010-2025............ 1,418,745 1,374,367
Federal National Mortgage Association 6.50% 2013-2028....... 5,582,678 5,443,091
</TABLE>
---------------------
37
<PAGE> 39
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
-----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCIES (continued)
Government National Mortgage Association 6.50% 2023......... $ 3,265,411 $ 3,139,889
United States Treasury Bonds 5.25% 2029..................... 2,000,000 1,796,880
United States Treasury Bonds 5.50% 2028..................... 4,000,000 3,662,480
UTILITIES -- 2.8%
AT&T Corp. 5.63% 2004....................................... 850,000 822,486
Niagara Mohawk Power Corp. 5.88% 2002....................... 1,250,000 1,228,900
United States West Capital Funding, Inc. 6.38% 2008......... 1,000,000 940,880
Worldcom, Inc. 6.40% 2005................................... 1,000,000 976,780
-------------
TOTAL BONDS & NOTES (cost $44,442,286)...................... 43,332,411
-------------
TOTAL INVESTMENT SECURITIES (cost $95,372,874).............. 131,746,155
-------------
SHORT-TERM SECURITIES -- 1.4%
-----------------------------------------------------------------------------------------
CORPORATE SHORT-TERM NOTES -- 0.8%
Fleet Mortgage Group, Inc. 6.50% due 6/15/2000.............. 1,000,000 1,006,020
Mobil Oil Corp. 9.17% due 2/29/2000......................... 165,875 168,122
-------------
TOTAL CORPORATE SHORT-TERM NOTES (cost $1,165,453).......... 1,174,142
-------------
U.S. GOVERNMENT -- 0.6%
United States Treasury Bills 4.52% due 10/26/99
(cost $769,545)........................................... 769,545
-------------
TOTAL SHORT-TERM SECURITIES (cost $1,934,998)............... 1,943,687
-------------
REPURCHASE AGREEMENT -- 4.4%#
-----------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (See Note 3)
(cost $6,175,000)..................................... 6,175,000
-------------
TOTAL INVESTMENTS --
(cost $103,482,872) 99.9% 139,864,842
Other assets less liabilities -- 0.1 169,832
----- -------------
NET ASSETS -- 100.0% $140,034,674
===== =============
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
@ Security represents an investment in an affiliated company
# The security or a portion thereof represents collateral for the
following open future contracts:
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
-----------------------------------------------------------------------------
NUMBER OF EXPIRATION VALUE AT
CONTRACTS DESCRIPTION DATE TRADE DATE
-----------------------------------------------------------------------------
<C> <S> <C> <C>
32 Short S&P 500 -- Chicago
Mercantile Exchange..................... July 1999 $10,515,127
12 Long Russell 2000 -- Chicago
Mercantile Exchange..................... July 1999 2,623,921
20 Long U.S. Treasury Bond -- Chicago
Board of Trade.......................... July 1999 2,320,671
Net Unrealized Depreciation......................................
<CAPTION>
OPEN FUTURES CONTRACTS
--------- -----------------------------
UNREALIZED
NUMBER OF VALUE AS OF APPRECIATION/
CONTRACTS JUNE 30, 1999 DEPRECIATION
--------- -----------------------------
<C> <C> <C>
32 Short
$11,053,600 $(538,473)
12 Long
2,772,000 148,079
20 Long
2,318,125 (2,546)
----------
$(392,940)
==========
</TABLE>
See Notes to Financial Statements
- ---------------------
38
<PAGE> 40
- ---------------------
ANCHOR SERIES TRUST
STRATEGIC MULTI-ASSET
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 62.1% SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CAPITAL APPRECIATION -- 18.1%
Broadcasting & Media -- 4.1%
AT&T Corp.-Liberty Media Group, Inc., Class A+@............. 11,400 $ 418,950
America Online, Inc.+....................................... 1,200 132,600
American Tower Corp., Class A+.............................. 10,600 254,400
Clear Channel Communications, Inc.+......................... 1,300 89,619
Crown Castle International Corp.+........................... 11,000 228,937
EchoStar Communications Corp., Class A+..................... 2,000 306,875
Getty Images, Inc.+......................................... 10,000 188,750
Outdoor Systems, Inc.+...................................... 4,200 153,300
Scripps (E.W) Co., Class A.................................. 2,500 118,906
United International Holdings, Inc., Class A+............... 500 33,813
Univision Communications, Inc., Class A+.................... 1,500 99,000
Business Services -- 1.9%
Comfort Systems USA, Inc.+.................................. 6,500 117,000
Iron Mountain, Inc.+........................................ 6,050 173,181
Metzler Group, Inc.+........................................ 6,200 171,275
NCO Group, Inc.+............................................ 6,300 239,400
Pegasus Systems, Inc. ...................................... 2,900 108,569
Pierce Leahy Corp. ......................................... 4,700 116,031
Communication Equipment -- 1.3%
ADC Telecommunications, Inc.+............................... 2,000 91,125
Gilat Satellite Networks Ltd.+.............................. 3,100 162,750
Motorola, Inc. ............................................. 1,700 161,075
QUALCOMM, Inc. ............................................. 1,700 243,950
Computers & Business Equipment -- 0.2%
Adaptec, Inc.+.............................................. 3,000 105,937
Drugs -- 2.0%
Astrazeneca PLC ADR......................................... 6,100 239,044
Genzyme Surgical Products+ ................................. 1 3
Genzyme Corp.+.............................................. 8,300 402,550
Gilead Sciences, Inc.+...................................... 2,500 130,625
Human Genome Sciences, Inc.+................................ 3,300 130,350
Pharmacia & Upjohn, Inc. ................................... 1,500 85,219
Electronics -- 1.7%
Analog Devices, Inc.+....................................... 4,000 200,750
Flextronics International Ltd.+............................. 3,500 194,250
General Cable Corp.+........................................ 9,950 159,200
Texas Instruments, Inc. .................................... 2,000 290,000
Energy Services -- 0.5%
Santa Fe International Corp. ............................... 7,500 172,500
Transocean Offshore, Inc. .................................. 2,300 60,375
Financial Services -- 0.4%
Associates First Capital Corp. ............................. 1,000 44,313
Heller Financial, Inc., Class A............................. 4,500 125,156
</TABLE>
---------------------
39
<PAGE> 41
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CAPITAL APPRECIATION (continued)
Health Services -- 0.5%
Covance, Inc.+.............................................. 3,500 $ 83,781
Stewart Enterprises, Inc., Class A.......................... 9,400 136,888
Insurance -- 0.8%
Ace Co., Ltd. ADR........................................... 7,000 197,750
American General Corp. ..................................... 2,300 173,362
Leisure & Tourism -- 0.2%
Ryanair Holdings PLC ADR+................................... 1,900 100,700
Medical Products -- 0.1%
Ocular Sciences, Inc.+...................................... 1,500 26,063
Retail -- 0.5%
Bed Bath & Beyond, Inc.+.................................... 6,500 250,250
Software -- 2.4%
Ask Jeeves, Inc. ........................................... 100 1,400
Avant Corp.+................................................ 12,500 157,812
BISYS Group, Inc.+.......................................... 3,200 187,200
BMC Software, Inc.+......................................... 1,500 81,000
First Data Corp. ........................................... 4,500 220,219
Fundtech Ltd.+.............................................. 5,000 129,688
Policy Management Systems Corp.+............................ 2,300 69,000
Rational Software Corp.+.................................... 4,500 148,219
Sterling Software, Inc.+.................................... 7,500 200,156
Telephone -- 0.8%
Colt Telecom Group PLC+..................................... 2,300 48,145
Intermedia Communications, Inc.+............................ 7,900 237,000
McLeod USA, Inc. ........................................... 1,900 104,500
Transportation -- 0.7%
Atlas Air, Inc.+............................................ 6,100 196,725
Werner Enterprises, Inc. ................................... 7,500 155,625
------------
8,855,261
------------
CORE EQUITY -- 16.5%
Aerospace & Military Technology -- 0.8%
United Technologies Corp. .................................. 5,600 401,450
Automotive -- 0.5%
Delphi Automotive Systems Corp. ............................ 6,597 122,457
General Motors Corp. ....................................... 2,000 132,000
Banks -- 1.4%
Citigroup, Inc. ............................................ 7,350 349,125
National City Corp. ........................................ 5,400 353,700
Broadcasting & Media -- 0.7%
Gannett, Inc. .............................................. 4,900 349,738
Communication Equipment -- 0.7%
Lucent Technologies, Inc. .................................. 5,400 364,163
Computers & Business Equipment -- 1.4%
Hewlett Packard Co. ........................................ 3,500 351,750
International Business Machines Corp. ...................... 1,600 206,800
Seagate Technology, Inc. +.................................. 4,500 115,312
Drugs -- 0.4%
Pharmacia & Upjohn, Inc. Depository Shares.................. 3,070 169,973
</TABLE>
- ---------------------
40
<PAGE> 42
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORE EQUITY (continued)
Electric Utilities -- 0.7%
Gpu, Inc. .................................................. 7,900 $ 333,281
Electronics -- 0.8%
Altera Corp.+............................................... 2,000 73,625
Intel Corp. ................................................ 3,800 226,100
Xilinx, Inc.+............................................... 1,900 108,775
Financial Services -- 0.2%
MBNA Corp. ................................................. 2,700 82,688
Food, Beverage & Tobacco -- 0.8%
Philip Morris Cos., Inc. ................................... 9,200 369,725
Health Services -- 0.9%
Cardinal Health, Inc., Class A.............................. 2,800 179,550
United HealthCare Corp. .................................... 4,500 281,812
Household Products -- 0.7%
Kimberly-Clark Corp. ....................................... 6,000 342,000
Insurance -- 1.1%
Marsh & Mclennan Cos., Inc. ................................ 2,400 181,200
The Hartford Financial Services Group, Inc. ................ 5,800 338,212
Machinery -- 1.0%
Caterpillar, Inc. .......................................... 3,500 210,000
Corning, Inc. .............................................. 4,300 301,537
Medical Products -- 0.4%
Boston Scientific Corp.+.................................... 4,200 184,538
Retail -- 1.7%
Gap, Inc. .................................................. 9,450 476,044
Wal-Mart Stores, Inc. ...................................... 7,400 357,050
Software -- 0.8%
Microsoft Corp.+............................................ 4,300 387,806
Telephone -- 1.5%
Ameritech Corp. ............................................ 4,900 360,150
Bellsouth Corp. ............................................ 3,800 178,125
Sprint Corp. ............................................... 3,600 190,125
------------
8,078,811
------------
GLOBAL CORE EQUITY -- 27.5%
AUSTRALIA -- 1.1%
Australia & New Zealand Banking Group Ltd. (Finance)........ 20,311 149,156
Broken Hill Proprietary Co., Ltd. (Materials)............... 15,179 175,596
News Corp., Ltd. (Information & Entertainment).............. 15,867 135,202
Pasminco Ltd. (Materials)................................... 93,071 102,623
BRAZIL -- 0.5%
Embratel Participacoes SA ADR (Utilities)................... 4,000 55,500
Petroleo Brasileiros SA (Energy)............................ 415,200 64,490
Telecomunicacoes Brasileiras SA -- Telebras ADR+
(Information Technology).................................. 2,700 169
Telecomunicacoes Brasileiras SA -- Telebras ADR (Information
Technology)............................................... 1,000 90,187
Telesp Participacpoes SA ADR+ (Information &
Entertainment)............................................ 1,900 43,463
</TABLE>
---------------------
41
<PAGE> 43
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL CORE EQUITY (continued)
CANADA -- 0.7%
Alcan Aluminum Ltd. (Materials)............................. 3,800 $ 120,645
Canadian Imperial Bank Toronto (Finance).................... 8,300 197,847
DENMARK -- 0.2%
Unidanmark A/S, Class A (Finance)........................... 1,410 93,841
FINLAND -- 0.7%
Nokia AB Oy, Series A (Information Technology).............. 2,942 257,785
Upm-Kymmene Oy (Materials).................................. 3,300 94,570
FRANCE -- 3.8%
AXA SA de CV (Finance)...................................... 790 96,340
Accor SA (Information & Entertainment)...................... 1,200 301,215
Alcatel Alsthom, Inc. (Information Technology).............. 840 118,197
Banque Nationale de Paris (Finance)+........................ 1,219 101,534
Compagnie Financiere de Paribas SA (Finance)................ 2,570 287,977
Compagnie de St. Gobain (Materials)......................... 900 143,340
Establissements Economiques du Casino Guichard-Perrachon SA
(Consumer Discretionary).................................. 670 58,707
Michelin SA, Class B (Consumer Discretionary)............... 2,400 98,145
Societe Generale (Finance).................................. 800 140,938
Suez Lyonnaise des Eaux (Utilities)......................... 1,030 185,704
Total SA, Class B (Energy).................................. 1,762 227,226
Vivendi SA (Utilities)...................................... 1,320 106,885
GERMANY -- 2.6%
Bayer AG (Healthcare)....................................... 5,200 216,561
DaimlerChrysler AG (Consumer Discretionary)................. 1,000 86,591
Deutsche Bank AG (Finance).................................. 1,700 103,657
Mannesmann AG (Information Technology)...................... 1,287 191,974
Munchener Ruckversicherungs AG (Finance)+................... 1,200 222,045
Siemens AG (Industrial & Commercial)........................ 3,960 305,346
Veba AG (Utilities)......................................... 2,300 135,145
HONG KONG -- 0.7%
Cheung Kong (Holdings) Ltd. (Industrial & Commercial)....... 23,000 204,547
China Telecom (Hong Kong) Ltd. (Information &
Entertainment)............................................ 24,500 68,050
New World Development Co., Ltd. (Real Estate)............... 29,000 86,904
INDONESIA -- 0.2%
Asia Pulp & Paper Ltd. ADR (Materials)+..................... 11,200 107,800
IRELAND -- 0.3%
Allied Irish Banks PLC (Finance)............................ 12,586 166,645
ITALY -- 0.2%
Telecom Italia SpA (Utilities).............................. 10,200 105,988
JAPAN -- 5.4%
Bank of Tokyo-Mitsubishi Ltd. (Finance)..................... 12,000 170,918
Dai Nippon Printing Co., Ltd. (Information &
Entertainment)............................................ 3,000 47,987
Eisai Co., Ltd. (Healthcare)................................ 9,000 177,441
Fujisawa Pharmaceutical Co. (Healthcare).................... 6,000 97,710
Hitachi Ltd. (Information & Entertainment)+................. 18,000 168,885
Mabuchi Motor Co., Ltd. (Industrial & Commercial)........... 600 55,799
Matsumotokiyoshi (Consumer Discretionary)................... 3,900 233,736
Matsushita Electric Industrial Co., Ltd. (Information &
Entertainment)+........................................... 3,000 58,279
</TABLE>
- ---------------------
42
<PAGE> 44
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL CORE EQUITY (continued)
JAPAN (continued)
Nippon Telegraph & Telephone Corp. (Utilities).............. 11 $ 128,214
NTT Mobile Communications Network, Inc. (Information &
Entertainment)+........................................... 8 107,134
NTT Mobile Communications Network, Inc. (Information &
Entertainment)............................................ 2 27,114
Olympus Optical Co. (Healthcare)............................ 14,000 207,043
Rohm Co., Ltd. (Information Technology)..................... 1,000 156,650
Sanwa Bank Ltd. (Finance)................................... 5,000 49,227
Sony Corp. (Information & Entertainment).................... 2,900 312,846
Takefuji Corp. (Finance).................................... 3,800 392,974
Tokyo Style Co., Ltd. (Consumer Discretionary).............. 5,000 53,732
Toshiba Corp. (Information Technology)...................... 27,000 192,618
MEXICO -- 0.2%
Fomento Economico Mexicano SA, Class B ADR (Consumer
Staples).................................................. 900 35,888
Panamerican Beverages, Inc., Class A ADR (Consumer
Staples).................................................. 2,400 57,150
NETHERLANDS -- 2.4%
Gucci Group NV (Consumer Discretionary)..................... 2,800 196,000
ING Groep NV (Finance)...................................... 1,500 81,179
Koninklijke Ahold NV (Consumer Discretionary)............... 2,754 94,821
Koninklijke (Royal) Philips Electronics NV (Information
Technology)+.............................................. 1,564 154,212
KPN NV (Utilities).......................................... 2,537 118,995
Royal Dutch Petroleum Co. (Energy).......................... 3,900 228,354
Unilever NV CVA (Consumer Staples).......................... 4,707 317,092
NEW ZEALAND -- 0.3%
Telecommunications Corp. of New Zealand Ltd. ADR
(Utilities)............................................... 28,318 121,443
PHILIPPINES -- 0.2%
Metro Bank & Trust Co. (Finance)............................ 7,000 69,908
SINGAPORE -- 0.3%
OverSeas Chinese Banking Corp. Ltd. (Finance)............... 7,000 58,402
OverSeas Union Bank (Finance)............................... 22,000 105,993
SPAIN -- 1.7%
Banco Popular Espanol SA (Finance).......................... 1,800 129,423
Banco Santander Central Hispano SA (Finance)................ 16,000 166,586
Endesa SA (Utilities)....................................... 5,350 114,051
Repsol SA (Energy).......................................... 7,100 146,015
Telefonica SA (Utilities)................................... 5,687 274,538
SWEDEN -- 1.2%
Ericsson L.M. Telecommunications Co., Class B (Information
Technology)............................................... 11,280 362,092
Hennes & Mauritz AB, Series B (Consumer Discretionary)+..... 3,880 95,983
Nordbanken AB (Finance)..................................... 21,000 122,947
SWITZERLAND -- 1.3%
Alusuisse Lonza Group AG (Materials)........................ 50 58,260
Credit Suisse Group (Financial Services).................... 1,170 202,386
Nestle SA (Consumer Staples)+............................... 140 252,164
Swisscom AG (Utilities)..................................... 320 120,378
UNITED KINGDOM -- 3.5%
BP Amoco PLC (Energy)....................................... 19,284 345,303
British Telecommunications PLC (Utilities).................. 65 1,088
</TABLE>
---------------------
43
<PAGE> 45
<TABLE>
<CAPTION>
COMMON STOCK (CONTINUED) SHARES VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL CORE EQUITY (continued)
UNITED KINGDOM (continued)
HSBC Holdings PLC (Finance)................................. 4,800 $ 175,083
Imperial Chemical Industries PLC (Materials)................ 4,700 46,414
National Westminster Bank PLC (Finance)..................... 12,200 258,647
Prudential Corp. PLC (Finance).............................. 7,400 109,061
Reckitt & Colman PLC (Consumer Discretionary)............... 7,400 77,276
Smith & Nephew PLC (Healthcare)............................. 16,576 50,166
SmithKline Beecham PLC (Healthcare)......................... 32,851 427,196
South African Brew (Consumer Staples)+*..................... 4,100 35,997
Vodafone Group PLC (Information & Entertainment)............ 10,489 206,335
------------
13,503,668
------------
TOTAL COMMON STOCK (cost $24,737,241)....................... 30,437,740
------------
PREFERRED STOCK -- 0.2%
--------------------------------------------------------------------------------------------
BRAZIL -- 0.1%
Companhia Cerrejaria Brahma (Consumer Staples).............. 103,100 58,174
NETHERLANDS -- 0.1%
Unilever NV (Consumer Staples)+............................. 4,600 24,658
------------
TOTAL PREFERRED STOCK (cost $83,770)........................ 82,832
------------
PRINCIPAL
BONDS & NOTES -- 32.7% AMOUNT
--------------------------------------------------------------------------------------------
CORE BONDS -- 22.7%
ASSET-BACKED SECURITIES -- 0.4%
Daimler Benz Vehicle Owner Trust 5.23% 2001................. $ 65,000 64,934
World Omni Automobile Lease Trust 6.18% 2003................ 114,514 114,621
AUTOMOTIVE -- 0.3%
Accuride Corp., Series B 9.25% 2008......................... 65,000 63,212
Federal Mogul Corp. 8.80% 2007@............................. 70,000 70,355
LDM Technologies, Inc., Series B 10.75% 2007 (1)............ 35,000 34,650
CHEMICALS -- 1.0%
ARCO Chemical Co. 9.80% 2020................................ 85,000 81,328
Acetex Corp. 9.75% 2003..................................... 75,000 70,313
Lyondell Chemical Co. 9.88% 2007*........................... 120,000 122,100
Pioneer Americas Acquisition Corp. 9.25% 2007............... 25,000 21,438
Royster Clark, Inc. 10.25% 2009*............................ 60,000 60,150
Sovereign Speciality Chemicals Corp. 9.50% 2007............. 55,000 55,137
Texas Petrochemicals Corp. 11.13% 2006...................... 100,000 90,500
COMMUNICATIONS & MEDIA -- 2.9%
AMC Entertainment, Inc. 9.50% 2009 -- 2011.................. 225,000 215,250
Allbritton Communications Co. 9.75% 2007.................... 50,000 50,250
American Media Operations, Inc. 10.25% 2009*................ 50,000 50,062
Benedek Communications Corp. 13.25% 2006(1)................. 75,000 61,781
Cablevision SA 13.75% 2009*................................. 40,000 36,900
Century Communications Corp., Series B zero coupon
2008(2)................................................... 150,000 66,000
Charter Communications Holdings 8.63% 2009*................. 75,000 72,000
Classic Cable, Inc. 9.88% 2008*............................. 45,000 46,913
Echostar DBS Corp. 9.38% 2009*.............................. 200,000 204,000
Fox Liberty Networks LLC 9.75% 2007(1)...................... 100,000 78,000
Frontiervision Holding LP 11.88% 2007(1).................... 35,000 30,275
Granite Broadcasting Corp. 8.88% 2008....................... 15,000 14,550
</TABLE>
- ---------------------
44
<PAGE> 46
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORE BONDS (continued)
COMMUNICATIONS & MEDIA (continued)
LIN Holdings Corp. 10.00% 2008(1)........................... $ 200,000 $ 132,000
Loews Cineplex Entertainment Corp. 8.88% 2008............... 125,000 119,375
Multicanal 13.13% 2009*..................................... 90,000 82,800
NTL Communications Corp. 12.38% 2008(1)..................... 75,000 51,094
Sullivan Graphics, Inc. 12.75% 2005......................... 100,000 103,000
CONSUMER DISCRETIONARY -- 0.9%
Bell Sports, Inc. 11.00% 2008............................... 100,000 100,625
Duane Reade, Inc. 9.25% 2008................................ 150,000 155,625
Revlon Worldwide Corp. zero coupon 2001(2).................. 75,000 50,063
True Temper Sports, Inc. 10.88% 2008*....................... 155,000 132,137
ENERGY -- 1.5%
Abraxas Petroleum Corp. 11.50% 2004......................... 100,000 63,500
Costilla Energy, Inc. 10.25% 2006........................... 130,000 38,675
Dailey International, Inc. 9.50% 2008....................... 150,000 95,250
Kelley Oil & Gas Corp. 14.00% 2003*......................... 100,000 101,625
P&L Coal Holdings Corp. 9.63% 2008.......................... 250,000 251,875
R&B Falcon Corp. 11.38% 2009*............................... 80,000 82,600
Tuboscope Vetco International, Inc. 7.50% 2008.............. 100,000 87,778
FINANCE -- 1.2%
AMRESCO, Inc. 9.88% 2005.................................... 50,000 38,500
Arcadia Financial Ltd. 11.50% 2007.......................... 40,000 34,700
General Motors Acceptance Corp. 6.85% 2004.................. 50,000 50,540
Prudential Funding Corp. 5.06% 2000(3)...................... 200,000 199,500
Residential Funding Mortgage Securities 6.00% 2009.......... 19,106 19,058
Resource America, Inc. 12.00% 2004.......................... 85,000 76,500
Western Financial Savings Bank 8.88% 2007................... 225,000 184,500
FOOD & LODGING -- 1.1%
Aurora Foods, Inc., Series D 9.88% 2007..................... 25,000 26,000
B & G Foods Corp. 9.63% 2007................................ 100,000 93,750
Chiquita Brands International, Inc. 10.00% 2009............. 75,000 75,000
Delaware Monte Foods Co., Series B 12.50% 2007(1)........... 65,000 48,669
Nash Finch Co. 8.50% 2008................................... 150,000 135,000
Purina Mills, Inc. 9.00% 2010............................... 75,000 59,062
Vlasic Foods International, Inc. 10.25% 2009................ 100,000 98,500
GAMING -- 0.6%
Aztar Corp. 8.88% 2007*..................................... 75,000 71,813
Hollywood Casino Corp. 11.25% 2007*......................... 110,000 110,275
Station Casinos, Inc. 8.88% 2008............................ 100,000 97,750
HEALTHCARE -- 0.6%
Alaris Medical, Inc. 11.13% 2008(1)......................... 100,000 54,875
MEDIQ, Inc/PRN Life Support Services 11.00% 2008............ 100,000 79,250
Triad Hospitals Holdings, Inc. 11.00% 2009*................. 55,000 55,963
Universal Hospital Services, Inc. 10.25% 2008............... 100,000 88,750
INDUSTRIAL & COMMERCIAL -- 1.0%
Alestra S De RL De CV 12.13% 2006*.......................... 125,000 118,437
Dunlop Standard Aerospace Holdings PLC 11.88% 2009*......... 85,000 85,213
K & F Industries, Inc., Series B 9.25% 2007................. 125,000 123,125
Moog, Inc., Series B 10.00% 2006............................ 70,000 72,800
ZSC Specialty Chemicals PLC 11.00% 2009*.................... 100,000 100,750
</TABLE>
---------------------
45
<PAGE> 47
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORE BONDS (continued)
INFORMATION TECHNOLOGY -- 1.0%
Advanced Micro Devices, Inc. 11.00% 2003.................... $ 100,000 $ 101,000
DecisionOne Holdings Corp. 11.50% 2008(1)................... 150,000 1,875
Exodus Communications, Inc. 11.25% 2008..................... 75,000 78,000
Fairchild Semiconductor Corp. 10.13% 2007................... 100,000 97,000
Fairchild Semiconductor Corp. 10.38% 2007*.................. 30,000 29,700
Fisher Scientific International, Inc. 9.00% 2008............ 50,000 47,500
Telecommunications Techniques 9.75% 2008.................... 140,000 140,350
MATERIALS -- 0.6%
Acindar Industria Argentina de Aceros SA 11.25% 2004........ 55,000 39,050
Armco, Inc. 8.88% 2008...................................... 50,000 50,625
CSN Iron SA 9.13% 2007*..................................... 100,000 77,000
Consumers Packaging, Inc. 9.75% 2007*....................... 55,000 53,625
Falcon Building Products, Inc. 10.50% 2007(1)............... 50,000 33,500
Nortek, Inc. 9.25% 2007..................................... 50,000 50,125
MULTI-INDUSTRY -- 0.4%
Grove Worldwide LLC 9.25% 2008.............................. 70,000 63,000
Neenah Corp. 11.13% 2007*................................... 20,000 19,775
WESCO Distribution, Inc., Series B 9.13% 2008............... 70,000 67,900
Werner Holding Delaware, Inc. 10.00% 2007................... 30,000 29,475
MUNICIPAL BONDS -- 0.3%
Austin Texas Rental Car Special Facility Revenue 6.13%
2007...................................................... 50,000 48,022
Philadelphia Pennsylvania Authority For Industrial
Development Pension Funding 5.64% 2006.................... 40,000 38,089
Worcester MA 5.50% 2007..................................... 50,000 46,366
PAPER PRODUCTS -- 0.5%
American Pad & Paper Co. 13.00% 2005........................ 65,000 40,788
Doman Industries Ltd. 12.00% 2004*.......................... 75,000 72,187
Gaylord Container Corp. 9.38% 2007.......................... 50,000 46,500
Packaging Corp. of America 9.63% 2009*...................... 40,000 40,300
Pindo Deli Finance Mauritius Ltd. 10.75% 2007............... 100,000 70,250
REAL ESTATE -- 0.7%
Avalon Bay Communitys, Inc. 6.50% 2003...................... 75,000 73,219
Engle Homes, Inc., Series C 9.25% 2008...................... 45,000 41,850
Spieker Properties LP 6.80% 2004............................ 55,000 54,345
Toll Corp. 8.13% 2009....................................... 100,000 94,750
Webb Delaware Corp. 10.25% 2010............................. 75,000 75,375
TELECOMMUNICATIONS -- 5.1%
BTI Telecommunications Corp. 10.50% 2007.................... 125,000 107,500
Clearnet Communications, Inc. 10.13% 2009(1)................ 125,000 70,469
Concentric Network Corp. 12.75% 2007........................ 150,000 154,875
Covad Communications Group, Inc. 12.50% 2009*............... 50,000 48,125
Crown Castle International Corp. 10.63% 2007(1)............. 50,000 34,688
ESpire Communications, Inc. 10.63% 2008(1).................. 150,000 54,000
GCI, Inc. 9.75% 2007........................................ 200,000 200,000
GST Telecommunications, Inc. 12.75% 2007.................... 60,000 64,875
GST Telecommunications, Inc. 10.50% 2008*(1)................ 105,000 59,325
Globalstar LP 10.75% 2004................................... 75,000 49,500
Hyperion Telecommunications, Inc. 13.00% 2003(1)............ 90,000 74,250
ITC DeltaCom, Inc. 9.75% 2008............................... 25,000 25,750
IXC Communications, Inc. 9.00% 2008......................... 75,000 71,813
Intermedia Communications, Inc. 8.88% 2007.................. 225,000 210,375
Iridium LLC 10.88% 2005..................................... 20,000 3,900
Iridium LLC 11.25% 2005..................................... 75,000 14,625
</TABLE>
- ---------------------
46
<PAGE> 48
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORE BONDS (continued)
TELECOMMUNICATIONS (continued)
KMC Telecom Holdings, Inc. 12.50% 2008 ..................... $ 330,000 $ 176,137
MGC Communications, Inc., Series B 13.00% 2004.............. 25,000 22,750
McLeodUSA, Inc. 9.50% 2008.................................. 75,000 75,187
Nextel Communications, Inc. 9.75% 2007(1)................... 450,000 313,875
Nextlink Communications, Inc. 9.45% 2008(1)................. 150,000 90,000
PSInet, Inc. 10.00% 2005.................................... 125,000 124,375
PSInet, Inc. 11.50% 2008.................................... 25,000 26,187
Paging Network, Inc. 10.13% 2007............................ 125,000 91,250
RCN Corp. 11.00% 2008(1).................................... 125,000 77,500
Time Warner Telecom, Inc. 9.75% 2008........................ 50,000 51,250
Verio, Inc. 11.25% 2008..................................... 150,000 157,125
Viatel, Inc. 11.25% 2008.................................... 80,000 81,200
U.S. GOVERNMENT & AGENCIES -- 2.2%@
Federal Home Loan Mortgage Corp. 6.00% 2029................. 87,851 82,608
Federal National Mortgage Association 6.38% 2007............ AUD 65,000 42,300
Federal National Mortgage Association 6.00% 2099............ 135,000 126,815
Government National Mortgage Association 6.00% 2009......... 111,442 108,725
Government National Mortgage Association 6.50% 2029......... 251,433 241,768
United States Treasury Bonds 6.25% 2023..................... 340,000 341,595
United States Treasury Bonds 10.75% 2003.................... 120,000 139,256
UTILITIES -- 0.4%
Energy Corp. America 9.50% 2007............................. 200,000 183,000
------------
11,139,535
------------
GLOBAL CORE BONDS -- 10.0%
ARGENTINA -- 0.4%
Disco SA 9.88% 2008......................................... 125,000 102,187
Republic of Argentina 11.75% 2009........................... 91,000 81,964
BERMUDA -- 0.2%
RSL Communications PLC 12.00% 2008.......................... 100,000 105,250
BRAZIL -- 0.3%
Aracruz Celulose SA 10.38% 2002*............................ 100,000 97,000
Federative Republic of Brazil 11.63% 2004................... 75,000 69,375
CANADA -- 1.2%
Government of Canada 7.25% 2003............................. CAD 170,000 122,726
Government of Canada 8.50% 2002............................. CAD 400,000 292,949
Province of Ontario 6.25% 2008.............................. NZD 330,000 162,750
Repap New Brunswick, Inc. 9.00% 2004........................ 35,000 32,463
CHILE -- 0.2%
SCL Terminal Aereo Santiago SA 6.95% 2012*.................. 100,000 93,117
FRANCE -- 1.5%
French Treasury Note B.T.A.N. 3.50% 2004.................... EUR 290,000 297,511
Government of France 6.00% 2025............................. EUR 100,000 111,126
Government of France 3.00% 2001............................. EUR 300,000 307,709
GERMANY -- 1.6%
Federal Republic of Germany 3.25% 2000...................... EUR 100,000 103,425
Federal Republic of Germany 6.25% 2024...................... EUR 573,000 661,441
</TABLE>
---------------------
47
<PAGE> 49
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (CONTINUED) AMOUNT VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GLOBAL CORE BONDS (continued)
ITALY -- 0.1%
Republic of Italy 6.50% 2027................................ EUR $ 36,151 $ 41,980
JAPAN -- 1.0%
Government of Japan 0.90% 2008.............................. JPY 65,500,000 495,499
MEXICO -- 0.8%
Petroleos Mexicanos 8.85% 2007.............................. 250,000 222,500
Satelites Mexicanos SA De CV 10.13% 2004.................... 100,000 79,750
United Mexican States 10.38% 2009........................... 100,000 100,375
SINGAPORE -- 1.0%
Government of Singapore 3.50% 2004.......................... SGD 680,000 395,055
Government of Singapore 5.63% 2008.......................... SGD 145,000 90,783
SUPRANATIONALS -- 0.3%
Euro Investment Bank 7.63% 2006............................. 90,000 155,184
SWEDEN -- 0.6%
Kingdom of Sweden 9.00% 2009................................ SEK 900,000 290,533
UNITED KINGDOM -- 0.8%
United Kingdom Treasury 7.75% 2006.......................... GBP 220,000 394,110
------------
4,906,762
------------
TOTAL BONDS & NOTES (cost $16,605,861)...................... 16,046,297
------------
<CAPTION>
FORWARD COMMITMENTS -- (0.5%)(4)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Government of New Zealand 7.00% 2009 settlement 10/12/99.... NZD (280,000) (152,215)
United Kingdom Treasury 8.00% 2021 settlement 8/10/99(3).... GBP (50,000) (112,814)
------------
TOTAL FORWARD COMMITMENTS (cost ($279,263))................. (265,029)
------------
WARRANTS -- 0.1%+ WARRANTS
--------------------------------------------------------------------------------------------
Asia Pulp & Paper Ltd. 7/27/00 (Materials).................. 2,240 5,880
KMC Telecom Holdings, Inc. 4/15/08
(Telecommunications)*(3).................................. 330 825
Siam Commercial Bank 5/31/02 (Finance)...................... 89,800 57,837
------------
TOTAL WARRANTS (cost $912).................................. 64,542
------------
TOTAL INVESTMENT SECURITIES (cost $41,148,521).............. 46,366,382
------------
PRINCIPAL
SHORT-TERM SECURITIES -- 3.4%@ AMOUNT VALUE
--------------------------------------------------------------------------------------------
CORPORATE SHORT TERM NOTES -- 2.0%
Co Op Centrale Rabobank 6.63% due 4/28/00................... $ 79,000 79,357
Enterprise Capital Funding Corp. 4.90% due 7/28/99.......... 284,000 282,956
General Electric Capital Corp. 4.85% due 7/30/99............ 200,000 199,219
Kingdom of Spain 6.50% due 9/29/99.......................... 160,000 160,288
Kittyhawk Funding Corp. 4.92% due 7/13/99................... 200,000 199,672
MCI Communications Corp. 7.13% due 1/20/00.................. 90,000 90,792
Companhia Vale do Rio Doce 5.06% due 12/31/99(1)(3)......... 2,000 0
------------
TOTAL CORPORATE SHORT-TERM NOTES (cost $1,019,170).......... 1,012,284
------------
</TABLE>
- ---------------------
48
<PAGE> 50
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM SECURITIES (CONTINUED) AMOUNT VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT -- 1.4%
United States Treasury Bills 4.53% due 8/26/99 (cost
$667,279)................................................. $ 675,000 $ 670,249
------------
TOTAL SHORT TERM SECURITIES (cost $1,686,449)............... 1,682,533
------------
REPURCHASE AGREEMENT -- 1.5%
--------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account@ (See Note 3)
(cost $725,000)....................................... 725,000
------------
TOTAL INVESTMENTS --
(cost $43,559,970) 99.5% 48,773,915
Other assets less liabilities -- 0.5 231,836
----- ------------
NET ASSETS -- 100.0% $49,005,751
===== ============
</TABLE>
-----------------------------
+ Non-income-producing securities
* Resale restricted to qualified institutional buyers
ADR -- American Depository Receipt
(1) Variable rate security; rate as of June 30, 1999
(2) Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
(3) Fair valued security, see Note 2
(4) Represents securities sold on a forward commitment basis to be
repurchased back on or before contracted settlement date
@ The security or a portion thereof represents collateral for the
following open futures and foreign currency contracts:
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
----------------------------------------------------------------------------------------------------------
VALUE AS OF UNREALIZED
NUMBER OF EXPIRATION VALUE AT JUNE 30, APPRECIATION/
CONTRACTS DESCRIPTION DATE TRADE DATE 1999 (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
5 Long IBEX Plus Index Futures --
Meff Renta Variable Exchange
(Madrid)........................... July 1999 $ 523,619 $ 525,319 $ 1,700
4 Short HANG SENG Index Futures --
Hong Kong Futures Exchange......... July 1999 354,045 349,276 4,769
2 Long EURO-BUND Futures --
Eurex Deutschland Exchange......... September 1999 235,751 227,732 (8,019)
4 Short S&P 500 Index Futures --
Chicago Mercantile Exchange........ September 1999 1,311,320 1,381,700 (70,380)
14 Long SPI Futures --
Sidney Futures Exchange............ September 1999 695,320 689,667 (5,653)
3 Long DAX Index Futures --
Eurex Deutschland Exchange......... September 1999 414,207 416,787 2,580
1 Short EURO-BUND Futures --
Eurex Deutschland Exchange......... September 1999 559 2,176 (1,617)
1 Short EURO-BUND Futures --
Eurex Deutschland Exchange......... September 1999 508 31 477
---------
Net Unrealized Depreciation.................................................. $(76,143)
=========
</TABLE>
---------------------
49
<PAGE> 51
<TABLE>
<CAPTION>
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
---------------------------------------------------------------
CONTRACT IN DELIVERY GROSS UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AUD 67,500 USD 44,672 07/06/99 $ 49
CAD 623,000 USD 428,768 07/06/99 5,643
*DKK 2,467,000 USD 343,306 07/07/99 1,097
*EUR 332,000 USD 357,292 07/07/99 14,876
CHF 551,600 USD 376,519 07/12/99 21,335
NZD 327,000 USD 173,735 07/12/99 566
USD 587,234 CAD 880,000 07/15/99 10,514
*GBP 630,000 USD 1,004,548 07/15/99 11,422
*NZD 318,000 USD 173,246 07/20/99 4,819
EUR 418,000 USD 448,190 07/22/99 16,608
SEK 2,615,000 USD 314,303 07/23/99 5,831
EUR 829,400 USD 872,280 07/28/99 15,558
EUR 212,000 USD 223,219 07/28/99 4,235
EUR 198,000 USD 208,920 07/28/99 4,397
EUR 479,600 USD 497,417 07/28/99 2,018
EUR 7,500 USD 7,799 07/28/99 52
*EUR 140,000 USD 148,652 08/06/99 3,944
*EUR 102,000 USD 108,382 08/06/99 2,952
*EUR 120,000 USD 124,728 08/06/99 692
*USD 149,435 JPY 18,359,600 08/06/99 3,138
*USD 108,944 JPY 13,340,000 08/06/99 1,915
JPY 81,050,000 USD 683,390 08/06/99 9,844
JPY 16,710,400 USD 141,087 08/06/99 2,220
JPY 17,750,000 USD 148,915 08/23/99 1,046
USD 148,732 SGD 252,000 08/23/99 105
EUR 44,000 USD 46,068 09/29/99 398
USD 84,716 PLN 340,000 09/29/99 171
GBP 348,000 USD 551,441 09/30/99 2,476
---------
147,921
---------
</TABLE>
<TABLE>
<CAPTION>
GROSS
UNREALIZED
DEPRECIATION
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
*USD 357,024 DKK 2,467,000 07/07/99 (14,815)
*USD 343,444 EUR 332,000 07/07/99 (1,028)
USD 374,042 EUR 345,000 07/12/99 (18,090)
SGD 831,000 USD 482,831 07/12/99 (5,997)
USD 1,891,725 EUR 1,742,000 07/15/99 (94,034)
*USD 1,019,214 GBP 630,000 07/15/99 (26,089)
*USD 139,138 AUD 207,000 07/20/99 (2,273)
*AUD 207,000 USD 136,326 07/20/99 (539)
USD 476,915 NZD 848,000 07/20/99 (27,774)
USD 448,773 SEK 3,736,000 07/22/99 (8,091)
USD 17,550 SEK 148,000 07/23/99 (91)
*USD 256,781 EUR 247,000 07/28/99 (1,645)
USD 679,410 EUR 639,000 08/06/99 (18,921)
USD 154,494 EUR 147,000 08/06/99 (2,550)
*USD 125,273 JPY 15,024,000 08/06/99 (420)
USD 700,019 AUD 1,057,000 09/30/99 (571)
----------
(222,928)
----------
Net Unrealized Depreciation........ $ (75,007)
==========
</TABLE>
----------------------------
* Represents open forward foreign currency contracts and offsetting
or partially offsetting open forward foreign currency contracts
that do not have additional market risk but have continued
counterparty settlement risk.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUD -- Australian Dollar EUR -- Euro Dollar PLN -- Polish Zloty
CAD -- Canadian Dollar GBP -- Pound Sterling SEK -- Swedish Krona
CHF -- Swiss Franc JPY -- Japanese Yen SGD -- Singapore Dollar
DKK -- Danish Krone NZD -- New Zealand Dollar USD -- United States Dollar
</TABLE>
See Notes to Financial Statements.
- ---------------------
50
<PAGE> 52
(This page intentionally left blank)
---------------------
51
<PAGE> 53
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value*............................ $ -- $13,219,245 $375,013,446 $21,164,088
Short-term securities*...................................... 59,833,851 -- 24,952,511 --
Repurchase agreements (cost equals market).................. 3,825,000 1,500,000 21,125,000 160,000
Cash........................................................ 2,227 2,942 4,402 3,755
Foreign currency............................................ -- -- -- --
Receivables for --
Fund shares sold.......................................... 275,060 86 1,658,179 1,028,894
Dividends and accrued interest............................ 157,078 280,868 4,611,151 548,474
Sales of investments...................................... -- -- -- 164,135
Variation margin on futures contracts..................... -- -- -- --
Foreign currency contracts................................ -- -- -- --
Prepaid expenses............................................ 17,053 8,005 39,663 8,170
Unrealized appreciation on forward foreign currency
contracts................................................. -- -- -- --
--------------------------------------------------------
64,110,269 15,011,146 427,404,352 23,077,516
--------------------------------------------------------
LIABILITIES:
Payables for --
Fund shares redeemed...................................... 1,922,062 -- 785,161 70,571
Management fees........................................... 27,451 7,714 205,437 12,889
Purchases of investments.................................. -- 622 -- 76,223
Foreign currency contracts................................ -- -- -- --
Variation margin on futures contracts..................... -- -- -- --
Other accrued expenses...................................... 14,320 20,222 52,977 27,888
Unrealized depreciation on forward foreign currency
contracts................................................. -- -- -- --
Due to custodian............................................ -- -- -- --
--------------------------------------------------------
1,963,833 28,558 1,043,575 187,571
--------------------------------------------------------
NET ASSETS.................................................. $62,146,436 $14,982,588 $426,360,777 $22,889,945
========================================================
Shares of beneficial interest outstanding (unlimited shares
authorized)............................................... 62,146,436 1,166,601 29,707,034 3,216,922
Net asset value per share................................... $ 1.00 $ 12.84 $ 14.35 $ 7.12
========================================================
COMPOSITION OF NET ASSETS:
Capital paid in............................................. $62,146,436 $15,007,254 $403,556,835 $27,920,601
Accumulated undistributed net investment income (loss)...... (1,211) 1,651,379 27,320,646 3,967,180
Accumulated undistributed net realized gain (loss) on
investments, futures contracts and foreign currency....... 1,211 (1,348,984) 6,141,037 (6,700,245)
Unrealized appreciation (depreciation) of investments....... -- (327,061) (10,657,741) (2,297,591)
Unrealized foreign exchange gain (loss) on other assets and
liabilities............................................... -- -- -- --
Unrealized appreciation (depreciation) on futures
contracts................................................. -- -- -- --
--------------------------------------------------------
$62,146,436 $14,982,588 $426,360,777 $22,889,945
========================================================
---------------
*Cost
Investment securities...................................... $ -- $13,546,306 $385,670,503 $23,461,679
========================================================
Short-term securities...................................... $59,833,851 $ -- $ 24,953,195 $ --
========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
52
<PAGE> 54
- ---------------------
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$52,837,226 $17,023,777 $738,109,629 $1,261,960,749 $54,593,905 $131,746,155 $46,366,382
-- 348,558 -- -- -- 1,943,687 1,682,533
220,000 10,940,000 10,330,000 84,910,000 1,405,000 6,175,000 725,000
3,977 -- 743 2,963 3,570 3,223 544
-- 6,851 -- 310 60,746 -- 8,667
10,706 91,330 3,858,736 6,044,050 442,149 -- 20,292
41,849 187,098 385,073 608,032 111,854 712,960 428,504
-- -- 6,164,869 14,901,504 -- -- 1,244,129
-- 21,606 -- -- -- -- --
-- 6,286 -- 1,711,219 -- -- 330,692
3,019 3,068 37,228 11,273 1,597 26,090 12,704
-- 50,148 -- -- -- -- 147,921
---------------------------------------------------------------------------------------------------
53,116,777 28,678,722 758,886,278 1,370,150,100 56,618,821 140,607,115 50,967,368
---------------------------------------------------------------------------------------------------
146,973 4,159 911,475 2,632,069 454,518 234,425 27,711
29,473 20,537 401,431 648,559 33,576 112,884 39,649
-- -- 946,489 4,219,020 144,378 -- 1,262,427
-- 6,294 -- 1,713,906 -- -- 327,192
-- -- -- -- -- 154,900 24,009
5,152 50,547 78,432 169,961 23,358 70,232 57,701
-- 3,021 -- -- -- -- 222,928
-- 65 -- -- -- -- --
---------------------------------------------------------------------------------------------------
181,598 84,623 2,337,827 9,383,515 655,830 572,441 1,961,617
---------------------------------------------------------------------------------------------------
$52,935,179 $28,594,099 $756,548,451 $1,360,766,585 $55,962,991 $140,034,674 $49,005,751
====================================================================================================
2,260,991 2,384,253 20,539,392 31,190,288 3,698,544 9,682,488 4,236,422
$ 23.41 $ 11.99 $ 36.83 $ 43.63 $ 15.13 $ 14.46 $ 11.57
====================================================================================================
$23,593,808 $23,297,203 $367,824,870 $ 749,307,855 $54,142,006 $ 68,231,315 $29,178,010
455,645 100,547 3,159,685 2,346,370 958,581 4,454,226 1,756,958
9,450,133 3,686,556 70,407,524 143,203,615 (7,656,819) 31,360,103 13,014,110
19,435,593 1,366,008 315,063,565 465,918,727 8,519,885 36,381,970 5,213,945
-- 43,964 92,807 (9,982) (662) -- (81,129)
-- 99,821 -- -- -- (392,940) (76,143)
---------------------------------------------------------------------------------------------------
$52,935,179 $28,594,099 $756,548,451 $1,360,766,585 $55,962,991 $140,034,674 $49,005,751
====================================================================================================
$33,401,633 $15,657,769 $423,046,064 $ 796,042,022 $46,074,020 $ 95,372,874 $41,148,521
====================================================================================================
$ -- $ 348,558 $ -- $ -- $ -- $ 1,934,998 $ 1,686,449
====================================================================================================
</TABLE>
---------------------
53
<PAGE> 55
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY HIGH YIELD
PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest.................................................. $1,748,089 $ 612,636 $12,271,273 $ 1,213,609
Dividends................................................. -- 2,031 -- 41,985
------------------------------------------------------
Total income*...................................... 1,748,089 614,667 12,271,273 1,255,594
------------------------------------------------------
Expenses:
Investment management fees................................ 172,250 49,967 1,213,265 86,948
Custodian fees............................................ 20,729 35,953 69,631 25,861
Audit and tax consulting fees............................. 12,200 22,650 8,315 13,680
Reports to investors...................................... 2,630 575 18,375 1,480
Trustees' fees............................................ 2,265 165 8,160 1,148
Legal fees................................................ 1,980 1,055 3,140 2,820
Insurance expense......................................... 632 145 1,640 309
Other expenses............................................ 1,414 959 2,760 1,020
------------------------------------------------------
Total expenses before custody credits.............. 214,100 111,469 1,325,286 133,266
Custody credits earned on cash balances............ (204) (8) (171) (41)
------------------------------------------------------
Net investment income....................................... 1,534,193 503,206 10,946,158 1,122,369
------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES:
Net realized gain (loss) on investments #................... 1,782 (259,277) (716,219) (989,155)
Net realized foreign exchange gain (loss) on other assets
and liabilities........................................... -- -- -- --
Net realized gain on futures contracts and options
contracts................................................. -- -- -- --
Change in unrealized appreciation/depreciation of
investments............................................... -- (679,531) (18,103,666) 1,074,611
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........................................ 1,782 (938,808) (18,819,885) 85,456
------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $1,535,975 ($ 435,602) ($7,873,727) $ 1,207,825
=========================================================
---------------
* Net of foreign withholding taxes on interest and dividends
of........................................................ $ -- $ 23 $ -- $ 1,249
=========================================================
# Net of foreign withholding taxes on capital gains of...... $ -- $ -- $ -- $ --
=========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
54
<PAGE> 56
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10,978 $ 65,487 $ 609,923 $ 1,878,841 $ 40,812 $ 1,658,794 $ 852,445
348,580 305,118 2,931,953 3,446,631 478,675 435,123 245,445
--------------------------------------------------------------------------------------------------
359,558 370,605 3,541,876 5,325,472 519,487 2,093,917 1,097,890
--------------------------------------------------------------------------------------------------
179,901 128,344 2,351,488 3,627,308 167,014 706,316 242,801
18,571 144,100 80,031 123,805 23,635 33,221 96,415
12,850 30,075 10,925 16,675 11,860 9,965 16,000
1,320 1,725 33,460 57,250 5,280 5,505 3,140
1,334 983 15,011 24,300 1,243 3,335 1,907
2,820 1,120 4,290 6,590 1,735 1,980 1,905
237 324 2,594 3,946 309 1,068 404
937 1,446 4,369 5,596 1,592 1,395 1,702
--------------------------------------------------------------------------------------------------
217,970 308,117 2,502,168 3,865,470 212,668 762,785 364,274
(46) -- (361) (1,405) (95) (76) (185)
--------------------------------------------------------------------------------------------------
141,634 62,488 1,040,069 1,461,407 306,914 1,331,208 733,801
--------------------------------------------------------------------------------------------------
2,667,830 5,686,223 24,019,532 93,574,707 (3,572,651) 12,151,932 4,548,365
-- (7,639) -- 4,130 (1,036) -- 314,560
-- (24,046) -- -- -- (291,100) 154,777
2,581,384 (2,483,312) 61,633,508 147,074,631 14,774,360 (3,052,262) (657,648)
-- 72,257 -- (5,875) (673) -- (90,121)
-- 99,821 -- -- -- (224,414) (99,937)
--------------------------------------------------------------------------------------------------
5,249,214 3,343,304 85,653,040 240,647,593 11,200,000 8,584,156 4,169,996
--------------------------------------------------------------------------------------------------
$ 5,390,848 $ 3,405,792 $ 86,693,109 $242,109,000 $ 11,506,914 $ 9,915,364 $ 4,903,797
==================================================================================================
$ 2,159 $ 36,527 $ 21,411 $ 91,206 $ 30,204 $ -- $ 20,772
==================================================================================================
$ -- $ 9,111 $ -- $ -- $ -- $ -- $ 6,370
==================================================================================================
</TABLE>
---------------------
55
<PAGE> 57
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (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.................................... $ 1,534,193 $ 503,206 $ 10,946,158 $ 1,122,369
Net realized gain (loss) on investments.................. 1,782 (259,277) (716,219) (989,155)
Net realized foreign exchange gain (loss) on other assets
and liabilities........................................ -- -- -- --
Net realized gain on futures contracts and options
contracts.............................................. -- -- -- --
Change in unrealized appreciation/depreciation of
investments............................................ -- (679,531) (18,103,666) 1,074,611
Change in unrealized foreign exchange gain/loss on other
assets and liabilities................................. -- -- -- --
Change in unrealized appreciation/depreciation on futures
contracts.............................................. -- -- -- --
-----------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................. 1,535,975 (435,602) (7,873,727) 1,207,825
-----------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from capital gains......................... -- -- -- --
Dividends from net investment income..................... (1,535,975) -- -- --
-----------------------------------------------------------
Total dividends and distributions to shareholders........ (1,535,975) -- -- --
-----------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold................................ 95,890,281 577,606 177,066,240 5,506,457
Proceeds from shares issued for reinvestment of dividends
and distributions...................................... 1,535,975 -- -- --
Cost of shares repurchased............................... (100,833,133) (2,589,752) (118,499,111) (9,923,098)
-----------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital share transactions............................. (3,406,877) (2,012,146) 58,567,129 (4,416,641)
-----------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................. (3,406,877) (2,447,748) 50,693,402 (3,208,816)
-----------------------------------------------------------
NET ASSETS:
Beginning of period...................................... 65,553,313 17,430,336 375,667,375 26,098,761
-----------------------------------------------------------
End of period............................................ $ 62,146,436 $14,982,588 $ 426,360,777 $22,889,945
===========================================================
---------------
Accumulated undistributed net investment income (loss)... $ (1,211) $ 1,651,379 $ 27,320,646 $ 3,967,180
===========================================================
Shares issued and repurchased:
Sold..................................................... 95,890,281 44,407 12,188,645 780,781
Issued in reinvestment of dividends and distributions.... 1,535,975 -- -- --
Repurchased.............................................. (100,833,133) (198,200) (8,150,046) (1,403,594)
-----------------------------------------------------------
Net increase (decrease).................................. (3,406,877) (153,793) 4,038,599 (622,813)
===========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
56
<PAGE> 58
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 141,634 $ 62,488 $ 1,040,069 $ 1,461,407 $ 306,914 $ 1,331,208 $ 733,801
2,667,830 5,686,223 24,019,532 93,574,707 (3,572,651) 12,151,932 4,548,365
-- (7,639) -- 4,130 (1,036) -- 314,560
-- (24,046) -- -- -- (291,100) 154,777
2,581,384 (2,483,312) 61,633,508 147,074,631 14,774,360 (3,052,262) (657,648)
-- 72,257 -- (5,875) (673) -- (90,121)
-- 99,821 -- -- -- (224,414) (99,937)
--------------------------------------------------------------------------------------------------------
5,390,848 3,405,792 86,693,109 242,109,000 11,506,914 9,915,364 4,903,797
--------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
-- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------
6,604,857 6,411,731 158,042,771 502,147,198 17,712,619 3,517,638 603,652
-- -- -- -- -- -- --
(11,250,165) (10,924,646) (157,517,270) (484,135,543) (12,555,419) (20,110,297) (5,755,927)
--------------------------------------------------------------------------------------------------------
(4,645,308) (4,512,915) 525,501 18,011,655 5,157,200 (16,592,659) (5,152,275)
--------------------------------------------------------------------------------------------------------
745,540 (1,107,123) 87,218,610 260,120,655 16,664,114 (6,677,295) (248,478)
--------------------------------------------------------------------------------------------------------
52,189,639 29,701,222 669,329,841 1,100,645,930 39,298,877 146,711,969 49,254,229
--------------------------------------------------------------------------------------------------------
$ 52,935,179 $ 28,594,099 $ 756,548,451 $1,360,766,585 $ 55,962,991 $140,034,674 $49,005,751
========================================================================================================
$ 455,645 $ 100,547 $ 3,159,685 $ 2,346,370 $ 958,581 $ 4,454,226 $ 1,756,958
========================================================================================================
297,410 571,179 4,593,829 13,000,985 1,265,208 251,326 54,847
-- -- -- -- -- -- --
(509,102) (966,441) (4,635,806) (12,732,705) (958,166) (1,445,066) (525,132)
--------------------------------------------------------------------------------------------------------
(211,692) (395,262) (41,977) 268,280 307,042 (1,193,740) (470,285)
========================================================================================================
</TABLE>
---------------------
57
<PAGE> 59
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................................... $ 3,455,742 $ 1,186,352 $ 16,372,581 $ 2,892,197
Net realized gain (loss) on investments................. -- 159,449 7,720,414 384,346
Net realized foreign exchange gain (loss) on other
assets and liabilities................................ -- -- -- 4,058
Net realized gain on futures contracts.................. -- -- 229,447 --
Change in unrealized appreciation/depreciation of
investments........................................... -- 15,677 1,573,127 (4,005,538)
Change in unrealized foreign exchange gain/loss on other
assets and liabilities................................ -- -- -- (2,745)
Change in unrealized appreciation/depreciation on
futures contracts..................................... -- -- -- --
------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 3,455,742 1,361,478 25,895,569 (727,682)
------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from capital gains........................ -- -- (500,000) --
Dividends from net investment income.................... (3,455,742) (1,415,000) (13,600,000) (3,760,000)
------------------------------------------------------------
Total dividends and distributions to shareholders....... (3,455,742) (1,415,000) (14,100,000) (3,760,000)
------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold............................... 172,261,459 3,024,969 327,025,063 16,456,461
Proceeds from shares issued for reinvestment of
dividends and distributions........................... 3,138,912 1,415,000 14,100,000 3,760,000
Cost of shares repurchased.............................. (179,651,239) (5,271,333) (211,876,204) (29,823,279)
------------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital share transactions............................ (4,250,868) (831,364) 129,248,859 (9,606,818)
------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS................. (4,250,868) (884,886) 141,044,428 (14,094,500)
------------------------------------------------------------
NET ASSETS:
Beginning of period..................................... 69,804,181 18,315,222 234,622,947 40,193,261
------------------------------------------------------------
End of period........................................... $ 65,553,313 $17,430,336 $ 375,667,375 $ 26,098,761
============================================================
---------------
Accumulated undistributed net investment income
(loss)................................................ $ (1,211) $ 1,148,173 $ 16,374,488 $ 2,844,811
============================================================
Shares issued and repurchased:
Sold.................................................... 172,261,459 223,978 22,544,620 2,203,779
Issued in reinvestment of dividends and distributions... 3,138,912 109,520 979,167 574,924
Repurchased............................................. (179,651,239) (392,187) (14,658,468) (3,737,618)
------------------------------------------------------------
Net increase (decrease)................................. (4,250,868) (58,689) 8,865,319 (958,915)
============================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
58
<PAGE> 60
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 336,017 $ 170,046 $ 2,185,018 $ 954,580 $ 710,724 $ 3,130,553 $ 1,037,331
6,821,664 (241,875) 46,595,637 51,248,404 (4,087,799) 18,483,095 8,083,476
-- (19,140) -- (4,284) (2,583) -- (211,115)
-- 15,383 -- -- -- 1,135,206 214,805
5,370,411 3,569,408 98,358,771 142,707,660 (5,229,472) 9,455,468 (1,765,867)
-- (26,625) -- 3,437 2,784 -- 27,978
-- -- -- -- -- (210,376) (47,999)
---------------------------------------------------------------------------------------------------------
12,528,092 3,467,197 147,139,426 194,909,797 (8,606,346) 31,993,946 7,338,609
---------------------------------------------------------------------------------------------------------
(1,830,000) (3,725,000) (31,210,000) (74,450,000) (425,000) (22,720,000) (7,725,000)
(400,000) (520,000) (2,560,000) (500,000) (620,000) (3,675,000) (1,050,000)
---------------------------------------------------------------------------------------------------------
(2,230,000) (4,245,000) (33,770,000) (74,950,000) (1,045,000) (26,395,000) (8,775,000)
---------------------------------------------------------------------------------------------------------
19,076,191 15,620,340 259,990,058 638,786,503 22,578,157 12,700,692 1,960,272
2,230,000 4,245,000 33,770,000 74,950,000 1,045,000 26,395,000 8,775,000
(23,831,304) (25,534,571) (223,327,903) (547,361,436) (24,726,866) (43,668,103) (13,333,802)
---------------------------------------------------------------------------------------------------------
(2,525,113) (5,669,231) 70,432,155 166,375,067 (1,103,709) (4,572,411) (2,598,530)
---------------------------------------------------------------------------------------------------------
7,772,979 (6,447,034) 183,801,581 286,334,864 (10,755,055) 1,026,535 (4,034,921)
---------------------------------------------------------------------------------------------------------
44,416,660 $ 36,148,256 485,528,260 814,311,066 50,053,932 145,685,434 53,289,150
---------------------------------------------------------------------------------------------------------
$ 52,189,639 $ 29,701,222 $ 669,329,841 $1,100,645,930 $ 39,298,877 $146,711,969 $ 49,254,229
=========================================================================================================
$ 314,011 $ 38,059 $ 2,119,618 $ 884,964 $ 651,667 $ 3,123,018 $ 1,023,157
=========================================================================================================
1,003,191 1,365,941 8,911,772 19,386,978 1,680,379 925,146 172,090
131,408 452,558 1,337,426 2,741,404 94,144 2,259,846 975,000
(1,253,473) (2,209,336) (7,621,126) (16,484,716) (1,853,949) (3,083,297) (1,164,033)
---------------------------------------------------------------------------------------------------------
(118,874) (390,837) 2,628,072 5,643,666 (79,426) 101,695 (16,943)
=========================================================================================================
</TABLE>
---------------------
59
<PAGE> 61
- ---------------------
ANCHOR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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.
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 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. The 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.
Nonconvertible 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 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.
- ---------------------
60
<PAGE> 62
FOREIGN CURRENCY TRANSLATION: The books and records of the Trust are maintained
in U.S. dollars.
Market values 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.
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 Trust 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 or other appropriate methods. 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.
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, 1998, the reclassification arising from
book/tax differences resulted in increases (decreases) to the components of net
assets as follows:
<TABLE>
<CAPTION>
ACCUMULATED
UNDISTRIBUTED ACCUMULATED
NET REALIZED UNDISTRIBUTED PAID
INVESTMENT NET REALIZED IN
INCOME/LOSS GAIN/LOSS CAPITAL
<S> <C> <C> <C>
---------------------------------------------
Money Market Portfolio...................................... $ (1,843) $ 1,843 $ --
Fixed Income Portfolio...................................... 4,303 446,090 (450,393)
Government & Quality Bond Portfolio......................... 49,352 (45,131) (4,221)
High Yield Portfolio........................................ 6,620 3,386,557 (3,393,177)
Growth and Income Portfolio................................. -- -- --
Foreign Securities Portfolio................................ (52,417) 52,417 --
Growth Portfolio............................................ (20,147) 20,147 --
Capital Appreciation Portfolio.............................. (13,612) 13,611 1
Natural Resources Portfolio................................. (30,772) 25,698 5,074
Multi-Asset Portfolio....................................... 36,427 (36,427) --
Strategic Multi-Asset Portfolio............................. (3,263) 2,714 549
</TABLE>
Reclassifications are primarily due to differing book and tax treatments for
foreign currency transactions, market discount, paydowns, and expiring capital
loss carryovers.
NOTE 3. OPERATING POLICIES:
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
---------------------
61
<PAGE> 63
bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited.
At June 30, 1999, the Money Market, Fixed Income, Government & Quality Bond,
High Yield, Growth and Income, Foreign Securities, Growth, Capital Appreciation,
Natural Resources, Multi-Asset and Strategic Multi-Asset Portfolios had a 2.6%,
1.0%, 14.6%, 0.1%, 0.2%, 4.1%, 7.1%, 58.7%, 1.0%, 4.3% and 0.5%, respectively,
undivided interest, representing $3,825,000, $1,500,000, $21,125,000, $160,000,
$220,000, $5,940,000, $10,330,000, $84,910,000, $1,405,000, $6,175,000 and
$725,000, respectively, in principal amount, in a joint repo with SBC Warburg
Dillon Read, which is dated June 30, 1999, bears interest at the rate of 4.80%
per annum, has a principal amount of $144,590,000 and a repurchase price of
$144,609,279, matures on July 1, 1999, and is collateralized by $149,919,000 of
U.S. Treasury Bonds, which bear interest at a rate of 6.00% per annum, matures
02/15/26, and has an approximate aggregate value of $147,698,428.
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.
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 book purposes.
At June 30, 1999, the cost of investment securities for book purposes,
including short-term securities and aggregate gross unrealized gain (loss) for
each portfolio were as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED GAIN (LOSS) COST OF
GAIN LOSS NET INVESTMENTS
<S> <C> <C> <C> <C>
-------------------------------------------------------
Money Market Portfolio.................. $ -- $ -- $ -- $ 63,658,851
Fixed Income Portfolio.................. 69,666 (396,727) 327,061 15,046,306
Government & Quality Bond Portfolio..... 1,415,423 (12,073,164) (10,657,741) 431,748,698
High Yield Portfolio*................... 322,531 (2,620,122) (2,297,591) 23,621,679
Growth and Income Portfolio............. 20,076,116 (640,523) 19,435,593 33,621,633
Foreign Securities Portfolio**.......... 1,633,748 (267,740) 1,366,008 26,946,327
Growth Portfolio........................ 320,613,865 (5,550,300) 315,063,565 433,376,064
Capital Appreciation Portfolio*......... 487,274,039 (21,355,312) 465,918,727 880,952,022
Natural Resources Portfolio**........... 10,428,780 (1,908,895) 8,519,885 47,479,020
Multi-Asset Portfolio................... 38,280,603 (1,898,633) 36,381,970 103,482,872
Strategic Multi-Asset Portfolio**....... 6,842,292 (1,628,347) 5,213,945 43,559,970
</TABLE>
* Post 10/31 Capital Loss Deferrals: High Yield $308,457 and Capital
Appreciation $8,425,601.
** Post 10/31 Foreign Exchange Loss Deferrals: Foreign Securities $21,105,
Natural Resources $795 and Strategic Multi-Asset $50,746.
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.
- ---------------------
62
<PAGE> 64
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%
Growth and Income $0-$100 million .700%
> $100 million .650%
> $250 million .600%
> $500 million .575%
</TABLE>
<TABLE>
<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>
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%
Growth/ $0-$ 50 million .325%
Growth and Income > $ 50 million .225%
> $150 million .200%
> $500 million .150%
</TABLE>
<TABLE>
<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, 1999, SAAMCo received fees of $8,925,604
from the Trust, of which SAAMCo informed the Trust that $6,416,377 was retained
and $2,509,227 was allocated to WMC.
---------------------
63
<PAGE> 65
NOTE 6. SECURITIES TRANSACTIONS: The portfolios had the following purchases and
sales of long-term securities for the six months ended June 30, 1999:
<TABLE>
<CAPTION>
MONEY FIXED GOVERNMENT & GROWTH
MARKET INCOME QUALITY BOND HIGH YIELD AND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
Purchases of portfolio securities (excluding U.S.
government securities)................................ $ -- $ 39,763 $ 9,988,250 $ 6,659,659 $5,052,981
Sales of portfolio securities (excluding U.S. government
securities)........................................... -- 5,461,642 4,964,950 10,124,671 8,092,094
U.S. government securities excluded above were as
follows:
Purchases of U.S. government securities................. -- 4,208,642 113,386,265 -- --
Sales of U.S. government securities..................... -- 1,353,938 84,756,792 -- 103,703
</TABLE>
<TABLE>
<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 of portfolio securities
(excluding U.S. government
securities).......................... $23,093,133 $98,050,385 $379,537,444 $30,549,049 $24,025,021 $38,395,005
Sales of portfolio securities
(excluding U.S. government
securities).......................... 38,774,874 94,340,747 405,752,111 24,450,288 35,130,010 2,284,879
U.S. government securities excluded
above were as follows:
Purchases of U.S. government
securities........................... -- -- -- -- 8,511,931 1,211,388
Sales of U.S. government securities.... -- -- -- -- 11,157,443 2,536,776
</TABLE>
NOTE 7. 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, 1999, the
Trust had accrued $184,163 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, 1999, expensed $21,785 for the Retirement Plan, which is included in
Trustee fees and expenses on the Statement of Operations.
NOTE 8. SUBSEQUENT EVENTS: On August 6, 1999, pursuant to a Substitution Order
granted by the Securities and Exchange Commission, the shares of the Fixed
Income Portfolio and the Foreign Securities Portfolio were replaced with shares
of the Government and Quality Bond Portfolio and Strategic Multi-Asset
Portfolio, respectively.
- ---------------------
64
<PAGE> 66
- ---------------------
ANCHOR SERIES TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET DIVIDENDS DIVIDENDS
REALIZED TOTAL DECLARED FROM NET NET
NET ASSET NET & UNREALIZED FROM FROM NET REALIZED NET ASSET ASSETS RATIO OF
VALUE INVEST- GAIN (LOSS) INVEST- INVEST- GAIN ON VALUE END OF EXPENSES
PERIOD BEGINNING MENT ON MENT MENT INVEST- END OF TOTAL PERIOD TO AVERAGE
ENDED OF PERIOD INCOME* INVESTMENTS OPERATIONS INCOME MENTS PERIOD RETURN** (000'S) NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Money Market Portfolio
12/31/94 $ 1.00 $0.04 $ -- $ 0.04 $(0.04) $ -- $ 1.00 3.8% $126,004 0.6%
12/31/95 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.6 93,692 0.6
12/31/96 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.0 74,001 0.6
12/31/97 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.1 69,804 0.6
12/31/98 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.1 65,553 0.6
06/30/99# 1.00 0.02 -- 0.02 (0.02) -- 1.00 2.2 62,146 0.6+
Fixed Income Portfolio
12/31/94 14.54 0.89 (1.36) (0.47) (1.17) -- 12.90 (3.2) 28,582 0.8
12/31/95 12.90 0.90 1.52 2.42 (1.16) -- 14.16 19.2 27,975 0.8
12/31/96 14.16 0.93 (0.64) 0.29 (1.15) -- 13.30 2.4 22,743 0.8
12/31/97 13.30 0.91 0.30 1.21 (1.23) -- 13.28 9.4 18,315 0.9
12/31/98 13.28 0.90 0.14 1.04 (1.12) -- 13.20 8.0 17,430 1.0
06/30/99# 13.20 0.41 (0.77) (0.36) -- -- 12.84 (2.7) 14,983 1.4+
Government & Quality Bond Portfolio
12/31/94 14.22 0.86 (1.30) (0.44) (0.73) (0.19) 12.86 (3.1) 232,530 0.7
12/31/95 12.86 0.90 1.55 2.45 (1.08) -- 14.23 19.4 225,579 0.7
12/31/96 14.23 0.87 (0.50) 0.37 (0.90) (0.03) 13.67 2.9 221,603 0.7
12/31/97 13.67 0.84 0.42 1.26 (0.92) (0.05) 13.96 9.5 234,623 0.7
12/31/98 13.96 0.79 0.48 1.27 (0.57) (0.02) 14.64 9.2 375,667 0.7
06/30/99# 14.64 0.39 (0.68) (0.29) -- -- 14.35 (2.0) 426,361 0.7+
High Yield Portfolio
12/31/94 9.43 0.15 (0.56) (0.41) (1.15) -- 7.87 (4.5) 48,057 0.9
12/31/95 7.87 0.77 0.67 1.44 (0.98) -- 8.33 18.8 46,817 0.9
12/31/96 8.33 0.74 0.19 0.93 (0.88) -- 8.38 11.7 45,687 0.9
12/31/97 8.38 0.75 0.18 0.93 (0.93) -- 8.38 11.4 40,193 0.9
12/31/98 8.38 0.71 (1.13) (0.42) (1.16) -- 6.80 (4.5) 26,099 0.9
06/30/99# 6.80 0.31 0.01 0.32 -- -- 7.12 4.7 22,890 1.1+
Growth and Income Portfolio
12/31/94 14.58 0.66 (1.96) (1.30) (0.52) (1.20) 11.56 (9.7) 34,995 0.9
12/31/95 11.56 0.61 1.29 1.90 (0.83) (0.62) 12.01 16.6 32,008 0.9
12/31/96++ 12.01 0.33 2.02 2.35 (0.77) -- 13.59 20.2 33,465 0.9
12/31/97 13.59 0.15 3.74 3.89 (0.34) -- 17.14 28.8 44,417 0.8
12/31/98 17.14 0.14 4.80 4.94 (0.17) (0.80) 21.11 30.2 52,190 0.8
06/30/99# 21.11 0.06 2.24 2.30 -- -- 23.41 10.9 52,935 0.8+
<CAPTION>
RATIO OF NET
INVESTMENT
INCOME PORTFOLIO
PERIOD TO AVERAGE TURNOVER
ENDED NET ASSETS RATE
<S> <C> <C>
Money Market Portfolio
12/31/94 3.8% --%
12/31/95 5.5 --
12/31/96 4.9 --
12/31/97 5.0 --
12/31/98 5.0 --
06/30/99# 4.5+ --
Fixed Income Portfolio
12/31/94 6.5 56.5
12/31/95 6.5 76.7
12/31/96 6.8 77.9
12/31/97 6.9 58.0
12/31/98 6.7 32.5
06/30/99# 6.3+ 27.7
Government & Quality Bond Portfolio
12/31/94 6.4 117.6
12/31/95 6.5 135.2
12/31/96 6.3 106.7
12/31/97 6.1 75.7
12/31/98 5.5 150.2
06/30/99# 5.4+ 23.5
High Yield Portfolio
12/31/94 9.0 97.9
12/31/95 9.2 68.1
12/31/96 8.8 58.0
12/31/97 8.8 101.4
12/31/98 9.0 109.6
06/30/99# 9.0+ 28.1
Growth and Income Portfolio
12/31/94 4.9 50.7
12/31/95 5.2 88.8
12/31/96++ 2.5 108.5
12/31/97 1.0 49.4
12/31/98 0.7 41.0
06/30/99# 0.6+ 9.9
</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 the
insurance companies. If such expenses had been included, total return would
have been lower for each period presented.
++ 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.
---------------------
65
<PAGE> 67
- ---------------------
ANCHOR SERIES TRUST
FINANCIAL HIGHLIGHTS -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET DIVIDENDS DIVIDENDS
REALIZED TOTAL DECLARED FROM NET NET
NET ASSET NET & UNREALIZED FROM FROM NET REALIZED NET ASSET ASSETS
VALUE INVESTMENT GAIN (LOSS) INVEST- INVEST- GAIN ON VALUE END OF
PERIOD BEGINNING INCOME ON MENT MENT INVEST- END OF TOTAL PERIOD
ENDED OF PERIOD (LOSS)* INVESTMENTS OPERATIONS INCOME MENTS PERIOD RETURN** (000'S)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Foreign Securities Portfolio
12/31/94 $10.93 $ 0.11 $(0.46) $(0.35) $(0.03) $ -- $10.55 (3.2)% $ 68,641
12/31/95 10.55 0.13 1.19 1.32 (0.05) (0.01) 11.81 12.6 53,609
12/31/96 11.81 0.15 1.19 1.34 (0.21) -- 12.94 11.5 48,036
12/31/97 12.94 0.11 (0.14) (0.03) (0.31) (1.20) 11.40 (1.0) 36,148
12/31/98 11.40 0.06 0.92 0.98 (0.21) (1.48) 10.69 10.7 29,701
06/30/99# 10.69 0.02 1.28 1.30 -- -- 11.99 12.2 28,594
Growth Portfolio
12/31/94 22.32 0.05 (1.03) (0.98) (0.05) (3.11) 18.18 (4.7) 246,149
12/31/95 18.18 0.11 4.62 4.73 (0.05) (3.38) 19.48 26.3 307,857
12/31/96 19.48 0.20 4.57 4.77 (0.11) (0.95) 23.19 25.0 366,602
12/31/97 23.19 0.16 6.76 6.92 (0.20) (2.87) 27.04 30.4 485,528
12/31/98 27.04 0.11 7.19 7.30 (0.14) (1.68) 32.52 29.0 669,330
06/30/99# 32.52 0.05 4.26 4.31 -- -- 36.83 13.3 756,548
Capital Appreciation Portfolio
12/31/94 20.28 (0.02) (0.71) (0.73) -- (2.04) 17.51 (3.8) 229,544
12/31/95 17.51 0.06 6.00 6.06 (0.15) (0.20) 23.22 34.6 356,218
12/31/96 23.22 0.06 5.73 5.79 (0.06) (0.95) 28.00 25.1 567,672
12/31/97 28.00 0.02 7.05 7.07 (0.05) (2.81) 32.21 25.4 814,311
12/31/98 32.21 0.04 6.24 6.28 (0.02) (2.88) 35.59 22.2 1,100,646
06/30/99# 35.59 0.05 7.99 8.04 -- -- 43.63 22.6 1,360,767
Natural Resources Portfolio
12/31/94 13.33 0.23 (0.09) 0.14 (0.09) (0.09) 13.29 1.0 21,230
12/31/95 13.29 0.18 2.15 2.33 (0.21) (0.29) 15.12 17.5 28,941
12/31/96 15.12 0.22 1.89 2.11 (0.13) (0.23) 16.87 14.1 45,329
12/31/97 16.87 0.20 (1.49) (1.29) (0.17) (0.99) 14.42 (8.6) 50,054
12/31/98 14.42 0.21 (2.72) (2.51) (0.19) (0.13) 11.59 (17.3) 39,299
06/30/99# 11.59 0.09 3.45 3.54 -- -- 15.13 30.5 55,963
Multi-Asset Portfolio
12/31/94 13.88 0.39 (0.60) (0.21) (0.47) (1.49) 11.71 (1.7) 164,159
12/31/95 11.71 0.40 2.47 2.87 (0.49) (1.05) 13.04 24.9 168,243
12/31/96 13.04 0.35 1.36 1.71 (0.49) (0.91) 13.35 13.9 150,619
12/31/97 13.35 0.34 2.36 2.70 (0.43) (2.10) 13.52 21.1 145,685
12/31/98 13.52 0.30 2.56 2.86 (0.40) (2.49) 13.49 24.5 146,712
06/30/99# 13.49 0.13 0.84 0.97 -- -- 14.46 7.2 140,035
Strategic Multi-Asset Portfolio
12/31/94 14.06 0.24 (0.53) (0.29) (0.20) (2.28) 11.29 (2.6) 65,357
12/31/95 11.29 0.32 2.18 2.50 (0.23) (1.78) 11.78 22.8 64,026
12/31/96 11.78 0.25 1.41 1.66 (0.40) (0.84) 12.20 14.8 57,744
12/31/97 12.20 0.23 1.48 1.71 (0.31) (2.32) 11.28 14.3 53,289
12/31/98 11.28 0.23 1.13 1.36 (0.26) (1.92) 10.46 15.2 49,254
06/30/99# 10.46 0.16 0.95 1.11 -- -- 11.57 10.6 49,006
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES INCOME (LOSS) PORTFOLIO
PERIOD TO AVERAGE TO AVERAGE TURNOVER
ENDED NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
- --------------------------------------------
Foreign Securities Portfolio
12/31/94 1.2% 1.0% 73.9%
12/31/95 1.2 1.2 33.0
12/31/96 1.4 1.2 74.3
12/31/97 1.4 0.9 79.9
12/31/98 1.5 0.5 140.0
06/30/99# 2.2+ 0.4+ 91.9
Growth Portfolio
12/31/94 0.8 0.2 74.8
12/31/95 0.9 0.6 92.1
12/31/96 0.8 0.9 51.7
12/31/97 0.8 0.6 32.2
12/31/98 0.8 0.4 27.1
06/30/99# 0.7+ 0.3+ 13.8
Capital Appreciation Portfolio
12/31/94 0.8 (0.1) 64.0
12/31/95 0.8 0.3 60.1
12/31/96 0.8 0.2 69.2
12/31/97 0.7 0.1 60.1
12/31/98 0.7 0.1 59.6
06/30/99# 0.7+ 0.3+ 34.3
Natural Resources Portfolio
12/31/94 1.0 1.7 36.0
12/31/95 1.0 1.3 32.0
12/31/96 0.9 1.3 52.5
12/31/97 0.9 1.2 27.9
12/31/98 0.9 1.6 51.2
06/30/99# 1.0+ 1.4+ 56.5
Multi-Asset Portfolio
12/31/94 1.1 3.0 82.5
12/31/95 1.1 3.2 85.9
12/31/96 1.1 2.6 64.1
12/31/97 1.1 2.4 56.5
12/31/98 1.1 2.2 51.1
06/30/99# 1.1+ 1.9+ 24.1
Strategic Multi-Asset Portfolio
12/31/94 1.3 1.8 63.7
12/31/95 1.3 2.7 36.9
12/31/96 1.4 2.0 51.3
12/31/97 1.4 1.8 59.7
12/31/98 1.5 2.0 157.1
06/30/99# 1.5+ 3.0+ 10.6
</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 the
insurance companies. If such expenses had been included, total return would
have been lower for each period presented.
# Unaudited.
+ Annualized.
- ---------------------
66
<PAGE> 68
------------------
[SUNAMERICA LOGO] BULK RATE
1 SunAmerica Center U.S. POSTAGE
Los Angeles, California 90067-6022 PAID
TOWNE, INC.
------------------
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS UNLESS
ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
A-1075 (8/99)
