ANCHOR
GOLD AND
CURRENCY
TRUST
ANNUAL REPORT
DECEMBER 31, 1999
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ANCHOR GOLD & CURENCY TRUST
Comparison of the Change in Value of a $10,000 Investment
in the Anchor Gold & Currency Trust, Gold Bullion and the XAU Index
[GRAPHIC OMITTED]
===============================================================================
Anchor Gold & Currency Trust
Average Annual Total Return
- -------------------------------------------------------------------------------
1 Year 5 Year 10 Year
(14.08)% (7.56)% (3.80)%
===============================================================================
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ANCHOR GOLD AND CURRENCY TRUST
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
Assets:
Investments at quoted market value (cost $227,137;
see Schedule of Investments, Notes 1, 2, & 5)................. $ 227,137
Cash ......................................................... 59,237
Dividends and interest receivable.............................. 1,657
Other assets................................................... 1,809
------------
Total assets.............................................. 289,840
------------
Liabilities:
Accrued expenses and other liabilities (Note 3)................ 113,552
------------
Total liabilities......................................... 113,552
------------
Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 48,912 shares outstanding) (Note 1)......... 8,962,216
Accumulated undistributed net investment income (Note 1)....... (1,662,529)
Accumulated realized loss from security transactions,
net (Note 1).................................................. (7,123,398)
Net unrealized depreciation in value of investments (Note 2).. 0
------------
Net assets (equivalent to $3.60 per share, based on
48,912 capital shares outstanding)....................... $ 176,289
============
The accompanying notes are an integral part of these financial statements.
3.
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ANCHOR GOLD AND CURRENCY TRUST
CONSOLIDATED STATEMENT OF OPERATIONS
DECEMBER 31, 1999
Income:
Interest...................................................... $ 214,767
Dividends..................................................... 18,730
------------
Total income.............................................. 233,497
------------
Expenses:
Management fees (Note 3)...................................... 78,637
Legal fees.................................................... 34,802
Pricing and bookkeeping fees (Note 4)......................... 21,722
Transfer fees (Note 4)........................................ 13,000
Custodian fees................................................ 12,587
Audit and accounting fees..................................... 9,500
Trustees fees and expenses.................................... 2,500
Reserve for liquidation (Note 4).............................. 88,450
Other expenses................................................ 5,042
------------
Total expenses............................................ 266,240
------------
Net investment loss............................................ (32,743)
------------
Realized and unrealized loss on investments:
Realized loss on investments-net............................. (4,868,527)
Increase in net unrealized appreciation in investments....... 3,014,084
------------
Net loss on investments................................... (1,854,443)
------------
Net decrease in net assets resulting from operations........... $(1,887,186)
============
The accompanying notes are an integral part of these financial statements.
4.
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ANCHOR GOLD AND CURRENCY TRUST
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASETS
Year Ended Year Ended
December 31, December 31,
1999 1998
-------------------------------
From operations:
Net investment (loss) income.................... $ (32,743) $ 159,000
Realized loss on investments, net............... (4,868,526) (654,950)
Increase (decrease) in net unrealized
appreciation in investments.................... 3,014,084 (85,345)
-------------- -------------
Net decrease in net assets resulting
from operations................................ (1,887,185) (581,295)
-------------- -------------
Distributions to shareholders:
From net investment income ($0.20 per share in
1998)......................................... -- (586,664)
-------------- -------------
Total distributions to shareholders......... -- (586,664)
-------------- -------------
From capital share transactions:
Number of Shares
1999 1998
-----------------------
Proceeds from sale of
shares.................. 13,889 -- 50,000 --
Shares issued to share-
holders in distributions
reinvested.............. -- 132,619 -- 555,675
Cost of shares redeemed.. (3,001,873) (15,497) (10,720,730) (71,169)
---------- --------- ----------- ------------
(Decrease) increase in net
assets resulting from
capital
share transactions...... (2,987,984) 117,122 (10,670,730) 484,506
=========== ========= ------------- -----------
Net decrease in net assets....................... (12,557,915) (683,453)
Net assets:
Beginning of period............................ 12,734,204 13,417,657
-------------- -------------
End of period (including undistributed
net investment income of $(883,840)
and $(851,097), respectively).............. $ 176,289 $ 12,734,204
============== =============
The accompanying notes are an integral part of these financial statements.
5.
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ANCHOR GOLD AND CURRENCY TRUST
CONSOLIDATED AND SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Year Ended December 31,
1999 1998 1997 1996 1995
------------------------------------------------------
Investment income........ $ 240.39 $(0.19) $0.08 $0.03 $0.04
Expenses, net............ 274.10 (0.09) 0.05 0.07 0.06
------------------------------------------------------
Net investment (loss)
income.................. (33.71) (0.10) 0.03 (0.04) (0.02)
Net realized and
unrealized gain (loss)
on investments.......... 33.12 (0.11) (1.68) 0.61 0.11
Distributions to
shareholders:
From net investment
income................ -- (0.20) (0.01) -- --
From net realized gain
on investments........ -- -- -- -- --
---------- --------- -------- -------- --------
Net (decrease) increase
in net asset value...... (0.59) (0.41) (1.66) 0.57 0.09
Net asset value:
Beginning of period..... 4.19 4.60 6.26 5.69 5.60
---------- --------- -------- -------- --------
End of period........... $3.60 $4.19 $4.60 $6.26 $5.69
========== ========= ======== ======== ========
Total Return............. (14.08%) (4.57%) (26.36%) (10.02%) 1.61%
Ratio of expenses to
average net assets...... 2.53% 1.27% 1.12% 1.10% 1.10%
Ratio of net investment
(loss)income to average
net assets.............. (0.31)% 1.20% 0.78% (0.60%) (0.47%)
Portfolio turnover....... 1.07 0.53 0.24 0.18 0.17
Average commission rate 0.0254 0.0403 0.0454 0.0389 0.0441
paid.....................
Number of shares out-
standing at end of period 48,912 3,036,896 2,919,774 3,688,612 3,688,612
The accompanying notes are an integral part of these financial statements.
6.
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ANCHOR GOLD AND CURRENCY
CONSOLIDATED SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
Value
Quantity (Note 1)
-------- --------
UNITED STATES TREASURY BILLS - 128.84%
$230,000 Treasury Bill, 5.21% yield, maturing 03/09/00 (at cost)..$ 227,137
-----------
Total investments (cost $227,137)........................ 227,137
-----------
CASH & OTHER ASSETS, LESS LIABILITIES - (28.84)%................... (50,848)
-----------
Total Net Assets.........................................$ 176,289
===========
The accompanying notes are an integral part of these financial statements.
7.
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ANCHOR GOLD AND CURRENCY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. Significant accounting policies:
On October 18, 1999, the shareholders of the Anchor Gold and Currency Trust
(the "Trust") voted to convert the Trust from a closed-end investment company
to an open-end investment company.
Anchor Gold and Currency Trust, a Massachusetts business trust, is registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end investment management company. The following is a summary of
significant accounting policies followed by the Trust which are in conformity
with those generally accepted in the investment company industry. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Investment securities-- Security transactions are recorded on the date the
investments are purchased or sold. Each day, at noon, securities traded on
national security exchanges are valued at the last sale price on the primary
exchange on which they are listed, or if there has been no sale by noon, at
the current bid price. Other securities for which market quotations are
readily available are valued at the last known sales price, or, if
unavailable, the known current bid price which most nearly represents
current market value. Options are valued in the same manner. Foreign
currencies and foreign denominated securities are translated at current
market exchange rates as of noon. Gold bullion is valued each day at noon
based on the New York spot gold price.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Gains and losses from sales of investments
are calculated using the "identified cost" method for both financial
reporting and federal income tax purposes.
B. Income Taxes-- The Trust has elected to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute each year all of its taxable income to its shareholders. No
provision for federal income taxes is necessary since the Trust intends to
qualify for and elect the special tax treatment afforded a "regulated
investment company" under subchapter M of the Internal Revenue Code. Income
and capital gains distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts
based on their federal tax basis treatment; temporary differences do not
require such reclassification. During the current fiscal year, permanent
differences, primarily due to foreign currency losses increasing net
investment loss, resulted in a net decrease in undistributed net investment
income and a decrease in accumulated realized loss from security
transactions. This reclassification had no affect on net assets.
C. Capital Stock-- The Trust records the sales and redemptions of its
capital stock on trade date.
8.
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ANCHOR GOLD AND CURRENCY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
D. Principles of Consolidation - The consolidated statements include the
consolidated operations of Anchor Gold & Currency Limited of which the Trust
owns all outstanding shares. Intercompany receivables, payables and
transactions have been eliminated.
E. Foreign Currency-- Amounts denominated in or expected to settle in foreign
currencies are translated into United States dollars at rates reported by a
major Boston bank on the following basis:
1. Market value of investment securities, other assets and liabilities at
the 12:00 noon Eastern Time rate of exchange at the balance sheet date.
2. Purchases and sales of investment securities, income and expenses at the
rate of exchange prevailing on the respective dates of such transactions (or
at an average rate if significant rate fluctuations have not occurred).
The Trust does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short term securities, sales of foreign currencies, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Trust's books, and
the United States dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in
the value of assets and liabilities other than investments in securities at
fiscal year end, resulting from changes in the exchange rate.
2. Tax basis of investments:
At December 31, 1999, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $0. Aggregate gross unrealized
depreciation in investments in which there was an excess of tax cost over
market value was $0. At December 31, 1999, there was no net unrealized
depreciation or appreciation in investments.
3. Investment advisory service agreements:
The investment advisory contract with Anchor Investment Management
Corporation (the "investment adviser") provides that the Trust will pay the
adviser a fee for investment advice based on 3/4 of 1% per annum of average
daily net assets. At December 31, 1999, investment advisory fees of $380 were
due and were included in "Accrued expenses and other liabilities" in the
accompanying Consolidated Statement of Assets and Liabilities. David Y.
Williams, a Trustee of the Trust, is President and a Director of the
Investment Adviser.
9.
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ANCHOR GOLD AND CURRENCY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
4. Certain transactions:
The Trust has entered into an agreement with Cardinal Investment Services,
Inc. for transfer agent and dividend disbursing agent services. Annual fees
for these services are $13,000.
Certain officers and trustees of the Trust are directors and/or officers of
the investment adviser and distributor. Meeschaert & Co., Inc., the Trust's
distributor, received $55,044 in brokerage commissions during the year
ended December 31, 1999.
Fees earned by Anchor Investment Management Corporation for expenses related
to daily pricing of the Trust shares and for bookkeeping services for the
year ended December 31, 1999 were $21,722.
At a meeting of the Board of Trustees on December 3, 1999, the board approved
in form a Plan of Liquidation and Dissolution of the Trust. In approving the
Plan of Liquidation and Dissolution, the Board considered the impact of the
withdrawal of the Trust's largest shareholder on the asset base of the Trust
and the subsequent impact on the Trust's expense ratio. The Trustees approved
and ratified the creation of a reserve fund in the amount of $88,450 for the
purpose of satisfying any and all reasonable costs and expenses which may be
incurred by the Trust in liquidating its assets.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the year ended December 31, 1999 were:
Cost of securities acquired:
U.S. Government and investments backed by
such securities......................... $ 227,137
Other investments....................... 157,006,087
-------------
$ 157,233,224
=============
Proceeds from sales and maturities:
U.S. Government and investments backed by
such securities......................... $ --
Other investments....................... 167,623,889
-------------
$ 167,623,889
=============
10.
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ANCHOR GOLD AND CURRENCY TRUST
Independent Auditors' Report
To the Shareholders and Trustees of Anchor Gold & Currency Trust:
We have audited the accompanying statement of assets and liabilities of Anchor
Gold & Currency Trust (a Massachusetts business trust), including the schedule
of investments, as of December 31, 1999, the related statement 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 selected per share data and ratios for
each of the five years in the period then ended. These financial statements and
per share data and ratios are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and per
share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of 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, 1999 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 selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Anchor Gold & Currency Trust as of December 31, 1999, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the selected per share data and
ratios for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
LIVINGSTON & HAYNES, P.C.
Wellesley, Massachusetts,
January 7, 2000
11.
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ANCHOR GOLD AND CURRENCY TRUST
OFFICERS AND TRUSTEES
ERNIE BUTLER Trustee
President, I.E. Butler Securities
SPENCER H. LEMENAGER Trustee
President, Equity Inc.
DAVID W.C. PUTNAM Chairman
President, F.L. Putnam and Trustee
Investment Management Company
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
DAVID Y. WILLIAMS President, Secretary
President and Director, Meeschaert & Co., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
12.
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ANCHOR GOLD AND CURRENCY TRUST
INVESTMENT ADVISER AND ADMINISTRATOR
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
TRANSFER AGENT
Cardinal Investment Services Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, Boston, Massachusetts 02116
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02482
LEGAL COUNSEL
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
This report is not authorized for distribution to prospective investors in the
Trust unless preceded or accompanied by an effective prospectus which includes
information concerning the Trust's record or other pertinent information.
13.
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