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002 D020000 5034
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011 A000001 KEYSTONE INVESTMENT DISTRIBUTORS COMPANY
011 B000001 8-395
011 C010001 BOSTON
011 C020001 MA
011 C030001 02116
011 C040001 5034
012 A000001 KEYSTONE INVESTOR RESOURCE CENTER, INC.
012 B000001 84-1571
012 C010001 CAMBRIDGE
012 C020001 MA
012 C030001 02142
013 A000001 KPMG PEAT MARWICK LLP
013 B010001 BOSTON
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<PAGE> PAGE 2
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020 A000001 NOMURA SECURITIES
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SIGNATURE J. KEVIN KENELY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 101
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS A
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 18,431,692
<INVESTMENTS-AT-VALUE> 21,743,875
<RECEIVABLES> 280,084
<ASSETS-OTHER> 37,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,061,505
<PAYABLE-FOR-SECURITIES> 191,367
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112,683
<TOTAL-LIABILITIES> 304,050
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,997,162
<SHARES-COMMON-STOCK> 425,914
<SHARES-COMMON-PRIOR> 542,279
<ACCUMULATED-NII-CURRENT> 53,898
<OVERDISTRIBUTION-NII> (15,103)
<ACCUMULATED-NET-GAINS> (204,231)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 741,849
<NET-ASSETS> 4,573,575
<DIVIDEND-INCOME> 79,154
<INTEREST-INCOME> 14,336
<OTHER-INCOME> 0
<EXPENSES-NET> (113,149)
<NET-INVESTMENT-INCOME> (19,659)
<REALIZED-GAINS-CURRENT> 20,384
<APPREC-INCREASE-CURRENT> 866,789
<NET-CHANGE-FROM-OPS> 867,515
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 114,081
<NUMBER-OF-SHARES-REDEEMED> (230,445)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (316,285)
<ACCUMULATED-NII-PRIOR> 4,608
<ACCUMULATED-GAINS-PRIOR> (257,009)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (47,648)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (113,916)
<AVERAGE-NET-ASSETS> 4,783,095
<PER-SHARE-NAV-BEGIN> 9.02
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 1.76
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.74
<EXPENSE-RATIO> 2.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 102
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS B
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 18,431,692
<INVESTMENTS-AT-VALUE> 21,743,875
<RECEIVABLES> 280,084
<ASSETS-OTHER> 37,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,061,505
<PAYABLE-FOR-SECURITIES> 191,367
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112,683
<TOTAL-LIABILITIES> 304,050
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,483,252
<SHARES-COMMON-STOCK> 1,427,520
<SHARES-COMMON-PRIOR> 1,634,469
<ACCUMULATED-NII-CURRENT> 172,297
<OVERDISTRIBUTION-NII> (203,555)
<ACCUMULATED-NET-GAINS> (581,570)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,290,695
<NET-ASSETS> 15,161,116
<DIVIDEND-INCOME> 254,293
<INTEREST-INCOME> 44,248
<OTHER-INCOME> 0
<EXPENSES-NET> (476,479)
<NET-INVESTMENT-INCOME> (177,939)
<REALIZED-GAINS-CURRENT> 93,361
<APPREC-INCREASE-CURRENT> 2,641,520
<NET-CHANGE-FROM-OPS> 2,556,942
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 263,001
<NUMBER-OF-SHARES-REDEEMED> (469,950)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 473,534
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (779,896)
<OVERDISTRIB-NII-PRIOR> (25,404)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (152,380)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (478,932)
<AVERAGE-NET-ASSETS> 15,290,315
<PER-SHARE-NAV-BEGIN> 8.99
<PER-SHARE-NII> (0.13)
<PER-SHARE-GAIN-APPREC> 1.76
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 3.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCOUNTING
RECORDS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ACCOUNTING
RECORDS.
</LEGEND>
<SERIES>
<NUMBER> 103
<NAME> KEYSTONE STRATEGIC DEVELOPMENT FUND CLASS C
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 18,431,692
<INVESTMENTS-AT-VALUE> 21,743,875
<RECEIVABLES> 280,084
<ASSETS-OTHER> 37,546
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,061,505
<PAYABLE-FOR-SECURITIES> 191,367
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 112,683
<TOTAL-LIABILITIES> 304,050
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,866,810
<SHARES-COMMON-STOCK> 190,428
<SHARES-COMMON-PRIOR> 155,020
<ACCUMULATED-NII-CURRENT> 19,544
<OVERDISTRIBUTION-NII> (23,361)
<ACCUMULATED-NET-GAINS> (46,860)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 206,630
<NET-ASSETS> 2,022,763
<DIVIDEND-INCOME> 29,230
<INTEREST-INCOME> 4,594
<OTHER-INCOME> 0
<EXPENSES-NET> (53,997)
<NET-INVESTMENT-INCOME> (20,172)
<REALIZED-GAINS-CURRENT> 18,167
<APPREC-INCREASE-CURRENT> 267,024
<NET-CHANGE-FROM-OPS> 265,019
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65,799
<NUMBER-OF-SHARES-REDEEMED> (30,391)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 629,733
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (75,700)
<OVERDISTRIB-NII-PRIOR> (3,455)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (17,304)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (54,275)
<AVERAGE-NET-ASSETS> 1,734,407
<PER-SHARE-NAV-BEGIN> 8.99
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> 1.73
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 3.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Trustees and Shareholders
Keystone Strategic Development Fund
In Planning and performing our audit of the financial statements of Keystone
Strategic Development Fund for the year ended March 31, 1996, we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing an
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of Keystone Strategic Development Fund is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgements made by management are required to
assess the expected benefits and related costs of internal control structure
policies and procedures. Two of the objectives of an internal control structure
are to provide management with reasonable, but not absolute, assurance that
assets are safeguarded against loss from unauthorized use or disposition and
that transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors and
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure of future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
March 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
Boston, Massachusetts
April 26, 1996
