ANCHOR
RESOURCE
AND
COMMODITY
TRUST
ANNUAL REPORT
DECEMBER 31, 1999
<PAGE>
ANCHOR RESOURCE AND COMMODITY TRUST
Comparison of the Change in Value of a $10,000 Investment in the
Anchor Resource and Commodity Trust and the Dow Jones - AIG Commodity Index
[GRAPHIC OMITTED]
===============================================================================
Anchor Resource and Commodity Trust
Average Annual Total Return
- -------------------------------------------------------------------------------
1 Year 5 Year
(16.01)% (5.09)%
===============================================================================
2.
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ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
Assets:
Investments at quoted market value (cost $986,365;
see Schedule of Investments, Notes 1, 2, & 5)................. $ 1,160,506
Investment securities sold receivable.......................... 1,614,667
Cash ......................................................... 150,510
Interest receivable............................................ 1,443
------------
Total assets.............................................. 2,927,126
------------
Liabilities:
Capital shares redeemed payable................................ 1,258,946
Accrued expenses and other liabilities (Note 3 )............... 45,813
------------
Total liabilities......................................... 1,304,759
------------
Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 247,414 shares outstanding) (Note 1 & 6).... 5,383,053
Accumulated undistributed net investment income (Note 1 & 6)... (728,828)
Accumulated realized loss from security transactions, net
(Note 1 & 6)................................................... (3,205,999)
Net unrealized depreciation in value of investments (Note 2 & 6) 174,141
------------
Net assets (equivalent to $6.56 per share, based on
247,414 capital shares outstanding)...................... $ 1,622,367
============
The accompanying notes are an integral part of these financial statements.
3.
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ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF OPERATONS
DECEMBER 31, 1999
Income:
Interest...................................................... $ 20,462
Dividends..................................................... 4,836
------------
Total income.............................................. 25,298
------------
Expenses:
Legal fees.................................................... 70,334
Pricing and bookkeeping fees (Note 4)......................... 16,816
Transfer fees (Note 4)........................................ 12,661
Management fees, net (Note 3)................................. 12,051
Custodian fees................................................ 3,498
Audit and accounting fees..................................... 3,000
Trustee fees.................................................. 1,833
Reserve for liquidation (Note 4).............................. 19,838
Other expenses................................................ 4,204
------------
Total expenses............................................ 144,235
------------
Net investment loss............................................ (118,937)
------------
Realized and unrealized loss on investments:
Realized loss on investments-net............................. (1,059,269)
Increase in net unrealized appreciation in investments....... 985,934
------------
Net loss on investments................................... (73,335)
------------
Net decrease in net assets resulting from operations........... $ (192,272)
============
The accompanying notes are an integral part of these financial statements.
4.
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ANCHOR RESOURCE AND COMMODITY TRUST
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
1999 1998
----------------------------
From operations:
Net investment (loss) income.................... $ (118,937) $ 56,321
Realized loss on investments, net............... (1,059,269) (670,858)
Increase (decrease) in net unrealized
appreciation in investments.................... 985,934 (1,092,930)
------------- ------------
Net decrease in net assets
resulting from operations............. (192,272) (1,707,467)
-------------- ------------
Distributions to shareholders:
From net investment income ($0.65 per share in
1998)......................................... -- (70,599)
From net realized gain on investments.......... -- --
-------------- ------------
Total distributions to shareholders......... -- (70,599)
-------------- ------------
From capital share transactions:
Number of Shares
1999 1998
---------- -----------
Proceeds from
Sale of shares.......... 14,057 56,849 98,450 494,745
Net assets received from
acquisition of Anchor
Strategic Assets Trust..... 399,227 -- 2,659,202 --
Shares issued to share-
holders in distributions
reinvested................ -- 9,026 -- 70,492
Cost of shares redeemed.... (283,845) (1,035,378) (1,864,548) (8,560,276)
-------- ---------- ----------- -----------
Increase (decrease) in net
assets resulting from
capital share
transactions.............. 129,439 (969,503) 893,104 (7,995,039)
========== =========== ------------ -----------
Net increase (decrease) in net assets............ 700,832 (9,773,105)
Net assets:
Beginning of period............................ 921,535 10,694,640
------------- -----------
End of period (including undistributed net
investment income of $(728,828)and
$9,226, respectively)......................... $ 1,622,367 $ 921,535
============= ===========
The accompanying notes are an integral part of these financial statements.
5.
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ANCHOR RESOURCE AND COMMODITY TRUST
SELECTED PER SHARE DATA AND RATIOS
Year Ended December 31,
1999 1998 1997 1996 1995
------------------------------------------------------
Investment income...... $0.64 $1.97 $0.22 $0.15 $0.89
Expenses, net.......... 3.68 1.25 0.13 0.09 0.32
------------------------------------------------------
Net investment (loss)
income................. (3.02) 0.72 0.09 0.06 0.57
Net realized and
unrealized gain (loss)
on investments........ 1.77 (2.09) (0.71) 1.08 0.13
Distributions to
shareholders:
From net investment
income............ -- (0.65 ) -- -- (0.58)
From net realized
gain on
investments....... -- -- -- -- --
------------------------------------------------------
Net (decrease) increase
in net asset value.... (1.25) (2.02) (0.62) 1.14 0.12
Net asset value:
Beginning of period... 7.81 9.83 10.45 9.31 9.19
------------------------------------------------------
End of period......... $6.56 $7.81 $9.83 $10.45 $9.31
======================================================
Total Return........... (16.01%) (14.99%) (5.93%) 12.24% 7.63%
Ratio of expenses to
average net assets.... 4.09% 1.50% 1.13% 1.10% 1.11%
Ratio of net
investment (loss) in-
come to average net
assets................ (3.37)% 0.86% 0.89% 0.85% 2.01%
Portfolio turnover..... 1.58 0.49 0.09 0.20 0.33
Average commission
rate paid............. 0.0325 0.0633 0.0575 0.0752 0.0374
Number of shares out-
standing at end of
period................ 247,414 117,975 1,087,478 1,106,994 782,903
The accompanying notes are an integral part of these financial statements.
6.
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ANCHOR RESOURCE AND COMMODITY TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
Value
Quantity (Note 1)
- -------- --------
COMMON STOCKS - 71.53%
Gold/Silver Mining Stocks - 71.53%
7,600 Barrick Gold Corporation.................................$ 135,375
3,000 Cominco Limited.......................................... 63,375
33,400 Franco Nevada Mining Corporation......................... 520,706
5,300 Freeport McMoran Copper and Gold, Class A................ 97,719
1,100 Rio Tinto PLC............................................ 103,331
3,000 Stillwater Mining........................................ 96,000
40,000 Universal Gold Limited................................... 144,000
-----------
Total common stocks (cost $986,365)...................... 1,160,506
-----------
CASH & OTHER ASSETS, LESS LIABILITIES - 28.47%..................... 461,861
-----------
Total Net Assets.........................................$1,622,367
===========
The accompanying notes are an integral part of these financial statements.
7.
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ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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.
On June 21, 1999, the shareholders approved the Agreement and Plan of
Reorganization between Anchor Resource and Commodity Trust ("Surviving
Trust") and Anchor Strategic Assets Trust ("Target Trust"). The shareholders
of the target Trust became shareholders of the Surviving Trust and received
shares of the Surviving Trust equal in dollar value to the then current value
of their shares in the Target Trust, effective at the close of business on
August 31, 1999.
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 decreasing 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.
8.
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ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(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 December 31, 1999, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $175,245. Aggregate gross unrealized
depreciation in investments in which there was an excess of tax cost over
market value was $1,104. Net unrealized appreciation in investments at
December 31, 1999 was $174,141.
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, 1999, investment advisory fees of $1,740
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.
The accompanying notes are an integral part of these financial statements.
9.
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ANCHOR RESOURCE AND COMMODITY TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
4. Certain transactions:
The Trust has entered into an agreement with Cardinal Investment Services,
Inc. for transfer agent and dividend disbursing agent services. Annual fees
for these services are $12,661.
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 $15,718 in brokerage commissions during the year ended
December 31, 1999. 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, 1999 were $16,816.
At a meeting of the Board of Trustees on December 3, 1999, the board approved
in form a Plan of Liquidation and Dissolution of the Trust. In approving the
Plan of Liquidation and Dissolution, the Board considered the impact of the
withdrawal of the Trust's largest shareholder on the asset base of the Trust
and the subsequent impact on the Trust's expense ratio. The Trustees approved
and ratified the creation of a reserve fund in the amount of $19,838 for the
purpose of satisfying any and all reasonable costs and expenses which may be
incurred by the Trust in liquidating its assets.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the year ended December 31, 1999 were:
Cost of securities acquired:
U.S. Government and investments backed by such
securities....................................... $ --
Other investments................................ 64,944,046
---------------
$ 64,944,046
===============
Proceeds from sales and maturities:
U.S. Government and investments backed by such
securities...................................... $ --
Other investments............................... 67,438,315
---------------
$ 67,438,315
===============
6. Acquisition of Anchor Strategic Assets Trust:
On August 31, 1999, Anchor Resource and Commodity Trust ("Surviving Trust")
acquired all of the assets of Anchor Strategic Assets Trust ("Target Trust")
pursuant to an Agreement and Plan of Reorganization and Termination approved
by the Target Trust's shareholders on June 21, 1999. The acquisition was
accomplished by a tax-free exchange of 785,930 shares of the Target Trust
valued at $2,659,202 for 399,207 shares of the Surviving Trust. The Target
Trust's net assets, which were $2,659,202 immediately before acquisition and
included $469,799 of unrealized depreciation, were combined with those of the
Surviving Trust. The net assets of the Surviving Trust immediately before and
after acquisition were $722,476 and $3,381,678, respectively.
The accompanying notes are an integral part of these financial statements.
10.
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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, 1999, 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 five 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, 1999 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, 1999, 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 five years in the period then ended, in
conformity with generally accepted accounting principles.
LIVINGSTON & HAYNES, P.C.
Wellesley, Massachusetts,
January 7, 2000
11.
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ANCHOR RESOURCE AND COMMODITY TRUST
OFFICERS AND TRUSTEES
ERNIE BUTLER Trustee
President, I.E. Butler Securities
SPENCER H. LEMENAGER Trustee
President, Equity Inc.
DAVID W.C. PUTNAM Chairman
President, F.L. Putnam and Trustee
Investment Management Company
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
DAVID Y. WILLIAMS President, Secretary
President and Director, Meeschaert & Co., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
12.
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ANCHOR RESOURCE AND COMMODITY TRUST
INVESTMENT ADVISER AND ADMINISTRATOR
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
TRANSFER AGENT
Cardinal Investment Services Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, Boston, Massachusetts 02116
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02482
LEGAL COUNSEL
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
This report is not authorized for distribution to prospective investors in the
Trust unless preceded or accompanied by an effective prospectus which includes
information concerning the Trust's record or other pertinent information.
13.
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