<PAGE> 1
------------------------------------------
SEMIANNUAL REPORT - MAY 31, 1996
------------------------------------------
ANCHOR
PATHWAY
FUND
<PAGE> 2
- ---------------------
DEAR ANCHOR PATHWAY INVESTOR:
We are pleased to report the results for the first half of
fiscal 1996 -- the six months ended May 31, 1996 -- for the
seven series in the Anchor Pathway Fund, which serves as the
underlying investment for the American Pathway II Variable
Annuity. As you will see, while all of the equity funds in the
series gained ground, the rise in interest rates hurt the U.S.
Government/AAA-Rated Securities Series. The following commentary
on the economy in general and the investment activities of each
of the series has been provided by Capital Research and
Management Company (CRMC), the investment adviser to the Anchor
Pathway Fund.
The economy continued to make progress through much of the
period. A modest pickup in consumer spending, housing and
exports helped the national output of goods and services expand
at an annual rate of 2.3% in the first calendar quarter of 1996,
with indications of an even higher rate of growth for the second
quarter. This burst of activity, coupled with reports that job
creation was growing faster than anticipated, rekindled concerns
among bond investors that inflationary pressures might begin to
rise. Yields on most fixed-income securities rose sharply,
causing bond prices to fall.
Equity markets, on the other hand, maintained an upward bias
over the past six months. It has been somewhat unusual in recent
years to see stock prices increase sharply when interest rates
rise, yet this is exactly what happened. Likewise, other factors
that might have dampened investor confidence (e.g., a less
promising corporate profit outlook and a stalemate on fiscal
policy in Congress) seemed to have had little effect. Stocks, as
measured by Standard & Poor's 500 Composite Index, rose in every
month of the period, bolstered in part by the extraordinary cash
flows into equity mutual funds.
THE GROWTH SERIES increased 5.3% over the six months ended May
31, as sustained economic growth translated into profit gains
for some U.S. corporations. Retailers and leisure companies,
which had earlier lagged the market, pulled to the fore; many
healthcare companies, which are well represented in the series'
portfolio, also rose in value. These included pharmaceutical
companies specializing in biotechnology, as well as managed-care
providers benefiting from mergers and cost-cutting measures.
Electronic technology remains our largest area of concentration,
and over the period this sector demonstrated its characteristic
volatility. America Online, the nation's largest provider of
online services and one of the portfolio's largest holdings,
increased substantially. On the other hand, Adobe Systems, which
had posted a substantial gain when CRMC reported to you last,
was one of the series' least successful holdings this period. Of
course, CRMC invests in individual companies with good long-term
prospects, and through careful research the investment adviser
continues to find attractive valuations in this area. At the
close of the fiscal period, the series held about 87.4% of its
assets in equities with the balance in cash and equivalents.
THE INTERNATIONAL SERIES rose 9.4% during the six-month
period. Many non-U.S. financial markets began to recover from
the doldrums of recent years. In Europe, where more than half of
the series' assets are invested, declining interest rates moved
stock prices higher in many markets in anticipation of better
business conditions. In Japan, the economy showed signs of
recovering from its long downturn, although returns for U.S.
investors were limited somewhat by the decline of the yen
against the dollar. Elsewhere, however, local currency movements
boosted returns for U.S. investors. Telecommunications continues
to be the series' largest industry concentration and several of
its investments in that area posted large price gains, such as
service providers Telecom Italia and Telefonica de Espana.
THE GROWTH-INCOME SERIES posted a gain of 9.8% during the
period. The series invests in a wide variety of established
companies with the potential for rising earnings and dividends.
Many of these companies responded favorably to indications of a
pickup in economic activity. Machinery and chemical-related
issues were areas of particular strength. A rise in consumer
spending contributed to price gains among merchandising
companies, such as clothing manufacturer Gap, Inc. as well as
automobile makers like Ford Motor Co. Meanwhile, bank stocks
cooled somewhat from their advances of recent months as the rise
in interest rates over the period slowed profit growth. Overall,
the series continued to show broad strength. Nearly 90.1% of the
portfolio was invested in equity-type securities, with the rest
in cash and cash equivalents as a buying reserve.
---------------------
1
<PAGE> 3
- ---------------------
THE ASSET ALLOCATION SERIES increased 7.7% for the six months
ended May 31, 1996. The series is managed as though it
constitutes the complete investment program of a prudent
investor, with holdings in carefully selected, high-quality
common stocks and bonds. Within the equity portion, rising
gasoline prices led to substantial price gains for energy
companies, one of the series' largest areas of concentration.
Phillips Petroleum Co., Chevron Corp. and Unocal Corp. were
among the series' profitable holdings. A number of retailing and
health-and-personal-care companies continued to benefit from
recent restructuring and merger activity. On the fixed-income
side, rising interest rates pulled bond prices down. At the
close of the period, the fund held 67.4% of its assets in
equities, 25.2% in bonds and notes and the remainder in cash and
equivalents.
THE HIGH-YIELD BOND SERIES rose 5.5% in the past six months.
During that period, higher-yielding, higher-risk, lower-rated
bonds provided investors with solid returns. Because these
securities respond to the strength or weakness of individual
companies, as well as to interest-rate changes, the series'
investments were cushioned somewhat from the decline experienced
by other fixed-income markets. Indeed, the series' return more
closely reflected the general strength of the stock market.
Improving corporate profits and balance sheets helped boost
perceptions of the credit quality of many of the bonds in the
portfolio. The investment adviser takes a research-intensive
approach and continues to uncover promising opportunities,
particularly among rapidly growing areas such as
telecommunications. At the close of the period, the majority of
the portfolio was invested in the fixed-income issues of U.S.
corporations.
THE U.S. GOVERNMENT/AAA-RATED SECURITIES SERIES declined 1.6%
as rising interest rates pushed bond prices lower. During the
six-month period, yields on the benchmark 30-year Treasury bond
moved from a low in January of 6.1% to a high of 6.9% in May;
home mortgage rates rose sharply as well. During the six-month
period, the series maintained its conservative, quality-oriented
approach. As of May 31, 1996, the fund held almost 80.7% of its
assets in U.S. Treasury issues, Government National Mortgage
Association (GNMA) and other mortgage-backed securities. The
rest was invested in other obligations, corporate bonds and cash
and equivalents. The fund typically invests in "seasoned
mortgages" (those five years old and older), which tend to carry
a lower risk of prepayment and are therefore more resistant to
short-term swings in interest rates.
THE CASH MANAGEMENT SERIES returned 2.5%. While intermediate
and long-term rates rose over the period, short-term rates
declined slightly in December and January in response to cuts by
the Federal Reserve Board of the Federal funds rate (the rate
that banks charge each other for overnight loans) in an attempt
to stimulate economic growth. A pickup in economic activity
since then has dampened expectations of further cuts in the near
future, and short-term rates have risen modestly. The series
maintains a high-quality orientation by concentrating in assets
in top-grade commercial paper. All of its money market
securities carry the highest credit rating from Standard &
Poor's or Moody's, or are determined to be of comparable
quality. The series offers an alternative to investors who wish
to temporarily reduce their stock or bond investments, or can be
used as a base for making regular investments into other funds.
While these last few months are a reminder that price
fluctuations are inevitable in the securities markets, we
encourage you to maintain a long-term perspective. In the
meantime, we will continue to monitor developments that could
affect your investments.
- ---------------------
2
<PAGE> 4
- ---------------------
As always, we appreciate your support and look forward to
reporting to you again following the close of the fiscal year on
November 30. In the meantime, the investment adviser will
continue to scan the economic and investment horizons and work
hard to help you realize your objectives.
Sincerely,
Eli Broad
Chairman, President and Chief Executive Officer,
Anchor National Life Insurance Company
July 15, 1996
-------------------------------
Performance figures quoted are for the Anchor Pathway Fund;
therefore, they are not net of the 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 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. Money market instruments
generally offer stability and income, but an investment in these
securities, like investments in the other series, is not
guaranteed.
---------------------
3
<PAGE> 5
- ---------------------
ANCHOR PATHWAY FUND
GROWTH SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK -- 86.5% SHARES (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CAPITAL EQUIPMENT -- 24.9%
Data Processing & Reproduction -- 7.2%
Adobe Systems, Inc. ................................................. 250,000 $ 9,281
Auto Desk, Inc. ..................................................... 50,000 1,737
Compuware Corp.+..................................................... 209,000 8,203
Data General Corp.+.................................................. 100,000 1,275
Digital Equipment Corp.+............................................. 50,000 2,606
Electronic Arts+..................................................... 32,000 1,012
International Business Machines Corp. ............................... 29,800 3,181
Mentor Graphics Corp.+............................................... 220,000 3,933
Oracle Systems Corp.+................................................ 375,400 12,435
Structural Dynamics Research Corp.+.................................. 150,000 4,275
Sybase, Inc.+........................................................ 390,000 9,019
Tandem Computers, Inc.+.............................................. 425,000 5,312
Electrical & Electronics -- 2.8%
General Instrumental Corp.+.......................................... 179,300 5,536
Lucent Technologies, Inc.+........................................... 15,000 570
Nokia Corp. ADR...................................................... 20,000 870
Silicon Graphics, Inc.+.............................................. 630,000 17,325
Electronic Components -- 13.4%
Analog Devices, Inc.+................................................ 225,000 6,216
EMC Corp.+........................................................... 200,000 4,425
Ericsson (L.M.) Telephone Co., Class B ADR........................... 275,000 6,342
Intel Corp. ......................................................... 477,600 36,059
Linear Technology Corp. ............................................. 130,000 4,485
LSI Logic Corp.+..................................................... 250,000 7,781
Maxim Integrated Products, Inc.+..................................... 120,000 4,080
Microchip Technology, Inc.+.......................................... 50,000 1,288
National Semiconductor Corp.+........................................ 50,000 813
Newbridge Networks Corp.+............................................ 50,000 3,556
Park Electrochemical Corp. .......................................... 187,200 4,516
Rogers Corp.+........................................................ 109,200 2,662
SCI Systems, Inc.+................................................... 215,000 9,675
Texas Instruments, Inc. ............................................. 320,600 18,034
Xilnx, Inc.+......................................................... 170,000 5,907
Electronic Instruments -- 0.2%
Applied Materials, Inc.+............................................. 50,000 1,862
Energy Equipment -- 1.3%
Reading & Bates Corp.+............................................... 150,000 3,300
Schlumberger Ltd. ................................................... 99,500 8,296
--------------
215,867
--------------
CONSUMER GOODS -- 7.6%
Appliances & Household Durables -- 0.5%
Mohawk Industries, Inc.+............................................. 270,000 4,522
Beverages & Tobacco -- 1.2%
PepsiCo, Inc. ....................................................... 80,000 2,660
Philip Morris Cos., Inc. ............................................ 80,000 7,950
</TABLE>
- ---------------------
4
<PAGE> 6
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (continued) SHARES (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS (continued)
Health & Personal Care -- 3.6%
Alpha Beta Technology, Inc.+......................................... 70,000 $ 831
Bausch & Lomb, Inc. ................................................. 20,000 860
Forest Labs, Inc.+................................................... 121,000 4,991
Genetics Institute, Inc.+............................................ 80,000 5,480
Guidant Corp. ....................................................... 105,000 6,090
Omnicare, Inc. ...................................................... 140,000 7,805
Paragon Trade Brands, Inc.+.......................................... 45,000 1,108
Pharmacia & Upjohn Inc. ............................................. 58,000 2,371
Revlon, Inc., Class A+ .............................................. 11,000 345
Tambrands, Inc. ..................................................... 20,000 923
Recreation & Other Consumer Products -- 1.5%
Duracell International, Inc. ........................................ 25,000 1,165
Hasbro, Inc. ........................................................ 45,000 1,699
Mattel, Inc. ........................................................ 370,308 10,091
Textiles & Apparel -- 0.8%
Fruit Of The Loom, Inc., Class A+.................................... 164,800 4,450
Phillips-Van Heusen Corp. ........................................... 210,000 2,809
--------------
66,150
--------------
ENERGY -- 0.9%
Energy Sources -- 0.6%
Murphy Oil Corp. .................................................... 80,000 3,530
Noble Affiliates, Inc. .............................................. 43,900 1,487
Utilities -- 0.3%
Columbia Gas Systems, Inc.+.......................................... 59,400 2,903
--------------
7,920
--------------
FINANCE -- 6.6%
Banking -- 2.6%
Banc One Corp. ...................................................... 131,587 4,869
Charter One Financial, Inc. ......................................... 70,000 2,546
Commerce Bancshares, Inc. ........................................... 121,225 4,182
Huntington Bancshares, Inc. ......................................... 72,000 1,782
Mercantile Bancorp. ................................................. 157,500 7,403
Northern Trust Corp. ................................................ 40,000 2,190
Financial Services -- 0.8%
Federal National Mortgage Association................................ 220,000 6,792.......
Insurance -- 3.2%
EXEL Ltd. ........................................................... 145,000 10,059
Mercury General Corp. ............................................... 60,000 2,625
NAC Reinsurance Corp. ............................................... 100,000 3,250
Transatlantic Holdings, Inc. ........................................ 110,000 7,068
Trenwick Group, Inc. ................................................ 97,400 4,639
--------------
57,405
--------------
MATERIALS -- 3.3%
Chemicals -- 2.2%
Air Products & Chemicals, Inc. ...................................... 10,300 613
Great Lakes Chemical Corp. .......................................... 105,000 6,773
Locite Corp. ........................................................ 80,000 3,990
Valspar Corp. ....................................................... 170,000 7,522
Metals -- 0.2%
Nucor Corp. ......................................................... 25,000 1,375
</TABLE>
---------------------
5
<PAGE> 7
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (continued) SHARES (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Services -- 0.9%
Pioneer Hi-Bred International, Inc................................... 140,000 $ 7,910
--------------
28,183
--------------
SERVICES -- 42.0%
Broadcasting & Publishing -- 13.0%
Adelphia Communications Corp.+....................................... 205,000 1,486
BHC Communications, Inc., Class A+................................... 75,821 7,374
Cablevision Systems Corp., Class A+.................................. 70,000 3,360
Comcast Corp., Class A Special+...................................... 207,500 3,605
Gaylord Entertainment Co., Class A................................... 236,250 6,172
Lin Television Corp.+................................................ 6,750 216
Marvel Entertainment Group, Inc.+.................................... 120,000 1,440
New York Times Co., Class A ......................................... 50,000 1,644
News Corp., Ltd. ADR................................................. 800,000 17,900
Tele-Communications Liberty Media Group+............................. 247,881 7,436
Tele-Communications TCI Group, Series A+............................. 625,525 11,807
Time Warner, Inc. ................................................... 355,000 14,333
Turner Broadcasting Systems, Inc., Class B........................... 595,000 16,214
U.S. West Media Group+............................................... 50,000 944
Viacom, Inc., Class B+............................................... 445,000 18,857
Business & Public Services -- 14.3%
ADT Ltd.+............................................................ 100,000 1,925
Air & Water Technologies Corp., Class A+............................. 165,000 1,052
America Online, Inc.+................................................ 351,500 19,860
Apria Healthcare Group, Inc.+........................................ 100,000 2,925
Avery Dennison Corp. ................................................ 90,000 5,130
Bay Networks, Inc.+.................................................. 155,000 4,495
Columbia HCA Healthcare Corp. ....................................... 88,750 4,781
Coram Healthcare Corp.+.............................................. 50,000 244
CUC International, Inc.+............................................. 110,000 4,070
Ecolab Inc. ......................................................... 100,000 3,250
Federal Express Corp.+............................................... 175,000 13,409
FHP International Corp.+............................................. 240,000 6,840
General Motors Corp., Class E........................................ 195,000 10,993
H&R Block, Inc. ..................................................... 40,000 1,395
Loewen Group, Inc. .................................................. 50,000 1,436
Manpower, Inc. ...................................................... 50,000 1,925
Oxford Health Plans, Inc.+........................................... 146,000 6,898
Pacificare Health Systems, Inc., Class B+............................ 35,000 2,896
Pitney Bowes, Inc. .................................................. 65,000 3,226
United Healthcare Corp. ............................................. 225,000 12,347
USA Waste Services, Inc.+............................................ 50,000 1,475
Value Health, Inc.+.................................................. 120,000 3,270
WMX Technologies, Inc. .............................................. 280,000 9,870
Leisure & Tourism -- 6.9%
Carnival Corp., Class A.............................................. 50,000 1,487
Circus Circus Enterprises, Inc.+..................................... 130,000 5,411
Disney (Walt) Co. ................................................... 440,000 26,730
Harrah's Entertainment, Inc.+........................................ 200,000 6,725
Host Marriott Corp.+................................................. 465,400 6,108
Host Marriott Services Corp.+........................................ 56,000 441
Luby's Cafeterias, Inc. ............................................. 100,000 2,463
Marriott International, Inc. ........................................ 180,000 8,550
Mirage Resorts, Inc.+................................................ 40,000 2,275
</TABLE>
- ---------------------
6
<PAGE> 8
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (continued) SHARES (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Merchandising -- 3.9%
Barnes & Noble, Inc.+................................................ 220,900 $ 7,759
Circuit City Stores, Inc. ........................................... 145,000 4,731
Consolidated Stores Corp. ........................................... 89,100 3,375
Home Shopping Network, Inc.+ ........................................ 260,000 3,738
Michaels Stores, Inc.+............................................... 60,000 997
Spiegel, Inc., Class A............................................... 366,600 3,918
Staples, Inc.+....................................................... 112,500 2,250
Toys R Us, Inc.+..................................................... 70,000 2,030
Wal-Mart Stores, Inc. ............................................... 200,000 5,175
Telecommunications -- 1.8%
Air Touch Communications, Inc.+...................................... 175,000 5,578
MCI Communications Corp. ............................................ 250,000 7,281
Telephone & Data Systems, Inc. ...................................... 20,000 873
United States Cellular Corp.+........................................ 52,000 1,645
Transportation: Airlines -- 2.1%
AMR Corp.+........................................................... 70,000 6,606
Delta Air Lines, Inc. ............................................... 10,000 829
Southwest Airlines Co. .............................................. 395,000 10,813
Transportation: Rail & Road -- 0.0%
Southern Pacific Rail Corp.+......................................... 15,573 380
--------------
364,668
--------------
OTHER COMMON STOCK -- 1.2%........................................... 10,399
--------------
TOTAL COMMON STOCK (cost: $487,894).................................. 750,592
--------------
<CAPTION>
PREFERRED STOCK -- 0.9%
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.9%
Broadcasting & Publishing -- 0.9%
News Corp. Ltd. ADR (cost: $2,661)................................... 400,000 7,750
--------------
TOTAL INVESTMENT SECURITIES (cost: $490,555)......................... 758,342
--------------
<CAPTION>
PRINCIPAL
AMOUNT
SHORT-TERM SECURITIES -- 11.7% (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 11.7%
Associates Corp. of North America 5.40% due 6/03/96 ................. $ 16,900 16,895
Deere (John) Capital Corp. 5.29% due 6/13/96 ........................ 5,000 4,991
Ford Motor Credit Co. 5.27% due 6/12/96 ............................. 14,900 14,876
Ford Motor Credit Co. 5.28% due 6/11/96 ............................. 7,300 7,289
Heinz (H.J.) Co. 5.27% due 6/20/96 .................................. 12,700 12,665
Heinz (H.J.) Co. 5.29% due 6/03/96 .................................. 9,000 8,997
Hewlett-Packard Co. 5.29% due 6/04/96 ............................... 10,000 9,996
Kimberly-Clark Corp. 5.27% due 6/21/96 .............................. 11,000 10,968
</TABLE>
---------------------
7
<PAGE> 9
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES (continued) (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
CORPORATE SHORT-TERM NOTES (continued)
SAFECO Credit Co., Inc. 5.27% due 6/17/96 ........................... $ 15,000 $ 14,965
--------------
TOTAL SHORT-TERM SECURITIES (cost: $101,642)......................... 101,642
--------------
TOTAL INVESTMENTS --
(cost: $592,197) 99.1% 859,984
Other assets less liabilities -- 0.9 8,066
------ --------------
NET ASSETS -- 100.0% $ 868,050
====== =============
</TABLE>
-----------------------------
+ Non-income producing securities
ADR - American Depositary Receipt
See Notes to Financial Statements
- ---------------------
8
<PAGE> 10
- ---------------------
ANCHOR PATHWAY FUND
INTERNATIONAL SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK, PREFERRED STOCK & WARRANTS -- 84.9% SHARES (IN THOUSANDS)
<S> <C> <C>
-------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
AUSTRALIA -- 5.3%
Australia & New Zealand Bank Group (Finance)....................... 978,309 $ 4,498
Coca-Cola Amatil Ltd. (Consumer Goods)#............................ 280,973 2,843
Lend Lease Corp., Ltd. (Multi-industry)............................ 88,701 1,388
News Corp., Ltd. Preferred ADR (Services).......................... 33,300 645
News Corp., Ltd. ADR (Services).................................... 66,600 1,490
Westpac Banking Corp. (Finance).................................... 331,757 1,549
Woolworths Ltd. (Consumer Goods)................................... 160,740 401
---------
12,814
---------
AUSTRIA -- 0.6%
Virginia Technologies AG (Capital Equipment)#...................... 11,700 1,532
---------
BELGIUM -- 0.9%
Groupe Bruxelles Lambert SA NV (Multi-industry).................... 17,000 2,277
---------
BERMUDA -- 0.8%
Mandarin Oriental (Services)....................................... 1,288,153 1,803
---------
BRAZIL -- 0.0%
CESP-Companhia Energetica de Sao Paulo (Energy).................... 1,440,000 32
---------
CANADA -- 2.9%
Bank Montreal Quebec (Finance)..................................... 37,000 888
Northern Telecom Ltd. (Capital Equipment).......................... 94,000 5,100
Teck Corp. Class B (Capital Equipment)............................. 40,000 927
---------
6,915
---------
DENMARK -- 1.5%
Tele Denmark Class B ADR (Capital Equipment)....................... 145,000 3,607
---------
FINLAND -- 2.5%
Nokia (AB) Oy Corp. Series A (Multi-industry)...................... 117,000 5,091
Nokia (AB) Oy Corp. Series K (Multi-industry)...................... 20,000 870
---------
5,961
---------
FRANCE -- 6.2%
Canal Plus (Services).............................................. 3,823 937
Groupe Danone (Consumer Goods)..................................... 8,000 1,170
L'Air Liquide (Materials).......................................... 14,000 2,435
Michelin (cie Gle), Class B (Capital Equipment).................... 84,000 4,233
Moet-Hennessy Louis Vuitton (Consumer Goods)....................... 3,300 800
Peugeot SA (Consumer Goods)........................................ 20,000 2,786
Sidel (Capital Equipment).......................................... 6,600 1,625
Total SA, Series B (Energy)........................................ 13,571 981
---------
14,967
---------
GERMANY -- 4.7%
Bayerische Motoren Werke AG (Consumer Goods)....................... 6,072 3,343
Bayerische Motoren Werke AG NV Preferred (Consumer Goods).......... 2,604 1,022
</TABLE>
---------------------
9
<PAGE> 11
<TABLE>
<CAPTION>
VALUE
COMMON STOCK, PREFERRED STOCK & WARRANTS (continued) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY (continued)
Daimler-Benz AG (Consumer Goods)................................... 2,420 $ 1,323
Mannesmann AG (Capital Equipment).................................. 13,300 4,613
Munchener Ruckvers (Finance)....................................... 545 964
Munchener Ruckvers Warrants (Finance)+............................. 125 11
---------
11,276
---------
HONG KONG -- 3.8%
Hong Kong Electric Holdings (Energy)............................... 1,032,000 3,308
HSBC Holdings PLC (Finance)........................................ 154,800 2,341
Hutchison Whampoa Ltd. (Multi-industry)............................ 230,000 1,477
Television Broadcasting Ltd. (Services)............................ 497,000 1,966
---------
9,092
---------
IRELAND -- 1.2%
Independent Newspapers (Services).................................. 197,382 1,575
Irish Life PLC (Finance)........................................... 294,625 1,192
---------
2,767
---------
ITALY -- 3.5%
STET (Services).................................................... 120,000 430
STET Risp (Services)............................................... 240,000 688
Telecom Italia Mobile SPA (Services)............................... 3,346,050 7,153
Telecom Italia Mobile SPA-Savings Shares (Services)................ 64,800 90
Telecom Italia SpA Risp (Services)................................. 64,800 109
---------
8,470
---------
JAPAN -- 7.0%
Amway Japan Ltd. ADR (Consumer Goods).............................. 36,000 864
Banyu Pharm (Services)............................................. 293,000 3,771
Ito-Yokado Co. (Miscellaneous)..................................... 10,000...... 568
Itochu Corp. Ltd. (Services)....................................... 120,000 862
Mitsubishi Corp. (Consumer Goods).................................. 65,000 891
Nippon Telegraph & Telecommunications Corp. (Services)............. 131 953
Nippon Yusen Kabushiki Kaish (Services)............................ 429,000 2,518
Sony Corp. (Consumer Goods)........................................ 22,000 1,399
Suzuki Motor Corp. (Consumer Goods)................................ 179,000 2,271
Toyota Motor Corp. (Consumer Goods)................................ 115,000 2,630
---------
16,727
---------
KOREA -- 1.4%
Hanil Bank (Finance)............................................... 96,580 1,038
Korea Electric Power Corp. (Energy)................................ 39,000 1,495
Korea Electric Power Corp. ADR (Energy)............................ 26,000 673
---------
3,206
---------
LUXEMBOURG -- 0.5%
Safra Republic Holdings, Inc. (Finance)............................ 10,000 1,300
---------
MEXICO -- 2.2%
Cifra SA de Cv-Series C (Services)................................. 195,500 291
Grupo Financiero Banamex-Accival SA de Cv-Series B (Finance)....... 324,000 733
Grupo Financiero Banamex-Accival SA de Cv-Series L (Finance)....... 26,406 55
Grupo Televisa SA de Cv ADR (Services)............................. 35,000 1,076
Telefonos de Mexico SA ADR (Services).............................. 95,200 3,142
---------
5,297
---------
NETHERLANDS -- 5.6%
ABN Amro Holdings NV (Finance)..................................... 85,546 4,719
International Nederlanden Warrants (Finance)+...................... 300,000 1,833
Koninklijke PTT Nederland NV (Services)............................ 20,000 724
Philips Electronics (Consumer Goods)............................... 76,000 2,697
</TABLE>
- ---------------------
10
<PAGE> 12
<TABLE>
<CAPTION>
VALUE
COMMON STOCK, PREFERRED STOCK & WARRANTS (continued) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
NETHERLANDS (continued)
PolyGram NV ADR (Consumer Goods)................................... 22,500 $ 1,319
Vereenigde Ned Uitgevers (Services)................................ 130,000 2,132
---------
13,424
---------
NEW ZEALAND -- 1.9%
Brierley Investment Ltd. (Multi-industry).......................... 2 0
Carter Holt Harvey Ltd. (Materials)................................ 1 0
Telecom Corp. of New Zealand (Services)#........................... 1,019,880 4,146
Telecom Corp. of New Zealand ADR (Services)#....................... 4,600 302
---------
4,448
---------
NORWAY -- 2.3%
Orkla AS (Consumer Goods).......................................... 110,000 5,463
---------
PHILIPPINES -- 0.2%
Philippine Long Distance Cv Preferred Series III GDS (Services).... 10,000 550
---------
SPAIN -- 3.9%
Banco de Santander ADR (Finance)................................... 1,500 68
Banco de Santander SA (Finance).................................... 55,500 2,532
Banco Popular Espanol (Finance).................................... 6,000 1,047
Corporacion Mapfre SA (Finance).................................... 11,615 572
Iberdrola SA (Energy).............................................. 142,000 1,440
Telefonica de Espana SA (Services)................................. 130,000 2,334
Telefonica de Espana SA ADR (Services)............................. 24,000 1,257
---------
9,250
---------
SWEDEN -- 9.8%
AGA AB-Series B (Materials)........................................ 60,000 1,027
Asea AB-Series A (Capital Equipment)............................... 24,500 2,534
Asea AB-Series B (Capital Equipment)............................... 22,000 2,240
Astra AB-Series A (Services)....................................... 184,000 8,422
Atlas Copco AB-Series A (Capital Equipment)........................ 115,000 2,140
Ericsson LM Telephone Co. Class B Cv ADR (Capital Equipment)....... 3,500 11
Ericsson LM Telephone Co. Series B (Capital Equipment)............. 112,200 2,513
Kinnevik-Series A (Multi-industry)................................. 23,900 655
Kinnevik-Series B (Multi-industry)................................. 15,000 418
Netcom Systems AB Series A (Services).............................. 23,900 274
Netcom Systems AB Series B (Services).............................. 15,000 174
Swedish Match (Consumer Goods)..................................... 125,000 417
Volvo AB-Series B (Consumer Goods)................................. 125,000 2,651
---------
23,476
---------
SWITZERLAND -- 3.9%
BBC Brown Boveri, Bearer (Capital Equipment)....................... 2,363 2,825
Ciba-Geigy AG, Nominative Shares (Materials)....................... 2,035 2,239
Holderbank Financiere Glarus, Bearer (Materials)................... 3,886 2,981
Nestle SA (Consumer Goods)......................................... 1,250 1,408
---------
9,453
---------
UNITED KINGDOM -- 8.0%
British Airways ADR (Services)..................................... 15,000 1,301
British Airways PLC (Services)..................................... 145,000 1,261
British Sky Broadcasting Group PLC ADR (Services)+................. 58,500 2,428
Cadbury Schweppes (Consumer Goods)................................. 37,874 284
English China Clays (Materials).................................... 305,000 1,283
Hazlewood Foods PLC (Consumer Goods)............................... 170,400 264
News International PLC (Services).................................. 136,000 653
Pearson PLC (Multi-industry)....................................... 120,000 1,291
</TABLE>
---------------------
11
<PAGE> 13
<TABLE>
<CAPTION>
VALUE
COMMON STOCK, PREFERRED STOCK & WARRANTS (continued) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (continued)
Rank Organisation PLC (Services)................................... 175,000 $ 1,387
Reuters Holdings PLC (Services).................................... 208,000 2,418
Scottish Power PLC (Energy)........................................ 120,000 590
Tesco PLC (Services)............................................... 408,616 1,909
Thorn EMI PLC (Consumer Goods)..................................... 104,950 2,924
Vodafone Group PLC (Services)...................................... 105,801 419
Vodafone Group PLC ADR (Services).................................. 18,000 713
---------
19,125
---------
OTHER COMMON STOCK -- 4.3%......................................... 10,379
---------
TOTAL COMMON STOCK, PREFERRED STOCK, & WARRANTS (cost: $156,743)... 203,611
---------
<CAPTION>
PRINCIPAL
AMOUNT
(DENOMINATED IN
LOCAL CURRENCY)
BONDS & NOTES -- 0.7% (IN THOUSANDS)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
FRANCE -- 0.1%
Michelin (cie Gle) 2.50% 2001...................................... 480 271
---------
NEW ZEALAND -- 0.6%
New Zealand Government 9.00% 1996.................................. 2,000 1,356
---------
OTHER BONDS & NOTES -- 0.0%........................................ 53
---------
TOTAL BONDS & NOTES (cost: $1,411)................................. 1,680
---------
TOTAL INVESTMENT SECURITIES (cost: $158,154)....................... 205,291
---------
<CAPTION>
SHORT-TERM SECURITIES -- 14.0%
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 12.2%
Daimler Benz North America 5.27% due 6/20/96 ...................... $ 6,300 6,283
Electricite De France 5.30% due 6/11/96 ........................... 2,400 2,396
National Australia Funding, Inc. 5.27% due 7/24/96 ................ 4,800 4,763
Pacific Bell 5.37% due 6/03/96 .................................... 4,700 4,699
Sandoz Corp. 5.28% due 6/24/96 .................................... 1,000 997
Sandoz Corp. 5.28% due 8/14/96 .................................... 5,200 5,142
Sony Capital Corp. 5.27% due 6/18/96 .............................. 4,800 4,788
---------
TOTAL CORPORATE SHORT-TERM NOTES................................... 29,068
---------
</TABLE>
- ---------------------
12
<PAGE> 14
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES (continued) (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
-------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
FEDERAL AGENCY OBLIGATIONS -- 1.8%
Federal Home Loan Mortgage 5.05% due 6/05/96 ...................... $ 4,400 $ 4,397
---------
TOTAL SHORT-TERM SECURITIES (cost: $33,466)........................ 33,465
---------
TOTAL INVESTMENTS --
(cost: $191,620) 99.6% 238,756
Other assets less liabilities -- 0.4 937
------ ---------
NET ASSETS -- 100.0% $ 239,693
====== =========
</TABLE>
-----------------------------
# Resale restricted to qualified institutional buyers
+ Non-income producing securities
ADR - American Depositary Receipt
ADS - American Depositary Shares
See Notes to Financial Statements
---------------------
13
<PAGE> 15
- ---------------------
ANCHOR PATHWAY FUND
GROWTH-INCOME SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
(IN
COMMON STOCK -- 89.9% SHARES THOUSANDS)
<S> <C> <C>
-------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CAPITAL EQUIPMENT -- 13.9%
Aerospace & Military Technology -- 3.2%
Boeing Co. ........................................................ 155,000 $ 13,213
General Motors Corp., Class H...................................... 85,000 5,164
Litton Industries, Inc.+........................................... 91,000 4,220
Sundstrand Corp. .................................................. 160,000 5,640
United Technologies Corp. ......................................... 10,000 1,094
Data Processing & Reproduction -- 2.4%
Adobe Systems, Inc. ............................................... 20,000 743
Digital Equipment Corp.+........................................... 50,000 2,606
International Business Machines Corp. ............................. 4,300 459
Novell, Inc.+...................................................... 40,000 570
Oracle Systems Corp.+.............................................. 120,000 3,975
Silicon Graphics, Inc.+............................................ 100,000 2,750
Xerox Corp. ....................................................... 70,000 11,016
Electrical & Electronics -- 1.0%
General Electric Co. .............................................. 40,000 3,310
Lucent Technologies, Inc.+......................................... 40,000 1,520
Nokia Corp. ADR.................................................... 95,000 4,133
Electronic Components -- 0.7%
Intel Corp. ....................................................... 50,000 3,775
Texas Instruments, Inc. ........................................... 40,000 2,250
Energy Equipment -- 1.2%
Cooper Industries, Inc. ........................................... 35,960 1,533
Schlumberger Ltd. ................................................. 70,000 5,836
Western Atlas, Inc.+............................................... 51,000 3,124
Industrial Components -- 1.8%
Dana Corp. ........................................................ 50,000 1,675
Goodyear Tire & Rubber Co. ........................................ 80,000 4,040
Johnson Controls, Inc. ............................................ 39,400 2,748
Rockwell International Corp. ...................................... 70,000 4,086
TRW, Inc. ......................................................... 40,000 3,770
Machinery & Engineering -- 3.6%
Caterpillar, Inc. ................................................. 175,000 11,484
Crompton & Knowles Corp. .......................................... 120,000 2,115
Deere & Co. ....................................................... 190,000 7,909
Ingersoll-Rand Co. ................................................ 80,000 3,370
Parker-Hannifin Corp. ............................................. 185,000 7,539
---------
125,667
---------
CONSUMER GOODS -- 17.8%
Appliances & Household Durables -- 0.7%
Corning, Inc. ..................................................... 130,000 4,973
LADD Furniture, Inc. .............................................. 88,900 1,022
Automotive -- 0.9%
Ford Motor Co. .................................................... 130,000 4,745
General Motors Corp. .............................................. 70,000 3,859
</TABLE>
- ---------------------
14
<PAGE> 16
<TABLE>
<CAPTION>
VALUE
(IN
COMMON STOCK (continued) SHARES THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS (continued)
Beverages & Tobacco -- 3.6%
Anheuser-Busch Cos., Inc. ......................................... 55,000 $ 3,919
PepsiCo, Inc. ..................................................... 210,000 6,982
Philip Morris Cos., Inc. .......................................... 143,000 14,211
Seagram Co., Ltd. ................................................. 220,000 7,617
Food & Household Products -- 2.2%
Archer-Daniels-Midland Co. ........................................ 150,000 2,925
Colgate-Palmolive Co. ............................................. 20,000 1,575
ConAgra, Inc. ..................................................... 60,000 2,558
CPC International, Inc. ........................................... 80,000 5,530
General Mills, Inc. ............................................... 45,000 2,582
Unilever N V....................................................... 30,000 4,046
Health & Personal Care -- 8.8%
Abbott Laboratories................................................ 50,000 2,156
American Home Products Corp. ...................................... 170,000 9,095
Bristol-Myers Squibb Co. .......................................... 108,000 9,221
Johnson & Johnson Co. ............................................. 30,000 2,921
Kimberly-Clark Corp. .............................................. 40,000 2,915
Lilly (Eli) & Co. ................................................. 100,000 6,425
Merck & Co., Inc. ................................................. 237,500 15,348
Pfizer, Inc. ...................................................... 175,000 12,381
Schering-Plough Corp. ............................................. 180,000 10,553
Tambrands, Inc. ................................................... 30,000 1,384
Warner-Lambert Co. ................................................ 120,000 6,720
Recreation & Other Consumer Products -- 1.3%
American Greetings Corp., Class A.................................. 70,000 1,899
Duracell International, Inc. ...................................... 40,000 1,865
Eastman Kodak Co. ................................................. 60,000 4,462
Polaroid Corp. .................................................... 30,000 1,350
Stanley Works...................................................... 40,000 2,425
Textiles & Apparel -- 0.3%
V. F. Corp. ....................................................... 45,000 2,739
---------
160,403
---------
ENERGY -- 7.9%
Energy Sources -- 6.7%
Amoco Corp. ....................................................... 105,000 7,612
Atlantic Richfield Co. ............................................ 55,000 6,579
Diamond Shamrock, Inc. ............................................ 30,000 986
Exxon Corp. ....................................................... 50,000 4,238
Phillips Petroleum Co. ............................................ 240,000 9,960
Royal Dutch Petroleum Co. ADR...................................... 55,000 8,250
Texaco, Inc. ...................................................... 70,000 5,863
Tosco Corp. ....................................................... 60,000 2,970
Total SA ADR....................................................... 59,990 2,160
Unocal Corp. ...................................................... 175,000 5,688
Valero Energy Corp. ............................................... 215,000 5,912
Utilities: Electric, Gas & Water -- 1.2%
Consolidated Edison Co. of New York, Inc........................... 100,000 2,788
General Public Utilities Corp. .................................... 40,000 1,340
Pacific Gas & Electric Co. ........................................ 150,000 3,487
Union Electric Co. ................................................ 80,000 3,150
---------
70,983
---------
</TABLE>
---------------------
15
<PAGE> 17
<TABLE>
<CAPTION>
VALUE
(IN
COMMON STOCK (continued) SHARES THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 11.3%
Banking -- 7.3%
Banc One Corp. .................................................... 209,000 $ 7,733
Bank of New York, Inc. ............................................ 80,000 4,150
BankAmerica Corp. ................................................. 65,000 4,891
Bankers Trust New York Corp. ...................................... 15,000 1,127
Boatmen's Bancshares, Inc. ........................................ 100,000 4,044
CoreStates Financial Corp. ........................................ 80,000 3,150
First Chicago Corp. ............................................... 50,000 2,181
First Union Corp. ................................................. 161,000 9,841
KeyCorp............................................................ 100,000 3,875
Morgan (J.P.) & Co., Inc. ......................................... 30,000 2,606
National City Corp. ............................................... 100,000 3,562
Northern Trust Corp. .............................................. 20,000 1,095
Norwest Corp. ..................................................... 20,000 698
PNC Bank Corp. .................................................... 202,000 6,136
SunTrust Banks, Inc. .............................................. 160,000 5,840
Wells Fargo & Co. ................................................. 20,000 4,820
Financial Services -- 0.6%
American Express Co. .............................................. 50,000 2,287
Beneficial Corp. .................................................. 20,000 1,165
Household International, Inc. ..................................... 30,000 2,078
Insurance -- 3.4%
Allstate Corp. .................................................... 140,000 5,915
American General Corp. ............................................ 30,000 1,065
Gallagher (Arthur J.) & Co. ....................................... 95,300 3,061
General Reinsurance Group ......................................... 38,100 5,563
Liberty Corp. ..................................................... 75,000 2,400
SAFECO Corp. ...................................................... 275,500 9,281
St. Paul Cos., Inc. ............................................... 40,000 2,115
TIG Holdings, Inc. ................................................ 50,000 1,500
---------
102,179
---------
MATERIALS -- 10.3%
Building Materials -- 0.2%
TRINOVA Corp. ..................................................... 50,000 1,650
Chemicals -- 3.5%
Dow Chemical Co. .................................................. 40,000 3,345
du Pont (E.I.) de Nemours & Co. ................................... 55,000 4,386
Eastman Chemical Co. .............................................. 120,000 8,040
Great Lakes Chemical Corp. ........................................ 20,000 1,290
Mallinckrodt Group, Inc. .......................................... 70,900 2,668
Monsanto Co. ...................................................... 30,000 4,556
PPG Industries, Inc. .............................................. 60,000 3,105
Praxair, Inc. ..................................................... 100,000 4,062
Forest Products & Paper -- 3.9%
Bowater, Inc. ..................................................... 200,000 7,875
Georgia-Pacific Corp. ............................................. 35,000 2,529
International Paper Co. ........................................... 100,000 3,988
James River Corp. ................................................. 125,000 3,109
Rayonier, Inc. .................................................... 92,500 3,469
Union Camp Corp. .................................................. 175,000 9,209
Westvaco Corp. .................................................... 60,000 1,920
Weyerhaeuser Co. .................................................. 75,000 3,403
Metals & Minerals -- 2.7%
Alumax, Inc.+...................................................... 40,000 1,330
Aluminum Co. of America............................................ 200,000 12,325
</TABLE>
- ---------------------
16
<PAGE> 18
<TABLE>
<CAPTION>
VALUE
(IN
COMMON STOCK (continued) SHARES THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Inco Ltd. ......................................................... 30,000 $ 979
Phelps Dodge Corp. ................................................ 10,000 685
Potash Corp. Saskatchewan, Inc. ................................... 130,000 8,645
---------
92,568
---------
MULTI-INDUSTRY -- 2.7%
Multi-Industry -- 2.7%
AlliedSignal, Inc. ................................................ 40,000 2,190
Minnesota Mining & Manufacturing Co. .............................. 130,000 8,872
Tenneco, Inc. ..................................................... 130,000 6,988
Textron, Inc. ..................................................... 75,000 6,356
---------
24,406
---------
SERVICES -- 24.8%
Broadcasting & Publishing -- 5.4%
Cox Communications, Inc., Class A+ ................................ 49,224 1,108
Gannett Co., Inc. ................................................. 50,000 3,487
New York Times Co., Class A........................................ 50,000 1,644
News Corp., Ltd. ADR............................................... 140,000 3,133
Scripps (E.W.) Co., Class A........................................ 135,000 6,007
Tele-Communications Liberty Media Group+........................... 145,000 4,350
Tele-Communications TCI Group, Series A+........................... 320,300 6,046
Time Warner, Inc. ................................................. 230,000 9,286
Times Mirror Co., Series A ........................................ 56,056 2,445
Tribune Co. ....................................................... 60,000 4,447
U.S. West Media Group+............................................. 171,800 3,243
Viacom, Inc., Class B+............................................. 85,000 3,602
Business & Public Services -- 5.0%
Alexander & Baldwin, Inc. ......................................... 180,000 4,612
Browning-Ferris Industries, Inc. .................................. 200,000 6,100
Dun & Bradstreet Corp. ............................................ 145,000 9,262
Ecolab, Inc. ...................................................... 50,000 1,625
Federal Express Corp.+............................................. 30,000 2,299
General Motors Corp., Class E...................................... 125,000 7,047
Omnicom Group...................................................... 40,000 1,745
Pitney Bowes, Inc. ................................................ 30,000 1,489
WMX Technologies, Inc. ............................................ 310,000 10,927
Leisure & Tourism -- 1.4%
Disney (Walt) Co. ................................................. 185,000 11,239
Host Marriott Corp.+............................................... 110,000 1,444
Merchandising -- 3.3%
Gap, Inc. ......................................................... 40,000 1,345
Giant Foods, Inc., Class A......................................... 200,000 6,900
May Department Stores Co. ......................................... 80,000 3,790
Mercantile Stores Co., Inc. ....................................... 50,000 3,225
Penney (J.C.), Inc. ............................................... 50,000 2,594
Wal-Mart Stores, Inc. ............................................. 375,000 9,703
Walgreen Co. ...................................................... 80,000 2,550
Telecommunications -- 6.3%
360 Communications Co.+............................................ 13,333 308
AirTouch Communications, Inc.+..................................... 81,013 2,582
Alltell Corp. ..................................................... 20,000 630
Ameritech Corp. ................................................... 95,000 5,368
AT&T Corp. ........................................................ 350,000 21,831
MCI Communications Corp. .......................................... 380,000 11,068
Pacific Telesis Group.............................................. 50,000 1,669
</TABLE>
---------------------
17
<PAGE> 19
<TABLE>
<CAPTION>
VALUE
(IN
COMMON STOCK (continued) SHARES THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Telecommunications (continued)
SBC Communications, Inc. .......................................... 40,000 $ 1,975
Sprint Corp. ...................................................... 40,000 1,695
Telefonos de Mexico SA ADR......................................... 130,000 4,290
US West, Inc. ..................................................... 171,800 5,605
Transportation: Airlines -- 0.7%
AMR Corp.+......................................................... 65,000 6,134
Transportation: Rail & Road -- 2.7%
Conrail, Inc. ..................................................... 150,000 10,538
Norfolk Southern Corp. ............................................ 65,000 5,606
Union Pacific Corp. ............................................... 110,000 7,714
---------
223,707
---------
OTHER COMMON STOCK -- 1.2%......................................... 11,452
---------
TOTAL COMMON STOCK (cost: $554,045)................................ 811,365
---------
<CAPTION>
PREFERRED STOCK -- 0.2%
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Broadcasting & Publishing -- 0.2%
News Corp., Ltd. ADR (cost: $1,045)................................ 80,000 1,550
---------
TOTAL INVESTMENT SECURITIES (cost: $555,090)....................... 812,915
---------
<CAPTION>
PRINCIPAL
AMOUNT
(IN
SHORT-TERM SECURITIES -- 10.0% THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 9.4%
Associates Corp. of North America 5.40% due 6/03/96 ............... $ 7,800 7,798
Deere (John) Capital Corp. 5.28% due 7/08/96 ...................... 10,000 9,946
Deere (John) Capital Corp. 5.29% due 6/13/96 ...................... 5,400 5,390
Ford Motor Credit Co. 5.28% due 6/24/96 ........................... 10,000 9,966
Ford Motor Credit Co. 5.29% due 7/08/96 ........................... 4,000 3,978
General Electric Capital Corp. 5.27% due 6/27/96 .................. 11,600 11,556
General Electric Capital Corp. 5.28% due 6/19/96 .................. 9,000 8,976
Heinz (H.J.) Co. 5.27% due 6/20/96 ................................ 4,600 4,587
Heinz (H.J.) Co. 5.27% due 6/24/96 ................................ 5,750 5,731
SAFECO Credit Co., Inc. 5.27% due 6/17/96 ......................... 10,000 9,976
SAFECO Credit Co., Inc. 5.27% due 7/22/96 ......................... 6,600 6,551
---------
TOTAL CORPORATE SHORT-TERM NOTES................................... 84,455
---------
FEDERAL AGENCY OBLIGATIONS -- 0.6%
Federal Home Loan Mortgage Discount Notes 5.25% due 6/17/96 ....... 5,600 5,587
---------
TOTAL SHORT-TERM SECURITIES (cost: $90,042)........................ 90,042
---------
TOTAL INVESTMENTS --
(cost: $645,132) 100.1% 902,957
Liabilities in excess of other assets -- (0.1) (1,034)
------ ---------
NET ASSETS -- 100.0% $901,923
====== ==========
</TABLE>
-----------------------------
+ Non-income producing securities
ADR - American Depositary Receipt
See Notes to Financial Statements
- ---------------------
18
<PAGE> 20
- ---------------------
ANCHOR PATHWAY FUND
ASSET ALLOCATION SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK -- 67.3% SHARES (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CAPITAL EQUIPMENT -- 9.9%
Aerospace & Military Technology -- 2.2%
Boeing Co. .......................................................... 10,000 $ 852
General Motors Corp., Class H........................................ 41,000 2,491
Data Processing & Reproduction -- 0.9%
Adobe Systems, Inc. ................................................. 10,000 371
International Business Machines Corp. ............................... 10,000 1,068
Electrical & Electronics -- 1.0%
Hubbell, Inc. ....................................................... 15,000 1,048
Nokia Corp. ADR...................................................... 10,000 435
Electronic Components -- 0.5%
Advanced Micro Devices, Inc.+........................................ 40,000 705
Energy Equipment -- 0.4%
Baker Hughes, Inc. .................................................. 20,000 627
Industrial Components -- 3.4%
Dana Corp. .......................................................... 35,000 1,173
Echlin, Inc. ........................................................ 15,000 516
Rockwell International Corp. ........................................ 60,000 3,502
Machinery & Engineering -- 1.5%
Crompton & Knowles Corp. ............................................ 60,000 1,057
Deere & Co. ......................................................... 30,000 1,249
---------
15,094
---------
CONSUMER GOODS -- 18.2%
Automotive -- 0.7%
General Motors Corp. ................................................ 20,000 1,102
Beverages & Tobacco -- 3.4%
Anheuser-Busch Cos., Inc. ........................................... 10,000 713
PepsiCo, Inc. ....................................................... 80,000 2,660
Seagram Co., Ltd. ................................................... 50,000 1,731
Food & Household Products -- 3.2%
Archer-Daniels-Midland Co. .......................................... 50,000 975
Colgate-Palmolive Co. ............................................... 10,000 788
General Mills, Inc. ................................................. 20,000 1,147
Heinz (H.J.) Co. .................................................... 30,000 997
McCormick & Co., Inc. ............................................... 30,000 683
Ralston Purina Co. .................................................. 5,000 306
Health & Personal Care -- 8.3%
American Home Products Corp. ........................................ 40,000 2,140
Bausch & Lomb, Inc. ................................................. 20,000 860
Bristol-Myers Squibb Co. ............................................ 15,000 1,281
Kimberly-Clark Corp. ................................................ 10,000 729
Pfizer, Inc. ........................................................ 44,000 3,113
Smithkline Beecham PLC ADR........................................... 50,000 2,550
Tambrands, Inc. ..................................................... 20,000 922
Warner-Lambert Co. .................................................. 20,000 1,120
</TABLE>
---------------------
19
<PAGE> 21
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (continued) SHARES (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS (continued)
Recreation & Other Consumer Products -- 2.6%
American Greetings Corp., Class A.................................... 25,000 $ 678
Duracell International, Inc. ........................................ 10,000 466
Eastman Kodak Co. ................................................... 30,000 2,232
Stanley Works........................................................ 10,000 606
---------
27,799
---------
ENERGY -- 8.1%
Energy Sources -- 8.1%
Amoco Corp. ......................................................... 15,000 1,088
Atlantic Richfield Co. .............................................. 12,500 1,495
Chevron Corp. ....................................................... 40,000 2,390
Diamond Shamrock, Inc. .............................................. 20,000 658
Kerr-McGee Corp. .................................................... 25,000 1,469
Phillips Petroleum Co. .............................................. 35,000 1,452
Royal Dutch Petroleum Co. ADR........................................ 6,000 900
Texaco, Inc. ........................................................ 30,000 2,512
Unocal Corp. ........................................................ 15,000 488
---------
12,452
---------
FINANCE -- 9.2%
Banking -- 7.0%
BankAmerica Corp. ................................................... 10,000 753
Citicorp............................................................. 30,000 2,520
Comerica, Inc. ...................................................... 15,000 656
CoreStates Financial Corp. .......................................... 20,000 788
First Union Corp. ................................................... 22,950 1,403
Fleet Financial Group, Inc. ......................................... 25,000 1,103
KeyCorp.............................................................. 15,000 581
NationsBank Corp. ................................................... 25,000 2,028
PNC Bank Corp. ...................................................... 30,000 911
Insurance -- 2.2%
AMBAC, Inc. ......................................................... 10,000 519
American General Corp. .............................................. 15,000 532
CIGNA Corp. ......................................................... 10,000 1,149
SAFECO Corp. ........................................................ 35,000 1,179
---------
14,122
---------
MATERIALS -- 5.5%
Chemicals -- 1.4%
Air Products & Chemicals, Inc. ...................................... 17,600 1,047
Eastman Chemical Co.................................................. 7,000 469
Great Lakes Chemical Corp. .......................................... 10,000 645
Forest Products & Paper -- 3.5%
Georgia-Pacific Corp. ............................................... 30,000 2,168
Rayonier, Inc. ...................................................... 25,500 956
Union Camp Corp. .................................................... 20,000 1,053
Weyerhaeuser Co. .................................................... 25,000 1,134
Metals & Minerals -- 0.6%
Aluminum Co. of America.............................................. 16,000 986
---------
8,458
---------
</TABLE>
- ---------------------
20
<PAGE> 22
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (continued) SHARES (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
MULTI-INDUSTRY -- 3.0%
Multi-Industry -- 3.0%
Minnesota Mining & Manufacturing Co. ................................ 20,000 $ 1,365
Tenneco, Inc. ....................................................... 35,000 1,882
Textron, Inc. ....................................................... 15,000 1,271
---------
4,518
---------
SERVICES -- 13.4%
Business & Public Services -- 1.0%
Alexander & Baldwin, Inc. ........................................... 30,000 769
H & R Block, Inc. ................................................... 20,000 697
Merchandising -- 7.9%
Circuit City Stores, Inc. ........................................... 10,000 326
Gap, Inc. ........................................................... 20,000 672
Hancock Fabrics, Inc. ............................................... 50,000 569
May Department Stores Co. ........................................... 30,000 1,421
Mercantile Stores Co., Inc. ......................................... 20,000 1,290
Penney (J.C.), Inc. ................................................. 35,000 1,816
Sears, Roebuck & Co. ................................................ 15,000 763
Wal-Mart Stores, Inc. ............................................... 130,000 3,364
Walgreen Co. ........................................................ 60,000 1,912
Telecommunications -- 1.3%
AT&T Corp. .......................................................... 10,000 624
Pacific Telesis Group................................................ 40,000 1,335
Transportation: Rail & Road -- 3.2%
Conrail, Inc. ....................................................... 25,000 1,756
Norfolk Southern Corp. .............................................. 20,000 1,725
Union Pacific Corp. ................................................. 20,000 1,403
---------
20,442
---------
TOTAL COMMON STOCK (cost: $80,374)................................... 102,885
---------
<CAPTION>
PREFERRED STOCKS -- 0.1%
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL EQUIPMENT -- 0.1%
Machinery & Engineering -- 0.1%
Greenfield Capital Trust (convertible) (cost: $150).................. 3 167
---------
<CAPTION>
PRINCIPAL
AMOUNT
BONDS & NOTES -- 25.2% (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS -- 2.1%
Broadcasting & Publishing -- 1.5%
Turner Broadcasting Systems, Inc. zero coupon 2007#.................. $ 5,000 2,306
Industrial -- 0.6%
Hanson America, Inc. 2.39% 2001#..................................... 1,000 853
---------
3,159
---------
CORPORATE & NONCONVERTIBLES -- 13.2%
Automotive -- 0.7%
General Motors Corp. 8.80% 2021...................................... 1,000 1,109
Broadcasting & Publishing -- 1.3%
TCI Communications, Inc. 8.75% 2015.................................. 500 484
Tele-Communications, Inc. 9.25% 2023................................. 500 490
Time Warner, Inc. 9.13% 2013......................................... 1,000 1,036
</TABLE>
---------------------
21
<PAGE> 23
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (continued) (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CORPORATE & NONCONVERTIBLES (continued)
Finance -- 2.2%
Capital One Bank 6.61% 1999.......................................... $ 2,500 $ 2,463
Irvine Property 7.46% 2006*.......................................... 500 464
Saul (B.F.) Real Estate Investment Trust 11.63% 2002................. 500 515
Industrial -- 6.4%
Acme Metals, Inc. 12.50% 2002........................................ 500 511
CenCall Communications Corp. zero coupon 2004(1)..................... 1,000 622
Columbia Gas Systems, Inc. 7.42% 2015................................ 500 462
Container Corp. of America 9.75% 2003................................ 2,000 1,990
Dayton Hudson Corp. 8.50% 2022....................................... 500 497
Inco Ltd. 9.60% 2022................................................. 400 426
Marvel Holdings, Inc. zero coupon 1998............................... 800 632
Mobil Corp. 8.00% 2032............................................... 1,000 1,002
Oryx Energy Co. 9.50% 1999........................................... 1,500 1,573
Oryx Energy Co. 10.00% 1999.......................................... 500 530
Parker & Parsley Petroleum Co. 8.25% 2007............................ 500 506
Pohang Iron & Steel Ltd. 7.50% 2002.................................. 1,000 1,001
Transportation -- 2.6%
Airplanes Pass Through Trust 8.15% 2019*............................. 500 493
Canadian National Railway Co. 7.63% 2023............................. 500 471
Continental Airlines Pass Through Trust 6.94% 2013#.................. 1,000 937
Delta Air Lines, Inc. 10.50% 2016.................................... 500 589
Jet Equipment Trust 7.83% 2012#...................................... 491 485
United Airlines Pass Through Trust 7.87% 2018........................ 500 478
United States Air, Inc. 6.76% 2008#.................................. 500 466
---------
20,232
---------
U.S. GOVERNMENT & AGENCIES -- 4.3%
Federal National Mortgage Association 6.53% 2006..................... 4,000 3,729
Federal National Mortgage Association 7.52% 2004..................... 2,000 1,986
Government National Mortgage Association 8.50% 2099.................. 845 865
---------
6,580
---------
UNITED STATES TREASURY -- 5.6%
10.38% Bonds 2012 ................................................... 6,000 7,533
8.75% Notes 1997 .................................................... 1,000 1,035
---------
8,568
---------
TOTAL BONDS & NOTES (cost: $39,664).................................. 38,539
---------
TOTAL INVESTMENT SECURITIES (cost: $120,188)......................... 141,591
---------
</TABLE>
- ---------------------
22
<PAGE> 24
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES -- 7.4% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 7.4%
Albertson's, Inc. 5.27% due 6/21/96.................................. $ 1,800 $ 1,795
Associates Corp. of North America 5.40% due 6/03/96.................. 3,470 3,469
Ford Motor Credit Co. 5.27% due 6/12/96.............................. 3,000 2,995
Lucent Technologies, Inc. 5.26% due 6/17/96.......................... 3,000 2,993
---------
TOTAL SHORT-TERM SECURITIES (cost: $11,252).......................... 11,252
---------
TOTAL INVESTMENTS --
(cost: $131,440) 100.0% 152,843
Other assets less liabilities -- 0.0 42
------ ---------
NET ASSETS -- 100.0% $ 152,885
====== =========
</TABLE>
-----------------------------
+ Non-income producing securities
* Fair value determined by Trustees
# Resale restricted to qualified institutional buyers
(1) Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
ADR - American Depositary Receipt
See Notes to Financial Statements
---------------------
23
<PAGE> 25
- ---------------------
ANCHOR PATHWAY FUND
HIGH-YIELD BOND SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES -- 87.7% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
-----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CAPITAL EQUIPMENT -- 3.2%
Aerospace & Military Technology -- 3.2%
Coltec Industries 9.75% 1999...................................... $ 500 $ 510
Coltec Industries 9.75% 2000...................................... 3,500 3,570
--------
4,080
--------
CONSUMER GOODS -- 2.2%
Food & Household Products -- 2.2%
Dr. Pepper/Seven Up Cos., Inc. 10.25% 2000........................ 2,750 2,819
--------
ENERGY -- 13.2%
Energy Sources -- 9.5%
Benton Oil & Gas Co. 11.63% 2003#................................. 500 512
Dual Drilling Co. 9.88% 2004...................................... 2,000 2,100
Flores & Rucks, Inc. 13.50% 2004.................................. 2,500 2,900
Global Marine, Inc. 12.75% 1999................................... 2,000 2,175
TransTexas Gas Corp. 11.50% 2002.................................. 1,500 1,470
Triton Energy Corp. zero coupon 2000(1)........................... 1,500 1,444
Tuboscope Vetco International, Inc. 10.75% 2003................... 1,500 1,551
Utilities: Electric, Gas & Water -- 3.7%
California Energy, Inc. zero coupon 2004(1)....................... 4,000 3,860
Midland Cogeneration, Series C-91 10.33% 2002..................... 386 404
Midland Cogeneration, Series C-94 10.33% 2002..................... 415 436
--------
16,852
--------
FINANCE -- 1.2%
Financial Services -- 1.2%
Indah Kiat International Finance Co. BV 11.88% 2002............... 1,000 1,042
Mesa Capital Corp. 12.75% 1998.................................... 500 500
--------
1,542
--------
INDUSTRIAL & COMMERCIAL -- 3.9%
Industrial -- 3.9%
Magnetek, Inc. 10.75% 1998........................................ 2,000 1,980
Newsquest Capital PLC 11.00% 2006#................................ 1,000 1,005
Stater Brothers Holdings, Inc. 11.00% 2001........................ 2,000 2,075
--------
5,060
--------
MATERIALS -- 13.1%
Forest Products & Paper -- 9.1%
Container Corp. of America 9.75% 2003............................. 5,250 5,224
Fort Howard Corp. 8.25% 2002...................................... 500 484
Fort Howard Corp. 9.25% 2001...................................... 3,000 2,992
P T Indah Kiat Pulp & Paper Corp. 8.88% 2000#..................... 1,500 1,440
Pacific Lumber Co. 10.50% 2003.................................... 1,000 975
Triangle Pacific Corp. 10.50% 2003................................ 500 522
</TABLE>
- ---------------------
24
<PAGE> 26
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (continued) (IN THOUSANDS) (IN THOUSANDS)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Metals & Minerals -- 4.0%
A.K. Steel Corp. 10.75% 2004...................................... $ 1,500 $ 1,639
Acme Metals, Inc. zero coupon 2004................................ 1,750 1,571
Kaiser Aluminum & Chemical Corp. 12.75% 2003...................... 1,250 1,350
Ucar Global Enterprises, Inc. 12.00% 2005......................... 535 612
--------
16,809
--------
NON-U.S. GOVERNMENT OBLIGATIONS -- 2.5%
Federative Republic of Brazil 6.56% 2012(2)....................... 500 327
Republic of Argentina 6.31% 2005(2)............................... 2,475 1,906
Republic of Poland 3.75% 2014(2).................................. 500 375
United Mexican States 6.25% 2019.................................. 750 484
United Mexican States 11.50% 2026................................. 180 166
--------
3,258
--------
SERVICES -- 48.4%
Advertising -- 0.8%
Neodata Services, Inc. zero coupon 2003(1)........................ 1,000 1,012
Broadcasting & Publishing -- 22.5%
American Media Operations, Inc. 11.63% 2004....................... 1,750 1,767
Bell Cablemedia PLC zero coupon 2004(1)........................... 5,000 3,575
Centennial Cellular Corp. 8.88% 2001.............................. 3,000 2,805
Century Communications Corp. 9.50% 2000........................... 2,500 2,513
Chancellor Broadcasting Co. 9.38% 2004............................ 1,500 1,402
Chancellor Broadcasting Co. 12.50% 2004........................... 250 275
Comcast UK Cable Partners Ltd. zero coupon 2007(1)................ 2,000 1,190
Continental Cablevision, Inc. 8.30% 2006#......................... 500 505
Continental Cablevision, Inc. 8.63% 2003.......................... 1,775 1,830
Continental Cablevision, Inc. 8.88% 2005.......................... 1,000 1,045
Heartland Wireless Communication, Inc. 13.00% 2003*............... 500 545
Infinity Broadcasting Corp. 10.38% 2002........................... 2,250 2,413
Mobilemedia Communications, Inc. zero coupon 2003(1).............. 1,500 1,118
Nextel Communications, Inc. zero coupon 2003(1)................... 1,500 1,042
Nextel Communications, Inc. zero coupon 2004(1)................... 1,000 607
PanAmSat L.P. 9.75% 2000.......................................... 1,000 1,045
Univision Television Group, Inc. 11.75% 2001...................... 500 533
Videotron Holdings PLC zero coupon 2004(1)........................ 5,500 4,125
Young Broadcasting, Inc. 10.13% 2005.............................. 500 486
Business & Public Services -- 3.5%
Integrated Health Services, Inc. 10.75% 2004...................... 500 513
Protection One Alarm Monitoring Corp. zero coupon 2005(1)*........ 1,000 855
Regency Health Services, Inc. 9.88% 2002.......................... 1,750 1,693
Rykoff Sexton, Inc. 8.88% 2003.................................... 500 460
Universal Health Services, Inc. 8.75% 2005........................ 1,000 986
Food Retail -- 4.5%
Allied Supermarkets, Inc. 6.63% 1998.............................. 1,200 1,170
Foodmaker, Inc. 9.25% 1999........................................ 1,900 1,876
Marvel Holdings, Inc. zero coupon 1998............................ 1,500 1,185
Safeway Store Holdings, Inc. 10.00% 2002.......................... 500 548
Star Market Co. Inc. 13.00% 2004.................................. 1,000 1,035
Leisure & Tourism -- 2.0%
Four Seasons Hotels, Inc. 9.13% 2000#............................. 1,000 1,002
Station Casinos, Inc. 9.63% 2003.................................. 500 484
Wyndham Hotel Corp. 10.50% 2006................................... 1,000 1,005
</TABLE>
---------------------
25
<PAGE> 27
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (continued) (IN THOUSANDS) (IN THOUSANDS)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Merchandising -- 2.6%
AnnTaylor, Inc. 8.75% 2000........................................ $ 500 $ 470
Barnes & Noble, Inc. 11.88% 2003.................................. 1,000 1,083
Thrifty PayLess Holdings, Inc. 12.25% 2004........................ 1,625 1,816
Telecommunications -- 11.0%
Brooks Fiber Properties zero coupon 2006#(1)...................... 2,750 1,530
Cellular Communications International, Inc. zero coupon 2000...... 2,250 1,373
Comunicacion Celular SA 13.13% 2003#*............................. 1,000 633
Horizon Cellular Telephone L.P. 11.38% 2000....................... 500 446
Intelcom Group, Inc. 12.50% 2006#................................. 1,000 553
International CableTel, Inc. zero coupon 2005(1).................. 750 491
MFS Communication zero coupon 2004(1)............................. 7,000 5,302
Paging Network, Inc. 11.75% 2002.................................. 2,200 2,393
Pricecellular Wireless Corp. zero coupon 2003(1).................. 1,000 785
Rogers Cantel Mobile Communications, Inc. 11.13% 2002............. 500 532
Transportation -- 1.5%
USAir, Inc. 10.00% 2003........................................... 1,000 940
USAir, Inc. 10.38% 2013........................................... 1,000 980
--------
61,972
--------
TOTAL BONDS & NOTES (cost: $110,131).............................. 112,392
--------
<CAPTION>
WARRANTS -- 0.1%+ SHARES
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.1%
Broadcasting & Publishing -- 0.0%
Heartland Wireless Communications, Inc.#*......................... 3,000 24
Nextel Communications, Inc........................................ 500 0
Business & Public Services -- 0.1%
Protection One Alarm Monitoring Corp.#*........................... 3,200 33
Telecommunications -- 0.0%
Comunicacion Celular SA*.......................................... 1,000 0
--------
TOTAL WARRANTS (cost: $42)........................................ 57
--------
<CAPTION>
PRINCIPAL
AMOUNT
U.S. GOVERNMENT AND AGENCIES -- 1.1% (IN THOUSANDS)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES TREASURY -- 1.1%
5.13% Note 1998 (cost: $1,452).................................... $ 1,500 1,458
--------
TOTAL INVESTMENT SECURITIES (cost: $111,625)...................... 113,907
--------
</TABLE>
- ---------------------
26
<PAGE> 28
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES -- 9.7% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
-----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 9.7%
Associates Corp. of North America 5.40% due 6/03/96 .............. $ 5,800 $ 5,798
Ford Motor Credit Co. 5.28% due 6/06/96 .......................... 2,300 2,298
Heinz (H.J.) Co. 5.25% due 6/26/96 ............................... 4,400 4,384
--------
TOTAL SHORT-TERM SECURITIES (cost: $12,480)....................... 12,480
--------
TOTAL INVESTMENTS --
(cost: $124,105) 98.6% 126,387
Other assets less liabilities -- 1.4 1,779
------ --------
NET ASSETS -- 100.0% $ 128,166
====== ========
</TABLE>
-----------------------------
# Resale restricted to qualified institutional buyers
* Fair value determined by Trustees
+ Non-income producing securities
(1) Represents a zero-coupon bond which will convert to an
interest-bearing security at later date
(2) Variable rate security -- the rate reflected is as of May 31,
1996
See Notes to Financial Statements
---------------------
27
<PAGE> 29
- ---------------------
ANCHOR PATHWAY FUND
U.S. GOVERNMENT/
AAA-RATED SECURITIES SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES -- 95.6% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ASSET-BACKED SECURITIES -- 4.8%
Green Tree Financial Corp. 6.80% 2027................................ $ 1,000 $ 956
Standard Credit Card Master Trust 8.88% 1998 -- Series 1991
Participation Certificates......................................... 4,500 4,697
--------------
5,653
--------------
DEVELOPMENTAL AUTHORITIES -- 3.7%
International Bank for Reconstruction & Development 7.90% 1998....... 3,000 3,077
International Bank for Reconstruction & Development 14.90% 1997...... 1,200 1,300
--------------
4,377
--------------
FEDERAL AGENCY OBLIGATIONS -- 29.4%++
Federal Home Loan Mortgage Corp. 6.50% 2009*......................... 2,000 1,875
Federal Home Loan Mortgage Corp. 9.00% 2021 - 2022................... 1,456 1,521
Federal Home Loan Mortgage Corp. 9.50% 2016.......................... 1,000 1,067
Federal Home Loan Mortgage Corp. 11.88% 2013*........................ 18 19
Federal Home Loan Mortgage Corp. 12.50% 2013*........................ 161 175
Federal National Mortgage Association zero coupon 2001 STRIPS(1)..... 5,000 4,827
Federal National Mortgage Association zero coupon 2001 STRIPS(1)..... 5,000 4,770
Federal National Mortgage Association 7.50% 2009..................... 1,727 1,731
Federal National Mortgage Association 7.70% 2004..................... 1,645 1,646
Federal National Mortgage Association 8.50% 2024..................... 2,089 2,150
Government National Mortgage Association 7.50% 2023.................. 1,390 1,366
Government National Mortgage Association 8.00% 2017.................. 1,846 1,869
Government National Mortgage Association 8.50% 1999 - 2022........... 3,916 4,016
Government National Mortgage Association 9.00% 2016 - 2017........... 866 915
Government National Mortgage Association 9.50% 2009 - 2017........... 5,493 5,971
Government National Mortgage Association 10.00% 2016................. 50 55
Government National Mortgage Association 10.50% 2016 - 2019.......... 322 355
Government National Mortgage Association 11.00% 2019................. 81 91
Government National Mortgage Association 11.50% 2010 - 2015.......... 18 21
--------------
34,440
--------------
INDUSTRIALS -- 2.2%
De Bartolo Capital Corp. Euronotes 8.00% 1996........................ 850 855
Public Service Electric & Gas Co. 7.00% 2024......................... 2,000 1,790
--------------
2,645
--------------
MISCELLANEOUS -- 3.2%
Columbia University Trustees NY 8.62% 2001........................... 1,500 1,595
Columbia University Trustees NY 8.65% 2003........................... 2,000 2,152
--------------
3,747
--------------
MORTGAGE-RELATED SECURITIES -- 6.5%
CMC Securities Corp. 6.50% 2008...................................... 2,801 2,519
Merrill Lynch Mortgage Investors, Inc. 6.85% 2015*................... 500 480
Morgan (J.P.) Commercial Mortgage Finance Corp. 7.35% 2010*.......... 1,000 980
Prudential Home Mortgage 7.50% 2022.................................. 3,686 3,690
--------------
7,669
--------------
</TABLE>
- ---------------------
28
<PAGE> 30
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (continued) (IN THOUSANDS) (IN THOUSANDS)
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.0%
Ontario Province Canada 15.25% 2012.................................. $ 1,000 $ 1,155
--------------
UNITED STATES TREASURY -- 44.8%
5.88% Notes 2004..................................................... 4,000 3,776
7.25% Notes 2004..................................................... 5,000 5,126
8.75% Bonds 2008..................................................... 2,000 2,206
8.88% Bonds 2017..................................................... 11,700 13,837
10.38% Bonds 2009.................................................... 4,500 5,462
10.38% Bonds 2012.................................................... 12,000 15,066
10.75% Bonds 2003.................................................... 1,750 2,126
11.25% Bonds 2015.................................................... 500 710
12.00% Bonds 2013.................................................... 3,000 4,188
--------------
52,497
--------------
TOTAL INVESTMENT SECURITIES (cost: $114,143)......................... 112,183
--------------
<CAPTION>
SHORT-TERM SECURITIES -- 4.9%
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 4.9%
Associates Corp. of North America 5.40% due 6/03/96.................. 1,920 1,919
General Electric Capital Services Inc. 5.26% due 6/12/96............. 3,800 3,794
--------------
TOTAL SHORT-TERM SECURITIES (cost: $5,713)........................... 5,713
--------------
TOTAL INVESTMENTS --
(cost: $119,856) 100.5% 117,896
Liabilities in excess of other assets -- (0.5) (609)
------ --------------
NET ASSETS -- 100.0% $ 117,287
=============
</TABLE>
-----------------------------
++ Pass-through securities are backed by a pool of mortgages or
other loans on which principal payments are periodically made.
Therefore, the effective maturity is shorter than stated
maturity.
* Fair value determined by Trustees
(1) Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
See Notes to Financial Statements
---------------------
29
<PAGE> 31
- ---------------------
ANCHOR PATHWAY FUND
CASH MANAGEMENT SERIES INVESTMENT PORTFOLIO -- MAY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES -- 100.7% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 96.1%
Albertson's, Inc. 5.28% due 6/14/96 ................................. $ 3,200 $ 3,194
American Express Credit Corp. 5.29% due 6/24/96 ..................... 1,600 1,594
American Express Credit Corp. 5.29% due 7/02/96 ..................... 1,600 1,593
Baltimore Gas & Electric Co. 5.27% due 7/18/96 ...................... 3,200 3,178
Beneficial Corp. 5.28% due 6/21/96 .................................. 3,200 3,191
CIT Group Holdings, Inc. 5.27% due 6/25/96 .......................... 3,000 2,990
Coca-Cola Co. 5.26% due 6/04/96 ..................................... 2,600 2,599
Commercial Credit Co. 5.29% due 6/19/96 ............................. 3,700 3,690
Deere (John) Capital Corp. 5.28% due 6/10/96 ........................ 3,500 3,495
Disney (Walt), Co. 5.27% due 6/17/96 ................................ 3,600 3,592
Emerson Electric Co. 5.27% due 6/18/96 .............................. 3,250 3,242
Ford Motor Credit Co. 5.30% due 6/05/96 ............................. 2,750 2,748
General Electric Capital Corp. 5.27% due 7/08/96 .................... 2,750 2,735
Heinz (H. J.) Co. 5.28% due 7/01/96 ................................. 2,300 2,290
Hershey Foods Corp. 5.27% due 6/27/96 ............................... 3,200 3,188
Home Depot 5.27% due 7/10/96 ........................................ 2,100 2,088
IBM Credit Corp. 5.28% due 6/21/96 .................................. 2,800 2,792
International Lease Finance Corp. 5.26% due 7/15/96 ................. 1,300 1,292
International Lease Finance Corp. 5.28% due 6/17/96 ................. 1,900 1,895
Lucent Technologies, Inc. 5.25% due 7/09/96 ......................... 3,000 2,983
Monsanto Co. 5.27% due 6/26/96 ...................................... 2,800 2,790
Motorola, Inc. 5.25% due 6/26/96 .................................... 2,300 2,292
Nordstrom Credit, Inc. 5.28% due 6/07/96 ............................ 3,000 2,997
Paccar Financial Corp. 5.27% due 6/25/96 ............................ 3,000 2,989
Penney (J.C.) Funding Corp. 5.29% due 6/20/96 ....................... 3,000 2,992
Pitney Bowes Credit Corp. 5.26% due 7/19/96 ......................... 2,200 2,185
President & Fellows Harvard 5.28% due 7/10/96 ....................... 2,200 2,187
Raytheon Co. 5.28% due 6/12/96 ...................................... 3,000 2,995
SAFECO Credit Co., Inc. 5.27% due 6/18/96 ........................... 2,800 2,793
Southwestern Bell Telephone Co. 5.27% due 6/13/96 ................... 2,800 2,795
US West Commerce, Inc. 5.32% due 6/03/96 ............................ 2,200 2,199
Xerox Corp. 5.28% due 6/04/96 ....................................... 2,400 2,399
--------------
TOTAL CORPORATE SHORT-TERM NOTES (cost: $85,982)..................... 85,982
--------------
FEDERAL AGENCY OBLIGATIONS -- 4.6%
Federal Home Loan Mortgage Discount Note 5.26% due 6/28/96
(cost: $4,084)..................................................... 4,100 4,084
--------------
TOTAL SHORT-TERM SECURITIES (cost: $90,066).......................... 90,066
--------------
TOTAL INVESTMENTS --
(cost: $90,066) 100.7% 90,066
Liabilities in excess of other assets -- (0.7) (638)
------ --------------
NET ASSETS -- 100.0% $ 89,428
====== =============
</TABLE>
See Notes to Financial Statements
- ---------------------
30
<PAGE> 32
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT/
GROWTH- ASSET HIGH-YIELD AAA-RATED
GROWTH INTERNATIONAL INCOME ALLOCATION BOND SECURITIES
SERIES SERIES SERIES SERIES SERIES SERIES
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment securities at value*........ $758,342 $205,291 $812,915 $141,591 $113,907 $112,183
Short-term securities*................. 101,642 33,465 90,042 11,252 12,480 5,713
Money market accounts.................. 101 111 128 71 73 100
Cash................................... 13 86 4 6 5 6
Foreign cash........................... -- 228 -- -- -- --
Receivables for --
Sales of investments................. 10,530 -- 1,212 -- 738 --
Dividends and accrued interest....... 268 1,138 2,299 961 1,894 1,425
Fund shares sold..................... 139 33 62 16 180 5
Prepaid expenses..................... 1 -- 1 -- -- --
-------------------------------------------------------------------------------
871,036 240,352 906,663 153,897 129,277 119,432
-------------------------------------------------------------------------------
LIABILITIES:
Payables for --
Purchases of investments............. 1,881 -- 3,552 876 817 1,967
Fund shares redeemed................. 572 284 629 25 199 89
Advisory fees........................ 222 121 229 40 34 32
Management fees...................... 148 49 153 27 23 21
Other accrued expenses................. 163 205 177 44 38 36
-------------------------------------------------------------------------------
2,986 659 4,740 1,012 1,111 2,145
-------------------------------------------------------------------------------
NET ASSETS............................. $868,050 $239,693 $901,923 $152,885 $128,166 $117,287
===================================================================================
Shares of beneficial interest
outstanding (unlimited shares
authorized).......................... 22,233 16,629 28,353 10,445 10,002 10,919
Net asset value per share.............. $ 39.04 $ 14.41 $ 31.81 $ 14.64 $ 12.81 $ 10.74
===================================================================================
COMPOSITION OF NET ASSETS:
Capital paid in........................ $522,158 $183,807 $585,066 $118,130 $122,287 $116,700
Accumulated undistributed net
investment income.................... 2,205 2,270 9,543 2,999 6,347 4,498
Accumulated undistributed net realized
gain (loss) on investments, futures,
options and foreign currency......... 75,900 6,479 49,489 10,353 (2,750) (1,951)
Unrealized appreciation (depreciation)
on investments....................... 267,787 47,136 257,825 21,403 2,282 (1,960)
Unrealized foreign exchange gain on
other assets and liabilities......... -- 1 -- -- -- --
-------------------------------------------------------------------------------
Net Assets $868,050 $239,693 $901,923 $152,885 $128,166 $117,287
===================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
-------------------------------------------------------------------------------------------
<S> <C<C>
ASSETS:
Investment securities at value*........ $ --
Short-term securities*................. 90,066
Money market accounts.................. 100
Cash................................... 50
Foreign cash........................... --
Receivables for --
Sales of investments................. --
Dividends and accrued interest....... --
Fund shares sold..................... 135
Prepaid expenses..................... --
90,351
LIABILITIES:
Payables for --
Purchases of investments............. --
Fund shares redeemed................. 846
Advisory fees........................ 27
Management fees...................... 18
Other accrued expenses................. 32
923
NET ASSETS............................. $89,428
Shares of beneficial interest
outstanding (unlimited shares
authorized).......................... 8,049
Net asset value per share.............. $ 11.11
COMPOSITION OF NET ASSETS:
Capital paid in........................ $87,048
Accumulated undistributed net
investment income.................... 2,381
Accumulated undistributed net realized
gain (loss) on investments, futures,
options and foreign currency......... (1)
Unrealized appreciation (depreciation)
on investments....................... --
Unrealized foreign exchange gain on
other assets and liabilities......... --
Net Assets $89,428
</TABLE>
- ---------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
* Cost
Investment securities................ $490,555 $158,154 $555,090 $120,188 $111,625 $114,143
===================================================================================
Short-term securities................ $101,642 $ 33,466 $ 90,042 $ 11,252 $ 12,480 $ 5,713
===================================================================================
<CAPTION>
* Cost
<S> <C<C>
Investment securities................ $ --
Short-term securities................ $90,066
</TABLE>
See Notes to Financial Statements
---------------------
31
<PAGE> 33
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT/
ASSET HIGH-YIELD AAA-RATED
GROWTH INTERNATIONAL GROWTH-INCOME ALLOCATION BOND SECURITIES
SERIES SERIES SERIES SERIES SERIES SERIES
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Dividends*........................... $ 2,512 $ 2,641 $ 9,631 $ 1,321 $ -- $ --
Interest............................. 2,085 836 2,382 2,136 6,759 4,882
-------------------------------------------------------------------------------------
Total income.................. 4,597 3,477 12,013 3,457 6,759 4,882
-------------------------------------------------------------------------------------
Expenses:
Advisory fees........................ 1,309 701 1,354 240 216 201
Management fees...................... 872 280 902 160 144 134
Custodian fees....................... 129 203 127 36 34 31
Auditing and legal fees.............. 26 9 28 7 6 6
Reports to investors................. 21 5 22 4 3 3
Trustees' fees....................... 9 3 9 2 2 1
Other expenses....................... 19 2 20 1 1 --
-------------------------------------------------------------------------------------
Total expenses................ 2,385 1,203 2,462 450 406 376
-------------------------------------------------------------------------------------
Net investment income................ 2,212 2,274 9,551 3,007 6,353 4,506
-------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on
investments.......................... 75,954 6,506 49,735 10,365 785 (141)
Net realized foreign exchange (loss) on
other assets and liabilities......... -- (18) -- -- -- --
Change in unrealized appreciation/
depreciation of investments.......... (34,331) 12,179 24,583 (2,117) 539 (6,246)
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... -- 1 -- -- -- --
-------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, foreign currency and
other assets and liabilities......... 41,623 18,668 74,318 8,248 1,324 (6,387)
-------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $ 43,835 $ 20,942 $ 83,869 $ 11,255 $ 7,677 $ (1,881)
===================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
---------------------------------------
<S> <C<C>
NET INVESTMENT INCOME:
Income:
Dividends*........................... $ --
Interest............................. 2,674
Total income.................. 2,674
Expenses:
Advisory fees........................ 155
Management fees...................... 104
Custodian fees....................... 19
Auditing and legal fees.............. 5
Reports to investors................. 2
Trustees' fees....................... 1
Other expenses....................... --
Total expenses................ 286
Net investment income................ 2,388
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on
investments.......................... --
Net realized foreign exchange (loss) on
other assets and liabilities......... --
Change in unrealized appreciation/
depreciation of investments.......... --
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... --
Net realized and unrealized gain (loss)
on investments, foreign currency and
other assets and liabilities......... --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $ 2,388
</TABLE>
- ---------------
* Net of foreign withholding taxes of $25; $342; $85 and $9 on Growth,
International, Growth-Income and Asset Allocation Series, respectively.
See Notes to Financial Statements
- ---------------------
32
<PAGE> 34
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT/
ASSET HIGH-YIELD AAA-RATED
GROWTH INTERNATIONAL GROWTH-INCOME ALLOCATION BOND SECURITIES
SERIES SERIES SERIES SERIES SERIES SERIES
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income.................. $ 2,212 $ 2,274 $ 9,551 $ 3,007 $ 6,353 $ 4,506
Net realized gain (loss) on
investments.......................... 75,954 6,506 49,735 10,365 785 (141)
Net realized foreign exchange (loss) on
other assets and liabilities......... -- (18) -- -- -- --
Change in unrealized appreciation/
depreciation of investments.......... (34,331) 12,179 24,583 (2,117) 539 (6,246)
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... -- 1 -- -- -- --
-------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations............ 43,835 20,942 83,869 11,255 7,677 (1,881)
-------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income... (5,500) (7,250) (20,695) (5,985) (13,970) (11,160)
Distributions from net realized gains
on investments....................... (120,665) (4,980) (55,955) (10,955) -- --
-------------------------------------------------------------------------------------
Total dividends and distributions paid
to shareholders...................... (126,165) (12,230) (76,650) (16,940) (13,970) (11,160)
-------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold.............. 103,136 34,551 38,211 9,072 14,809 7,472
Proceeds from shares issued for
reinvestment of dividends and
distributions........................ 126,165 12,230 76,650 16,940 13,970 11,160
Cost of shares repurchased............. (176,196) (43,934) (102,300) (21,050) (40,910) (23,242)
-------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions......................... 53,105 2,847 12,561 4,962 (12,131) (4,610)
-------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................... (29,225) 11,559 19,780 (723) (18,424) (17,651)
NET ASSETS:
Beginning of period.................... 897,275 228,134 882,143 153,608 146,590 134,938
-------------------------------------------------------------------------------------
End of period.......................... $ 868,050 $ 239,693 $ 901,923 $ 152,885 $ 128,166 $ 117,287
===================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
---------------------------------------
<S> <C<C>
OPERATIONS:
Net investment income.................. $ 2,388
Net realized gain (loss) on
investments.......................... --
Net realized foreign exchange (loss) on
other assets and liabilities......... --
Change in unrealized appreciation/
depreciation of investments.......... --
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... --
Net increase (decrease) in net assets
resulting from operations............ 2,388
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income... (7,520)
Distributions from net realized gains
on investments....................... (1)
Total dividends and distributions paid
to shareholders...................... (7,521)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold.............. 115,512
Proceeds from shares issued for
reinvestment of dividends and
distributions........................ 7,521
Cost of shares repurchased............. (129,344)
Net increase (decrease) in net assets
resulting from capital share
transactions......................... (6,311)
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................... (11,444)
NET ASSETS:
Beginning of period.................... 100,872
End of period.......................... $ 89,428
</TABLE>
- ---------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment income.... $ 2,205 $ 2,270 $ 9,543 $ 2,999 $ 6,347 $ 4,498
===================================================================================
Shares issued and repurchased:
Sold................................. 2,531 2,437 1,187 594 1,105 641
Issued in reinvestment of dividends
and distributions.................. 3,361 880 2,462 1,177 1,103 1,030
Repurchased.......................... (4,286) (3,095) (3,181) (1,383) (2,979) (2,014)
-------------------------------------------------------------------------------------
Net increase (decrease)................ 1,606 222 468 388 (771) (343)
===================================================================================
<CAPTION>
Undistributed net investment income.... $ 2,381
<S> <C<C>
Shares issued and repurchased:
Sold................................. 10,082
Issued in reinvestment of dividends
and distributions.................. 683
Repurchased.......................... (11,378)
Net increase (decrease)................ (613)
</TABLE>
See Notes to Financial Statements
---------------------
33
<PAGE> 35
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED NOVEMBER 30, 1995
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
U.S.
GOVERNMENT/
ASSET HIGH-YIELD AAA-RATED
GROWTH INTERNATIONAL GROWTH-INCOME ALLOCATION BOND SECURITIES
SERIES SERIES SERIES SERIES SERIES SERIES
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income.................. $ 5,324 $ 4,604 $ 20,693 $ 5,960 $ 13,821 $ 10,773
Net realized gain (loss) on
investments.......................... 120,927 7,678 55,815 11,006 (2,317) (1,413)
Net realized foreign exchange gain on
other assets and liabilities......... 174 (2) -- -- -- --
Change in unrealized appreciation/
depreciation of investments.......... 134,125 12,035 160,433 22,856 13,271 11,975
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... -- (9) -- -- -- --
-------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations...................... 260,550 24,306 236,941 39,822 24,775 21,335
-------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income... (4,130) (4,020) (20,910) (7,070) (15,715) (14,600)
Distributions from net realized gains
on investments....................... (53,955) (8,900) (61,645) (3,970) (1,315) (730)
-------------------------------------------------------------------------------------
Total dividends and distributions paid
to shareholders...................... (58,085) (12,920) (82,555) (11,040) (17,030) (15,330)
-------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold.............. 264,548 86,003 84,337 15,947 66,944 33,236
Proceeds from shares issued for
reinvestment of dividends and
distributions........................ 58,085 12,920 82,555 11,040 17,030 15,330
Cost of shares repurchased............. (340,425) (141,673) (205,106) (44,839) (72,596) (69,001)
-------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions......................... (17,792) (42,750) (38,214) (17,852) 11,378 (20,435)
-------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................... 184,673 (31,364) 116,172 10,930 19,123 (14,430)
NET ASSETS:
Beginning of period.................... 712,602 259,498 765,971 142,678 127,467 149,368
-------------------------------------------------------------------------------------
End of period.......................... $ 897,275 $ 228,134 $ 882,143 $ 153,608 $ 146,590 $ 134,938
===================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
---------------------------------------
<S> <C<C>
OPERATIONS:
Net investment income.................. $ 7,516
Net realized gain (loss) on
investments.......................... 1
Net realized foreign exchange gain on
other assets and liabilities......... --
Change in unrealized appreciation/
depreciation of investments.......... --
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities.......................... --
Net increase in net assets resulting
from operations...................... 7,517
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income... (6,355)
Distributions from net realized gains
on investments....................... (1)
Total dividends and distributions paid
to shareholders...................... (6,356)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold.............. 320,102
Proceeds from shares issued for
reinvestment of dividends and
distributions........................ 6,356
Cost of shares repurchased............. (413,143)
Net increase (decrease) in net assets
resulting from capital share
transactions......................... (86,685)
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................... (85,524)
NET ASSETS:
Beginning of period.................... 186,396
End of period.......................... $ 100,872
</TABLE>
- ---------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment income.... $ 5,493 $ 7,246 $ 20,687 $ 5,977 $ 13,964 $ 11,152
===================================================================================
Shares issued and repurchased:
Sold................................. 6,919 6,506 2,970 1,155 5,131 2,849
Issued in reinvestment of dividends
and distributions.................. 1,644 1,073 3,211 864 1,415 1,406
Repurchased.......................... (8,845) (10,739) (7,247) (3,268) (5,539) (5,944)
-------------------------------------------------------------------------------------
Net increase (decrease)................ (282) (3,160) (1,066) (1,249) 1,007 (1,689)
===================================================================================
<CAPTION>
Undistributed net investment income.... $ 7,513
<S> <C<C>
Shares issued and repurchased:
Sold................................. 27,835
Issued in reinvestment of dividends
and distributions.................. 566
Repurchased.......................... (35,988)
Net increase (decrease)................ (7,587)
</TABLE>
See Notes to Financial Statements
- ---------------------
34
<PAGE> 36
- ---------------------
ANCHOR PATHWAY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION: Anchor Pathway Fund (the
"Fund") is an entity of the type commonly known as a Massachusetts Business
Trust. Its Agreement and Declaration of Trust permits the issuance of an
unlimited number of shares ($.01 par value per share) of beneficial interest in
seven separate series, with shares of each series representing an interest in a
separate portfolio of assets and operating as a distinct fund. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. Shares of the Fund are
offered only to Variable Separate Accounts, a separate account of Anchor
National Life Insurance Company which offers annuity contracts.
The investment objectives for each series are as follows:
The GROWTH SERIES seeks growth of capital by investing primarily in common
stocks or securities with common stock characteristics, such as convertible
preferred stocks, which demonstrate the potential for appreciation.
The INTERNATIONAL SERIES seeks long-term growth of capital by investing
primarily in securities of issuers domiciled outside the United States.
The GROWTH-INCOME SERIES seeks growth of capital and income by investing
primarily in common stocks or securities which demonstrate the potential for
appreciation and/or dividends.
The ASSET ALLOCATION SERIES seeks high total return (including income and
capital gains) consistent with preservation of capital over the long-term
through a diversified portfolio that can include common stocks and other
equity-type securities (such as convertible bonds and preferred stocks), bonds
and other intermediate and long-term fixed-income securities and money market
instruments (debt securities maturing in one year or less) in any combination.
The HIGH YIELD BOND SERIES seeks a high level of current income and secondarily
seeks capital appreciation by investing primarily in intermediate and long-term
corporate obligations, with emphasis on higher yielding, higher risk, lower
rated or unrated securities.
The U.S. GOVERNMENT/AAA-RATED SECURITIES SERIES seeks a high level of current
income consistent with prudent investment risk and preservation of capital by
investing primarily in a combination of securities guaranteed by the U.S.
Government and other debt securities rated AAA by Standard & Poor's Ratings
Services or Aaa by Moody's Investors Service, Inc. or that have not received a
rating but are determined to be of comparable quality by the investment adviser.
The CASH MANAGEMENT SERIES seeks high current yield while preserving capital by
investing in a diversified selection of high quality money market instruments.
In the opinion of management of the Fund, the accompanying financial
statements contain all normal and recurring adjustments necessary for the fair
presentation of the financial position of the Funds at May 31, 1996, and the
results of its operations, the changes in its net assets and financial
highlights for the periods then ended.
2. SIGNIFICANT ACCOUNTING POLICIES: Following is a summary of significant
accounting policies consistently followed by the Fund 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. 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. Short-term
securities with 60 days or less to maturity are amortized to maturity based on
their cost to the Fund if acquired within 60 days of maturity or, if already
held by the Fund 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 Fund's Trustees.
---------------------
35
<PAGE> 37
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
published rates on the following basis:
(i) market value of investment securities, other assets and liabilities -- at
the prevailing rate of exchange at the valuation date.
(ii) purchases and sales of investment securities, income and expenses -- at
the rate of exchange prevailing on the respective dates of such transactions.
Assets and liabilities denominated in foreign currencies and commitments under
forward foreign currency 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.
The Fund 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. Similarly, the Fund 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 gains and losses on other assets and liabilities and
change in unrealized foreign exchange gains and losses 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 Fund'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: As is
customary in the mutual fund industry, securities transactions are accounted for
on the first business day following the trade date. Interest income is accrued
daily except when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities which are
recorded as soon as the Fund is informed after the ex-dividend date. The Fund
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 Fund are allocated among the series based upon
relative net assets. In all other respects, expenses are charged to each series
as incurred on a specific identification basis.
The Fund records dividends and distributions to its shareholders on the
ex-dividend date.
STATEMENT OF POSITION 93-2: In accordance with the requirements of Statement of
Position 93-2 Determination, Disclosure, and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment
Companies, permanent book-tax differences relating to shareholder distributions
have been reclassified to paid-in-capital. Accordingly, 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 were not affected by this change.
- ---------------------
36
<PAGE> 38
For the year ended November 30, 1995, the reclassification arising from
book/tax differences resulted in increases (decreases) to the components of net
assets as follows, (dollars in thousands):
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED PAID
NET REALIZED NET INVESTMENT IN
GAIN/(LOSS) INCOME/(LOSS) CAPITAL
<S> <C> <C> <C>
---------------------------------
Growth Series.............................................................. $ (434) $ 174 $ 260
International Series....................................................... (2,648) 2,647 1
Growth-Income Series....................................................... 172 -- (172)
Asset Allocation Series.................................................... (26) 26 --
High-Yield Bond Series..................................................... (150) 150 --
U.S. Government/AAA-Rated Securities Series................................ (387) 386 1
Cash Management Series..................................................... (1) 1 --
</TABLE>
3. FEDERAL INCOME TAXES: It is the Fund's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any net
realized gain on investments, to its shareholders. Therefore, no federal tax
provision is required.
Capital losses incurred after October 31 within the taxable year are deemed to
arise on the first business day of the Funds' next taxable year. Accordingly,
U.S. Government/AAA-Rated Securities Series, High-Yield Bond Series and Cash
Management Series incurred and will elect to defer net capital losses of
$317,498, $1,130,613 and $172 to the taxable year ended November 30, 1996. To
the extent these losses are used to offset future gains, it is probable that the
gains so offset will not be distributed.
At November 30, 1995 U.S. Government/AAA-Rated Securities Series and High
Yield Bond Series had net capital loss carryforwards of $1,491,040 and
$2,405,184 which are available to the extent provided in regulations to offset
future capital gains and will expire in 2003. To the extent that these
carryforward losses are used to offset capital gains, it is probable that the
gains so offset will not be distributed.
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities, including short-term securities at May 31, 1996 were as follows
(dollars in thousands):
<TABLE>
<CAPTION>
UNREALIZED
AGGREGATE AGGREGATE GAIN
UNREALIZED UNREALIZED (LOSS) COST OF
GAIN (LOSS) NET INVESTMENTS
<S> <C> <C> <C> <C>
---------------------------------------------
Growth Series...................................................... $283,877 $(17,164) $266,713 $593,271
International Series............................................... 52,773 (5,637) 47,136 191,620
Growth-Income Series............................................... 266,184 (8,931) 257,253 645,704
Asset Allocation Series............................................ 23,000 (1,597) 21,403 131,440
High-Yield Bond Series............................................. 3,703 (1,421) 2,282 124,105
U.S. Government/AAA-Rated Securities Series........................ 1,507 (3,245) (1,738) 119,634
Cash Management Series............................................. -- -- -- 90,066
</TABLE>
4. BUSINESS MANAGER AND INVESTMENT ADVISER: Anchor Investment Adviser, Inc.
(the "Business Manager"), an indirect wholly owned subsidiary of Anchor National
Life Insurance Company, pursuant to a business management agreement, manages the
business affairs and the administration of the Fund. For these services, the
Business Manager receives a monthly fee which is accrued daily based on the
average net assets of each series of the Fund. Except for the International
Series, the business manager fee accrues at the annual rate of .24% on that
portion of each series' average daily net assets not exceeding $30,000,000 and
.20% on that portion of the series' average daily net assets in excess of
$30,000,000. The business manager fee for the International Series accrues at
the annual rate of .24% on the series' average daily net assets.
Advisory fees paid to Capital Research and Management Company (the "Investment
Adviser") are based on the net assets of each series at the following annual
rates: .36% on that portion of each series' (except for the International
Series) average daily net assets not exceeding $30,000,000 and .30% on that
portion of the series' average net assets in excess of $30,000,000. The advisory
fee for the International Series accrues at the annual rate of .66% on that
portion of the series' average daily net assets not exceeding $60,000,000 and
.58% on that portion of the series' average daily net assets in excess of
$60,000,000.
---------------------
37
<PAGE> 39
The Fund pays no salaries or compensation to any of its officers, all of whom
are officers or employees of SunAmerica Asset Management Corp., an affiliate of
the Business Manager, or SunAmerica Inc., the ultimate parent of the Business
Manager.
An annual fee of $13,000, plus expenses, is paid to each non-interested
Trustee for attendance at meetings of the Trustees. The interested Trustees
receive no remuneration from the Fund.
5. PURCHASES AND SALES OF SECURITIES: Information with respect to purchases and
sales of long-term securities (dollars in thousands) for the six months ended
May 31, 1996, was as follows:
<TABLE>
<CAPTION>
U.S.
GOVERNMENT/
ASSET HIGH-YIELD AAA-RATED CASH
GROWTH INTERNATIONAL GROWTH-INCOME ALLOCATION BOND SECURITIES MANAGEMENT
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
Purchases of portfolio securities........ $103,659 $40,152 $ 87,138 $35,524 $15,781 $19,206 $ --
Sales of portfolio securities............ 157,461 62,960 142,804 42,934 37,964 27,393 --
U.S. government securities included above
were as follows:
Purchases of U.S. government
securities............................. -- -- -- 12,513 978 17,302 --
Sales of U.S. government securities...... -- -- -- 5,100 2,490 15,498 --
</TABLE>
- ---------------------
38
<PAGE> 40
- ---------------------
ANCHOR PATHWAY FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD
<TABLE>
<CAPTION>
NET REALIZED TOTAL DIVIDENDS DIVIDENDS
NET ASSET NET & UNREALIZED FROM DECLARED FROM NET NET ASSET
VALUE INVEST- GAIN (LOSS) INVEST- FROM NET REALIZED VALUE
PERIOD BEGINNING MENT ON MENT INVESTMENT GAIN ON END OF TOTAL
ENDED OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS PERIOD RETURN**
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Series
11/30/91 $ 21.01 $ 0.37 $ 5.25 $ 5.62 $(0.77) $ (0.29) $ 25.57 26.80%
11/30/92 25.57 0.23 5.21 5.44 (0.01) (0.04) 30.96 21.29
11/30/93 30.96 0.24@ 5.32 5.56 (0.23) (0.53) 35.76 18.26
11/30/94 35.76 0.19@ 1.04 1.23 (0.25) (2.66) 34.08 3.33
11/30/95 34.08 0.25@ 12.02 12.27 (0.20) (2.65) 43.50 37.93
5/31/96* 43.50 0.10@ 1.94 2.04 (0.28) (6.22) 39.04 5.28
International Series
11/30/91 9.68 0.16 0.38 0.54 (0.09) -- 10.13 5.59
11/30/92 10.13 0.15 (0.12) 0.03 (0.14) (0.02) 10.00 0.31
11/30/93 10.00 0.18@ 2.54 2.72 (0.14) (0.01) 12.57 27.41
11/30/94 12.57 0.22@ 0.81 1.03 (0.12) (0.22) 13.26 8.17
11/30/95 13.26 0.26@ 1.11 1.37 (0.23) (0.50) 13.90 11.18
5/31/96* 13.90 0.14@ 1.14 1.28 (0.46) (0.31) 14.41 9.40
Growth-Income Series
11/30/91 20.71 0.73 3.62 4.35 (0.87) (0.40) 23.79 21.14
11/30/92 23.79 0.64 3.12 3.76 (0.72) (0.58) 26.25 16.02
11/30/93 26.25 0.71@ 2.44 3.15 (0.63) (0.54) 28.23 12.34
11/30/94 28.23 0.69@ (0.14) 0.55 (0.76) (1.56) 26.46 2.00
11/30/95 26.46 0.71@ 7.46 8.17 (0.76) (2.23) 31.64 33.47
5/31/96* 31.64 0.34@ 2.70 3.04 (0.77) (2.10) 31.81 9.80
Asset Allocation Series
11/30/91 10.62 0.56 1.32 1.88 (0.60) (0.02) 11.88 18.66
11/30/92 11.88 0.50 1.10 1.60 (0.53) (0.05) 12.90 13.80
11/30/93 12.90 0.63@ 0.72 1.35 (0.46) (0.13) 13.66 10.76
11/30/94 13.66 0.58@ (0.69) (0.11) (0.62) (0.31) 12.62 (0.84)
11/30/95 12.62 0.55@ 3.16 3.71 (0.68) (0.38) 15.27 31.01
5/31/96* 15.27 0.30@ 0.84 1.14 (0.63) (1.14) 14.64 7.65
High-Yield Bond Series
11/30/91 12.08 1.19 2.16 3.35 (1.52) -- 13.91 29.25
11/30/92 13.91 1.20 0.65 1.85 (1.16) -- 14.60 14.06
11/30/93 14.60 1.27@ 1.02 2.29 (1.22) -- 15.67 16.44
11/30/94 15.67 1.24@ (1.88) (0.64) (1.49) (0.49) 13.05 (4.70)
11/30/95 13.05 1.26@ 0.99 2.25 (1.56) (0.13) 13.61 18.97
5/31/96* 13.61 0.62@ 0.11 0.73 (1.53) -- 12.81 5.48
U.S. Government/AAA-Rated Securities Series
11/30/91 11.78 0.74 0.78 1.52 (0.81) -- 12.49 13.59
11/30/92 12.49 0.85 0.31 1.16 (0.78) -- 12.87 9.84
11/30/93 12.87 0.95@ 0.61 1.56 (0.91) (0.18) 13.34 12.58
11/30/94 13.34 0.90@ (1.43) (0.53) (1.11) (0.17) 11.53 (4.17)
11/30/95 11.53 0.86@ 0.85 1.71 (1.20) (0.06) 11.98 15.95
5/31/96* 11.98 0.41@ (0.59) (0.18) (1.06) -- 10.74 (1.57)
Cash Management Series
11/30/91 11.78 0.60 0.07 0.67 (0.57) -- 11.88 5.85
11/30/92 11.88 0.40 (0.03) 0.37 (0.75) -- 11.50 3.26
11/30/93 11.50 0.29@ -- 0.29 (0.39) -- 11.40 2.57
11/30/94 11.40 0.40@ -- 0.40 (0.33) -- 11.47 3.56
11/30/95 11.47 0.61@ 0.01 0.62 (0.44) -- 11.65 5.53
5/31/96* 11.65 0.28@ -- 0.28 (0.82) -- 11.11 2.45
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME PORTFOLIO AVERAGE
PERIOD PERIOD TO AVERAGE TO AVERAGE TURNOVER COMMISSION
ENDED (000'S) NET ASSETS NET ASSETS RATE PER SHARE#
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/30/91 $458,719 0.62% 1.51% 12.30% N/A
11/30/92 644,060 0.56 0.88 14.31 N/A
11/30/93 735,400 0.55 0.71 21.99 N/A
11/30/94 712,602 0.55 0.56 33.79 N/A
11/30/95 897,275 0.55 0.65 23.72 N/A
5/31/96 868,050 0.55+ 0.51+ 13.18 0.0582
11/30/91 50,654 1.40 2.20 14.30 N/A
11/30/92 85,919 1.19 1.88 21.04 N/A
11/30/93 192,162 1.12 1.62 22.56 N/A
11/30/94 259,498 1.04 1.64 21.68 N/A
11/30/95 228,134 1.05 1.95 16.79 N/A
5/31/96 239,693 1.03+ 1.95+ 19.54 0.0149
11/30/91 584,668 0.59 3.45 21.20 N/A
11/30/92 777,448 0.56 2.88 18.81 N/A
11/30/93 862,716 0.55 2.60 29.22 N/A
11/30/94 765,971 0.55 2.54 32.97 N/A
11/30/95 882,143 0.55 2.52 18.81 N/A
5/31/96 901,923 0.55+ 2.13+ 10.81 0.0596
11/30/91 78,271 0.77 5.50 16.50 N/A
11/30/92 134,100 0.63 4.84 21.86 N/A
11/30/93 166,555 0.60 4.70 22.66 N/A
11/30/94 142,678 0.59 4.47 48.53 N/A
11/30/95 153,608 0.59 4.04 53.58 N/A
5/31/96 152,885 0.58+ 3.90+ 24.95 0.0596
11/30/91 117,714 0.69 10.51 24.40 N/A
11/30/92 147,951 0.62 9.40 75.27 N/A
11/30/93 190,515 0.59 8.43 59.03 N/A
11/30/94 127,467 0.59 8.76 44.97 N/A
11/30/95 146,590 0.59 9.66 31.64 N/A
5/31/96 128,166 0.59+ 9.22+ 12.44 N/A
11/30/91 192,330 0.66 7.96 30.90 N/A
11/30/92 230,798 0.59 7.32 47.58 N/A
11/30/93 228,569 0.58 7.19 9.14 N/A
11/30/94 149,368 0.58 7.42 16.95 N/A
11/30/95 134,938 0.59 7.49 43.43 N/A
5/31/96 117,287 0.59+ 7.05+ 15.96 N/A
11/30/91 197,942 0.64 5.59 -- N/A
11/30/92 203,548 0.61 3.21 -- N/A
11/30/93 192,384 0.58 2.59 -- N/A
11/30/94 186,396 0.57 3.52 -- N/A
11/30/95 100,872 0.58 5.32 -- N/A
5/31/96 89,428 0.59+ 4.90+ -- N/A
</TABLE>
- ---------------
@ Calculated based upon average shares outstanding
+ Annualized
# The average commission per share is derived by taking the agency commissions
paid on equity securities trades and dividing by the number of
shares purchased or sold.
* Unaudited
** Does not reflect expenses that apply to the separate accounts of Anchor
National Life Insurance Company and First SunAmerica Life Insurance
Company. If such expenses had been included, total return would have been
lower for each period presented.
See Notes to Financial Statements
---------------------
39
<PAGE> 41
P-1064 (R 7/96)
