Registration Nos. 33-82998; 811-8706
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post Effective Amendment No. 3 |X|
and
REGISTRATION STATEMENT UNDER THE |X|
INVESTMENT COMPANY ACT OF 1940
Amendment No. 4 |X|
(Check appropriate box or boxes)
ANCHOR RESOURCE AND COMMODITY TRUST
(Exact Name of Registrant as Specified in Charter)
2717 Furlong Road
Doylestown, Pennsylvania 18901
Registrant's Telephone Number, including Area Code: (215) 794-2980
It is proposed that this filing will become effective
(Check appropriate box)
|X| immediately upon filing pursuant to Paragraph (b) of Rule 485 |_| on
___________________ pursuant to Paragraph (b) |_| 60 days after filing pursuant
to Paragraph (a)(1) |_| on ________ oursuant to Paragraph (a)(1) |_| 75 days
after filing pursuant to Paragraph (a)(2) |_| on _______ pursuant to Paragraph
(a)(2) of Rule 485
Peter K. Blume, Esquire
Yukevich, Blume, Marchetti & Zangrilli, P.C.
One Gateway Center, Sixth Floor
Pittsburgh, PA 15222
The Registrant has previously filed a declaration of indefinite
registration of its shares pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The Registrant's Notice under Rule
24f-2 for the fiscal year ended December 31, 1996 will be filed on or
before June 30, 1997
PAGE 1 OF 61. EXHIBIT INDEX ON PAGE 44.
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ANCHOR STRATEGIC ASSETS TRUST
Cross Reference sheet Pursuant to Rule 495(a)
Part A
Form Item Cross Reference
Item 1. Cover Page. Cover Page
Item 2. Synopsis. Shareholder Transaction
Expenses; Annual Trust
Operating Expenses
Item 3. Condensed Financial Statement of Selected Per Share
Information Data.
Item 3A Financial Data Schedule
Item 4. General Description of Cover
Registrant Page; About the Trust;
Investment Objective and
Policies; Specialized
Investment Techniques and
Related Risks
Item 5. Management of the Trust.
(a) ............................. Management -- Trustees
(b) ............................. Manager -- Investment
Adviser
(c) ............................. Not Applicable
(d) ............................. Miscellaneous Information
-- Custodian, Transfer
Agent and Dividend Paying
Agent
(e) ............................. Management -- Expenses
(f) ............................. Management -- Brokerage
Item 5A Management's Discussion of Fund Performance
Item 6. Capital Stock and Other Securities.
(a) ............................. About the Trust;
Miscellaneous Information
(b) ............................. Not Applicable
(c) ............................. Not Applicable
(d) ............................. Not Applicable
(e) ............................. How to Purchase Shares;
Other Information
............................. -- Shareholder Inquiries
(f) ............................. About the Trust; Services
for Shareholders --
Dividends and
Distributions; Taxes
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Item 7. Purchase of Securities Being Offered.
(a) ............................. How to Purchase Shares
(b) ............................. Determination of Net
Asset Value
(c) ............................. How to Purchase Shares
(d) ............................. How to Purchase Shares
(e) ............................. Distribution of Shares
Item 8. Redemption or Repurchase. Redemption and
Repurchase of Shares
Item 9. Pending Legal Proceedings. Not Applicable
Statement of Additional
Part B......... Information Cross Reference
Form Item
Item 10. Cover Page........ Cover Page
Item 11. Table of Contents. Table of Contents
Item 12. General Information and Not Applicable
History.
Item 13. Investment Objectives
and Policies Investment Objectives and
Policies; Specialized
Investment Techniques and
Related Risks
Item 14. Management of the Fund. Management --
Officers and Trustees
Item 15. Control Persons and Principal
Holders of Securities.
(a) ............................. Management
(b) ............................. Management
(c) ............................. Management -- Officers
and Trustees
Item 16. Investment Advisory and Other Services.
(a), (b)......................... Management -- Investment
Advisory Contract
(c),(d),(e)...................... Not Applicable
(f) ............................. Distribution of Shares
(g) ............................. Not Applicable
(h) ............................. Miscellaneous Information
(i) ............................. Not Applicable
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Item 17. Brokerage Allocation. Portfolio Security
Transactions
Item 18. Capital Stock and Other
Securities About the Trust
Item 19. Purchase Redemption and Pricing
of Securities Being Offered.
(a),(b)........................ How to Purchase Shares;
Determination of Net
Asset Value
(c) ............................. Not Applicable
Item 20. Tax Status........ Taxes
Item 21. Underwriters...... Distribution of Shares;
How to Purchase Shares;
Management
Item 22. Calculation of Performance Not Applicable
Data
Item 23. Financial Statements. Financial Statements
Part C......... Other Information
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C of the Registration Statement.
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ANCHOR RESOURCE AND COMMODITY TRUST
PROSPECTUS
Dated May 1, 1997
Anchor Investment Management Corporation
Investment Adviser
2717 Furlong Road
Doylestown, Pennsylvania 18901
Anchor Resource & Commodity Trust (the "Trust") is a diversified open-end
management investment company. While originally organized as an unincorporated
business trust in October, 1989, the Trust did not commence operations until
January 12, 1995. Its investments and affairs are managed, subject to the
supervision of its Trustees, by Anchor Investment Management Corporation, a
Massachusetts corporation (the "Investment Adviser"). The address of the Trust
is 2717 Furlong Road, Doylestown, Pennsylvania 18901, and its telephone number
is (215) 794-2980.
The primary investment objective of the Trust is long-term growth of
capital and the protection of the purchasing power of its shareholders' capital.
The Trust seeks to achieve its investment objective by investing in equity
securities of domestic and foreign companies that have substantial natural
resource assets or that engage in natural resource or energy-related activities.
As a secondary investment objective, the Trust will seek to generate current
income consistent with the preservation of shareholders' purchasing power. See
"Investment Objectives and Policies" herein.
Anchor Resource and Commodity Trust is intended for investors who are
willing to accept the risks of investments in natural resource companies. The
Trust's investments in equity securities of natural resource companies involve
certain risks not assumed by certain other investment companies that do not
emphasize investments in particular industries or markets. See "Risk Factors and
Other Investor Considerations" herein.
The Trust has adopted a Distribution Plan under Rule 12b-1 of the
Investment Company Act of 1940, providing for compensation to the Trust's
Distributor in respect of sales of Trust shares in the maximum amount of 5% of
the sale price (currently limited to .75 of 1% of the average daily net assets
for any fiscal year) and in addition may impose a related contingent deferred
sales charge, commencing at 4% in the first calendar year and declining
thereafter, in connection with redemptions or repurchases made within four
calendar years of purchase of the shares redeemed or repurchased. The
Distribution Plan has not been made effective pending review and approval of the
Plan by the Trust's shareholders. See "Distribution of Shares" herein and in the
Statement of Additional Information.
No assurance can be given that the Trust's investment
objectives will be achieved.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus sets forth certain information about the Trust
which investors should know before investing, and it should be retained
for future reference. Additional facts about the Trust are contained in a
Statement of Additional Information dated May 1, 1997 which has been
filed with the Securities and Exchange Commission. The Statement and the
Trust's Annual Report for 1996 are available without charge by calling or
by writing the Trust at the above telephone number or address. The
Statement of Additional Information is incorporated by reference in this
Prospectus.
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TABLE OF TRUST FEES AND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchase .. None
Maximum Deferred Sales Load (as a percentage
of original purchase price) (Note 1)
Year of Purchase................. 4.00%
Second Year...................... 3.00%
Third Year....................... 2.00%
Fourth Year...................... 1.00%
Maximum Sales Load Imposed on Reinvested
Dividends............................. None
Redemption Fees.......................... None
Exchange Fees............................ None
ANNUAL TRUST OPERATING EXPENSES:
(as a percentage of average net assets) (Notes 2 & 3)
Management Fees.......................... .75%
12b-1 Fees............................... None
Other Expenses........................... 0.35%
Total Trust Operating Expenses........... 1.10%
EXAMPLE:
1 Year 3 Years 5 Years 10 Years
You would pay the following expenses $51 $55 $61 $134
on a $1,000 investment assuming (1)
5% annual return and (2) redemption
at the end of each time period:
You would pay the following expenses $11 $35 $61 $134
on the same investment, assuming no
redemption:
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS
THAN THOSE SHOWN.
The purpose of this table is to assist the investor in understanding the various
costs and expenses that an investor in the Trust will bear, directly or
indirectly. This information should be read in conjunction with the Trust's
Annual Report, which contains a more complete description of the various costs
and expenses and is incorporated by reference in this Prospectus. Note 1. A
contingent deferred sales charge may be imposed upon certain redemptions of
shares purchased after inception of the Trust's Distribution Plan. See
"Contingent Deferred Sales Charge" herein. The Trustees do not currently impose
the charge. Note 2. "Other Expenses" are estimated based on the current
operating expenses of other similar funds under management by the Investment
Adviser. Also it should be noted that the amount of the Trust's operating
expenses as a percentage of the Trust's average net assets is typically higher
during the first year of the Trust's operations as indicated above. Note 3. The
Trustees have set an aggregate limit on the amount of 12b-1 payments equal to
.75 of 1% of the Trust's average daily assets for any fiscal year. The Trustees
do not currently impose the charge, since the Plan is not in effect.
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TABLE OF CONTENTS
TABLE OF TRUST FEES AND EXPENSES..................................2
ANNUAL TRUST OPERATING EXPENSES...................................2
CONDENSED FINANCIAL INFORMATION & SELECTED PER SHARE DATA
AND RATIOS........................................................4
Financial Highlights...........................................4
ABOUT THE TRUST...................................................5
INVESTMENT OBJECTIVES AND POLICIES................................5
Investment Strategy............................................6
Specialized Investment Techniques and Related Risks............8
Lending of Portfolio Securities................................8
Repurchase Agreements..........................................8
Portfolio Turnover.............................................9
Investment Restrictions........................................9
RISK FACTORS AND OTHER INVESTOR CONSIDERATIONS....................9
MANAGEMENT.......................................................11
Trustees......................................................11
Investment Adviser............................................11
Expenses......................................................11
Brokerage.....................................................11
Management Discussion of Fund Performance.....................12
HOW TO PURCHASE SHARES...........................................13
DISTRIBUTION OF SHARES...........................................13
Contingent Deferred Sales Charge..............................13
HOW TO EXCHANGE SECURITIES FOR TRUST SHARES......................14
REDEMPTION AND REPURCHASE OF SHARES..............................15
DETERMINATION OF NET ASSET VALUE.................................16
SERVICES FOR SHAREHOLDERS........................................16
Open Accounts.................................................16
Invest-By-Mail................................................16
DIVIDENDS AND DISTRIBUTIONS......................................17
TAXES............................................................17
MISCELLANEOUS INFORMATION........................................18
Custodian, Transfer Agent and Dividend-Paying Agent...........18
Shareholder Inquiries.........................................18
APPLICATION FORM.................................................19
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CONDENSED FINANCIAL INFORMATION AND SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period ended December 31,)
The following information for the three years ended December 31, 1996 has been
examined by Livingston & Haynes, P.C., independent accountants, and should be
read in conjunction with their report and the financial statements and notes
appearing in the Trust's Annual Report which are incorporated by reference in
this Prospectus.
Financial Highlights
Year Ended December 31,
1996 1995 1994
---- ---- ----
Investment income...................$ 0.15 $ 0.89 $ 0.22
Expenses, net....................... 0.09 0.32 2.20
--------------------------------
Net investment loss................. 0.06 0.57 (1.98)
Net realized and unrealized gain 1.08 0.13 --
(loss) on investments...............
Distributions to shareholders:
From net investment income ......... -- (0.58) --
From net realized gain on -- -- --
investments.........................
Net decrease in net asset value..... 1.14 0.12 (1.98)
Net asset value:
Beginning of period................. 9.31 9.19 11.17
================================
End of period....................... $10.45 $9.31 $9.19
================================
Total Return........................ 12.24% 7.63%
(17.74%)
Ratio of expenses to average net 1.10% 1.11% 20.12%
assets..............................
Ratio of net investment income to 0.85% 2.01% (18.13)%
average net assets..................
Portfolio turnover.................. 0.20 0.33 --
Average Commission Rate Paid........ 0.0752 0.0374 --
Number of shares outstanding at end 1,106,994 782,903 12,000
of period...........................
Per share data and ratios assuming no waiver of advisory fees:
Expenses............................ $ 2.28
Net investment loss................. $ (2.06)
Ratio of expenses to average net 20.87%
assets..............................
Ratio of net investment loss to (18.88)%
average net assets..................
* Includes balancing effect of calculating per share amounts.
Note 1. All per share numbers give retroactive effect to stock dividends.
Note 2. Investment income, operating expenses and net income (loss) per share
are computed based on the weighted average shares outstanding throughout fiscal
periods.
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ABOUT THE TRUST
......The Anchor Resource and Commodity Trust is a diversified open-end
management investment company established as an unincorporated business trust
under the laws of Massachusetts by a Declaration of Trust dated October 2, 1989.
The Trustees first amended the Declaration of Trust in August, 1990 to change
the name of the Trust from Meeschaert Equity Plus Trust to Anchor Equity Plus
Trust, and subsequently amended the Declaration of Trust in August 1994 to
change the Trust's name to Anchor Resource and Commodity Trust. The Trust first
commenced operations on January 12, 1995.
.....The capitalization of the Trust consists of an unlimited number of shares
of beneficial interest, without par value, designated "Common Shares," which
participate equally in dividends and distributions. Issued shares are fully paid
and non-assessable and transferable on the books of the Trust. The shares have
no preemptive rights. The shares each have one vote and proportionate
liquidation rights. ......The Trust normally will not hold annual meetings of
shareholders to elect Trustees. If less than a majority of the Trustees holding
office have been elected by shareholders, a meeting of shareholders will be
called to elect Trustees. The Trust will, if requested by shareholders of at
least ten percent of the Trust's outstanding shares, call a meeting for the
purpose of voting on the removal of a Trustee or Trustees. Under the Declaration
of Trust and the Investment Company Act of 1940, the record holders of not less
than two-thirds of the outstanding shares of the Trust may remove a Trustee by
votes cast in person or by proxy at a meeting called for the purpose or by a
written declaration filed with the Trust's custodian bank. In connection with
shareholder rights to remove Trustees, the Trust will provide shareholders with
certain assistance in communicating with other shareholders. Except as described
above, the Trustees will continue to hold office and may appoint successor
Trustees. ......Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or a Trustee. The Declaration of Trust provides for indemnification from the
assets of the Trust for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the risk of a
shareholder incurring a financial loss on account of his or her liability as a
shareholder of the Trust is limited to circumstances in which the Trust itself
would be unable to meet its obligations. The possibility that these
circumstances would occur is remote. Upon payment of any liability incurred by
the Trust, the shareholder paying the liability will be entitled to
reimbursement from the general assets of the Trust. The Trustees intend to
conduct the operations of the Trust to avoid, to the extent possible, ultimate
liability of shareholders for liabilities of the Trust. ......^....^ ^
INVESTMENT OBJECTIVES AND POLICIES
......The primary investment objective of the Trust is to achieve long-term
growth of capital and to protect the purchasing power of its shareholders'
capital by investing in equity securities of domestic and foreign companies
having substantial natural resource assets or that engage in natural resource or
energy-related activities. Protection of the purchasing power of its
shareholders' capital means that the Trust seeks to protect generally
shareholders' invested capital against erosion of the value of the U.S. dollar
through inflation. This objective is fundamental and may not be changed without
shareholder approval. As a secondary investment objective, the Trust will seek
to generate current income consistent with the preservation of shareholders'
purchasing power. The Trust will endeavor to achieve its objectives by
anticipating inflationary and deflationary economic cycles and investing the
Trust's assets as set forth under the "Investment Strategy" below. There can, of
course, be no guarantee that the Trust's investment objectives will be achieved,
due to the uncertainty inherent in all investments. ......Since the values of
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the portfolio securities of the Trust, and therefore the net asset value per
share, will fluctuate with general economic and market conditions, the net asset
value per share at the time an investor's shares are redeemed may be more or
less than the value at the time of purchase. ......Because of its emphasis on
one industrial sector, the Trust should be considered as one aspect of a
diversified portfolio and should not be considered as a complete investment
program.
Investment Strategy
I. Under normal circumstances, the Trust will pursue its primary
investment objectives by investing at least 65% of its total assets in equity
securities of domestic and foreign companies with substantial natural resource
assets, natural resource or energy related activities, or that provide equipment
or services primarily devoted to the natural resource or energy-related
activities of such companies.
Natural resource assets consist of precious metals (e.g., gold, silver,
and platinum), ferrous and nonferrous metals (e.g., iron, aluminum, and copper),
strategic metals (e.g., uranium, and titanium), hydrocarbons (e.g., coal, oil,
and natural gas), timberland, developed and undeveloped real property and
agricultural commodities.
The Investment Adviser will identify companies that, in its opinion, have
substantial holdings of resource assets so that when compared to the company's
capitalization, revenues, or operating profits, such assets are of enough
magnitude that changes in the assets' economic value will affect the market of
the company. The Trust will consider a company to be a Natural Resource Company
if, at the time the Trust acquires its securities, at least 50% of the company's
assets, capitalization, gross revenues or operating profits in the most recent
or current fiscal year are: (1) involved in or result from (directly or
indirectly through subsidiaries) exploring, mining, refining, processing,
transporting, fabricating, dealing in or owning resource assets; or (2) are
involved in or result from energy-related activities directly or indirectly
through subsidiaries.
Energy-related activities consist of those activities which relate to the
development and use of energy sources, such as:
1. the generation of power from hydroelectric, geothermal,
tidal, or other naturally occurring sources, or from natural
resource manufacturing by-products or refuse;
2. the development of synthetic fuels;
3. transportation of energy producing sources such as
coal, oil, electricity, or nuclear fuels;
4. the development and application of techniques and
devices for conservation or efficient use of energy; and,
5. the control of pollution related to energy
industries and waste disposal.
Generally, a company will be considered to provide equipment or services
to such Natural Resource Companies if at least 50% of the company's assets are
invested in such Natural Resource Companies, or at least 50% of its income is
derived from providing equipment or services to such Natural Resource Companies.
Examples of this kind of company are:
1. manufacturers of mining or earth moving equipment
2. providers of seismology testing services; and,
3. providers of supplies and maintenance services to
offshore drilling sites.
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The Investment Adviser believes an investment in the Trust may provide a
good hedge against inflation.
II. When, based on an analysis of numerous economic and monetary factors,
including a declining rate of change in the CPI, declining interest rates,
and/or an increase in the value of the U.S. dollar, the Investment Adviser
expects a deflationary cycle, the Trust will invest up to 90% of its total
assets in U.S. or foreign government and government agency fixed-income
securities of sufficient maturities to realize its objective of long-term
capital appreciation. During such periods, the Trust will hold the balance of
its assets in short-term government securities, either U.S. or foreign
denominated. Investment in U.S. and other government securities in anticipation
of deflationary periods is intended to preserve capital, while providing a
relatively secure income, and to provide an opportunity for capital appreciation
if interest rates decline in such deflationary periods.
III. If, in the opinion of the Investment Adviser, there are periods when
there is a very small rate of change in the Consumer Price Index, and other
leading economic indicators, such as interest rates and the value of the U.S.
dollar, offer no clear evidence of inflationary or deflationary trends, then,
for temporary defensive purposes, the Trust may invest up to 100% of its assets
in cash or cash equivalents (in U.S. dollars and foreign currencies) and
high-quality short-term securities having minimum credit ratings of AAA or Aaa,
including money market securities (such as certificates of deposit, commercial
paper and bankers' acceptances) and repurchase agreements.
In addition, the Trust may invest up to 100% of its assets in securities
principally traded on foreign securities markets and in securities of foreign
issuers that are traded on U. S. securities markets, including American
Depository Receipts. The Trust may invest in securities of foreign issuers of
both developed and developing countries. For a discussion of the risks
associated with such investments see "Risk Factors and Other Investor
Considerations" herein.
With respect to the Trust's investments in the debt securities of foreign
corporations, it is the Trust's intention to invest only in such securities
which, at the time of purchase, are determined by the Investment Adviser to have
a quality comparable to securities receiving investment grade ratings (BBB by
Standard & Poor's Corporation or Fitch Investors Service, Inc. or Baa by Moody's
Investors Service, Inc.) or higher. Securities rated BBB or Baa, although
considered to be investment grade, may have speculative characteristics in that
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity of the issuer to make principal and interest payments than
is the case for higher grade securities.
Foreign securities are generally purchased on foreign exchanges, if they
are listed. Other markets also exist over-the-counter. There may be less
publicly available information about a foreign company than about a United
States company, and foreign companies may not be subject to uniform accounting,
auditing and financial reporting standards and requirements comparable to those
of United States companies. Foreign securities markets, while growing in volume,
have, for the most part, substantially less volume than United States markets,
and securities of many foreign companies are less liquid and their prices more
volatile than securities of comparable domestic companies. Brokerage commissions
and other transactions costs on foreign securities exchanges are generally fixed
and are higher than those in the United States. There is generally less
government supervision and regulation of exchanges, brokers and issuers in
foreign countries than there is in the United States.
As a diversified investment company, the Trust is subject to the following
limitations as to 75% of its total assets: (a) the Trust may not invest more
than 5% of its total assets in the securities of any one issuer, except
obligations of the U.S. Government and its agencies and instrumentalities; and
(b) the Trust may not own more than 10% of the outstanding voting securities of
any one issuer.
The extent to which the Trust will be able to achieve its investment
objective depends upon the Investment Adviser's ability to evaluate and develop
the information it receives into a successful investment program. It should be
emphasized that the Investment Adviser will not apply a rigid, mechanical
determination in assessing whether the economy is in an inflationary or
disinflationary environment. Rather, its determination will be the result of its
subjective judgment of all factors it considers to be relevant.
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The policies set forth above are fundamental policies and may not be
changed without shareholder approval.
As a non-fundamental policy, the Trust presently does not intend to invest
directly in: (a) physical commodities or in other natural resource assets or
contracts related to natural resource assets; (b) option transactions involving
portfolio securities and securities indices; (c) options on foreign currencies;
and (d) financial futures and related options.
Specialized Investment Techniques And Related Risks
The Trust's investments are subject to the following two
(2) investment techniques, each of which may involve certain risks which are
summarized below and discussed in the Statement of Additional Information. While
in general such transactions are not limited, reference is made to "Lending of
Portfolio Securities" and "Repurchase Agreements" herein for limitations
applicable to those activities. There can be no assurance that the Trust will
attain its investment objectives.
Lending Of Portfolio Securities
The Trust may seek to increase its income by lending portfolio securities
in accordance with its secondary investment objective of generating current
income consistent with the preservation of shareholders' purchasing power. Any
such loan will be continuously secured by collateral at least equal to the
market value of the security loaned. The Trust would have the right to call a
loan and obtain the securities loaned at any time upon five days' notice. During
the existence of a loan, the Trust would continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned and would
also receive a fee, or the interest on investment of the collateral, if any. The
total value of the securities loaned at any time will not be permitted to exceed
30% of the Trust's total assets. As with other extensions of credit, there are
risks of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. However, the loans would be made
only to U.S. domestic organizations deemed by the Trust's management to be of
good standing and when, in the judgment of the Trust's management, the
consideration to be earned justified the attendant risk.
Repurchase Agreements
A repurchase agreement is an agreement under which the Trust acquires a
money market instrument (a security issued by the U.S. government or any agency
thereof, a bankers' acceptance or a certificate of deposit) from a commercial
bank, subject to resale to the seller at an agreed upon price and date (normally
the next business day). Such an agreement is, in effect, a loan by the Trust.
The resale price reflects an agreed upon interest rate effective for the period
the instrument is held by the Trust and is unrelated to the interest rate on the
underlying instrument. The Trust will effect repurchasing agreements only with
large well-capitalized banks whose deposits are insured by the Federal Deposit
Insurance Corporation and which have the capital and undivided surplus of at
least $200,000,000. The instrument acquired by the Trust in these transactions
(including accrued interest) must have a total value in excess of the value of
the repurchase agreement and will be held by the Trust's custodian bank until
repurchased. The Trustees of the Trust will monitor the Trust's repurchase
agreement transactions on a continuous basis and will require that the
applicable collateral will be retained by the Trust's custodian bank. No more
than an aggregate of 10% of the Trust's total assets, at the time of investment,
will be invested in repurchase agreements maturing in more than seven days or in
any other similarly illiquid security which is subject to legal or contractual
restrictions on resale or which is not readily marketable. There is no
limitation on the Trust's assets with respect to investments in repurchase
agreements having maturities of less than seven days.
The use of repurchase agreements involves certain risks. For example, if
the seller under a repurchase agreement defaults on its obligation to repurchase
the underlying instrument at a time when the value of the instrument has
declined, the Trust may incur a loss upon its disposition. If the seller becomes
insolvent and subject to liquidation or reorganization under bankruptcy or other
laws, a bankruptcy court may determine that the underlying instrument is
collateral for a loan by the Trust and therefore is subject to sale by the
trustee in bankruptcy. Finally, it is possible that the Trust may not be able to
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substantiate its interest in the underlying instrument. While the Trust's
Trustees acknowledge these risks, it is expected that they can be controlled
through careful monitoring procedures.
Portfolio Turnover
Securities will generally be purchased for possible long-term appreciation
and not for short-term trading profits; however, the rate of portfolio turnover
is not a limiting factor when the Investment Adviser deems changes appropriate.
It is anticipated that the Trust's annual portfolio turnover rate will normally
not exceed 50%. A rate of turnover of 100% could occur, for example, if the
value of the lesser of purchases and sales of portfolio securities for a
particular year equaled the average monthly value of portfolio securities owned
during the year (excluding short-term securities).
A high rate of portfolio turnover involves a correspondingly greater
amount of brokerage commissions and other costs which must be borne directly by
the Trust and thus indirectly by its shareholders. It may also result in the
realization of larger amounts of short-term capital gains which are taxable to
shareholders as ordinary income.
Investment Restrictions
The Trust has adopted certain fundamental investment restrictions which
are described in detail in the Statement of Additional Information and may not
be changed without shareholder approval. Among these restrictions are that the
Trust may not: 1) purchase any securities if as a result such purchase would
cause more than 10% of the total outstanding voting securities of the issuer to
be held by the Trust; and 2) invest more than an aggregate of 10% of the Trust's
total assets in repurchase agreements having maturities longer than seven days
and other investments subject to legal or contractual restrictions on resale, or
which are not readily marketable.
For purposes of the above limitations: (i) all percentage limitations
apply immediately after a purchase or initial investment; and (ii) any
subsequent change in any applicable percentage resulting from market
fluctuations or other changes in total or net assets does not require
elimination of any security from the portfolio. In addition, the practices
described above with respect to the lending of portfolio securities are
fundamental policies which may not be changed without approval of the
shareholders. Further information on the Trust's investment restrictions may be
found in the Trust's Statement of Additional Information.
RISK FACTORS AND OTHER INVESTOR CONSIDERATIONS
The Trust concentrates its assets in the global natural resource
industries, and thus should not be considered as a complete investment program.
Under normal circumstances, the Trust will invest at least 65% of its total
assets in equity securities of domestic and foreign companies with substantial
natural resource assets, natural resource or energy related activities, or that
provide equipment or services primarily devoted to the natural resource or
energy-related activities of such companies. Because the Trust focuses on this
specific investment area, the price of the Trust's shares may be more volatile
than that of investment companies that do not concentrate their investments in
such a manner. The value of Trust shares may be susceptible to factors affecting
the natural resource industries. The value of equity securities of natural
resource companies will fluctuate due to various factors including changes in
the market for the particular natural resource in which the issuer is involved.
Events occurring in nature, inflationary pressures and international politics
can effect the overall supply and demand of a natural resource and thereby the
value of the companies involved in such natural resource. In both the U.S. and
foreign countries, for example, these industries may be subject to greater
political, environmental and other governmental regulation than other
industries.
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<PAGE>
The nature of such regulation continues to evolve in both the U.S. and
foreign countries, and changes in governmental policies and the need for
regulatory approvals may have a material effect on the products and services of
natural resource companies. For example, the exploration, development and
distribution of coal, oil and gas in the United States are subject to
significant federal and state regulation, which may effect rates of return on
such investments and the kinds of services that may be offered.
In addition, many natural resource companies historically have been
subject to significant costs associated with compliance with environmental and
other safety regulations and changes in the regulatory climate. Such
governmental regulations may also hamper the development of new technologies,
and it is impossible to predict the direction, type or effect of any future
regulation.
Further, competition is intense for many natural resource companies. As a
result, many of these companies may be adversely affected in the future and the
value of the securities issued by such companies may be subject to increased
share price volatility.
The value of the Trust's securities will fluctuate in response to stock
market developments, as well as market conditions for the particular natural
resource with which the issuer is involved. The price of the commodity will
fluctuate due to changes in worldwide levels of inventory, and changes,
perceived or actual, in production and consumption. The value of natural
resources may fluctuate directly with respect to various stages of the
inflationary cycle and perceived inflationary trends and is subject to numerous
factors, including national and international politics. Further, the Trust's
investments in companies are expected to be subject to irregular fluctuations in
earnings, because these companies are effected by changes in the availability of
money, the level of interest rates, and other factors.
Investment on an international basis involves certain risks not involved
in domestic investments, including fluctuations in foreign exchange rates, costs
of currency conversion, currency blockage, future political and economic
developments, and the possible imposition of exchange controls or other foreign
governmental laws or restrictions. Since the Trust may invest in securities
denominated or quoted in currencies other than the U. S. dollar, changes in
foreign currency exchange rates will affect the value of securities in the
portfolio and the unrealized appreciation or depreciation of investments. In
addition, with respect to certain foreign countries there is the possibility of
expropriation and nationalization of assets, confiscatory taxation, political or
social instability or diplomatic developments which could affect investments in
those countries. Interest and dividends, and possibly other amounts received by
the Trust with respect to foreign investments, may be subject to withholding and
other taxes at the source, depending upon the laws of the country in which the
investment is made.
The Trust's investments in foreign securities involve additional special
risks for the following reasons: (1) there may be less public information
available about foreign companies than is available about United States
companies; (2) foreign companies are not generally subject to the uniform
accounting, auditing and financial reporting standards and practices applicable
to United States companies; (3) foreign stock markets have less volume than the
United States markets, and the securities of some foreign companies are less
liquid and more volatile than the securities of comparable United States
companies; (4) there may be less governmental regulation of stock exchanges,
brokers, listed companies and banks in foreign countries than in the United
States; (5) the Trust may incur fees on currency exchanges when it changes
investments from one country to another; (6) the Trust's foreign investments
could be affected by expropriation, confiscatory taxation, nationalization of
bank deposits, establishment of exchanges controls, political or social
instability, diplomatic developments or currency blockage; (7) fluctuations in
foreign exchange rates will affect the value of the Trust's portfolio
securities, the value of dividends and interest earned, gains and losses
realized on the sale of securities, net investment income and unrealized
appreciation or depreciation of investments; (8) payments may be withheld at the
source; and (9) it may be more difficult to obtain legal judgments abroad.
There can, of course, be no assurance that the Trust will achieve its
investment objectives since there is uncertainty in every investment. Further,
given the foregoing risks and those disclosed elsewhere in this Prospectus and
in the Statement of Additional Information, an investment in the Trust may not
be appropriate for all investors, particularly those who seek assured income.
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<PAGE>
MANAGEMENT
Trustees
Under the terms of the Declaration of Trust establishing the Trust, which
is governed by the laws of the Commonwealth of Massachusetts, the Trustees of
the Trust are ultimately responsible for the management of its business and
affairs. The Statement of Additional Information contains background information
regarding each Trustee and executive officer of the Trust.
Investment Adviser
The Investment Adviser, Anchor Investment Management Corporation, manages
the Trust's investments and affairs, subject to the supervision of the Trust's
Trustees. The principal offices of both the Trust and the Investment Adviser are
located at 2717 Furlong Road, Doylestown, Pennsylvania 18901.
For its services under its Investment Advisory Contract with the Trust
(the "Investment Advisory Contract"), the Investment Adviser receives a fee,
payable monthly, calculated at the rate of .75% per annum of the average daily
net assets of the Trust. This fee is higher than that of most other investment
companies. For the fiscal year ended December 31, 1996, the Investment Adviser
received investment advisory fees of $63,710 for its services to the Trust,
which represented .75% of the Trust's average net assets. For each of the
Trust's fiscal years ended December 31, 1994, 1993, 1992, 1991 and 1990, the
Investment Adviser did not receive any investment advisory fees or other
compensation under the Investment Advisory Contract because the Trust had not
commenced operations during any such year.
The Investment Adviser and Meeschaert & Co., Inc., the Trust's underwriter
(the "Distributor"), are affiliated through common control with Societe D'Etudes
et de Gestion Financieres Meeschaert, S.A., one of France's largest privately
owned investment management firms, which together are referred to as the
"Meeschaert Organization." The Meeschaert Organization was established in
Roubaix, France in 1935 by Emile C. Meeschaert, and presently manages, with full
discretion, an aggregate amount of approximately $1.5 billion for approximately
8,000 individual (and institutional) customers, including $250 million in French
mutual funds.
The person who is primarily responsible for the day-to-day management of
the Trust's portfolio is Paul Jaspard, who is a Vice President of the Investment
Adviser. Mr. Jaspard is President of Global Equity Managers, S.A., an investment
advisory firm headquartered in Luxembourg. He has managed other portfolios for
the Meeschaert Organization for more than eighteen years.
Expenses
The Trust is responsible for all its expenses that are not assumed by the
Investment Adviser under the Investment Advisory Contract, including without
limitation, the fees and expenses of the custodian and transfer agent; costs
incurred in determining the Trust's net asset value and keeping its books; the
cost of share certificates; membership dues in investment company organizations;
distribution and brokerage commissions and fees; fees and expenses of
registering its shares; expenses of reports to shareholders, proxy statements
and other expenses of shareholders' meetings; insurance premiums; printing and
mailing expenses; interest, taxes and corporate fees; legal and accounting
expenses; and fees and expenses of Trustees not affiliated with the Investment
Adviser. The Trust will also bear expenses incurred in connection with
litigation in which the Trust is a party and the legal obligation the Trust may
have to indemnify its officers and Trustees with respect thereto. For the fiscal
year ended December 31, 1996, expenses borne by the Trust amounted to $93,474
which represented 1.10% of the Trust's average net assets.
Brokerage
Decisions to buy and sell portfolio securities for the Trust are made
pursuant to recommendations by the Investment Adviser. The Trust, through the
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Investment Adviser, seeks to execute its portfolio security transactions on the
most favorable terms and in the most effective manner possible. To the extent
consistent with the policy of seeking best price and execution, a portion of the
Trust's portfolio transactions may be executed through the Distributor, which is
an affiliate of the Investment Adviser. In the event that this occurs, it will
be on the basis of what management believes to be current information as to
rates which are generally competitive with the rates available from other
responsible brokers and the lowest rates, if any, currently offered by the
Distributor. In selecting among broker-dealer firms to execute its portfolio
transactions, the Trust, through the Investment Adviser, may give consideration
to those firms which have sold or are selling shares of the Trust, and who
furnish other services to the Trust or the Investment Adviser.
Management Discussion of Fund Performance For its second year of existence,
the Trust received a substantial flow of new subscriptions. Believing that the
prices of many commodities including energy were coming to the end of a secular
decline, the Trust invested an increasing proportion of assets in oil and gas
producing companies, oil service companies, and in a broad array of U.S. and
Canadian non ferrous metal producers. At the end of the year, 60% was invested
compared with 44% a year earlier. This steady investment process continues in
1997.
[GRAPHIC OMITTED]
The average annual total return for a share of the Trust was as follows for the
period indicated:
12.24% for the one year period beginning on January 1, 1996
through December 31, 1996; and
9.91% for the two year period beginning on January 1, 1995
through December 31, 1996;
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HOW TO PURCHASE SHARES
Shares of the Trust may be purchased from the Meeschaert & Co., Inc., 2717
Furlong Road, Doylestown, Pennsylvania 18901. There is no sales charge or
commission payable by the investor with respect to purchases of shares. For new
shareholders initiating accounts, the minimum investment is $500, except for
exchanges of securities for Trust shares, where the minimum is $5,000 (see "How
to Exchange Securities for Trust Shares" below). There is no minimum for
shareholders purchasing additional shares for deposit to existing accounts.
An application for use in making an initial investment in
the Trust is included in the back of this Prospectus. The
applicable price will be the net asset value next determined
after the order is received by the Distributor. (See
"Determination of Net Asset Value.")
DISTRIBUTION OF SHARES
In addition to advisory fees and other expenses, the Trust may pay for
certain expenses pursuant to a distribution plan (the "Plan") designed to meet
the requirements of Rule 12b-1 ("Rule 12b-1") under the Investment Company Act
of 1940 (the "Act"). The Plan, which has been approved by the Board of Trustees
of the Trust but will not be implemented unless and until approved by a majority
(as defined in the Act) of the Trust's shareholders, is of the type sometimes
called a compensation plan. The Plan provides that the Trust will pay the
Distributor a commission equal to up to 5% of the price paid to the Trust for
each sale, all or any part of which may be re-allowed by the Distributor to
others (dealers) making such sales. To the extent that the distribution fee is
not paid to such dealers, the Distributor may use such fee for its expenses of
distribution of Trust shares. If such fee exceeds its expenses, the Distributor
may realize a profit from these arrangements. The Plan currently provides for an
aggregate limit on the amount of all payments pursuant to the Plan equal to .75
of 1% of the Trust's average daily net assets for any fiscal year. If, so long
as the Plan is in effect, the Distributor's reallowances to dealers and other
expenses exceed the limit (currently .75 of 1%) for any particular year, it
could collect in any future year such amounts (which do not include interest or
other carrying charges) up to any amount by which amounts paid to it under the
Plan in that year are less than the earlier year's limit. In such a case it
might receive amounts in excess of its then current expenses. The Distributor's
expenses are likely to be higher in the early years of the Trust and
accordingly, the annual fees received by the Distributor in the early years are
not likely to reimburse the Distributor for the total distribution expenses that
it will incur in those years. The following numerical example demonstrates this
principle: If, in each of the first three years of sales of the Trust's shares,
sales by the Distributor equaled $1,000,000, and the Distributor's total
expenses for such years were $60,000, $55,000 and $45,000, respectively, the
Distributor's expenses would exceed the Distributor's expected commissions of
$50,000 for the first two years. (Note: this example does not take into account
the .75 of 1% aggregate limit discussed above.)
Meeschaert & Co., Inc. serves as the Trust's principal
underwriter under a Distributor's Contract dated December 16,
1994.
Contingent Deferred Sales Charge
In conjunction with, but not as part of, the Plan, a contingent deferred
sales charge may be imposed upon certain redemptions of shares purchased after
inception of the Plan. The charge in respect of such redemptions made during the
first four calendar years following purchase of the shares is as follows: 4% in
the year of purchase; 3% in the second year; 2% in the third year; and 1% in the
fourth year. These charges are not received by the Distributor and will not
reduce amounts paid to the Distributor under the Plan.
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HOW TO EXCHANGE SECURITIES FOR TRUST SHARES
When shares of the Trust are being offered, the Trust may accept U.S.
Government securities and U.S. Government agency fixed-income securities
acceptable to the Investment Adviser in exchange for shares of the Trust at net
asset value. The minimum value of securities accepted for deposit in any single
transaction is $5,000. The Trust will value accepted securities in the manner
provided for valuing its portfolio securities (see "Determination of Net Asset
Value").
Securities determined to be acceptable for the Trust, in proper form for
transfer to the Trust, together with a completed and signed letter of
transmittal in approved form (available from the Distributor) ("Letter of
Transmittal"), should be forwarded to the Trust as follows:
Investors Bank & Trust Company
Financial Product Services Group
Attn: Anchor Resource and Commodity Trust
1 Lincoln Plaza
Boston, Massachusetts 02205
An investor must forward all securities pursuant to a single Letter of
Transmittal or, in certain instances as indicated in the Instructions to the
Letter of Transmittal, multiple Letters of Transmittal attached and transmitted
as a single exchange. The Trust will only accept securities which are delivered
in proper form.
An investor will be required to represent, among other things, that the
securities forwarded are not subject to any restrictions upon their sale by the
Trust by reason of any agreement or representation that the investor has made in
respect thereof, or of his being in control of, controlled by, or under common
control with, the issuer thereof within the meaning of Section 2(11) of the
Securities Act of 1933, or for any other reason. The Trust will not accept
securities for exchange if, in the opinion of its counsel, acceptance would
violate any federal or other law to which the Trust is subject.
Investors who are contemplating an exchange of securities for shares of
the Trust, or their representatives, are advised to contact the Distributor to
determine whether the securities are acceptable to the Trust before forwarding
such securities. The Trust reserves the right to reject any securities when it
determines in its sole discretion that it is in the best interests of the Trust
to do so.
If securities presented for exchange are found to be in good order only in
part, the Trust may issue the appropriate number of shares in accordance with
the procedure described below for such part and return the balance to the
investor or, at its option, may waive any or all irregularities to the extent
permissible under applicable law and issue shares for all or a portion of such
defective presentation. A confirmation for shares of the Trust will be issued to
an investor after accepted securities presented by him have cleared for transfer
to the Trust. No certificates will be issued unless requested by the investor.
By tendering securities, an investor agrees to accept the determination of
market value by the Trustees concurrently with the determination of the Trust's
net asset value per share. The number of shares of the Trust to be issued to an
investor in exchange for securities shall be the value of such accepted
securities determined in the manner described above, divided by the net asset
value per Trust share next determined after the Trust's acceptance of such
securities.
A gain or loss for federal tax purposes may be realized by an investor in
connection with the exchange of securities for shares of the Trust, depending
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upon his tax cost basis for the securities tendered for exchange. Each investor
should consult his tax advisor with respect to the particular federal income tax
consequences, as well as any state and local tax consequences, of exchanging his
securities for Trust shares.
REDEMPTION AND REPURCHASE OF SHARES
Any shareholder may require the Trust to redeem his shares. In addition,
the Trust maintains a continuous offer to repurchase its shares. If a
shareholder used the services of a broker in selling his shares in the
over-the-counter market, the broker may charge a reasonable fee for his
services. Redemptions and repurchases will be made in the following manner.
1. Certificates for shares of the Trust may be mailed or presented, duly
endorsed, with signatures guaranteed in the manner described below, with a
written request that the Trust redeem the shares, to the Trust's transfer agent,
Anchor Investment Management Corporation, at 2717 Furlong Road, Doylestown,
Pennsylvania 18901. If no certificate has been issued and shares are held in an
Open Account, a written request that the Trust redeem such shares, with
signatures guaranteed in the manner described below, may be mailed or presented
as described above. The redemption price will be the net asset value next
determined after the request and/or certificates are received.
2. A request for repurchase may be communicated to the Trust by a
shareholder through a broker. The repurchase price will be the net asset value
next determined after the request is received by the Trust, provided that, if
the broker receives the request before noon and transmits it to the Trust before
1:00 p.m. Eastern Time the same day, the repurchase price will be the net asset
value determined as of 12:00 noon Eastern Time that day. If the broker receives
the request after noon, the repurchase price will be the next asset value
determined as of 12:00 noon Eastern Time the following day. If an investor uses
the services of a broker in having his shares repurchased, the broker may charge
a reasonable fee for his services.
Payment for shares redeemed or repurchased will be delivered within seven
days after receipt of the shares, and/or required documents, duly endorsed. The
signature(s) on an issued certificate must be guaranteed by a commercial bank or
trust company or by a member of the New York, American, Pacific Coast, Boston or
Chicago Stock Exchange. A signature guarantee by a savings bank or savings and
loan association or notarization by a notary public is not acceptable. In order
to ensure proper authorization the transfer agent may request additional
documents such as, but not restricted to, stock powers, trust instruments,
certificates of corporate authority and waiver of tax required in some states
from selling estates before repurchasing shares.
The right of redemption may be suspended or the payment date postponed
when the New York Stock Exchange is closed for other than customary weekend or
holiday closings, or when trading on the New York Stock Exchange is restricted,
as determined by the Securities and Exchange Commission; for any period when an
emergency as defined by the rules of the Commission exists; or during any period
when the Commission has, by order, permitted such suspension. In case of a
suspension of the right of redemption, a shareholder who has tendered a
certificate for redemption or made a request for repurchase through a broker may
withdraw his request or certificate or, absent such withdrawal, he will receive
payment of the net asset value determined nest after the suspension has been
terminated.
A Shareholder may receive more or less than he paid for his shares,
depending on the net asset value of the shares at the time of redemption or
repurchase.
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DETERMINATION OF NET ASSET VALUE
The net asset value is determined by the Trust as of 12:00 noon Eastern
Time on each business day on which the New York Stock Exchange is open for
trading or on any day that the Trust is open for business, but the New York
Stock Exchange is not open for business, if there occurs an event which might
materially affect the net asset value of the Trust's redeemable shares.
The manner of determination of the net asset value is briefly as follows:
Securities traded on a U.S. national or other foreign securities exchange are
valued at the last sale price on the primary exchange on which they are listed,
or if there has been no sale that day, at the current bid price. Other U.S. and
foreign securities and foreign currencies for which market quotations are
readily available are valued at the known current bid price believed most nearly
to represent current market value. Other securities (including limited traded
securities) and all other assets of the Trust are valued at fair value as
determined in good faith by the Trustees of the Trust. Liabilities are deducted
from the total, and the resulting amount is divided by the number of shares
outstanding.
Each day investment securities traded on a national securities exchange
are valued at the noon sales price; securities traded in the over-the-counter
market are valued at the last sale price as of 12:00 noon. Gold bullion is
valued each day at noon based on the New York spot gold price. Gold coins,
foreign currencies, and foreign denominated securities for which market
quotations are readily available are valued at the known bid prices as of 12:00
noon. Temporary cash investments are stated at cost. In the absence of a
reliable market for a particular metal, security or currency, an investment
therein will be valued at fair value as determined in good faith by the
Trustees.
SERVICES FOR SHAREHOLDERS
Open Accounts
As a convenience to the shareholder, all shares of the Trust registered in
his name are automatically credited to an Open Account maintained for him on the
books of the Trust. All shares acquired by the shareholder will be credited to
his Open Account and share certificates will not be issued unless requested.
Certificates representing fractional shares will not be issued in any case.
Certificates previously acquired may be surrendered to the Trust's transfer
agent, such certificates will be canceled and the share represented thereby will
continue to be credited to the Open Account of the shareholder.
Each time shares are credited to his Open Account, the shareholder will
receive a statement showing the details of the transaction and the then current
balance of shares owned by him. Shortly after the end of each calendar year he
will also receive a complete annual statement of his Open Account as well as
information as to the federal tax status of dividends and capital gain
distributions, if any, paid by the Trust during the year.
Shares credited to an Open Account are transferable upon written
instructions to the Trust's transfer agent.
Invest-By-Mail
An Open Account provides a single and convenient way of setting up a
flexible investment program for the accumulation of shares of the Trust. At any
time when the Trust is offering its shares the shareholder may send a check
(payable to the order of the Trust) to Investors Bank & Trust
Company--Shareholders Services, Attn: Anchor Resource and Commodity Trust, 24
Federal Street, Boston, Massachusetts 02110 (giving the full name or names of
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his account). The check will be used to purchase additional shares for his Open
Account at the net asset value next determined after the check is received. Any
check not payable to the order of the Trust will be returned.
The cost of administering Open Accounts for the benefit of shareholders
who participate in them will be borne by the Trust as an expense of all its
shareholders.
DIVIDENDS AND DISTRIBUTIONS
The Trust currently intends to distribute any dividends and distributions
in additional shares, or, at the option of the shareholder, in cash. In
accordance with his distribution option, a shareholder may elect (1) to receive
both dividends and capital gain distributions in additional shares, or (2) to
receive dividends in cash and capital gain distributions in additional shares,
or (3) to receive both dividends and capital gain distributions in cash. A
shareholder may change his distribution option at any time by notifying the
Trust's transfer agent in writing. To be effective with respect to a particular
dividend or distribution, the new distribution option must be received by the
transfer agent at least 30 days prior to the close of the fiscal year. All
accounts with a cash dividend option will be changed to reinvest both dividends
and capital gains automatically upon determination by the Trust's transfer agent
that the address of record is not current.
Dividends and capital gain distributions received in shares will be
received by the Trust's transfer agent, as agent for the shareholder, and
credited to his Open Account in full and fractional shares computed at the
record date closing net asset value.
TAXES
The Trust intends to qualify under Subchapter M of the Internal Revenue
Code as a regulated investment company and to distribute substantially all
investment income and capital gains, if any, at least once every year so that,
to the extent of such distributions, the Trust will not be subject to federal
income taxes.
Shareholders will be subject to federal income taxes on distributions made
by the Trust whether they are received in cash or additional Trust shares.
Distributions of net investment income and short-term capital gains, if any,
will be taxable to shareholders as ordinary income. Distributions of long-term
capital gains, if any, will be taxable to shareholders as long-term capital
gains, without regard to how long a shareholder has held shares of the Trust.
Dividends paid by the Trust will generally not qualify for the dividends
received deductions for corporations. The Trust will notify shareholders each
year of the amount of dividends and distributions, including the amount of any
distribution of long-term capital gains.
The Trust's foreign investments may be subject to foreign withholding
taxes. The Trust will be entitled to claim a deduction for such foreign
withholding taxes for federal income tax purposes. However, any such taxes will
reduce the income available for distribution to shareholders.
The Trust is required to withhold 20% of the dividends paid with respect
to any shareholder who fails to furnish the Trust with a correct taxpayer
identification number, who under-reported dividend or interest income, or who
fails to certify to the Trust that he or she is not subject to such withholding.
An individual's tax identification is his or her social security number.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Internal Revenue code and Treasury regulations currently in
effect. For the complete provisions, reference should be made to the pertinent
Code sections and regulations. The Code and regulations are subject to change by
legislative or administrative actions.
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MISCELLANEOUS INFORMATION
Custodian, Transfer Agent and Dividend-Paying Agent
All securities, cash and other assets of the Trust are
received, held in custody and delivered or distributed by Investors Bank & Trust
Company, Custodian, 24 Federal Street, Boston, Massachusetts 02110, provided
that in cases where foreign securities must, as a practical matter, be held
abroad, the Trust's custodian bank and the Trust will make appropriate
arrangements so that such securities may legally be so held abroad. The Trust's
custodian bank does not decide on purchases or sales of portfolio securities or
the making of distributions. Anchor Investment Management Corporation, 2717
Furlong Road, Doylestown, Pennsylvania 18901, serves as transfer agent and
dividend-paying agent for the Trust.
SHAREHOLDER INQUIRIES
For further information about the Trust, investors should call (215)
794-2980. Written inquiries should be addressed to Anchor Resource and Commodity
Trust, 2717 Furlong Road, Doylestown, Pennsylvania 18901.
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ANCHOR RESOURCE AND COMMODITY TRUST
(the "Trust")
MEESCHAERT & CO., INC.
("Distributor")
APPLICATION AND REGISTRATION FORM1
Send Application to
Meeschaert & Co., Inc., 2717 Furlong Road, Doylestown,
Pennsylvania 18901
Date:
-------------------
I. ACCOUNT REGISTRATION:
[GRAPHIC OMITTED] New: Social Security or Tax
Number___________________________________________________
(if two names below, circle which one has this number.)
[GRAPHIC OMITTED] Existing: Account Number
- ----------------------------------------------------------
(from your latest statement - vital for identification.)
Name(s)
- --------------------------------------------------------------------------------
(Type or print exactly as they are to appear on the Trust's records.)
Street
- --------------------------------------------------------------------------------
City ___________________________ State ______________________ Zip __________
If address outside the U.S.A., please circle I (am) (am not)
a citizen of the U.S.A.
If registration requested in more than one name, shares will be registered as
"Joint Tenants with Rights of Survivorship" unless otherwise instructed.
II. BASIS FOR OPENING NEW ACCOUNT:
[GRAPHIC OMITTED] A check for $_______________ payable to the Trust attached.
or
[GRAPHIC OMITTED] Shares _______________ recently purchased on ________
(number) (date)
Distribution Option: (exercisable only by holders of Common
Shares) Check only one. If none checked, option A will be assigned.
[GRAPHIC OMITTED] A. Dividends and capital gains in additional full and
fractional shares credited to shareholder's
account, no certificates issued.
OR
[GRAPHIC OMITTED] B. Dividends in cash; capital gains in additional full
and fractional shares credited to shareholder's
account; no certificates issued.
OR
[GRAPHIC OMITTED] C. Dividends in cash; capital gains in cash.
(Certificates will be issued to shareholders
requesting such in writing from the Transfer Agent.)
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III. INVEST-BY-MAIL SERVICE: for periodic share accumulation
(whether or not dividends are received in shares)
[GRAPHIC OMITTED] Please check if you wish to utilize the Trust's Invest-By-Mail
Service. This is a voluntary service involving no extra charge to the
shareholder, and it may be changed or discontinued at any time.
IV. SHAREHOLDER'S SIGNATURE: Should be the same as name in
Account Registration.
- ---------------------------------- -------------------------------------
Signature Signature of Co-Owner (if any)
(I have received a current prospectus of the Trust and I understand that my
account will be covered by the provisions on the reverse side of this
Application. I also understand that I may terminate any of these services at any
time.)
DEALER AUTHORIZATION:
(please print)
Representative
- --------------------------------- -------------------------------------
Dealer's Name (Representative's Name)
- --------------------------------- -------------------------------------
Home Office Address Telephone Number(Representative's Number)
Branch Office:
- --------------------------------- -------------------------------------
City State Zip Address
- --------------------------------- -------------------------------------
Telephone Number Authorized Signature of Dealer City State Zip
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ANCHOR RESOURCE AND COMMODITY TRUST
2717 Furlong Road
Doylestown, Pennsylvania 18901
(215) 794-2980
STATEMENT OF ADDITIONAL INFORMATION
Dated May 1, 1997
This Statement of Additional Information is not a prospectus. This Statement
of Additional Information supplements the information contained in the
Prospectus of Anchor Resource and Commodity Trust (the "Trust"), dated May 1,
1997 and should be read in conjunction with the Trust's Prospectus.
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TABLE OF CONTENTS
ABOUT THE TRUST .............................................3
INVESTMENT STRATEGY .........................................3
GENERAL RISK CONSIDERATIONS .................................5
SPECIALIZED INVESTMENT TECHNIQUES AND RELATED RISKS .........6
Lending of Portfolio Securities .........................6
Repurchase Agreements ...................................6
PORTFOLIO TURNOVER ..........................................7
INVESTMENT RESTRICTIONS .....................................7
MANAGEMENT ..................................................8
Officers and Trustees ...................................8
Remuneration of Officers and Trustees ..................10
Investment Advisory Contract ...........................10
Investment Adviser .....................................10
PRINCIPAL HOLDERS OF SECURITIES ............................11
DETERMINATION OF NET ASSET VALUE ...........................11
DISTRIBUTION OF SHARES .....................................11
Contingent Deferred Sales Charge...........................12
HOW TO PURCHASE SHARES .....................................12
REDEMPTION, EXCHANGE AND REPURCHASE OF SHARES ..............12
DISTRIBUTIONS ..............................................13
TAXES ......................................................13
PORTFOLIO SECURITY TRANSACTIONS ............................14
MISCELLANEOUS INFORMATION ..................................15
Custodian, Transfer Agent and Dividend-Paying Agent ....15
Independent Public Accountants .........................15
Registration Statement .................................15
FINANCIAL STATEMENTS........................................15
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ABOUT THE TRUST
......The Trust was established as an unincorporated business trust under the
laws of Massachusetts by a Declaration of Trust dated September 22, 1989. The
Trust first commenced operations on January 12, 1995. ......The Trustees amended
the Declaration of Trust in 1990 to change the name of the Trust from Meeschaert
Equity Plus Trust to Anchor Equity Plus Trust and again in 1994 to change the
name to Anchor Resource and Commodity Trust. ......The capitalization of the
Trust consists of an unlimited number of shares of beneficial interest, without
par value, designated "Common Shares", which participate equally in dividends
and distributions. Issued shares are fully paid and non-assessable and
transferable on the books of the Trust. The shares have no preemptive rights.
The shares each have one vote and proportionate liquidation rights. ......The
Trust normally will not hold meetings of shareholders to elect Trustees. If less
than a majority of the Trustees holding office have been elected by
shareholders, a meeting of shareholders will be called to elect Trustees. The
Trust will, if requested by shareholders of at least ten percent of the Trust's
outstanding shares, call a meeting for the purpose of voting on the removal of a
Trustee or Trustees. Under the Declaration of Trust and the Investment Company
Act of 1940, the record holders of not less than two-thirds of the outstanding
shares of the Trust may remove a Trustee by votes cast in person or by proxy at
a meeting called for the purpose or by a written declaration filed with the
Trust's custodian bank. In connection with shareholder rights to remove
Trustees, the Trust will provide shareholders with certain assistance in
communicating with other shareholders. Except as described above, the Trustees
will continue to hold office and may appoint successor Trustees. ......Under
Massachusetts law, shareholders could, under certain circumstances, be held
personally liable for the obligations of the Trust. However, the Declaration of
Trust disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of this disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or a Trustee. The
Declaration of Trust provides for indemnification from the assets of the Trust
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring a financial
loss on account of his or her liability as a shareholder of the Trust is limited
to circumstances in which the Trust itself would be unable to meet its
obligations. The possibility that these circumstances would occur is remote.
Upon payment of any liability incurred by the Trust, the shareholder paying the
liability will be entitled to reimbursement from the general assets of the
Trust. The Trustees intend to conduct the operations of the Trust to avoid, to
the extent possible, ultimate liability of shareholders for liabilities of the
Trust.
INVESTMENT STRATEGY
......The Trust's Prospectus contains a description of the investment objectives
and policies of the Trust, including a discussion of specialized techniques that
the Trust may use in order to achieve its investment objectives and certain
risks related thereto. The following discussion is intended to provide further
information concerning investment strategy, techniques, and risk considerations
which the Investment Adviser believes to be of interest to investors.
......Historically, during periods of increasing inflation and during periods of
economic or monetary instability, the prices of commodity and resource-related
equity securities have tended to increase as rapidly or more rapidly than the
rate of inflation. Also, currencies of countries not involved in inflationary
circumstances may increase in value relative to the U.S. dollar. During these
same periods, interest rates have tended to increase, causing the market value
of debt instruments to decline. Conversely, during periods of deflation (when
inflationary forces are being reversed) the price of high grade debt instruments
has tended to increase while the value of commodity and resource-related equity
securities have tended to decline. Foreign currencies (relative to the U.S.
dollar) may also decline in value at such times. ......Accordingly, the
Investment Adviser will seek to anticipate oncoming inflationary and
deflationary economic cycles because of their significant effect on the value of
the Trust's investments in natural resources and commodity related equity
securities. ......The Investment Adviser's determination as to whether the
economy is inflationary or deflationary will be based upon constant study of
numerous economic and monetary factors. These factors will include, but not
necessarily be limited to: actual and anticipated rates of change in the
Consumer Price Index ("CPI") over specified periods of time; actual and
anticipated changes and rates of changes in the U.S. dollar in relation to other
key currencies, e.g., the German mark, the British pound and the Japanese yen;
actual and anticipated changes, and rates of change, in short and long term
interest rates and real interest rates, i.e., inflation adjusted interest rates;
actual and anticipated changes in the money supply; and actual and anticipated
governmental fiscal and monetary policy. It should be emphasized that the
Investment Adviser will not apply a rigid, mechanical determination in assessing
whether the economy is an inflationary or disinflationary environment. Rather,
its determination will be the result of its subjective judgment of all factors
it considers relevant. ......Under normal circumstances, when, by reason of a
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rising rate of change in the CPI, rising interest rates, and/or a decline in the
value of the U.S. dollar, an inflationary cycle is expected, the Trust will
invest at least 65% of the value of its total assets in equity securities of
domestic and foreign companies with substantial natural resource assets, natural
resource or energy-related activities, or that provide equipment or services
primarily devoted to the natural resource or energy-related activities of such
companies.
Natural resource assets consist of precious metals (e.g., gold,
silver, and platinum), ferrous and nonferrous metals (e.g., iron, aluminum, and
copper), strategic metals (e.g., uranium, and titanium), hydrocarbons (e.g.,
coal, oil, and natural gas), timberland, developed and undeveloped real property
and agricultural commodities.
The Investment Adviser will identify companies that, in its opinion,
have substantial holdings of resource assets so that when compared to the
company's capitalization, revenues, or operating profits, such assets are of
enough magnitude that changes in the assets' economic value will affect the
market of the company. The Trust will consider a company to be a Natural
Resource Company if, at the time the Trust acquires its securities, at least 50%
of the company's assets, capitalization, gross revenues or operating profits in
the most recent or current fiscal year are: (1) involved in or result from
(directly or indirectly through subsidiaries) exploring, mining, refining,
processing, transporting, fabricating, dealing in or owning resource assets; or
(2) are involved in or result from energy-related activities directly or
indirectly through subsidiaries.
Energy-related activities consist of those activities which relate to
the development and use of energy sources, such as: ......1. the generation of
power from hydroelectric, geothermal, tidal, or other naturally occurring
sources, or from natural resource manufacturing by-products or refuse; ......2.
the development of synthetic fuels; ......3. transportation of energy producing
sources such as coal, oil, electricity, or nuclear fuels; ......4. the
development and application of techniques and devices for conservation or
efficient use of energy; and, ......5. the control of pollution related to
energy industries and waste disposal. ......Generally, a company will be
considered to provide equipment or services to such Natural Resource Companies
if at least 50% of the company's assets are invested in or at least 50% of its
income is derived from providing equipment or services to such Natural Resource
Companies. Examples of this kind of company are: ......1. manufacturers of
mining or earth moving equipment ......2. providers of seismology testing
services; and, ......3. providers of supplies and maintenance services to
offshore drilling sites. ......The Investment Adviser believes an investment in
the Trust may provide a good hedge against inflation. ......Assets of the Trust
not invested as described above will largely be invested in debt instruments of
the U.S. Government and its agencies having varied maturities or in repurchase
agreements or loans of securities as described below. As used herein, the
following terms have the indicated definitions: "equity securities" means shares
in a corporation, whether or not transferable or denominated 'stock', or similar
security, interest of a limited partner in a limited partnership, or warrants or
rights other than rights to convert, to purchase, sell, or subscribe to a share,
security, or interest of a kind previously specified; and "convertible
securities" means debentures or preferred stock that may be exchanged by the
owner for common stock or another security, usually of the same company, in
accordance with the terms of the issue. ......When, by reason of a declining
rate of change in the CPI, declining interest rates, and/or an increase in the
value of the U.S. dollar, a deflationary cycle is anticipated, the Trust will
invest up to 90% of its total assets in debt instruments of U.S. or foreign
government and government agency fixed-income securities of sufficient
maturities to realize its objective of long-term capital appreciation. During
such periods, the Trust will hold the balance of its assets in short-term U.S.
or foreign denominated securities. ......U.S. Government securities include U.S.
Treasury bills, notes and bonds, which differ in their interest rates,
maturities and times of issuance. Treasury bills have maturities of one year or
less. Treasury notes have maturities of one to ten years and Treasury bonds have
maturities of greater than ten years at the date of issuance. U.S. Government
securities also include obligations of agencies and instrumentalities of the
U.S. Government. Agencies and instrumentalities of the U.S. Government include,
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but are not limited to: Federal Land Banks; Farmers Home Administration; Central
Bank of Cooperatives; Federal Intermediate Credit Banks; Federal Home Loan
Banks; and Federal National Mortgage Association. Some obligations of the U.S.
Government agencies and instrumentalities, such as Treasury bills, Government
National Mortgage Association (GNMA) certificates, are supported by the full
faith and credit of the United States; others, such as securities of Federal
Home Loan Banks, are supported by the right of the issuer to borrow from the
U.S. Treasury; still others, such as bonds issued by the Federal National
Mortgage Association, a private corporation, are supported only by the credit of
the instrumentality. These securities are not insured by the U.S. Government and
there can be no assurance that the U.S. Government will support an
instrumentality it sponsors. The Trust will invest in the securities issued by
such an instrumentality only when its Investment Adviser determines that the
credit risk with respect to the instrumentality does not make its securities
unsuitable investments. ......GNMA certificates have yield and maturity
characteristics corresponding to the underlying mortgage loans. Thus, unlike
U.S. Treasury bonds, which pay a fixed rate of interest until maturity when the
entire principal amount comes due, payments on GNMA certificates include both
interest and a partial prepayment of principal. Additional prepayments of
principal may result from the prepayment, refinancing or foreclosure of the
underlying mortgage loans. Although maturities of the underlying mortgage loans
range up to 30 years, such prepayments shorten the effective maturities to
approximately 12 years (based upon current government statistics). GNMA
certificates currently offer yields higher than those available from other types
of U.S. Government securities, but because of the prepayment feature may be less
effective than other types of securities as a means of "locking in" attractive
long-term interest rates. This is caused by the need to reinvest prepayments of
principal generally and the possibility of significant unscheduled prepayments
resulting from declines in mortgage interest rates. As a result, GNMA
certificates may have less potential for capital appreciation during periods of
declining interest rates than other investments of comparable maturities, while
having a comparable risk of decline during periods of rising interest rates.
......There are certain other risks associated with GNMA, Federal National
Mortgage Association (FNMA), and Federal Home Loan Mortgage Corp. (FHLMC)
certificates. Prepayments and scheduled payments of principal will be reinvested
at prevailing interest rates which may be less than the rate of interest for the
securities on which such payments are made. When prevailing interest rates rise,
the value of each of these types of securities may decrease as do other debt
securities, but when prevailing interest rates decline, the value of such
securities is not likely to rise on a comparable basis with other debt
securities because of the prepayment feature of each of these type of
securities. If a GNMA, FNMA, or FHLMC certificate is purchased at a premium
above principal because its fixed rate of interest exceeds the prevailing level
of yields, the premium is not guaranteed and a decline in value to par may
result in a loss of the premium especially in the event of prepayments.
......U.S. Government debt securities of the sort owned by the Trust fluctuate
in market price (but not in ultimate repayment amount) primarily with interest
rate levels and trends, rising when interest rates decline and declining when
interest rates rise; they generally possess a high degree of dependability with
respect to timely payment of principal or interest. ......If, in the opinion of
the Investment Adviser, there are periods when there is a very small rate of
change in the Consumer Price Index, and other leading economic indicators, such
as interest rates and the value of the U.S. dollar, offer no clear evidence of
inflationary or deflationary trends, then, for temporary defensive purposes, the
Trust may invest in short-term U.S. Government securities and other money market
instruments, cash or cash equivalents. Money market instruments include
high-grade commercial paper (promissory notes issued by corporations to finance
their short-term credit needs), negotiable certificates of deposit,
non-negotiable fixed time deposits, bankers' acceptances and repurchase
agreements. Investments in commercial paper will be rated Prime-1 by Moody's
Investors Services, Inc. or A-1 by Standard & Poor's corporation or F-1 by Fitch
Investors Service, Inc., which are the highest ratings assigned by these
agencies. Money market instruments will be limited to U.S. dollar denominated
instruments which are rated in the top two categories by an independent
nationally recognized rating organization or, if not rated, are of comparable
quality as determined by the Trustees. Investments in bank instruments will be
in instruments which are issued by U.S. or foreign banks having capital and
undivided surplus at the time of investment of $200,000,000 or more and which
mature in one year or less from the date of acquisition. ......The Investment
Adviser believes that, based upon past performance, the securities of specific
companies that hold different types of substantial resource assets or engage in
resource-related or energy-related activities may move relatively independently
of one another during different stages of inflationary or deflationary cycles
because of different degrees of demand for, or market values of, their
respective resource holdings or resource-related or energy-related business
during particular portions of such cycles. For example, during the period 1976
to 1980, the prices of oil company stocks increased relatively more than the
price of coal company stocks when compared to the performance of relevant stock
market indices. The Investment Advisor will seek to identify companies which it
believes are attractively priced relative to the intrinsic value of the
underlying resource assets or resource-related or energy-related business or are
especially well positioned to benefit during particular portions of inflationary
or deflationary cycles. The Trust's approach of active investment management
enables it to switch its emphasis among various industry groups, depending upon
the Investment Adviser's outlook with respect to prevailing trends and
developments.
......GENERAL RISK CONSIDERATIONS ......Because of the following
considerations, an investment in the Trust should not be considered a complete
investment program (additional risk considerations are discussed below).
......The Trust concentrates its assets in the global natural resource
industries, and thus should not be considered as a complete investment program.
Because the Trust focuses on this specific investment area, the price of the
Trust's shares may be more volatile than that of investment companies that do
not concentrate their investments in such a manner. The value of Trust shares
may be susceptible to factors affecting the natural resource industries. In both
the U.S. and foreign countries, for example, these industries may be subject to
greater political, environmental and other governmental regulation than other
industries. ......The nature of such regulation continues to evolve in both the
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U.S. and foreign countries, and changes in governmental policies and the need
for regulatory approvals may have a material effect on the products and services
of natural resource companies. For example, the exploration, development and
distribution of coal, oil and gas in the United States are subject to
significant federal and state regulation, which may effect rates of return on
such investments and the kinds of services that may be offered. ......In
addition, many natural resource companies historically have been subject to
significant costs associated with compliance with environmental and other safety
regulations and changes in the regulatory climate. Such governmental regulations
may also hamper the development of new technologies, and it is impossible to
predict the direction, type or effect of any future regulation. ......Further,
competition is intense for many natural resource companies. As a result, many of
these companies may be adversely affected in the future and the value of the
securities issued by such companies may be subject to increased share price
volatility. ......The value of the Trust's securities will fluctuate in response
to stock market developments, as well as market conditions for the particular
natural resource with which the issuer is involved. The price of the commodity
will fluctuate due to changes in worldwide levels of inventory, and changes,
perceived or actual, in production and consumption. The value of natural
resources may fluctuate directly with respect to various stages of the
inflationary cycle and perceived inflationary trends and is subject to numerous
factors, including national and international politics. Further, the Trust's
investments in companies are expected to be subject to irregular fluctuations in
earnings, because these companies are effected by changes in the availability of
money, the level of interest rates, and other factors. ......The success of the
Trust's investment program will be dependent to a high degree on the Investment
Adviser's ability to anticipate the onset and termination of inflationary and
deflationary cycles. A failure to anticipate a deflationary cycle could result
in the Trust's assets being disproportionately invested in resource-related
equity securities. Conversely, a failure to predict an inflationary cycle could
result in the Trust's assets being disproportionately invested in U.S.
Government securities. The success of the Trust's investment program will also
be dependent to a high degree on the validity of the premise that the values of
resource-related equity securities will move in a different direction than the
values of U.S. Government securities during periods of inflation or deflation.
If values of both precious metals and U.S. Government securities move down
during the same period of time, the value of the shareholder's investment will
decline rather than stabilize or increase, as anticipated, regardless of whether
the Trust is primarily invested in equity securities or U.S. Government
securities. ......Investment on an international basis involves certain risks
not involved in domestic investments, including fluctuations in foreign exchange
rates, higher foreign brokerage costs, costs of currency conversion, currency
blockage, different accounting standards, difficulty in obtaining foreign court
judgments, future political and economic developments, and the possible
imposition of exchange controls or other foreign governmental laws or
restrictions. Since the Trust may invest in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of securities in the portfolio and the unrealized
appreciation or depreciation of investments. In addition, with respect to
certain foreign countries there is the possibility of expropriation and
nationalization of assets, confiscatory taxation, political or social
instability or diplomatic developments which could affect investments in those
countries. Interest and dividends, and possibly other amounts received by the
Trust in respect of foreign investments, may be subject to withholding and other
taxes at the source, depending upon the laws of the country in which the
investment is made.
SPECIALIZED INVESTMENT TECHNIQUES AND RELATED RISKS ......The Trust's
investments are subject to the following techniques and may involve certain
risks, which are summarized below. There can be no assurance that the Trust will
attain its investment objectives.
Lending of Portfolio Securities
The Trust may seek to increase its income by lending portfolio securities
in accordance with its secondary investment objective of generating current
income consistent with the preservation of shareholders' purchasing power. Any
such loan will be continuously secured by collateral at least equal to the
market value of the security loaned. The Trust would have the right to call a
loan and obtain the securities loaned at any time on five days' notice. During
existence of a loan, the Trust would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned and would also
receive a fee, or the interest on investment of the collateral, if any. The
total value of the securities loaned at any time will not be permitted to exceed
30% of the Trust's total assets. As with other extensions of credit, there are
risks of delay in recovery or even loss of rights in the collateral should the
borrower of the securities fail financially. However, the loans would be made
only to U.S. domestic organizations deemed by the Trust's management to be
earned justifies the attendant risk.
Repurchase Agreements
A repurchase agreement is an agreement under which the Trust acquires a
money market instrument (a security issued by the U.S. Government or any agency
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thereof, a banker's acceptance or a certificate of deposit) from a commercial
bank, subject to resale to the seller at an agreed upon price and date (normally
the next business day). Such an agreement is, in effect, a loan by the Trust.
The resale price reflects an agreed upon interest rate effective for the period
the instrument is held by the Trust and is unrelated to the interest rate on the
underlying instrument. The Trust will effect repurchase agreements only with
large well-capitalized banks whose deposits are insured by the Federal Deposit
Insurance Corporation and which have capital and undivided surplus of at least
$200,000,000. The instrument acquired by the Trust in these transactions
(including accrued interest) must have a total value in excess of the value of
the repurchase agreement and will be held by the Trust's custodian bank until
repurchased. The Trustees of the Trust will monitor the Trust's repurchase
agreement transactions on a continuous basis and will require that the
applicable collateral will be retained by the Trust's custodian bank. No more
than an aggregate of 10% of the Trust's total assets, at the time of investment,
will be invested in repurchase agreements maturing in more than seven days or in
any other similarly illiquid security which is subject to legal or contractual
restrictions on resale or which is not readily marketable. There is no
limitation on the Trust's assets with respect to investments in repurchase
agreements having maturities of less than seven days.
The use of repurchase agreements involves certain risks. For example, if
the seller under a repurchase agreement defaults on its obligation to repurchase
the underlying instrument at a time when the value of the instrument has
declined, the Trust may incur a loss upon its disposition. If the seller becomes
insolvent and subject to liquidation or reorganization under bankruptcy or other
laws, a bankruptcy court may determine that the underlying instrument is
collateral for a loan by the Trust and therefore is subject to sale by the
trustee in bankruptcy. Finally, it is possible that the Trust may not be able to
substantiate its interest in the underlying instrument. While the Trust's
Trustees acknowledge these risks, it is expected that they can be controlled
through careful monitoring procedures.
PORTFOLIO TURNOVER
Securities will generally be purchased for possible
long-term appreciation and not for short-term trading profits; however, the rate
of portfolio turnover is not a limiting factor when the Investment Adviser deems
changes appropriate. It is anticipated that the Trust's annual portfolio
turnover rate will normally not exceed 50%. A rate of turnover of 100% could
occur, for example, if the value of the lesser of purchases and sales of
portfolio securities for a particular year equaled the average monthly value of
portfolio securities owned during the year (excluding short-term securities).
A high rate of portfolio turnover involves a correspondingly greater
amount of brokerage commissions and other costs which must be borne directly by
the Trust and thus indirectly by its shareholders. It may also result in the
realization of larger amounts of short-term capital gains which are taxable to
shareholders as ordinary income.
The portfolio turnover rates for the years, 1996, 1995, and 1994 were 20%,
33%, and 0%, respectively.
INVESTMENT RESTRICTIONS
The Trust has adopted the following investment restrictions which are
fundamental policies and cannot be changed without approval by the holders of a
majority of the outstanding voting securities of the Trust (which in the
Prospectus and this Statement of Additional Information means the lesser of
either (i) a majority of the outstanding shares of the Trust or (ii) 67% or more
of the shares represented at a meeting if more than 50% of such shares are
present or represented by proxy at the meeting):
1. The Trust will not purchase any securities (other than securities of
the U.S. Government, its agencies, or instrumentalities) if as a result more
than 5% of the Trust's total assets (taken at current value) would then be
invested in securities of a single issuer.
2. The Trust will not make loans, except that the Trust may (a) purchase a
portion of an issue or publicly distributed bonds, debentures, or similar debt
securities (including so-called "repurchase agreements" whereby the Trust's cash
is, in effect, deposited on a secured basis with a bank for a period and yields
a return; provided, however, that no more than an aggregate of 10% of the
Trust's total assets, immediately after such investment, will be invested in
repurchase agreements having maturities longer than seven days and other
investments subject to legal or contractual restrictions on resale, or which are
not readily marketable), and (b) lend portfolio securities upon such conditions
as may be imposed from time to time by the Securities and Exchange Commission,
provided that the value of securities loaned at any time may not exceed 30% of
the Trust's total assets.
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3. The Trust will not borrow in excess of 5% of its total assets, taken at
market or other fair value, at the time such borrowing is made, and any such
borrowing may be undertaken only as a temporary measure for extraordinary or
emergency purposes; and the Trust may not pledge, mortgage, or hypothecate its
assets taken at market to an extent greater than 15% of the Trust's gross assets
taken at cost. The Trust has no current intention of pledging its assets.
4. The Trust will not purchase any securities if such purchase would cause
more than 10% of the total outstanding voting securities of such issuer (other
than any wholly-owned subsidiary of the Trust) to be held by the Trust.
5. The purchase or retention of the securities of any issuer is prohibited
if the officers and Trustees of the Trust or its Investment Adviser owning
beneficially more than 1/2 of 1% of the securities of such issuer together own
beneficially more than 5% of the securities of such issuer.
6. The purchase of the securities of any other investment company is
prohibited, except that the Trust may make such a purchase in the open market
involving no commission or profit to a sponsor or dealer (other than the
customary broker's commission), provided that not more than 10% of the trust's
total assets (taken at market or other fair value) would be invested in such
securities and not more than 3% of the voting stock of another investment
company would be owned by the Trust immediately after the making of any such
investment, and the Trust may make such a purchase as part of a merger,
consolidation or acquisition of assets. The Trust has no current intention of
investing in other investment companies.
7. The purchase of securities of companies with a record (including that
of their predecessors) of less than three years' continuous operation is
prohibited if such purchase would cause the Trust's investments in such
companies taken at cost to exceed 5% of the total assets of the Trust taken at
current values, except that this restriction shall not apply to any of the
Trust's investments in any of its wholly-owned subsidiaries.
8. The Trust will not participate in a joint venture or on
a joint and several basis in any securities trading account.
9. The Trust will not act as an underwriter of securities issued by
others, except to the extent it may be deemed such in connection with the
disposition of securities owned by it.
10. The Trust will not make short sales of securities unless at all times
when a short position is open, it owns an equal amount of such securities or
owns securities convertible into or exchangeable for, without payment of any
further consideration, securities of the same issue as, and at least equal in
amount to, the securities sold short. The Trust has no current intention of
selling securities short.
11. The Trust will not purchase securities on margin, but may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities.
12. The Trust will not make investments in real estate or
indirect interests in real estate.
As a diversified investment company, the Trust is subject to the following
limitations as to 75% of its total assets: (a) the Trust may not invest more
than 5% of its total assets in the securities of any one issuer, except
obligations of the U.S. Government and its agencies and instrumentalities; (b)
the Trust may not own more than 10% of the outstanding voting securities of any
one issuer.
The policies set forth above are fundamental policies and may not be
changed without shareholder approval.
As a non-fundamental policy, the Trust presently does not intend to invest
directly in: (a) physical commodities or in other natural resource assets or
contracts related to natural resource assets; (b) option transactions involving
portfolio securities and securities indices; (c) options on foreign currencies;
(d) financial futures and related options. The Trust presently does not intend
to invest directly in natural resource assets or contracts related to natural
resource assets.
MANAGEMENT
Officers and Trustees
The Trust's Officers and Trustees, their positions with the Trust and
their principal occupations are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company, other
than the Trust, for the last five years. Unless otherwise noted, the business
address of each Officer and Trustee is 2717 Furlong Road, Doylestown,
Pennsylvania 18901, which is also the address of the Trust's Investment Adviser,
Anchor Investment Management Corporation. Those Trustees who are "interested
persons" of the Trust or the Investment Adviser, as defined in the Investment
Company Act of 1940, by virtue of their affiliation with either the Trust or the
Investment Adviser, are indicated by an asterisk (*).
Positions with Principal
Name and Address the Trust Occupation
DAVID W. C. PUTNAM Chairman Chairman and Trustee,
10 Langley Road and Trustee Anchor Capital Accumulation Trust,
Newton Centre, MA 02159 Anchor International Bond Trust, Anchor
Strategic Assets Trust, Anchor Resource and
Commodity Trust,and Anchor Gold and
Currency Trust (Investment Companies);
President and
Director, F. L. Putnam Securities Company,
Inc.; Chairman and Director,Boston Security
Counsellors, Inc.(Investment Adviser);
Chairman and Trustee, The Advest Advantage
Investment Trusts (Investment Companies.)
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SPENCER H. LE MENAGER Secretary and President, Equity, Inc.; formerly
222 Wisconsin Avenue Trustee President, Howe, Barnes & Johnson
P. O. Box 390 Inc. (securities dealer).
Lake Forest, IL 60045
MAURICE A. DONAHUE Trustee Director and Professor, Institute for
50 Holy Family Road Governmental Services and Walsh-
Holyoke, MA 01040 Saltonstall Professor of Practical
Politics, University of Massachusetts,
Director Vanguard Savings Bank,
Former Member , Massachusetts House of
Representatives, Former Member and
President, Massachusetts Senate.
DAVID Y. WILLIAMS* President and President and Director, Anchor
2717 Furlong Road Trustee Investment Management Corporation;
Doylestown, PA 18901 President and Director,
Meeschaert & Co., Inc.
(securities dealer).
J. STEPHEN PUTNAM Vice President President, Robert Thomas
880 Carillon Parkway and Treasurer Securities, Inc. (securities
P.O. Box 12749 dealer) since June 1983; Director
St. Petersburg, FL 33733 F. L. Putnam Securities Company,
Incorporated. Formerly,
President and Director, EPB,Inc.
and Vice President, Burgess &
Leith Incorporated.
CHRISTOPHER Y. WILLIAMS Vice President Vice President and Secretary, Anchor
1442 Margaret Court and Asst. Investment Management Corporation;
Jamison, PA 18929 Secretary Vice President and Secretary,
Meeschaert & Co., Inc. (securities
dealer)
JOSEPH C. WILLIAMS Vice President Vice President and Treasurer, Anchor
4664 Louise St Clair and Asst. Investment Management Corporation;
Doylestown,PA 18901 Treasurer Vice President and Treasurer,
Meeschaert & Co., Inc. (securities
dealer)
The Officers and Trustees of the Trust as a group owned or had
beneficial interests in less than one percent (1%) of those
shares of the Trust outstanding on December 31, 1996.
Messrs. Putnam, Le Menager, and Donahue, are the Trustees who
are not "interested persons" (as that term is defined in the
Investment Company Act of 1940) of the Trust.
Mr. David W.C. Putnam and Mr. J. Stephen Putnam are brothers.
Mr. David Y. Williams is the father of Mr. Christopher Y.
Williams and Mr. Joseph C. Williams. Mr. Christopher Y. Williams
and Mr. Joseph C. Williams are brothers.
Mr. David W.C. Putnam and Mr. J. Stephen Putnam are brothers.
Mr. David Y. Williams is the father of Mr. Christopher Y.
Williams and Mr. Joseph C. Williams. Mr. Christopher Y. Williams
and Mr. Joseph C. Williams are brothers.
The standing audit committee is composed of Messrs. Le Menager
and, Donahue. The Trust does not have a nominating or
compensation committee.
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Remuneration of Officers and Trustees
The Trust does not and will not pay any remuneration to its Officers or
Trustees as such who are "interested persons" (as that term is defined in the
Investment Company Act of 1940) of the Trust or of any investment advisor or
distributor of the Trust but does pay an annual fee not in excess of $1,000 to
each Trustee who is not such an "interested person". The Trust did not
compensate any persons, including directors, officers or employees, in excess of
$60,000.00 during its most recent fiscal year.
Investment Advisory Contract
The Trust engages Anchor Investment Management Corporation as Investment
Adviser pursuant to an Investment Advisory Contract dated December 16, 1994
which was approved on such date by the Trust's sole shareholder.
The Investment Adviser manages the investments and affairs of the Trust,
subject to the supervision of the Trust's Board of Trustees. The Investment
Adviser furnishes to the Trust investment advice and assistance, administrative
services, office space, equipment and clerical personnel and investment
advisory, statistical and research facilities. The Trust is responsible for all
its expenses not assumed by the Investment Adviser under the contract,
including, without limitation, the fees and expenses of the custodian and
transfer agents, costs incurred in determining the Trust's net asset value and
keeping its books; the cost of share certificates; membership dues in investment
company organizations; distribution and brokerage commissions and fees; fees and
expenses of registering its shares; expenses of reports to shareholders, proxy
statements and other expenses of shareholders' meetings; insurance premiums,
printing and mailing expenses; interest, taxes and corporate fees; legal and
accounting expenses; and fees and expenses of Trustees not affiliated with the
Investment Adviser. The Trust will also bear expenses incurred in connection
with litigation in which the Trust is a party and the legal obligation the Trust
may have to indemnify its Officers and Trustees with respect thereto.
The Trust pays the Investment Adviser, as compensation under the
Investment Advisory Contract, a monthly fee at the rate of .75% per annum of the
average daily net assets of the Trust. This fee is higher than that paid by most
other investment companies. The Investment Adviser received fees of $$0,
$50,131, and $63,710 for services rendered in 1994, 1995, and 1996,
respectively.
The Investment Advisory Contract which remained in effect until December
16, 1996, has been extended by a vote of the majority of the Trust's
disinterested trustees to November 1997. In general, the investment advisory
contract may be extended from year to year thereafter if approved at least
annually (a) by the vote of a majority of the outstanding shares of the Trust or
by the Board of Trustees, and in either case, (b) by vote of a majority of the
Trustees of the Trust who are not parties to the contract or "interested
persons" (as that term is defined in the Investment Company Act of 1940) of any
such party cast in person at a meeting called for the purpose. Amendments to the
contract require similar approval by the shareholders and "disinterested"
Trustees. The contract is terminable at any time without penalty by the Board of
Trustees of the Trust or by vote of a majority of the Trust's shares on 60 days'
written notice or by the Investment Adviser on 90 days' written notice. The
contract terminates automatically in the event of its assignment (which includes
the transfer of a controlling block of the stock of the Investment Adviser).
Investment Adviser
The Investment Adviser, Anchor Investment Management Corporation, is
located at 2717 Furlong Road, Doylestown, Pennsylvania 18901. The Trust's
principal offices are also located at this address.
The Investment Adviser and Meeschaert & Co., Inc., the Trust's principal
underwriter (the "Distributor"), are affiliated through common control with
Societe D'Etudes et de Gestion Financieres Meeschaert, S.A. ("Societe
D'Etudes"), one of France's largest privately-owned investment management firms,
which together are referred to as the "Meeschaert organization". The Meeschaert
organization was established in Roubaix, France in 1935 by Emile C. Meeschaert,
and presently manages, with full discretion, an aggregate amount of
approximately $1.5 billion for about 8,000 individual (and institutional)
customers, including $250 million in French mutual funds. The Investment
Adviser's Directors and Officers are as follows:
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Luc E. Meeschaert, Chairman; his principal occupation is serving as Chief
Executive Officer of Societe D'Etudes.
David Y. Williams, President and Director; Mr. Williams is
also President and a Trustee of the Trust and President and a
Director of Meeschaert & Co., Inc., the Trust's Distributor.
Paul Jaspard, Vice President; his principal occupation is serving as
President of Global Equity Managers, S.A., 26A Rue Albert-Premier, L-1015,
Luxembourg (Investment Advisor). Mr. Jaspard has managed other portfolios for
the Meeschaert Organization for more than eighteen years and is the individual
primarily responsible for the day-to-day management of the Trust's portfolio.
PRINCIPAL HOLDERS OF SECURITIES
As of the date of this Statement of Additional Information,
Wendel & Co., as an indirect nominee of Societe D'Etudes, 23 Rue Drouot, 75009,
Paris, France, held of record 89.70% of the outstanding shares of the Trust. ^
DETERMINATION OF NET ASSET VALUE
The net asset value is determined by the Trust as of 12:00
Noon Eastern Time on each business day on which the New York Stock Exchange is
open for trading or on any day that the Trust is open, but the New York Stock
Exchange is not open for business, if there occurs an event which might
materially affect the net asset value of the Trust's redeemable shares.
The manner of determination of the net asset value is briefly as follows:
Securities traded on a U.S. national or other foreign securities exchange are
valued at the last sale price on the primary exchange on which they are listed,
of if there has been no sale that day, at the current bid price. Other U.S. and
foreign securities for which market quotations are readily available are valued
at the known current bid price believed most nearly to represent current market
value. Other securities (including limited traded securities) and all other
assets of the Trust are valued at fair market value as determined in good faith
by the Trustees of the Trust. Liabilities are deducted from the total, and the
resulting amount is divided by the number of shares outstanding.
Each day investment securities traded on a national securities exchange
are valued at the noon sales price; securities traded in the over-the-counter
market are valued at the last sale price as of 12:00 Noon. Gold bullion is
valued at noon based on the New York spot gold price. Gold coins, foreign
currencies, and foreign denominated securities for which market quotations are
readily available are valued at the known bid price as of 12:00 Noon. Temporary
cash investments are stated at cost. In the absence of a reliable market for a
particular metal, security or currency, an investment therein will be valued at
fair value as determined in good faith by the Trustees.
^ ^ ^
DISTRIBUTION OF SHARES
Rule 12-b-1 under the Investment Company Act of 1940 ("Rule 12b-1")
permits investment companies to use their assets to bear expenses of
distributing their shares if they comply with various conditions, including
adoption of a distribution plan containing certain provisions set forth in the
rule. On December 16, 1994, such a Plan was approved by the Board of Trustees,
including a majority of the Independent Trustees who have no direct or indirect
financial interest in the Plan or any agreement related thereto (the "Rule 12b-1
Trustees"). The Plan is of the type sometimes called a compensation plan.
The Plan is currently not in effect, and will not be implemented
unless and until reapproved by the Trust's shareholders and Board of Trustees.
Accordingly, for the year ended December 31, 1996, the Trust paid no fees under
the Plan to the Distributor.
In connection with the Plan, Trust shares are offered for sale at net
asset value, and the Trust may pay the Distributor a commission equal to up to
5% of the price paid to the Trust for each sale, all or any part of which may be
re-allowed by the Distributor to others (dealers) making such sales. To the
extent that the distribution fee is not paid to such dealers, the Distributor
may use such fee for its expenses of Distribution of Trust shares. If such fee
exceeds its expenses, the Distributor may realize a profit from these
arrangements. The Plan provides for an aggregate limit on the amount of all
payments pursuant to the Plan equal to .75 of 1% of the Trust's average daily
net assets for any fiscal year. If, so long as the Plan is in effect, the
Distributor's re-allowances to dealers and other expenses exceed the .75 of 1%
limit in any particular year, it could collect in any future year such amounts
(which do not include interest or other carrying charges) up to any amount by
which amounts paid to it under the Plan in that year are less than the
applicable limit for the prior year. In such a case it might receive amounts in
excess of its then current expenses.
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Whether any expenditure under the Plan is subject to a state expense limit
will depend upon the nature of the expenditure and the terms of the state law,
regulation or order imposing the limit. Any expenditure subject to such a limit
will be included in the Trust's total operating expenses for purposes of
determining compliance with the expense limit.
The Plan may be terminated at any time by vote of the Rule 12b-1.
Trustees, or by vote of a majority of the outstanding voting shares of the
Trust. Any change in the Plan that would materially increase the distribution
expenses of the Trust provided for in the Plan requires shareholder approval;
otherwise, the Plan may be amended by the Trustees, including the Rule 12b-1
Trustees.
If and when the Plan is in effect, the selection and nomination of
candidates for Independent Trustees must be committed to the discretion of the
Independent Trustees.
The total amounts paid by the Trust under the foregoing arrangements may
not currently exceed the maximum limit specified above, and the amounts and
purposes of expenditures under the Plan must be reported to the Rule 12b-1
Trustees quarterly. The Rule 12-b1 Trustees may require or approve changes in
the implementation or operation of the Plan, and may also require that total
expenditures by the Trust under the Plan be kept within limits lower than the
maximum amount currently permitted under the Plan as stated above.
If the limit on expenditures is reached at any given time, the Distributor
intends, although it is not obligated to do so, to continue to offer shares of
the Trust and to continue to pay others re-allowances and maintenance fees. In
such an event, the Distributor intends that it will seek payment from the Trust
in the amount of its commissions (including re-allowances) and maintenance fees
at such times when the expenditures limit has not otherwise been reached. The
Trust will have no contractual obligation to pay any portion of such amounts to
the Distributor, and the amount, if any, and the time and conditions under which
the Trust might make such payment as requested by the Distributor will be solely
within the discretion of the 12b-1 Trustees.
Contingent Deferred Sales Charge
In conjunction with, but not as part of, the Plan, a contingent deferred
sales charge may be imposed upon certain redemptions of shares purchased after
inception of the plan. The charge in respect of such redemptions made during the
first four calendar years following purchase of the shares is as follows: 4% in
the year of purchase; 3% in the second year; 2% in the third year; and 1% in the
fourth year. These charges are not received by the Distributor and will not
reduce amounts paid to the Distributor under the Plan.
HOW TO PURCHASE SHARES
Shares of the Trust may be purchased from the Distributor,
2717 Furlong Road, Doylestown, Pennsylvania 18901. There is no sales charge or
commission payable by the investor with respect to the purchase of shares. For
new shareholders initiating accounts, the minimum investment is $500, except for
exchanges of securities for Trust shares, where the minimum is $5,000 (see "How
to Exchange Securities for Trust Shares" in the Prospectus). There is no minimum
for shareholders making additional investments to existing accounts.
An application for use in making an initial investment in the Trust
appears in the back of the Trust's Prospectus. The applicable price will be the
net asset value next determined after the order is received by the Distributor.
(See "Determination of Net Asset Value".)
The Distributor sells shares to the public as agent for the trust and is
the sole principal underwriter for the Trust under a Distributor's Contract
dated November 23, 1994. The contract automatically terminates upon assignment
(which includes the transfer of a controlling block of the stock of the
Distributor) by either party. The contract also provides that it will continue
for two years from its date and thereafter its continuation from year to year
will require approval by a majority of the Trust's shares or by the Board of
Trustees and, in addition to such approval, the approval, by vote cast in
person, at a meeting called for the purpose, by a majority of the Independent
Trustees. Under the contract, the Distributor pays expenses of sales literature,
including copies of any prospectus of the Trust delivered to investors, and the
Trust pays for its registration and registration of its shares under the Federal
Securities and Investment Company Acts and state securities acts and other
expenses in which it has a direct interest.
For the years ended December 31, 1996, December 31, 1995
and December 31, 1994, the Distributor received no sales
commission from the Trust.
REDEMPTION, EXCHANGE AND REPURCHASE OF SHARES Any shareholder will be
able to require the Trust to redeem
his shares. In addition, the Trust will maintain a continuous offer to
repurchase its shares. If a shareholder uses the services of a broker in selling
his shares in the over-the-counter market, the broker may charge a reasonable
fee for his services. Redemptions, exchanges and repurchases will be made in the
following manner:
1. Certificates for shares of the Trust may be mailed or presented, duly
endorsed, with signatures guaranteed in the manner described below, with a
written request that the Trust redeem the shares, to the Trust's transfer agent,
Anchor Investment Management Corporation, 2717 Furlong Road, Doylestown,
Pennsylvania 18901 or to the Trust. If no certificate has been issued and shares
are held in an Open Account with the Trust's transfer agent, a written request
that the Trust redeem such shares, accompanied by a separate assignment form
(stock power), duly endorsed, with signatures guaranteed in the manner described
below, may be mailed to presented as described above. The redemption price will
be the net asset value next determined after the certificates and request are
received.
2. A request for repurchase may be communicated to the Trust by a
shareholder through a broker. The repurchase price will be the net asset value
next determined after the request is received by the Trust, provided that, if
the broker receives the request before noon and transmits it to the Trust before
1:00 p.m. Eastern Time the same day, the repurchase price will be the net asset
value determined as of 12:00 Noon Eastern Time that day. If the broker receives
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the request after noon, the repurchase price will be the net asset value
determined as of 12:00 Noon Eastern Time the following day. If an investor uses
the services of a broker in having his shares repurchased, the broker may charge
a reasonable fee for his services.
Payment for shares redeemed or repurchased will be delivered within seven
days after receipt of the shares, and/or required documents, duly endorsed. The
signature(s) on the certificate or separate assignment form must be guaranteed
by a commercial bank or trust company or by a member of the New York, American,
Pacific Coast, Boston or Chicago Stock Exchange. A signature guarantee by a
savings bank and loan association or notarization by a notary public is not
acceptable.
In order to insure proper authorization the transfer agent may request
additional documents such as, but not restricted to, stock powers, trust
instruments, certificates of death, appointments as executor, certificates of
corporate authority and waiver of tax required in some states from selling
estates before redeeming shares.
Under unusual circumstances, when the Board of Trustees deems it in the
best interest of the Trust's shareholders, the Trust may make payment for shares
repurchased or redeemed in whole or in part in securities or other assets of the
Trust taken at current values. Such payments are permitted pursuant to Rule
18f-1 of the Investment Company Act of 1940, provided that the Trust does not
make an election with the Commission that would irrevocably preclude such
payments in kind. The Trust does not presently intend to make such an election.
Such an election would require the Trust to redeem with cash at a shareholder's
election in any case where the redemption involves less than $250,000 (or 1% of
the Trust's net assets at the beginning of each ninety day period during which
such redemptions are in effect, if that amount is less than $250,000). Should
payment be made in securities, the redeeming shareholder may incur brokerage
costs in converting such securities to cash.
The right of redemption may be suspended or the payment date postponed
when the New York Stock Exchange is closed for other than customary weekend or
holiday closings, or when trading on the New York Stock Exchange is restricted,
as determined by the Securities and Exchange Commission; for any period when an
emergency as defined by rules of the Commission exists; or during any period
when the Commission has, by order, permitted such suspension. In case of a
suspension of the right of redemption, a shareholder who has tendered a
certificate for redemption or made a request for redemption through a broker may
withdraw his request or certificate or he will receive payment of the net asset
value determined next after the suspension has been terminated.
A shareholder may receive more or less than he paid for his shares,
depending on the net asset value of the shares at the time of redemption or
repurchase.
DISTRIBUTIONS
The Trust distributes any income dividends and capital gains distributions
in additional shares, or, at the option of the shareholder, in cash. In
accordance with his distribution option, a shareholder may elect (1) to receive
both dividend and capital gain distributions in additional shares or (2) to
receive dividends in cash and capital gain distributions in additional shares or
(3) to receive both dividends and capital gain distributions in cash. A
shareholder may change his distribution option at any time by notifying the
Transfer Agent in writing. To be effective with respect to a particular dividend
or distribution, the new distribution option must be received by the Transfer
Agent at least 30 days prior to the close of the fiscal year. All accounts with
a cash dividend option will be changed to reinvest both dividends and capital
gains automatically upon determination by the Trust's transfer agent that the
address of record for the account is not current.
Dividends and capital gain distributions received in shares will be
received by the Trust's transfer agent, as agent for the shareholder, and
credited to his Open Account in full and fractional shares computed at the
record date closing net asset value.
Interest and dividends, and possible other amounts received by the Trust
in respect of foreign investments, may be subject to withholding and other taxes
at the source, depending upon the laws of the country in which the investment is
made.
TAXES
The Trust intends to qualify each year as a regulated investment company
under Subchapter M of the Internal Revenue Code, as subsequently amended or
re-enacted. In order to so qualify, the Trust must, among other things, (i)
derive at least 90% of its gross income from dividends, interest, payments with
respect to certain securities, loans and gains from the sale of securities; (ii)
derive less than 30% of its gross income from gains from the sale or other
disposition of securities held for less than three months; (iii) distribute at
least 90% of its dividend, interest and certain other taxable income each year;
(iv) maintain at least 50% of the value of its total assets in cash, cash items,
U.S. Government securities, securities of other regulated investment companies,
and other securities to the extent that no more than 5% of its assets are
invested in the securities of one issuer and it owns no more than 10% of the
value of any issuer's voting securities, and (v) have no more than 25% of its
assets invested in the securities (other than those of the U.S. Government or
other regulated investment companies) of any one issuer or of two or more
issuers which the Trust controls and which are engaged in the same, similar or
related trades and businesses. To the extent the Trust qualifies for treatment
as a regulated investment company, the Trust will not be subject to Federal
income tax on income paid to its shareholders in the form of dividends or
capital gains distributions.
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Dividends paid by the trust will generally not qualify for the
dividends-received deductions for corporations. The Trust will notify
shareholders each year of the amount of dividends and distributions, including
the amount of any distribution of long-term capital gains.
The Trust will be subject to a nondeductible 4% exercise tax to the extent
that it fails to distribute, with respect to each calendar year, at least 98% of
its ordinary income for such calendar year and 98% of its capital gain net
income for the one-year period ending on October 31 of such calendar year. In
addition, to the extent that the Trust fails to distribute 100% of its ordinary
and capital gain net income with respect to any calendar year, the amount of
such shortfall is subject to such tax unless distributed with respect to the
following calendar year. For a distribution to qualify as such with respect to a
calendar year under the foregoing rules, it must be declared by the Trust before
December 31 of the year and paid by the Trust before the following February 1.
Such distributions will be taxable to taxable shareholders in the year the
distributions are declared rather than the year in which the distributions are
received.
The Trust's foreign investments may be subject to foreign withholding
taxes. The Trust will be entitled to claim a deduction for such foreign
withholding taxes for federal income tax purposes. However, any such taxes will
reduce the income available for distribution to shareholders.
Under the Interest and Dividend Compliance Act of 1983, the Trust will be
required to withhold and remit to the U.S. Treasury 20% of the dividends and
proceeds of redemptions paid with respect to any shareholder who fails to
furnish the Trust with a correct taxpayer identification number, who
under-reported dividends or interest income, or who fails to certify that he or
she is not subject to such withholding. An individual's tax identification
number is his or her social security number.
If, in any taxable year, the Trust fails to qualify as a regulated
investment company, the Trust would be taxed in the same manner as an ordinary
corporation and the distributions to its shareholders would not be deductible by
the Trust in computing its taxable income. In addition, in the event of such
failure to qualify, the Trust's distributions, to the extent derived from the
Trust's current or accumulated earnings and profits, would be taxable to its
shareholders as ordinary income dividends, even if those dividends might
otherwise have been considered distributions of capital gains.
PORTFOLIO SECURITY TRANSACTIONS
Decisions to buy and sell portfolio securities for the
Trust are made pursuant to recommendations by the Investment Adviser. The Trust,
through the Investment Adviser, seeks to execute portfolio security transactions
on the most favorable terms and in the most effective manner possible. In
seeking such execution, the Investment Adviser will use its best judgment in
evaluating the terms of a transaction and will give consideration to various
relevant factors, including without limitation the size and type of the
transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the quality of services rendered by the broker-dealer in other
transactions, and the reasonableness of the brokerage commission, if any.
It is expected that on frequent occasions, there will be many
broker-dealer firms which will meet the foregoing criteria for a particular
transaction. In selecting among such firms, the Trust, through the Investment
Adviser, may give consideration to those firms which have sold, or are selling,
shares of the Trust. In addition, the Investment Adviser may allocate Trust
brokerage business on the basis of brokerage and research services and other
information provided by broker-dealer firms, which may involve the payment of
reasonable brokerage commissions in excess of those chargeable by other
broker-dealer firms for effecting the same transactions. Such "brokerage and
research services" may be used for other of the Investment Adviser's advisory
accounts and all such services may not be used by the Investment Adviser in
managing the Trust. The term "brokerage and research services" includes advice
as to the value of the securities; the advisability of investing in, purchasing
or selling securities; the availability of securities, or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends; portfolio strategy and the performance
of accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement).
The policy referred to above of considering sales of shares of the Trust
as one of the factors in the selection of broker-dealer firms to execute
portfolio transactions, subject to the requirement of seeking best execution, is
specifically permitted by a rule of the National Association of Securities
Dealers, Inc. The rule also provides, however, that no member firm shall favor
or disfavor the distribution of shares of any particular fund or group of funds
on the basis of brokerage commissions received or expected by such firm from any
source.
The Trust and one or more of the other investment companies or accounts
for which the Investment Adviser or its affiliates render investment advisory
services on occasion may simultaneously be engaged in the purchase or sale of
the same security. In such event the transactions in such security normally will
be averaged as to price and allocated as to amount among the several clients or
accounts in a manner deemed equitable to all. It is recognized that in some
cases this system could have a detrimental effect on the price or volume of the
security as far as the Trust is concerned. In other cases, however, it is
believed that the ability to participate in volume transactions will produce
better executions for the Trust.
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To the extent consistent with the policy of seeking best price and
execution, a portion of the Trust's portfolio transactions may be executed
through the Distributor, Meeschaert & Co., Inc., which is an affiliate of the
Investment Adviser. In the event that this occurs, it will be on the basis of
what management believes to be current information as to rates which are
generally competitive with the rates available from other responsible brokers
and the lowest rates, if any, currently offered by the Distributor. During 1996,
1995, and 1994, commissions paid to broker-dealers by the Trust were $10,228,
$19,248, and $0 respectively. During 1996, 1995, and 1994, brokerage commissions
of $4,078, $4,015, and $0, respectively, were paid by the Trust to Meeschaert &
Co., Inc. For the year ended December 31, 1996, the percentage of total
commissions paid to Meeschaert & Co., Inc. was 39.9%. During 1996 the Trust's
purchases and sales of securities, exclusive of United States government
securities and short-term notes, amounted to $3,711,233 and $1,124,700,
respectively. 51.9% of such purchases and sales involved the payment of
commissions with respect to transactions effected through Meeschaert & Co., Inc.
The portfolio turnover rates for 1996, 1995, and 1994 were 20%, 33%, and 0%,
respectively.
MISCELLANEOUS INFORMATION
Custodian, Transfer Agent and Dividend-Paying Agent
All securities, cash and other assets of the Trust are
received, held in custody and delivered or distributed by Investors Bank & Trust
Company, Custodian, 24 Federal Street, Boston, Massachusetts 02110, provided
that in cases where foreign securities must, as a practical matter, be held
abroad, the Trust's custodian bank and the Trust will make appropriate
arrangements so that such securities may be legally so held abroad. The Trust's
custodian bank does not decide on purchases or sales of portfolio securities or
the making of distributions. Anchor Investment Management Corporation, 2717
Furlong Road, Doylestown, Pennsylvania 18901, serves as transfer agent and
dividend-paying agent for the Trust.
Independent Public Accountants
For the fiscal year ended December 31, 1996, the Trust employed Livingston
& Haynes, P.C., 40 Grove St., Wellesley, Massachusetts 02181, to certify its
financial statements and to prepare its federal and state income tax returns.
Registration Statement
This Statement of Additional Information does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules relating thereto, which the Trust has filed with, and which are
available at the Securities and Exchange Commission, Washington, DC., under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, to which reference is hereby made.
FINANCIAL STATEMENTS
The financial statements of the Trust appearing in the
Statement of Additional Information have been examined by Livingston and Haynes,
P.C., independent accountants, as set forth in their report, and are included in
reliance upon such reports given on the authority of said firm as experts in
accounting and auditing. A copy of the Trust's Annual Report may be obtained
without charge by writing Anchor Investment Management Corporation, 2717 Furlong
Road, Doylestown, Pennsylvania 18901, or by calling Anchor Investment Management
Corporation at (215) 794-2980.
39
<PAGE>
Part C. Other Information.
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Selected Per Share Data and Ratios for a share outstanding
throughout each period ended December 31, for the ten years
ended December 31, 1996
Included in Part B:
Report of Independent Public Accountants*
Statement of Assets and Liabilities December 31,1996*
Statement of Operations for the year ended
December 31, 1996*
Statement of Changes in Net Assets for the years
ended December 31, 1996 and December 31, 1995*
Schedule of Investments, December 31, 1996*
Notes to Financial Statements*
* Included in Registrant's annual report to
shareholders for December 31, 1996
a copy of which is included as Exhibit 12 and
incorporated herein by reference thereto.
(b) Exhibits:
Exhibit 11. Consent of Independent Public Accountants.
Exhibit 12. Trust's Annual Reports to Shareholders, December 31,1996.
Exhibit 17. Power of Attorney, dated April 19, 1997 and Certified Resoulutions.
Exhibit 27. Financial Data Schedule.
Item 25. Persons controlled by or under common Control with Registrant.
(a) No person controls the Registrant.
(b) The following table sets forth the name, address and percentage of
ownership at March 31, 1997, of each person who then owned of record 5%
or more of any class of the Registrant's outstanding shares:
Name: Address: Percentage Ownership:
Bank of New York PO Box 1066 89.70%
Wall Street Station
New York, NY 10268
Lazard Freres & Co. 120 Broadway 8.06%
New York, NY 10271
At March 31, 1997, officers and Trustees of the Registrant as a group owned
less than 1% of the outstanding Common shares.
Item 26. Number of Holders of Securities.
The number of holders of record of securities of the Registrant as of
March 31, 1997 is as follows:
Title of Class:Number of Holders of Record:
Common Shares 8
Class A Shares 0
40
<PAGE>
Item 27. Indemnification.
No amendment. The information was filed in Item 27 of
Amendment No. 1
Item 28. Business and Other connections of Investment Advisor.
The information in the Statement of Additional Information under the
caption of "Management-Investment Adviser" is hereby incorporated herein
by this reference thereto.
Item 29. Principal Underwriters.
(a) The Distributor currently acts as distributor for the
following investment companies:
Anchor Capital Accumulation Trust
S.E.C. file # 811-00972
Anchor International Bond Trust
S.E.C. file # 811-4644
Anchor Strategic Assets Trust
S.E.C. file # 811-5963
(b) See the answer to Item 21 of Part B, which is herein
incorporated by this
reference thereto.
Item 30. Location of Accounts and Records.
Persons maintaining physical possession of accounts, books, and other
documents required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and rules promulgated thereunder include Registrant's
Secretary, David W.C. Putnam; Registrant's Investment Advisor, Anchor
Investment Management Corporation; and Registrant's custodian, Investors
Bank & Trust company. The address of the Secretary is 10 Langley Road,
Suite 404, Newton Centre, Massachusetts 02159; the address of the
investment adviser and the transfer agent and dividend paying agent is
7022 Bennington Woods Drive, Pittsburgh, Pennsylvania 15237; and the
address of the custodian is Financial Product Services, 1 Lincoln Plaza,
Boston, Massachusetts 02205.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
(a) Not applicable.
(b) Not applicable.
(c) Registrant hereby undertakes to call a meeting of
shareholders for the purpose of voting on the question of
removal of a Trustee or Trustees when requested in
writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of common stock and, in
connection with such meeting, to comply with the
provisions of Section 16(c) of the Investment Company Act
of 1940 relating to shareholder communications.
41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) and has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Doylestown and the Commonwealth of Pennsylvania on the 19th day of April,
1997.
ANCHOR RESOURCE AND COMMODITY TRUST
By:DAVID Y. WILLIAMS
David Y. Williams, President
Pursuant to the Securities Act of 1933, this Amendment to this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
DAVID W.C. PUTNAM Chairman and Trustee April 19, 1997
David W. C. Putnam
J. STEPHEN PUTANM Treasurer (Principle April 19, 1997
J. Stephen Putnam Financial Officer)
MAURICE A. DONAHUE Trustee April 19, 1997
Maurice A. Donahue
SPENCER H. LEMENAGER Secretary and Trustee April 19, 1997
Spencer H. LeMenager
DAVID Y. WILLIAMS President and Trustee April 19, 1997
David Y. Williams
*By: PETER K. BLUME April 19, 1997
-----------------
Peter K. Blume
Attorney-in-Fact
42
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 3
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 4
----------------------------------------
ANCHOR RESOURCE AND COMMODITY TRUST
----------------------------------------
EXHIBITS
43
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description of Exhibit
(1) Restated Declaration of Trust, as
amended. (Previously filed as Exhibit 1
to Amendment No. 1)
(2) By-Laws of the Registrant, as amended.
(Previously filed as Exhibit 2 to
Amendment No. 1)
(3) Not applicable.
(4) Specimen Certificates representing Common
Shares and Class A Common Shares of
Beneficial Interest of the Registrant.
(Previously filed as Exhibit 4 to
Amendment No. 1)
(5) Investment Advisory Agreement between the
Registrant and Anchor Investment
Management Corporation. (Previously filed
as Exhibit 5 to Amendment No. 2)
(6) Distributor's Contract between the
Registrant and Meeschaert & Co., Inc.
(Previously filed as Exhibit 6 to
Amendment No. 2)
(7) Not applicable.
(8) Custodian Agreement between the Registrant
and Investors Bank & Trust Company.
(Previously filed as Exhibit 8 to
Amendment No. 1)
(9) Transfer Agency and Service Agreement
between the Registrant and Anchor
Investment Management Corporation.
(Previously filed as Exhibit 9 to
Amendment No. 1)
(10) Opinion and Consent of Counsel.
(Previously filed as Exhibit 10 to
Amendment No. 1)
(11) P.45 Consent of Independent Public Accountants.
(12) P.46 Trust's Annual Report to Shareholders,
December 31, 1996.
(13) Not applicable.
(14) Not applicable.
(15) Distribution Plan of the Registrant.
(Previously filed as Exhibit 15 to
Amendment No. 1)
(16) Not applicable.
(17) P.59 Power of Attorney, dated April 19, 1997
and Certified Resolutions.
(27) P.61 Financial Data Schedule.
44
Livingston & Haynes, P.C.
Certified Public Accountants
40 Grove Street
Wellesley, MA 02181
(617) 237-3339
Member AICPA Division for CPA Firms
Private Companies Practice Section
SEC Practice Section
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Anchor Resource
and Commodity Trust on the amended Form N-1A our report dated January 17,1997,
appearing in the prospectus, which is part of such Registration Statement, and
to the reference to us under the captions, "Condensed Financial Information and
Selected Per Share Data and Ratios".
LIVINGSTON & HAYNES
Wellesley, Massachusetts
April 25, 1997
45
- ------------------------------------------------------------------
ANCHOR
RESOURCE
AND
COMMODITY
TRUST
ANNUAL REPORT
DECEMBER 31, 1996
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
Assets:
Investments at quoted market value (cost $9,695,666;
see Schedule of Investments, Notes 1, 2, & 5)....... $11,196,383
Cash ................................................ 368,353
Dividends and interest receivable.................... 22,756
Other assets......................................... 3,769
-----------
Total assets..................................... 11,591,261
-----------
Liabilities:
Accrued expenses and other liabilities (Note 3 )..... 19,326
-----------
Total liabilities................................ 19,326
-----------
Net Assets:
Capital stock (unlimited shares authorized at $1.00 par
value,amount paid in on 1,106,994 shares outstanding)
(Note 1)............................................. 10,353,183
Accumulated undistributed net investment income...... 62,153
Accumulated realized loss from security transactions,net (344,118)
Net unrealized appreciation in value of investments
(Note 2)............................................. 1,500,717
-----------
Net assets (equivalent to $10.45 per share, based
on 1,106,994 capital shares outstanding)........... $11,571,935
===========
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF OPERATIONS
DECEMBER 31, 1996
Income:
Dividends........................................... $ 93,690
Interest............................................ 72,141
-----------
Total income..................................... 165,831
-----------
Expenses:
Management fees, net (Note 3)....................... 63,710
Audit and accounting fees........................... 9,000
Legal fees.......................................... 8,000
Pricing and bookkeeping fees (Note 4)............... 6,000
Trustees' fees and expenses......................... 1,000
Transfer fees (Note 4).............................. 1,000
Custodian fees...................................... 1,000
Other expenses...................................... 3,764
-----------
Total expenses................................... 93,474
-----------
Net investment income................................ 72,357
-----------
Realized and unrealized gain (loss) on investments:
Realized loss on investments-net................... (110,599)
Increase in net unrealized appreciation in investments 1,116,114
-----------
Net gain on investments.......................... 1,005,515
===========
Net increase in net assets resulting from operations. $1,077,872
===========
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
1996 1995
----------------------------
From operations:
Net investment income................... $ 72,357 $ 135,138
Realized gain (loss) on investments, net (110,599) 60,536
Increase in net unrealized
appreciation in investments............ 1,116,114 384,602
----------- ------------
Net increase in net assets resulting
from operations..................... 1,077,872 580,276
------------ -----------
Distributions to shareholders:
From net investment income ($0.58 per
share in 1995) .......................... -- (429,688)
From net realized gain on investments.. -- --
------------ -----------
Total distributions to shareholders.. -- (429,688)
------------ -----------
From capital share transactions:
Number of Shares
1996 1995
--------- ---------
Proceeds from sale of
shares.............. 391,909 729,330 3,853,096 6,639,581
Shares issued to
shareholders in
distributions
reinvested.......... -- 46,253 -- 429,688
Cost of shares
redeemed.............. (67,818) (4,680) (644,043) (45,139)
-------- -------- ---------- ------------
Increase in net
assets resulting
from capital
share transactions.. (324,091) 770,903 3,209,053 7,024,130
========= ========= ------------ -----------
Net increase in net assets............... 4,286,925 7,174,718
Net assets:
Beginning of period.................... 7,285,010 110,292
End of period (including undistributed
net investment income of $62,153 and
overdistributed net investment
income of $10,203, respectively)......... $ 11,571,935 $7,285,010
============ ===========
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
SELECTED PER SHARE DATA AND RATIOS
Year Ended December 31,
1996 1995 1994
---------------------------------
Investment income........................ $0.15 $0.89 $0.22
Expenses, net............................ 0.09 0.32 2.20
---------------------------------
Net investment income (loss)............. 0.06 0.57 (1.98)
Net realized and unrealized
gain on investments..................... 1.08 0.13 --
Distributions to shareholders:
From net investment
income................................ -- (0.58) --
From net realized gain
on investments........................ -- -- --
---------------------------------
Net increase (decrease)
in net asset value...................... 1.14 0.12 (1.98)
Net asset value:
Beginning of period..................... 9.31 9.19 11.17
================================
End of period........................... $10.45 $9.31 $9.19
================================
Ratio of expenses to
average net assets...................... 1.10% 1.11% 20.12%
Ratio of net investment in-
come (loss) to average net assets....... 0.85% 2.01% (18.13)%
Portfolio turnover....................... 0.20 0.33 --
Number of shares out-
standing at end of period............... 1,106,994 782,903 12,000
Per share data and ratios assuming no
waiver of advisory fees:
Expenses................................. -- -- $ 2.28
Net investment loss...................... -- -- $ (2.06)
Ratio of expenses to
average net assets...................... -- -- 20.87%
Ratio of net investment loss
to average net assets.................. -- -- (18.88)%
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
Value
Quantity (Note 1)
COMMON STOCKS -- 60.39%
Canadian Energy Industry -- 12.35%
10,000 Anderson Exploration Limited................... $ 129,200
6,000 Imperial Oil Limited........................... 283,500
15,000 Rennaissance Energy............................ 514,800
15,000 Talisman Energy Limited....................... 502,800
----------
1,430,300
----------
Coal/Alternate Energy Industry -- 4.28%
15,000 Calenergy Company Incorporated................. 495,000
----------
Gold/Diamond (South African) Indusrty -- 1.24%
5,000 De Beers Consolidated Mines Limited............ 143,125
----------
Gold/Silver Mining Stocks -- 16.20%
15,000 Franco-Nevada Mining Corporation............... 668,100
10,208 Freeport McMoRan Copper & Gold, Class A........ 287,100
40,000 Miramar Mining Corporation..................... 175,200
30,000 Northern Orion Exploration Limited............. 110,700
15,000 Stillwater Mining Company...................... 271,875
16,000 Teck Corporation Class B....................... 362,240
----------
1,875,215
----------
Petroleum (Integrated) Industry -- 6.58%
3,000 Amoco Corporation.............................. 245,625
2,000 Atlantic Richfield Company..................... 269,250
2,000 Mobil Oil Corporation.......................... 246,250
----------
761,125
----------
Petroleum Producing Industry -- 3.58%
12,000 Apache Corporation............................. 414,000
----------
Oilfield Services/Equipment Indusrty --5.34%
6,100 Schlumberger Limited........................... 617,625
----------
Metals & Mining (Diversified) Indusrty --2.32%
12,000 Noranda Incorporated........................... 268,080
----------
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Continued)
Value
Quantity (Note 1)
Environmental Indusrty --1.72%
8,000 Cominco Limited................................ 199,000
----------
Metals & Mining (Diversified) Industry -- 6.78%
5,000 Aluminum Company of America.................... 316,875
5,000 Phelps Dodge Corporation....................... 339,375
2,000 RTZ Corporation PLC, ADR....................... 128,000
----------
784,250
----------
Total common stocks (cost $5,485,250).......... 6,987,720
----------
FOREIGN TIME DEPOSITS -- 10.79%
1,947,405Deutsche Mark, maturing 01/03/97,
at 3.375%..................................... 1,249,455
----------
Total foreign time deposits (cost $1,251,208).. 1,249,455
----------
U.S. TREASURY BILLS -- 25.57%
$3,000,00Treasury Bill, 5.01% yield, maturing 2/27/97
(at cost)...................................... 2,959,208
----------
Total investments (cost $9,695,666)............ 11,196,383
----------
CASH & OTHER ASSETS, LESS LIABILITIES -- 3.25%.......... 375,552
-----------
Total Net Assets............................... $11,571,935
==========
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. Significant accounting policies:
Anchor Resource and Commodity Trust (the "Trust"), a Massachusetts business
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. 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.
C. Capital Stock-- The Trust records sales and redemptions of
its capital stock on trade date.
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).
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(Continued)
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 December 31, 1996, 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 $1,627,280. Aggregate gross
unrealized depreciation in investments in which there was an excess of tax
cost over market value was $126,563. Net unrealized appreciation in
investments at December 31, 1996 was $1,500,717.
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 3/4 of 1% per annum of average
daily net assets. At December 31, 1996, investment advisory fees of $7,302
were due which 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 year ended December 31, 1996 were $1,000.
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 $4,078 in brokerage commissions during the year ended
December 31, 1996. Fees earned by Anchor Investment Management Corporation
for expenses related to daily pricing of the Trust shares and for bookkeeping
services for the year ended December 31, 1996 were $6,000.
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(Continued)
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for year ended December 31, 1996 were:
Cost of securities acquired:
U.S. Government and investments backed by
such securities........................... $ 2,959,208
Other investments....................... 99,866,140
=============
$ 102,825,348
=============
Proceeds from sales and maturities:
U.S. Government and investments backed by
such securities........................... $ --
Other investments....................... 98,941,294
=============
$ 98,941,294
=============
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Trustees of Anchor Resource and
Commodity Trust:
We have audited the accompanying statement of assets and liabilities of Anchor
Resource and Commodity Trust (a Massachusetts business trust), including the
schedule of investments, as of December 31, 1996, the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the selected per share data
and ratios for each of the three years in the period then ended. These financial
statements and per share data and ratios are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and per share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Anchor Resource and Commodity Trust as of December 31, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the selected per share
data and ratios for each of the three years in the period then ended, in
conformity with generally accepted accounting principles.
LIVINGSTON & HAYNES, P.C.
Wellesley, Massachusetts,
January 17, 1997.
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
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
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., and Trustee
Inc.,
President and Director, Anchor Investment
Management Corporation
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
INVESTMENT ADVISER AND TRANSFER AGENT
Anchor Investment Management Corporation
2717 Furlong Rd., Doylestown, Pennsylvania 18901
(215) 794-2980
DISTRIBUTOR
Meeschaert & Co., Inc.
2717 Furlong Rd., Doylestown, Pennsylvania 18901
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
Yukevich, Blume, Marchetti & Zangrilli
One Gateway Center, Pittsburgh, Pennsylvania 15222
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Anchor Resource and
Commodity Trust, hereby severally constitute David WC Putnam,David Y. Williams,
and Peter K. Blume, and each of them singly, our true and lawful attorneys, with
full power to them and each of them singly to sign for us, and in our names and
in the capacity mentioned below, any and all Registration Statements and/or
Amendments to the Registration Statements, filed with the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys to any and all amendments to said Registration
Statement, and all additional Registration Statements and Amendments thereto.
Witness our hands and common seal on the dates set forth below*
Signature Title Date
DAVID W.C. PUTNAM
David W. C. Putnam Chairman and Trustee April 19, 1997
J. STEPHEN PUTNAM
J. Stephen Putnam Treasurer (Principle April 19, 1997
Financial Officer)
SPENCER H. LEMENAGER
Spencer H. LeMenager Secretary and Trustee April 19, 1997
MAURICE A.DONAHUE
Maurice A. Donahue Trustee April 19, 1997
DAVID Y. WILLIAMS
David Y. Williams President and Trustee April 19, 1997
* This Power of Attorney may be executed in several counterparts, each of which
shall be regarded as an original and all of which taken together shall
constitute one and the same Power of Attorney, and any of the parties hereto may
execute this Power of Attorney by signing any such counterpart.
59
<PAGE>
CERTIFIED RESOLUTIONS
The undersigned, Christopher Y. Williams, Assistant Secretary of
Anchor International Bond Trust, DOES HEREBY CERTIFY that the following
resolutions were duly adopted by the Trustees of the Trust, and that such
resolutions have not been amended, modified or rescinded and remain in full
force and effect on the date hereof.
RESOLVED: That Peter K. Blume, Esquire, attorney for the
Trust, be and hereby is named and constituted agent
for service with respect to the aforesaid
Registration Statement to receive notices and
communication with respect to the 1993 Act and the
1940 Act, with all power consequent upon such
designation of and under the rules and regulations
of the Commission.
RESOLVED: That the signature of any officer of the Trust required by law to
be affixed to the Registration Statement, or to any amendment
thereof, may be affixed by said officer personally or by an
attorney-in-fact duly constituted in writing by said officer to
sign his name thereto.
IN WITNESS WHEREOF, I have executed this Certificate as of April 19,
1997.
CHRISTOPHER Y. WILLIAMS
Christopher Y. Williams
60
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ANCHOR RESOURCE AND COMMODITY TRUST DECEMBER 31, 1996 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE ANNUAL REPORT.
Item Item Description
Number
1996
3(a) Net asset value:
Beginning of year $9.31
3(a) Net investment income 0.06
(loss)...........
3(a) Net realized and
unrealized gain . 1.08
(loss) on investments
3(a) Distributions to
shareholders:
3(a) From net
investment income
(loss)........... --
3(a) From net realized
gains on ....
investments...... --
3(a) Net asset value:
End of year.... $10.45
======
3(a) Ratio of expenses to
average net ..... 1.10%
assets...........
61
</TABLE>
