ANCHOR STRATEGIC
ASSETS
TRUST
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SEMI-ANNUAL REPORT
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JUNE 30, 1999
(UNAUDITED)
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ANCHOR STRATEGIC ASSETS TRUST
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Comparison of the Change in Value of a $10,000 Investment in the Anchor
Strategic Assets Trust and the Barron's Gold Mining Index
[GRAPHIC OMITTED]
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Anchor Strategic Assets Trust
Average Annual Total Return
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Six Months* 1 Year 5 Year
(13.11%) (11.09%) (6.24%)
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*Not Annualized for the period from December 31, 1998 to June 30, 1999.
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ANCHOR STRATEGIC ASSETS TRUST
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(Unaudited)
Assets:
Investments at quoted market value (cost $2,537,265;
see Schedule of Investments, Notes 1, 2, & 5)................. $ 2,091,085
Cash ......................................................... 578,307
Dividends and interest receivable.............................. 752
Total assets.............................................. 2,670,144
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Liabilities:
Accrued expenses and other liabilities (Note 3)................ 10,332
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Total liabilities......................................... 10,332
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Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 786,357 shares outstanding) (Note 1)........ 4,892,697
Accumulated undistributed net investment income (Note 1)....... (329,187)
Accumulated realized loss from security transactions, net (Note 1) (1,457,518)
Net unrealized depreciation in value of investments (Note 2)... (446,180)
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Net assets (equivalent to $3.38 per share, based on
786,357 capital shares outstanding)...................... $ 2,659,812
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The accompanying notes are an integral part of these financial statements.
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ANCHOR STRATEGIC ASSETS TRUST
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STATEMENT OF OPERATIONS
JUNE 30, 1999
(Unaudited)
Income:
Dividends..................................................... $ 5,524
Interest...................................................... 27,189
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Total income.............................................. 32,713
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Expenses:
Management fees, net (Note 3)................................. 21,617
Pricing and bookkeeping fees (Note 4)......................... 7,458
Audit and accounting fees..................................... 3,728
Legal fees.................................................... 3,480
Transfer fees (Note 4)........................................ 2,487
Custodian fees................................................ 1,491
Trustees' fees and expenses................................... 125
Other expenses................................................ 1,491
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Total expenses............................................ 41,877
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Net investment loss............................................ (9,164)
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Realized and unrealized loss on investments:
Realized loss on investments-net............................. (398,754)
Increase in net unrealized appreciation in investments....... 332
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Net loss on investments................................... (398,422)
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Net decrease in net assets resulting from operations........... $ (407,586)
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The accompanying notes are an integral part of these financial statements.
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ANCHOR STRATEGIC ASSETS TRUST
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STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
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From operations:
Net investment loss............................ $ (9,164) $ (8,892)
Realized loss on investments, net.............. (398,754) (210,713)
Increase in net
unrealized
Appreciation in investments................... 332 204,111
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Net decrease in net assets
resulting from operations................. (407,586) (15,494)
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Distributions to shareholders:
From net investment income ($0.08 per share in
1998).......................................... -- (65,594)
From net realized gain on investments.......... -- --
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Total distributions to shareholders......... -- (65,594)
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From capital share transactions:
Number of Shares
1999 1998
Proceeds from sale of
shares.................... 16,890 381,788 59,638 1,541,119
Shares issued to share-
holders in distributions
reinvested................ -- 16,930 -- 65,517
Cost of shares redeemed... (69,812) (762,761) (255,622) (2,959,484)
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Decrease in net
assets resulting from
capital share (52,922) (364,043) (195,984) (1,352,848)
transactions.............. ========= ========== ----------- ----------
Net decrease in net assets....................... (603,570) (1,433,936)
Net assets:
Beginning of period............................ 3,263,382 4,697,318
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End of period (including undistributed
net investment income of $(329,187) and
$(320,023), respectively).................. $ 2,659,812 $ 3,263,382
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The accompanying notes are an integral part of these financial statements.
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ANCHOR STRATEGIC ASSETS TRUST
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SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Six Months
Ended
June 30, Year Ended December 31,
1999
(Unaudited) 1998 1997 1996 1995
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Investment income...... $ 0.13 $ 0.45 $ 0.40 $0.01 $0.03
Expenses, net.......... 0.17 0.48 0.50 0.03 0.06
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Net investment income
(loss)................. (0.04) (0.03) (0.10) (0.02) (0.03)
Net realized and
unrealized
gain (loss) on
investments............ (0.47) 0.10 (0.86) 0.31 0.12
Distributions to
shareholders:
From net investment
income.............. -- (0.08) -- -- --
From net realized
gain on investments.. -- -- -- -- --
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Net increase (decrease)
in net asset value.... (0.51) (0.01) (0.96) 0.29 0.09
Net asset value:
Beginning of period... 3.89 3.90 4.86 4.57 4.48
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End of period......... $3.38 $3.89 $3.90 $4.86 $4.57
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Total Return*.......... (13.11%) 1.31% (19.75%) 6.35% 2.01%
Ratio of expenses to
average net assets.... 2.89% 2.54% 2.35% 1.98% 1.99%
Ratio of net investment
loss to average net
assets................ (0.63%) (0.19%) (0.40%) (1.49%) (1.10%)
Portfolio turnover..... 0.59 0.60 0.21 0.37 0.12
Average commission
rate paid............. 0.0475 0.0446 0.0386 0.0568 0.0433
Number of shares out-
standing at end of
period................. 786,357 839,279 1,203,322 1,684,362 1,184,752
*Not Annualized for the six months ended June 30, 1999
The accompanying notes are an integral part of these financial statements.
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ANCHOR STRATEGIC ASSETS TRUST
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SCHEDULE OF INVESTMENTS
JUNE 30, 1999
(Unaudited)
Value
Quantity (Note 1)
COMMON STOCKS -- 26.40%
Gold/Silver Mining Stocks
40,000 Aquiline Resources Corporation...........................$ 3,200
20,000 Euro-Nevada Mining Corporation........................... 237,600
18,000 Franco-Nevada Mining Corporation......................... 280,440
33,500 Guyanor Resources, Class B*.............................. 10,385
65,000 Miramar Mining Corporation............................... 39,650
40,000 Universal Gold Limited*.................................. 130,800
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Total common stocks (cost $1,139,498).................... 702,075
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FOREIGN TIME DEPOSITS - 52.22%
1,347,246 Euro Time Deposits, maturing 07/08/99
at 2.500% (cost $1,397,767).............................. 1,389,010
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Total investments (cost $2,537,265)...................... 2,091,085
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CASH & OTHER ASSETS, LESS LIABILITIES -- 21.38%.................... 568,727
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Total Net Assets.........................................$2,659,812
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* Non income producing security
The accompanying notes are an integral part of these financial statements.
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ANCHOR STRATEGIC ASSETS TRUST
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(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
non-diversified, open-end investment management company. The following is a
summary of significant accounting policies followed by the Trust which are in
conformity with those generally accepted in the investment company industry.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Investment securities--
Security transactions are recorded on the date
the investments are purchased or sold. Each day, at 12:00 noon EST,
securities traded on national security exchanges are valued at the last
sale price on the primary exchange on which they are listed, or if there
has been no sale by noon, at the current bid price. Other securities for
which market quotations are readily available are valued at the last known
sales price, or, if unavailable, the known current bid price which most
nearly represents current market value. Options are valued in the same
manner. Foreign currencies and foreign denominated securities are
translated at current market exchange rates as of noon. Gold bullion is
valued each day at noon based on the New York spot gold price. 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 gains increasing net
investment income, resulted in a net increase 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, 1999
(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, 1999, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $84,420. Aggregate gross unrealized
depreciation in investments in which there was an excess of tax cost over
market value was $530,600. Net unrealized depreciation in investments at June
30, 1999 was $446,180.
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, 1999, investment advisory fees of
$3,628 were due and were included in "Accrued expenses and other liabilities"
in the accompanying Statement of Assets and Liabilities. David Y. Williams, a
Trustee of the Trust, is President and a Director of the Investment Adviser.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(Unaudited)
(Continued)
4. Certain transactions:
The Trust has entered into an agreement with Cardinal Investment Services,
Inc. for transfer agent and dividend disbursing agent services. Annual
fees for these services are $6,000.
Certain officers and trustees of the Trust are directors and/or officers of
the investment adviser and distributor. Meeschaert & Co., Inc., the Trust's
distributor, received $3,908 in brokerage commissions during the six months
ended June 30, 1999. 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, 1999 were $7,458.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the six months ended June 30, 1999 were:
Cost of securities acquired:
U.S. Government and investments backed by such
securities......................................... $ --
Other investments................................ 32,584,886
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$ 32,584,886
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Proceeds from sales and maturities:
U.S. Government and investments backed by such
securities......................................... $ --
Other investments................................ 33,294,249
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$ 33,294,249
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OFFICERS AND TRUSTEES
ERNIE BUTLER Trustee
President, I.E. Butler Securities
SPENCER H. LE MENAGER Trustee
President, Equity Inc.
DAVID W.C. PUTNAM Chairman
President, F.L. Putnam and Trustee
Investment Management Company
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
DAVID Y. WILLIAMS President, Secretary
President and Director, Meeschaert & Co., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
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INVESTMENT ADVISER AND ADMINISTRATOR
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
TRANSFER AGENT
Cardinal Investment Services Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, Boston, Massachusetts 02116
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02482
LEGAL COUNSEL
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
This report is not authorized for distribution to prospective investors in the
Trust unless preceded or accompanied by an effective prospectus which includes
information concerning the Trust's record or other pertinent information.
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