ANCHOR
STRATEGIC
ASSETS
TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1998
(UNAUDITED)
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ANCHOR STRATEGIC ASSETS TRUST
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(Unaudited)
Assets:
Investments at quoted market value (cost $5,608,016;
see Schedule of Investments, Notes 1, 2, & 5)................. $4,860,218
Cash ......................................................... 56,663
Dividends and interest receivable.............................. 12,629
Dividends and interest receivable.............................. 381
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Total assets.............................................. 4,929,891
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Liabilities:
Payable for capital shares redeemed............................ 3,045
Accrued expenses and other liabilities (Note 3 )............... 11,813
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Total liabilities......................................... 14,858
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Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 1,267,177 shares outstanding) (Note 1)...... 6,728,476
Accumulated undistributed net investment income (Note 1)....... (338,024)
Accumulated realized loss from security transactions, net (Note 1) (727,621)
Net unrealized depreciation in value of investments (Note 2)... (747,798)
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Net assets (equivalent to $3.88 per share, based on
1,267,177 capital shares outstanding).................... $4,915,033
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STATEMENT OF OPERATIONS
JUNE 30, 1998
(Unaudited)
Income:
Dividends..................................................... $ 6,293
Interest...................................................... 34,788
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Total income.............................................. 41,081
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Expenses:
Management fees, net (Note 3)................................. 36,870
Pricing and bookkeeping fees (Note 4)......................... 9,247
Legal fees.................................................... 4,194
Audit and accounting fees..................................... 2,999
Custodian fees................................................ 1,781
Transfer fees (Note 4)........................................ 1,499
Trustees' fees and expenses................................... 499
Other expenses................................................ 1,678
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Total expenses............................................ 58,767
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Net investment loss............................................ (17,686)
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Realized and unrealized loss on investments:
Realized loss on investments-net............................. 45,631
Decrease in net unrealized appreciation in investments....... (97,175)
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Net loss on investments................................... (51,544)
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Net decrease in net assets resulting from operations........... $ (69,230)
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ANCHOR STRATEGIC ASSETS TRUST
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STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) December 31,1997
---------------- ---------------
From operations:
Net investment loss............................ $ (17,686) $ (22,940)
Realized loss on investments, net.............. 45,631 (486,770)
(Decrease) increase in net
unrealized appreciation in investments........... (97,175) (731,850)
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Net (decrease) increase in net assets
resulting from operations................. (69,230) (1,241,560)
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Distributions to shareholders:
From net investment income..................... -- --
From net realized gain on investments.......... -- --
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Total distributions to shareholders......... -- --
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From capital share transactions:
Number of Shares
1998 1997
Proceeds from sale of
shares.................... 186,258 218,740 768,725 950,843
Shares issued to share-
holders in distributions
reinvested................ -- -- -- --
Cost of shares redeemed...(122,403) (699,780) (481,780) (3,194,210)
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(Decrease) increase in net
assets resulting from
capital 63,855 (481,040) 286,946 (2,243,367)
share transactions........
========= ========== -------------- ------------
Net (decrease) increase in net assets............ 217,715 (3,484,927)
Net assets:
Beginning of period............................ 4,697,318 8,182,245
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End of period (including undistributed
net investment income of ($(338,024)) and
($320,338), respectively).................. $ 4,915,033 $ 4,697,318
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SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Six Months Year Ended December 31,
Ended
June 30, 1998
(Unaudited) 1997 1996 1995 1994
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Investment income...... $ 0.00 $ 0.40 $0.01 $0.03 $(3.40)
Expenses, net.......... 0.00 0.50 0.03 0.06 (7.86)
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Net investment income
(loss)................. 0.00 (0.10) (0.02) (0.03) 4.46
Net realized and
unrealized
gain (loss) on
investments............ (0.02) (0.86) 0.31 0.12 (5.41)
Distributions to
shareholders:
From net investment
income.............. -- -- -- -- --
From net realized
gain
on investments...... -- -- -- -- --
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Net increase (decrease)
in net asset value.... (0.02) (0.96) 0.29 0.09 (0.95)
Net asset value:
Beginning of period... 3.90 4.86 4.57 4.48 5.43
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End of period.......... $3.88 $3.90 $4.86 $4.57 $4.48
========================================================
Ratio of expenses to
average net assets.... 2.37% 2.35% 1.98% 1.99% 2.19%
Ratio of net investment
loss to average net
assets................. (0.71)% (0.40)% (1.49)% (1.10)% (1.24)%
Portfolio turnover..... 0.36 0.21 0.37 0.12 0.42
Average commission
rate paid.............. 0.0457 0.0386 0.0568 0.0433 0.0345
Number of shares out-
standing at end of
period................ 1,267,177 1,203,322 1,684,362 1,184,752 1,044,287
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SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(Unaudited)
Value
Quantity (Note 1)
COMMON STOCKS -- 28.54%
Gold/Silver Mining Stocks
40,000 Aquiline Resources Corporation...........................$ 2,800
16,000 Cambior Incorporated..................................... 94,560
30,000 Euro-Nevada Mining Corporation........................... 412,800
18,000 Franco-Nevada Mining Corporation......................... 360,900
10,000 Freeport Mcmoran Copper & Gold, Class A.................. 142,500
33,500 Guyanor Resources, Class B............................... 43,215
30,000 Kinross Gold Corporation................................. 99,390
65,000 Miramar Mining Corporation............................... 79,300
47,300 Northern Orion Exploration Limited....................... 16,082
25,000 TVX Gold Incorporated.................................... 76,575
50,000 Viceroy Resource Corporation............................. 74,500
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Total common stocks (cost $1,857,255).................... 1,402,622
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FOREIGN TIME DEPOSITS -- 10.17%
3,020,773 French Franc maturing 07/01/98
at 3.25% (cost $500,240)................................. 499,938
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PRECIOUS METALS -- 18.98%
Gold Bullion
3,139 Ounces gold bullion (cost $1,225,874) ................... 933,011
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U.S. TREASURY BILLS -- 41.19%
425,000 Treasury Bill, 5.00% yield, maturing 7/16/98 (at cost)... 419,505
400,000 Treasury Bill, 4.93% yield, maturing 8/06/98 (at cost)... 394,686
1,225,000 Treasury Bill, 4.97% yield, maturing 9/3/98 (at cost).... 1,210,456
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Total U.S. Treasury Bills (at cost)...................... 2,024,647
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Total investments (cost $5,608,016)...................... 4,860,218
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CASH & OTHER ASSETS, LESS LIABILITIES -- 1.12%..................... 54,815
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Total Net Assets.........................................$4,915,033
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ANCHOR STRATEGIC ASSETS TRUST
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
1. Significant accounting policies:
Anchor Strategic Assets Trust, a Massachusetts business trust (the "Trust"),
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end investment management company. The following is a
summary of significant accounting policies followed by the Trust which are in
conformity with those generally accepted in the investment company industry.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. A. Investment securities--
Security transactions are recorded on the date
the investments are purchased or sold. Each day, at noon, securities traded
on national security exchanges are valued at the last sale price on the
primary exchange on which they are listed, or if there has been no sale by
noon, at the current bid price. Other securities for which market
quotations are readily available are valued at the last known sales price,
or, if unavailable, the known current bid price which most nearly
represents current market value. Options are valued in the same manner.
Foreign currencies and foreign denominated securities are translated at
current market exchange rates as of noon.The gold bullion is valued each
day at noon based on the New York spot gold price. Temporary cash
investments are stated at cost, which approximates market value. Dividend
income is recorded on the ex-dividend date and interest income is recorded
on the accrual basis. Gains and losses from sales of investments are
calculated using the "identified cost" method for both financial reporting
and federal income tax purposes.
B.Income Taxes-- The Trust has elected to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute each year all of its taxable income to its shareholders. No
provision for federal income taxes is necessary since the Trust intends to
qualify for and elect the special tax treatment afforded a "regulated
investment company" under subchapter M of the Internal Revenue Code. Income
and capital gains distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts
based on their federal tax basis treatment; temporary differences do not
require such reclassification. During the current fiscal year, permanent
differences, primarily due to foreign currency losses offset by net
investment income, resulted in a net decrease in undistributed net
investment income and an increase in accumulated realized loss from
security transactions. This reclassification had no affect on net assets.
C. Capital Stock-- The Trust records the sales and redemptions of its
capital stock on trade date.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
D.Foreign Currency-- Amounts denominated in or expected to settle in foreign
currencies are translated into United States dollars at rates reported by a
major Boston bank on the following basis:
A. Market value of investment securities, other assets and liabilities
at the 12:00 noon Eastern Time rate of exchange at the balance sheet date.
B. Purchases and sales of investment securities, income and expenses at
the rate of exchange prevailing on the respective dates of such
transactions (or at an average rate if significant rate fluctuations have
not occurred). The Trust does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments. Reported net realized foreign exchange gains
or losses arise from sales and maturities of short term securities, sales
of foreign currencies, currency gains or losses realized between the trade
and settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Trust's books, and the United States dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in the
exchange rate.
2. Tax basis of investments:
At June 30, 1998, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $247,919. Aggregate gross unrealized
depreciation in investments in which there was an excess of tax cost over
market value was $995,717. Net unrealized depreciation in investments at June
30, 1998 was $747,798.
3. Investment advisory service agreements:
The investment advisory contract with Anchor Investment Management
Corporation (the "investment adviser") provides that the Trust will pay the
adviser a fee for investment advice based on a rate of 1 1/2% per annum of
average daily net assets. At June 30, 1998, investment advisory fees of
$5,878 were due and were included in "Accrued expenses and other liabilities"
in the accompanying Statement of Assets and Liabilities. David Y. Williams, a
Trustee of the Trust, is President and a Director of the Investment Adviser.
4. Certain transactions:
Anchor Investment Management Corporation provides transfer agent services for
the Trust. Fees earned by Anchor Investment Management Corporation for
transfer agent services for the six months ended June 30, 1998 were $1,499.
Certain officers and trustees of the Trust are directors and/or officers of
the investment adviser and distributor. Meeschaert & Co., Inc., the Trust's
distributor, received $5,640 in brokerage commissions during the six months
ended June 30, 1998. Fees earned by Anchor Investment Management Corporation
for expenses related to daily pricing of the Trust shares and for bookkeeping
services for the six months ended June 30, 1998 were $9,247.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the six months ended June 30, 1998 were:
Cost of securities acquired:
U.S. Government and investments backed by such
securities......................................... $ 2,148,031
Other investments................................ 28,928,873
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$ 31,076,904
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Proceeds from sales and maturities:
U.S. Government and investments backed by such
securities......................................... $ 123,384
Other investments................................ 30,704,169
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$ 30,827,553
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OFFICERS AND TRUSTEES
DAVID W.C. PUTNAM Chairman
Chairman, Board of Directors, F.L. Putnam and Trustee
Investment Management Corporation
President and Director, F.L. Putnam Securities
Company Incorporated
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
SPENCER H. LE MENAGER Secretary
President, Equity Inc. and Trustee
ERNIE BUTLER Trustee
President, I.E. Butler Securities
MAURICE A. DONAHUE Trustee
Director and Professor, Institute for Governmental
Services and Walsh-Saltonstall Professor of
Practical Politics, University of Massachusetts
DAVID Y. WILLIAMS President
President and Director, Meeschaert & Co., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
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INVESTMENT ADVISER, ADMINISTRATOR AND TRANSFER AGENT
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
CUSTODIAN
Investors Bank & Trust Company
89 South Street, Boston, Massachusetts 02111
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02181
LEGAL COUNSEL
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
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