[ ASTRA LOGO ]
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I & II ANNUAL REPORT
Dear Shareholder: February 14, 1997
The Astra Short-Term Multi-Market Income Fund I and the Astra Short-Term
Multi-Market Income Fund II (collectively, the "Funds" or individually, a
"Fund") for the twelve months ending December 31, 1996, provided total returns
of 4.94% and 1.81% respectively*. During the same period, U.S. interest rates,
as measured by the 3-year U.S. Treasury, increased 80 basis points from 5.21% to
6.01%, and conversely, bond prices fell.
In aggregate, all of the world's major bond markets, excluding the U.S., rallied
over the past year. In fact, bond yields in a number of markets fell so sharply
that, at one point during 1996, they were approaching the cyclical low in yields
set in late-1993/early-1994. In addition, European/German bond yield spreads
have narrowed so sharply that they are now approaching their narrowest yield
spreads since late-1993/early-1994. The U.S. bond market joined the party during
the last half of 1996, despite the fact that U.S. economic activity remains
somewhat strong.
The key factors supporting the bullish trend in global bonds over the past year
were: 1) the generally sluggish pace in global economic activity, 2) the
relatively benign global inflation environment, and 3) a policy mix of fiscal
restraint and monetary ease in Europe, Canada, and Australia, that is supportive
of lower real rates. Additionally, during the last half of 1996, the spread
between European and German bond yields narrowed significantly. The principal
factor behind the move was a new wave of EMU optimism on the part of
institutional investors. The possibility that a growing number of EU countries
will come close to meeting the Maastricht Treaty criteria on inflation and
budget deficits makes it increasingly likely that not only will EMU start on
time, but that more countries may qualify for EMU membership than was previously
thought possible.
The major fundamental risk to global bonds is a significant upturn in global
economic activity. At present, global economic activity is quite subdued, but
leading indicators of global economic activity are beginning to turn upward,
suggesting that a strong economic upturn may be building for 1997. U.S. and
Japanese leading indicators are up strongly relative to their average pace. The
German and European leading indicators have recently begun to trend higher, but
the rate of change in both indicators is still quite weak when viewed in an
historical context. The same is true for Australia, and a bit less so for
Canada. Additionally, the euphoria surrounding the possibility that a number of
countries may qualify for EMU membership is believed to be overdone at this
point.
<PAGE>
The uncertainty surrounding the timing and nature of the U.S. Federal Reserve's
monetary policy decision lives on. Consensus opinion that the Fed will hike
interest rates is probably less certain now. As a result, the 30-year U.S.
Treasury bond yield continues to trade in a range of 6.50% to 7.00%. That range
will probably remain intact until the uncertainty on policy has been clarified.
With the U.S. yield relatively stable, the other international yields continue
to extend their rallies due to domestic issues: economic weakness, stable or
declining inflation, deficit reduction, and EMU optimism.
Against the backdrop described above, the Funds are expected to maintain a
somewhat shorter duration than normal during 1997. Additionally, the Fund may at
times hold cash for attractive reinvestment opportunities when it is believed
that bond markets may fall and interest rates rise. The Funds will overweight
the dollar-bloc countries at the expense of the yen and DM-bloc countries. The
desire to overweight the dollar-bloc currencies reflects the view that the U.S.
dollar will continue to gain ground on both the yen and DM over the course of
1997. Within the dollar-bloc, the Funds favor overweight positions in Canadian
dollars and, to a lesser extent, Australia. These currencies enjoy a substantial
real yield pick-up over comparable U.S. dollar assets. Within the DM-bloc, the
Funds favor overweight positions in the higher-yielding European countries such
as Spain and Italy.
Please be assured that the management of Astra will continue to closely monitor
the performance of the Funds as well as all the other funds of the Astra family.
We appreciate your continued support and welcome your comments and suggestions.
Sincerely,
Astra Management Corp.
- ------------------
* Total return calculations assume a hypothetical initial investment at the
offering price for Fund I and the net asset value for Fund II on the business
day before the first day of the stated period, with all dividends and
distributions reinvested in additional shares at the net asset value on the
ex-dividend date, and redemption at the net asset value on the last business
day of the stated period and after reduction for a 4% contingent deferred
sales charge for Fund II. Sales charges or commissions are not reflected in
the total returns. Total return for the year ended December 31, 1996 was 1.78%
and (2.16%) for Fund I and Fund II, respectively, after deduction of
applicable sales charges and assuming the reinvestment of all dividends.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NOT INDICATIVE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
- ------
2
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I & II
MANAGEMENT DISCUSSION AND ANALYSIS
- ------------------------------
GENERAL ECONOMIC AND MARKET ENVIRONMENT
In aggregate, all of the world's major bond markets, excluding the U.S., rallied
over the past year. In fact, bond yields in a number of markets fell so sharply
that, at one point during 1996, they were approaching the cyclical low in yields
set in late-1993/early-1994. In addition, European/German bond yield spreads
have narrowed so sharply that they are now approaching their narrowest yield
gaps since the same time period. The U.S. bond market joined the party during
the last half of 1996, despite the fact that U.S. economic activity remains
somewhat strong.
GLOBAL FIXED INCOME MARKETS IN PARTICULAR
The U.S. interest rate environment during the past fiscal year, as well as
specific economic and political developments in each country, combined to create
a tremendous impact on the global fixed income sector. In general, the global
bond market can be summarized as bullish with the U.S. dollar outperforming
other currencies.
The key factors supporting the bullish trend in global bonds over the past year
were: 1) the generally sluggish pace in global economic activity, 2) the
relatively benign global inflation environment, and 3) a policy mix of fiscal
restraint and monetary ease in Europe, Canada, and Australia, that is supportive
of lower real rates. Additionally, during the last half of 1996, the spread
between European and German bond yields narrowed significantly. The principal
factor behind the move was a new wave of EMU optimism on the part of
institutional investors. The possibility that a growing number of EU countries
will come close to meeting the Maastricht Treaty criteria on inflation and
budget deficits makes it increasingly likely that not only will EMU start on
time, but that more countries may qualify for EMU membership than was previously
thought possible.
The uncertainty surrounding the timing and nature of the U.S. Federal Reserve's
monetary policy decision lives on. Consensus opinion that the Fed will hike
interest rates is probably less certain now. As a result, the 30-year U.S.
Treasury bond yield continues to trade in a range of 6.50% to 7.00%. That range
will probably remain intact until the uncertainty on policy has been clarified.
With the U.S. yield relatively stable, the other international yields continue
to extend their rallies due to domestic issues: economic weakness, stable or
declining inflation, deficit reduction, and EMU optimism.
In Europe, the 'core' of Europe led the region into a mild recession in the
second half of 1995, while the 'periphery' continued to enjoy trade and
investment boosts from cheap currencies. Manufacturing in the core was weak at
the end of 1995, and construction subsequently plunged in early 1996. Lower
interest rates in the core, a weaker German DM against European periphery
countries, and a working-off of excess inventories are expected to set the stage
for a resumption of growth in Germany and neighboring economies.
By contrast, the economies in Europe's periphery are relatively weak. The
periphery's currencies have appreciated steadily against the core's and Central
Banks are taking every opportunity to ease monetary policy in line with
declining inflation. In some cases, particularly the United Kingdom, weakness in
activity is concentrated in manufacturing. In others, especially Italy and
Sweden (where budgetary tightness has compounded tougher monetary conditions),
weakness is more pronounced throughout the
- ------
3
<PAGE>
economy. It is expected that the monetary easing that is currently underway will
work, and the whole of Europe will begin to grow at a pace above potential in
1997.
It appears that central banks have been highly successful on inflation. U.S.
inflation has remained stable at approximately 3% as the economy has operated at
full employment. German inflation has fallen under 1.5% and Japanese prices are
actually falling.
Near term, it appears there are limited risks to inflation, especially as the
threat from higher commodity prices has somewhat receded in recent weeks. Tight
labor market conditions are the main source of a likely modest acceleration of
U.S. inflation over the next six months, taking the core CPI rate to 3.5% by mid
to late 1997. However, Europe appears to show some prospect for further
reductions in core inflation rates, reflecting the low operating levels of the
region's economies, the gradual erosion in inflation expectations there
(especially the periphery countries), and its continued tightness in fiscal
policy.
The U.S. dollar's bullish trend continues on. The dollar is now above
DM/US$1.58, close to the high for the past two years. Bullish dollar trends are
also occurring in Europe, with the exception of the Italian Lira, where the
strength of the currency against the DM has offset U.S. dollar strength.
ANALYSIS OF THE ASTRA SHORT-TERM MULTI-MARKET INCOME FUNDS
Given the previously described scenarios in both the U.S. and global fixed
income markets, the major focus of the Astra Short-Term Multi-Market Income
Funds was to cautiously decrease exposure in U.S. government securities and
selectively add government securities of countries whose credit profiles were
relatively stable or improving. Consequently, the funds chose to overweight
Spain and Italy in Europe, and Canada, Australia, and New Zealand in the
dollar-bloc. However, during the last quarter of 1996, the Funds chose to
liquidate a portion of higher-yielding foreign government securities in
anticipation of a rise in interest rates abroad. Consequently, the funds were
invested in lower yielding U.S. government debt during the fourth quarter. This
caused the Funds' yield to drop during the fourth quarter of 1996. On the other
hand, the Funds' share price showed somewhat less volatility than would have
been the case if it was fully invested in foreign government debt.
- ------
4
<PAGE>
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE ASTRA
SHORT-TERM MULTI-MARKET INCOME FUND I AND THE SALOMON BROTHERS
CURRENCY HEDGED 1-5 YEAR WORLD GOVERNMENT INDEX
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts the
following plot points:
<TABLE>
<CAPTION>
01/21/86 12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Astra Short-Term
Multi-Market
Income Fund I** $ 9,701 10,586 9,578 10,560 9,007 7,660 7,766 6,595 6,697 6,895 7,293 7,652
Salomon Brothers
Currency Hedged
1-5 Year
World Government
Index** $10,000 11,090 11,831 12,658 13,720 14,825 16,465 17,609 19,045 18,925 21,458 23,283
</TABLE>
Average Annual Total Returns
December 31, 1996
1 Year 5 Year Since Inception*
1.78% -0.90% -2.41%
NOTE: INCLUDES ALL SALES CHARGES
Performance data represents past performance. Past performance is not predictive
of future performance. Investment return and principal value of an investment in
the Fund will fluctuate. Shares, when redeemed, may be worth more or less than
their original cost.
* In the past, the Trust's manager has voluntarily waived all or a portion of
its management fees or assumed responsibility for other expenses, which
reduced operating expenses and increased total return to shareholders.
Without these reductions, the total return would have been lower.
** From inception through June 20, 1990, the Fund operated as Pilgrim Preferred
Fund investing in high yield preferred stock, with the objective of
providing high after-tax income for corporations and high current income for
individuals.
*** A subset of the Salomon Brothers World Government Bond Index. Please note
that indices do not take into account any fees and expenses of investing in
the individual securities that they track, and that individuals cannot
invest directly in any index.
- ------
5
<PAGE>
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE ASTRA
SHORT-TERM MULTI-MARKET INCOME FUND II AND THE SALOMON BROTHERS
CURRENCY HEDGED 1-5 YEAR WORLD GOVERNMENT INDEX
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts the
following plot points:
<TABLE>
<CAPTION>
10/01/91 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C> <C>
Astra Short-Term
Multi-Market
Income Fund II $ 10,000 9,779 8,820 8,964 9,027 9,384 9,554
Salomon Brothers
Currency Hedged
1-5 Year
World Government
Index** $ 10,000 10,325 11,043 11,943 11,868 13,456 14,600
</TABLE>
Average Annual Total Returns
December 31, 1996
1 Year 5 Year Since Inception*
-2.16% -0.46% -0.86%
NOTE: INCLUDES ALL SALES CHARGES
Performance data represents past performance. Past performance is not predictive
of future performance. Investment return and principal value of an investment in
the Fund will fluctuate. Shares, when redeemed, may be worth more or less than
their original cost.
* In the past, the Fund's investment manager has voluntarily waived all or a
portion of its management fees or assumed responsibility for other expenses,
which reduced operating expenses and increased total return to shareholders.
Without these reductions, the total return would have been lower.
** A subset of the Salomon Brothers World Government Bond Index. Please note
that indices do not take into account any fees and expenses of investing in
the individual securities that they track, and that individuals cannot invest
directly in any index.
- ------
6
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
PORTFOLIO OF INVESTMENTS AS OF DECEMBER 31, 1996
- ------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* BONDS AND NOTES: 97.6% VALUE
- -------------- ------------
<S> <C> <C>
AUSTRALIA: 5.0%
425,000 Australian Government Bond, 7.00%, Due 8/15/98................................ $ 342,139
-----------
CANADA: 6.1%
550,000 Canadian Government Bond, 6.25%, Due 2/1/98................................... 413,281
-----------
DENMARK: 2.2%
850,000 Denmark Government Bond, 7.00%, Due 8/15/97................................... 147,651
-----------
ITALY: 7.3%
700,000,000 Italian Government Bond, 10.50%, Due 11/1/98.................................. 493,487
-----------
SPAIN: 10.3%
90,000,000 Spanish Government Bond, 7.30%, Due 7/30/97................................... 699,823
-----------
SWEDEN: 4.3%
2,000,000 Swedish Government Bond, 10.75%, Due 1/23/97.................................. 295,499
-----------
UNITED KINGDOM: 10.6%
400,000 United Kingdom Government Bond, 9.50%, Due 1/15/99............................ 717,903
-----------
UNITED STATES: 51.8%
3,500,000 U.S. Treasury Note, 6.125%, Due 5/15/98....................................... 3,518,095
-----------
Total Bonds and Notes (Cost $6,520,116)..................................... 6,627,878
-----------
SHARES PREFERRED STOCK: 0.0%
- --------------
FINANCIAL: 0.0%
71,265 (R) (a) Westfed Holdings, Inc., 15.50%................................................ 1
-----------
Total Preferred Stock (Cost $6,180,331)................................... 1
-----------
COMMON STOCK: 0.0%
FINANCIAL: 0.0%
21,120 (R) (a) Westfed Holdings, Inc., Series B.............................................. 1
-----------
Total Common Stock (Cost $638)............................................ 1
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $12,701,085)** (NOTES 2A AND 3)................................. 97.6% 6,627,880
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.......................... 2.4% 165,862
----- -----------
TOTAL NET ASSETS...................................................... 100.0% $ 6,793,742
===== ===========
</TABLE>
(R) Restricted securities (see Note 3).
(a) Non-income producing security.
- ------------------
* Stated in local currencies unless otherwise noted.
** Cost for Federal income tax purposes is $12,701,085 and net unrealized
depreciation consists of:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gross Unrealized Appreciation...................................................... $ 140,229
Gross Unrealized Depreciation...................................................... (6,213,434)
-----------
Net Unrealized Depreciation.................................................... $(6,073,205)
===========
</TABLE>
See Notes to Financial Statements
- ------
7
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
PORTFOLIO OF INVESTMENTS AS OF DECEMBER 31, 1996
--------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT* BONDS AND NOTES: 97.7% VALUE
- -------------- ------------
<S> <C> <C>
AUSTRALIA: 5.6%
96,000 Australian Government Bond, 7.00%, Due 8/15/98................................ $ 77,283
-----------
CANADA: 8.1%
150,000 Canadian Government Bond, 6.25%, Due 2/1/98................................... 112,713
-----------
DENMARK: 2.5%
200,000 Denmark Government Bond, 7.00%, Due 8/15/97................................... 34,741
-----------
ITALY: 10.2%
200,000,000 Italian Government Bond, 10.50%, Due 11/1/98.................................. 140,996
-----------
SPAIN: 11.8%
21,000,000 Spanish Government Bond, 7.30%, Due 7/30/97................................... 163,292
-----------
SWEDEN: 5.3%
500,000 Swedish Government Bond, 10.75%, Due 1/23/97.................................. 73,875
-----------
UNITED KINGDOM: 12.9%
100,000 United Kingdom Government Bond, 9.50%, Due 1/15/99............................ 179,476
-----------
UNITED STATES: 41.3%
570,000 U.S. Treasury Note, 6.125%, Due 5/15/98....................................... 572,947
-----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $1,327,321)** (NOTES 2A AND 3).................................. 97.7% 1,355,323
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.......................... 2.3% 32,092
----- -----------
TOTAL NET ASSETS........................................................ 100.0% $ 1,387,415
===== ===========
</TABLE>
- ------------------
* Stated in local currencies unless otherwise noted.
** Cost for Federal income tax purposes is $1,327,321 and net unrealized
appreciation consists of:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gross Unrealized Appreciation...................................................... $ 35,832
Gross Unrealized Depreciation...................................................... (7,830)
------------
Net Unrealized Appreciation........................................................ $ 28,002
============
</TABLE>
See Notes to Financial Statements
- ------
8
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUNDS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- ------------------------------
<TABLE>
<CAPTION>
FUND I FUND II
------------- ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (identified cost $12,701,085 and $1,327,321,
respectively) (Notes 2A and 3)................................................... $ 6,627,880 $1,355,323
Cash............................................................................... 43,983 45,140
Receivables:
Interest......................................................................... 140,732 34,617
Expense reimbursement from Manager (Note 6)...................................... 16,969 2,546
Prepaid expenses............................................................... 11,294 2,385
----------- ----------
Total Assets................................................................... 6,840,858 1,440,011
----------- ----------
LIABILITIES:
Payable for capital stock redeemed................................................. 11,425 38,002
Accrued expenses................................................................... 35,691 14,594
----------- ----------
Total Liabilities.............................................................. 47,116 52,596
----------- ----------
NET ASSETS........................................................................... $ 6,793,742 $1,387,415
=========== ==========
COMPUTATION OF OFFERING PRICE:
Net asset value and redemption price per share ($6,793,742 divided by 995,751
shares and $1,387,415 divided by 189,798 shares, respectively) (Note 7).......... $ 6.82 $ 7.31
=========== ==========
Offering price per share ($6.82 divided by 97% and $7.31 divided by 100%).......... $ 7.03* $ 7.31
=========== ==========
</TABLE>
- ------------------
* On investments of $100,000 or more the offering price is reduced.
<TABLE>
<CAPTION>
<S> <C> <C>
At December 31, 1996 the components of net assets were as follows:
Paid-in capital.................................................................... $78,696,285 $2,831,764
Accumulated net realized loss on investments....................................... (65,830,618) (1,472,991)
Net unrealized appreciation (depreciation) of investments and foreign currency
transactions..................................................................... (6,071,925) 28,642
----------- ----------
$ 6,793,742 $1,387,415
=========== ==========
</TABLE>
See Notes to Financial Statements
- ------
9
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUNDS
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- ------------------------------
<TABLE>
<CAPTION>
FUND I FUND II
---------- ----------
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Interest.............................................................................. $570,932 $154,283
-------- --------
EXPENSES:
Transfer agent fees................................................................... 55,791 16,600
Investment management fees (Note 6)................................................... 52,544 14,071
Professional fees..................................................................... 37,658 17,100
Distribution expenses (Note 5)........................................................ 25,221 22,513
Registration and filing fees.......................................................... 22,925 16,539
Recordkeeping fees.................................................................... 22,611 7,150
Amortization of organization expenses................................................. -- 21,144
Custody fees.......................................................................... 12,219 8,400
Miscellaneous......................................................................... 13,121 5,134
Insurance expense..................................................................... 10,755 3,306
Reports to shareholders............................................................... 9,741 3,000
Trustees' fees........................................................................ 2,871 850
-------- --------
Total expenses...................................................................... 265,457 135,807
Expense waiver (Note 6)............................................................... (30,107) (14,071)
-------- --------
Net expenses........................................................................ 235,350 121,736
-------- --------
Net investment income............................................................ 335,582 32,547
-------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments...................................................... 110,373 19,283
Net realized loss from forward currency contracts and
foreign exchange transactions....................................................... (30,876) (15,421)
-------- --------
Net realized gain..................................................................... 79,497 3,862
Net change in unrealized appreciation (depreciation) of investments, forward currency
contracts and foreign currency transactions.......................................... (40,385) (15,490)
-------- --------
Net realized and unrealized gain (loss) on investments and foreign currency
transactions......................................................................... 39,112 (11,628)
-------- --------
Net increase in net assets resulting from operations............................. $374,694 $ 20,919
========== ==========
</TABLE>
See Notes to Financial Statements
- ------
10
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
- ------------------------------
<TABLE>
<CAPTION>
1996 1995
---------------- ----------------
OPERATIONS:
<S> <C> <C>
Net investment income...................................................... $ 335,582 $ 502,178
Net realized gain on investments........................................... 110,373 10,396
Net realized loss from forward currency contracts and foreign exchange
transactions............................................................ (30,876) (73,238)
Net change in unrealized appreciation (depreciation) of investments,
forward currency contracts and foreign currency transactions............ (40,385) 292,667
----------- ------------
Net increase in net assets resulting from operations....................... 374,694 732,003
DISTRIBUTION TO SHAREHOLDERS:
Distributions from net investment income ($0.22 and $0.25 per share,
respectively)........................................................... (286,463) (470,288)
Distributions from paid-in capital ($0.04 and $0.10 per share,
respectively)........................................................... (49,100) (196,366)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets from capital share transactions (a)............. (3,846,537) (5,030,683)
----------- ------------
Total decrease in net assets.......................................... (3,807,406) (4,965,334)
Net assets at the beginning of the period.................................... 10,601,148 15,566,482
----------- ------------
NET ASSETS at the end of the period.......................................... $ 6,793,742 $ 10,601,148
=========== ============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares sold........................................... 4,443 $ 29,837 16,884 $ 113,670
Shares issued in reinvestment of distributions to
shareholders........................................ 26,064 175,227 49,436 333,216
-------- ----------- -------- -----------
30,507 205,064 66,320 446,886
Shares redeemed....................................... (602,323) (4,051,601) (810,824) (5,477,569)
-------- ----------- -------- -----------
Net decrease..................................... (571,816) ($3,846,537) (744,504) ($5,030,683)
======== =========== ======== ===========
</TABLE>
See Notes to Financial Statements
- ------
11
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
- ------------------------------
<TABLE>
<CAPTION>
1996 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 32,547 $ 131,065
Net realized gain on investments........................................... 19,283 51,681
Net realized loss from forward currency contracts and foreign exchange
transactions............................................................ (15,421) (30,514)
Net change in unrealized appreciation (depreciation) of investments,
forward currency contracts and foreign currency transactions............ (15,490) 43,768
----------- -----------
Net increase in net assets resulting from operations....................... 20,919 196,000
DISTRIBUTION TO SHAREHOLDERS:
Distributions from net investment income ($0.21 per share)................. -- (136,223)
Distributions from paid-in capital ($0.19 and $0.10 per share,
respectively)........................................................... (65,377) (61,440)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets from capital share transactions (a)............. (2,003,910) (3,050,121)
----------- -----------
Total decrease in net assets.......................................... (2,048,368) (3,051,784)
Net assets at the beginning of the period.................................... 3,435,783 6,487,567
----------- -----------
NET ASSETS at the end of the period.......................................... $ 1,387,415 $ 3,435,783
=========== ===========
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Shares sold........................................... 2,562 $ 18,595 91,683 $ 677,067
Shares issued in reinvestment of distributions to
shareholders........................................ 5,483 39,889 17,645 130,464
-------- ----------- -------- -----------
8,045 58,484 109,328 807,531
Shares redeemed....................................... (284,227) (2,062,394) (521,691) (3,857,652)
-------- ----------- -------- -----------
Net decrease..................................... (276,182) ($2,003,910) (412,363) ($3,050,121)
======== =========== ======== ===========
</TABLE>
See Notes to Financial Statements
- ------
12
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period.................. $ 6.76 $ 6.73 $ 6.89 $ 7.27 $ 9.31
------ ------- ------- ------- -------
Income (loss) from investment operations --
Net investment income............................... 0.22 0.25 0.08 0.45 0.86
Net realized and unrealized gain (loss) on
investments and foreign currency transactions..... 0.10 0.13 0.12 (0.35) (2.16)
------ ------- ------- ------- -------
Total from investment operations.................. 0.32 0.38 0.20 0.10 (1.30)
------ ------- ------- ------- -------
Less distributions --
Distributions from net investment income............ 0.22 0.25 0.08 -- 0.74
Distributions from paid-in capital.................. 0.04 0.10 0.28 0.48 --
------ ------- ------- ------- -------
Total distributions................................... 0.26 0.35 0.36 0.48 0.74
------ ------- ------- ------- -------
Net asset value, end of period........................ $ 6.82 $ 6.76 $ 6.73 $ 6.89 $ 7.27
====== ======= ======= ======= =======
TOTAL RETURN (a)...................................... 4.94% 5.77% 2.96% 1.54% (15.08%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands).............. $6,794 $10,601 $15,566 $27,630 $59,283
Ratio to average net assets --
Expenses............................................ 2.80(b) 2.45% 1.68% 1.85% 1.31%
Net investment income............................... 3.99(c) 3.98% 3.42% 6.41% 9.46%
Portfolio turnover rate............................... 87% 382% 337% 151% 167%
</TABLE>
- ------------------
(a) Calculated without the deduction of sales charges.
(b) Ratio of expenses to average net assets prior to expense waiver and
reimbursement from Manager was 3.16%.
(c) Ratio of net investment income to average net assets prior to expense waiver
and reimbursement from Manager was 3.63%.
See Notes to Financial Statements
- ------
13
<PAGE>
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993* 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period...................... $ 7.37 $ 7.39 $ 7.71 $ 8.10 $ 9.73
------ ------- ------- ------- -------
Income (loss) from investment operations --
Net investment income................................... -- 0.21 0.04 0.34 0.73
Net realized and unrealized gain (loss) on investments
and foreign currency transactions..................... 0.13 0.08 0.01 (0.21) (1.61)
------ ------- ------- ------- -------
Total from investment operations...................... 0.13 0.29 0.05 0.13 (0.88)
------ ------- ------- ------- -------
Less distributions --
Distributions from net investment income................ -- 0.21 0.04 -- 0.75
Distributions from paid-in capital...................... 0.19 0.10 0.33 0.52 --
------ ------- ------- ------- -------
Total distributions................................... 0.19 0.31 0.37 0.52 0.75
------ ------- ------- ------- -------
Net asset value, end of period............................ $ 7.31 $ 7.37 $ 7.39 $ 7.71 $ 8.10
====== ======= ======= ======= =======
TOTAL RETURN (a).......................................... 1.81% 3.96% 0.69% 1.63% (9.80%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands).................. $1,387 $ 3,436 $ 6,488 $ 8,127 $14,909
Ratio to average net assets --
Expenses................................................ 5.41(b) 3.49(b) 2.66% 3.10% 1.87%(b)
Net investment income................................... 1.45(c) 2.80(c) 2.37% 4.32% 7.85%(c)
Portfolio turnover rate................................... 119% 414% 301% 153% 216%
</TABLE>
- ------------------
* Calculation based on average shares outstanding.
(a) Calculated without the deduction of sales charges.
(b) Ratio of expenses to average net assets prior to expense waiver and
reimbursement from Manager was 6.03%, 3.78% and 2.64% in 1996, 1995 and
1992, respectively.
(c) Ratio of net investment income to average net assets prior to expense waiver
and reimbursement from Manager was 0.83%, 2.51% and 7.08% in 1996, 1995 and
1992, respectively.
See Notes to Financial Statements
- ------
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
- ------------------------------
NOTE 1 -- ORGANIZATION
Astra Global Investment Series (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company
and is authorized to issue shares in separate series. The Trust currently offers
shares in Astra Short-Term Multi-Market Income Fund I ("Fund I") and Astra
Short-Term Multi-Market Income Fund II ("Fund II") (collectively, the "Funds")
both non-diversified series. The Funds' primary investment objectives are to
provide investors with high current income with preservation of capital as
secondary objectives. To achieve these objectives the Funds will invest in
non-diversified portfolios of high quality debt instruments having remaining
maturities of not more than 3 years denominated in the U.S. dollar and a range
of foreign currencies. The Funds may hedge their foreign currency exposure
through the use of forward selling and options. There can be no assurance that
the Funds' investment objectives will be achieved.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Funds in the preparation of their financial statements.
A. SECURITY VALUATION. Portfolio securities of the Funds which are traded both
on an exchange and in the over-the-counter market are valued according to
the broadest and most representative market. All assets and liabilities
initially expressed in foreign currency values are converted into U.S.
dollar values at the mean between the bid and offered quotations of
currencies against the U.S. dollar as last quoted by any recognized dealer.
When portfolio securities are traded, the valuation is the last reported
sale price on the day of valuation. If there is no such reported sale or
the valuation is based on the over-the-counter market, the securities are
valued at the mean between the last available bid and asked prices.
Securities for which reliable quotations are not readily available and all
other assets are valued at their respective fair market value as determined
in good faith by, or under procedures established by, the Board of Trustees
of the Funds.
Money market instruments with less than sixty days to maturity when
acquired by the Fund are valued on an amortized cost basis, which
approximates market value.
B. CURRENCY TRANSLATION. The market values of all assets and liabilities
denominated in foreign currency are recorded in the financial statements
after translation to the U.S. dollar based upon exchange rates at the end
of the period. The cost basis of such assets and liabilities is determined
based upon historical exchange rates. Income and expenses are translated at
average exchange rates in effect as accrued or incurred.
C. FORWARD CURRENCY CONTRACTS. The Funds may enter into forward purchases or
sales of foreign currencies to hedge certain assets and liabilities
denominated in foreign currencies against declines in market value relative
to the U.S. dollar. Forward currency contracts are marked-to-market daily
and the change in market value is recorded by the Funds as an unrealized
gain or loss. When the forward currency contract is closed, the Funds
record a realized gain or loss equal to the difference between the value of
the forward currency contract at the time it was opened and the value at
the time it was closed. Investments in forward currency contracts may
expose the Funds to risks resulting from unanticipated movements in foreign
currency exchange rates or failure of the counterparty to the agreement to
perform in accordance with the terms of the contract.
D. FEDERAL INCOME TAXES. The Funds intend to comply with the requirements of
the
- ------
15
<PAGE>
Internal Revenue Code applicable to regulated investment companies and to
distribute all of their taxable income to their shareholders. Therefore, no
Federal income tax provision is required.
Distributions paid to shareholders during the year ended December 31, 1996,
differ from net investment income as determined for financial reporting
purposes principally as a result of the characterization of realized
foreign currency gains (losses).
E. SECURITY TRANSACTIONS AND DIVIDENDS. As is common in the industry, security
transactions are accounted for on the trade date. Interest income is
accrued as earned. Discounts and premiums on debt securities are amortized
in accordance with the provisions of the Internal Revenue Code.
Distributions to shareholders are recorded on the ex-dividend date. The
Funds intend to declare and pay dividends monthly.
F. USE OF ESTIMATES. In preparing financial statements in accordance with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements, and revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 -- INVESTMENTS
For the year ended December 31, 1996, the cost of purchases and the proceeds
from sales of securities, excluding short-term notes, were $7,037,078 and
$10,290,679, respectively, for Fund I and $2,580,091 and $4,339,885,
respectively, for Fund II.
On December 31, 1996, Fund I held certain restricted securities (i.e.,
securities which may not be publicly sold without registration under the
Securities Act of 1933 (the '33 Act) or without an exemption under the '33 Act).
These securities are valued at fair value as determined by the Board of Trustees
by considering quality, dividend rate, and marketability of the securities
compared to similar issues.
On December 31, 1996, and on the acquisition dates of the restricted securities,
there were no market quotations available for unrestricted securities of the
same class. The date of acquisition and costs of restricted securities are as
follows:
DATE OF
ACQUISITION COST
----------- -----------
Westfed Holdings, Inc.,
15.50% Pfd................ 9/23/88 $6,180,331
Westfed Holdings, Inc.,
Series B Common........... 9/23/88 638
----------
Total restricted securities
(market value of $2 at
December 31, 1996)........ $6,180,969
==========
Fund I will not pay the costs of disposition of the above restricted securities
other than ordinary brokerage fees, if any.
At December 31, 1996, the funds had capital loss carryforwards for federal
income tax purposes as follows:
CAPITAL LOSS EXPIRES
CARRYFORWARD DECEMBER 31
-------------- -----------
Fund I.................. $ 30,519,253 1997
16,993,222 1998
7,987,637 2000
10,290,576 2001
39,930 2003
-----------
$65,830,618
===========
Fund II................. $ 272,874 2000
1,175,535 2001
24,582 2002
-----------
$ 1,472,991
===========
NOTE 4 -- CAPITAL SHARES
At December 31, 1996, the authorized capital of the Funds consisted of an
unlimited number of shares of beneficial interest without par value.
NOTE 5 -- DISTRIBUTION PLANS
A. FUND I DISTRIBUTION PLAN. Fund I has adopted a distribution plan pursuant to
Rule 12b-1 under the 1940 Act (the "Distribution
- ------
16
<PAGE>
Plan"), whereby it may pay up to a maximum annual rate of 0.30% of its
average daily net assets to Astra Fund Distributors Corp. ("Distributors"),
its principal underwriter, for expenses incurred in the distribution of the
shares of Fund I. Pursuant to this Distribution Plan, Distributors is
entitled to reimbursement each month for its actual expenses incurred in the
distribution and promotion of Fund I's shares, including the printing of
prospectuses and reports used for sales purposes, expenses of preparation
and printing of sales literature and other such distribution related
expenses, including any distribution or service fees paid to securities
dealers who have executed a distribution agreement with Distributors. The
Distribution Plan permits Distributors to carryforward for a maximum of
three years (without carrying charges) distribution expenses from prior
years covered by the Distribution Plan for which Distributors has not
received reimbursement. At December 31, 1996, Distributors had incurred
$367,058 of distribution expenses in excess of amounts currently
reimbursable by the Fund.
During the year ended December 31, 1996, Fund I reimbursed Distributors
$25,221 for distribution expenses. Reimbursable expenses incurred by
Distributors during the year ended December 31, 1996, included $2,863 for
the costs of personnel involved with the promotion and distribution of Fund
I's shares.
B. FUND II DISTRIBUTION PLAN. Fund II has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act (the "Distribution Plan"), whereby it will
provide daily compensation to Distributors in the form of sales commissions
equal to 4% of the amount received by Fund II for each share sold (excluding
reinvestment of dividends and distributions) plus an interest fee calculated
by applying the rate of 1% over prime rate to the outstanding balance of
Uncovered Distribution Charges. Daily compensation payments will be made
monthly and are limited to an annual rate of .75% Fund II's daily net
assets. During the year ended December 31, 1996, Distributors earned $16,885
in daily compensation. At December 31, 1996, Uncovered Distribution Charges
(cumulative sales commissions and interest fees reduced by cumulative daily
compensation and contingent deferred sales charges paid to the Distributors)
amounted to $736,725.
Fund II has adopted a shareholder maintenance agreement that provides
monthly payments to Distributors of a trail or maintenance fee in an amount
equal to an annual rate of .25% of Fund II's daily net assets. During the
year ended December 31, 1996, Distributors earned maintenance fees of
$5,628.
NOTE 6 -- INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Astra Management Corp. (the "Manager") provides the Funds with investment
management and administrative services under an Investment Management Agreement.
The Manager furnishes all investment advice, office space and salaries of
personnel needed by the Funds, except those involved with recordkeeping, daily
net asset value calculations, shareholder servicing, placing orders for the
execution of portfolio transactions, and maintaining registration of shares
under state securities laws. As compensation for its services, the Manager is
paid monthly a fee which is equal to the annual rate of 0.625% on the first $1
billion of average daily net assets for each fund and is reduced on assets in
excess of that amount.
The Manager has agreed to reduce its aggregate fees for any fiscal year, or to
reimburse the Funds to the extent required, so that the Funds' expenses do not
exceed the expense limitations applicable to the Funds under the securities laws
or regulations of those states or jurisdictions in which the Funds' shares are
registered or qualified for sale. During the year ended December 31, 1996, the
Manager reimbursed $30,107 and $14,071 of expenses of Fund I and Fund II,
respectively, pursuant to these expense limitation provisions.
Certain officers and trustees of the Trust are also officers and/or directors of
the Manager and Distributors.
- ------
17
<PAGE>
NOTE 7 -- EARLY WITHDRAWAL CHARGES
Shares of Fund II redeemed within the first four years of their purchase will be
subject to a contingent deferred sales charge. The contingent deferred sales
charge will not, however, be imposed on shares acquired through the reinvestment
of distributions, or on the appreciation of the value of shares acquired within
the preceding four year period over the purchase price of such shares.
Redemption proceeds will be applied first against shares not subject to the
contingent deferred sales charge for purposes of calculating such charge. The
contingent deferred sales charge is paid by the investor to Distributors and is
imposed at the rate of 4% for redemptions in the first year after purchase,
declining to 3%, 2%, and 1% in the second, third and fourth years, respectively.
During the year ended December 31, 1996, Distributors received contingent
deferred sales charges of $2,244.
- ------
18
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- ------------------------------
To the Shareholders of Astra
Short-Term Multi-Market Income
Fund I and II and the Trustees of
Astra Global Investment Series
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Astra Global Investment Series (comprising,
respectively, Astra Short-Term Multi-Market Income Funds I and II), as of
December 31, 1996, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting Astra Global Investment Series as of
December 31, 1996, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 17, 1997
- ------
19
<PAGE>
ASTRA GROUP
FAMILY OF FUNDS
- ------------------------------
ADJUSTABLE-INCOME FUNDS
- ------------------------------
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
FIXED-INCOME FUNDS
- ------------------------------
ASTRA ALL-AMERICAS GOVERNMENT INCOME TRUST
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
- ------------------
Prospectuses containing more complete information about the Funds, including
charges and expenses, may be obtained from Astra Fund Distributors Corp. Read
the Prospectus carefully before you invest or send money.
- ------
20
<PAGE>
750 B Street
Suite 2350
San Diego, CA 92101
ASTRA SHORT-TERM MULTI-MARKET
INCOME FUND I & II
Investment Manager
Astra Management Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-619-238-7100
Principal Underwriter
Astra Fund Distributors Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-800-219-1080
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
1-800-441-7267
Transfer Agent
Investors Fiduciary Trust Company
c/o DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective prospectus which includes
details regarding the Funds' objectives, policies, sales commissions and other
information.
ST I/II 297 2.0 AST 701134
[ASTRA LOGO]
ASTRA
SHORT-TERM
MULTI-MARKET
INCOME FUND I & II
ANNUAL REPORT
DECEMBER 31, 1996
In the printed Prospectus there appears
a photograph of the planet earth
as viewed from space.
