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SEMIANNUAL REPORT - AUGUST 31, 1999
[ANCHOR LOGO]
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ANCHOR
PATHWAY
FUND
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DEAR ANCHOR PATHWAY INVESTOR:
We are pleased to offer the following report on the Anchor
Pathway Fund, which serves as the underlying investment vehicle
for the American Pathway II Variable Annuity. This report covering
the six-month period ending August 31, 1999 represents the first
semiannual report since the change in the fiscal year of the fund.
As we noted in our last report to you, the fund's year-end has
been changed to February 28 (February 29 in leap year) to reduce
fund costs and to facilitate timely reporting to our shareholders.
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.
ECONOMIC OVERVIEW
For most of the period between February 28, 1999 and August 31,
1999, global equity markets seemed to be marching to the beat of
the same drummer. As investors gained confidence in the health of
global economies, stock prices rapidly appreciated. The lone
exception early in the period was the European region, as economic
difficulties in two of its largest countries cast doubt on the
successful blending of the 11 European Union participants. By
mid-period, Europe's economies were back on track and its equity
markets joined the rest of the world on their climb to higher
ground. Bond markets, on the other hand, declined steadily
throughout the period as the Federal Reserve confirmed investors'
suspicions on inflation by raising the federal funds rate
twice -- 0.25% each time -- during the period. As the period came
to a close, though, these inflation fears had begun to take their
toll on the U.S. equity market.
Longer term, CRMC notes that the U.S. economy continues to grow
at a healthy, although potentially troublesome, pace. Unemployment
remains at historically low levels, consumer spending and income
growth are robust, and inflation remains subdued. While the U.S.
economy is in its ninth year of expansion, other economies
throughout the world are just beginning to enjoy the fruits of
growth. With virtually all economies in the world in a growth mode
it can be easy to be lulled into a euphoric state; however, as
market volatility over the past few years has shown, investors'
enthusiasm for stocks can change quite rapidly. By maintaining its
traditional long-term perspective, CRMC assesses the opportunities
that exist and ultimately acts on its convictions about what is
most appropriate for shareholders.
Here are brief comments on the investment activities of each
series:
THE GROWTH SERIES posted a 14.11% increase for the six-month
period ending August 31, 1999, significantly outpacing the 7.29%
figure posted by the benchmark S&P 500 Composite Index for the
same period. Although the series' primary objective is growth of
capital, CRMC has generally avoided the narrow list of so-called
"mega-capitalization growth" stocks that have infatuated many
other investors in recent months. Instead, the manager has sought
out a wider range of solid, well-managed companies it believed
would reward shareholders over the long term. That position stood
investors in good stead during the period, when the majority of
the series' holdings appreciated in price. Many of the series'
largest media and technology-related issues -- Time Warner, Texas
Instruments and Applied Materials, to name a few -- made
particularly strong contributions to results.
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THE INTERNATIONAL SERIES returned 12.19% for the same six-month
period ending August 31, 1999, compared to the benchmark MSCI EAFE
Index return of 10.55%. The series is designed to add a measure of
diversification to a U.S. stock portfolio, as well as expose
long-term investors to the most rewarding international
opportunities CRMC's research can uncover. During the period, the
series benefited from its large position -- nearly 13% of
assets -- in Japanese companies, as well as those based in Latin
America and Southeast Asia, regions that have taken the first
arduous steps toward economic recovery. Some of the biggest
gainers for the six months were Cemex of Mexico, Sony Music, South
Korea's SK Telecom and Rohm, the Japanese electronics concern. In
Europe, by contrast, returns were less dramatic, although several
large European holdings -- such as Dixons, a British retailer of
consumer electronics, and Deutsche Telekom -- advanced strongly in
price.
THE GROWTH-INCOME SERIES returned 8.46% for the six-month period
ending August 31, 1999, compared to the S&P 500 return of 7.29%.
The series, which generally invests in stocks of established,
dividend-paying companies, is the fund's largest, with net assets
of $914 million. The series comprises investments in stocks of 155
companies and cuts a broad swath across industries. Technology
holdings were among those showing the strongest gains, but the
series was also well-positioned to benefit from the surge in
cyclical and commodities-related issues toward the end of the
period. CRMC notes that, amid signs of a global recovery,
investors bid up stock prices of companies that supply the
building blocks for growth, ranging from basic materials producers
such as International Paper and Alcoa, to industrial and capital
equipment concerns, including Ingersoll-Rand and Schlumberger.
THE ASSET ALLOCATION SERIES returned 7.07% for the six-month
period ending August 31, 1999, compared to the S&P 500 return of
7.29%, the Salomon Smith Barney Investment Grade Bond Index of
-0.83% for the same period. The series is managed as though it
constitutes the complete portfolio of a prudent investor, with a
balance of stocks, bonds and short-term instruments. The equity
position accounts for nearly two-thirds of assets, with
investments in 50 companies. The emphasis is on large, solid
businesses; holdings include some of the world's best-known
corporations -- household names such as Citigroup, Corning, and
General Mills -- many of which did quite well during the period.
However, overall results were dampened by the bonds in the series,
which fell due to rising interest rates. Roughly 28% of assets are
invested in bonds; the remaining 8% is held in cash and
equivalents.
THE HIGH-YIELD BOND SERIES declined -3.38% in a very challenging
fixed income and high-yield market environment for the six-month
period ending August 31, 1999, compared to the Salomon Smith
Barney Long-Term High-Yield Index return of -1.87%, and the
Salomon Smith Barney Investment Grade Bond Index return of -0.83%
for the same period. The series invests primarily in lower quality
bonds, which typically pay higher yields to compensate for a
higher risk of default. Fundamental research helps CRMC minimize
that risk: it also helps the manager uncover hidden gems in the
marketplace. That marketplace has been weak due to rising interest
rates, poor secondary market liquidity, and an increasing default
rate. Such market conditions can create price volatility. In
particular, the Fund's performance has been hurt by its exposure
to the healthcare industry, which is currently out of favor with
investors. Over the long-term, CRMC believes this sector will
deliver an attractive return. The manager notes that a silver
lining to these market difficulties has been that bond prices in
many cases have dropped to an
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acceptable range, and CRMC has found a number of promising
investments in the media, forest products, and telecommunications
sectors.
THE U.S. GOVERNMENT/AAA RATED SECURITIES SERIES declined -0.62%
for the six-month period ending August 31, 1999, almost matching
the Salomon Smith Barney Treasury/Gov't-Sponsored/Mortgage Index
return of -0.63% for the same period. Although the series carries
virtually no risk of default, it is nonetheless vulnerable to
changes in interest rates, a fact that was amply demonstrated
during the period. U.S. Treasury bond prices peaked in October,
shortly before the beginning of the reporting period. CRMC notes
that the "flight to quality" that had boosted government bonds
through late summer and early fall sharply reversed itself as
investors returned to stocks and other financial assets. Matters
worsened in the new year, when stronger than expected economic
data rekindled inflation fears. The series' declines were tempered
by its investments in mortgage-backed securities, which generally
held up better than U.S. Treasury bonds.
THE CASH MANAGEMENT SERIES provided investors with a return of
2.19% for the six-month period ending August 31, 1999. In a
preemptive strike against a potentially overheating U.S. economy,
the Federal Reserve Board increased short-term interest rates in
June and August to 5.25%. Managed for relatively stable value and
a reasonable rate of return, the series can be an important
diversification tool. Roughly 30% of the series' assets is
invested in federal agency discount notes (short-term loans to
federal government agencies). The balance is concentrated in
high-quality commercial paper (short-term loans to major,
well-known corporations), all of which carry the highest credit
ratings from Moody's Investors Service or Standard & Poor's.
The seven series in the Anchor Pathway Fund offer you a wide
range of investment options to help you reach your long-term
financial goals. CRMC remains committed to helping you achieve
these goals by striving to find the best values that financial
markets have to offer. We thank you for your continued support,
and we look forward to reporting to you again at the end of the
fiscal year in February, 2000.
Sincerely,
/s/ ELI BROAD
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Eli Broad
Chairman, President and Chief Executive Officer,
Anchor National Life Insurance Company
September 30, 1999
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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. Mortgage-backed securities are
subject to prepayment, which can result in reinvestment of
principal at lower yields. Money market instruments generally
offer stability and income, but an investment in these securities,
like investments in the other series, is not guaranteed.
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ANCHOR PATHWAY FUND
GROWTH SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK -- 92.5% SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL EQUIPMENT -- 37.8%
Data Processing & Reproduction -- 11.3%
Adobe Systems, Inc. ........................................ 155,000 $ 15,442
Autodesk, Inc. ............................................. 30,000 690
Compaq Computer Corp. ...................................... 277,500 6,435
Computer Associates International, Inc. .................... 75,000 4,237
Data General Corp.+......................................... 200,000 3,687
Fujitsu Ltd. ............................................... 355,000 10,423
Gateway 2000, Inc.+......................................... 64,000 6,204
Lexmark International Group, Inc., Class A+................. 24,000 1,890
Mentor Graphics Corp.+...................................... 120,000 1,076
Microsoft Corp.+............................................ 140,000 12,959
Oracle Corp. ............................................... 420,000 15,330
PeopleSoft, Inc. ........................................... 620,000 8,757
Siebel Systems, Inc.+....................................... 150,000 10,303
Silicon Graphics, Inc.+..................................... 300,000 3,431
Storage Technology Corp.+................................... 185,000 3,885
Structural Dynamics Research Corp.+......................... 150,000 2,419
Electrical & Electronics -- 1.3%
Lucent Technologies, Inc. .................................. 49,500 3,171
NEC Corp. .................................................. 380,000 6,186
Nortel Networks Corp. ...................................... 90,000 3,696
Electronic Components -- 21.0%
Adaptec, Inc.+.............................................. 365,000 14,235
Altera Corp.+............................................... 355,000 14,954
Analog Devices, Inc.+....................................... 486,666 25,063
Corning, Inc. .............................................. 54,200 3,604
Cypress Semiconductor Corp.+................................ 50,000 1,156
Intel Corp. ................................................ 322,400 26,497
LSI Logic Corp.+............................................ 200,000 11,350
Maxim Integrated Products, Inc.+............................ 75,000 5,048
Microchip Technology, Inc.+................................. 210,000 11,498
Newbridge Networks Corp.+................................... 46,000 1,262
Park Electrochemical Corp. ................................. 187,200 5,441
Quantum Corp.-DLT & Storage Systems+........................ 165,000 3,022
Quantum Corp.-Hard Disk Drive+.............................. 20,000 143
Rambus, Inc.+............................................... 18,800 1,824
Rogers Corp.+............................................... 109,200 3,508
SCI Systems, Inc.+.......................................... 240,000 11,955
Texas Instruments, Inc. .................................... 720,000 59,085
Electronic Instruments -- 3.9%
Applied Materials, Inc.+.................................... 275,000 19,542
KLA-Tencor Corp.+........................................... 245,000 15,389
Teradyne, Inc.+............................................. 40,000 2,723
Energy Equipment -- 0.3%
Schlumberger Ltd. .......................................... 40,000 2,670
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360,190
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</TABLE>
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<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS -- 5.7%
Beverages & Tobacco -- 1.3%
Coca-Cola West Japan Co. Ltd. .............................. 100,000 $ 4,719
PepsiCo, Inc. .............................................. 40,000 1,365
Philip Morris Cos., Inc. ................................... 160,000 5,990
Food & Household Products -- 0.5%
Dole Food, Inc. ............................................ 90,000 2,267
Keebler Foods Co.+.......................................... 80,000 2,385
Health & Personal Care -- 3.1%
BioChem Pharma, Inc.+....................................... 60,000 1,555
Cardinal Health, Inc. ...................................... 55,500 3,538
Eli Lilly & Co. ............................................ 20,000 1,493
Forest Labs, Inc.+.......................................... 45,000 2,182
Guidant Corp. .............................................. 100,000 5,869
Millenium Pharmaceuticals, Inc.+............................ 50,000 2,947
Omnicare, Inc. ............................................. 230,000 2,214
Pfizer, Inc. ............................................... 45,000 1,699
Pharmacia & Upjohn, Inc. ................................... 58,000 3,030
Sepracor, Inc.+............................................. 26,600 1,992
Warner-Lambert Co. ......................................... 40,000 2,650
Recreation & Other Consumer Products -- 0.3%
Hasbro, Inc. ............................................... 135,000 3,299
Textiles & Apparels -- 0.5%
Nike, Inc., Class B......................................... 100,000 4,625
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53,819
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ENERGY -- 3.9%
Energy Sources -- 3.6%
Apache Corp. ............................................... 125,000 5,687
Burlington Resources, Inc. ................................. 100,000 4,181
Enron Oil & Gas Co. ........................................ 250,000 5,969
Enterprise Oil PLC ADR...................................... 300,000 2,184
Murphy Oil Corp. ........................................... 80,000 4,060
Pogo Producing Co. ......................................... 222,500 4,645
Talisman Energy, Inc.+...................................... 40,000 1,173
Total SA ADR................................................ 20,000 1,301
Union Pacific Resources Group, Inc. ........................ 300,000 5,381
Utilities: Electric, Gas & Water -- 0.3%
Questar Corp. .............................................. 160,000 3,020
---------
37,601
---------
FINANCE -- 3.9%
Banking -- 1.6%
Charter One Financial, Inc. ................................ 184,999 4,330
M & T Bank Corp. ........................................... 3,500 1,624
Washington Mutual, Inc. .................................... 145,000 4,604
Wells Fargo Co. ............................................ 125,000 4,976
Financial Services -- 1.4%
Capital One Financial Corp. ................................ 93,000 3,511
Federal National Mortgage Association....................... 40,000 2,485
Household International, Inc. .............................. 110,000 4,152
Providian Financial Corp. .................................. 40,000 3,105
</TABLE>
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<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Insurance -- 0.9%
MGIC Investment Corp. ...................................... 50,000 $ 2,172
XL Capital Ltd. ............................................ 130,000 6,541
---------
37,500
---------
MATERIALS -- 2.9%
Chemicals -- 1.8%
Air Products & Chemicals, Inc. ............................. 100,000 3,400
Monsanto Co. ............................................... 194,500 7,986
Valspar Corp. .............................................. 150,000 5,447
Forest Products & Paper -- 0.7%
Sealed Air Corp.+........................................... 115,000 6,756
Metals: Non-ferrous -- 0.4%
Freeport-McMoRan Copper & Gold, Inc. ....................... 250,000 4,016
---------
27,605
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SERVICES -- 37.5%
Broadcasting & Publishing -- 16.3%
AMFM, Inc.+................................................. 100,000 4,925
AT&T Corp.-Liberty Media Group, Inc., Class A+.............. 617,874 19,772
BHC Communications, Inc., Class A........................... 55,821 7,340
Cablevision Systems Corp., Class A+......................... 16,100 1,127
Fox Entertainment Group, Inc., Class A+..................... 450,000 10,378
Knight-Ridder, Inc. ........................................ 800 43
News Corp., Ltd. ADR........................................ 680,000 19,933
Time Warner, Inc. .......................................... 697,500 41,371
USA Networks, Inc.+......................................... 356,500 15,998
Viacom, Inc., Class B+...................................... 820,000 34,491
Business & Public Services -- 12.1%
Allied Waste Industries, Inc.+.............................. 350,000 4,463
Avery Dennison Corp. ....................................... 40,000 2,195
Cendant Corp.+.............................................. 1,295,562 23,239
Columbia/HCA Healthcare Corp. .............................. 168,625 4,152
Concord EFS, Inc.+.......................................... 140,000 5,197
FDX Corp.+.................................................. 350,000 14,853
Juniper Networks, Inc.+..................................... 12,500 2,563
Quintiles Transnational Corp.+.............................. 245,000 8,774
Robert Half International, Inc.+............................ 65,000 1,706
Snyder Communications, Inc.+................................ 35,000 713
Solectron Corp.+............................................ 520,000 40,690
Universal Health Services, Inc., Class B+................... 74,900 2,500
Waste Management, Inc. ..................................... 200,000 4,363
Leisure & Tourism -- 1.9%
Carnival Corp., Class A..................................... 94,300 4,214
Mirage Resorts, Inc.+....................................... 350,000 4,572
Seagram Co., Ltd. .......................................... 125,000 6,633
Starbucks Corp.+............................................ 100,000 2,287
Merchandising -- 1.9%
Consolidated Stores Corp.+.................................. 352,400 5,683
Sunglass Hut International, Inc.+........................... 734,000 9,267
The Limited, Inc. .......................................... 80,237 3,039
</TABLE>
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<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Telecommunications -- 2.6%
Crown Castle International Corp.+........................... 50,000 $ 756
MCI WorldCom, Inc.+......................................... 33,000 2,500
Nextel Communications, Inc., Class A+....................... 170,000 9,828
Nippon Telegraph & Telephone Mobile Communications Corp. ... 425 7,075
Paging Network, Inc.+....................................... 230,000 711
Teleglobe, Inc. ............................................ 212,000 3,617
Transportation: Airlines -- 2.7%
AMR Corp.+.................................................. 190,000 11,139
Delta Air Lines, Inc. ...................................... 20,000 1,016
Southwest Airlines Co. ..................................... 815,625 13,611
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356,734
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OTHER COMMON STOCK -- 0.8%.................................. 7,873
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TOTAL COMMON STOCK (cost $531,769).......................... 881,322
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<CAPTION>
PREFERRED STOCK -- 1.0%
-------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 1.0%
Broadcasting & Publishing -- 1.0%
News Corp., Ltd. ADR (cost $2,313).......................... 340,000 8,989
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TOTAL INVESTMENT SECURITIES (cost $534,082)................. 890,311
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<CAPTION>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENTS -- 6.2% (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 6.2%
American General Corp. 5.13% due 9/13/99.................... $ 3,700 3,694
Archer Daniels Midland Co. 4.84% due 9/17/99................ 5,500 5,488
Associates Corp. of North America 5.53% due 9/01/99......... 248 248
BellSouth Telecommunications, Inc. 5.17% due 9/28/99........ 8,000 7,969
Coca-Cola Co. 5.10% due 9/20/99............................. 7,700 7,679
Coca-Cola Co. 5.15% due 10/15/99............................ 2,300 2,286
Equilon Enterprises LLC 5.13% due 10/04/99.................. 6,700 6,668
Gannett Co., Inc. 5.25% due 9/08/99......................... 6,900 6,893
Halliburton Corp. 5.25% due 10/01/99........................ 6,500 6,472
Procter & Gamble Co. 5.10% due 10/21/99..................... 1,600 1,589
Shell Oil Co. 5.10% due 9/13/99............................. 10,000 9,983
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58,969
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</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL AGENCY OBLIGATIONS -- 0.0%
Federal National Mortgage Association Discount Notes 5.16%
due 11/05/99.............................................. $ 400 $ 396
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TOTAL SHORT-TERM INVESTMENTS (cost $59,365)................. 59,365
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</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS --
(cost $593,447) 99.7% $949,676
Other assets less liabilities -- 0.3 2,888
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NET ASSETS -- 100.0% $952,564
====== ========
</TABLE>
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+ Non-income producing security
ADR - American Depository Receipt
See Notes to Financial Statements
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ANCHOR PATHWAY FUND
INTERNATIONAL SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK & PREFERRED STOCK -- 93.2% SHARES (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
ARGENTINA -- 0.4%
Telefonica de Argentina SA (Services)....................... 30,000 $ 893
---------
AUSTRALIA -- 5.0%
Brambles Industries Ltd. (Services)......................... 100,000 2,787
Broken Hill Proprietary Co., Ltd. (Energy).................. 428,900 4,614
Fosters Brewing Group Ltd. (Consumer Goods)................. 389,300 1,141
Westpac Banking Corp., Ltd. (Finance)....................... 313,073 1,899
---------
10,441
---------
BRAZIL -- 0.8%
Centrais Geradoras do Sul do Brasil SA ADR+ (Energy)........ 18,300 64
Companhia Energetica de Minas Gerais ADR+ (Energy).......... 73,400 1,138
Companhia Paranaense de Energia (Energy).................... 118,055,000 467
---------
1,669
---------
CANADA -- 3.7%
Nortel Networks Corp. (Capital Equipment)................... 188,000 7,720
---------
FINLAND -- 6.0%
Nokia Oyj+ (Capital Equipment).............................. 130,000 10,864
UPM-Kymmene OY (Materials).................................. 48,000 1,663
---------
12,527
---------
FRANCE -- 5.9%
Canal Plus (Services)....................................... 54,000 3,724
Carrefour SA (Services)..................................... 25,800 4,203
Total SA, Class B (Energy).................................. 33,876 4,372
---------
12,299
---------
GERMANY -- 9.7%
Bayerische Motoren Werke AG NV (Consumer Goods)............. 189,436 5,972
Bayerische Motoren Werke AG NV Preferred (Consumer Goods)... 81,224 1,314
Deutsche Telekom AG (Services).............................. 296,000 13,120
---------
20,406
---------
HONG KONG -- 0.5%
China Telecom (Services).................................... 326,000 1,012
---------
ITALY -- 1.3%
Telecom Italia SpA+ (Services).............................. 484,900 2,780
---------
JAPAN -- 13.7%
Fujisawa Pharmaceutical Co., Ltd. (Consumer Goods).......... 120,000 2,064
Fujitsu Ltd. (Capital Equipment)............................ 180,000 5,285
NEC Corp. (Capital Equipment)............................... 170,000 2,768
Nintendo Co., Ltd. (Consumer Goods)......................... 11,000 1,912
Nippon Telegraph & Telephone Corp. (Services)............... 330 3,712
Rohm Co., Ltd. (Capital Equipment).......................... 20,000 3,988
Shohkoh Fund & Co., Ltd. (Finance).......................... 8,600 6,237
Toshiba Corp. (Capital Equipment)........................... 300,000 2,670
---------
28,636
---------
</TABLE>
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<TABLE>
<CAPTION>
VALUE
COMMON STOCK & PREFERRED STOCK (CONTINUED) SHARES (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
KOREA -- 1.0%
Hyundai Microelectronics Co., Ltd. (Capital Equipment)...... 96,634 $ 2,091
---------
LUXEMBOURG -- 1.3%
Safra Republic Holdings, Inc. (Finance)..................... 40,000 2,770
---------
MEXICO -- 5.3%
Cemex SA de CV Series A+ (Materials)........................ 560,000 2,487
Cemex SA de CV+ (Materials)................................. 21,513 95
Cifra SA de CV Series V+ (Services)......................... 49,461 82
Grupo Televisa SA de CV GDR+ (Services)..................... 35,000 1,273
Telefonos de Mexico SA ADR (Services)....................... 95,200 7,080
---------
11,017
---------
NETHERLANDS -- 3.8%
AEGON NV (Finance).......................................... 35,000 3,066
Vereenigde Ned Uitgevers NV (Services)...................... 130,000 4,992
---------
8,058
---------
NORWAY -- 1.2%
Orkla ASA (Multi-industry).................................. 160,000 2,492
---------
PHILIPPINES -- 0.4%
Philippine Long Distance Telephone Co. (Services)........... 35,000 829
---------
SPAIN -- 3.4%
Telefonica SA (Services).................................... 449,454 7,179
---------
SWEDEN -- 5.5%
AstraZeneca Group PLC (Consumer Goods)...................... 136,215 5,344
Ericsson LM Telecommunications Co., Class B (Capital
Equipment)................................................ 190,400 6,152
---------
11,496
---------
SWITZERLAND -- 4.9%
Nestle SA + (Consumer Goods)................................ 1,250 2,471
Novartis AG (Consumer Goods)................................ 1,954 2,816
Swisscom AG+ (Services)..................................... 15,163 5,007
---------
10,294
---------
UNITED KINGDOM -- 13.1%
Dixons Group PLC (Services)................................. 600,000 11,265
EMI Group PLC (Consumer Goods).............................. 930,000 7,919
Orange PLC+ (Services)...................................... 325,000 5,487
ScottishPower PLC (Energy).................................. 132,240 1,216
Zeneca Group PLC (Consumer Goods)........................... 37,900 1,503
---------
27,390
---------
UNITED STATES -- 1.4%
News Corp., Ltd. ADR (Services)............................. 100,000 2,931
---------
OTHER COMMON STOCK -- 4.9%.................................. 10,267
---------
TOTAL INVESTMENT SECURITIES (cost $128,793)................. 195,197
---------
<CAPTION>
PRINCIPAL
AMOUNT
SHORT-TERM INVESTMENTS -- 6.7% (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 5.9%
Abbott Laboratories, Inc. 5.12% due 9/08/99................. $ 1,500 1,498
American Honda Finance Corp. 5.25% due 10/07/99............. 3,200 3,183
British Columbia Province 4.93% due 9/27/99................. 2,000 1,993
</TABLE>
- ---------------------
10
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES (continued)
Electronic Data Systems Corp. 5.25% due 9/13/99............. $ 2,400 $ 2,396
Heinz (H.J.) Co. 5.28% due 9/14/99.......................... 1,000 998
Siemens Capital Corp. 5.11% due 9/01/99..................... 2,200 2,200
--------
12,268
--------
FEDERAL AGENCY OBLIGATIONS -- 0.8%
Federal National Mortgage Association Discount Notes 5.02%
due 9/03/99............................................... 1,766 1,766
--------
TOTAL SHORT-TERM SECURITIES (cost $14,034).................. 14,034
--------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS --
(cost $142,827) 99.9% $209,231
Other assets less liabilities -- 0.1 219
----- --------
NET ASSETS -- 100.0% $209,450
===== ========
</TABLE>
-----------------------------
+ Non-income producing security
ADR - American Depository Receipt
GDR - Global Depository Receipt
See Notes to Financial Statements
---------------------
11
<PAGE> 13
O
- ---------------------
ANCHOR PATHWAY FUND
GROWTH-INCOME SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK -- 80.8% SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL EQUIPMENT -- 17.9%
Aerospace & Military Technology -- 1.4%
Boeing Co. ................................................. 80,000 $ 3,625
Raytheon Co., Class A....................................... 36,556 2,454
United Technologies Corp. .................................. 105,800 6,996
Data Processing & Reproduction -- 5.8%
3Com Corp.+................................................. 150,000 3,722
Cadence Design Systems, Inc.+............................... 200,000 2,725
Cisco Systems, Inc.+........................................ 100,000 6,781
Computer Associates International, Inc. .................... 175,000 9,888
Oracle Corp.+............................................... 90,000 3,285
Silicon Graphics, Inc.+..................................... 294,400 3,367
Storage Technology Corp.+................................... 600,000 12,600
Xerox Corp. ................................................ 228,600 10,916
Electrical & Electronics -- 1.6%
Harris Corp. ............................................... 70,000 1,838
Hitachi Ltd.+ .............................................. 150,000 1,524
Nokia Corp., Class A ADR.................................... 40,000 3,335
York International Corp. ................................... 184,400 7,583
Electronic Components -- 2.4%
Corning, Inc. .............................................. 85,000 5,653
SCI Systems, Inc.+.......................................... 100,000 4,981
Texas Instruments, Inc. .................................... 140,000 11,489
Electronic Instruments -- 1.4%
Applied Materials, Inc.+.................................... 80,000 5,685
PE Corp.-PE Biosystems Group................................ 100,000 6,881
Energy Equipment -- 0.6%
Schlumberger Ltd. .......................................... 85,000 5,674
Industrial Components -- 1.6%
Dana Corp. ................................................. 50,000 2,178
Eaton Corp. ................................................ 70,000 6,860
Federal-Mogul Corp. ........................................ 125,000 5,703
Machinery & Engineering -- 3.1%
Caterpillar, Inc. .......................................... 70,000 3,964
Deere & Co. ................................................ 150,000 5,831
Ingersoll-Rand Co. ......................................... 120,000 7,635
Millipore Corp. ............................................ 150,000 5,662
New Holland NV ............................................. 200,000 3,100
Pall Corp. ................................................. 100,000 1,988
---------
163,923
---------
CONSUMER GOODS -- 12.8%
Beverages & Tobacco -- 1.8%
PepsiCo, Inc. .............................................. 150,000 5,119
Philip Morris Cos., Inc. ................................... 225,000 8,423
UST, Inc. .................................................. 100,000 3,169
</TABLE>
- ---------------------
12
<PAGE> 14
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS (continued)
Food & Household Products -- 2.8%
Campbell Soup Co. .......................................... 150,000 $ 6,628
General Mills, Inc. ........................................ 50,000 4,187
Sara Lee Corp. ............................................. 650,000 14,422
Health & Personal Care -- 6.9%
AstraZeneca Group PLC....................................... 100,900 3,973
Avon Products, Inc. ........................................ 149,800 6,572
Bergen Brunswig Corp., Class A.............................. 250,000 3,859
Bristol-Myers Squibb Co..................................... 50,000 3,519
Cardinal Health, Inc. ...................................... 50,000 3,188
Glaxo Wellcome PLC ADR...................................... 120,000 6,352
Guidant Corp. .............................................. 80,000 4,695
Kimberly-Clark Corp. ....................................... 130,000 7,402
McKesson HBOC, Inc. ........................................ 50,000 1,556
Merck & Co., Inc. .......................................... 100,000 6,719
Pfizer, Inc. ............................................... 50,000 1,888
Schering-Plough Corp. ...................................... 125,000 6,570
United HealthCare Corp. .................................... 50,000 3,041
Warner-Lambert Co. ......................................... 60,000 3,975
Recreation & Other Consumer Products -- 0.7%
Pennzoil Quaker State Co. .................................. 450,000 6,244
Textiles & Apparels -- 0.6%
Nike, Inc., Class B......................................... 50,000 2,313
V.F. Corp. ................................................. 100,000 3,600
---------
117,414
---------
ENERGY -- 10.4%
Energy Sources -- 6.8%
Ashland, Inc. .............................................. 48,800 1,882
Atlantic Richfield Co. ..................................... 75,000 6,595
BP Amoco PLC ADR............................................ 26,466 2,967
Conoco, Inc., Class A....................................... 132,000 3,531
Conoco, Inc., Class B....................................... 49,138 1,321
Kerr-McGee Corp. ........................................... 123,800 6,933
Murphy Oil Corp. ........................................... 50,000 2,537
Noble Affiliates, Inc. ..................................... 100,000 3,100
Petro-Canada................................................ 200,000 3,000
Phillips Petroleum Co. ..................................... 60,000 3,060
Texaco, Inc. ............................................... 130,000 8,255
Ultramar Diamond Shamrock Corp. ............................ 461,000 12,044
Valero Energy Corp. ........................................ 360,000 7,650
Utilities: Electric, Gas & Water -- 3.6%
Ameren Corp. ............................................... 100,000 4,006
Citizens Utilities Co., Class B............................. 565,000 6,215
Consolidated Natural Gas Co. ............................... 125,000 7,961
DPL, Inc. .................................................. 270,000 5,113
Duke Energy Corp. .......................................... 50,000 2,875
GPU, Inc. .................................................. 100,000 3,413
TECO Energy, Inc. .......................................... 150,000 3,150
---------
95,608
---------
FINANCE -- 9.4%
Banking -- 6.3%
Bank of America Corp. ...................................... 100,000 6,050
Bank of New York Co., Inc. ................................. 100,000 3,575
Bank One Corp. ............................................. 33,000 1,324
Bank Tokyo Mitsubishi Ltd. ADR.............................. 100,000 1,563
</TABLE>
---------------------
13
<PAGE> 15
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Banking (continued)
Chase Manhattan Corp. ...................................... 70,000 $ 5,858
First Union Corp. .......................................... 196,172 8,141
Huntington Bancshares, Inc. ................................ 101,156 3,028
KeyCorp..................................................... 170,000 4,930
Morgan (J.P.) & Co., Inc. .................................. 30,000 3,876
Sakura Bank Ltd. ADR........................................ 35,000 1,851
SunTrust Banks, Inc. ....................................... 50,000 3,216
Wells Fargo Co. ............................................ 347,000 13,815
Financial Services -- 1.2%
Associates First Capital Corp., Class A..................... 31,072 1,066
Household International, Inc. .............................. 271,332 10,243
Insurance -- 1.9%
Aetna, Inc. ................................................ 50,000 3,887
Allstate Corp. ............................................. 235,000 7,711
MGIC Investment Corp. ...................................... 70,000 3,041
Royal & Sun Alliance Insurance Group PLC.................... 300,000 2,498
---------
85,673
---------
MATERIALS -- 8.8%
Chemicals -- 5.2%
du Pont (E.I.) de Nemours & Co. ............................ 20,000 1,268
International Flavors & Fragrances, Inc. ................... 200,000 8,150
Mallinckrodt, Inc. ......................................... 200,000 6,412
Millenium Chemicals, Inc. .................................. 250,000 5,750
Monsanto Co. ............................................... 350,000 14,372
PPG Industries, Inc. ....................................... 80,000 4,805
Praxair, Inc. .............................................. 100,000 4,700
Witco Corp. ................................................ 120,000 1,942
Forest Products & Paper -- 2.8%
Bowater, Inc. .............................................. 160,000 8,580
Fort James Corp. ........................................... 125,000 4,032
Georgia-Pacific Timber Group................................ 30,000 722
International Paper Co. .................................... 138,816 6,533
Sonoco Products Co. ........................................ 100,000 2,375
Westvaco Corp. ............................................. 60,000 1,571
Weyerhaeuser Co. ........................................... 25,000 1,406
Metals: Non-ferrous -- 0.3%
Alcoa, Inc. ................................................ 50,000 3,228
Metals: Steel -- 0.2%
Allegheny Teldyne, Inc. .................................... 100,000 1,869
Metals & Minerals -- 0.3%
Crown, Cork & Seal Co., Inc. ............................... 100,000 2,656
---------
80,371
---------
MULTI-INDUSTRY -- 1.5%
Multi-Industry -- 1.5%
AlliedSignal, Inc. ......................................... 80,000 4,900
FMC Corp.+.................................................. 75,000 4,369
Textron, Inc. .............................................. 50,000 4,037
---------
13,306
---------
</TABLE>
- ---------------------
14
<PAGE> 16
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
REAL ESTATE -- 1.0%
Real Estate Investment Trusts -- 1.0%
Boston Properties, Inc. .................................... 150,000 $ 4,997
Equity Residential Properties Trust......................... 60,000 2,640
Meditrust Cos. ............................................. 125,000 1,117
---------
8,754
---------
SERVICES -- 18.9%
Broadcasting & Publishing -- 4.8%
AT&T Corp.-Liberty Media Group, Inc., Class A+.............. 150,000 4,800
Fox Entertainment Group, Inc., Class A+..................... 150,000 3,459
Gannett Co., Inc. .......................................... 80,000 5,435
Harte-Hanks, Inc. .......................................... 305,100 6,846
Knight-Ridder, Inc. ........................................ 70,000 3,776
News Corp., Ltd. ADR........................................ 140,000 4,104
Sinclair Broadcast Group, Inc., Class A+.................... 200,000 3,250
Time Warner, Inc. .......................................... 40,000 2,372
Viacom, Inc., Class B+...................................... 230,000 9,674
Business & Public Services -- 5.2%
Alexander & Baldwin, Inc. .................................. 180,000 4,354
Allied Waste Industries, Inc.+.............................. 470,000 5,993
Cendant Corp.+.............................................. 250,000 4,484
Digex, Inc.................................................. 40,000 1,330
Electronic Data Systems Corp. .............................. 100,000 5,613
Focal Communications Corp.+................................. 36,000 875
Hertz Corp., Class A........................................ 100,000 4,031
Ikon Office Solutions, Inc. ................................ 660,000 7,342
Pitney Bowes, Inc. ......................................... 60,000 3,540
Service Corp. International................................. 250,000 3,453
The ServiceMaster Co. ...................................... 150,000 2,475
Waste Management, Inc. ..................................... 200,000 4,363
Leisure & Tourism -- 0.9%
Seagram Co., Ltd. .......................................... 150,000 7,959
Merchandising -- 3.4%
Albertson's, Inc. .......................................... 37,800 1,812
Circuit City Stores, Inc. .................................. 40,000 1,720
Dillards, Inc., Class A .................................... 325,300 7,645
Dollar General Corp. ....................................... 26,100 679
Federated Department Stores, Inc.+.......................... 90,000 4,140
Lowe's Cos., Inc. .......................................... 75,000 3,394
Penney (J.C.) Co., Inc. .................................... 190,000 6,887
The Limited, Inc. .......................................... 100,000 3,787
Too, Inc.+ ................................................. 55,000 966
Telecommunications -- 2.5%
AT&T Corp. ................................................. 80,000 3,600
GTE Corp. .................................................. 94,800 6,506
SBC Communications, Inc. ................................... 40,000 1,920
U.S. West, Inc. ............................................ 145,000 7,576
Western Wireless Corp., Class A............................. 100,000 3,869
</TABLE>
---------------------
15
<PAGE> 17
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Transportation: Rail & Road -- 2.1%
Burlington Northern Santa Fe Corp. ......................... 100,000 $ 2,900
Canadian National Railway Co. .............................. 170,000 10,806
Norfolk Southern Corp. ..................................... 195,000 5,106
---------
172,841
---------
OTHER COMMON STOCK -- 0.1%.................................. 772
---------
TOTAL COMMON STOCK (cost $585,874).......................... 738,662
---------
<CAPTION>
PREFERRED STOCK -- 0.2%
-------------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.2%
Broadcasting & Publishing -- 0.2%
News Corp. Ltd., ADR (cost $1,044).......................... 80,000 2,115
---------
<CAPTION>
PRINCIPAL
AMOUNT
CONVERTIBLE BONDS -- 0.9% (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS -- 0.7%
Health & Personal Care -- 0.7%
Sepracor, Inc. 6.25% 2005*#................................. $ 3,650 6,150
---------
SERVICES -- 0.2%
Telecommunications -- 0.2%
Telefonos de Mexico SA 4.25% 2004........................... 1,660 1,627
---------
TOTAL CONVERTIBLE BONDS (cost $5,291)....................... 7,777
---------
TOTAL INVESTMENT SECURITIES (cost $592,209)................. 748,554
---------
<CAPTION>
Short-Term Investments -- 18.7%
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 17.6%
American General Corp. 5.13% due 9/13/99.................... 10,300 10,282
BellSouth Capital Funding Corp. 5.06% due 9/21/99........... 8,200 8,177
Campbell Soup Co. 5.10% due 10/14/99........................ 11,940 11,867
Coca-Cola Co. 5.15% due 10/15/99............................ 11,800 11,726
Colgate-Palmolive Co. 5.07% due 9/03/99..................... 9,000 8,998
Deere & Co. 5.08% due 9/22/99............................... 10,000 9,970
Duke Energy Co. 5.05% due 9/01/99........................... 10,800 10,800
Fortune Brands, Inc. 5.12% due 9/10/99...................... 10,000 9,987
Halliburton Corp. 5.14% due 9/14/99......................... 12,000 11,978
Heinz (H.J.) Co. 5.15% due 9/22/99.......................... 6,500 6,481
IBM Credit Corp. 5.20% due 10/01/99......................... 12,900 12,844
Minnesota Mining & Manufacturing Co. 5.12% due 9/20/99...... 10,000 9,973
Motorola, Inc. 5.28% due 10/29/99........................... 10,850 10,758
National Rural Utilities Cooperative Finance Corp. 5.03% due
9/14/99................................................... 7,100 7,087
Pfizer, Inc. 5.18% due 9/27/99.............................. 17,300 17,235
Wal-Mart Stores, Inc. 5.11% due 9/15/99..................... 2,900 2,894
---------
161,057
---------
</TABLE>
- ---------------------
16
<PAGE> 18
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES (continued)
FEDERAL AGENCY OBLIGATIONS -- 1.1%
Federal National Mortgage Association Discount Notes 5.16%
due 11/05/99.............................................. $ 10,100 $ 10,005
--------
TOTAL SHORT-TERM INVESTMENTS (cost $171,063)................ 171,062
--------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS --
(cost $763,272) 100.6% $919,616
Liabilities in excess of other
assets -- (0.6) (5,192)
------ --------
NET ASSETS -- 100.0% $914,424
====== ========
</TABLE>
-----------------------------
+ Non-income producing security
* Fair valued security; see Note 2
# Resale restricted to qualified institutional buyers
ADR - American Depository Receipt
See Notes to Financial Statements
---------------------
17
<PAGE> 19
O
- ---------------------
ANCHOR PATHWAY FUND
ASSET ALLOCATION SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
COMMON STOCK -- 61.7% SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL EQUIPMENT -- 23.4%
Aerospace & Military Technology -- 3.9%
Boeing Co. ................................................. 40,000 $ 1,812
Raytheon Co., Class B....................................... 25,000 1,703
United Technologies Corp. .................................. 20,000 1,323
Data Processing & Reproduction -- 8.1%
Computer Associates International, Inc. .................... 30,000 1,695
Gateway 2000, Inc.+......................................... 20,000 1,939
Hewlett-Packard Co. ........................................ 20,000 2,108
International Business Machines Corp. ...................... 15,000 1,868
Storage Technology Corp.+................................... 70,000 1,470
Xerox Corp. ................................................ 20,000 955
Electrical & Electronics -- 3.9%
Emerson Electric Co. ....................................... 15,000 939
Nokia Corp., Class A ADR.................................... 20,000 1,668
York International Corp. ................................... 55,000 2,262
Electronic Components -- 2.1%
Corning, Inc. .............................................. 40,000 2,660
Energy Equipment -- 1.1%
Schlumberger Ltd. .......................................... 20,000 1,335
Industrial Components -- 2.5%
Dana Corp. ................................................. 40,000 1,742
Genuine Parts Co. .......................................... 50,000 1,444
Machinery & Engineering -- 1.8%
Deere & Co. ................................................ 20,000 778
Millipore Corp. ............................................ 39,500 1,491
---------
29,192
---------
CONSUMER GOODS -- 7.4%
Automotive -- 1.0%
Volvo AB, Class B........................................... 42,700 1,198
Beverages & Tobacco -- 2.1%
PepsiCo, Inc. .............................................. 40,000 1,365
UST, Inc. .................................................. 40,000 1,267
Food & Household Products -- 2.0%
General Mills, Inc. ........................................ 30,000 2,513
Health & Personal Care -- 2.3%
SmithKline Beecham PLC ADR.................................. 20,000 1,275
Warner-Lambert Co. ......................................... 25,000 1,656
---------
9,274
---------
ENERGY -- 6.2%
Energy Sources -- 5.5%
Kerr-McGee Corp. ........................................... 30,000 1,680
Murphy Oil Corp. ........................................... 40,000 2,030
Phillips Petroleum Co. ..................................... 35,000 1,785
Ultramar Diamond Shamrock Corp. ............................ 50,000 1,306
</TABLE>
- ---------------------
18
<PAGE> 20
<TABLE>
<CAPTION>
VALUE
COMMON STOCK (CONTINUED) SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY (continued)
Utilities: Electric, Gas & Water -- 0.7%
Central & South West Corp. ................................. 40,000 $ 905
---------
7,706
---------
FINANCE -- 8.9%
Banking -- 2.7%
Bank of America Corp. ...................................... 33,948 2,054
Washington Mutual, Inc. .................................... 40,000 1,270
Financial Services -- 3.8%
Citigroup, Inc. ............................................ 56,250 2,499
Household International, Inc. .............................. 60,666 2,290
Insurance -- 2.4%
American General Corp. ..................................... 25,000 1,775
AON Corp. .................................................. 35,000 1,168
---------
11,056
---------
MATERIALS -- 3.2%
Chemicals -- 1.6%
Monsanto Co. ............................................... 25,000 1,026
PPG Industries, Inc. ....................................... 15,000 901
Forest Products & Paper -- 1.6%
Sonoco Products Co. ........................................ 15,000 356
Weyerhaeuser Co. ........................................... 30,000 1,688
---------
3,971
---------
MULTI-INDUSTRY -- 2.8%
Multi-Industry -- 2.8%
Dover Corp. ................................................ 40,000 1,547
Textron, Inc. .............................................. 25,000 2,019
---------
3,566
---------
SERVICES -- 8.0%
Broadcasting & Publishing -- 1.1%
New York Times Co., Class A................................. 35,000 1,367
Business & Public Services -- 2.9%
Pitney Bowes, Inc. ......................................... 40,000 2,360
Rentokil Initial PLC ADR.................................... 30,000 1,207
Merchandising -- 3.1%
May Department Stores Co. .................................. 35,000 1,367
Penney (J.C.) Co., Inc. .................................... 30,000 1,088
Walgreen Co. ............................................... 60,000 1,391
Telecommunications -- 0.9%
Sprint Corp.+............................................... 25,000 1,110
---------
9,890
---------
OTHER COMMON STOCK -- 1.8%.................................. 2,299
---------
TOTAL COMMON STOCK (cost $60,105)........................... 76,954
---------
</TABLE>
---------------------
19
<PAGE> 21
<TABLE>
<CAPTION>
VALUE
PREFERRED STOCK -- 0.6% SHARES (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE -- 0.2%
Banking -- 0.2%
NB Capital Corp., Series A 8.35%............................ 10,000 $ 250
SERVICES -- 0.4%
Broadcasting & Publishing -- 0.4%
Adelphia Communications Corp., Series B 13.00%*............. 5,000 550
---------
TOTAL PREFERRED STOCK (cost $756)........................... 800
---------
<CAPTION>
PRINCIPAL
AMOUNT
BONDS & NOTES -- 28.9% (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Finance -- 0.1%
Bell Atlantic Financial Services, Inc. 4.25% 2005#.......... $ 150 159
---------
CORPORATE BONDS -- 17.9%
Asset-Backed Securities -- 0.6%++
First Plus Home Loan Trust Series 1997-1, Class A6 6.95%
2015...................................................... 500 497
PP&L Transition Bond Co., LLC 7.05% 2009.................... 250 250
Broadcasting & Publishing -- 1.5%
American Media Operations, Inc. 10.25% 2009#................ 350 339
Charter Commerce Holdings LLC zero coupon 2011#@............ 750 450
Time Warner, Inc. 9.13% 2013................................ 1,000 1,128
Finance -- 4.7%
Advanta Corp., Series D 6.57% 2000.......................... 1,325 1,316
Capital One Financial Corp. 7.13% 2008...................... 500 459
Cei Citicorp Holdings SA 11.25% 2007#....................... 400 280
Chevy Chase Savings Bank 9.25% 2008......................... 500 502
Ford Motor Credit Co. 5.80% 2009............................ 500 449
Fuji Bank Investment Preferred LLC 9.87% 2008#(1)........... 250 246
GS Escrow Corp. 7.13% 2005.................................. 500 464
IBJ Preferred Capital Co., LLC 8.79% 2008#(1)............... 500 468
Newcourt Credit Group, Inc. 6.88% 2005#..................... 350 337
Ocwen Financial Corp. 11.88% 2003........................... 250 223
Providian National Bank 6.65% 2004.......................... 500 475
Socgen Real Estate Co., LLC, Series A 7.64% 2007#(1)........ 500 451
Tokai Preferred Capital Co., LLC 9.98% 2008#(1)............. 250 251
Industrial -- 6.6%
Allegiance Corp. 7.00% 2026................................. 500 497
Allied Waste Industries, Inc. 10.00% 2009#.................. 500 480
British Sky Broadcasting Group PLC 8.20% 2009#.............. 500 489
Ceridian Corp. 7.25% 2004#.................................. 500 493
Conoco, Inc. 6.35% 2009..................................... 250 236
Container Corp. of America 9.75% 2003....................... 500 507
Dayton Hudson Corp. 8.50% 2022.............................. 500 512
Equistar Chemicals, LP 8.75% 2009#.......................... 500 491
Freeport-McMoRan Copper & Gold, Inc. 7.20% 2026............. 500 314
Globo Comunicacoes Participacoes Ltd., Class B 10.50%
2006#..................................................... 220 163
Gruma SA de CV 7.63% 2007................................... 250 217
Horseshoe Gaming LLC 8.63% 2009#............................ 500 480
Hyundai Semiconductor America, Inc. 8.63% 2007#............. 425 334
Inco Ltd. 9.60% 2022........................................ 400 388
Omnipoint Corp. 11.63% 2006................................. 250 260
Oryx Energy Co. 9.50% 1999.................................. 1,500 1,507
Owens Illinois, Inc. 8.10% 2007............................. 250 242
</TABLE>
- ---------------------
20
<PAGE> 22
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (continued)
Industrial (continued)
Wharf International Finance Ltd. 7.63% 2007................. $ 500 $ 445
Ziff Davis, Inc. 8.50% 2008................................. 250 239
Merchandising -- 0.8%
Penney (J.C.) Co., Inc. 7.95% 2017.......................... 975 948
Recreation & Other Consumer Products -- 0.5%
Royal Caribbean Cruises Ltd. 7.00% 2007..................... 500 468
V2 Music Holdings PLC zero coupon 2008*#@(2)................ 175 87
(GBP)
Telecommunications -- 1.6%
Clearnet Communications, Inc. zero coupon 2008@............. 1,000 394
(CAD)
Consorcio Ecuatoriano de Telecommunicaciones 14.00%
2002*#.................................................... 250 88
Esat Telecom Group PLC zero coupon 2007*@................... 500 357
Nextel Communications, Inc. zero coupon 2008@............... 1,500 1,035
Nextel International, Inc. zero coupon 2008@................ 300 150
Transportation -- 1.6%
Airplanes Pass Through Trust, Class C 8.15% 2019++*......... 489 462
Delta Air Lines, Inc. 10.50% 2016++......................... 500 586
Jet Equipment Trust, Class B 7.83% 2012#.................... 450 446
United Airlines Pass Through Trust, Series 1996, Class A
7.87% 2019++.............................................. 500 463
---------
22,363
---------
U.S. GOVERNMENT & AGENCIES -- 0.2%
Government National Mortgage Association 8.50% 2029......... 269 278
---------
U.S. TREASURY -- 10.7%
3.63% Bonds 2002............................................ 2,076 2,057
7.25% Bonds 2016............................................ 2,000 2,155
7.50% Bonds 2016............................................ 2,000 2,206
8.75% Bonds 2008............................................ 2,500 2,727
6.50% Notes 2002............................................ 1,000 1,016
6.63% Notes 2007............................................ 1,000 1,026
7.25% Notes 2004............................................ 2,000 2,101
---------
13,288
---------
TOTAL BONDS & NOTES (cost $38,026).......................... 36,088
---------
<CAPTION>
WARRANTS -- 0.0%+ SHARES
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS -- 0.0%
Recreation & Other Consumer Products -- 0.0%
V2 Music Holdings PLC 4/15/08*#............................. 175 0
---------
SERVICES -- 0.0%
Telecommunications -- 0.0%
Esat Holdings Ltd. 2/01/07*#................................ 500 45
Iridium World Communications, Inc. 7/15/05*#................ 250 0
---------
TOTAL WARRANTS (cost $15)................................... 45
---------
TOTAL INVESTMENT SECURITIES (cost $98,902).................. 113,887
---------
</TABLE>
---------------------
21
<PAGE> 23
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS -- 8.0% (IN THOUSANDS) (IN THOUSANDS)
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 8.0%
Associates Corp. of North America 5.53% due 9/01/99......... $ 2,500 $ 2,500
Coca-Cola Co. 5.25% due 9/24/99............................. 500 498
Coca-Cola Co. 5.30% due 9/13/99............................. 2,000 1,997
Heinz (H.J.) Co. 5.15% due 9/22/99.......................... 1,200 1,196
Pfizer, Inc. 5.18% due 9/27/99.............................. 1,000 996
Wal-Mart Stores, Inc. 5.11% due 9/09/99..................... 2,800 2,797
---------
TOTAL SHORT-TERM INVESTMENTS (cost $9,984).................. 9,984
---------
</TABLE>
<TABLE>
<S> <C> <C> <C>
TOTAL INVESTMENTS -- (cost $108,886) 99.2% $123,871
Other assets less liabilities -- 0.8 1,058
------ ---------
NET ASSETS -- 100.0% $124,929
====== =========
</TABLE>
-----------------------------
+ Non-income producing security
++ 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 valued security; see Note 2
# Resale restricted to qualified institutional buyers
@ Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
(1) Variable rate security; rate as of August 31, 1999
(2) Bond issued as a part of a unit which includes an equity
component
ADR - American Depository Receipt
CAD - Canadian Dollar
GBP - Great British Pound
See Notes to Financial Statements
- ---------------------
22
<PAGE> 24
O
- ---------------------
ANCHOR PATHWAY FUND
HIGH-YIELD BOND SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES -- 93.9% (IN THOUSANDS) (IN THOUSANDS)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL EQUIPMENT -- 3.6%
Electronic Components -- 2.2%
Flextronics International Ltd. 8.75% 2007*.................. $ 750 $ 737
Zilog, Inc., Series B 9.50% 2005*........................... 1,000 910
Industrial Components -- 1.4%
Kappa Beheer BV 10.63% 2009*#............................... 1,000 1,058
(EUR)
--------
2,705
--------
CONSUMER GOODS -- 5.8%
Beverages & Tobacco -- 2.0%
Canandaigua Wine, Inc. 8.75% 2003*.......................... 500 490
Delta Beverage Group, Inc. 9.75% 2003*...................... 1,000 1,015
Food & Household Products -- 3.0%
Home Products International, Inc. 9.63% 2008................ 1,750 1,540
Tekni-Plex, Inc., Series B 9.25% 2008*...................... 750 728
Recreation & Other Consumer Products -- 0.8%
V2 Music Holdings PLC zero coupon 2008*#@(2)................ 2,000 620
--------
4,393
--------
CONSUMER SERVICES -- 0.3%
Retail -- 0.3%
Kmart Corp. 9.78% 2020...................................... 250 256
--------
ENERGY -- 0.2%
Energy Sources -- 0.2%
Kelley Oil & Gas Corp., Series B 10.38% 2006*............... 250 113
--------
FINANCE -- 6.5%
Banking -- 2.2%
Florida Panthers Holdings, Inc. 9.88% 2009*................. 750 701
Fuji Bank Investment Preferred LLC 9.87% 2008#(1)........... 1,000 985
Financial Services -- 4.3%
DR Structured Finance Corp. 9.35% 2019*..................... 500 500
PTC International Finance BV zero coupon 2007@.............. 1,000 730
Salton, Inc. 10.75% 2005.................................... 500 514
United States Xchange LLC 15.00% 2008*...................... 1,250 1,250
William Hill Finance PLC 10.63% 2008........................ 157 257
(GBP)
--------
4,937
--------
MATERIALS -- 9.1%
Chemicals -- 1.3%
Key Plastics, Inc. 10.25% 2007.............................. 1,000 960
Forest Products & Paper -- 4.6%
Container Corp. of America 9.75% 2003....................... 1,000 1,015
Pacifica Papers, Inc. 10.00% 2009#.......................... 1,000 1,015
Packaging Corp. of America 9.63% 2009#...................... 500 505
Paperboard Industries International, Inc. 8.38% 2007........ 1,100 1,015
</TABLE>
---------------------
23
<PAGE> 25
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Metals & Minerals -- 3.2%
Doe Run Resources Corp., Series B 11.25% 2005*.............. $ 1,500 $ 1,387
Kaiser Aluminum & Chemical Corp. 12.75% 2003................ 1,000 1,015
--------
6,912
--------
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.9%
Foreign Government -- 1.9%
Republic of Argentina 11.38% 2017........................... 500 438
Republic of Venezuela 6.31% 2007(1)......................... 405 291
United Mexican States 11.38% 2016........................... 700 731
--------
1,460
--------
SERVICES -- 62.6%
Broadcasting & Publishing -- 21.5%
American Media Operations, Inc. 10.25% 2009#................ 1,750 1,693
Chancellor Media Corp. 8.75% 2007........................... 1,000 975
Chancellor Media Corp. 9.38% 2004........................... 500 505
Charter Commerce Holdings LLC zero coupon 2011#@............ 1,750 1,050
Comcast UK Cable Partners Ltd. zero coupon 2007@............ 2,365 2,128
Fox Liberty Networks LLC zero coupon 2007@.................. 575 448
Fox Liberty Networks LLC 8.88% 2007......................... 1,250 1,266
Gray Communications Systems, Inc. 10.63% 2006............... 1,500 1,582
Lenfest Communications, Inc. 8.25% 2008*.................... 250 251
RBS Participacoes SA 11.00% 2007#........................... 500 356
Spectrasite Holdings, Inc. zero coupon 2009#@............... 2,250 1,136
Spectrasite Holdings, Inc. 12.00% 2008#..................... 750 413
STC Broadcasting, Inc. 11.00% 2007.......................... 1,500 1,508
Sun Media Corp. 9.50% 2007.................................. 1,475 1,519
Telemundo Holdings, Inc. zero coupon 2008@.................. 1,000 530
Transwestern Publishing Co. 9.63% 2007...................... 750 724
TVN Entertainment Corp. 14.00% 2008*#....................... 500 180
Business & Public Services -- 9.3%
Boyds Collection Ltd. 9.00% 2008............................ 299 293
Graham Packaging Co., Series B 8.75% 2008................... 1,500 1,395
Integrated Health Services, Inc., Series A 9.25% 2008....... 1,750 525
Integrated Health Services, Inc., Series A 9.50% 2007....... 1,825 548
Mariner Health Group, Inc. 9.50% 2006....................... 610 49
Paracelsus Healthcare Corp. 10.00% 2006..................... 2,750 2,197
Printpack, Inc., Series B 10.63% 2006....................... 1,500 1,436
Protection One Alarm Monitoring Corp. 13.63% 2005@.......... 650 585
Business Services -- 1.9%
Allied Waste Industries, Inc. 10.0% 2009#................... 750 720
Iron Mountain, Inc. 8.75% 2009.............................. 500 471
Safety Kleen Services, Inc. 9.25% 2008*..................... 250 251
Cellular & Paging -- 4.5%
American Cellular Corp. 10.50% 2008......................... 1,750 1,811
Omnipoint Corp. 11.63% 2006................................. 750 780
Pagemart Nationwide, Inc. zero coupon 2005@(2).............. 250 235
Pagemart Wireless, Inc. zero coupon 2008*@.................. 1,500 555
Leisure & Tourism -- 5.0%
AMF Bowling Worldwide, Inc. 10.88% 2006..................... 1,500 1,185
AMF Bowling Worldwide, Inc., Series B zero coupon 2006@..... 405 243
Boyd Gaming Corp. 9.50% 2007................................ 250 246
Carmike Cinemas, Inc. 9.38% 2009............................ 500 463
Horseshoe Gaming LLC 8.63% 2009#............................ 1,250 1,200
Jupiters Ltd. 8.50% 2006#................................... 500 493
Telecommunications -- 19.7%
Avalon Cable Michigan, Inc. 9.38% 2008...................... 750 750
Clearnet Communications, Inc. zero coupon 2008@............. 5,425 2,140
(CAD)
</TABLE>
- ---------------------
24
<PAGE> 26
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES (continued)
Telecommunications (continued)
Clearnet Communications, Inc. 11.75% 2007@.................. $ 1,000 $ 455
(CAD)
COLT Telecom Group 7.63% 2008............................... 1,000 533
(EUR)
COLT Telecom Group PLC 8.88% 2007........................... 1,500 828
(EUR)
Comunicacion Celular SA zero coupon 2005#@.................. 1,000 590
Consorcio Ecuatoriano de Telecommunicaciones 14.00% 2002*... 500 175
Crown Castle International Corp. zero coupon 2007@.......... 1,000 700
Crown Castle International Corp. zero coupon 2011#@*........ 500 286
Dobson Communications Corp. 11.75% 2007..................... 750 791
Esat Telecom Group PLC zero coupon 2007@*................... 1,500 1,072
Esat Telecom Group PLC Series B 11.88% 2008................. 250 258
McCaw International Ltd. zero coupon 2007@.................. 1,000 575
Nextel Communications, Inc. zero coupon 2007@............... 750 549
Nextel Communications, Inc. zero coupon 2007@............... 2,250 1,575
Nextel Communications, Inc. zero coupon 2008@............... 250 173
Nextlink Communications, Inc. 9.00% 2008.................... 250 234
Time Warner Telecom, Inc. 9.75% 2008........................ 500 508
Versatel Telecom International NV 11.88% 2009*.............. 500 505
(EUR)
Viatel, Inc. 11.15% 2008(2)................................. 500 268
(EUR)
Viatel, Inc. 11.25% 2008(2)................................. 2,000 1,960
Transportation -- 0.7%
USAir, Inc. 10.38% 2013..................................... 500 533
--------
47,403
--------
U.S. TREASURY -- 3.9%
7.25% Notes 2004............................................ 2,810 2,951
--------
TOTAL BOND & NOTES (cost $79,388)........................... 71,130
--------
<CAPTION>
COMMON STOCK -- 1.0% SHARES
-----------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.8%
Telecommunications -- 0.8%
Viatel, Inc................................................. 15,341 593
--------
OTHER COMMON STOCK -- 0.2%.................................. 126
--------
TOTAL COMMON STOCK (cost $1,458)............................ 719
--------
<CAPTION>
PREFERRED STOCK -- 0.8%
-----------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.8%
Telecommunications -- 0.8%
Dobson Communications Corp. 12.25%+* (cost $645)............ 743 639
--------
<CAPTION>
WARRANTS -- 0.2%+
-----------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GOODS -- 0.0%
Recreation & Other Consumer Products -- 0.0%
V2 Music Holdings PLC 04/15/08*#............................ 2,000 0
--------
</TABLE>
---------------------
25
<PAGE> 27
<TABLE>
<CAPTION>
VALUE
WARRANTS (CONTINUED) SHARES (IN THOUSANDS)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
SERVICES -- 0.2%
Broadcasting & Publishing -- 0.0%
TVN Entertainment Corp. 8/01/08*#........................... 500 $ 0
Cellular & Paging -- 0.0%
Globalstar Telecommunications 2/15/04*...................... 250 14
Telecommunications -- 0.2%
Cellnet Data Systems, Inc. 9/15/07*#........................ 1,000 9
Comunicacion Celular SA 11/15/03*#.......................... 1,000 62
Esat Holdings Ltd. 2/01/07*#................................ 500 45
McCaw International Ltd. 4/15/07*#.......................... 1,000 3
NTL, Inc. 10/14/08*#........................................ 712 52
--------
TOTAL WARRANTS (cost $81)................................... 185
--------
TOTAL INVESTMENT SECURITIES (cost $81,572).................. 72,673
--------
<CAPTION>
PRINCIPAL
AMOUNT
SHORT-TERM SECURITIES -- 1.9% (IN THOUSANDS)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE SHORT-TERM NOTES -- 1.9%
Associates Corp. of North America 5.53% due 9/01/99 (cost
$1,460)................................................... $ 1,460 1,460
--------
TOTAL INVESTMENTS --
(cost $83,032) 97.8% $74,133
Other assets less liabilities -- 2.2 1,650
------ --------
NET ASSETS -- 100.0% $75,783
====== ========
</TABLE>
-----------------------------
+ Non-income producing security
* Fair valued security; See Note 2
# Resale restricted to qualified institutional buyers
@ Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
(1) Variable rate security; rate as of August 31, 1999
(2) Bond issued as a part of a unit which includes an equity
component
OPEN FORWARD FOREIGN CURRENCY CONTRACTS
------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS UNREALIZED
CONTRACT IN DELIVERY DEPRECIATION
TO DELIVER EXCHANGE FOR DATE (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
EUR 162,000 USD 172,470 11/22/99 $ (1)
EUR 583,000 USD 599,388 11/22/99 (2)
EUR 589,500 USD 627,166 11/24/99 (5)
EUR 1,000,000 USD 1,069,758 01/24/00 (23)
GBP 102,000 USD 164,135 09/20/99 (2)
-----
Net Unrealized Depreciation.............. $(33)
=====
</TABLE>
-----------------------------
<TABLE>
<S> <C>
CAD - Canadian Dollar GBP - Great British Pound
EUR - Euro Dollar USD - United States Dollar
</TABLE>
See Notes to Financial Statements
- ---------------------
26
<PAGE> 28
O
- ---------------------
ANCHOR PATHWAY FUND
U.S. GOVERNMENT/
AAA-RATED SECURITIES SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BOND & NOTES -- 98.5% (IN THOUSANDS) (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES -- 16.1%++
Green Tree Financial Corp., Series 1995-9, Class A5 6.80%
2027...................................................... $ 1,000 $ 996
Nomura Asset Securities, Series 1998-D6, Class A1A 6.28%
2028...................................................... 2,698 2,622
NPF XII, Inc., Series 1999-2, Class A 7.05% 2003*#.......... 1,125 1,114
Peco Energy Transport Trust, Series 1999-A, Class A7 6.13%
2009...................................................... 750 696
PP&L Transition Bond Co., LLC, Series 1999-1, Class A8 7.15%
2009...................................................... 725 721
Structured Asset Securities Corp., Series 1998-RE1, Class 1
8.70% 2028#(1)............................................ 1,509 1,536
Structured Asset Securities Corp., Series 1998-RF2, Class A
8.57% 2027#(1)............................................ 2,982 3,003
--------
10,688
--------
DEVELOPMENTAL AUTHORITIES -- 3.4%
Intermediate American Development Bank 8.88% 2009........... 2,000 2,280
--------
FEDERAL AGENCY OBLIGATIONS -- 46.1%++
Federal Home Loan Bank 5.63% 2001........................... 1,000 993
Federal Home Loan Mortgage Corp. 5.13% 2008................. 1,700 1,498
Federal Home Loan Mortgage Corp. 6.50% 2009................. 2,000 1,938
Federal Home Loan Mortgage Corp. 8.00% 2012................. 343 348
Federal Home Loan Mortgage Corp. 9.00% 2021-2022............ 455 476
Federal Home Loan Mortgage Corp. 9.50% 2016................. 369 388
Federal Home Loan Mortgage Corp. 11.88% 2013................ 8 8
Federal Home Loan Mortgage Corp. 12.50% 2013................ 70 77
Federal National Mortgage Association 5.50% 2014............ 2,935 2,733
Federal National Mortgage Association 6.00% 2008-2013....... 993 938
Federal National Mortgage Association 6.50% 2011............ 1,786 1,737
Federal National Mortgage Association 6.85% 2026*........... 1,255 1,121
Federal National Mortgage Association 7.00% 2012-2027....... 1,758 1,718
Federal National Mortgage Association 7.50% 2009............ 588 593
Federal National Mortgage Association 11.50% 2029........... 193 215
Government National Mortgage Association 6.00% 2014-2029.... 2,979 2,764
Government National Mortgage Association 6.50% 2013-2028.... 1,724 1,668
Government National Mortgage Association 7.00% 2023-2029.... 3,425 3,335
Government National Mortgage Association 7.50% 2022-2023.... 2,091 2,082
Government National Mortgage Association 8.00% 2017-2023.... 2,826 2,871
Government National Mortgage Association 8.50% 2016......... 135 140
Government National Mortgage Association 9.00% 2016-2017.... 456 481
Government National Mortgage Association 9.50% 2009-2017.... 2,267 2,412
Government National Mortgage Association 10.00% 2016........ 9 10
Government National Mortgage Association 10.50% 2016........ 74 82
--------
30,626
--------
MORTGAGE-RELATED SECURITIES -- 17.1%++
Chase Commercial Mortgage Securities Corp., Series 1998-2,
Class A2 6.39% 2008....................................... 250 234
Commercial Mortgage Acceptance Corp., Series 1998-C1, Class
A1 6.23% 2007............................................. 463 448
Credit Suisse First Boston Mortgage, Series 1998-C1, Class
A1A 6.26% 2007............................................ 690 668
DLJ Mortgage Acceptance Corp., Series 1996-CF2, Class A1B
7.29% 2021#............................................... 3,800 3,794
</TABLE>
---------------------
27
<PAGE> 29
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
BONDS & NOTES (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE-RELATED SECURITIES (continued)
GMAC Commercial Mortgage Security, Inc., Series 1997-C1,
Class A3 6.87% 2007......................................... $ 250 $ 243
Merrill Lynch Mortgage Investors, Inc., Series 1995-C3,
Class A2 6.82% 2025(1).................................... 500 495
Merrill Lynch Mortgage Investors, Inc., Series 1995-C3,
Class A3 7.06% 2025(1).................................... 500 494
Morgan (J.P.) Commercial Mortgage Finance Corp., Series
1995-C1, Class A2 7.42% 2010.............................. 1,000 999
Morgan Stanley Capital I, Inc., Series 1998-HF2, Class A2
6.48% 2030................................................ 500 473
Morgan Stanley Capital I, Inc., Series 1999-FNV1, Class A2
6.53% 2031................................................ 750 710
Mortgage Capital Funding, Inc., Series 1998-MC1, Class A1
6.42% 2007................................................ 1,375 1,339
Norwest Asset Securities Corp., Series 1998-31, Class A1
6.25% 2014................................................ 295 284
Ocwen Residential MBS Corp., Series 1998-R1, Class AWAC
0.57% 2040*#(1)........................................... 1,242 1,175
--------
11,356
--------
MUNICIPAL BONDS -- 1.4%
Puerto Rico Public Finance Corp., Series 1999-1, Class A
6.15% 2008*............................................... 963 935
--------
U.S. TREASURY -- 14.4%
7.13% Bonds 2023............................................ 600 650
8.88% Bonds 2017............................................ 2,375 2,969
11.63% Bonds 2002........................................... 1,500 1,742
12.00% Bonds 2013........................................... 1,000 1,376
5.88% Notes 2002............................................ 675 675
6.13% Notes 2007............................................ 900 897
6.38% Notes 2000-2001....................................... 1,250 1,257
--------
9,566
--------
TOTAL INVESTMENT SECURITIES (cost $67,693).................. 65,451
--------
SHORT-TERM SECURITIES -- 0.4%
---------------------------------------------------------------------------------------------
CORPORATE SHORT-TERM NOTES -- 0.4%
Associates Corp. of North America 5.53% due 9/01/99 (cost
$241)..................................................... 241 241
--------
TOTAL INVESTMENTS --
(cost $67,934) 98.9% $65,692
Other assets less liabilities -- 1.1 753
------ --------
NET ASSETS -- 100.0% $66,445
===== ========
</TABLE>
-----------------------------
<TABLE>
<S> <C> <C>
++ 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 the
stated maturity.
* Fair valued security; see Note 2
# Resale restricted to qualified institutional buyers
(1) Variable rate security; rate as of August 31, 1999
</TABLE>
See Notes to Financial Statements
- ---------------------
28
<PAGE> 30
O
- ---------------------
ANCHOR PATHWAY FUND
CASH MANAGEMENT SERIES INVESTMENT PORTFOLIO -- AUGUST 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES -- 99.7% (IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C>
---------------------------------------------------------------------------------------------
CORPORATE SHORT-TERM NOTES -- 73.9%
Abbott Laboratories, Inc. 5.10% due 9/01/99................. $ 2,500 $ 2,500
Alcoa, Inc. 5.30% due 10/14/99.............................. 2,200 2,186
American Express Credit Corp. 5.15% due 9/16/99............. 2,600 2,594
American General Corp. 5.19% due 10/04/99................... 2,200 2,190
American Home Products Corp. 5.08% due 9/24/99.............. 2,000 1,993
Ameritech Capital Funding Corp. 5.22% due 9/21/99........... 1,900 1,894
Bell Atlantic Network Funding Corp. 5.17% due 9/29/99....... 2,000 1,992
BellSouth Capital Funding Corp. 5.24% due 10/21/99.......... 1,700 1,688
Bestfoods 5.13% due 9/22/99................................. 2,000 1,994
Campbell Soup Co. 5.07% due 9/14/99......................... 430 429
Campbell Soup Co. 5.10% due 10/01/99........................ 1,800 1,792
CIT Group Holdings, Inc. 5.10% due 9/13/99.................. 2,400 2,396
Coca-Cola Co. 5.07% due 9/23/99............................. 1,400 1,396
Colgate-Palmolive Co. 5.07% due 9/03/99..................... 2,000 1,999
du Pont (E.I.) de Nemours & Co. 5.19% due 10/06/99.......... 2,500 2,487
Eastman Kodak Co. 5.14% due 9/24/99......................... 2,200 2,193
Electronic Data Systems Corp. 5.25% due 9/08/99............. 1,000 999
General Motors Acceptance Corp. 5.15% due 9/14/99........... 2,000 1,996
Gillette Co. 5.15% due 10/07/99............................. 2,500 2,487
Heinz (H.J.) Co. 5.15% due 9/23/99.......................... 2,600 2,592
Hershey Foods Corp. 5.20% due 10/05/99...................... 2,100 2,090
Hewlett Packard Co. 5.28% due 9/28/99....................... 2,000 1,992
Kimberly-Clark Corp. 5.28% due 10/13/99..................... 2,300 2,286
Lucent Technologies, Inc. 5.13% due 10/04/99................ 2,200 2,190
Minnesota Mining & Manufacturing Co. 5.10% due 9/20/99...... 2,319 2,313
Monsanto Co. 5.22% due 10/05/99............................. 1,000 995
Motorola, Inc. 5.23% due 9/30/99............................ 2,000 1,992
Pfizer, Inc. 5.07% due 9/08/99.............................. 1,900 1,898
Procter & Gamble Co. 5.10% due 9/01/99...................... 2,000 2,000
SBC Communications, Inc. 5.08% due 9/09/99.................. 2,100 2,098
Schering Corp. 5.28% due 10/06/99........................... 1,100 1,094
Wal-Mart Stores, Inc. 5.12% due 9/28/99..................... 2,200 2,192
--------
TOTAL CORPORATE SHORT-TERM NOTES (cost $62,937)............. 62,937
--------
FEDERAL AGENCY OBLIGATIONS -- 25.8%
Federal Home Loan Bank Discount Notes 5.15% due 10/13/99.... 1,100 1,093
Federal Home Loan Bank Discount Notes 5.18% due 10/15/99.... 3,200 3,180
Federal Home Loan Mortgage Discount Notes 5.01% due
9/20/99................................................... 4,550 4,538
Federal Home Loan Mortgage Discount Notes 5.02% due
9/09/99................................................... 1,000 999
Federal Home Loan Mortgage Discount Notes 5.02% due
9/20/99................................................... 2,100 2,094
Federal Home Loan Mortgage Discount Notes 5.03% due
9/02/99................................................... 1,200 1,200
Federal Home Loan Mortgage Discount Notes 5.11% due
10/08/99.................................................. 2,000 1,989
Federal National Mortgage Association Discount Notes 4.94%
due 9/07/99............................................... 1,500 1,499
Federal National Mortgage Association Discount Notes 4.99%
due 9/27/99............................................... 1,500 1,495
Federal National Mortgage Association Discount Notes 5.00%
due 9/10/99............................................... 1,500 1,498
Federal National Mortgage Association Discount Notes 5.23%
due 10/25/99.............................................. 1,300 1,290
</TABLE>
---------------------
29
<PAGE> 31
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SHORT-TERM SECURITIES (CONTINUED) (IN THOUSANDS) (IN THOUSANDS)
---------------------------------------------------------------------------------------------
<S> <C> <C>
FEDERAL AGENCY OBLIGATIONS (continued)
Tennessee Valley Authority Discount Notes 4.95% due
9/07/99..................................................... $ 1,100 $ 1,099
--------
TOTAL FEDERAL AGENCY OBLIGATIONS (cost $21,974)............. 21,974
--------
TOTAL SHORT-TERM SECURITIES (cost $84,911).................. 84,911
--------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS --
(cost $84,911) 99.7% $84,911
Other assets less liabilities -- 0.3 240
----- --------
NET ASSETS -- 100.0% $85,151
===== ========
</TABLE>
-----------------------------
See Notes to Financial Statements
- ---------------------
30
<PAGE> 32
O
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999 (UNAUDITED)
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<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>
ASSETS:
Investment securities at value*........... $890,311 $195,197 $748,554 $113,887 $ 72,673 $65,451
Short-term securities*.................... 59,365 14,034 171,062 9,984 1,460 241
Cash...................................... -- 31 43 52 9 1
Foreign Cash.............................. -- 12 -- -- -- --
Receivables for --
Sales of investments.................... 9,816 -- -- 205 15 --
Foreign currency contracts.............. 3,460 -- -- -- -- --
Dividends and accrued interest.......... 237 579 1,514 808 1,766 538
Fund shares sold........................ 71 1 19 110 2 301
Prepaid expenses.......................... 10 2 12 2 1 1
--------------------------------------------------------------------------------
963,270 209,856 921,204 125,048 75,926 66,533
--------------------------------------------------------------------------------
LIABILITIES:
Payables for --
Purchases of investments................ 5,817 -- 5,125 -- -- --
Foreign currency contracts.............. 3,422 -- -- -- -- --
Fund shares redeemed.................... 529 147 1,196 46 49 34
Due to custodian bank................... 497 -- -- -- -- --
Advisory fees........................... 245 107 240 34 21 19
Management fees......................... 163 42 160 22 14 12
Other accrued expenses.................... 33 110 59 17 26 23
Unrealized depreciation on forward foreign
currency contracts...................... -- -- -- -- 33 --
--------------------------------------------------------------------------------
10,706 406 6,780 119 143 88
--------------------------------------------------------------------------------
NET ASSETS:............................... $952,564 $209,450 $914,424 $124,929 $ 75,783 $66,445
================================================================================
Shares of beneficial interest outstanding
(unlimited shares authorized)........... 21,753 14,243 31,678 9,740 7,647 6,671
Net asset value per share................. $ 43.79 $ 14.71 $ 28.87 $ 12.83 $ 9.91 $ 9.96
================================================================================
COMPOSITION OF NET ASSETS:
Capital paid in........................... $474,900 $137,608 $631,345 $ 98,780 $ 85,076 $68,309
Accumulated undistributed net investment
income.................................. 898 201 8,753 2,223 4,137 2,262
Accumulated undististributed net realized
gain (loss) on investments and foreign
currency................................ 120,537 5,231 117,982 8,941 (4,498) (1,884)
Unrealized appreciation (depreciation) on
investments............................. 356,229 66,404 156,344 14,985 (8,899) (2,242)
Unrealized foreign exchange gain (loss) on
other assets and liablities............. -- 6 -- -- (33) --
--------------------------------------------------------------------------------
Net Assets............................ $952,564 $209,450 $914,424 $124,929 $ 75,783 $66,445
================================================================================
---------------
*Cost
Investment Securities................... $534,082 $128,793 $592,209 $ 98,902 $ 81,572 $67,693
================================================================================
Short-term Securities................... $ 59,365 $ 14,034 $171,063 $ 9,984 $ 1,460 $ 241
================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
------------------------------------------ ----------
<S> <C>
ASSETS:
Investment securities at value*........... $ --
Short-term securities*.................... 84,911
Cash...................................... 98
Foreign Cash.............................. --
Receivables for --
Sales of investments.................... --
Foreign currency contracts.............. --
Dividends and accrued interest.......... --
Fund shares sold........................ 479
Prepaid expenses.......................... 1
---------
85,489
---------
LIABILITIES:
Payables for --
Purchases of investments................ --
Foreign currency contracts.............. --
Fund shares redeemed.................... 276
Due to custodian bank................... --
Advisory fees........................... 22
Management fees......................... 15
Other accrued expenses.................... 25
Unrealized depreciation on forward foreign
currency contracts...................... --
-------
338
-------
NET ASSETS:............................... $85,151
=======
Shares of beneficial interest outstanding
(unlimited shares authorized)........... 7,879
Net asset value per share................. $ 10.81
=======
COMPOSITION OF NET ASSETS:
Capital paid in........................... $83,550
Accumulated undistributed net investment
income.................................. 1,602
Accumulated undististributed net realized
gain (loss) on investments and foreign
currency................................ (1)
Unrealized appreciation (depreciation) on
investments............................. --
Unrealized foreign exchange gain (loss) on
other assets and liablities............. --
-------
Net Assets............................ $85,151
=======
---------------
*Cost
Investment Securities................... $ --
=======
Short-term Securities................... $84,911
=======
</TABLE>
See Notes to Financial Statements
---------------------
31
<PAGE> 33
O
- ---------------------
ANCHOR PATHWAY FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1999 (UNAUDITED)
(DOLLARS 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:
Interest................................ $ 2,072 $ 582 $ 4,250 $ 1,770 $ 4,472 $2,506
Dividends............................... 1,419 2,016 7,088 847 -- --
--------------------------------------------------------------------------------
Total income*.................... 3,491 2,598 11,338 2,617 4,472 2,506
--------------------------------------------------------------------------------
Expenses:
Advisory fees........................... 1,468 631 1,453 205 140 116
Management fees......................... 979 251 969 137 94 77
Custodian fees.......................... 102 164 115 30 35 26
Auditing and legal fees................. 14 15 14 11 12 12
Reports to investors.................... 11 6 11 3 4 4
Trustees' fees.......................... 7 2 7 1 1 1
Other expenses.......................... 8 2 8 1 -- 1
--------------------------------------------------------------------------------
Total expenses before custody
credits........................ 2,589 1,071 2,577 388 286 237
Custody credits earned on cash
balances....................... (3) (1) (2) (1) (3) (1)
--------------------------------------------------------------------------------
Net investment income..................... 905 1,528 8,763 2,230 4,189 2,270
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments... 120,805 5,276 117,986 8,944 (4,620) (333)
Net realized foreign exchange gain (loss)
on other assets and liabilities......... -- (30) -- (1) 131 --
Change in unrealized appreciation/
depreciation of investments............. 3,910 17,017 (49,080) (2,199) (2,312) (2,325)
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities............................. -- 6 -- -- (78) --
--------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments and foreign currencies...... 124,715 22,269 68,906 6,744 (6,879) (2,658)
--------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... $125,620 $23,797 $ 77,669 $ 8,974 $(2,690) $ (388)
================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
------------------------------------------ ----------
<S> <C>
NET INVESTMENT INCOME:
Income:
Interest................................ $1,841
Dividends............................... --
------
Total income*.................... 1,841
------
Expenses:
Advisory fees........................... 120
Management fees......................... 80
Custodian fees.......................... 19
Auditing and legal fees................. 12
Reports to investors.................... 4
Trustees' fees.......................... 1
Other expenses.......................... --
------
Total expenses before custody
credits........................ 236
Custody credits earned on cash
balances....................... (1)
------
Net investment income..................... 1,606
------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on investments... (1)
Net realized foreign exchange gain (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 and foreign currencies...... (1)
------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............... $1,605
======
</TABLE>
- ---------------
* Net of foreign witholding taxes of $22; $247; $71, and $10 on Growth,
International, Growth-income and Asset Allocation Series, respectively.
See Notes to Financial Statements
- ---------------------
32
<PAGE> 34
O
- ---------------------
ANCHOR PATHWAY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED AUGUST 31, 1999 (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..................... $ 905 $ 1,528 $ 8,763 $ 2,230 $ 4,189 $ 2,270
Net realized gain (loss) on investments... 120,805 5,276 117,986 8,944 (4,620) (333)
Net realized foreign exchange gain (loss)
on other assets and liabilities......... -- (30) -- (1) 131 --
Change in unrealized appreciation/
depreciation of investments............. 3,910 17,017 (49,080) (2,199) (2,312) (2,325)
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities............................. -- 6 -- -- (78) --
---------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations............... 125,620 23,797 77,669 8,974 (2,690) (388)
---------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income...... (3,520) (5,485) (20,340) (6,450) (12,930) (6,130)
Distributions from net realized gains on
investments............................. (242,808) (27,757) (233,900) (22,292) (2,960) --
---------------------------------------------------------------------------------
Total dividends and distributions paid to
shareholders............................ (246,328) (33,242) (254,240) (28,742) (15,890) (6,130)
---------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold................. 55,437 12,135 23,717 2,742 12,616 8,125
Proceeds from shares issued for
reinvestment of dividends and
distributions........................... 246,328 33,242 254,240 28,742 15,890 6,130
Cost of shares repurchased................ (135,813) (31,003) (101,072) (16,587) (25,391) (16,573)
---------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions............................ 165,952 14,374 176,885 14,897 3,115 (2,318)
---------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS... 45,244 4,929 314 (4,871) (15,465) (8,836)
NET ASSETS:
Beginning of period....................... 907,320 204,521 914,110 129,800 91,248 75,281
---------------------------------------------------------------------------------
End of period............................. $ 952,564 $209,450 $ 914,424 $124,929 $ 75,783 $ 66,445
=================================================================================
---------------
Accumulated undistributed net investment
income.................................. $ 898 $ 201 $ 8,753 $ 2,223 $ 4,137 $ 2,262
=================================================================================
Shares issued and repurchased:
Sold.................................... 1,015 742 624 172 986 742
Issued in reinvestment of dividends and
distributions......................... 5,723 2,331 8,734 2,255 1,591 620
Repurchased............................. (2,472) (1,898) (2,624) (1,030) (2,007) (1,515)
---------------------------------------------------------------------------------
Net increase (decrease)................... 4,266 1,175 6,734 1,397 570 (153)
=================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
------------------------------------------ ----------
<S> <C>
OPERATIONS:
Net investment income..................... $ 1,606
Net realized gain (loss) on investments... (1)
Net realized foreign exchange gain (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............... 1,605
--------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income...... (4,180)
Distributions from net realized gains on
investments............................. (2)
--------
Total dividends and distributions paid to
shareholders............................ (4,182)
--------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold................. 89,544
Proceeds from shares issued for
reinvestment of dividends and
distributions........................... 4,182
Cost of shares repurchased................ (88,245)
--------
Net increase (decrease) in net assets
resulting from capital share
transactions............................ 5,481
--------
TOTAL INCREASE (DECREASE) IN NET ASSETS... 2,904
NET ASSETS:
Beginning of period....................... 82,247
--------
End of period............................. $ 85,151
========
---------------
Accumulated undistributed net investment
income.................................. $ 1,602
========
Shares issued and repurchased:
Sold.................................... 8,004
Issued in reinvestment of dividends and
distributions......................... 388
Repurchased............................. (7,898)
--------
Net increase (decrease)................... 494
========
</TABLE>
See Notes to Financial Statements
---------------------
33
<PAGE> 35
O
- ---------------------
ANCHOR PATHWAY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD DECEMBER 1, 1998 THROUGH FEBRUARY 28, 1999#
(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 (loss).............. $ 769 $ (38) $ 3,745 $ 1,164 $ 2,277 $ 1,162
Net realized gain on investments.......... 43,357 3,365 41,842 3,184 607 202
Net realized foreign exchange gain on
other assets and liabilities............ -- 5 -- -- 112 --
Change in unrealized appreciation/
depreciation of investments............. 74,943 17,708 (4,264) (2,522) (2,631) (1,597)
Change in unrealized foreign exchange
gain/loss on other assets and
liabilities............................. -- (8) -- 3 24 --
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations............... 119,069 21,032 41,323 1,829 389 (233)
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold................. 27,772 8,280 14,357 3,124 7,120 7,030
Cost of shares repurchased................ (75,876) (18,554) (57,564) (9,222) (16,322) (11,201)
--------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions............................ (48,104) (10,274) (43,207) (6,098) (9,202) (4,171)
--------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS... 70,965 10,758 (1,884) (4,269) (8,813) (4,404)
NET ASSETS:
Beginning of period....................... 836,355 193,763 915,994 134,069 100,061 79,685
--------------------------------------------------------------------------------
End of period............................. $907,320 $204,521 $914,110 $129,800 $ 91,248 $75,281
================================================================================
---------------
Accumulated undistributed net investment
income.................................. $ 3,513 $ 4,158 $ 20,330 $ 6,443 $ 12,878 $ 6,122
================================================================================
Shares issued and repurchased:
Sold.................................... 541 549 393 202 551 633
Repurchased............................. (1,503) (1,229) (1,584) (597) (1,270) (1,010)
--------------------------------------------------------------------------------
Net increase (decrease)................... (962) (680) (1,191) (395) (719) (377)
================================================================================
<CAPTION>
CASH
MANAGEMENT
SERIES
------------------------------------------ ----------
<S> <C>
OPERATIONS:
Net investment income (loss).............. $ 761
Net realized gain 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 (decrease) in net assets
resulting from operations............... 762
--------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold................. 65,150
Cost of shares repurchased................ (47,491)
--------
Net increase (decrease) in net assets
resulting from capital share
transactions............................ 17,659
--------
TOTAL INCREASE (DECREASE) IN NET ASSETS... 18,421
NET ASSETS:
Beginning of period....................... 63,826
--------
End of period............................. $82,247
========
---------------
Accumulated undistributed net investment
income.................................. $ 4,176
========
Shares issued and repurchased:
Sold.................................... 5,878
Repurchased............................. (4,287)
--------
Net increase (decrease)................... 1,591
========
</TABLE>
- ---------------
# The Fund changed its fiscal year end from November 30 to February 28.
See Notes to Financial Statements
- ---------------------
34
<PAGE> 36
O
- ---------------------
ANCHOR PATHWAY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION: Anchor Pathway Fund (the
"Fund") is 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 that demonstrate the
potential for appreciation.
The INTERNATIONAL SERIES seeks long-term growth of capital by investing
primarily in common stocks or securities with common stock characteristics of
issuers that are domiciled outside the U.S., including those domiciled in
developing countries.
The GROWTH-INCOME SERIES seeks growth of capital and income by investing
primarily in common stocks or securities with common stock characteristics that
demonstrate the potential for solid growth and dividends.
The ASSET ALLOCATION SERIES seeks high total return (including income and
capital gains) consistent with preservation of capital over the long-term by
investing in a diversified portfolio of common stocks, bonds and money market
instruments.
The HIGH YIELD BOND SERIES seeks high current income with capital appreciation
as a secondary objective by investing primarily in intermediate and long-term
corporate debt obligations, with emphasis on higher yielding, higher risk, lower
rated or unrated corporate securities, which are commonly known as "junk bonds."
The U.S. GOVERNMENT/AAA-RATED SECURITIES SERIES seeks high current income
consistent with prudent investment risk and preservation of capital by investing
primarily in a combination of securities issued or guaranteed by the U.S.
Government (i.e., backed by the full faith and credit of the U.S.) and other
debt securities rated in the highest rating category (or that 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 high quality money market instruments.
2. SIGNIFICANT ACCOUNTING POLICIES: The preparation of financial statements in
accordance with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from these estimates.
The 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, other long-term debt securities, and
short-term securities with original or remaining maturities in excess of 60 days
are valued at prices obtained for the day of valuation from a bond pricing
service or a major dealer in bonds when such prices are available; however, in
circumstances where the investment adviser deems it appropriate to do so, an
over-the-counter or exchange quotation at the mean of representative bid or
asked prices may be used. Securities traded primarily on securities exchanges
outside the United States are valued at the last sale price on such exchanges on
the day of valuation, or if there is no sale on the day of valuation, at the
last reported bid price. If a security's price is available from more than one
foreign exchange the Fund uses the exchange that is the primary market for the
security. 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. 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 between the trade and settlement dates of securities
transactions, the difference between the amounts of interest, dividends, 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: Securities
transactions are recorded on a trade date basis. 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.
Funds 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
their relative net asset values or other appropriate allocation methods. 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. 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. Net investment income/loss, net realized gain/loss, and net
assets are not affected.
For the period December 1, 1998 through February 28, 1999, the
reclassification arising from book/tax differences primarily related to tax
adjustments on passive foreign investment companies sold and book/tax
characterization of foreign currency transactions, market discount and paydown
gains/losses. The reclassifications 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............................................... $ 1 $ -- $(1)
International Series........................................ (826) 826 --
Growth-Income Series........................................ -- -- --
Asset Allocation Series..................................... -- -- --
High-Yield Bond Series...................................... (130) 130 --
U.S. Government/AAA-Rated Securities Series................. 31 (31) --
Cash Management Series...................................... -- -- --
</TABLE>
3. OPERATING POLICIES:
FORWARD FOREIGN CURRENCY CONTRACTS: Certain series may enter into forward
foreign currency contracts ("forward contracts") to attempt to protect
securities and related receivables and payables against changes in future
foreign exchange rates. A forward contract is an agreement between two parties
to buy or sell currency at a set price on a future date. The market value of the
contract will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the forward rate and the change in market value is
recorded by the Fund as unrealized gain or loss. On settlement date, the Fund
records either realized gains or losses when the contract is closed equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. Forward contracts involve elements of risk
in excess of the amount reflected in the Statement of Assets and Liabilities.
The Fund bears the risk of an unfavorable change in the foreign exchange rate
underlying the forward contract.
- ---------------------
36
<PAGE> 38
4. 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.
The amounts of aggregate unrealized gain (loss) and the cost of investment
securities for tax purposes, including short-term securities at August 31, 1999,
were as follows (dollars in thousands):
<TABLE>
<CAPTION>
NET
AGGREGATE AGGREGATE UNREALIZED
UNREALIZED UNREALIZED GAIN COST OF CAPITAL LOSS
GAIN (LOSS) (LOSS) INVESTMENTS CARRYOVER*+
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------
Growth Series........................................ $398,355 $(42,091) $356,264 $593,412 $--
International Series................................. 70,192 (3,788) 66,404 142,827 --
Growth-Income Series................................. 199,217 (42,791) 156,426 763,190 --
Asset Allocation Series.............................. 20,417 (5,432) 14,985 108,886 --
High-Yield Bond Series............................... 1,467 (10,366) (8,899) 83,032 --
U.S. Government/AAA-Rated Securities Series*......... 357 (2,497) (2,140) 67,832 1,549
Cash Management Series............................... -- -- -- 84,911 --
<CAPTION>
CAPITAL LOSS
UTILIZED
<S> <C>
Growth Series........................................ -$-
International Series................................. --
Growth-Income Series................................. --
Asset Allocation Series.............................. --
High-Yield Bond Series............................... --
U.S. Government/AAA-Rated Securities Series*......... 216
Cash Management Series............................... --
</TABLE>
- ---------------
* Expire 2005
+ Net capital loss carryover reported as of February 28, 1999, which are
available to the extent provided in regulations to offset future capital
gains. To the extent that these carryovers are used to offset future capital
gains, it is probable that the gains so offset will not be distributed.
5. BUSINESS MANAGER AND INVESTMENT ADVISER: SunAmerica Asset Management Corp.
(the "Business Manager"), pursuant to a business management agreement, manages
the business affairs and the administration of the Fund. For providing 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.
6. PURCHASES AND SALES OF SECURITIES: Information with respect to purchases and
sales of long-term securities (dollars in thousands) for the six months ended
August 31, 1999, were as follows:
<TABLE>
<CAPTION>
ASSET
GROWTH INTERNATIONAL GROWTH-INCOME ALLOCATION HIGH-YIELD
SERIES SERIES SERIES SERIES BOND SERIES
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------
Purchases of portfolio securities............ $149,480 $20,468 $136,338 $22,795 $18,585
Sales of portfolio securities................ 206,725 23,052 217,813 34,229 24,665
U.S. government securities excluded above
were as follows:
Purchases of U.S. government securities...... -- -- -- 2,124 2,976
Sales of U.S. government securities.......... 1,146 -- -- 2,375 2,317
<CAPTION>
U.S.
GOVERNMENT/
AAA-RATED CASH
SECURITIES MANAGEMENT
SERIES SERIES
<S> <C> <C>
-------------------------------------------------------------------
Purchases of portfolio securities............ $ 1,233 $ --
Sales of portfolio securities................ 4,443 --
U.S. government securities excluded above
were as follows:
Purchases of U.S. government securities...... 21,016 --
Sales of U.S. government securities.......... 17,260 --
</TABLE>
7. TRANSACTIONS WITH AFFILIATES: The following series incurred brokerage
commissions (dollars in thousands) with an affiliated broker:
<TABLE>
<CAPTION>
FSC
SECURITIES
CORP.
----------
<S> <C>
Asset Allocation Series..................................... $1
</TABLE>
---------------------
37
<PAGE> 39
O
- ---------------------
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
11/30/95 $34.08 $0.25 $12.02 $12.27 $(0.20) $ (2.65) $43.50 37.93%
11/30/96 43.50 0.18 5.10 5.28 (0.28) (6.22) 42.28 14.02
11/30/97 42.28 0.18 8.30 8.48 (0.21) (6.73) 43.82 23.78
11/30/98 43.82 0.15 10.18 10.33 (0.20) (8.62) 45.33 25.21
2/28/99# 45.33 0.04 6.52 6.56 -- -- 51.89 14.47
8/31/99(1) 51.89 0.05 7.01 7.06 (0.22) (14.94) 43.79 14.11
International Series
11/30/95 $13.26 $0.26 $ 1.11 $ 1.37 $(0.23) $ (0.50) $13.90 11.18%
11/30/96 13.90 0.22 2.46 2.68 (0.46) (0.31) 15.81 20.03
11/30/97 15.81 0.17 1.78 1.95 (0.27) (1.22) 16.27 13.15
11/30/98 16.27 0.22 2.31 2.53 (0.27) (4.44) 14.09 14.56
2/28/99# 14.09 -- 1.56 1.56 -- -- 15.65 11.07
8/31/99(1) 15.65 0.12 1.70 1.82 (0.46) (2.30) 14.71 12.19
Growth-Income Series
11/30/95 $26.46 $0.71 $ 7.46 $ 8.17 $(0.76) $ (2.23) $31.64 33.47%
11/30/96 31.64 0.67 5.87 6.54 (0.77) (2.10) 35.31 21.88
11/30/97 35.31 0.66 6.91 7.57 (0.75) (5.10) 37.03 24.62
11/30/98 37.03 0.62 4.91 5.53 (0.71) (6.80) 35.05 15.07
2/28/99# 35.05 0.15 1.45 1.60 -- -- 36.65 4.56
8/31/99(1) 36.65 0.35 2.84 3.19 (0.88) (10.09) 28.87 8.46
Asset Allocation Series
11/30/95 $12.62 $0.55 $ 3.16 $ 3.71 $(0.68) $ (0.38) $15.27 31.01%
11/30/96 15.27 0.56 2.17 2.73 (0.63) (1.14) 16.23 19.34
11/30/97 16.23 0.55 2.00 2.55 (0.63) (1.65) 16.50 17.86
11/30/98 16.50 0.55 0.98 1.53 (0.61) (2.08) 15.34 9.28
2/28/99# 15.34 0.14 0.08 0.22 -- -- 15.56 1.43
8/31/99(1) 15.56 0.27 0.81 1.08 (0.85) (2.96) 12.83 7.07
High-Yield Bond Series
11/30/95 $13.05 $1.26 $ 0.99 $ 2.25 $(1.56) $ (0.13) $13.61 18.97%
11/30/96 13.61 1.21 0.56 1.77 (1.53) -- 13.85 14.05
11/30/97 13.85 1.19 0.44 1.63 (1.43) -- 14.05 12.76
11/30/98 14.05 1.22 (0.73) 0.49 (1.39) (0.32) 12.83 3.22
2/28/99# 12.83 0.31 (0.25) 0.06 -- -- 12.89 0.47
8/31/99(1) 12.89 0.60 (1.02) (0.42) (2.09) (0.47) 9.91 (3.38)
U.S. Government/AAA-Rated Securities Series
11/30/95 $11.53 $0.86 $ 0.85 $ 1.71 $(1.20) $ (0.06) $11.98 15.95%
11/30/96 11.98 0.80 (0.21) 0.59 (1.06) -- 11.51 5.49
11/30/97 11.51 0.76 (0.14) 0.62 (1.03) -- 11.10 6.09
11/30/98 11.10 0.68 0.23 0.91 (0.94) -- 11.07 8.70
2/28/99# 11.07 0.17 (0.21) (0.04) -- -- 11.03 (0.36)
8/31/99(1) 11.03 0.35 (0.43) (0.08) (0.99) -- 9.96 (0.62)
Cash Management Series
11/30/95 $11.47 $0.61 $ 0.01 $ 0.62 $(0.44) $ -- $11.65 5.53%
11/30/96 11.65 0.55 -- 0.55 (0.82) -- 11.38 4.94
11/30/97 11.38 0.54 0.01 0.55 (0.62) -- 11.31 5.03
11/30/98 11.31 0.54 -- 0.54 (0.83) -- 11.02 5.04
2/28/99# 11.02 0.12 -- 0.12 -- -- 11.14 1.09
8/31/99(1) 11.14 0.24 -- 0.24 (0.57) -- 10.81 2.19
<CAPTION>
RATIO OF NET
NET ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME PORTFOLIO
PERIOD PERIOD TO AVERAGE TO AVERAGE TURNOVER
ENDED (000'S) NET ASSETS NET ASSETS RATE
- --------------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Growth Series
11/30/95 $897,275 0.55% 0.65% 23.72%
11/30/96 813,164 0.55 0.46 25.51
11/30/97 801,230 0.54 0.44 29.01
11/30/98 836,355 0.54 0.34 32.37
2/28/99 907,320 0.55+ 0.34+ 5.75
8/31/99 952,564 0.53+ 0.19+ 17.15
11/30/95 $228,134 1.05% 1.95% 16.79%
11/30/96 249,144 1.02 1.56 44.94
11/30/97 223,337 1.04 0.99 47.45
11/30/98 193,763 1.03 1.50 60.19
2/28/99 204,521 1.05+ (0.08)+ 5.28
8/31/99 209,450 1.02+ 1.46+ 11.29
11/30/95 $882,143 0.55% 2.52% 18.81%
11/30/96 919,356 0.55 2.07 23.72
11/30/97 950,432 0.54 1.88 30.06
11/30/98 915,994 0.54 1.76 32.42
2/28/99 914,110 0.55+ 1.63+ 7.57
8/31/99 914,424 0.54+ 1.82+ 17.36
11/30/95 $153,608 0.59% 4.04% 53.58%
11/30/96 153,060 0.58 3.74 40.97
11/30/97 155,446 0.59 3.49 39.14
11/30/98 134,069 0.58 3.56 31.43
2/28/99 129,800 0.62+ 3.57+ 9.77
8/31/99 124,929 0.59+ 3.42+ 21.06
11/30/95 $146,590 0.59% 9.66% 31.64%
11/30/96 131,337 0.58 9.09 36.99
11/30/97 118,670 0.61 8.68 64.49
11/30/98 100,061 0.60 9.18 78.82
2/28/99 91,248 0.67+ 9.61+ 12.05
8/31/99 75,783 0.65+ 9.56+ 26.80
11/30/95 $134,938 0.59% 7.49% 43.43%
11/30/96 108,852 0.59 7.03 17.12
11/30/97 81,609 0.63 6.93 46.17
11/30/98 79,685 0.63 6.20 163.75
2/28/99 75,281 0.70+ 6.08+ 29.54
8/31/99 66,445 0.66+ 6.36+ 31.60
11/30/95 $100,872 0.58% 5.32% --%
11/30/96 89,236 0.58 4.81 --
11/30/97 69,226 0.63 4.87 --
11/30/98 63,826 0.63 4.91 --
2/28/99 82,247 0.69+ 4.40+ --
8/31/99 85,151 0.64+ 4.34+ --
</TABLE>
- ---------------
@ Calculated based upon average shares outstanding
* Total return is not annualized and does not reflect expenses that apply to
the separate accounts of Anchor National Life Insurance Company. If such
expenses had been included, total return would have been lower for each
period presented.
# The Series changed its fiscal year end from November 30 to February 28.
+ Annualized
(1) Unaudited
See Notes to Financial Statements
- ---------------------
38
<PAGE> 40
[SUN AMERICA LOGO]
Anchor National Life Insurance Company
1 SunAmerica Center
Los Angeles, California 90067-6022
ADDRESS SERVICE REQUESTED
P-1064 (R 10/99)
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