ANCHOR
RESOURCE
AND
COMMODITY
TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1998
(UNAUDITED)
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ANCHOR RESOURCE AND COMMODITY TRUST
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(Unaudited)
Assets:
Investments at quoted market value (cost $9,153,112 ;
see Schedule of Investments, Notes 1, 2, & 5)................. $9,364,794
Cash ......................................................... 112,597
Dividends and interest receivable.............................. 13,009
Other Assets................................................... 913
--------------
Total assets.............................................. 9,491,313
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Liabilities:
Payable for capital shares redeemed............................ 3,418
Accrued expenses and other liabilities (Note 3 )............... 12,948
--------------
Total liabilities......................................... 16,366
--------------
Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 1,029,708 shares outstanding) (Note 1)...... 9,669,311
Accumulated undistributed net investment income (Note 1)....... 62,265
Accumulated realized loss from security transactions, net (Note 1) (468,311)
Net unrealized appreciation in value of investments (Note 2)... 211,682
--------------
Net assets (equivalent to $9.20 per share, based on
1,029,708 capital shares outstanding).................... $ 9,474,947
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ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF OPERATIONS
JUNE 30, 1998
(Unaudited)
Income:
Dividends..................................................... $ 70,406
Interest...................................................... 42,941
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Total income.............................................. 113,347
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Expenses:
Management fees, net (Note 3)................................. 38,690
Pricing and bookkeeping fees (Note 4)......................... 7,248
Legal fees.................................................... 3,999
Audit and accounting fees..................................... 2,999
Transfer fees (Note 4)........................................ 2,500
Custodian fees................................................ 1,789
Trustees' fees and expenses................................... 1,000
Other expenses................................................ 2,029
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Total expenses............................................ 60,254
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Net investment income.......................................... 53,093
------------
Realized and unrealized loss on investments:
Realized loss on investments-net............................. (149,881)
Decrease in net unrealized appreciation in investments....... (539,255)
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Net loss on investments................................... (689,136)
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Net decrease in net assets resulting from operations........... $ (636,043)
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ANCHOR RESOURCE AND COMMODITY TRUST
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STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1998 Year Ended
(Unaudited) December 31,
1997
------------- -------------
From operations:
Net investment income........................... $ 53,093 108,043
Realized loss on investments, net............... (149,881) (135,336)
(Decrease) increase in net unrealized
appreciation in investments.................... (539,255) (749,780)
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Net (decrease) increase in net assets
resulting from operations............. (636,043) (777,073)
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Distributions to shareholders:
From net investment income..................... -- --
From net realized gain on investments.......... -- --
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Total distributions to shareholders......... -- --
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From capital share transactions:
Number of Shares
1998 1997
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Proceeds from
sale of shares.......... 3,300 121,833 34,065 1,316,315
Shares issued to share-
holders in distributions
reinvested................ -- -- -- --
Cost of shares redeemed....(61,070) (141,349) (617,715) (1,416,537)
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(Decrease) increase in net
assets resulting from
capital share
transactions............. (57,770) (19,516) (583,650) (100,222)
========== =========== ------------ -----------
Net (decrease) increase in net assets............ (1,219,693) (877,295)
Net assets:
Beginning of period............................ 10,694,640 11,571,935
============== ============
End of period (including undistributed net
investment income of $62,265 and
$9,172, respectively).......................... $ 9,474,947 $10,694,640
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ANCHOR RESOURCE AND COMMODITY TRUST
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SELECTED PER SHARE DATA AND RATIOS
Six Months
Ended Year Ended December 31,
June 30,
1998
(Unaudited) 1997 1996 1995 1994
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Investment income......$ 0.11 $ 0.22 $0.15 $0.89 $0.22
Expenses, net.......... 0.06 0.13 0.09 0.32 2.20
-------------------------------- ---------------------
Net investment income
(loss)................. 0.05 0.09 0.06 0.57 (1.98)
Net realized and
unrealized
(loss) gain on
investments............ (0.68) (0.71) 1.08 0.13 --
Distributions to
shareholders:
From net investment
income............ -- -- -- (0.58) --
From net realized
gain on investments.... -- -- -- -- --
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Net increase (decrease)
in net asset value.... (0.63) (0.62) 1.14 0.12 (1.98)
Net asset value:
Beginning of period... 9.83 10.45 9.31 9.19 11.17
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End of period......... $9.20 $9.83 $10.45 $9.31 $9.19
======================================================
Ratio of expenses to
average net assets.... 1.16% 1.13% 1.10% 1.11% 20.12%
Ratio of net
investment in-
come (loss) to
average net assets..... 1.02% 0.89% 0.85% 2.01% (18.13)%
Portfolio turnover..... 0.14 0.09 0.20 0.33 --
Average commission
rate paid.............. 0.0672 0.0575 0.0752 0.0374 --
Number of shares out-
standing at end of
period................. 1,029,708 1,087,478 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)%
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ANCHOR RESOURCE AND COMMODITY TRUST
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SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(Unaudited)
Value
Quantity (Note 1)
COMMON STOCKS -- 64.65%
Canadian Energy Industry -- 2.86%
18,000 Rennaissance Energy...................................... 270,900
-----------
Copper Industry --3.03%
5,000 Phelps Dodge Corporation................................. 287,190
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Gold/Silver Mining Stocks -- 11.33%
30,000 Euro-Nevada Mining Corporation........................... 412,800
30,000 Franco-Nevada Mining Corporation......................... 601,500
40,000 Miramar Mining Corporation............................... 48,800
30,000 Northern Orion Exploration Limited....................... 10,200
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1,073,300
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Metals & Mining (Diversified) Industry --4.69%
8,000 Rio Algom Limited........................................ 119,360
7,000 Rio Tinto PLC ADR........................................ 325,500
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444,860
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Oilfield Services/Equipment Industry --16.52%
10,000 Enron Oil & Gas Corporation.............................. 199,380
12,000 Halliburton Company...................................... 531,000
12,200 Schlumberger Limited..................................... 834,944
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1,565,324
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Petroleum (Integrated) Industry -- 22.21%
6,000 Amoco Corporation........................................ 251,628
4,000 Atlantic Richfield Company............................... 312,000
5,000 Kerr McGee Company....................................... 291,565
4,000 Mobil Oil Corporation.................................... 307,000
5,000 Noble Affiliates Incorporated............................ 189,690
40,000 Nova Corporation of Canada............................... 459,600
8,000 Unocal Corporation....................................... 292,504
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2,103,987
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Petroleum Producing Industry -- 4.01%
12,000 Apache Corporation....................................... 380,256
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Total common stocks (cost $5,900,105).................... 6,125,817
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ANCHOR RESOURCE AND COMMODITY TRUST
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SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
Value
Quantity (Note 1)
FOREIGN TIME DEPOSITS -- 11.27%
1,948,607 Deutsche Mark, maturing 07/01/98,
at 3.250% (cost $1,081,672)............................. 1,067,642
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U.S. TREASURY BILLS -- 22.92%.......
2,200,000 Treasury Bill, 4.99% yield, maturing 9/17/98 (at cost)... 2,171,335
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Total investments (cost $9,153,112)...................... 9,364,794
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CASH & OTHER ASSETS, LESS LIABILITIES -- 1.16%..................... 110,153
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Total Net Assets........................................ $9,474,947
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ANCHOR RESOURCE AND COMMODITY TRUST
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
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. Options are valued in the same manner.
Foreign currencies and foreign denominated securities are translated at
current market exchange rates as of noon. Temporary cash investments are
stated at cost, which approximates market value. Dividend income is
recorded on the ex-dividend date and interest income is recorded on the
accrual basis. Gains and losses from sales of investments are calculated
using the "identified cost" method for both financial reporting and federal
income tax purposes.
B.Income Taxes-- The Trust has elected to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute each year all of its taxable income to its shareholders. No
provision for federal income taxes is necessary since the Trust intends to
qualify for and elect the special tax treatment afforded a "regulated
investment company" under subchapter M of the Internal Revenue Code. Income
and capital gains distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts
based on their federal tax basis treatment; temporary differences do not
require such reclassification. During the current fiscal year, permanent
differences, primarily due to foreign currency losses offset by net
investment income, resulted in a net decrease in undistributed net
investment income and a decrease in accumulated realized loss from security
transactions. This reclassification had no affect on net assets.
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ANCHOR RESOURCE AND COMMODITY TRUST
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
C. Capital Stock-- The Trust records the 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).
The Trust does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments. Reported net realized foreign exchange gains or losses
arise from sales and maturities of short term securities, sales of foreign
currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Trust's books, and the United States dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in the
exchange rate.
2. Tax basis of investments:
At June 30, 1998, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $1,070,297. Aggregate gross
unrealized depreciation in investments in which there was an excess of tax
cost over market value was $858,615. Net unrealized appreciation in
investments at June 30, 1998 was $211,682.
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 June 30, 1998, investment advisory fees of $5,693 were
due and were included in "Accrued expenses and other liabilities" in the
accompanying Statement of Assets and Liabilities. David Y. Williams, a
Trustee of the Trust, is President and a Director of the Investment Adviser.
4. Certain transactions:
Anchor Investment Management Corporation provides transfer agent services for
the Trust. Fees earned by Anchor Investment Management Corporation for
transfer agent services for six months ended June 30, 1998 were $3,000.
Certain officers and trustees of the Trust are directors and/or officers of
the investment adviser and distributor. Meeschaert & Co., Inc., the Trust's
distributor, received $3,118 in brokerage commissions during the six months
ended June 30, 1998.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
Fees earned by Anchor Investment Management Corporation
for expenses related to daily pricing of the Trust shares and for
bookkeeping services for the six months ended June 30, 1998 were $7,248.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the six months ended June 30, 1998 were:
Cost of securities acquired:
U.S. Government and investments backed by such
securities...................................... $ 3,454,487
Other investments................................ 28,351,735
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$ 31,806,222
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Proceeds from sales and maturities:
U.S. Government and investments backed by such
securities......................................... $ 2,222,654
Other investments................................ 30,139,380
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$ 32,362,034
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ANCHOR RESOURCE AND COMMODITY TRUST
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OFFICERS AND TRUSTEES
DAVID W.C. PUTNAM Chairman
Chairman, Board of Directors, F.L. Putnam and Trustee
Investment Management Corporation
President and Director, F.L. Putnam Securities
Company Incorporated
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
SPENCER H. LE MENAGER Secretary
President, Equity Inc. and Trustee
ERNIE BUTLER Trustee
President, I.E. Butler Securities
MAURICE A. DONAHUE Trustee
Director and Professor, Institute for Governmental
Services and Walsh-Saltonstall Professor of
Practical Politics, University of Massachusetts
DAVID Y. WILLIAMS President
President and Director, Meeschaert & Co., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
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ANCHOR RESOURCE AND COMMODITY TRUST
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INVESTMENT ADVISER, ADMINISTRATOR AND TRANSFER AGENT
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
CUSTODIAN
Investors Bank & Trust Company
89 South Street, Boston, Massachusetts 02111
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02181
LEGAL COUNSEL
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
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