ANCHOR
INTERNATIONAL
BOND
TRUST
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SEMI-ANNUAL REPORT
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JUNE 30, 2000
(Unaudited)
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Anchor International Bond Trust
Comparison of the Change in Value of a $10,000 Investment in the Anchor
International Bond Trust and the Solomon Brothers World Govt. Bond Index
[GRAPHIC OMITTED]
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Anchor International Bond Trust
Average Annual Total Return
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Six Months* 1 Year 5 Year 10 Year
3.18% (13.14%) (0.83%) 3.39%
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*Not Annualized for the period from December 31, 1999 to June 30, 2000.
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Anchor International Bond Trust
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
Unaudited)
Assets:
Investments at quoted market value (cost $83,913;
see Schedule of Investments, Notes 1, 2, & 5)................. $ 83,913
Cash ......................................................... 8,243
Interest receivable............................................ 381
Other assets................................................... 442
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Total assets.............................................. 92,979
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Liabilities:
Accrued expenses and other liabilities (Note 3 )............... 9,409
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Total liabilities......................................... 9,409
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Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 12,259 shares outstanding) (Note 1)......... 2,365,177
Accumulated undistributed net investment income (Note 1)....... (566,564)
Accumulated realized loss from security transactions, net (Note 1) (1,715,043)
Net unrealized depreciation in value of investments (Note 2)... 0
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Net assets (equivalent to $6.82 per share, based on
12,259 capital shares outstanding)....................... $ 83,570
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The accompanying notes are an integral part of these financial statements.
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Anchor International Bond Trust
STATEMENT OF OPERATIONS
JUNE 30, 2000
(Unaudited)
Income:
Interest...................................................... $ 3,210
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Total income.............................................. 3,210
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Expenses:
Management fees, net (Note 3)................................. 349
Audit and accounting fees..................................... 0
Legal fees.................................................... 0
Pricing and bookkeeping fees ................................. 0
Transfer fees (Note 4)........................................ 0
Custodian fees................................................ 0
Trustees' fees and expenses................................... 0
Other expenses................................................ 0
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Total expenses............................................ 349
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Net investment income.......................................... 2,861
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Realized and unrealized gain on investments:
Realized loss on investments-net............................. 0
Decrease in net unrealized appreciation in investments....... 0
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Net gain on investments................................... 0
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Net decrease in net assets resulting from operations........... $ 2,861
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The accompanying notes are an integral part of these financial statements.
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Anchor International Bond Trust
STATEMENTS OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
June 30, 2000 December 31,
(Unaudited) 1999
---------------- ------------
From operations:
Net investment income........................... $ 2,861 $ 25,367
Realized loss on investments, net............... 0 (687,604)
Decrease (increase) in net unrealized
appreciation in investments.................... 0 8,985
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Net decrease (increase) in net assets
resulting from operations............. 2,861 (653,252)
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Distributions to shareholders:
From net investment income ..................... -- --
From net realized gain on investments.......... -- --
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Total distributions to shareholders......... -- --
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From capital share transactions:
Number of Shares
2000 1999
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Proceeds from sale of
shares................... 21 7,485 139 50,000
Shares issued to share-
holders in distributions
reinvested................ -- -- -- --
Cost of shares redeemed....(7,748) (717,292) (51,624) (4,815,483)
---------- ----------- ------------ ------------
Decrease in net assets
resulting from capital
share transactions....... (7,769) (709,811) (51,485) (4,765,483)
========== =========== ------------ ------------
Net decrease in net assets....................... (48,624) 5,550,929
Net assets:
Beginning of period............................ 132,194 132,194
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End of period (including undistributed net
investment income of $(566,564)and
$(569,425), respectively).................... $ 83,570 $ 5,550,929
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The accompanying notes are an integral part of these financial statements.
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Anchor International Bond Trust
SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Six Months
Ended
June 30, Year Ended December 31,
2000
(Unaudited) 1999 1998 1997 1996
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Investment income......... $(19.88) $(140.99) $0.78 $0.42 $0.35
Expenses, net............. (2.16) (112.55) 0.21 0.11 0.09
----------- ---------- ------ ------- ------
Net investment income..... (17.72) (28.44) 0.57 0.31 0.26
Net realized and
unrealized gain (loss) on
investments.............. 17.93 27.44 0.19 (1.17) (0.69)
Distributions to
shareholders:
From net investment
income................. -- -- (0.61) -- --
From net realized gain
on investments........ -- -- -- -- --
----------- ---------- ------ ------- ------
Net increase (decrease)
in net asset value....... 0.21 (1.00) 0.15 (0.86) (0.43)
Net asset value:
Beginning of period...... 6.61 7.61 7.46 8.32 8.75
----------- ---------- ------ ------- ------
End of period............ $6.82 $6.61 $7.61 $7.46 $8.32
=====================================================
Total Return.............. 3.18% (13.14%) 10.20% (10.34%) (4.91%)
Ratio of expenses to
average net assets....... 0.74% 2.20% 1.30% 1.11% 1.06%
Ratio of net investment
income to average net
assets................... 6.04% 0.56% 3.53% 3.16% 3.19%
Average commission rate
paid..................... -- -- -- -- --
Number of shares out-
standing at end of period 12,259 19,986 729,797 2,569,500 3,136,313
The accompanying notes are an integral part of these financial statements.
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Anchor International Bond Trust
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(Unaudited)
Value
Quantity (Note 1)
-------- --------
UNITED STATES TREASURY BILLS - 100.41%
$85,000 Treasury Bill, 5.48% yield, maturing 08/24/00 (at cost) $ 83,913
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Total investments (cost $83,913)........................ 83,913
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CASH & OTHER ASSETS, LESS LIABILITIES - (0.41)%.................... (343)
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Total Net Assets........................................ $ 83,570
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The accompanying notes are an integral part of these financial statements.
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Anchor International Bond Trust
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
1. Significant accounting policies:
Anchor International Bond Trust, a Massachusetts business trust (the
"Trust"), is registered under the Investment Company Act of 1940, as amended,
as a 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, securities traded in the
foreign over-the-counter market are valued at the closing bid price of the
European markets; other investment securities traded on a national
securities exchange are valued at the last sales price as of 12:00 noon, 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. Temporary cash
investments are stated at cost, which approximates market value.
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 offset by
net investment income, 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.
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Anchor International Bond Trust
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
(Continued)
C. Capital Stock-- The Trust records the sales and redemptions of its
capital stock on trade date.
D. 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:
A. Market value of investment securities, other assets and liabilities
at the 12:00 noon Eastern Time rate of exchange at the balance sheet date.
B. 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 June 30, 2000, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
There was no aggregate gross unrealized appreciation in investments in which
there was an excess of market value over tax cost. Aggregate gross unrealized
depreciation in investments in which there was an excess of tax cost over
market value was $0. Net unrealized depreciation in investments at June 30,
2000 was $0.
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 June 30, 2000, investment advisory fees of $349 were due
and were included in "Accrued expenses and other liabilities" in the
accompanying Statement of Assets and Liabilities. David Y. Williams, a
Trustee of the Trust, is President and a Director of the Investment Adviser.
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Anchor International Bond Trust
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
(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 no brokerage
commissions during the six months ended June 30, 2000. At meetings of the
Board of Trustees on December 3, 1999 and March 8, 2000, after discussions
with the Trust's investment adviser, independent accountant, counsel and
administrator, the Board determined that the continued operation of the Trust
was not economically feasible or in the best interests of the Trust or its
shareholders. After careful consideration of various alternatives, the full
Board concluded that a prompt liquidation of the Trust was the alternative
that was in the best interests of the shareholders of the Trust. The Board
then unanimously approved the Plan of Liquidation and Dissolution of the
Trust and directed that it be submitted to the Trust's shareholders for
consideration. 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 $26,598 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 six months ended June 30, 2000 were:
Cost of securities acquired:
U.S. Government and investments backed by
such securities.......................... $ 192,382
Other investments......................... 0
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$ 192,382
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Proceeds from sales and maturities:
U.S. Government and investments backed by
such securities.......................... $ 276,285
Other investments........................ 0
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$ 276,285
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Anchor International Bond Trust
OFFICERS AND TRUSTEES
Ernie Butler Trustee
President, I.E. Butler Securities
Spencer H. Le Menager Trustee
President, Equity Inc.
David W.C. Putnam Chairman
President, F.L. Putnam and Trustee
Investment Management Company
J. Stephen Putnam Vice President
President, Robert Thomas Securities and Treasurer
David Y. Williams President, Secretary
President and Director, Meeschaert and Trustee
& Co., Inc.,; President and Director,
Anchor Investment Management Corporation
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Anchor International Bond Trust
INVESTMENT ADVISER
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
ADMINISTRATOR AND 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 submitted for the general information of shareholders of the
Anchor International Bond Trust. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective
Prospectus for the Trust. The Prospectus includes more complete information
about management fees and expenses. Please read the Prospectus carefully.
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