-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PL4hD9+Ot23F9wIYpAnOVATRfq5DivtyatX5PigmOS0ZcjOt7L6X5yvZkBRTDrCE dbzcCNjaX8dI1aOtg/GH4w== 0000715165-02-000017.txt : 20020430 0000715165-02-000017.hdr.sgml : 20020430 ACCESSION NUMBER: 0000715165-02-000017 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020429 EFFECTIVENESS DATE: 20020501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRIGHT MANAGED INCOME TRUST CENTRAL INDEX KEY: 0000715165 IRS NUMBER: 042789493 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-81915 FILM NUMBER: 02624013 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 MAIL ADDRESS: STREET 1: 24 FEDERAL ST STREET 2: 11TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: WRIGHT MANAGED BOND TRUST DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BOND FUND FOR BANK TRUST DEPARTMENTS BFBT FUND DATE OF NAME CHANGE: 19880218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRIGHT MANAGED INCOME TRUST CENTRAL INDEX KEY: 0000715165 IRS NUMBER: 042789493 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03668 FILM NUMBER: 02624014 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 MAIL ADDRESS: STREET 1: 24 FEDERAL ST STREET 2: 11TH FLOOR CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: WRIGHT MANAGED BOND TRUST DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BOND FUND FOR BANK TRUST DEPARTMENTS BFBT FUND DATE OF NAME CHANGE: 19880218 485BPOS 1 insec-1.txt INCOME TRUST PEA #31 DATED MAY 1, 2002 As filed with the Securities and Exchange Commission on April 29, 2002. 1933 Act File No. 2-81915 1940 Act File No. 811-3668 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N--1A REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933 [x] POST-EFFECTIVE AMENDMENT NO. 31 [x] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x] AMENDMENT NO. 33 [x] The Wright Managed Income Trust ---------------------------------------------------- (Exact Name of Registrant as Specified in Charter) 255 State Street, Boston, Massachusetts 02109 ----------------------------------------------------- (Address of Principal Executive Offices) 617-482-8260 ---------------------------------- (Registrant's Telephone Number) Alan R. Dynner 255 State Street, Boston, Massachusetts 02109 ---------------------------------------------------- (Name and Address of Agent for Service) It is proposed that this filing will become effective pursuant to Rule 485 (check appropriate box): [ ] Immediately upon filing pursuant to paragraph (b) [ ] On [date] pursuant to paragraph (a)(1) [x] On May 1, 2002 pursuant to paragraph (b) [ ] 75 days after filing pursuant to paragraph (a)(2) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] On (date) pursuant to paragraph (a)(2) If appropriate, check the following box: [ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment. This Amendment to the registration statement on Form N-1A has been executed by The Wright Blue Chip Master Portfolio Trust. THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS Standard Shares Institutional Shares Money Market Shares PROSPECTUS MAY 1, 2002 THE WRIGHT MANAGED EQUITY TRUST o Wright Selected Blue Chip Equities Fund o Wright Major Blue Chip Equities Fund o Wright International Blue Chip Equities Fund THE WRIGHT MANAGED INCOME TRUST o Wright U.S. Government Intermediate Fund (formerly Wright U.S. Treasury Fund) o Wright U.S. Government Near Term Fund o Wright Total Return Bond Fund o Wright Current Income Fund o Wright U.S. Treasury Money Market Fund As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved these securities or determined whether the information in this prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime. An investment in a mutual fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. TABLE OF CONTENTS - ------------------------------------------------------------------------------- OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUNDS.........1 Wright Selected Blue Chip Equities Fund.........................2 Wright Major Blue Chip Equities Fund............................4 Wright International Blue Chip Equities Fund....................6 Wright U.S. Government Intermediate Fund........................8 Wright U.S. Government Near Term Fund..........................10 Wright Total Return Bond Fund..................................12 Wright Current Income Fund.....................................14 Wright U.S. Treasury Money Market Fund.........................16 INFORMATION ABOUT YOUR ACCOUNT..........................................18 How the Funds Value Their Shares...............................18 Purchasing Shares..............................................18 Selling Shares.................................................19 Exchanging Shares..............................................20 Privacy Concerns...............................................20 DIVIDENDS AND TAXES.....................................................21 MANAGING THE FUNDS......................................................22 FINANCIAL HIGHLIGHTS....................................................24 Wright Selected Blue Chip Equities Fund........................24 Wright Major Blue Chip Equities Fund...........................25 Wright International Blue Chip Equities Fund...................26 Wright U.S. Government Intermediate Fund.......................28 Wright U.S. Government Near Term Fund..........................29 Wright Total Return Bond Fund..................................30 Wright Current Income Fund.....................................31 Wright U.S. Treasury Money Market Fund.........................33 - ------------------------------------------------------------------------------- HOW TO USE THIS PROSPECTUS: Reading this prospectus will help you decide if investing in the Wright funds is right for you. Please keep this prospectus for future reference. Included in this prospectus are descriptions telling you about each fund's: (Graphic -- ship's wheel) OBJECTIVE: what the fund seeks to achieve. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES: how the fund intends to achieve its investment objective and the strategies used by Wright Investors' Service, the fund's investment adviser. (Graphic -- life preserver) PRINCIPAL RISKS: the risks associated with the fund's primary investments. Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST: decide if the fund is a suitable investment for you. (Graphic -- ship's log) PAST PERFORMANCE: the total return on your investment, including income from dividends and interest, and the increase or decrease in price over various time periods. (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES: what overall costs you bear by investing in the fund. OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUNDS - ------------------------------------------------------------------------------- This prospectus offers a variety of equity, fixed income and money market mutual funds designed to meet various individual investment objectives. You can use them singularly or in any combination to meet your objectives. WRIGHT INVESTORS SERVICE, INC. AND THE APPROVED WRIGHT INVESTMENT LIST Using bottom-up fundamental analysis, Wright Investors' Service systematically identifies those companies in the Worldscope(R) database that meet minimum standards of prudence and thus are suitable for investment by fiduciary investors. These companies are then subjected to extensive analysis and evaluation to identify those which meet Wright's standards of investment quality or are leaders in their industry. These standards focus on liquidity, financial strength, stability of profits and growth. - -----SIDE BAR TEXT----- Fundamental Analysis and "Bottom-up" vs "Top-Down" Investing FUNDAMENTAL ANALYSIS is the analysis of company financial statements to forecast future price movements using past records of assets, earnings, sales, products, management and markets. It differs from technical analysis which relies on price and volume movements of stocks and does not concern itself with financial statistics. BOTTOM-UP INVESTING is the analysis of company information before considering the impact of industry and economic trends. It differs from the "top-down" approach which looks first at the economy, then the industry and last the company. - -----END SIDE BAR TEXT----- Only those companies meeting or exceeding these standards are eligible for selection by the Wright investment committee for inclusion on an Approved Wright Investment List (AWIL). There are separate AWILs for U.S. companies, non-U.S. companies, small companies and fixed income securities. Different standards may apply to each list. For example, smaller companies may have a lower market capital requirement but a higher standard of profitability and growth. All the companies on the lists are considered by Wright to be "Blue Chips." This means that the companies have established records of earnings profitability and equity growth. All these companies have established investment acceptance and active, liquid markets or are leaders in their industry. Securities are selected from the various approved lists to meet the objectives and strategies of each fund. - ----SIDE BAR TEXT---- Blue Chip Financial dictionaries define Blue Chip as a common stock of a company that has a long record of profit growth and dividend payment and a reputation for quality management, products and services. Wright further defines this to include only securities issued by companies that meet its qualitative standards. - ----END SIDE BAR TEXT---- WRIGHT SELECTED BLUE CHIP EQUITIES FUND - -------------------------------------------------------------------------------- CUSIP:Standard Shares 98235F107 Ticker Symbol: Standard Shares WSBEX (Graphic -- ship's wheel) OBJECTIVE The fund seeks to provide long-term total return consisting of price appreciation and current income. The fund invests all of its assets in Selected Blue Chip Equities Portfolio, which has the same objectives and policies as the fund. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The portfolio invests at least 80% of its net assets in the equity securities of well-established quality companies on the AWIL. Benchmark weightings and Wright's expectation as to which industries or sectors will perform best also play a role in Portfolio construction. Only those companies whose current operations reflect defined, quantified characteristics which Wright believes are likely to provide comparatively superior total investment return are selected. Wright considers recent valuations and price/earnings momentum when deciding which companies present the best value in terms of current price, and current and forecasted earnings. Selected companies may or may not currently pay dividends on their shares. At the end of 2001, the portfolio's median market capitalization was $3.7 billion. Professional investment personnel characterize the fund as a blend of growth and value. The portfolio attempts to outperform the Standard & Poor's Mid-Cap 400 Index (S&P Mid-Cap 400). Typically, the portfolio sells an individual security when it is no longer eligible for inclusion in the AWIL, or it ceases to meet the investment criteria. When the market is unfavorable, the portfolio's assets may be held in cash or invested in short-term obligations without limit. Although the portfolio would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS Before you invest in any mutual fund, you should understand the risks involved. There are two basic risks prevalent in mutual funds investing in common stocks, such as the fund. They are: o MARKET RISK: when the prices of stocks fall, the value of the fund's investments may fall o MANAGEMENT RISK: Wright's strategy may not produce the expected results, causing losses. In addition to normal market and management risks, fund performance will be adversely affected if mid-cap or value stocks fall out of favor with the market and returns trail the overall stock market, or selected companies remain undervalued or experience an adverse event, such as an unfavorable earnings report. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may be interested in the fund if you are seeking an actively managed common stock investment for total investment return and intend to make a long-term investment commitment. (Graphic -- ship's log) PAST PERFORMANCE The information on the next page shows the performance of the fund's Standard Shares for the ten-year period through December 31, 2001. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart on the following page illustrates the risk of investing in the fund by showing how volatile the fund's performance has been for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 40% - ------------------------------------------------------------------------------------------------------------------- 30% 30.34% 32.70% - ------------------------------------------------------------------------------------------------------------------- 20% 18.57% - ------------------------------------------------------------------------------------------------------------------- 10% 10.75% - ------------------------------------------------------------------------------------------------------------------- 0% 4.71% 2.06% 0.14% 5.75% - ------------------------------------------------------------------------------------------------------------------- 10)% -3.52% - ------------------------------------------------------------------------------------------------------------------- (20)% -10.15% - ------------------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best Quarter:18.72%(4th quarter 1998) Worst Quarter:-19.20%(3rd quarter 1998)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the Standard & Poor's Mid-Cap 400 Index (S&P Mid-Cap 400). The S&P Mid-Cap 400, unlike the fund, reflects no deductions for fees, expenses or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001 1 Year 5 Years 10 Years - ------------------------------------------------------------------------------- STANDARD SHARES - Return before taxes -10.15% 6.94% 8.34% - Return after taxes on distributions -11.57% 3.59% 5.28% - Return after taxes on distributions and sales of fund shares -6.19% 5.30% 6.24% S&P Mid-Cap 400 -0.58% 16.08% 14.98% - ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT---- (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund.
Annual Fund Operating Expenses(1) Standard Shares - ------------------------------------------------------------------------------------------------- (deducted directly from fund Management fee 0.60% assets) Distribution and service (12b-1) fees 0.25% As a shareholder in the fund Other expenses(2) 0.41% you do not pay any sales charges, -------------------------------------------------------------- redemption or exchange fees. TOTAL OPERATING EXPENSES 1.26% -------------------------------------------------------------- (1) Annual fund operating expenses consist of the fund's expenses plus the fund's share of the expenses of the portfolio. (2) Under an expense offset arrangement, custodian fees are reduced by credits based on the fund's average cash balance. Under SEC reporting requirements, these reductions are not reflected in the above expense ratios. If reflected, ratios would be: NET OPERATING EXPENSES AFTER CUSTODIAN FEE REDUCTION 1.25%
EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares $128 $400 $692 $1,523 - -----SIDE BAR TEXT------- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include the fund's share of the portfolio's expenses,12b-1 fees, an administration fee and registration fees. - -----END SIDE BAR TEXT----- WRIGHT MAJOR BLUE CHIP EQUITIES FUND - -------------------------------------------------------------------------------- CUSIP:Standard Shares 98235F305 Ticker Symbol: Standard Shares WQCEX (Graphic -- ship's wheel) OBJECTIVE The fund seeks total return, consisting of price appreciation plus income. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The fund invests at least 80% of its net assets in the equity securities of the larger companies (i.e. with a market capitalization of $5 billion or more) on the AWIL. The fund is quality oriented and focuses on the common stocks of high quality, well-established and profitable companies. The fund attempts to outperform the Standard & Poor's 500 Index (S&P 500). Wright uses quantitative formulas to identify such factors as over/under valuations and compatibility with current market trends. Selected companies are expected to do better over the intermediate term. The market capitalizations of these companies are similar to those companies in the S&P 500. At the end of 2001, the fund's median market capitalization was $41.5 billion. Typically, the fund will sell a security when Wright's quantitative formulas indicate it is no longer desirable to hold it, it becomes incompatible with current market trends or it no longer is eligible for inclusion in the AWIL. The fund will buy securities to increase positions which are below target values and to acquire new securities. When the market is unfavorable, the fund's assets may be held in cash or invested in short-term obligations without limit. Although the fund would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS Before you invest in any mutual fund, you should understand the risks involved. There are two basic risks prevalent in mutual funds investing in common stocks, such as the fund. They are: o MARKET RISK: when the prices of stocks fall, the value of the fund's investments may fall o MANAGEMENT RISK: Wright's strategy may not produce the expected results, causing losses. In addition to normal market and management risk, fund performance will be adversely affected if large capitalization stocks fall out of favor with the market and their returns trail the overall stock market. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST This fund may be suitable for investors seeking a common stock investment for total investment return or a core equity portfolio for those investing in several asset classes. (Graphic -- ship's log) PAST PERFORMANCE The information on the next page shows the performance of the fund's Standard Shares for the ten-year period through December 31, 2001. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart on the following page illustrates the risk of investing in the fund by showing how volatile the fund's Standard Share performance has been for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 40% 33.86% - ------------------------------------------------------------------------------------------------------------------- 30% 20.43% - ------------------------------------------------------------------------------------------------------------------- 20% 28.98% 23.87% - ------------------------------------------------------------------------------------------------------------------- 10% 17.63% - ------------------------------------------------------------------------------------------------------------------- 0% 8.02% 1.00% - ------------------------------------------------------------------------------------------------------------------- (10)% -0.73% - ------------------------------------------------------------------------------------------------------------------- (20)% -12.49% -16.87% - ------------------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:20.97%(4th quarter 1998) Worst quarter:-5.41%(3rd quarter 2001)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the S&P 500. The S&P 500, unlike the fund, reflects no deductions for fees, expenses or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001 1 Year 5 Years 10 Years - ------------------------------------------------------------------------------- STANDARD SHARES - Return before taxes -16.87% 7.75% 9.09% - Return after taxes on distributions -16.87% 5.39% 5.82% - Return after taxes on distributions and sales of fund shares -10.28% 5.55% 6.08% S&P 500 -11.83% 10.69% 12.91% - ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT---- (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES STANDARD SHARES - ------------------------------------------------------------------------------ (deductly directly from fund assets) As a shareholder in Management fee 0.60% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees 0.25% redemption or exchange Other Expenses 0.28% fees. ------------------------------------------------- Total Operating Expenses 1.13% EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Year - ------------------------------------------------------------------------------- Standard Shares $115 $359 $622 $1,375 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include management fees,12b-1 fees and administrative costs, such as shareholder recordkeeping and reports, custodian and pricing services, and registration fees. - -----END SIDE BAR TEXT----- WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND - -------------------------------------------------------------------------------- CUSIP:Standard Shares 98235F404 Ticker Symbol: Standard Shares WIBCX Institutional Shares 98235F867 Institutional Shares WIBIY (Unofficial) (Graphic -- ship's wheel) OBJECTIVE The fund seeks total return consisting of price appreciation plus income. The fund invests all of its assets in International Blue Chip Equities Portfolio, which has the same objectives and policies as the fund. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The portfolio invests at least 80% of its net assets in the equity securities of well-established non-U.S. companies on the International Approved Wright Investment List (IAWIL). Wright focuses on individual stock selection and also considers which country or industry will perform best. Wright systematically reviews about 14,000 non-U.S. companies from more than 50 countries contained in the Worldscope(R) database to identify those which meet minimum standards for fiduciary investment. These companies must have at least five years of audited records and show a record of profitability over the last three years. Wright selects well-established and profitable non-U.S. companies of any size that qualifies for trading on the securities market of the company's home country, on other foreign exchanges or in the U.S. through American Depositary Receipts (ADRs). ADRs represent interests in an underlying security. Companies may or may not currently pay dividends on their shares. Typically, individual securities which no longer meet the standard for the IAWIL or Wright's investment criteria are sold. When the market is unfavorable, the portfolio's assets may be held in cash or invested in short-term obligations without limit. Although the portfolio would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS Before you invest in any mutual fund, you should understand the risks involved. There are two basic risks prevalent in mutual funds investing in common stocks, such as the fund. They are: o MARKET RISK: when the prices of stocks fall, the value of the fund's investments may fall o Management risk: Wright's strategy may not produce the expected results, causing losses. In addition to market and management risks, the fund is subject to additional risks in connection with investing in foreign securities. These include: currency risk (changes in foreign currency rates reducing the value of the fund's assets), seizure, expropriation or nationalization of a company's assets, less publicly available information, and the impact of political, social or diplomatic events. If an ADR is not sponsored by the issuer of the underlying security, there may be reduced access to information about the issuer. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST The fund may be suitable for investors seeking a diversified portfolio of quality non-U.S. equities offering ownership in some of the leading companies throughout the world and who are not adverse to the risks associated with international investing. Also, because foreign stock prices may not move in concert with U.S. market prices, the fund may be a useful way to diversify your investments. (Graphic -- ship's log) PAST PERFORMANCE The information in the table on the next page shows the performance of the fund's Standard Shares for the periods indicated through December 31, 2001 and its Institutional Shares since their inception on July 6, 1997. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart illustrates the risk of investing in the fund by showing how volatile the fund's Standard Share performance has been by illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 30% 34.26% - ---------------------------------------------------------------------------------------------------------- 20% 28.22% 20.73% - ---------------------------------------------------------------------------------------------------------- 10% 13.61% - ---------------------------------------------------------------------------------------------------------- 0% 1.54% 6.14% - ---------------------------------------------------------------------------------------------------------- (10)% -3.94% -1.64% - ---------------------------------------------------------------------------------------------------------- (20)% -17.58% - ---------------------------------------------------------------------------------------------------------- (30)% -24.18% - ---------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best quarter:16.59%(4th quarter 1999) Worst quarter:-17.39%(1st quarter 2001) The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the MSCI Developed World ex U.S. Index. While the fund does not seek to match the returns of this index, this unmanaged index is a good indicator of foreign stock market performance. The MSCI Developed World ex U.S. Index, unlike the fund, reflects no deductions for fees, expenses, or taxes. Prior to March, 2002 the benchmark for this fund was the FT/S&P Actuaries World ex U.S. Index, which has now been revamped to include all markets covered by FTSE which includes many emerging markets. The fund has determined that the MSCI Developed World ex U.S. Index is now a more appropriate benchmark. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001
1 Yr 5 Yrs 10 Yrs 1 Yr Life of the Class(1) - ----------------------------------------------------------------------------------------------------------------------------------- STANDARD SHARES INSTITUTIONAL SHARES (inception date 7/6/97) - Return before taxes -24.18% -1.99% 4.16% - Return before taxes -24.06% -3.38% - Return after taxes on distributions -24.18% -3.08% 3.27% - Return after taxes on distributions -24.06% -5.49% - Return after taxes on distributions - Return after taxes on distributions and sales of fund shares -14.72% -1.47% 3.38% and sales of fund shares -14.65% -2.52% FT/S&P Actuaries World ex U.S. Index -19.91% 1.26% 4.55% FT/S&P Actuaries World ex U.S. Index -19.91% -1.39% MSCI Developed World ex U.S. Index -21.40% 1.13% 4.60% MSCI Developed World ex U.S. Index -21.40% -1.50% - ---------------------------------------------------------------------------------------------------------------------------------- (1)The investment results of Funds with less than 10 years are shown from the first month-end since the Fund's inception for comparison with other averages.
- ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT---- (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. SHAREHOLDER FEES* - ------------------------------------------------------------------------------- (paid directly from Maximum redemption fee your investment) (% of redemption proceeds) 2.00% - ------------------------------------------------------------------------------ * A redemtion fee applies if you redeem your shares within three months of purchase. Standard Institutional ANNUAL FUND OPERATING EXPENSES(1) Shares Shares - ------------------------------------------------------------------------------- (deductly directly from fund assets) As a shareholder in Management fee 0.80% 0.80% the fund, you do not Distribution and pay any sales charges service (12b-1) fees 0.25% none or exchange fees. Other Expenses 0.51% 0.63% ----------------------------------------------------- TOTAL OPERATING EXPENSES 1.56% 1.43% - ------------------------------------------------------------------------------- (1)Annual fund operating expenses consist of the fund's expenses plus the fund's share of the expenses of the portfolio. EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares $159 $493 $850 $1,856 Institutional Shares $146 $452 $782 $1,713 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include the fund's share of the portfolio's expenses,12b-1 fees, an administration fee and registration fees. - -----END SIDE BAR TEXT----- WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND - ------------------------------------------------------------------------------- CUSIP: Standard Shares 982349102 Ticker Symbol: Standard Shares WGOBX (Graphic -- ship's wheel) OBJECTIVE The fund seeks a high total return with an emphasis on income. The fund invests all of its assets in U.S. Government Intermediate Portfolio, which has the same objectives and policies as the fund. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The portfolio invests at least 80% of its total assets in U.S. government obligations and maintains an average weighted maturity of from two to six years depending on the economic outlook and expected trend of interest rates. The portfolio will not invest in derivatives. U.S. government obligations include: o direct obligations of the U.S. government, such as U.S. Treasury bills, notes and bonds o obligations of U.S. government agencies secured by the full faith and credit of the U.S. Treasury, such as securities, including pass-through securities, of the Government National Mortgage Association or securitie of the Export-Import Bank o obligations secured by the right to borrow from the U.S.Treasury, such as securities by the Federal Financing Bank or the Student Loan Marketing Association o obligations backed only by the credit of a government agency such as the Federal Home Loan Bank, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Wright allocates assets based on its view of the economic outlook and expected trend in short-term interest rates. For example, the fund may invest more heavily in shorter term securities when it expects an increase in interest rates. In buying and selling securities for the portfolio, Wright analyzes a security's structural features, current price compared with its estimated value and the credit quality of its issuer. The portfolio's average maturity as of December 31, 2001, was 9.8 years and its duration was 5.8 years. When the market is unfavorable, the portfolio's assets may be held in cash or invested in short-term obligations without limit. Although the portfolio would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS The general risks of bond funds are credit and interest rate risks. Because the portfolio invests in U.S. government obligations, credit risk is less than other types of bonds. However, this does not protect the portfolio against interest rate risk or guarantee the value of the fund's shares. The fund's income may decline during times of falling interest rates. Also, mortgage-related securities (such as Ginnie Maes) are subject to prepayment and extension risks during times of falling or rising interest rates. These risks are defined to mean: o Credit or default risk: An issuer's credit rating may be downgraded or the issuer may be unable to pay principal and interest obligations. o Interest rate risk: Bond prices fall when interest rates rise and vice versa. The longer the maturity of the bonds, the greater the potential change in price. o Prepayment risk: When interest rates decline, the issuer of a security may exercise an option to prepay the principal. This forces the portfolio to reinvest in lower yielding securities. o Extension risk: When interest rates rise, the life of a mortgage-related security is extended beyond the expected prepayment time, reducing the value of the security. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. - -----SIDE BAR TEXT----- Understanding Duration Duration measures how quickly the principal and interest of a bond is expected to be paid. It is also used to predict how much a bond's value will rise or fall in response to small changes in interest rates. Generally, the shorter a fund's duration is, the less its securities will decline in value when there is an increase in interest rates. - -----END SIDE BAR TEXT----- (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may be interested in the fund if you are looking for a higher level of income than a short-term U.S. Government bond fund. (Graphic -- ship's log) PAST PERFORMANCE The information below shows performance of the ten-year period through December 31, 2001. From September 1995 to April 2002, the fund limited its investments to U.S. Treasury issues.. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart illustrates the risk of investing in the fund by showing how volatile the fund's performance has been for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 30% - --------------------------------------------------------------------------------------------------------------- 20% 28.18% - --------------------------------------------------------------------------------------------------------------- 10% 15.90% 12.61% - --------------------------------------------------------------------------------------------------------------- 0% 7.07% 9.08% 9.95% 5.39% - --------------------------------------------------------------------------------------------------------------- (10)% -8.62% -1.26% -3.97% - --------------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:8.63%(2nd quarter 1995) Worst quarter:-7.73%(1st quarter 1994)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the Lehman U.S. Government Intermediate Bond Index. While the fund does not seek to match the returns of the index, this unmanaged index is a good indicator of the performance of the U.S. government bond market. The Indices, unlike funds, reflect no deductions for fee, expenses, or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001
1 Year 5 Years 10 Years - ------------------------------------------------------------------------------------------------------------------------ Standard Shares - Return before taxes 5.39% 6.45% 6.97% - Return after taxes on distributions 3.02% 4.06% 4.45% - Return after taxes on distributions and sales of fund shares 3.37% 4.03% 4.40% Lehman U.S. Government Intermediate Bond Index 8.42% 7.06% 6.65% Lehman U.S. Treasury Bond Index 6.75% 7.32% 7.09%
- ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES(1) Standard Shares - ------------------------------------------------------------------------------- (deductly directly from fund assets) As a shareholder in Management fee 0.45% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees 0.25% redemption or exchange Other Expenses 1.14% fees. ------------------------------------------------- Total Operating Expenses 1.26% Expense Reimbursement(2) (0.82%) -------------------------------------------------- NET OPERATING EXPENSES(3) 1.02% (1)Annual fund operating expenses consist of the fund's expenses plus the fund's share of the expenses of the portfolio. (2)Under a written agreement, Wright waives a portion of its advisory fee and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%. (3)Under an expense offset arrangement, custodian fees are reduced by credits based on the fund's average daily cash balance. Under SEC reporting requirements, these reductions are not reflected in the net operating ratio above. If reflected, the ratio would be: NET OPERATING EXPENSES AFTER CUSTODIAN FEE REDUCTIONS 0.95% EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------- Standard Shares $104 $325 $563 $1,248 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include the fund's share of the portfolio's expenses,12b-1 fees, an administration fee and registration fees. - -----END SIDE BAR TEXT----- WRIGHT U.S. GOVERNMENT NEAR TERM FUND - -------------------------------------------------------------------------------- CUSIP Standard Shares 982349201 Ticker Symbol: Standard Shares WNTBX (Graphic -- ship's wheel) OBJECTIVE The fund seeks a high level of income, which is normally above that available from short-term money market instruments or funds. The fund invests all of its assets in U.S. Government Near Term Portfolio, which has the same objectives and policies as the fund. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The portfolio invests at least 80% of its total assets in U.S. government obligations and maintains an average weighted maturity of between one and three years. These include: o direct obligations of the U.S. government, such as U.S. Treasury bills, notes and bonds o obligations of U.S. government agencies secured by the full faith and credit of the U.S. Treasury, such as securities, including pass-through securities, of the Government National Mortgage Association or securities of the Export-Import Bank o obligations secured by the right to borrow from the U.S. Treasury,such as securities by the Federal Financing Bank or the Student Loan Marketing Association o obligations backed only by the credit of a government agency such as the Federal Home Loan Bank, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). Wright allocates assets among different market sectors and maturities based on its view of the economic outlook and expected trend in short-term interest rates. For example, the fund may invest more heavily in shorter term securities when it expects an increase in interest rates. In buying and selling securities for the portfolio, Wright analyzes a security's structural features, current price compared with its estimated value and the credit quality of its issuer. The portfolio's average maturity as of December 31, 2001, was 2.1 years and its duration was 1.9 years. When the market is unfavorable, the portfolio's assets may be held in cash or invested in short-term obligations without limit. Although the portfolio would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS The general risks of bond funds are credit and interest rate risks. Because the portfolio invests in U.S. government obligations, credit risk is less than other types of bonds. However, this does not protect the portfolio against interest rate risk or guarantee the value of the fund's shares. The fund's income may decline during times of falling interest rates. Also, mortgage-related securities (such as Ginnie Maes) are subject to prepayment and extension risks during times of falling or rising interest rates. These risks are defined to mean: o Credit or default risk: An issuer's credit rating may be downgraded or the issuer may be unable to pay principal and interest obligations. o Interest rate risk: Bond prices fall when interest rates rise and vice versa. The longer the maturity of the bonds, the greater the potential change in price. o Prepayment risk: When interest rates decline, the issuer of a security may exercise an option to prepay the principal. This forces the portfolio to reinvest in lower yielding securities. o Extension risk: When interest rates rise, the life of a mortgage-related security is extended beyond the expected prepayment time, reducing the value of the security. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. - -----SIDE BAR TEXT----- Understanding Duration Duration measures how quickly the principal and interest of a bond is expected to be paid. It is also used to predict how much a bond's value will rise and fall in response to small changes in interest rates. Generally, the shorter a fund's duration is, the less its securities will decline in value when there is an increase in interest rates. - -----END SIDE BAR TEXT----- (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may be interested in the fund if you seek a higher level of income than is available from money market instruments and can accept greater fluctuation in principal. Also, the fund may be suitable if you seek a total return alternative to a money market investment. (Graphic -- ship's log) PAST PERFORMANCE The information below shows the fund's performance of its Standard Shares for the ten-year period through December 31, 2001. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart illustrates the risk of investing in the fund by showing how volatile the fund's performance has been for each full calendar year for the past ten years. YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
20% - ------------------------------------------------------------------------------------------------------------------ 10% 11.93% - ------------------------------------------------------------------------------------------------------------------ 0% 6.26% 7.95% 3.94% 5.93% 5.98% 1.91% 6.94% 6.82% - ------------------------------------------------------------------------------------------------------------------ (10)% -3.09% - ------------------------------------------------------------------------------------------------------------------ 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:4.20%(3nd quarter 1992) Worst quarter:-2.60%(1st quarter 1994)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the Lehman Short (1-3 years) Government Bond Index. While the fund does not seek to match the returns of the Lehman Short Government Bond Index, this unmanaged index is a good indicator of the performance of the U.S. government bond market. The Lehman Short Government Bond Index, unlike the fund, reflects no deductions for fees, expenses, or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001 1 Year 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares - Return before taxes 6.82% 5.50% 5.39% - Return after taxes on distributions 4.94% 3.33% 3.11% - Return after taxes on distributions and sales of fund shares 4.12% 3.31% 3.11% Lehman Government 1-3 Year 8.53% 8.64% 6.10% - ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES(1) Standard Shares - ------------------------------------------------------------------------- (deductly directly from fund assets) As a shareholder in Management fee 0.45% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees 0.25% redemption or exchange Other Expenses 0.52% fees. --------------------------------------------- Total Operating Expenses 1.22% Expense Reimbursement(2) (0.25%) --------------------------------------------- NET OPERATING EXPENSES(3) 0.97% (1)Annual fund operating expenses consist of the fund's expenses plus the fund's share of the expenses of the portfolio. (2)Under a written agreement, Wright waives a portion of its advisory fee and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%. (3)Under an expense offset arrangement, custodian fees are reduced by credits based on the fund's average daily cash balance. Under SEC reporting requirements, these reductions are not reflected in the net operating ratio above. If reflected, the ratio would be: NET OPERATING EXPENSES AFTER CUSTODIAN FEE REDUCTIONS 0.95% EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares $99 $309 $536 $1,190 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include the fund's share of the portfolio's expenses,12b-1 fees, an administration fee and registration fees. - -----END SIDE BAR TEXT----- WRIGHT TOTAL RETURN BOND FUND - ------------------------------------------------------------------------------- CUSIP:Standard Shares 982349300 Ticker Symbol: Standard Shares WTRBX (Graphic -- ship's wheel) OBJECTIVE The fund seeks a superior rate of total return, consisting of a high level of income plus price appreciation. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The fund invests at least 80% of its total assets in U.S. government and investment grade (rated "BBB" or higher) corporate debt securities. These securities must also meet the Wright Quality Rating Standards. Investment selections differ depending on the trend in interest rates. The fund looks for securities that in Wright's judgment will produce the best total return. Wright allocates assets among different market sectors (such as U.S. Treasury securities, U.S. government agency securities and corporate bonds) with different maturities based on its view of the relative value of each sector or maturity. There are no limits on the minimum or maximum weighted average maturity of the fund's portfolio or an individual security. The average weighted maturity will vary from one to 30 years depending on the economic outlook and expected trend in interest rates. As of December 31, 2001, the fund's average maturity was 7.8 years and its duration was 4.8 years. The fund attempts to outperform the Lehman U.S. Aggregate Bond Index. Generally, the fund will sell an individual security if its rating is downgraded below "BBB" by the major rating services such as Moody's or Standard and Poor's. When the market is unfavorable, the fund's assets may be held in cash or invested in short-term obligations without limit. Although the fund would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS The general risks of bond funds are credit and interest rate risks. The fund's risk profile will vary, depending on the mix of its assets. The fund reduces credit risk by investing in U.S. government obligations and investment grade or higher corporate bonds. However, this does not protect the fund against interest rate risk. Interest rate risk is greater for long-term debt securities than for short-term debt securities. These risks are defined to mean: o Interest rate risk: Bond prices fall when interest rates rise and vice versa. The longer the maturity of the bonds, the greater the potential change in price. o Credit or default risk: An issuer's credit rating may be downgraded or the issuer may be unable to pay principal and interest obligations. o Prepayment risk: When interest rates decline, the issuer of a security may exercise an option to prepay the principal. This forces the fund to reinvest in lower yielding securities. Corporate bonds may have a "call" feature which gives the issuer the right to redeem outstanding bonds before their scheduled maturity. o Extension risk: When interest rates rise, the life of a mortgage-related security is extended beyond the expected prepayment time, reducing the value of the security. Also, the fund's income may decline during times of falling interest rates. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. - -----SIDE BAR TEXT----- Understanding Duration Duration measures how quickly the principal and interest of a bond is expected to be paid. It is also used to predict how much a bond's value will rise and fall in response to small changes in interest rates. Generally, the shorter a fund's duration is, the less its securities will decline in value when there is an increase in interest rates. - -----END SIDE BAR TEXT----- (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may be interested in the fund if you seek a level of income consistent with total return by investing in intermediate and longer term debt and can accept price fluctuations. (Graphic -- ship's log) PAST PERFORMANCE The information on the following page shows the fund's performance of its Standard Shares for the ten-year period through December 31, 2001. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart illustrates the risk of investing in the fund by showing how volatile the fund's performance has been for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31 30% - ---------------------------------------------------------------------------------------------------------- 20% 21.97% - ---------------------------------------------------------------------------------------------------------- 10% 11.03% 10.62% - ---------------------------------------------------------------------------------------------------------- 0% 7.13% 0.90% 9.25% 9.56% 4.96% - ---------------------------------------------------------------------------------------------------------- (10)% -6.55% -3.91% - ---------------------------------------------------------------------------------------------------------- 20)% - ---------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:7.69%(2nd quarter 1995) Worst quarter:-4.76%(1st quarter 1994)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the Lehman U.S. Aggregate Bond Index. The Lehman U.S. Aggregate Bond Index, unlike the fund, reflects no deductions for fees, expenses, or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001 1 Year 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares - Return before taxes 4.96% 5.95% 6.21% - Return after taxes on distributions 2.74% 3.64% 3.80% - Return after taxes on distributions and sales of fund shares 3.01% 3.63% 3.80% Lehman Aggregate Bond Index 8.44% 7.43% 7.23% - ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES Standard Shares - ----------------------------------------------------------------------------- (deductly directly from fund assets) As a shareholder in Management fee 0.45% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees 0.25% redemption or exchange Other Expenses 0.32% fees. ------------------------------------------------- Total Operating Expenses 1.02% Expense Reimbursement(1) (0.06%) ------------------------------------------------- NET OPERATING EXPENSES(2) 0.96% - ------------------------------------------------------------------------------- (1) Under a written agreement, Wright waives a portion of its advisory fee and/ or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%. (2)Under an expense offset arrangement, custodian fees are reduced by credits based on the fund's daily average cash balance.Under SEC reporting requirements, these reductions are not reflected in the above expense ratios. If reflected ratios would be: NET OPERATING EXPENSES AFTER CUSTODIAN FEE REDUCTION 0.95% EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------- Standard Shares $98 $306 $531 $1,178 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include management fees,12b-1 fees and administrative costs, such as shareholder recordkeeping and reports, custodian and pricing services, and registration fees. - -----END SIDE BAR TEXT----- WRIGHT CURRENT INCOME FUND - ------------------------------------------------------------------------------- CUSIP: Standard Shares 982349607 Ticker Symbol: Standard Shares WCIFX Institutional Shares 982349870 Institutional Shares WCIIY (Unofficial) (Graphic -- ship's wheel) OBJECTIVE The fund seeks a high level of current income consistent with moderate fluctuations of principal. The fund invests all of its assets in Current Income Portfolio, which has the same objectives and policies as the fund. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The portfolio invests at least 80% of its total assets in debt obligations issued or guaranteed by the U.S. government or any of its agencies or backed only by the credit of a federal agency such as the Federal Home Loan Bank, Fannie Mae (Federal National Mortgage Association) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and corporate debt securities. Since inception, the portfolio has invested mostly in Ginnie Mae (Government National Mortgage Association) mortgage-related securities, but may be expected to invest in Fannie Maes and Freddie Macs in the future. The portfolio maintains an average weighted maturity of less than 30 years. Corporate debt securities include commercial paper and other short-term instruments rated A-1 by Standard & Poor's Ratings Group or P-1 by Moody's Investors Service, Inc. THE PORTFOLIO DOES NOT INVEST IN THE RESIDUAL CLASSES OF COLLATERALIZED MORTGAGE OBLIGATIONS, STRIPPED MORTGAGE-RELATED SECURITIES, LEVERAGED FLOATING RATE INSTRUMENTS OR INDEXED SECURITIES. The portfolio reinvests all principal payments. When the market is unfavorable, the portfolio's assets may be held in cash or invested in short-term obligations without limit. Although the portfolio would do this to reduce losses, defensive investments may conflict with and hurt the fund's efforts to achieve its investment objective. The fund's objective may be changed by the trustees without shareholder approval. (Graphic -- life preserver) PRINCIPAL RISKS The general risks of bond funds are credit and interest rate risks. Credit risk is minimal to the extent the portfolio concentrates in mortgage-related securities whose timely payment of interest and principal is guaranteed by the U.S. government. However, this does not protect the portfolio against interest rate risk or guarantee the value of the fund's shares. Securities based on underlying loans are generally subject to prepayments and extension risks. These risks are defined to mean: o Interest rate risk: Bond prices fall when interest rates rise and vice versa. The longer the maturity of the bonds, the greater the potential change in price. o Credit or default risk: An issuer's credit rating may be downgraded or the issuer may be unable to pay principal and interest obligations. o Prepayment risk: When interest rates decline, the issuer of a security may exercise an option to prepay the principal. This forces the portfolio to reinvest in lower yielding securities. o Extension risk: When interest rates rise, the life of a mortgage-related security is extended beyond the expected prepayment time, reducing the value of the security. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may want to invest in the fund if you are seeking a high level of income over a long period of time. The fund is designed for investors who want to receive the kind of income that mortgage-related securities provide, but do not want to bother with the receipt or reinvestment of principal payments. (Graphic -- ship's log) PAST PERFORMANCE The information in the table on the next page shows the fund's performance of its Standard Shares for the ten-year period through December 31, 2001 and its Institutional Shares since their inception on July 7, 1997. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart illustrates the risk of investing in the fund by showing how volatile the fund's performance has been for each full calendar year for the past ten years. YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
30% - --------------------------------------------------------------------------------------------------------------- 20% - --------------------------------------------------------------------------------------------------------------- 10% 14.46% 10.31% - --------------------------------------------------------------------------------------------------------------- 0% 6.73% 6.59% 4.35% 8.56% 6.51% 0.52% 7.18% - --------------------------------------------------------------------------------------------------------------- (10)% -3.28% - --------------------------------------------------------------------------------------------------------------- (20)% - --------------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:5.61%(2nd quarter 1995) Worst quarter:-3.21%(1st quarter 1994)
The fund's annual return shown above does not reflect the impact of taxes. The table below shows before- and after-tax performance. The fund's average annual return is compared with that of the Lehman GNMA Backed Bond Index. While the fund does not seek to match the returns of the Lehman GNMA Backed Bond Index, this unmanaged index is a good indicator of the performance of government and corporate mortgage-backed bond markets. The Lehman GNMA Backed Bond Index, unlike the fund, reflects no deductions for fees, expenses, or taxes. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001
1 Yr 5 Yrs 10 Yrs 1 Yr Life of the Class(1) - ------------------------------------------------------------------------------------------------------------------------------------ (inception date 7/6/97) STANDARD SHARES INSTITUTIONAL SHARES - Return before taxes 7.18% 6.56% 6.36% - Return before taxes 7.35% 6.38% - Return after taxes on distributions 4.78% 4.04% 3.76% - Return after taxes on distributions 4.83% 3.97% - Return after taxes on distributions - Return after taxes on distributions and sales of fund shares 4.34% 3.98% 3.79% and sales of fund shares 4.43% 3.94% Lehman GNMA Index 8.22% 7.50% 7.17% Lehman GNMA Index 8.22% 7.12% - ----------------------------------------------------------------------------------------------------------------------------------- (1)The investment results of Funds with less than 10 years are shown from the first month-end since the Fund's inception for comparison with other averages.
- ----SIDE BAR TEXT---- AFTER-TAX RETURN After-tax performance is computed two ways: "Return after taxes on distributions" assumes the payment of federal taxes on fund distributions before their reinvestment and "Return after taxes on distributions and sales of fund shares" reflects the additional taxable impact of the realized gain or loss if any, from the sale of fund shares at the end of the holding period. After-tax returns are calculated using the highest individual federal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. - ----END SIDE BAR TEXT (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund.
Standard Institutional ANNUAL FUND OPERATING EXPENSES(1) Shares Shares - ------------------------------------------------------------------------------------------------ (deductly directly from fund assets) As a shareholder in Management fee 0.45% 0.45% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees 0.25% none redemption or exchange Other Expenses 0.32% 0.37% fees. ------------------------------------------------------------------- Total Operating Expenses 1.02% 0.82% Expense Reimbursement(2) (0.07%) (0.12%) -------------------------------------------------------------------- NET OPERATING EXPENSES 0.95% 0.70% (1) Annual fund operating expenses consist of the fund's expenses plus the fund's share of the expenses of the portfolio. (2)Under a written agreement, Wright waives a portion of its advisory fee and assumes operating expenses to the extent necessary to limit expense ratios to 0.95% and 0.70%%.
EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Year ----------------------------------------------------------------- Standard Shares $97 $303 $525 $1,166 Institutional Shares $72 $224 $390 $ 871 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include the fund's share of the portfolio's expenses,12b-1 fees, an administration fee and registration fees. - -----END SIDE BAR TEXT----- WRIGHT U.S. TREASURY MONEY MARKET FUND - -------------------------------------------------------------------------------- CUSIP: Money Market Shares 982349706 Ticker Symbol: WUSXX (Graphic -- ship's wheel) OBJECTIVE The fund seeks to provide as high a rate of current income as possible consistent with the preservation of capital and maintenance of liquidity. The fund also seeks to maintain a stable net asset value per share price or NAV of $1.00 per share. (Graphic -- compass) PRINCIPAL INVESTMENT STRATEGIES The fund invests at least 80% of its total assets in securities of the U.S. government and its agencies that are backed by the full faith and credit of the U.S. government (U.S. Treasury securities). The fund limits it portfolio to investments maturing in 13 months or less and maintains a weighted average maturity of 90 days or less. The fund may also invest in repurchase agreements which are collateralized by U.S. Treasury securities. The fund may enter into repurchase agreements only with large, well-capitalized banks or government securities dealers that meet Wright credit standards. Wright monitors the daily interest rate yield curve and selects the best yield and maturities available. Longer maturities are selected when interest rates are expected to fall and shorter maturities are selected when interest rates are expected to rise. The fund invests and engages only in investment practices that are legal for federal credit unions described in the Federal Credit Union Act and the National Credit Union Administration Regulations. The fund reserves the right to hold up to 20% of its assets in cash or to invest them in repurchase agreements. Repurchase agreements are collateralized short-term (usually overnight) debt used to invest cash. The fund's objective may be changed by the trustees without shareholder approval. (Graphic --Life preserver) PRINCIPAL RISKS Although the fund invests exclusively in U.S. Treasury bills, notes and bonds, an investment in the fund is neither insured nor guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, or any other government agency. There is no guarantee that the fund will be able to maintain a stable net asset value of $1.00 per share. The rate of income will vary from day to day generally reflecting market changes in short-term interest rates. The fund cannot eliminate risk or assure achievement of its objective and you may lose money. (Graphic -- assorted nautical flags) WHO MAY WANT TO INVEST You may be interested in the fund if you seek to earn current income while preserving the value of your investment. The fund may serve as a temporary investment vehicle. You may also be interested in the fund if you live in a state or local jurisdiction that exempts the fund's dividends from taxes. (Graphic -- ship's log) PAST PERFORMANCE The information on the next page shows the fund's performance for the indicated periods through December 31, 2001. These returns include reinvestment of all dividends and capital gain distributions, and reflect fund expenses. As with all mutual funds, past performance does not guarantee future results. The bar chart shows how the fund's performance has varied by illustrating the differences for each full calendar year since the Fund's inception. YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
15% - ----------------------------------------------------------------------------------------------------------- 10% - ----------------------------------------------------------------------------------------------------------- 5% 5.34% 5.44% - ----------------------------------------------------------------------------------------------------------- 0% 3.27% 2.53% 3.56% 4.85% 4.84% 4.29% 4.29% 3.70% - ----------------------------------------------------------------------------------------------------------- (5)% - ----------------------------------------------------------------------------------------------------------- (10)% - ----------------------------------------------------------------------------------------------------------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Best quarter:5.63%(4th quarter 2000) Worst quarter:-2.49%(4nd quarter 1993)
The fund's 7-day yield on December 31, 2001, was 1.64%. For the fund's current yield call (800) 225-6265 x7750. The fund's average annual return is compared with that of 90-day Treasury bills. While the fund does not seek to match the returns of 90-day Treasury bills, they are a good indicator of the performance of money market instruments. AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2001 1 Year 5 Years 10 Years - ------------------------------------------------------------------------------- Money Market Shares 3.70% 4.60% 4.25% 90-day Treasury bills 3.39% 4.86% 4.57% (Graphic -- two crossed anchors with a $ in the center) FEES AND EXPENSES The table describes the fees and expenses you may pay if you buy and hold shares of the fund. ANNUAL FUND OPERATING EXPENSES Money Market Shares - ---------------------------------------------------------------------------- (deductly directly from fund assets) As a shareholder in Management fee 0.35% the fund, you do not Distribution and pay any sales charges, service (12b-1) fees none redemption or exchange Other Expenses 0.53% fees. ---------------------------------------------- Total Operating Expenses 0.88% Fee Waiver and Expense Reimbursement(1) (0.41%) ----------------------------------------------- NET OPERATING EXPENSES(2) 0.47% (1)Under a written agreement in effect for the current fiscal year, Wright assumes operating expenses to the extent necessary to limit expense ratios to 0.45%. (2)Under an expense offset arrangement, custodian fees are reduced by credits based on the fund's daily average cash balance.Under SEC reporting requirements, these reductions are not reflected in the above expense ratios. If reflected ratios would be: NET OPERATING EXPENSES AFTER CUSTODIAN FEE REDUCTION 0.45% EXAMPLE The following example allows you to compare the cost of investing in the fund to the cost of investing in other mutual funds by showing what your costs may be over time. It uses the same assumptions that other funds use in their prospectuses: $10,000 initial investment, 5% total return for each year, fund operating expenses remain the same for each period and redemption after the end of each period. Your actual costs may be higher or lower, so use this example for comparison only. Based on these assumptions your costs at the end of each period would be: 1 Year 3 Years 5 Years 10 Years - ------------------------------------------------------------------------------- Money Market Shares $48 $151 $263 $591 - -----SIDE BAR TEXT----- Understanding Expenses Annual fund operating expenses are paid by the fund. As a result, you pay for them indirectly because they reduce the fund's return. Fund expenses include management fees,12b-1 fees and administrative costs, such as shareholder recordkeeping and reports, custodian and pricing services, and registration fees. - -----END SIDE BAR TEXT----- INFORMATION ABOUT YOUR ACCOUNT - ------------------------------------------------------------------------------- HOW THE FUNDS VALUE THEIR SHARES The price at which you buy, sell or exchange fund shares is the net asset value per share or NAV. The NAV for each fund, except Wright U.S. Treasury Money Market Fund, is calculated at the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. New York time) each day the Exchange is open. It is not calculated on days the Exchange is closed. The price for a purchase, redemption or exchange of fund shares is the next NAV calculated after your order is received. Wright U.S. Treasury Money Market Fund's NAV is normally calculated three times each day the Exchange is open. Calculations are made at noon, 3:00 p.m. and as of the close of regular trading on the Exchange, normally 4:00 p.m. (in each case, New York time). The fund's securities are valued at amortized cost, which approximates market value. The other funds calculate their share price by valuing their portfolio securities at the last current sales price on the market where the security is normally traded. Securities that cannot be valued at these closing prices are valued by Wright at fair value in accordance with procedures adopted by the trustees. This could happen if an event after the close of the market seemed likely to have a major impact on the price of securities traded on the market. The value of all assets and liabilities expressed in foreign currencies is converted into U.S. dollars at the most recent market rates quoted by one or more major banks shortly before the close of the Exchange. Foreign securities trade during hours and on days when the Exchange is closed and Wright International Blue Chip Equities Fund's NAV is not calculated. Although Wright International Blue Chip Equities Fund's NAV may be affected, you will not be able to purchase or redeem shares on these days. - -----SIDE BAR TEXT----- Determining NAV Share price is determined by adding the value of a fund's investments, cash and other assets, deducting liabilities, and then dividing that amount by the total number of shares outstanding. - -----END SIDE BAR TEXT----- PURCHASING SHARES PURCHASING SHARES OF WRIGHT U.S. TREASURY MONEY MARKET FUND The fund's transactions in money market instruments normally require immediate settlement in federal funds. Accordingly, purchase orders for the fund are executed at the NAV next calculated after payment in cash or federal funds is received. Shares purchased before 3:00 p.m. receive that day's dividends. Shares purchased between 3:00 p.m. and 4:00 p.m. start to earn dividends the next business day. If you pay by personal check, your purchase will be executed at the close of the second business day in Boston. The minimum initial investment is $1,000. There is no minimum for subsequent investments. PURCHASING SHARES FOR CASH - NON-MONEY MARKET FUNDS Shares of each fund may be purchased without a sales charge at NAV. The minimum initial investment is $1,000 for Standard Shares and $3,000,000 for Institutional Shares. There are no minimums for subsequent investments. WAIVER OF THE MINIMUM INITIAL INVESTMENT: The minimums may be waived for investments by bank trust departments, 401(k) tax-sheltered retirement plans and automatic investment program accounts. The minimum initial investment will be reduced to $500 for shares purchased through certain investment advisers, financial planners, brokers or other intermediaries that charge a fee for their services. - -----SIDE BAR TEXT----- Paying for Shares You may pay for shares by wire, check or Federal Reserve draft payable in U.S. dollars and drawn on U.S banks. Third party checks will not be accepted. A charge is imposed on any returned checks. - -----END SIDE BAR TEXT----- Authorized dealers, including investment dealers, banks or other institutions, may impose investment minimums higher than those imposed by the funds. They may also charge for their services. There are no transaction charges if you purchase your shares directly from the funds. The funds have the right to reject any purchase order, or limit or suspend the offering of their shares. BUYING FUND SHARES o If you are buying shares directly from the funds, please refer to your Shareholder Manual for additional instructions on how to buy fund shares. o If you buy shares through bank trust departments or other fiduciary institutions, please consult your trust or investment officer. o If you buy shares through a broker, please consult your broker for purchase instructions. o If you buy shares through an account with a registered investment adviser or financial planner, please consult your investment adviser or planner. o If you buy shares of the funds through a retirement plan, please consult your plan documents or speak with your plan administrator. PURCHASING SHARES THROUGH EXCHANGE OF SECURITIES You may buy shares by delivering to the funds' custodian securities that meet that fund's investment objective and policies, have easily determined market prices and are otherwise acceptable. Exchanged securities must have a minimum aggregate value of $5,000. Securities are valued as of the date they are received by the funds. If you want to exchange securities for fund shares you should furnish a list with a full description of these securities. See the Shareholder Manual for detailed instructions. DISTRIBUTION AND SERVICE PLANS The funds have adopted a 12b-1 plan permitting them to pay a fee to finance the distribution of their shares. Wright Investors' Service Distributors, Inc. (WISDI), the principal underwriter and distributor of the funds' shares, receives a distribution fee of 0.25% of the average daily net assets of each fund's Standard Share class's average daily net assets. Because this fee is paid on an ongoing basis, it may cost you more than other types of sales charges over time. - -----SIDE BAR TEXT----- Service Plans Each fund, except for Wright U.S. Treasury Money Market Fund, has adopted a service plan. This plan allows each fund to reimburse WISDI for payments to intermediaries for providing account administration and personal and account maintenance services to shareholders of the funds. The combined annual service and 12b-1 plan fee may not exceed 0.25% of the average daily net assets of each class of shares. - -----END SIDE BAR TEXT----- SELLING SHARES You may redeem or sell shares of the funds on any business day. NO REDEMPTION REQUEST WILL BE PAID UNTIL YOUR SHARES HAVE BEEN PAID FOR IN FULL. IF THE SHARES TO BE REDEEMED WERE PURCHASED BY CHECK, THE REDEMPTION PAYMENT WILL BE DELAYED UNTIL THE CHECK HAS BEEN COLLECTED, WHICH MAY TAKE UP TO 15 DAYS FROM THE DATE OF PURCHASE. Telephone, mail and internet redemption procedures are described in the Shareholder Manual. Redemption requests received in "proper form" before 4:00 p.m. New York time will be processed at that day's NAV. "Proper form" means that the fund has received your request, all shares are paid for, and all documentation along with any required signature guarantee, are included. The funds normally pay redemption proceeds by check on the next business day to the address of record. Payment will be by wire if you specified this option on your account application. Wire redemptions from Wright U.S. Treasury Money Market Fund received before noon will be forwarded that afternoon. If you redeem shares of Wright International Blue Chip Equities Fund purchased after July 1, 2000 within three months after purchase, you will pay a redemption fee of 2.00%. These redemption fees may be waived on shares purchased for Wright's investment advisory clients and 401(k) or similar plans. - -----SIDE BAR TEXT----- Redemption Proviso In times of drastic economic or market conditions, you may have difficulty selling shares by telephone or the internet. These redemption options may be modified or terminated without notice to shareholders. - -----END SIDE BAR TEXT----- For more information about selling your shares, please refer to your Shareholder Manual or consult your trust officer, adviser or plan administrator. REDEMPTIONS IN-KIND Although the funds expect to pay redemptions in cash, they reserve the right to redeem shares in-kind by giving shareholders readily marketable portfolio securities instead of cash. This is done to protect the interests of remaining shareholders. If this occurs, you will incur transaction costs if you sell the securities. INVOLUNTARY REDEMPTION If your account falls below $500 a fund may redeem your shares. You will receive notice 60 days before this happens. Your account will not be redeemed if the balance is below the minimum due to investment losses. EXCHANGING SHARES Shares of the funds may be exchanged for shares of the same class of any other fund described in this prospectus. The exchange of shares results in the sale of one fund's shares and the purchase of another, normally resulting in a gain or loss, and is therefore a taxable event for you. You are limited to four "round-trip" exchanges each year. A round-trip exchange is an exchange of one fund into another Wright fund, and then back into the original fund. You will receive notice 60 days before the fund materially amends or terminates the exchange privilege. For more information on exchanging shares please see the Shareholder Manual or consult your adviser. - -----SIDE BAR TEXT----- Market-Timers The funds believe that use of the exchange privilege by investors utilizing market-timing strategies adversely affects other fund shareholders. Therefore, each fund generally will not honor requests for exchanges by shareholders who identify themselves or are identified as "market-timers." Market-timers are identified as those investors who repeatedly make exchanges within a short period. The funds do not automatically redeem shares that are the subject of a rejected exchange request,but will honor any later redemption requests. - -----END SIDE BAR TEXT----- PRIVACY CONCERNS We respect and protect your privacy. We collect nonpublic personal information about you from the information we receive from you on application or other forms and information about your transactions with us, our affiliates, or others. We do not disclose any nonpublic personal information about our customers or former customers to anyone except as permitted by law. However, we may disclose your name and address to affiliated companies who perform marketing services on our behalf. We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information. DIVIDENDS AND TAXES - ------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS Unless you tell us that you want to receive your distributions in cash, they are reinvested automatically in fund shares. The funds generally make two different kinds of distributions: o Capital gains from the sale of portfolio securities held by a fund. Each fund will distribute any net realized capital gains annually, normally in December. Capital gains are the main source of distributions paid by the equity funds. o Net investment income from interest or dividends received on securities held by a fund. Net investment income is the primary source of dividends paid by the bond and money market funds. The funds will distribute their investment income as follows: Distributions of Fund Net Investment Income - ------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund Quarterly Wright Major Blue Chip Equities Fund Quarterly - ------------------------------------------------------------------------------- Wright International Blue Chip Equities Fund Annually - ------------------------------------------------------------------------------- Wright U.S. Government Intermediate Fund Declared Daily - Paid Monthly Wright U.S. Government Near Term Fund Declared Daily - Paid Monthly Wright Total Return Bond Fund Declared Daily - Paid Monthly Wright Current Income Fund Declared Daily - Paid Monthly Wright U.S. Treasury Money Market Fund Declared Daily - Paid Monthly - -----SIDE BAR TEXT----- Tax Considerations Unless your investment is in a tax-deferred account you may want to avoid: o Investing in a fund near the end of its fiscal year. If the fund makes a capital gains distribution you will receive some of your investment back as a taxable distribution. o Selling shares at a loss for tax purposes and then making an identical investment within 30 days before or after the sale. This results in a "wash sale" and you will not be allowed to claim a tax loss. - -----END SIDE BAR TEXT----- TAX CONSEQUENCES Selling or exchanging mutual fund shares generally is a taxable event and may result in a capital gain or loss. Distributions, whether received in cash or additional fund shares are subject to federal income tax. Distribution Tax Status - ------------------------------------------------------------------------------- Income dividends Ordinary income Short-term capital gains Ordinary income Long-term capital gains Long-term capital gains Wright International Blue Chip Equities Fund may be subject to foreign withholding taxes or other foreign taxes on some of its foreign investments. This will reduce the yield or total return on those investments. Your investment in the funds could have additional tax consequences. Please consult your tax advisor on state, local or other applicable tax laws. MANAGING THE FUNDS Wright Investors' Service, Inc. is a leading independent international investment management and advisory firm with more than 35 years experience. Wright manages approximately $3 billion of assets in portfolios of all sizes and styles as well as a family of mutual funds. Wright developed Worldscope(R), one of the world's largest and most complete databases of financial information, which currently includes more than 24,000 companies in more than 50 nations. Wright manages the investments of the funds and portfolios. Wright is located at 440 Wheelers Farms Road, Milford, CT 06460. Wright receives a monthly advisory fee for its services. The table below lists the advisory fee rates paid for the fiscal year ended December 31, 2001 : Fee Paid Fund (as a % of average daily net assets) - ------------------------------------------------------------------------------- Selected Blue Chip Equities Portfolio 0.60% Wright Major Blue Chip Equities Fund 0.60% International Blue Chip Equities Portfolio 0.80% U.S. Government Intermediate Portfolio 0.45% U.S. Government Near Term Portfolio 0.45% Wright Total Return Bond Fund 0.45% Current Income Portfolio 0.45% Wright U.S. Treasury Money Market Fund 0.35% - ------------------------------------------------------------------------------- INVESTMENT COMMITTEE An investment committee of senior officers controls the investment selections, policies and procedures of the funds and the portfolios. These officers are experienced analysts with different areas of expertise, and have over 195 years of combined service with Wright. The investment committee consists of the following members:
Committee Member Title Joined Wright in - -------------------------------------------------------------------------------------------------------------- Peter M. Donovan, CFA President and Chief Executive Officer 1966 Chairman of the investment committee Judith R. Corchard Executive Vice President - Investment Management 1960 Senior Investment Officer Jatin J. Mehta, CFA Executive Vice President 1969 Michael F. Flament, CFA Senior Vice President - Investment and Economic Analysis 1972 James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982 Amit S. Khandwala Senior Vice President - International Investments 1986 Stanley Kirtman Senior Vice President - Equities 2002 Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985 George F. Faherty, CFA Senior Vice President - Equities 2000
The investment adviser, principal underwriter, and each fund and portfolio have adopted codes of ethics governing personal securities transactions. Under the codes, Wright employees may purchase and sell securities subject to certain pre-clearance and reporting requirements and other procedures. - -----SIDE BAR TEXT----- Administrator Eaton Vance Management serves as the funds' administrator and is responsible for managing their daily business affairs. Eaton Vance's services include operating the funds' order room, recordkeeping, preparing and filing documents required to comply with federal and state securities laws, supervising the activities of the funds' custodian and transfer agent, providing assistance in connection with the trustees' and shareholders' meetings and other necessary administrative services. - -----END SIDE BAR TEXT----- PORTFOLIO TURNOVER The funds may sell a portfolio security regardless of how long the security has been held. The funds do not intend to engage in trading for short-term profits. However, portfolio turnover rates will vary. In the past turnover rates have exceeded and in the future may exceed 100%. A turnover rate of 100% means the securities owned by a fund were replaced once during the year. Higher turnover rates may result in higher brokerage costs to the funds and in higher net taxable gains for you as an investor, and will reduce the funds' returns. MASTER/FEEDER FUND STRUCTURE Wright Selected Blue Chip Equities Fund, Wright International Blue Chip Equities Fund, Wright U.S. Government Intermediate Fund, Wright U.S. Government Near Term Fund and Wright Current Income Fund are organized as "feeder" funds in a "master/feeder" structure. This means that the funds' assets are all invested in larger "master" portfolios of securities which have investment objectives and policies identical to those of the funds. All references to funds in this prospectus include the master portfolio in which each feeder fund invests all of its assets. If the trustees determine that it is in the best interests of the fund, a fund may withdraw its investment in a portfolio at any time. In that event, the fund might transfer its assets to another master fund or hire its own investment adviser. A withdrawal could result in the fund receiving an in-kind distribution of portfolio securities from the portfolio. In that case, the fund could incur brokerage, tax or other charges if it converted the securities to cash. In addition, an in-kind distribution could adversely affect the liquidity of the fund. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- These financial highlights will help you understand each fund's financial performance for the periods indicated. Certain information reflects financial results for a single fund share. Total return shows how much your investment in the fund increased or decreased during each period, assuming you reinvested all dividends and distributions. Deloitte & Touche LLP, independent certified public accountants, audited this information. Their reports and the funds' financial statements are incorporated herein by reference and are included in the funds' annual report, which is available upon request.
Year Ended December 31, ------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund 2001(6) 2000(6) 1999 1998 1997 - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 13.430 $ 15.130 $ 17.630 $ 19.200 $ 17.730 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income (loss)* ......... $ (0.045) $ (0.041) $ 0.181 $ 0.095 $ 0.133 Net realized and unrealized gain (loss) (1.322) 1.638 0.638 (0.139) 5.172 -------- -------- -------- -------- -------- Total income (loss) from investment operations......... $ (1.367) $ 1.597 $ 0.819 $ (0.044) $ 5.305 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ - $ (0.055) $ (0.090) $ (0.145) Distributions from capital gains....... (0.483) (3.297) (3.264) (1.436) (3.690) -------- -------- -------- -------- -------- Total distributions................ $ (0.483) $ (3.297) $ (3.319) $ (1.526) $ (3.835) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 11.580 $ 13.430 $ 15.130 $ 17.630 $ 19.200 ========== ========== ========== ========== ========== Total return(1) ............................ (10.15%) 10.75% 5.75% 0.14% 32.70% Ratios/Supplemental Data*: Net assets, end of year (000 omitted).. $ 45,883 $ 51,201 $ 74,547 $ 220,965 $259,411 Ratio of net expenses to average net assets 1.26%(3) 1.26%(3) 1.16%(3) 1.11%(3) 1.08%(3) Ratio of net expenses after custodian fee reduction to average net assets(5).. 1.25%(3) 1.25%(3) 1.15%(3) 1.11%(3) 1.08%(3) Ratio of net investment income (loss) to average net assets.......................... (0.38%) (0.28%) 0.36% 0.46% 0.75% Portfolio turnover rate .............. 67%(4) 55%(4) 106%(4) 78%(4) 10%(2) - --------------------------------------------------------------------------------------------------------------------------------- * For the years ended December 31, 2001, 2000 and 1999, the distributor reduced its fees. Had such action not been undertaken, net investment income (loss) per share and the ratios would have been as follows: 2001 2000 1999 ------------------------------------------ Net investment income (loss) per share. $ (0.057) $ (0.051) $ 0.151 ========== ========== ========== Ratios (As a percentage of average net assets): Expenses........................... 1.37%(3) 1.33%(3) 1.22%(3) ========== ========== ========== Expenses after custodian fee reduction(5) 1.36%(3) 1.32%(3) 1.21%(3) ========== ========== ========== Net investment income (loss)....... (0.49%) (0.35%) 0.30% ========== ========== ========== - ----------------------------------------------------------------------------------------------------------------------------------- (1)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be invested at the net asset value on the reinvestment date. (2)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (3)Includes each fund's share of its corresponding portfolio's allocated expenses. (4)Represents portfolio turnover rate of the fund's corresponding portfolio. (5)Custodian fees were reduced by credits resulting from cash balances the trust maintained with the custodian (Note 1D). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (6)Certain per share amounts are based on average shares outstanding.
Year Ended December 31, ------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- Wright Major Blue Chip Equities Fund 2001(4) 2000(4) 1999(4) 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------- Standard Shares ------------------------------------------------------------- Net asset value, beginning of year.......... $ 13.690 $ 16.290 $ 13.670 $ 12.020 $ 12.450 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income (loss)(1) ....... $ (0.009) $ (0.001) $ 0.042 $ 0.091 $ 0.100 Net realized and unrealized gain (loss) (2.301) (2.005) 3.202 2.324 3.515 -------- -------- -------- -------- -------- Total income (loss) from investment operations......... $ (2.310) $ (2.006) $ 3.244 $ 2.415 $ 3.615 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ (0.010) $ (0.045) $ (0.055) $ (0.085) Distributions from capital gains....... - (0.584) (0.579) (0.710) (3.960) -------- -------- -------- -------- -------- Total distributions................ $ - $ (0.594) $ (0.624) $ (0.765) $ (4.045) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 11.380 $ 13.690 $ 16.290 $ 13.670 $ 12.020 ========== ========== ========== ========== ========== Total Return(3) ............................ (16.87%) (12.49%) 23.95% 20.43% 33.86% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).. $ 93,696 $ 135,262 $ 144,359 $ 50,878 $ 27,721 Ratio of net expenses to average net assets 1.13% 1.06% 1.05% 1.07%(2) 1.08%(2) Ratio of net expenses after custodian fee reduction to average net assets .... 1.13% 1.06% 1.05% 1.05%(2)(6) 1.05%(2)(6) Ratio of net investment income (loss) to average net assets ................. (0.08%) (0.00%)(5) 0.27% 0.49% 0.68% Portfolio turnover rate................ 78% 88% 59% 36% 89% - -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 1999, 1998, and 1997, the operating expenses of the Fund were reduced by an allocation of expenses to the distributor and/or investment adviser. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 1999 1998 1997 -------------------------------------- Net investment income (loss) per share. $ 0.034 $ 0.052 $ 0.049 ========== ========== ========== Ratios (As a percentage of average net assets): Expenses............................. 1.10% 1.28% 1.43% ========== ========== ========== Expenses after custodian fee reduction(2) 1.10% 1.26% 1.40% ========== ========== ========== Net investment income................ 0.22% 0.28% 0.33% ========== ========== ========== - -------------------------------------------------------------------------------------------------------------------------------- (2)Custodian fees were reduced by credits resulting from cash balances the trust maintained with the custodian (Note 1D). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (3)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be invested at the net asset value on the reinvestment date. (4)Certain per share amounts are based on average shares outstanding. (5)Amount represents less than (0.00%) of average net shares. (6)Under a written agreement, Wright waives a portion of its advisory fee and assumes operating expenses to the extent necessary to limit expense ratios to 1.25%.
Year Ended December 31, -------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- Wright International Blue Chip Equities Fund 2001(5) 2000(5) 1999(5) 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------- Standard Shares -------------------------------------------------------------- Net asset value, beginning of year.......... $15.180 $18.900 $16.020 $16.020 $16.690 --------- --------- --------- --------- --------- Income (loss) from investment operations: Net investment income (loss) .......... $ (0.023) $ 0.135 $ (0.004) $ 0.078 $ 0.185 Net realized and unrealized gain (loss) (3.647) (3.455) 5.181 0.868 0.048+ --------- --------- --------- --------- --------- Total income (loss) from investment operations......... $ (3.670) $ (3.320) $ 5.177 $ 0.946 $ 0.233 --------- --------- --------- --------- --------- Less distributions: Dividends from investment income....... $ - $ - $ - $ (0.070) $ (0.163) Distributions from capital gains....... - (0.400) (2.297) (0.876) (0.740) --------- --------- --------- --------- --------- Total distributions................ $ - $ (0.400) $ (2.297) $ (0.946) $ (0.903) --------- --------- --------- --------- --------- Net asset value, end of year................ $11.510 $15.180 $18.900 $16.020 $16.020 ========== ========== ========== ========== ========== Total return(1) ............................ (24.18%) (17.58%) 34.26% 6.14% 1.54% Ratios/Supplemental Data Net assets, end of year (000 omitted).. $66,828 $110,868 $147,610 $193,327 $212,698 Ratio of total expenses to average daily net assets 1.56%(3) 1.49%(3) 1.49%(3) 1.35%(3) 1.31%(3) Ratio of net investment income (loss) to average daily net assets (0.18%) 0.76% (0.02%) 0.42%+ 0.82% Portfolio turnover rate .............. 39%(4) 53%(4) 105%(4) 66%(4) 4%(2) - ------------------------------------------------------------------------------------------------------------------------------- (1)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be invested at the net asset value on the reinvestment date. (2)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (3)Includes each fund's share of its corresponding Portfolio's allocated expenses. (4)Represents portfolio turnover rate of the fund's corresponding portfolio. (5 Certain per share amounts are based on average shares outstanding. + Per share amount is not in accordance with the net realized and unrealized gain (loss) for the period because of the timing of sales of fund shares and the amounts per share of realized and unrealized gains and losses at such times.
Year Ended December 31, ----------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- Wright International Blue Chip Equities Fund 2001(4) 2000(4) 1999(4) 1998 1997* - ------------------------------------------------------------------------------------------------------------------------------- Institutional Shares ----------------------------------------------------------------- Net asset value, beginning of year.......... $ 7.150 $ 9.160 $ 8.750 $ 9.130 $ 10.000 -------- -------- -------- -------- -------- Income (loss) from Investment Operations: Net investment income (loss) .......... $ (0.001) $ 0.070 $ 0.014 $ 0.159 $ 0.006 Net realized and unrealized gain (loss) (1.719) (1.680) 2.693 0.487 (0.646)+ -------- -------- -------- -------- -------- Total income (loss) from investment operations......... $ (1.720) $ (1.610) $ 2.707 $ 0.646 $ (0.640) -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ - $ - $ (0.150) $ - Distributions from capital gains....... - (0.400) (2.297) (0.876) (0.230) -------- -------- -------- -------- -------- Total distribution................. $ - $ (0.400) $ (2.297) $ (1.026) $ (0.230) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 5.430 $ 7.150 $ 9.160 $ 8.750 $ 9.130 ========= ========= ========= ========= ========= Total return(1) ............................ (24.06%) (17.62%) 34.49% 7.54% (6.37%) Ratios/Supplemental Data: Net assets, end of year (000 omitted).. $ 13,186 $ 17,929 $ 24,254 $ 18,511 $ 45,094 Ratio of total expenses to average daily net assets........................... 1.43%(2) 1.30%(2) 1.28%(2) 1.12%(2) 1.16%(2)++ Ratio of net investment income (loss) to average daily net assets............. (0.02%) 0.87% 0.16% 0.73% 0.15%++ Portfolio turnover rate................ 39%(3) 53%(3) 105%(3) 66%(3) 4%(5) - -------------------------------------------------------------------------------------------------------------------------------- (1)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be invested at the net asset value on the reinvestment date. (2)Includes each fund's share of its corresponding portfolio's allocated expenses. (3)Represents portfolio turnover rate of the fund's corresponding portfolio. (4)Certain per share amounts are based on average shares outstanding. (5)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. + Per share amount is not in accordance with the net realized and unrealized gain (loss) for the period because of the timing of sales of fund shares and the amounts per share of realized and unrealized gains and losses at such times. + Annualized. * For the period from July 7, 1997 (inception of offering institutional shares) to December 31, 1997.
Year Ended December 31, ------------------------------------------------------------- WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND 2001 2000 1999 1998 1997 - -------------------------------------------------------------------------------------------------------------------------- (formerly Wright U.S. Treasury Fund) Net asset value, beginning of year.......... $ 13.750 $ 12.890 $ 14.400 $ 13.950 $ 13.580 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.651 (8) $ 0.737 $ 0.722 $ 0.724 $ 0.721 Net realized and unrealized gain (loss).. (0.006)(8) 0.842 (1.282) 0.632 0.462 ----------- -------- -------- -------- -------- Total income (loss) from investment operations............. $ 0.657 $ 1.579 $ (0.560) $ 1.356 $ 1.183 -------- ---------- -------- -------- -------- Less distributions: Dividends from investment income......... $ (0.701) $ (0.719) $ (0.716) $ (0.741) $ (0.703) Distributions from capital gains......... (0.076) - (0.234) (0.165) (0.110) -------- -------- -------- -------- -------- Total distributions.................... $ (0.777) $ (0.719) $ (0.950) $ (0.906) $ (0.813) -------- ---------- -------- -------- -------- Net asset value, end of year................ $ 13.630 $ 13.750 $ 12.890 $ 14.400 $ 13.950 ========= ========= ========= ========= ========= Total return(2) ............................ 5.40% 12.61% (3.97%) 9.95% 9.08% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 10,169 $ 16,498 $ 31,192 $ 67,256 $ 74,158 Ratio of net expenses to average net assets(4) 1.02% 0.97% 0.92% 0.94% 1.01% Ratio of net expenses after custodian fee reduction to average net assets(4)(5) 0.95%(7) 0.95%(7) 0.90% 0.90% 0.87% Ratio of net investment income to average net assets............... 5.11% 5.55% 5.26% 5.09% 5.34% Portfolio turnover rate ................ 27%(6) 74%(6) 0%(6) 7%(6) 1%(3) - --------------------------------------------------------------------------------------------------------------------------------- (1)For each of the periods presented, the operating expenses of the fund were reduced by an allocation of expenses to the investment adviser, a reduction in distribution fees by the distributor, a reduction in administrator fees, or a combination thereof. Had such action not been undertaken, the net investment income per share and the ratios would have been as follows: 2001 2000 1999 1998 1997 - --------------------------------------------------------------------------------------------------------------------------- Net investment income per share............. $ 0.547 $ 0.700 $ 0.703 $ 0.721 $ 0.720 ========= ========= ========= ========= ========= Ratios (as a percentage of average net assets): Expenses(4) ............................. 1.84% 1.26% 1.06% 0.96% 1.02% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(4)(5) 1.77% 1.24% 1.04% 0.92% 0.88% ========= ========= ========= ========= ========= Net investment income.................... 4.29% 5.27% 5.12% 5.07% 5.33% ========= ========= ========= ========= ========= - ---------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each year reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. (3)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (4)Includes each fund's share of its corresponding portfolio's allocated expenses. (5)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio maintained with the custodian (Note 1C). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (6)Represents portfolio turnover rate at the fund's corresponding portfolio. (7)Under a written agreement, Wright waives all or a portion of either its advisory and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%. (8)Reporting guidelines require the funds to disclose the effects of implementing the change in accounting for the amortization of premium and discount on debt securities. If the adjustments were not made, net investment income per share would have been $0.713 and net realized and unrealized gain (loss) per share would have been $(0.056).
Year Ended December 31, --------------------------------------------------------------- WRIGHT U.S. GOVERNMENT NEAR TERM FUND 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year.......... $ 10.080 $ 9.930 $ 10.270 $ 10.240 $ 10.240 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.480(8) $ 0.525 $ 0.534 $ 0.549 $ 0.599 Net realized and unrealized gain (loss).. 0.195(8) 0.143 (0.343) 0.048+ (0.010) ----------- -------- -------- -------- -------- Total income from investment operations............... $ 0.675 $ 0.668 $ 0.191 $ 0.597 $ 0.589 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ (0.465) $ (0.518) $ (0.531) $ (0.567) $ (0.589) -------- -------- -------- -------- -------- Total distributions.................... $ (0.465) $ (0.518) $ (0.531) $ (0.567) $ (0.589) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.290 $ 10.080 $ 9.930 $ 10.270 $ 10.240 ========= ========= ========= ========= ======== Total return(2) ............................ 6.82% 6.94% 1.91% 5.98% 5.93% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 36,025 $ 39,198 $ 52,825 $ 91,922 $102,565 Ratio of net expenses to average net assets(4) 0.97% 0.98% 0.91% 0.88% 0.87% Ratio of expenses after custodian fee reduction to average net assets(4)(5) 0.95%(7) 0.95%(7) 0.90% 0.87% 0.87% Ratio of net investment income to average net assets............................ 4.40% 5.27% 5.27% 5.38% 5.82% Portfolio turnover rate ................ 92%(6) 65%(6) 0%(6) 10%(6) 4%(3) - --------------------------------------------------------------------------------------------------------------------------------- (1)For certain periods presented, the operating expenses of the fund were reduced by an allocation of expenses to the investment adviser, a reduction in distribution fees by the principal underwriter, a reduction in administrator fees, or a combination thereof. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2001 2000 1999 1998 1997 -------------------------------------------------------------------- Net investment income per share........ $ 0.452 $ 0.511 $ 0.526 $ 0.546 $ 0.597 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses(4) ......................... 1.22% 1.13% 0.99% 0.91% 0.89% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(4)(5) 1.20% 1.10% 0.98% 0.90% 0.89% ========= ========= ========= ========= ========= Net investment income................ 4.15% 5.13% 5.19% 5.35% 5.80% ========= ========= ========= ========= ========= - --------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each year reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. (3)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (4 Includes each fund's share of its corresponding portfolio's allocated expenses. (5)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio maintained with the custodian (Note 1C). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (6) Represents portfolio turnover rate of the fund's corresponding portfolio. (7)Under a written agreement, Wright waives all or a portion of either its advisory and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%. (8)Reporting guidelines require the funds to disclose the effects of implementing the change in accounting for amortization of premium and discount on debt securities. If adjustments were not made, net investment income per share would have been $0.491 and net realized and unrealized gain (loss) per share would have been $0.184. + Per share amount is not in accordance with the net realized and unrealized gain (loss) for the period because of the timing of sales of Fund shares and the amounts per share of realized and unrealized gains and losses at such times.
Year Ended December 31, ----------------------------------------------------------------- WRIGHT TOTAL RETURN BOND FUND 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 12.630 $ 12.100 $ 13.310 $ 12.930 $ 12.500 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income ................... $ 0.709 (4) $ 0.712 $ 0.679 $ 0.680 $ 0.690 Net realized and unrealized gain (loss).. (0.090)(4) 0.530 (1.190) 0.524 0.427 ------------ -------- -------- -------- -------- Total income (loss) from investment operations............. $ 0.619 $ 1.242 $ (0.511) $ 1.204 $ 1.117 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income......... $ (0.699) $ (0.712) $ (0.680) $ (0.690) $ (0.687) Distributions from capital gains......... - - (0.019) (0.134) - -------- -------- -------- -------- -------- Total distributions.................... $ (0.699) $ (0.712) $ (0.699) $ (0.824) $ (0.687) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 12.550 $ 12.630 $ 12.100 $ 13.310 $ 12.930 ========= ========= ========= ========= ========= Total return(2) ............................ 4.96% 10.62% (3.91%) 9.56% 9.25% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 50,620 $ 65,775 $ 87,336 $ 115,937 $ 80,004 Ratio of net expenses to average net assets 0.96% 0.96% 0.90% 0.90% 0.90% Ratio of net expenses after custodian fee reduction to average net assets(3) .... 0.95%(5) 0.95%(5) 0.90% 0.90% 0.90% Ratio of net investment income to average net assets............................ 5.44% 5.84% 5.36% 5.18% 5.50% Portfolio turnover rate.................. 38% 61% 31% 26% 34% - -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2001 and 1999, the operating expenses of the fund were reduced by an allocation of expenses to the investment adviser, or a reduction in distribution expenses by the distributor. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2001 1999 ------------------------------------------ Net investment income per share.......... $ 0.701 $ 0.678 ========== ========== Ratios (As a percentage of average net assets): Expenses............................... 1.02% 0.91% ========== ========== Expenses after custodian fee reduction(3) 1.01% 0.91% ========== ========== Net investment income.................. 6.38% 5.35% ========== ========== - ---------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each year reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. (3)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio maintained with the custodian (Note 1C). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (4)Reporting guidelines require the funds to disclose the effects of implementing the change in accounting for amortization of premium and discount on debt securities. If adjustments were not made, net investment income per share would have been $0.716 and net realized and unrealized gain (loss) per share would have been $(0.097). (5)Under a written agreement, Wright waives all or a portion of either its advisory and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%.
Year Ended December 31, ----------------------------------------------------------------- WRIGHT CURRENT INCOME FUND 2001(5) 2000(5) 1999(5) 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- Standard Shares ----------------------------------------------------------------- Net asset value, beginning of year.......... $ 10.460 $ 10.090 $ 10.660 $ 10.630 $ 10.430 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.616 $ 0.631 $ 0.620 $ 0.646 $ 0.658 Net realized and unrealized gain (loss).. 0.120 0.372 (0.570) 0.028 0.206 -------- -------- -------- -------- -------- Total income from investment operations............. $ 0.736 $ 1.003 $ 0.050 $ 0.674 $ 0.864 -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income..... $ (0.616) $ (0.633) $ (0.620) $ (0.644) $ (0.664) -------- -------- -------- -------- -------- Total distributions.................. $ (0.616) $ (0.633) $ (0.620) $ (0.644) $ (0.664) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.580 $ 10.460 $ 10.090 $ 10.660 $ 10.630 ========= ========= ========= ========= ========= Total return(2) ............................ 7.18% 10.31% 0.52% 6.51% 8.56% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 54,966 $ 68,015 $ 76,452 $ 90,262 $76,217 Ratio of net expenses to average net assets(4) 0.95%(7) 0.95%(7) 0.91% 0.90% 0.89% Ratio of net investment income to average net assets................. 5.83% 6.22% 6.02% 6.03% 6.44% Portfolio turnover rate ................. 4%(6) 6%(6) 0%(6) 1%(6) 3%(3) - --------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2001, 2000, 1999, 1998 and 1997, the operating expenses of the fund were reduced by an allocation of expenses to the investment advisor or a reduction in distribution expense by the distributor. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2001 2000 1999 1998 1997 ----------------------------------------------------------------- Net investment income per share........ $ 0.609 $ 0.629 $ 0.615 $ 0.644 $ 0.652 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses........................... 1.02%(4) 0.97%(4) 0.96%(4) 0.92%(4) 0.95%(4) ========= ========= ========= ========= ========= Net investment income.............. 5.76% 6.20% 5.97% 6.01% 6.38% ========= ========= ========= ========= ========= - ------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. (3)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (4)Includes each fund's share of its corresponding portfolio's allocated expenses. (5)Certain of the per share data are based on average shares outstanding. (6)Represents portfolio turnover rate at the fund's corresponding portfolio. (7)Under a written agreement in effect for the current fiscal year, Wright waives all or a portion of either its advisory and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95%.
Year Ended December 31, ------------------------------------------------------------------ WRIGHT CURRENT INCOME FUND - continued 2001(5) 2000(5) 1999(5) 1998 1997(4) - ------------------------------------------------------------------------------------------------------------------------------- Institutional Shares ------------------------------------------------------------------ Net asset value, beginning of year.......... $ 9.960 $ 9.600 $ 10.150 $ 10.120 $ 10.000 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income .................. $ 0.622 $ 0.625 $ 0.620 $ 0.619 $ 0.313 Net realized and unrealized gain (loss).. 0.094 0.359 (0.560) 0.026 0.120 -------- -------- -------- -------- -------- Total income from investment operations............. $ 0.716 $ 0.984 $ 0.060 $ 0.645 $ 0.433 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income......... $ (0.616) $ (0.624) $ (0.610) $ (0.615) $ (0.313) -------- -------- -------- -------- -------- Total distributions.................. $ (0.616) $ (0.624) $ (0.610) $ (0.615) $ (0.313) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.060 $ 9.960 $ 9.600 $ 10.150 $ 10.120 ========= ========= ========= ========= ========= Total return(9) ............................ 7.34% 10.63% 0.60% 6.56% 4.40% Ratios/Supplemental Data:(1) Net assets, end of year (000 omitted).... $ 18,562 $ 25,695 $ 23,374 $ 23,231 $ 21,801 Ratio of net expenses to average net assets(2) 0.70%(8) 0.70%(8) 0.70% 0.75% 0.48%(3) Ratio of net investment income to average net assets................. 6.11% 6.46% 6.23% 6.11% 4.70%(3) Portfolio turnover rate ................. 4%(6) 6%(6) 0%(6) 1%(6) 3%(7) - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2001 and 2000, the operating expenses of the fund were reduced by an allocation of expenses to the investment advisor or a reduction by the principal underwriter. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2001 2000 ----------------------------- Net investment income per share.......... $ 0.603 $ 0.619 ========== ========== Ratios (As a percentage of average net assets): Expenses(2) ........................... 0.82% 0.76% ========== ========== Net investment income.................. 5.99% 6.40% ========== ========== - --------------------------------------------------------------------------------------------------------------------------------- (2)Includes each fund's share of its corresponding portfolio's allocated expenses. (3)Annualized. (4)For the period from July 7, 1997 (inception of offering of institutional shares) to December 31, 1997. (5)Certain of the per share data are based on average shares outstanding. (6)Represents portfolio turnover rate at the fund's corresponding portfolio. (7)Portfolio turnover represents the rate of portfolio activity for the period while the fund was making investments directly in securities. (8)Under a written agreement in effect for the current fiscal year, Wright waives all or a portion of either its advisory and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.70%. (9)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date.
Year Ended December 31, --------------------------------------------------------------- WRIGHT U.S. TREASURY MONEY MARKET FUND 2001 2000 1999 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 Income from investment operations: Net investment income(1).................... 0.0359 0.0530 0.0420 0.0460 0.0474 Net realized gain on investments sold....... 0.0004 - - - - ------ ------ ------ ------ ------- Total income from investment operations.... 0.0363 0.0530 0.0420 0.0460 0.0474 Less distributions: Dividends from net Investment income........ (0.0359) (0.0530) (0.0420) (0.0460) (0.0474) Dividends from net realized gain............ (0.0004) -------- -------- -------- -------- -------- Total distributions......................... (0.0359) (0.0530) (0.0420) (0.0460) (0.0474) -------- -------- -------- -------- -------- Net asset value, end of year................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 ========= ========= ========= ========= ========= Total return(2) ............................... 3.70% 5.44% 4.29% 4.73% 4.84% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted)....... $ 18,523 $43,608 $62,527 $91,323 $87,059 Ratio of net expenses to average net assets(3) 0.47% 0.46% 0.45% 0.45% 0.45% Ratio of net expenses after custodian fee reduction to average net assets(4) ....... 0.45%(3) 0.45%(3) 0.45% 0.45% 0.45% Ratio of net investment income to average net assets 3.93% 5.33% 4.19% 4.61% 4.74% - ------------------------------------------------------------------------------------------------------------------------------- (1)During each of the above periods, the investment adviser voluntarily reduced its fee and in certain periods was allocated a portion of the operating expenses. Had such actions not been undertaken, net investment income per share and the ratios would have been as follows: Net investment income per share................ $0.0330 $0.0505 $0.0402 $0.0444 $0.0460 ========== ========== ========== ========== ========== Ratios (as a percentage of average daily net assets): Expenses.................................... 0.88% 0.71% 0.63% 0.61% 0.59% ========== ========== ========== ========== ========== Expenses after custodian fee reduction(3) .. 0.86% 0.70% 0.63% 0.61% 0.59% ========== ========== ========== ========== ========== Net investment income ...................... 3.52% 5.08% 4.01% 4.45% 4.60% ========== ========== ========== ========== ========== - -------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. (3)Custodian fees were reduced by credits resulting from cash balances the fund maintained with the custodian (Note 1C). The computation of net expenses to average daily net assets reported above is computed without consideration of such credits. (4)Under a written agreement in effect for the current fiscal year, Wright waives advisory fees and/or assumes operating expenses to the extent necessary to limit the expense ratio to 0.45%.
FOR MORE INFORMATION Additional information about the funds' investments is available in the funds' semi-annual and annual reports to shareholders. The funds' annual report contains a discussion of the market conditions and investment strategies that affected the funds' performance over the past year. You may want to read the statement of additional information (SAI) for more information on the funds and the securities they invest in. The SAI is incorporated into this prospectus by reference, which means that it is considered to be part of the prospectus. You can get free copies of the semi-annual and annual reports and the SAI, request other information or get answers to your questions about the funds by writing or calling: Wright Investors' Service Distributors, Inc. 440 Wheelers Farms Road Milford, CT 06460 (800) 888-9471 E-mail: funds@wrightinvestors.com Copies of documents and application forms can be viewed and downloaded from Wright's web site: www.wrightinvestors.com. Text-only versions of fund documents can be viewed online or downloaded from the SEC's web site at http://www.sec.gov. You can also obtain copies by visiting the SEC's Public Reference Room in Washington DC. For information on the operation of the Public Reference Room, call (202) 942-8090. Copies of documents may also be obtained by sending your request and the appropriate duplicating fee to the SEC's Public Reference Section, Washington, DC 20549-0102 or by electronic mail at publicinfo@sec.gov. Investment Company Act file numbers: The Wright Managed Equity Trust..........................811-03489 The Wright Managed Income Trust..........................811-03668 STATEMENT OF ADDITIONAL INFORMATION STANDARD SHARES INSTITUTIONAL SHARES MONEY MARKET SHARES May 1, 2002 THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS THE WRIGHT MANAGED EQUITY TRUST Wright Selected Blue Chip Equities Fund Wright Major Blue Chip Equities Fund Wright International Blue Chip Equities Fund and THE WRIGHT MANAGED INCOME TRUST Wright U.S. Government Intermediate Fund (formerly Wright U.S. Treasury Fund) Wright U.S. Government Near Term Fund Wright Total Return Bond Fund Wright Current Income Fund Wright U.S. Treasury Money Market Fund 255 State Street Boston, Massachusetts 02109 TABLE OF CONTENTS Page The Funds and their Investment Policies....................2 The Wright Managed Equity Trust.......................2 The Wright Managed Income Trust.......................4 Additional Investment Policies and Other Information.......5 Additional Information about the Trusts and the Portfolio Trust...............................9 Investment Restrictions...................................10 Management and Organization...............................12 Control Persons and Principal Holders of Shares...........15 Investment Advisory and Administrative Services...........17 Custodian and Transfer Agent..............................18 Independent Certified Public Accountants..................19 Brokerage Allocation......................................19 Pricing of Shares.........................................20 Principal Underwriter.....................................21 Service Plans.............................................22 Calculation of Performance and Yield Quotations...........23 Taxes.....................................................25 Financial Statements......................................27 APPENDIX..................................................28 This combined Statement of Additional Information is NOT a prospectus and is authorized for distribution to prospective investors only if preceded or accompanied by the current combined Prospectus of the funds in The Wright Managed Equity Trust and The Wright Managed Income Trust (the "Trusts"), dated May 1, 2002, as supplemented from time to time, which is incorporated herein by reference. A copy of the Prospectus may be obtained without charge from Wright Investors' Service Distributors, Inc., 440 Wheelers Farms Road, Milford, CT 06460 (Telephone: (800) 888-9471) or from the World Wide Web site (http://www.wrightinvestors.com). Although each fund offers only its shares of beneficial interest, it is possible that a fund might become liable for a misstatement or omission in this Statement of Additional Information regarding another fund because the funds use this combined Statement of Additional Information. The Trustees of the Trusts have considered this factor in approving the use of a combined Statement of Additional Information. THE FUNDS AND THEIR INVESTMENT POLICIES Each fund is a diversified series of an open-end management investment company. The market price of securities held by the funds and the net asset value of each fund's shares will fluctuate in response to stock or bond market developments and, for WIBC, currency rate fluctuations. Capitalized terms used in this Statement of Additional Information have the same meaning as in the Prospectus. THE WRIGHT MANAGED EQUITY TRUST The Wright Managed Equity Trust (the "Equity Trust") consists of three equity funds: Wright Selected Blue Chip Equities Fund (WBC), Wright Major Blue Chip Equities Fund (WMBC), and Wright International Blue Chip Equities Fund (WIBC) (collectively, the "Equity funds"). The objective of each Equity fund is described in the Prospectus. There is no guarantee that a fund will achieve its investment objective. Securities selected for each fund or portfolio are drawn from an investment list prepared by Wright Investors' Service, Inc. ("Wright" or "Investment Adviser"), and known as The Approved Wright Investment List (the "AWIL") and the International Approved Wright Investment List (the "International AWIL"). All companies on the AWIL or International AWIL are, in the opinion of Wright, soundly financed "Blue Chips" with established records of earnings profitability and equity growth. All have established investment acceptance and active, liquid markets for their publicly owned shares. APPROVED WRIGHT INVESTMENT LIST (AWIL). Wright systematically reviews about 10,000 U.S. companies in its proprietary database in order to identify those which pass the minimum standards of prudence (e.g., the value of the company's assets and shareholders' equity exceeds certain minimum standards) and thus are suitable for consideration by fiduciary investors. Companies which meet these requirements (about 2,500 companies) are considered by Wright to be of "investment grade." They may be large or small, may have their securities traded on exchanges or over the counter, and may include companies not currently paying dividends on their shares. These companies are then subjected to extensive analysis and evaluation in order to identify those which meet Wright's standards of investment quality or are leaders in their industry. Only those companies meeting or exceeding these standards are assigned a Wright Quality Rating and are eligible for selection by the Wright Investment Committee for inclusion in the AWIL. The AWIL will normally be made of about 350 companies. WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WBC). This fund seeks to achieve its investment objective by investing substantially all of its assets in a corresponding portfolio that has the same investment objective as the fund. The portfolio invests only in those companies whose current operations reflect defined, quantified characteristics which have been identified by Wright as being likely to provide comparatively superior total investment return. The process selects companies from the quality companies on the AWIL on the basis of Wright's evaluation of their recent valuation and price/earnings momentum. These selections are further reviewed to determine those that have the best value in terms of current price and current, as well as forecasted, earnings. Capitalization of companies selected is not a consideration. Companies may be mid cap or large. Professional investment personnel characterize Wright Selected Blue Chip Equities Fund as a blend of growth and value. The fund's benchmark is the Standard & Poor's Mid-Cap 400 Index (S&P Mid-Cap 400). The disciplines which determine sale include preventing individual holdings from exceeding 2 times their normal value position in this portfolio, preventing the retention of the securities of any company which no longer meets the standards of the AWIL, and portfolio holdings which cease to meet the outlook criteria described above. The disciplines which determine purchase provide that new funds, income from securities currently held, and proceeds of sales of securities will be used to increase those positions which at current market values are the further below their normal target values and to purchase companies which become eligible for the portfolio. The portfolio will, under normal market conditions, invest at least 80% of its net assets in Selected Blue Chip equity securities, including common stocks, preferred stocks and securities convertible into stock. This is a fundamental policy that can only be changed with shareholder approval. However, for temporary defensive purposes the portfolio may hold cash or invest without limit in the short-term debt securities described under "Additional Investment Policies and Other Information - Defensive Investments." WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC). This fund seeks to enhance total investment return (consisting of price appreciation plus income) by providing management of a broadly diversified portfolio of equity securities of larger well-established companies meeting strict quality standards. The fund will, through continuous professional investment supervision by Wright, pursue these objectives by investing in a diversified portfolio of common stocks of what are believed to be high-quality, well-established and profitable companies. The fund will, under normal market conditions, invest at least 80% of its net assets in equity securities, including common stocks, preferred stocks and securities convertible into stock. This is a fundamental policy that can only be changed with shareholder approval. However, for temporary defensive purposes the fund may hold cash or invest without limit in the short-term debt securities described under "Additional Investment Policies and Other Information - Defensive Investments." This fund is quality oriented and is suitable for a total equity account or as a base portfolio for accounts with multiple objectives. Investment, except for temporary defensive investments, will be made solely in larger companies on the AWIL. In selecting companies from the AWIL for this portfolio, the Investment Committee of Wright selects, based on quantitative formulae, those companies which are expected to do better over the intermediate term. The quantitative formulae take into consideration factors such as over/under valuation and compatibility with current market trends. The fund's benchmark is the Standard & Poor's 500 Index (S&P 500). The disciplines which determine sale include preventing individual holdings from exceeding 2-1/2 times their normal value position in this fund and requiring the sale of the securities of any company which no longer meets the standards of the AWIL. Also, portfolio holdings which fall in the unfavorable category based on the quantitative formulae described above are generally sold. The disciplines which determine purchase provide that new funds, income from securities currently held, and proceeds of sales of securities will be used to increase those positions which at current market are the furthest below their normal target values and to purchase companies which become eligible for the portfolio as described above. THE INTERNATIONAL APPROVED WRIGHT INVESTMENT LIST (INTERNATIONAL AWIL) . Wright systematically reviews approximately 14,000 non-U.S. companies from more than 50 countries contained in the Worldscope(R) database in order to identify those which, on the basis of at least five years of audited records, pass the minimum standards of prudence (e.g., the value of the companies assets and shareholders' equity exceeds certain minimum standards and its operations have been profitable during the last three years) and thus are suitable for consideration by fiduciary investors. Companies which meet these requirements (about 3,000 companies) are considered by Wright to be suitable for prudent investment. They may be large or small, may have their securities traded on exchanges or over the counter, and may include companies not currently paying dividends on their shares. These approximately 3,000 companies are then subjected to extensive analysis and evaluation in order to identify those which meet Wright's standards of investment quality or are leaders in their industry. Only those companies meeting or exceeding these standards (a subset of the 3,000 companies considered for prudent investment) are assigned a Wright Quality Rating and are eligible for selection by the Wright Investment Committee for inclusion in the International AWIL. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC). This fund seeks to achieve its investment objective by investing substantially all of its assets in a corresponding portfolio that has the same investment objective as the fund. The portfolio will, through continuous professional investment supervision by Wright, pursue its objective by investing in a diversified portfolio of equity securities of high-quality, well-established and profitable non-U.S. companies having their principal business activities in at least three different countries outside the United States. The portfolio, under normal market conditions, will invest at least 80% of its net assets in International Blue Chip equity securities, including common stocks, preferred stocks and securities convertible into stock. This is a fundamental policy that can only be changed with shareholder approval. International Blue Chip equity securities are those included in the International AWIL, as described above. However, for temporary defensive purposes the portfolio may hold cash or invest without limit in the short-term debt securities described under "Additional Investment Policies and Other Information -- Defensive Investments." The portfolio may purchase equity securities traded on a securities market of the country in which the company is located or other foreign securities exchanges, or it may purchase American Depositary Receipts ("ADRs") traded in the United States. Investing in the fund may be suitable for investors wishing to diversify their portfolios by investing in non-U.S. companies or for investors who simply wish to participate in non-U.S. investments. Although the fund's and the portfolio's net asset values will be calculated in U.S. dollars, fluctuations in foreign currency exchange rates may affect the value of an investment in the portfolio and the fund. The disciplines which determine sale include disposing of equity securities of any company which no longer meets the quality standards of the International AWIL. The disciplines which determine purchase provide that new funds, income from the securities held by the portfolio and proceeds of sales of the securities held by the portfolio will be used to increase those positions which at current market value are the furthest below their normal target values. THE WRIGHT MANAGED INCOME TRUST The Wright Managed Income Trust (the "Income Trust") consists of four fixed income funds: Wright U.S. Government Intermediate Fund (WUSGIF), Wright U.S. Government Near Term Fund (WNTB), Wright Total Return Bond Fund (WTRB), and Wright Current Income Fund (WCIF) (collectively, the "Income Funds"), and a money market fund, Wright U.S. Treasury Money Market Fund (WTMM). Each fund seeks to achieve its objective through the investment policies described below. WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGIF) . This fund seeks to achieve its investment objective by investing substantially all of its assets in a corresponding portfolio that has the same investment objective as the fund. U.S. Government Intermediate Portfolio ("USGIP") invests in U.S. government obligations. Under normal market conditions, the portfolio will invest substantially all, but in any case at least 80%, of its total assets in such U.S. government obligations and in repurchase agreements with respect to such obligations. The portfolio will not invest in derivatives. The fund's benchmark is the Lehman Intermediate Government Bond Index. WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) . This fund seeks to achieve its investment objective by investing substantially all of its assets in a corresponding portfolio that has the same investment objective as the fund. U.S. Government Near Term Portfolio ("USGNTP") invests in U.S. Government obligations with an average weighted maturity between one and three years. The U.S. Government securities in which the portfolio may invest include direct obligations of the U.S. Government, such as bills, notes and bonds issued by the U.S. Treasury; obligations of U.S. Government agencies and instrumentalities secured by the full faith and credit of the U.S. Treasury, such as securities, including pass-through securities, of the Government National Mortgage Association (GNMA) or the Export-Import Bank; obligations secured by the right to borrow from the U.S. Treasury, such as securities issued by the Federal Financing Bank or the Student Loan Marketing Association; and obligations backed only by the credit of the government agency itself, such as securities of the Federal Home Loan Bank, the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). The portfolio may enter into repurchase agreements with respect to any securities in which it may invest. This fund is designed to appeal to the investor seeking a high level of income that is normally somewhat less variable and normally somewhat higher than that available from short-term U.S. Government money market securities and who is also seeking to limit fluctuation of capital (i.e. compared with longer term U.S. Government securities). WRIGHT TOTAL RETURN BOND FUND (WTRB) . The fund invests in bonds or other investment-grade debt securities selected by the Investment Adviser with a weighted average maturity that, in the Investment Adviser's judgment, produces the best total return, i.e., the highest total of ordinary income plus capital appreciation. There are no limits on the minimum or maximum weighted average maturity of the fund's portfolio or on the maturity of any individual security. Accordingly, investment selections may differ depending on the particular phase of the interest rate cycle. This fund may invest in U.S. Government and agency obligations, certificates of deposit of federally insured banks and corporate obligations rated at the date of investment "BBB" or better (investment grade) by Standard & Poor's Ratings Group ("S&P") or by Moody's Investors Service, Inc. ("Moody's") or, if not rated by such rating organizations, of comparable quality as determined by Wright pursuant to guidelines established by the Trustees. In any case, they must also meet Wright Quality Rating Standards. The fund will seek to dispose of securities downgraded to a rating below BBB by both Moody's and S&P. The fund's benchmark is the Lehman U.S. Aggregate Bond Index. WRIGHT CURRENT INCOME FUND (WCIF) . This fund seeks to achieve its investment objective by investing substantially all of its assets in a corresponding portfolio that has the same investment objective as the fund. Current Income Portfolio ("CIP") invests primarily in debt obligations issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, mortgage-related securities of governmental or corporate issuers and corporate debt securities. The U.S. Government securities in which the portfolio may invest include direct obligations of the U.S. Government, such as bills, notes, and bonds issued by the U.S. Treasury; obligations of U.S. Government agencies and instrumentalities secured by the full faith and credit of the U.S. Treasury, such as securities of GNMA or the Export-Import Bank; obligations secured by the right to borrow from the U.S. Treasury, such as securities issued by the Federal Financing Bank or the Student Loan Marketing Association; and obligations backed only by the credit of the government agency itself, such as securities of Federal Home Loan Bank, FNMA and FHLMC. The portfolio may invest in mortgage-related securities issued by certain of the agencies or federally chartered corporations listed above. These include mortgage-backed securities of GNMA, FNMA and FHLMC, debentures and short-term notes issued by FNMA and collateralized mortgage obligations issued by FHLMC. These securities are backed by a pool of mortgages which pass through to investors the principal and interest payments of homeowners. Ginnie Mae guarantees that investors will receive timely principal payments even if homeowners do not make their mortgage payments on time. See "Additional Investment Policies and Other Information - Mortgage-Related Securities" on page 8. The corporate debt securities in which the portfolio may invest include commercial paper and other short-term instruments rated A-1 by S&P or P-1 by Moody's. The portfolio may invest in unrated debt securities if these are determined by Wright pursuant to guidelines established by the Trustees to be of a quality comparable to that of the rated securities in which the portfolio may invest. All of the corporate debt securities purchased by the portfolio must meet Wright Quality Rating Standards. Wright may allocate assets among different market sectors (such as agency securities, U.S. government and Treasury securities, and corporate debt securities) with different maturities based on its view of the relative value of each sector or maturity. In buying and selling securities for the portfolio, Wright analyzes a security's structural features, current price compared with its estimated long-term price, and the credit quality of its issuer. The portfolio may enter into repurchase agreements with respect to any securities in which it may invest. WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) . The fund's objective is to provide as high a rate of current income as possible consistent with the preservation of capital and maintenance of liquidity. The fund will pursue its objective by investing exclusively in securities of the U.S. Government and its agencies that are backed by the full faith and credit of the U.S. Government ("U.S. Treasury securities") and in repurchase agreements relating to such securities. At least 80% of the fund's assets will be invested in direct obligations of the U.S. Treasury, including Treasury bills, notes and bonds, which differ only in their interest rates, maturities and times of issuance. Up to 20% of the fund's assets may be held in cash or invested in repurchase agreements. The fund will limit its portfolio to investments maturing in 13 months or less and maintains a weighted average maturity of not more than 90 days. The fund will seek to maintain a net asset value of $1.00 per share, but there is no assurance that the fund will be able to do so. The yield of the fund will fluctuate in response to changes in market conditions and interest rates. The fund will limit its investments to legal investments and investment practices for federal credit unions as set forth in the Federal Credit Union Act and the National Credit Union Administration Regulations. The fund will provide all federal credit union shareholders of record with sixty (60) days' written notice before changing this investment policy. * * * None of the funds is intended to be a complete investment program, and the prospective investor should take into account its objectives and other investments when considering the purchase of any fund's shares. The funds cannot eliminate risk or assure achievement of their objectives. ADDITIONAL INVESTMENT POLICIES AND OTHER INFORMATION The Equity Trust, the Income Trust and the Portfolio Trust have adopted certain fundamental investment restrictions which are enumerated under "Investment Restrictions" and which may be changed as to a fund or portfolio only by the vote of a majority of the fund's or the portfolio's outstanding voting securities. Except for such enumerated restrictions and as otherwise indicated herein, the investment objective and policies of each fund and portfolio are not fundamental polices and accordingly may be changed by the Trustees of each Trust and the Portfolio Trust without obtaining the approval of a fund's shareholders or the investors in the corresponding portfolio, as the case may be. If any changes were made in a fund's investment objective, the fund might have investment objectives different from the objective which an investor considered appropriate at the time the investor became a shareholder in the fund. Each fund will notify its shareholders of any material change in its investment objective. The use of the term "fund" or "funds" in the following "Additional Investment Policies and Other Information" is intended to include the corresponding portfolios, except as noted. U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY SECURITIES - U.S. Government securities are issued by the Treasury and include bills, certificates of indebtedness, notes, and bonds. Agencies and instrumentalities of the U.S. Government are established under the authority of an act of Congress and include, but are not limited to, GNMA, the Tennessee Valley Authority, the Bank for Cooperatives, the Farmers Home Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks, and FNMA. REPURCHASE AGREEMENTS - Each of the funds may enter into repurchase agreements to the extent permitted by its investment policies. A fund may enter into repurchase agreements only with large, well-capitalized banks or government securities dealers that meet Wright credit standards. Repurchase Agreements involve purchase of U.S. Government securities or of other high-quality, short-term debt obligations. At the same time a fund purchases the security, it resells it to the vendor (a member bank of the Federal Reserve System or recognized securities dealer), and is obligated to redeliver the security to the vendor on an agreed-upon date in the future. The resale price is in excess of the purchase price and reflects an agreed-upon market rate unrelated to the coupon rate on the purchased security. Such transactions afford an opportunity for a fund to earn a return on cash which is only temporarily available. A fund's risk is the ability of the vendor to pay an agreed-upon sum upon the delivery date, and the Trust believes the risk is limited to the difference between the market value of the security and the repurchase price provided for in the repurchase agreement. However, bankruptcy or insolvency proceedings affecting the vendor of the security which is subject to the repurchase agreement, prior to the repurchase, may result in a delay in a fund being able to resell the security. In all cases when entering into repurchase agreements with other than FDIC insured depository institutions, the funds will take physical possession of the underlying collateral security, or will receive written confirmation of the purchase of the collateral security and a custodial or safekeeping receipt from a third party under a written bailment for hire contract, or will be the recorded owner of the collateral security through the Federal Reserve Book-Entry System. Repurchase agreements are considered to be loans under the Investment Company Act of 1940 (the "1940 Act"). CERTIFICATES OF DEPOSIT - are certificates issued against funds deposited in a bank, are for a definite period of time, earn a specified rate of return, and are normally negotiable. BANKERS' ACCEPTANCES - are short-term credit instruments used to finance the import, export, transfer or storage of goods. They are termed "accepted" when a bank guarantees their payment at maturity. COMMERCIAL PAPER - refers to promissory notes issued by corporations in order to finance their short-term credit needs. FINANCE COMPANY PAPER - refers to promissory notes issued by finance companies in order to finance their short-term credit needs. CORPORATE OBLIGATIONS - include bonds and notes issued by corporations in order to finance longer-term credit needs. FOREIGN SECURITIES - WIBC may invest in foreign securities. Investing in securities of foreign governments or securities issued by companies whose principal business activities are outside the United States may involve significant risks not associated with domestic investments. It is anticipated that in most cases, the best available market for foreign securities will be on exchanges or in over-the-counter markets located outside the U.S. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the U.S. Securities of some foreign issuers (particularly those located in emerging market countries) may be less liquid and more volatile than securities of comparable U.S. companies. In addition, foreign brokerage commissions are generally higher than commissions on securities traded in the U.S. and may be non-negotiable. In general, there is less overall governmental supervision and regulation of securities exchanges, brokers and listed companies than in the U.S. The limited liquidity of certain foreign markets in which the fund may invest may affect the fund's ability to accurately value its assets invested in such market. In addition, the settlement systems of certain foreign countries are less developed than the U.S., which may impede the fund's ability to effect portfolio transactions. There is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing and financial reporting requirements comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in exchange control regulations, expropriation or confiscatory taxation, limitation on removal of funds or other assets of the fund, political or financial instability or diplomatic and other developments which could affect such investments. Further, economies of particular countries or areas of the world may differ favorably or unfavorably from the economy of the U.S. These risks may be intensified for the fund's investments in Latin or South American emerging markets and countries with limited or developing capital markets. Security prices in these markets can be significantly more volatile than in more developed countries, reflecting the greater uncertainties of investing in less established markets and economies. Political, legal and economic structures in many of these emerging market countries may be undergoing significant evolution and rapid development, and they may lack the social, political, legal and economic stability characteristic of more developed countries. Emerging market countries may have failed in the past to recognize private property rights. They may have relatively unstable governments, present the risk of nationalization of businesses, restrictions on foreign ownership, or prohibitions on repatriation of assets, and may have less protection of property rights than more developed countries. Their economies may be predominately based on only a few industries, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens, inflation rates or currency exchange rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of substantial holdings difficult or impossible at times. The fund may be required to establish special custodial or other arrangements before making certain investments in those countries. Securities of issuers located in these countries may have limited marketability and may be subject to more abrupt or erratic price movements. FOREIGN CURRENCY EXCHANGE TRANSACTIONS - WIBC may engage in foreign currency exchange transactions. Investments in securities of foreign governments and companies whose principal business activities are located outside of the United States will frequently involve currencies of foreign countries. In addition, assets of the fund may temporarily be held in bank deposits in foreign currencies during the completion of investment programs. Therefore, the value of the fund's assets, as measured in U.S. dollars, may be affected favorably or unfavorably by changes in foreign currency exchange rates and exchange control regulations. Although the fund values its assets daily in U.S. dollars, the fund does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. The fund may conduct its foreign currency exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market. The fund will convert currency on a spot basis from time to time and will incur costs in connection with such currency conversion. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference (the "spread") between the prices at which they are buying and selling various currencies. Thus, a dealer may offer to sell a foreign currency to the fund at one rate, while offering a lesser rate of exchange should the fund desire to resell that currency to the dealer. The fund does not intend to speculate in foreign currency exchange rates. As an alternative to spot transactions, the fund may enter into contracts to purchase or sell foreign currencies at a future date ("forward" contracts) or purchase currency call or put options. A forward contract involves an obligation to purchase or sell a specific currency at a future date and price fixed by agreement between the parties at the time of entering into the contract. These contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A forward contract generally involves no deposit requirement and no commissions are charged at any stage for trades. The fund intends to enter into such contracts only on net terms. The purchase of a put or call option is an alternative to the purchase or sale of forward contracts and will be used if the option premiums are less then those in the forward contract market. The fund may enter into forward contracts only under two circumstances. First, when the fund enters into a contract for the purchase or sale of a security quoted or dominated in a foreign currency, it may desire to "lock in" the U.S. dollar price of the security. This is accomplished by entering into a forward contract for the purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign currency involved in the underlying security transaction ("transaction hedging"). Such forward contract transactions will enable the fund to protect itself against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the subject foreign currency during the period between the date the security is purchased or sold and the date of payment for the security. Second, when the Investment Adviser believes that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, the fund may enter into a forward contract to sell, for a fixed amount of U.S. dollars, the amount of foreign currency approximating the value of some or all of the securities quoted or denominated in such foreign currency. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible. The future value of such securities in foreign currencies will change as a consequence of fluctuations in the market value of those securities between the date the forward contract is entered into and the date it matures. The projection of currency exchange rates and the implementation of a short-term hedging strategy are highly uncertain. The fund will place cash or liquid securities in a segregated account. The amount of such segregated assets will be at least equal to the value of the fund's total assets committed to the consummation of forward contracts involving the purchase of forward currency. If the value of the securities placed in the segregated account declines, additional cash or securities will be placed in the account on a daily basis so that the value of the account will equal the amount of the fund's commitments with respect to such contracts. At the maturity of a forward contract, the fund may elect to sell the portfolio security and make delivery of the foreign currency. Alternatively, the fund may retain the security and terminate its contractual obligation to deliver the foreign currency by purchasing an identical offsetting contract from the same currency trader. It is impossible to forecast with precision the market value of portfolio securities at the expiration of a forward contract. Accordingly, it may be necessary for the fund to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the fund intends to sell the security and the market value of the security is less than the amount of foreign currency that the fund is obligated to deliver. Conversely, it may be necessary to sell on the spot market some of the foreign currency received upon the sale of the portfolio security if its market value exceeds the amount of foreign currency that the fund is obligated to deliver. If the fund retains the portfolio security and engages in an offsetting transaction, the fund will incur a gain or a loss (as described below) to the extent that there has been a change in forward contract prices. If the fund engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward contract prices decline during the period between the date the fund enters into a forward contract for the sale of the foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the fund will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward contract prices increase, the fund will suffer a loss to the extent that the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. The fund will not speculate in forward contracts and will limit its use of such contracts to the transactions described above. Of course, the fund is not required to enter into such transactions with respect to its portfolio securities and will not do so unless deemed appropriate by the Investment Adviser. This method of protecting the value of the fund's securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which the fund can achieve at some future time. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, they also tend to limit any potential gain which might be realized if the value of such currency increases. "FORWARD COMMITMENTS AND WHEN-ISSUED" SECURITIES - Each fund may purchase when-issued securities and make contracts to purchase or sell securities for a fixed price at a future date beyond customary settlement time. Alternatively, a fund may enter into offsetting contracts for the forward sale of other securities that it owns. Securities purchased or sold on a when-issued or forward commitment basis involve a risk of loss if the value of the security to be purchased declines prior to the settlement date or if the value of the security to be sold increases prior to the settlement date. Securities are frequently offered on a "when-issued" basis. When so offered, the price, which is generally expressed in terms of yield to maturity, is fixed at the time the commitment to purchase is made, but delivery and payment for the when-issued securities may take place at a later date. Normally, the settlement date occurs 15 to 90 days after the date of the transaction. The payment obligation and the interest rate that will be received on the securities are fixed at the time a fund enters into the purchase commitment. During the period between purchase and settlement, no payment is made by the fund to the issuer and no interest accrues to the fund. To the extent that assets of a fund are held in cash pending the settlement of a purchase of securities, the fund would earn no income; however, it is intended that the funds will be fully invested to the extent practicable and subject to the policies stated above. While forward commitments and when-issued securities may be sold prior to the settlement date, it is intended that such securities will be purchased for a fund with the purpose of actually acquiring them unless a sale appears to be desirable for investment reasons. At the time a commitment to purchase securities on a when-issued basis is made for a fund, the transaction will be recorded and the value of the security reflected in determining the fund's net asset value. The Trust will establish a segregated account in which a fund that purchases securities on a when-issued basis will maintain cash and liquid securities equal in value to commitments for when-issued securities. If the value of the securities placed in the separate account declines, additional cash or securities will be placed in the account on a daily basis so that the value of the account will at least equal the amount of a fund's when-issued commitments. Such segregated securities either will mature or, if necessary, be sold on or before the settlement date. Securities purchased on a when-issued basis and the securities held by a fund are subject to changes in value based upon the public's perception of the credit worthiness of the issuer and changes in the level of interest rates (which will generally result in both changing in value in the same way, i.e., both experiencing appreciation when interest rates decline and depreciation when interest rates rise). Therefore, to the extent that a fund remains substantially fully invested at the same time that it has purchased securities on a when-issued basis, there will be greater fluctuations in the market value of the fund's net assets than if cash were solely set aside to pay for when-issued securities. DEFENSIVE INVESTMENTS - During periods of unusual market conditions, when Wright believes that investing for temporary defensive purposes is appropriate, all or a portion of each fund's or portfolio's assets may be held in cash or invested in short-term obligations. Short-term obligations include but are not limited to short-term obligations issued or guaranteed as to interest and principal by the U.S. Government or any agency or instrumentality thereof (including repurchase agreements collateralized by such securities); commercial paper which at the date of investment is rated A-1 by S&P or P-1 by Moody's, or, if not rated by such rating organizations, is deemed by Wright pursuant to procedures established by the Trustees to be of comparable quality; short-term corporate obligations and other debt instruments which at the date of investment are rated AA or better by S&P or Aa or better by Moody's or, if unrated by such rating organizations, are deemed by Wright pursuant to procedures established by the Trustees to be of comparable quality; and certificates of deposit, bankers' acceptances and time deposits of domestic banks which are determined to be of high quality by Wright pursuant to procedures established by the Trustees. The funds may invest in instruments and obligations of banks that have other relationships with the funds, the portfolios, Wright or Eaton Vance Management, the Trusts' Administrator ("Eaton Vance" or "Administrator"). No preference will be shown towards investing in banks which have such relationships. MORTGAGE-RELATED SECURITIES - WTRB and WCIF may invest in mortgage-related securities, including collateralized mortgage obligations ("CMOs") and other derivative mortgage-related securities. These securities will either be issued by the U.S. Government or one of its agencies or instrumentalities or, if privately issued, supported by mortgage collateral that is insured, guaranteed or otherwise backed by the U.S. Government or its agencies or instrumentalities. The funds do not invest in the residual classes of CMOs, stripped mortgage-related securities, leveraged floating rate instruments or indexed securities. Mortgage-related securities represent participation interests in pools of adjustable and fixed mortgage loans. Unlike conventional debt obligations, mortgage-related securities provide monthly payments derived from the monthly interest and principal payments (including any prepayments) made by the individual borrowers on the pooled mortgage loans. The mortgage loans underlying mortgage-related securities are generally subject to a greater rate of principal prepayments in a declining interest rate environment and to a lesser rate of principal prepayments in an increasing interest rate environment. Under certain interest and prepayment rate scenarios, a fund may fail to recover the full amount of its investment in mortgage-related securities purchased at a premium, notwithstanding any direct or indirect governmental or agency guarantee. The fund may realize a gain on mortgage-related securities purchased at a discount. Since faster than expected prepayments must usually be invested in lower yielding securities, mortgage-related securities are less effective than conventional bonds in "locking in" a specified interest rate. Conversely, in a rising interest rate environment, a declining prepayment rate will extend the average life of many mortgage-related securities. Extending the average life of a mortgage related security increases the risk of depreciation due to future increases in market interest rates. A fund's investments in mortgage-related securities may include conventional mortgage pass-through securities and certain classes of multiple class CMOs. Senior CMO classes will typically have priority over residual CMO classes as to the receipt of principal and/or interest payments on the underlying mortgages. The CMO classes in which a fund may invest include sequential and parallel pay CMOs, including planned amortization class ("PAC") and target amortization class ("TAC") securities. Different types of mortgage-related securities are subject to different combinations of prepayment, extension, interest rate and/or other market risks. Conventional mortgage pass-through securities and sequential pay CMOs are subject to all of these risks, but are typically not leveraged. PACs, TACs and other senior classes of sequential and parallel pay CMOs involve less exposure to prepayment, extension and interest rate risk than other mortgage-related securities, provided that prepayment rates remain within expected prepayment ranges or "collars." LENDING PORTFOLIO SECURITIES - All of the funds in the Equity Trust may seek to increase income by lending portfolio securities to broker-dealers or other institutional borrowers. Under present regulatory policies of the Securities and Exchange Commission, such loans are required to be secured continuously by collateral in cash or liquid assets held by the fund's custodian and maintained on a current basis at an amount at least equal to the market value of the securities loaned, which will be marked to market daily. Cash equivalents include certificates of deposit, commercial paper and other short-term money market instruments. The fund would have the right to call a loan and obtain the securities loaned at any time on up to five business days' notice. The fund would not have the right to vote any securities having voting rights during the existence of a loan, but would call the loan in anticipation of an important vote to be taken among holders of the securities or the giving or withholding of their consent on a material matter affecting the investment. During the existence of a loan, a fund will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities loaned and will also receive a fee, or all or a portion of the interest, if any, on investment of the collateral. However, the fund may at the same time pay a transection fee to such borrowers and administrative expenses, such as finders' fees to third parties. As with other extensions of credit there are risks of delay in recovery or even loss of rights in the securities loaned if the borrower of the securities fails financially. However, the loans will be made only to organizations deemed by the Investment Adviser to be of good standing and when, in the judgment of the Investment Adviser, the consideration which can be earned from securities loans of this type justifies the attendant risk. The financial condition of the borrower will be monitored by the Investment Adviser on an ongoing basis and collateral values will be continuously maintained at no less than 100% by "marking to market" daily. If the Investment Adviser decides to make securities loans, it is intended that the value of the securities loaned would no exceed 30% of the fund's total assets. ADDITIONAL INFORMATION ABOUT THE TRUSTS AND THE PORTFOLIO TRUST Unless otherwise defined herein, capitalized terms have the meaning given them in the Prospectus. Each Trust is an open-end, management investment company organized as a Massachusetts business trust. The Wright Managed Equity Trust was organized in 1982 and has the three series described herein. Wright Selected Blue Chip Equities Fund and Wright Major Blue Chip Equities Fund each offer a single class of shares - Standard Shares. Wright International Blue Chip Equities Fund offers two classes of shares - Standard Shares and Institutional Shares. The Wright Managed Income Trust was organized in 1983 and has the five series described herein. Each of Wright U.S. Government Intermediate Fund, Wright Government Near Term Fund and Wright Total Return Fund offers a single class of shares - Standard Shares. Wright Current Income Fund offers two classes of shares - -Standard Shares and Institutional Shares. Wright U.S. Treasury Money Market Fund offers a single class of shares referred to as Money Market Shares. The Trusts' series are collectively referred to as the "funds." Each fund is a diversified fund. Prior to May 1, 2002, the name of Wright U.S. Government Intermediate Fund was "Wright U.S. Treasury Fund." Each Trust's Declaration of Trust may be amended with the affirmative vote of a majority of the outstanding shares of the Trust or, if the interests of a particular fund or class are affected, a majority of such fund's or class's outstanding shares. The Trustees are authorized to make amendments to each Declaration of Trust that do not have a material adverse effect on the financial interests of shareholders. Each Trust or series may be terminated upon the sale of the Trust's or series' assets to another diversified open-end management investment company, if approved by vote of a majority of the Trust's Trustees. Each Trust or series or class may be terminated upon liquidation and distribution of the assets of the Trust or series or class, if approved by a majority of the Trustees. If not so terminated, each Trust or series or class may continue indefinitely. Each Trust's Declaration of Trust further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law; however, nothing in either Declaration of Trust protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office. The Trusts are organizations of the type commonly known as "Massachusetts business trusts." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for the obligations of the trust. Each Trust's Declaration of Trust contains an express disclaimer of shareholder liability in connection with the Trust property or the acts, obligations or affairs of the Trust. Each Declaration of Trust also provides for indemnification out of the Trust property of any shareholder held personally liable for the claims and liabilities to which a shareholder may become subject by reason of being or having been a shareholder. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which a Trust itself would be unable to meet its obligations. The risk of any shareholder incurring any liability for the obligations of a Trust is extremely remote. The Investment Adviser does not consider this risk to be material. Each portfolio is a series of the Portfolio Trust, an open-end management investment company registered under the 1940 Act. The Portfolio Trust was organized as a trust under the laws of the State of New York on March 18, 1997. Interests in the Portfolio Trust have no preemptive or conversion rights, and are fully paid and non-assessable except as described in the Prospectus. The Portfolio Trust normally will not hold meetings of holders of such interests except as required under the 1940 Act. The Portfolio Trust would be required to hold a meeting of holders in the event that at any time less than a majority of its Trustees holding office had been elected by holders. The Trustees of the Portfolio Trust continue to hold office until their successors are elected and have qualified. Trustees may be removed by a majority vote of the interests held by holders in the Portfolio Trust qualified to vote in the election. The 1940 Act requires the Portfolio Trust to assist its holders in calling such a meeting. Upon liquidation of a portfolio, holders in the portfolio would be entitled to share pro rata in the net assets of the portfolio available for distribution to holders. Each holder in the Portfolio Trust is entitled to a vote in proportion to its percentage interest in the Portfolio Trust. INVESTMENT RESTRICTIONS The following investment restrictions have been adopted by each Trust and the Portfolio Trust and may be changed as to a fund or a portfolio, as the case may be, only by the vote of a majority of the fund's or portfolio's outstanding voting securities, which as used in this Statement of Additional Information means the lesser of (a) 67% of the shares of the fund or the interests of the portfolio if the holders of more than 50% of the shares or interests, as the case may be, are present or represented at the meeting or (b) more than 50% of the shares or interests of the fund or portfolio. Accordingly, the funds (portfolios) may not: (1) Borrow money or issue senior securities except as permitted by the Investment Company Act of 1940. In addition, a fund or portfolio may not issue bonds, debentures or senior equity securities, other than shares of beneficial interest; (2) With respect to 75% of the total assets of a fund or portfolio, purchase the securities of any issuer if such purchase would cause more than 5% of its total assets (taken at market value) to be invested in the securities of such issuer, or purchase securities of any issuer if such purchase would cause more than 10% of the total voting securities of such issuer to be held by the fund or portfolio, except obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities; (3) Purchase securities on margin (but a fund or portfolio may obtain such short-term credits as may be necessary for the clearance of purchase and sales of securities); (4) Purchase or sell real estate, although a fund or portfolio may purchase and sell securities which are secured by real estate and securities of companies which invest or deal in real estate; (5) Purchase or sell commodities or commodity contracts for the purchase or sale of physical commodities other than currency, excluding financial futures contracts and options on these financial futures contracts; (6) Make an investment in any one industry that would cause investments in such industry to equal or exceed 25% of the fund's or portfolio's total assets taken at market value at the time of such investment (other than securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities); (7) Underwrite or participate in the marketing of securities of others; and (8) Make loans to any person except by (a) the acquisition of debt securities and making portfolio investments, (b) entering into repurchase agreements, or (c) lending portfolio securities. Notwithstanding the investment policies and restrictions of a fund, a fund which is organized in a master-feeder structure may invest its assets in an open-end management investment company with substantially the same investment objective, policies and restrictions as the fund. Notwithstanding the investment restrictions set forth above, WTMM will be subject to the restrictions set forth in Rule 2a-7 under the 1940 Act. NONFUNDAMENTAL INVESTMENT RESTRICTIONS - In addition to the foregoing fundamental investment restrictions, each Trust and the Portfolio Trust have adopted the following nonfundamental policies which may be amended or rescinded by the vote of the Trust's or the Portfolio Trust's Board of Trustees without shareholder or interest holder approval. The funds (portfolios) may not: (a) Invest more than 15% (10% for Wright U.S. Treasury Money Market Fund) of the fund's or portfolio's net assets in illiquid investments, including repurchase agreements maturing in more than seven days, securities which are not readily marketable and restricted securities not eligible for resale pursuant to Rule 144A under the 1933 Act, but excluding commercial paper offered in reliance on Section 4(2) of the 1933 Act. (b) Purchase additional securities if the fund's or portfolio's borrowings exceed 5% of its total assets; (c) Make short sales of securities, except short sales against the box; and (d) For purposes of fundamental investment restriction no. 6, the Trusts and the Portfolio Trust consider utility companies, gas, electric, water and telephone companies as separate industries; except that, with respect to any fund which has a policy of being primarily invested in obligations whose interest income is exempt from federal income tax, the restriction shall be that the Trust (Portfolio Trust) will not purchase for that fund either (i) pollution control and industrial development bonds issued by non-governmental users or (ii) securities whose interest income is not exempt from federal income tax, if in either case the purchase would cause more than 25% of the market value of the assets of the fund (portfolio) at the time of such purchase to be invested in the securities of one or more issuers having their principal business activities in the same industry. The Equity Trust on behalf of Wright Major Blue Chip Equities Fund, the Income Trust on behalf of Wright Total Return Bond Fund and Wright U.S. Treasury Money Market Fund, and the Portfolio Trust, have each adopted the following nonfundamental investment restriction. o The funds (portfolios) may not acquire the securities of a registered open-end investment company or a registered unit investment trust in reliance on the provisions of Section 12(d)(1)(F) or Section 12(d)(1)(G) of the 1940 Act. Each fund and portfolio has adopted the following non-fundamental investment policies which may be changed by the trustees without approval by the fund's shareholders: o The 1940 Act currently allows a fund to borrow (1) for any reason from banks or by entering into reverse repurchase agreements in an amount not exceeding one-third of the fund's total assets and (2) for temporary purposes (presumed to mean not more than 60 days). If a fund's borrowings under clause (1) later exceeds one-third of the fund's total assets, the fund must reduce its borrowings below this level within three business days. o Each fund has adopted a policy to give shareholders at least 60 days written notice of any name-related investment policy changes. Except for the restriction on borrowing described in the above paragraph, if a percentage restriction contained in any fund's or portfolio's investment policies is adhered to at the time of investment, a later increase or decease in the percentage resulting from a change in the value of portfolio securities or the fund's or portfolio's net assets will not be considered a violation of such restriction. If such a change causes a fund to exceed its percentage limitation on illiquid investments, the fund will reduce these investments, in an orderly manner, to a level that does not exceed this limitation. MANAGEMENT AND ORGANIZATION Fund Management. The Trustees and principal officers of the Trust and the Portfolios are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. The business address of each Trustee and principal officer is 255 State Street, Boston, Massachusetts 02109. Definitions: - ----------- "WISDI" means Wright Investors' Service Distributors, Inc., the principal underwriter of the fund. "Winthrop" means The Winthrop Corporation, a holding company which owns all of the shares of Wright and WISDI.
Number of Term* Portfolios in Position(s) of Office Fund Complex Name with the and Length Principal Occupation Overseen Other and Age [Trust/Fund] of Service During Past Five Years By Trustee Directorships - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEES H. Day Brigham, Jr.** Vice President,Vice President, Director of Wright and Winthrop since 15 Director of Age 75 Secretary Secretary and February 1997; Retired Vice President, Wright and and Trustee Chairman of the Management Committee Winthrop Trustee since and Chief Legal Officer of Eaton Vance Inception Corp.; Vice President and Secretary of 15 funds managed by Wright - ---------------------------------------------------------------------------------------------------------------------------------- Judith R. Corchard*** Vice President Vice President Executive Vice President, Investment 14 Director of Age 63 and of the Trusts Management; Senior Investment Officer Wright and Trustee since June, 1998; and Director of Wright and Winthrop; Winthrop Trustee of the Vice President of 15 funds managed Trusts since by Wright December, 1997; Vice President and Trustee of the Portfolio since Inception - ----------------------------------------------------------------------------------------------------------------------------------- Peter M. Donovan*** President President President and Chief Executive Officer and 15 Director of Age 58 and and Trustee Director of Wright and Winthrop; Chairman Wright and Trustee since of the Investment Committee; Vice President, Winthrop Inception Treasurer and a Director of WISDI; President of 15 funds managed by Wright - ----------------------------------------------------------------------------------------------------------------------------------- A.M. Moody, III**** Vice President Vice President Senior Vice President of Wright and 15 None Age 65 and of the Trusts Winthrop; President of WISDI; Vice Trustee since December, President of 15 funds managed by 1990; Trustee of Wright the Trusts since January, 1990; Vice President and Trustee of the Portfolio since Inception - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES James P. Biggs Trustee Trustee Retired President, Peoples Bank of 14 None Age 61 since Connecticut; 1997 to 1999 President June, 2001 and Chief Operating Officer, Peoples Bank of Connecticut - ----------------------------------------------------------------------------------------------------------------------------------- Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 15 None Age 55 since (a public policy and government relations December, firm) Spotsylvania, VA; Director, 1998 The Options Clearing Corporation and First Coast Service Options, Jacksonville, FL; former Commissioner of Social Security - ---------------------------------------------------------------------------------------------------------------------------------- Number of Term* Portfolios in Position(s) of Office Fund Complex Name with the and Length Principal Occupation Overseen Other and Age [Trust/Fund] of Service During Past Five Years By Trustee Directorships - ---------------------------------------------------------------------------------------------------------------------------------- Leland Miles Trustee Trustee President Emeritus, University of 15 None Age 78 since Bridgeport (1987 to present); 1988 President Emeritus of the International Association of University Presidents (1984 to present) - ----------------------------------------------------------------------------------------------------------------------------------- Lloyd F. Pierce Trustee Trustee Retired Vice Chairman, 15 None Age 83 since Inception People's Bank, Bridgeport, CT - ---------------------------------------------------------------------------------------------------------------------------------- Richard E. Taber Trustee Trustee since Chairman and Chief Executive Officer 15 None Age 53 March, 1997 of First County Bank, Stamford, CT. - ----------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES James L. O'Connor Treasurer Trustee of Vice President Eaton Vance Management; 15 None Age 56 the Trusts Administrator for the funds and the since April 1989; portfolios; Treasurer of 15 funds managed Treasurer of by Wright and 170 funds managed by the Portfolio Eaton Vance and its affiliates. since Inception - ---------------------------------------------------------------------------------------------------------------------------------- * Trustees serve an indefinite term. Officers are elected annually. ** Mr. Brigham is an interested person of the Trusts/Portfolio because of his positions as Vice President and Secretary of the Trust and a Director of Wright and Winthrop *** Ms. Corchard an interested person of the Trusts/Portfolio because of her position as a Vice President of the Trust and Vice President, Investment Management and Senior Investment Officer, and Director of Wright and Winthrop **** Mr. Donovan is an interested person of the Trusts/Portfolio because of his positions as President of the Trust, President, Chief Executive Officer and Director of Wright and Winthrop, Chairman of the Investment Committee and Vice President, Treasurer and a Director of WISDI ***** Mr. Moody is an interested person of the Trusts/Portfolio because of his positions as Vice President of the Trust, Senior Vice President of Wright and Winthrop and President of WISDI
The fees and expenses of those Trustees of the Trusts and the Portfolio Trust (Messrs. Biggs, Miles, Pierce, and Taber and Ms. Hardy) who are not interested persons of the Trusts and the Portfolio Trust and of Mr. Brigham are paid by the Trusts and the Portfolio Trust, respectively. They also receive additional payments from other investment companies for which Wright provides investment advisory services. The Trustees who are employees of Wright receive no compensation from the Trusts and the Portfolio Trust. The Trusts and the Portfolio Trust do not have a retirement plan for the Trustees. For Trustee compensation from the Trusts and the other funds in the Wright Funds complex for the fiscal year ended December 31, 2001, see the following table. COMPENSATION TABLE Fiscal Year Ended December 31, 2001 THE WRIGHT MANAGED EQUITY TRUST - 3 Funds THE WRIGHT MANAGED INCOME TRUST - 5 Funds
Aggregate Compensation from - --------------------------------------------------------------------------------------------------------------------------------- The Wright Managed The Wright Managed The Wright Managed Funds and Trustees Equity Trust Income Trust Portfolio Trust Funds Complex(1) - --------------------------------------------------------------------------------------------------------------------------------- James P. Biggs $1,800 $1,800 $1,800 $ 7,200 H. Day Brigham, Jr. 2,800 2,800 2,800 15,000 Dorcas R. Hardy 2,800 2,800 2,800 15,000 Leland Miles 2,800 2,800 2,800 15,000 Lloyd F. Pierce 3,267 3,267 3,267 17,500 Richard E. Taber 2,800 2,800 2,800 15,000 - ---------------------------------------------------------------------------------------------------------------------------------- (1) As of May 1, 2002, the Wright fund complex consists of 15 funds.
Each Trust's and the Portfolio Trust's Board of Trustees has established an Independent Trustees' Committee and an Audit Committee, each consisting of all of the Independent Trustees who are Messrs. Biggs, Miles, Pierce (Chairman) and Taber and Ms. Hardy. The responsibilities of the Independent Trustees' Committee include those of a nominating committee for additional or replacement trustees of the Trust and a contract review committee for consideration of renewals or changes in the investment advisory agreements, distribution agreements and distribution plans and other agreements as appropriate. The responsibilities of the Audit Committee are: (a) to oversee the Trusts' accounting and financial reporting practices, their internal controls and, as appropriate, the internal controls of certain service providers; (b) to oversee the quality and objectivity of the Trusts' financial statements and the independent audit thereof; and (c) to act as a liaison between the Trusts' independent auditors and the full Board of Trustees. In the fiscal year ending December 31, 2001, the Independent Trustees Committee convened five times and the Audit Committee convened two times. The Trustees will, when a vacancy exists or is anticipated, consider any nominee for Trustee recommended by a shareholder if such recommendation is submitted to the Trustees in writing and contains sufficient background information concerning the individual to enable a proper judgment to be made as to such individual's qualifications. The Trustees, including the Independent Trustees, considered the renewal of the Investment Advisory Contract between the Trust/Portfolio and Wright at a meeting held for that purpose on January 24, 2002. In evaluating the Investment Advisory Contract, the Independent Trustees met separately from the Interested Trustees and reviewed and considered materials furnished by Wright, including information regarding Wright, its affiliates and personnel, operations and financial condition. The Independent Trustees discussed with representatives of Wright (including portfolio management personnel) the operations of the funds and the capabilities of Wright to provide advisory and other services to each fund. The Independent Trustees considered, among other things, the following: o The nature, extent and quality of services provided by Wright as investment adviser; o Information on the investment performance of the fund, relevant peer groups of funds and appropriate indices; o Costs of services provided and the resulting profits realized by the adviser from its relationship with the fund; o Other sources of revenue, if any, that accrue to the adviser as a result of the relationship; o The financial condition and organization of the investment adviser; o Wright's administrative systems which monitor the relationships with the fund's custodian and transfer agent; o Control of operating expenses of the fund; o The manner in which portfolio transactions are conducted; o The resources devoted to compliance efforts on behalf of the fund and the record of compliance with the fund's investment policies and restrictions and the adviser's code of ethics; o Comparative analysis of expense ratios of similar funds; o Investment management staffing of the adviser; o Information provided to investors, including shareholders; o Sales and redemption data in respect of the fund; The Independent Trustees' Committee did not consider any single factor as controlling in their consideration of the renewal of the Investment Advisory Contract, nor are the considerations described above all encompassing. Based on their consideration of all factors which they considered material, and with the assistance of independent counsel, the Independent Trustees' Committee concluded that the renewal of the Investment Advisory Contract with its current fee structure is in the interests of the shareholders. SHARE OWNERSHIP. The following table shows the dollar range of equity securities beneficially owned by each Trustee in each fund and in all Wright Managed Funds overseen by the Trustee as of December 31, 2001. INTERESTED TRUSTEES
Trustee Name and Dollar Range of Equity Securities Owned - ---------------------------------------------------------------------------------------------------------------------------------- Fund Name Brigham Corchard Donovan Moody - ---------------------------------------------------------------------------------------------------------------------------------- WSBC $10,001-$50,000 $50,001-$100,000 $10,001-$50,000 None WMBC $10,001-$50,000 Over $100,000 Over $100,000 $50,001-$100,000 WIBC $1- $10,000 $50,001-$100,000 $50,001-$100,000 None WUSGI $1- $10,000 None $10,001-$50,000 None WNTB $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 None WTRB $1- $10,000 Over $100,000 None None WCIF $1- $10,000 None None None WTMM $1- $10,000 None None None Aggregate Dollar Range of Equity $50,001-$100,000 Over $100,000 Over $100,000 $50,001-$100,000 Securities Owned in all Registered Funds Overseen by Trustee in the Wright Fund Complex - -----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
Trustee Name and Dollar Range of Equity Securities Owned - --------------------------------------------------------------------------------------------------------------------------------- Fund Name Biggs Hardy Miles Pierce Taber - --------------------------------------------------------------------------------------------------------------------------------- WSBC None $1 - $10,000 None None $10,001-$50,000 WMBC None None None $10,001-$50,000 $10,001-$50,000 WIBC None None $10,001-$50,000 None $10,001-$50,000 WUSGI None None None None None WNTB None None None None None WTRB None None None None $1- $10,000 WCIF None $10,001-$50,000 None None None WTMM None None None None None Aggregate Dollar Range of Equity None $10,001-$50,000 $10,001-$50,000 $10,001-$50,000 Over $100,000 Securities Owned in all Registered Funds Overseen by Trustee in the Wright Fund Complex - ----------------------------------------------------------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES As of April 1, 2002, the following shareholders were record holders of the following percentages of the outstanding shares of the funds:
EQUITY TRUST Percent of Outstanding Shares Owned ---------------------------------------------------------- WSBC WMBC WIBC ---------------------------------------------------------- Standard Standard Institutional - -------------------------------------------------------------------------------------------------------------------------------- Ruane & Co. 5.25% 5.17% 21.93% c/o Tompkins County Trust Co. Ithaca, NY 14851 - --------------------------------------------------------------------------------------------------------------------------------- Circle Trust Co. Cust. 6.14% FBO Wri Inv Sheet Metal Workers Local 46 Annuity Fund Stamford, CT 06902 - --------------------------------------------------------------------------------------------------------------------------------- Cenco 20.54% Asset Management Group Birmingham, AL 35296 - --------------------------------------------------------------------------------------------------------------------------------- RWDSU Pension Fund 79.45% c/o Compass Bank Asset Management Group Birmingham, AL 35296 - ---------------------------------------------------------------------------------------------------------------------------------- Sturco 6.39% Sturgis, MI 49091 - ----------------------------------------------------------------------------------------------------------------------------------
INCOME TRUST Percent of Outstanding Shares Owned ---------------------------------------------------------------------------------------- WUSGI WNTB WTRB WCIF WTMM ------------------------------------------------------------------------------------------ Standard Standard Standard Standard Institutional Standard - ------------------------------------------------------------------------------------------------------------------------------ Farmers State Bank 8.65% La Grange, IN 46761 - ------------------------------------------------------------------------------------------------------------------------------ Charles Schwab & Co., Inc. 18.78% Mutual Funds Dept. San Francisco, CA 94104 - ------------------------------------------------------------------------------------------------------------------------------ First Community Bank 10.95% 10.77% Trust & Financial Services Bluefield, WV - ------------------------------------------------------------------------------------------------------------------------------ Ruane & Co. 13.01% c/o Tompkins County Trust Company Ithaca, NY 14851 - ------------------------------------------------------------------------------------------------------------------------------- Sturco 5.32% Sturgis, MI 49091 - ------------------------------------------------------------------------------------------------------------------------------- FTC & Co. 7.29% Denver, CO 80217 - ------------------------------------------------------------------------------------------------------------------------------- Richard E. Gray TTEE 5.69% The Gray Family Trust Amelia Island, FL 32034 - ------------------------------------------------------------------------------------------------------------------------------- Circle Trust Co. Cust 5.16% FBO Plumbers Local 112 Annuity Fund Stamford, CT 06902 - ------------------------------------------------------------------------------------------------------------------------------- RWDSU Pension Fund - Fixed 80.16% RWDSU Benefit Plan c/o Compass Bank Birmingham, AL 35296 - --------------------------------------------------------------------------------------------------------------------------------- RWDSU Benefit Fund 19.84% c/o Compass Bank Birmingham, AL 35296 - -------------------------------------------------------------------------------------------------------------------------------- First County Bank 5.29% 5.09% Stamford, CT 06901 - --------------------------------------------------------------------------------------------------------------------------------- Circle Trust Co. - Cust. fbo 15.91% Wri. Inv. Sheet Metal Workers Local 46 Annuity Fund Stamford, CT 06902 - -------------------------------------------------------------------------------------------------------------------------------- Saturn & Co. 16.96% c/o Investors Bank & Trust Co. Boston, MA 02117 - -------------------------------------------------------------------------------------------------------------------------------- Hudson Savings Bank 8.00% Hudson, MA 01749 - --------------------------------------------------------------------------------------------------------------------------------- Woronoco Savings Bank 7.17% Westfield, MA 01085 - --------------------------------------------------------------------------------------------------------------------------------- Greenfield Savings Bank 14.94% Greenfield, MA 01302 - --------------------------------------------------------------------------------------------------------------------------------- As of April 1, 2002, to the knowledge of the trust, no other person owned of record or beneficiary 5% or more of the fund's outstanding shares as of such date.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES The Trusts have engaged Wright to act as investment adviser to the funds pursuant to an Investment Advisory Contract (the "Investment Advisory Contract"). Wright furnishes each non-feeder fund with investment advice and management services, as described below. Wright has agreed that for so long as a feeder fund invests its investable assets in a corresponding portfolio it will not impose any advisory fees to which it would be entitled under the respective Investment Advisory Contract. The Portfolio Trust has engaged Wright as investment adviser to provide investment advice and management services to the portfolios pursuant to the Portfolio Investment Advisory Contract. Pursuant to the Investment Advisory Contract and the Portfolio Investment Advisory Contract, Wright will carry out the investment and reinvestment of the assets of the non-feeder funds and the portfolios, will furnish continuously an investment program with respect to the non-feeder funds and the portfolios, will determine which securities should be purchased, sold or exchanged, and will implement such determinations. Wright will furnish to the non-feeder funds and the portfolios investment advice and management services, office space, equipment and clerical personnel, and investment advisory, statistical and research facilities. In addition, Wright has arranged for certain members of the Eaton Vance and Wright organizations to serve without salary as officers or Trustees. In return for these services, each non-feeder fund or portfolio is obligated to pay a monthly advisory fee calculated at the rates set forth in the current Prospectus. The investment adviser, the distributor and each fund and portfolio have adopted Codes of Ethics governing personal securities transactions. Under the Codes, Wright employees may purchase and sell securities subject to certain pre-clearance and reporting requirements and other procedures. These Codes of Ethics are on public file with, and available from, the Securities and Exchange Commission. The following table sets forth the net assets of each fund or portfolio at December 31, 2000 and the advisory fee paid by the funds and the portfolios during the fiscal years ended December 31, 2001, 2000, and 1999.
Advisory Fees Paid Aggregate for the Fiscal Year Ended December 31 Net Assets ------------------------------------------------ at 12/31/01 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED EQUITY TRUST SBCP(1) $ 46,507,632 $ 303,497 $ 323,944 $ 843,755 WMBC(2) 95,121,323 666,807 826,415 490,732 IBCP 83,135,668 788,793 1,192,273 1,290,967 THE WRIGHT MANAGED INCOME TRUST USGIP(3) $ 11,535,386 $ 61,061 $ 100,759 $ 213,958 USGNTP 36,078,552 163,447 182,500 299,429 WTRB(4) 50,620,482 263,397 295,515 429,396 CIP(5) 73,665,781 372,710 399,520 434,441 WTMM(6) 18,583,888 101,740 173,013 278,468 - ------------------------------------------------------------------------------------------------------------------------------ (1) To enhance the net income of the fund, Wright made a reduction of its advisory fee during the fiscal year ended December 31, 1999 by $11,400. (2) To enhance the net income of the Institutional share class, $20,867 of expenses were allocated to the investment adviser for the fiscal year ended December 31, 2001. (3) To enhance the net income of the fund, $15,108 of expenses were allocated to the investment adviser for the fiscal year ended December 31, 1999. In addition, Wright made a reduction of its advisory fee of $44,750 for the fiscal year ended December 31, 2001. (4) To enhance the net income of the fund, Wright made a reduction of its advisory fee during the fiscal year ended December 31, 1999 by $11,175. (5) To enhance the net income of the fund, Wright waived $59,400 of its advisory fee for fiscal year ended December 31, 2001. (6) To enhance the net income of the fund, Wright made a reduction of its advisory fee during each of the three fiscal years ended December 31, 2001 by $94,613, $125,928, and $146,004, respectively. In addition, for the fiscal year ended December 31, 2001, $24,113 of expenses were allocated to the investment adviser.
The Trusts have engaged Eaton Vance to act as the administrator for each fund pursuant to separate Administration Agreements. The Portfolio Trust has engaged Eaton Vance to act as the administrator for each portfolio pursuant to a Portfolio Administration Agreement. For its services under the Trusts' and the Portfolio Trust's Administration Agreements, Eaton Vance receives monthly administration fees. The following table sets forth the administration fee rates paid for the fiscal year ended December 31, 2001.
Fee Paid as a % of Average Daily Administration Fees Paid by the Funds Net Assets for the Fiscal Year for the Fiscal Year Ended December 31 Ended December 31, 2001 2001 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED EQUITY TRUST WBC 0.02% $ 9,963 $ 11,267 $ 24,115 SBCP 0.10% 50,582 83,865 220,457 WMBC 0.11% 127,847 222,387 212,534(1) WIBC 0.02% 19,028 25,305 26,865 IBCP 0.14% 142,594 211,655 235,077 THE WRIGHT MANAGED INCOME TRUST WUSGIF 0.02% $ 1,983 $ 4,522 $ 10,513 USGIP 0.07% 9,500 22,378 53,490 WNTB 0.02% 7,291 8,770 14,928 USGNTP 0.07% 25,425 39,855 74,857 WTRB 0.07% 40,972 64,785 101,757 WCIF 0.02% 16,619 18,926 20,783 CIP 0.07% 57,975 86,444 103,352 WTMM 0.07% 20,280 35,358 55,741 - --------------------------------------------------------------------------------------------------------------------------------
Eaton Vance is a business trust organized under Massachusetts law. Eaton Vance, Inc. ("EV") serves as trustee of Eaton Vance. Eaton Vance and EV are wholly owned subsidiaries of Eaton Vance Corporation ("EVC"), a Maryland corporation and publicly held holding company. EVC through its subsidiaries and affiliates engages primarily in investment management, administration and marketing activities. In addition to the fees payable to the service providers described herein, the funds and portfolios are responsible for usual and customary expenses associated with their respective operations not otherwise payable by Wright or Eaton Vance. These include, among other things, organization expenses, legal fees, audit and accounting expenses, insurance costs, the compensation and expenses of the Trustees, interest, taxes and extraordinary expenses (such as for litigation). For each fund, such expenses also include printing and mailing reports, notices and proxy statements to shareholders and registration fees under federal securities laws and the cost of providing required notices to state securities administrators. For the portfolios, such expenses also include registration fees under foreign securities laws (for IBCP) and brokerage commissions. The Investment Advisory Contract and Portfolio Investment Advisory Contract will remain in effect until February 28, 2003. The Investment Advisory Contract and the Portfolio Investment Advisory Contract may be continued from year to year so long as such continuance is approved at least annually (i) by the vote of a majority of the Trustees who are not "interested persons" of the Trust, the Portfolio Trust, Eaton Vance or Wright cast in person at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the respective funds or portfolios. The Administration Agreements may be continued from year to year after February 28, 2003 so long as such continuance is approved annually by the vote of a majority of the Trustees. Each agreement may be terminated at any time without penalty on sixty (60) days written notice by the Board of Trustees or Directors of either party, or by vote of the majority of the outstanding shares of the affected fund or portfolio, and each agreement will terminate automatically in the event of its assignment. Each agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations or duties to the Trust or Portfolio Trust, as the case may be, under such agreement on the part of Eaton Vance or Wright, Eaton Vance or Wright will not be liable to the Trust or Portfolio Trust, as the case may be, for any loss incurred. CUSTODIAN AND TRANSFER AGENT Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston, Massachusetts, acts as custodian for the funds and the portfolios. IBT has the custody of all cash and securities of the funds and portfolios, maintains the funds' and portfolios' general ledgers and computes the daily net asset value per share. In such capacity it attends to details in connection with the sale, exchange, substitution, transfer or other dealings with the funds' and portfolios' investments, receives and disburses all funds and performs various other ministerial duties upon receipt of proper instructions from the funds and portfolios. IBT also acts as transfer agent to the portfolios and keeps the records of all purchases and redemptions of interests in the portfolios. Forum Shareholder Services, LLC, Two Portland Square, Portland, ME 04101 is the funds' transfer agent. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts 02116-9698 are the Trusts' and the Portfolio Trust's independent certified public accountants, providing audit services, tax return preparation, and assistance and consultation with respect to the preparation of filings with the Securities and Exchange Commission. BROKERAGE ALLOCATION Wright places the portfolio security transactions for each non-feeder fund and portfolio, which in some cases may be effected in block transactions which include other accounts managed by Wright. Wright provides similar services directly for bank trust departments. Wright seeks to execute portfolio security transactions on the most favorable terms and in the most effective manner possible. In seeking best execution, Wright 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 value and quality of service rendered by the broker-dealer in other transactions, and the reasonableness of the brokerage commission or markup, 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 funds may give consideration to those firms which supply brokerage and research services, quotations and statistical and other information to Wright for their use in servicing their accounts. The funds may include firms which purchase investment services from Wright. The term "brokerage and research services" includes advice as to the value of securities, the advisability of investing in, purchasing or selling securities, and 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). Such services and information may be useful and of value to Wright in servicing all or less than all of their accounts and the services and information furnished by a particular firm may not necessarily be used in connection with the account which paid brokerage commissions to such firm. The advisory fee paid by the non-feeder funds and the portfolios to Wright is not reduced as a consequence of Wright's receipt of such services and information. While such services and information are not expected to reduce Wright's normal research activities and expenses, Wright would, through use of such services and information, avoid the additional expenses which would be incurred if it should attempt to develop comparable services and information through its own staffs. Subject to the requirement that Wright use its best efforts to seek to execute each non-feeder fund's and portfolio's portfolio security transactions at advantageous prices and at reasonably competitive commission rates, Wright, as indicated above, is authorized to consider as a factor in the selection of any broker-dealer firm with whom portfolio orders may be placed the fact that such firm has sold or is selling shares of the funds or of other investment companies sponsored by Wright. This policy is consistent with a rule of the National Association of Securities Dealers, Inc., which rule provides that no firm which is a member of the Association may favor or disfavor the distribution of shares of any particular investment company or group of investment companies on the basis of brokerage commissions received or expected by such firm from any source. Under the Investment Advisory Contract and the Portfolio Investment Advisory Contract, Wright has the authority to pay commissions on portfolio transactions for brokerage and research services exceeding that which other brokers or dealers might charge provided certain conditions are met. This authority will not be exercised, however, until the Prospectus or this Statement of Additional Information has been supplemented or amended to disclose the conditions under which Wright proposes to do so. The Investment Advisory Contract and the Portfolio Investment Advisory Contract expressly recognizes the practices which are provided for in Section 28(e) of the Securities Exchange Act of 1934 by authorizing the selection of a broker or dealer which charges a non-feeder fund or portfolio a commission which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if it is determined in good faith that such commission was reasonable in relation to the value of the brokerage and research services which have been provided. During the fiscal years ended December 31, 2001, 2000, and 1999, the Equity funds or their corresponding portfolios paid the following aggregate brokerage commissions on portfolio transactions: 2001 2000 1999 - ------------------------------------------------------------------------------- SBCP $ 60,919 $ 97,086 $ 485,035 WMBC 196,336 183,274 177,407 IBCP 222,703 470,326 1,336,210 - ------------------------------------------------------------------------------- It is expected that purchases and sales of portfolio investments by the Income funds (or their corresponding portfolios) will be with the issuers or with major dealers in debt instruments acting as principal, and that the funds (or portfolios) will normally pay no brokerage commissions. The cost of securities purchased from underwriters includes a disclosed, fixed underwriting commission or concession, and the prices for which securities are purchased from and sold to dealers usually include an undisclosed dealer mark-up or mark-down. During the fiscal years ended December 31, 2001, 2000, and 1999, none of the Income funds paid brokerage commissions. PRICING OF SHARES ALL FUNDS EXCEPT WRIGHT U.S. TREASURY MONEY MARKET FUND For a description of how the funds value their Standard Shares and Institutional Shares, see "Information About Your Account - How the Funds Value their Shares" in the funds' current Prospectus. The funds value securities with a remaining maturity of 60 days or less by the amortized cost method. The amortized cost method involves initially valuing a security at its cost (or its fair market value on the sixty-first day prior to maturity) and thereafter assuming a constant amortization to maturity of any discount or premium, without regard to unrealized appreciation or depreciation in the market value of the security. Wright U.S. Treasury Money Market Fund Wright U.S. Treasury Money Market Fund values its shares three times on each day the New York Stock Exchange (the "Exchange") is open at noon, at 3:00 p.m. and as of the close of regular trading on the Exchange - normally 4:00 p.m., in each case New York time. The net asset value is determined by IBT (as agent for the fund) in the manner authorized by the Trustees. Portfolio assets of the fund are valued at amortized cost in an effort to attempt to maintain a constant net asset value of $1.00 per share, which the Trustees have determined to be in the best interests of the fund and its shareholders. The fund's use of the amortized cost method to value the portfolio securities is conditioned on its compliance with conditions contained in a rule issued by the Securities and Exchange Commission (the "Rule"). Under the Rule, the Trustees are obligated, as a particular responsibility within the overall duty of care owed to the shareholders, to establish procedures reasonably designed, taking into account current market conditions and the investment objectives of the fund, to stabilize the net asset value per share as computed for the purposes of distribution, redemption and repurchase at $1.00 per share. The Trustees' procedures include periodically monitoring, as they deem appropriate and at such intervals as are reasonable in light of current market conditions, the extent of deviation between the amortized cost value per share and a net asset value per share based upon available indications of market value as well as review of the methods used to calculate the deviation. The Trustees will consider what steps, if any, should be taken in the event of a difference of more than 1/2 of 1% between such two values. The Trustees will take such steps as they consider appropriate (e.g., redemption in kind, selling prior to maturity to realize gains or losses or to shorten the average portfolio maturity, withholding dividends or using market quotations) to minimize any material dilution or other unfair results to investors or existing shareholders, which might arise from differences between the two values. The Rule requires that the fund's investments, including repurchase agreements, be limited to those U.S. dollar-denominated instruments which are determined to present minimal credit risks and which are at the time of acquisition rated by the requisite number of nationally recognized statistical rating organizations in one of the two highest short-term rating categories or, in the case of any instrument that is not so rated, of comparable quality as determined by Wright in accordance with procedures established by the Trustees. It also calls for the fund to maintain a dollar-weighted average portfolio maturity (not more than 90 days) appropriate to its objective of maintaining a stable net asset value of $1.00 per share and precludes the purchase of any instrument with a remaining maturity of more than 397 days. Should the disposition of a portfolio security result in a dollar-weighted average portfolio maturity of more than 90 days, the fund's available cash will be invested in such a manner as to reduce such maturity to 90 days or less as soon as reasonably practicable. It is the normal practice of Wright U.S. Treasury Money Market Fund to hold portfolio securities to maturity and to realize par value therefor unless a sale or other disposition is mandated by redemption requirements or other extraordinary circumstances. Under the amortized cost method of valuation, traditionally employed by institutions for valuation of money market instruments, neither the amount of daily income nor the fund's net asset value is affected by any unrealized appreciation or depreciation on securities held for the fund. There can be no assurance that the fund's objectives will be achieved. * * * The funds and the portfolios will not price securities on the following national holidays: New Year's Day; Martin Luther King, Jr. Day; Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day. PRINCIPAL UNDERWRITER Each Trust has adopted a Distribution Plan as defined in Rule 12b-1 under the 1940 Act (the "Plan") on behalf of its funds (except Wright U.S. Treasury Money Market Fund) with respect to each fund's Standard Shares. Each Plan was approved by the Trustees, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interests in the operation of the Trust's Plan (the "12b-1 Trustees") on January 22, 1997. Each Trust's Plan specifically authorizes each fund to pay direct and indirect expenses incurred by any separate distributor or distributors under agreement with the Trust in activities primarily intended to result in the sale of its Standard Shares. The expenses of such activities will not exceed 0.25% per annum of each fund's average daily net assets attributable to the Standard Shares. Payments under the Plan are reflected as an expense in each fund's financial statements relating to the applicable class of shares. Each Trust has entered into a distribution contract on behalf of its funds with respect to the funds' Standard Shares and Institutional Shares with its principal underwriter, Wright Investors' Service Distributors, Inc. ("WISDI"), a wholly owned subsidiary of Winthrop, providing for WISDI to act as a separate distributor of each fund's Standard Shares and Institutional Shares. Wright U.S. Treasury Money Market Fund is not obligated to make any distribution payments to WISDI under its Distribution Contract. Each fund, except Wright U.S. Treasury Money Market Fund, will pay 0.25% of its average daily net assets attributable to Standard Shares, to WISDI for distribution activities on behalf of the fund in connection with the sale of its Standard Shares. WISDI will provide on a quarterly basis documentation concerning the expenses of such activities. Documented expenses of a fund may include compensation paid to and out-of-pocket disbursements of officers, employees or sales representatives of WISDI, including telephone costs, the printing of prospectuses and reports for other than existing shareholders, preparation and distribution of sales literature, advertising of any type intended to enhance the sale of shares of the fund and interest or other financing charges. Subject to the 0.25% per annum limitation imposed on Standard Shares by each Trust's Plan, a fund may pay separately for expenses of activities primarily intended to result in the sale of the fund's Standard Shares. It is contemplated that the payments for distribution described above will be made directly to WISDI. If the distribution payments to WISDI exceed its expenses, WISDI may realize a profit from these arrangements. Peter M. Donovan, President, Chief Executive Officer and a Trustee of each Trust and President and a Director of Wright and Winthrop, is Vice President, Treasurer and a Director of WISDI. A.M. Moody, III, Vice President and a Trustee of the Trust and Senior Vice President of Wright and Winthrop, is President and a Director of WISDI. It is the opinion of the Trustees and officers of each Trust that the following are not expenses primarily intended to result in the sale of Standard Shares issued by any fund: fees and expenses of registering shares of the fund under federal or state laws regulating the sale of securities; fees and expenses of registering the Trust as a broker-dealer or of registering an agent of the Trust under federal or state laws regulating the sale of securities; fees of registering, at the request of the Trust, agents or representatives of a principal underwriter or distributor of any fund under federal or state laws regulating the sale of securities, provided that no sales commission or "load" is charged on sales of shares of the fund; and fees and expenses of preparing and setting in type the Trust's registration statement under the Securities Act of 1933. Should such expenses be deemed by a court or agency having jurisdiction to be expenses primarily intended to result in the sale of Standard Shares issued by a fund, they will be considered to be expenses contemplated by and included in the Plan but not subject to the 0.25% per annum limitation described herein. Under each Trust's Plan, the President or Vice President of the Trust will provide to the Trustees for their review, and the Trustees will review at least quarterly, a written report of the amounts expended under the Plan and the purposes for which such expenditures were made. For the fiscal year ended December 31, 2001, it is estimated that WISDI spent approximately the following amounts on behalf of The Wright Managed Investment Funds, including the funds in the Trusts: Wright Investors' Service Distributors, Inc. Financial Summaries for the Year 2001
Printing Travel Commissions Adminis- & Mailing & & tration FUNDS - Standard Shares Promotional Prospectuses Entertainment Service Fees & Other TOTAL - ----------------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED EQUITY TRUST Wright Selected Blue Chip Equities Fund (WBC) $14,207 $ 3,552 $ 710 $ 31,966 $20,600 $ 71,036 Wright Major Blue Chip Equities Fund (WMBC) 55,128 13,782 2,756 124,038 79,936 275,640 Wright International Blue Chip Equities Fund (WIBC) 41,451 10,363 2,073 93,266 60,105 207,257 THE WRIGHT MANAGED INCOME TRUST Wright U.S. Government Intermediate Fund (WUSGIF) $ 3,000 $ 500 $ - 0 - $ 6,200 $ - 0 - $ 9,700 Wright U.S. Government Near Term Fund (WNTB) 4,948 1,237 247 11,133 7,175 24,741 Wright Total Return Bond Fund (WTRB) 22,164 5,541 1,108 49,870 32,138 110,822 Wright Current Income Fund (WCIF) 29,702 7,425 1,485 66,829 43,067 148,508 - ----------------------------------------------------------------------------------------------------------------------------------
The following table shows the distribution expenses allowable to WISDI and paid by each fund during the year ended December 31, 2001.
Distribution Distribution Distribution Distribution Distribution Expenses Expenses Paid Distribution Expenses Expenses Paid Expenses Paid As a % of Fund's Expenses Paid As a % of Fund's Allowable by Fund Average Net Asset Value Allowable By Fund Average Net Asset Value - --------------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED EQUITY TRUST - Standard Shares THE WRIGHT MANAGED INCOME TRUST - Standard Shares WUSGIF $ 30,745 $ - 0 - 0.00% WBC $124,568 $ 71,036 0.14% WNTB 90,614 24,741 0.07% WMBC 275,640 275,640 0.25% WTRB 146,334 110,822 0.19% WIBC 207,257 207,257 0.25% WCIF 148,508 148,508 0.25% - -----------------------------------------------------------------------------------------------------------------------------------
Under its terms, each Trust's Plan remains in effect from year to year, provided such continuance is approved annually by a vote of its Trustees, including a majority of the 12b-1 Trustees. Each Plan may not be amended to increase materially the amount to be spent by the applicable class for the services described therein without approval of a majority of the outstanding Standard Shares and all material amendments of the Plan must also be approved by the Trustees of the Trust in the manner described above. Each Trust's Plan may be terminated as to each class at any time without payment of any penalty by vote of a majority of the Trustees of the Trust who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Plan or by a vote of a majority of the outstanding voting securities of the affected class. If a Plan is terminated, the respective fund would stop paying the distribution fee with respect to the affected class and the Trustees would consider other methods of financing the distribution of the fund's Standard Shares. So long as a Trust's Plan is in effect, the selection and nomination of Trustees who are not interested persons of the Trust will be committed to the discretion of the Trustees who are not such interested persons. The Trustees of each Trust have determined that in their judgment there is a reasonable likelihood that the Plan will benefit the Trust and the holders of Standard Shares. SERVICE PLANS The Service Plans were adopted on behalf of the funds by the Trustees of each Trust, including a majority of the Trustees who are not interested persons of the Trust and who have no direct or indirect financial interest in the operation of the Trust's Service Plan (the "Plan Trustees"), on January 22, 1997, and will continue in effect from year to year, provided such continuance is approved annually by a vote of the respective Trust's Trustees, including a majority of the Plan Trustees. Each Service Plan may be terminated at any time without payment of any penalty by vote of a majority of the Trustees of the appropriate Trust who are not interested persons of that Trust and who have no direct or indirect financial interest in the operation of the Service Plan. The Trustees of each Trust have determined that in their judgment there is a reasonable likelihood that the Service Plan will benefit the funds in each respective Trust and each fund's holders of Standard Shares and Institutional Shares. For the fiscal year ended December 31, 2001, the funds did not accrue or pay any service fees. CALCULATION OF PERFORMANCE AND YIELD QUOTATIONS The average annual total return before deduction of taxes ("pre-tax return") of each fund is determined for a particular period by calculating the actual dollar amount of investment return on a $1,000 investment in the fund made at the maximum public offering price (i.e., net asset value) at the beginning of the period, and then calculating the annual compounded rate of return which would produce that amount. Total return for a period of one year is equal to the actual return of the fund during that period. This calculation assumes that all dividends and distributions are reinvested at net asset value on the reinvestment dates during the period. Average annual total return after the deduction of taxes on distributions is calculated in the same manner as pre-tax return except the calculation assumes that any federal income taxes due on distributions are deducted from the distributions before they are reinvested. Average annual total return after the deduction of taxes on distributions and taxes on redemption also is calculated in the same manner as pre-tax return except the calculation assumes that (i) any federal income taxes due on the distributions are deducted from the distributions before they are reinvested and (ii) any federal income taxes due upon redemption are deducted at the end of the period. After-tax returns are based on the highest federal income tax rate in effect for individual taxpayers as of the time of each assumed distribution and redemption (taking into account their tax character) and do not reflect the impact of state and local taxes. In calculating after-tax returns, the net value of any federal income tax credits available to shareholders is applied to reduce federal income taxes payable on distributions at or near year-end and, to the extent the net value of such credits exceeds such distributions, is then assumed to be reinvested in additional fund shares at net asset value on the last day of the fiscal year in which the credit was generated, or, in the case of certain tax credits, on the date on which the year-end distribution is paid. The yield of each fixed income fund, other than Wright U.S. Treasury Money Market Fund, is computed by dividing its net investment income per share earned during a recent 30-day period by the maximum offering price (i.e., net asset value) per share on the last day of the period and annualizing the resulting figure. Net investment income per share is equal to the fund's dividends and interest earned during the period, with the resulting number being divided by the average daily number of shares outstanding and entitled to receive dividends during the period. For the 30-day period ended December 31, 2001, the yield of each fund, other than Wright U.S. Treasury Money Market Fund, was as follows:
30-Day Period Ended 30-Day Period Ended December 31, 2001* December 31, 2001* - -------------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED INCOME TRUST THE WRIGHT MANAGED INCOME TRUST Wright U.S. Government Intermediate Fund 3.69% Wright Current Income Fund Wright U.S. Government Near Term Fund 2.36% - Standard Shares 5.53% Wright Total Return Bond Fund 4.86% - Institutional Shares 5.76% - --------------------------------------------------------------------------------------------------------------------------------
* according to the following formula: Yield = 2 [ ( a-b + 1)6 - 1 ] --- cd Where: a = dividends and interest earned during the period. b = expenses accrued for the period (after reductions). c = the average daily number of accumulation units outstanding during the period. d = the maximum offering price per accumulation unit on the last day of the period. NOTE: "a" has been estimated for debt securities other than mortgage certificates by dividing the year-end market value times the yield to maturity by 360. "a" for mortgage securities, such as GNMA's, is the actual income earned. Neither discount nor premium have been amortized. "b" has been estimated by dividing the actual expense amounts for the year by 360 or the number of days the fund was in existence. Because each class of shares of each fund bears its own fees and certain expenses, the classes will have different performance results. * * * From time to time, quotations of Wright U.S. Treasury Money Market Fund's yield and effective yield may be included in advertisements or communications to shareholders. If a portion of the fund's expenses had not been subsidized, the fund would have had lower returns. These performance figures are calculated in the following manner: A. Yield - the net annualized yield based on a specified 7-calendar days calculated at simple interest rates. Yield is calculated by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one share at the beginning of the period, subtracting a hypothetical charge reflecting deductions from shareholders accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return. The yield is annualized by multiplying the base period return by 365/7. The yield figure is stated to the nearest hundredth of one percent. The yield of Wright U.S. Treasury Money Market Fund for the seven-day period ended December 31, 2001 was 1.64%. B. Effective Yield - the net annualized yield for a specified 7-calendar days assuming a reinvestment of the yield or compounding. Effective yield is calculated by the same method as yield except the annualized yield figure is compounded by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting one from the result, according to the following formula: Effective Yield = [(Base Period Return + 1 )^365/7] - 1. The effective yield of Wright U.S. Treasury Money Market Fund for the seven-day period ended December 31, 2001 was 1.66%. As described above, yield and effective yield are based on historical earnings and are not intended to indicate future performance. Yield and effective yield will vary based on changes in market conditions and the level of expenses. A fund's yield or total return may be compared to the Consumer Price Index and various domestic securities indices. A fund's yield or total return and comparisons with these indices may be used in advertisements and in information furnished to present or prospective shareholders. From time to time, evaluations of a fund's performance made by independent sources may be used in advertisements and in information furnished to present or prospective shareholders. The Lipper performance analysis includes the reinvestment of dividends and capital gain distributions, but does not take sales charges into consideration and is prepared without regard to tax consequences. The following table shows the average annual total return of each fund for the one, five and ten-year periods ended December 31, 2001.
Period Ended 12/31/01 Inception To Inception One Year Five Years Ten Years 12/31/01 Date - ---------------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED EQUITY TRUST Wright Selected Blue Chip Equities Fund(1) Standard Shares - Return before taxes -10.15% 6.94% 8.34% - Return after taxes on distributions -11.57% 3.59% 5.28% - Return after taxes on distributions and sales of fund shares - 6.19% 5.30% 6.24% Wright Major Blue Chip Equities Fund(2) Standard Shares - Return before taxes -16.87% 7.75% 9.09% - Return after taxes on distributions -16.87% 5.39% 5.82% - Return after taxes on distributions and sales of fund shares -10.28% 5.55% 6.08% Wright International Blue Chip Equities Fund Standard Shares - Return before taxes -24.18% -1.99% 4.16% - Return after taxes on distributions -24.18% -3.08% 3.27% - Return after taxes on distributions and sales of fund shares -14.72% -1.47% 3.38% Institutional Shares - Return before taxes -24.06% -3.38% 7/06/97 - Return after taxes on distributions -24.06% -5.49% - Return after taxes on distributions and sales of fund shares -14.65% -2.52% - ----------------------------------------------------------------------------------------------------------------------------------- Period Ended 12/31/01 Inception To Inception One Year Five Years Ten Years 12/31/01 Date - ----------------------------------------------------------------------------------------------------------------------------------- THE WRIGHT MANAGED INCOME TRUST Wright U.S. Government Intermediate Fund(3) Standard Shares - Return before taxes 5.40% 6.45% 6.97% - Return after taxes on distributions 3.02% 4.06% 4.45% - Return after taxes on distributions and sales of fund shares 3.37% 4.03% 4.40% Wright U.S. Government Near Term Fund(4) Standard Shares - Return before taxes 6.82% 5.50% 5.39% - Return after taxes on distributions 4.94% 3.33% 3.11% - Return after taxes on distributions and sales of fund shares 4.12% 3.31% 3.11% Wright Total Return Bond Fund(5) Standard Shares - Return before taxes 4.96% 5.95% 6.21% - Return after taxes on distributions 2.74% 3.64% 3.80% - Return after taxes on distributions and sales of fund shares 3.01% 3.63% 3.80% Wright Current Income Fund(6) Standard Shares - Return before taxes 7.18% 6.56% 6.36% - Return after taxes on distributions 4.78% 4.04% 3.76% - Return after taxes on distributions and sales of fund shares 4.34% 3.98% 3.79% Institutional Shares - Return before taxes 7.34% 6.38% 7/06/97 - Return after taxes on distributions -4.83% 3.97% - Return after taxes on distributions and sales of fund shares 4.43% 3.94% - --------------------------------------------------------------------------------------------------------------------------------- (1)If a portion of the WBC's expenses had not been subsidized or if fees had not been reduced for the years ended December 31, 2001 and 1999, the fund would have had lower returns. (2)If a portion of the WMBC's expenses had not been subsidized or if fees had not been reduced during the five years ended December 31, 2001 and the years ended December 31, 1996 and 1995, the fund would have had lower returns. (3)If a portion of WUSGIF's expenses had not been subsidized or if fees had not been reduced for the years ended December 31, 2001, 2000, 1999, 1998, 1996, 1995, 1993 and 1992, the fund would have had lower returns. (4)If a portion of WNTB's expenses had not been subsidized or if fees had not been reduced during the five years ended December 31, 2001, the fund would have had lower returns. (5)If a portion of WTRB's expenses had not been reduced during the years ended December 31, 2001 and 1999, the fund would have had lower returns. (6)If a portion of WCIF's expenses had not been subsidized or if fees had not been reduced during the five years ended December 31, 2001, the fund would have had lower returns.
TAXES Each fund has elected to be treated, has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders. If a fund did not qualify as a regulated investment company, it would be treated as a U.S. corporation subject to U.S. federal income tax. In order to qualify as a regulated investment company for any taxable year, each fund must meet certain requirements with respect to the sources of its income, the diversification of its assets, and the distribution of its income to shareholders. In satisfying these requirements, each of the feeder funds will be treated as owning its proportionate share of each of its corresponding portfolio's assets and be entitled to the income of that portfolio properly attributable to such share. Because each feeder fund invests in its corresponding portfolio, each portfolio normally must satisfy the applicable source of income and diversification requirements in order for the feeder funds to satisfy them. Each portfolio will allocate among its investors, including the corresponding feeder fund, the portfolio's net investment income, net realized capital gains, and any other items of income, gain, loss, deduction or credit in a manner intended to comply with the Code and applicable regulations. As a partnership under the Code, each portfolio does not pay federal income or excise taxes. Each portfolio also does not expect to be required to pay any state income or corporate excise or franchise taxes in Massachusetts or New York. Each fund also will be subject to a nondeductible 4% federal excise tax on a portion of its undistributed ordinary income and capital gains if it fails to meet certain other distribution requirements with respect to each calendar year. Each portfolio will make moneys available for withdrawal at appropriate times and in sufficient amounts to enable the corresponding feeder fund to satisfy the tax distribution requirements the feeder fund must satisfy in order to avoid liability for federal income and/or excise tax. Each fund intends to make the required distributions in a timely manner and accordingly does not expect to be subject to the excise tax. In order to qualify as a regulated investment company under Subchapter M of the Code, each fund must, among other things, derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures and forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "90% income test") and satisfy annual distribution and quarterly diversification requirements. For purposes of the 90% income test, the character of income earned by certain entities in which a fund invests that are not treated as corporations (e.g., partnerships or trusts) for U.S. federal income tax purposes will generally pass through to the fund. Consequently, the funds may be required to limit their equity investments in such entities that earn fee income, rental income or other nonqualifying income. Any dividend declared by a fund as of a record date in October, November, or December and paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it is declared. At the time of an investor's purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the fund's portfolio or undistributed taxable income of the fund. Consequently, subsequent distributions of the fund with respect to these shares from such appreciation or income may be taxable to such investor even if the net asset value of the investor's shares is, as a result of the distributions, reduced below the investor's cost for such shares and the distributions economically represent a return of a portion of the investment. As of December 31, 2001, the following funds had capital loss carryforwards, as determined for federal income tax purposes, of $12,528,270 (WIBC), $17,128,584 (WMBC), $7,867,964 (WNTB), $2,729,896 (WTRB), and $1,632,160 (WCIF) which in varying amounts expire between the years 2002 and 2009. These loss carryforwards will reduce the applicable fund's taxable income arising from future net realized capital gains, if any, to the extent they are permitted to be used under the Code and applicable Treasury regulations prior to their expiration dates, and thus will reduce the amounts of the future distributions to shareholders that would otherwise be necessary in order to relieve that fund of liability for federal income tax. Any dividends received deduction with respect to qualifying dividends received from WBC or WMBC will be reduced to the extent the shares with respect to which the dividends are received are treated as debt-financed under the Code and will be eliminated if the shares are deemed to have been held for less than a minimum period, generally 46 days, which must be satisfied over a prescribed period immediately before and after the shares become ex-dividend. In particular cases, receipt of distributions qualifying for the deduction may result in liability for the alternative minimum tax and/or, for "extraordinary dividends," reduction of the tax basis (possibly requiring current recognition of income to the extent such basis would otherwise be reduced below zero) of the corporate shareholder's shares. A fund may be subject to withholding and other taxes imposed by foreign countries including taxes on interest, dividends and capital gains with respect to its investments in those countries, which would, if imposed, reduce the yield on or return from those investments. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases. The funds do not expect to satisfy the requirements for passing through to shareholders their pro rata shares of qualified foreign taxes paid by any fund, with the result that the shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns. Section 988 of the Code may cause certain foreign exchange gains and losses realized by a fund to be treated as ordinary income and losses and may affect the amount, timing and character of distributions to shareholders. If a fund acquires any equity interest (under future Treasury regulation, generally including not only stock but also an option to acquire stock such as is inherent in a convertible bond) in certain foreign corporations that receive at least 75% of their annual gross income from passive sources (such as interest, dividends, certain rents and royalties, or capital gains) or that hold at least 50% of their assets in investments producing such passive income, the fund could be subject to U.S. federal income tax and additional interest charges on "excess distributions" received from such companies or on gain from the sale of stock of such companies, even if all income or gain actually received by the fund is timely distributed to shareholders. The fund would not be able to pass through to its shareholders any credit or deduction for such a tax. An election may generally be available that would ameliorate these adverse tax consequences, but any such election could require the fund to recognize taxable income or gain (subject to tax distribution requirements) without the concurrent receipt of cash. These investments could also result in the treatment of associated capital gains as ordinary income. A fund may limit and/or manage its holdings in such foreign companies to limit its tax liability or maximize its return from these investments. International Blue Chip Equities Portfolio's transactions in certain foreign currency options, futures or forward contracts will be subject to special tax rules, the effect of which may be to accelerate income to WIBC, defer fund losses, cause adjustments in the holding periods of securities and convert capital gains or losses into ordinary income or losses. These rules may therefore affect the amount, timing and character of WIBC's distributions to shareholders. Certain foreign exchange gains or losses realized by the portfolio and allocated to WIBC may be treated as ordinary income and losses. Certain uses of foreign currency and foreign currency contracts, and equity investments by International Blue Chip Equities Portfolio in certain "passive foreign investment companies," may be limited, or in the latter case a tax election (if available) may be made, in order to avoid the imposition of a tax on WIBC. An Equity fund may follow the tax accounting practice known as equalization, which may affect the amount, timing and character of its distributions to shareholders. Redemptions (including exchanges) and other dispositions of fund shares in transactions that are treated as sales for tax purposes will generally result in the recognition of taxable gain or loss by shareholders that are subject to tax, except in the case of WTMM (provided that WTMM has maintained a constant net asset value). Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular redemption, exchange or other disposition of fund shares is properly treated as a sale for tax purposes, as this discussion assumes. Any loss realized upon the redemption, exchange or other sale of shares of a fund with a tax holding period of six months or less will be treated as a long-term capital loss to the extent of any distributions of long-term capital gains designated as capital gain dividends with respect to such shares. All or a portion of a loss realized upon the redemption, exchange or other sale of fund shares may be disallowed under "wash sale" rules to the extent shares of the same fund are purchased (including shares acquired by means of reinvested dividends) within the period beginning 30 days before and ending 30 days after the date of such redemption, exchange or other sale. Unless shareholders specify otherwise, all distributions will be automatically reinvested in additional full and fractional shares of the same fund. For U.S. federal income tax purposes, all dividends are taxable whether a shareholder takes them in cash or reinvests them in additional shares. Dividends from investment company taxable income, which includes net investment income, net short-term capital gain in excess of net long-term capital loss and certain net foreign exchange gains, are taxable as ordinary income. Dividends from net long-term capital gain in excess of net short-term capital loss ("net capital gain"), if any, are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares. The U.S. federal income tax status of all distributions will be reported to shareholders annually. Federal law requires that each fund withhold (as "backup withholding") 30% of reportable payments, including dividends, capital gains distributions and the proceeds of redemptions and exchanges or repurchases of fund shares, paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, shareholders must certify on separate IRS Forms W-9, that the Social Security Number or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding. The funds may nevertheless be required to withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income. The description of certain federal tax provisions above relates only to U.S. federal income tax consequences for shareholders who are U.S. persons, i.e., U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax. This description does not address special tax rules that may be applicable to particular types of investors, such as IRAs and other retirement plan accounts, as well as financial institutions, insurance companies, securities dealers, or tax-exempt or tax deferred plans, accounts or entities. Investors other than U.S. persons may be subject to different U.S. tax treatment, including a nonresident alien U.S. withholding tax at the rate of 30% or at a lower treaty rate on amounts treated as ordinary dividends from the fund and, unless an effective IRS Form W-8BEN, or other authorized withholding certificate is on file, backup withholding at the rate of 30% on certain other payments from the fund. Investors should consult their own tax advisers on these matters and on state, local and other applicable tax laws. FINANCIAL STATEMENTS The audited financial statements of, and the independent auditors' report for the funds and the Portfolios appear in the funds' most recent annual report to shareholders and are incorporated by reference into this Statement of Additional Information. A copy of the funds' annual report accompanies this Statement of Additional Information. Registrant incorporates by reference the audited financial information for the funds and the Portfolios for the fiscal year ended December 31, 2001 as previously filed electronically with the Securities and Exchange Commission on February 28, 2002 (Accession Number 0000715165-02-000009). APPENDIX - ------------- WRIGHT QUALITY RATINGS Wright Quality Ratings provide the means by which the fundamental criteria for the measurement of quality of an issuer's securities can be objectively evaluated. Each rating is based on individual measures of quality grouped into four components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability and Stability, and (4) Growth. The total rating is three letters and a numeral. The three letters measure (1) Investment Acceptance, (2) Financial Strength, and (3) Profitability and Stability. Each letter reflects a composite measurement of eight individual standards which are summarized as A: Outstanding, B: Excellent, C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects Growth and is a composite of eight individual standards ranging from 0 to 20. EQUITY SECURITIES Investment Acceptance reflects the acceptability of a security by and its marketability among investors, and the adequacy of the floating supply of its common shares for the investment of substantial funds. Financial Strength represents the amount, adequacy and liquidity of the corporation's resources in relation to current and potential requirements. Its principal components are aggregate equity and total capital, the ratio of invested equity capital to debt, the adequacy of net working capital, its fixed charges coverage ratio and other appropriate criteria. Profitability and Stability measures the record of a corporation's management in terms of (1) the rate and consistency of the net return on shareholders' equity capital investment at corporate book value, and (2) the profits or losses of the corporation during generally adverse economic periods, including its ability to withstand adverse financial developments. Growth per common share of the corporation's equity capital, earnings, cash earnings, dividends, assets, and sales -- rather than the corporation's overall growth of dollar sales and income. These ratings are determined by specific quantitative formulae. A distinguishing characteristic of these ratings is that The Wright Investment Committee must review and accept each rating. At the discretion of The Investment Committee, a computed rating may be changed to reflect relevant corporate factors. DEBT SECURITIES Wright ratings for commercial paper, corporate bonds and bank certificates of deposit consist of the two central positions of the four position alphanumeric corporate equity rating. The two central positions represent those factors which are most applicable to fixed income and reserve investments. The first, Financial Strength, represents the amount, the adequacy and the liquidity of the corporation's resources in relation to current and potential requirements. Its principal components are aggregate equity and total capital, the ratios of (a) invested equity capital, and (b) long-term debt, total of corporate capital, the adequacy of net working capital, fixed charges coverage ratio and other appropriate criteria. The second letter represents Profitability and Stability and measures the record of a corporation's management in terms of: (a) the rate and consistency of the net return on shareholders' equity capital investment at corporate book value, and (b) the profits and losses of the corporation during generally adverse economic periods, and its ability to withstand adverse financial developments. The first letter rating of the Wright four-part alphanumeric corporate rating is not included in the ratings of fixed-income securities since it primarily reflects the adequacy of the floating supply of the company's common shares for the investment of substantial funds. The numeric growth rating is not included because this element is identified only with equity investments. A-1 and P-1 Commercial Paper Ratings by S&P and Moody's An S&P Commercial Paper Rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days. `A': Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. Issues in this category are delineated with the numbers 1, 2, and 3 to indicate the relative degree of safety. The `A-1' designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics will be denoted with a plus (+) sign designation. The commercial paper rating is not a recommendation to purchase or sell a security. The ratings are based on current information furnished to Standard & Poor's by the issuer or obtained from other sources it considers reliable. The ratings may be changed, suspended or withdrawn as a result of changes in or unavailability of such information. Issuers (or related supporting institutions) rated P-1 by Moody's have a superior capacity for repayment of short-term promissory obligations. P-1 repayment capacity will normally be evidenced by the following characteristics: -- Leading market positions in well-established industries. -- High rates of return on funds employed. -- Conservative capitalization structures with moderate reliance on debt and ample asset protection. -- Broad margins in earnings coverage of fixed financial charges and high internal cash generation. -- Well-established access to a range of financial markets and assured sources of alternate liquidity. BOND RATINGS In addition to Wright quality ratings, bonds or bond insurers may be expected to have credit risk ratings assigned by the two major rating companies, Moody's and S&P. Moody's uses a nine-symbol system with Aaa being the highest rating and C the lowest. S&P uses a 10-symbol system that ranges from AAA to D. Bonds within the top four categories of Moody's (Aaa, Aa, A, and Baa) and of S&P (AAA, AA, A, and BBB) are considered to be of investment-grade quality. Bonds in the lowest investment grade category (BBB) may have speculative characteristics. Only the top three grades are acceptable for the taxable income funds. Note that both S&P and Moody's currently give their highest rating to issuers insured by the American Municipal Bond Assurance Corporation (AMBAC) or by the Municipal Bond Investors Assurance Corporation (MBIA). Bonds rated A by S&P have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of change in circumstances and economic conditions than debt in higher- rated categories. The rating of AA is accorded to issues where the capacity to pay principal and interest is very strong and they differ from AAA issues only in small degree. The AAA rating indicates an extremely strong capacity to pay principal and interest. Bonds rated A by Moody's are judged by Moody's to possess many favorable investment attributes and are considered as upper medium grade obligations. Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than Aaa bonds because margins of protection may not be as large or fluctuations of protective elements may be of greater degree or there may be other elements present which make the long-term risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the best quality. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issuers. NOTE RATINGS In addition to Wright quality ratings, municipal notes and other short-term loans may be assigned ratings by Moody's or Standard & Poor's. Moody's ratings for municipal notes and other short- term loans are designated Moody's Investment Grade (MIG). This distinction is in recognition of the differences between short-term and long-term credit risk. Loans bearing the designation MIG 1 are of the best quality, enjoying strong protection by establishing cash flows of funds for their servicing or by established and broad- based access to the market for refinancing, or both. Loans bearing the designation MIG 2 are of high quality, with margins of protection ample although not so large as in the preceding group. Standard & Poor's top ratings for municipal notes issued after July 29, 1984 are SP-1 and SP-2. The designation SP-1 indicates a very strong capacity to pay principal and interest. A "+" is added for those issues determined to possess overwhelming safety characteristics. An "SP-2" designation indicates a satisfactory capacity to pay principal and interest. PART C ===================== OTHER INFORMATION Item 23. Exhibits (a) (1)Amended and Restated Declaration of Trust dated April 28, 1997 filed as Exhibit (1) to Post-Effective Amendment No. 22 filed April 29, 1997 and incorporated herein by reference. (2) Amendment of Establishment and Designation of Series dated February 26, 2002 filed herewith. (b) Amended and Restated By-Laws dated March 18, 1997 filed as Exhibit (2) to Post-Effective Amendment No. 22 filed April 29, 1997 and incorporated herein by reference. (c) Not Applicable (d) (1) Investment Advisory Contract dated September 23, 1998 with Wright Investors' Service, Inc. (on behalf of Wright U.S. Treasury Money Market Fund) filed as Exhibit (d)(1) to Post-Effective Amendment No. 24 on February 24, 1999 and incorporated herein by reference. (2) Investment Advisory Contract dated September 1, 2000 with Wright Investors' Service, Inc. on behalf of: Wright U.S. Treasury Fund, Wright U.S. Government Near Term Fund, Wright Total Return Bond Fund and Wright Current Income Fund filed as Exhibit (d)(2) to Post-Effective Amendment No. 28 on February 28, 2001 and incorporated herein by reference. (3) Amended and Restated Administration Agreement with Eaton Vance Management dated February 1, 1998 filed as Exhibit (5)(b)(1) to Post-Effective Amendment No. 23 filed April 29, 1998 and incorporated herein by reference. (4) Amendment dated June 6, 2000 to Amended and Restated Administration Agreement with Eaton Vance Management dated February 1, 1998 filed as Exhibit (d)(4) to Post-Effective Amendment No. 28 on February 28, 2001 and incorporated herein by reference. (e) Distribution Contract with MFBT Corporation dated December 19, 1984 filed as Exhibit (6) to Post-Effective Amendment No. 20 filed February 29, 1996 and incorporated herein by reference. (f) Not Applicable (g) (1) Custodian Agreement with Investors Bank & Trust Company dated December 19, 1990 filed as Exhibit (8)(a) to Post-Effective Amendment No. 20 filed February 29, 1996 and incorporated herein by reference. (2) Amendment dated September 20, 1995 to Master Custodian Agreement filed as Exhibit (8)(b) to Post-Effective Amendment No. 20 filed February 29, 1996 and incorporated herein by reference. (3) Amendment dated September 24, 1997 to Master Custodian Agreement filed as Exhibit (g)(3) to Post-Effective Amendment No. 24 on February 24, 1999 and incorporated herein by reference. (4) Extension Agreement dated January 9, 2001 to the Custodian Agreement with Investors Bank & Trust Company dated December 19, 1990 filed as Exhibit (g)(4) to Post-Effective Amendment No. 28 on February 28, 2001 and incorporated herein by reference. (5) Delegation Agreement with Investors Bank & Trust Company dated December 7, 2000 pursuant to Rules 17f-5 and 17f-7 filed as Exhibit (g)(4) to Post-Effective Amendment No. 7 o Catholic Values Investment Trust (File Nos. 333-17161, 811-07951) filed with the Commission on April 26, 2001 (Accession No. 0000715165-01-500014) and incorporated herein by reference. (h) (1) Transfer Agency and Services Agreement dated June 14,2002 between the Registrant and Forum Shareholder Services, LLC, filed herewith. (2) Service Plan for Standard Shares and Institutional Shares dated May 1, 1997 filed as Exhibit (9)(c) to Post-Effective Amendment No. 22 filed April 29, 1997 and incorporated herein by reference. (i) (1) Opinion of Counsel dated April 7, 1998 filed as Exhibit (10) to Post-Effective Amendment No. 23 and incorporated herein by reference. (2) Consent of Counsel, filed herewith. (j) Independent Auditors' Consent, filed herewith. (k) Not Applicable (l) Not Applicable (m) Standard Shares Distribution Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940 dated May 1, 1997 filed as Exhibit (15)(c) to Post-Effective Amendment No. 22 filed April 29, 1997 and incorporated herein by reference. (n) Not Applicable (o) Rule 18f-3 Plan dated May 1, 1997 for Standard and Institutional Shares filed as Exhibit (18) to Post-Effective Amendment No. 22 filed April 29, 1997 and incorporated herein by reference. (p) Codes of Ethics filed as Exhibit (q) to Post-Effective Amendment No. 27 on April 28, 2000 and incorporated herein by reference. (q) (1) Power of Attorney dated December 13, 2001 filed as Exhibit (q)(1) to Post-Effective Amendment No. 30 filed on February 28, 2002 and incorporated herein by reference. (2) Power of Attorney of The Wright Blue Chip Master Portfolio Trust dated December 13, 2001 filed as Exhibit (q)(2) to Post-Effective Amendment No. 30 filed on February 28, 2002 and incorporated herein by reference. Item 24. Persons Controlled by or under Common Control with Registrant Not Applicable Item 25. Indemnification The Registrant's Amended and Restated By-Laws filed as Exhibit(2) to Post Effective Amendment No. 22 contain provisions limiting the liability, and providing for indemnification, of the Trustees and officers under certain circumstances. Registrant's Trustees and officers are insured under a standard investment company errors and omissions insurance policy covering loss incurred by reason of negligent errors and omissions committed in their capacities as such. Item 26. Business and Other Connections of Investment Adviser Reference is made to the information set forth under the captions "Officers and Trustees" and "Investment Advisory and Administrative Services" in the Statement of Additional Information, which information is incorporated herein by reference. Item 27. Principal Underwriter (a) Wright Investors' Service Distributors, Inc. (a wholly-owned subsidiary of The Winthrop Corporation) acts as principal underwriter for each of the investment companies named below. The Wright Managed Equity Trust The Wright Managed Income Trust Catholic Values Investment Trust The Wright Asset Allocation Trust
(b) (1) (2) (3) Name and Principal Positions and Officers Positions and Offices Business Address with Principal Underwriter with Registrant - ------------------------------------------------------------------------------------------------------------------------------ A. M. Moody III* President Vice President and Trustee Peter M. Donovan* Vice President and Treasurer President and Trustee Vincent M. Simko* Vice President and Secretary None - ------------------------------------------------------------------------------------------------------------------------------- * Address is 440 Wheelers Farms Road, Milford, CT 06460.
(c) Not Applicable. Item 28. Location of Accounts and Records All applicable accounts, books and documents required to be maintained by the Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are in the possession and custody of the registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116, and its transfer agent, Forum Shareholder Services, LLC, Two Portland Square, Portland, ME 04101, with the exception of certain corporate documents and portfolio trading documents which are either in the possession and custody of the Registrant's administrator, Eaton Vance Management, 255 State Street, Boston, MA 02109 or of the investment adviser, Wright Investors' Service, Inc., 440 Wheelers Farms Road, Milford, CT 06460. Registrant is informed that all applicable accounts, books and documents required to be maintained by registered investment advisers are in the custody and possession of Registrant's administrator, Eaton Vance Management, or of the investment adviser, Wright Investors' Service, Inc. Item 29. Management Services Not Applicable Item 30. Undertakings Not Applicable 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 of the requirements for effectiveness of this amendment to the Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and it 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 Milford, and the State of Connecticut on the 25th day of April, 2002. THE WRIGHT MANAGED INCOME TRUST By: Peter M. Donovan* ----------------------------- Peter M. Donovan, President Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities indicated and on the 25th day of April, 2002. SIGNATURE TITLE - ------------------------------------------------------------------------------- Peter M. Donovan* President, Principal - ------------------ Executive Officer & Trustee Peter M. Donovan James L. O'Connor* Treasurer, Principal - ------------------- Financial and Accounting Officer James L. O'Connor James P. Biggs* Trustee - ------------------ James P. Biggs H. Day Brigham, Jr.* Trustee - --------------------- H. Day Brigham, Jr. Judith R. Corchard* Trustee - -------------------- Judith R. Corchard Dorcas R. Hardy* Trustee - ------------------- Dorcas R. Hardy Leland Miles* Trustee - --------------- Leland Miles /s/ A. M. Moody III Trustee - --------------------- A. M. Moody III Lloyd F. Pierce* Trustee - ---------------- Lloyd F. Pierce Richard E. Taber* Trustee - ------------------ Richard E. Taber * By /s/ A. M. Moody III - ------------------------- A. M. Moody III Attorney-in-Fact Signatures The Wright Blue Chip Master Portfolio Trust has duly caused this Post-Effective Amendment No. 31 to the Registration Statement of The Wright Managed Income Trust (File No. 2-81915) to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Milford, and the State of Connecticut on the 25th day of April, 2002. THE WRIGHT BLUE CHIP MASTER PORTFOLIO TRUST By: Peter M. Donovan* ------------------------------ Peter M. Donovan, President This Post-Effective Amendment No. 31 to the Registration Statement of The Wright Managed Income Trust (File No. 2-81915) has been signed below by the following persons in the capacities indicated and on the 25th day of April, 2002. SIGNATURE TITLE - ------------------------------------------------------------------------- Peter M. Donovan* President, Principal - ----------------- Executive Officer & Trustee Peter M. Donovan James L. O'Connor* Treasurer, Principal - ------------------ Financial and Accounting Officer James L. O'Connor James P. Biggs* Trustee - ----------------- James P. Biggs H. Day Brigham, Jr.* Trustee - --------------------- H. Day Brigham, Jr. Judith R. Corchard* Trustee - -------------------- Judith R. Corchard Dorcas R. Hardy* Trustee - ------------------ Dorcas R. Hardy Leland Miles* Trustee - ----------------- Leland Miles /s/ A. M. Moody III Trustee - ---------------------- A. M. Moody III Lloyd F. Pierce* Trustee - ------------------- Lloyd F. Pierce Richard E. Taber* Trustee - ------------------ Richard E. Taber * By /s/ A. M. Moody III - ------------------------- A. M. Moody III Attorney-in-Fact EXHIBIT INDEX The following Exhibits are filed as part of this Amendment to the Registration Statement pursuant to Rule 483 of Regulation C. Exhibit No. Description - ------------------------------------------------------------------------------- (a)(2) Amendment of Establishment and Designation of Series dated February 26, 2002 (h)(1) Transfer Agency and Services Agreement with Forum Shareholder Services, LLC dated June 14, 2002 (i)(2) Consent of Counsel (j) Independent Auditors' Consent - ------------------------------------------------------------------------------- EX-1 3 incexa20402.txt DESIGNATION OF SERIES EXHIBIT (a)(2) THE WRIGHT MANAGED INCOME TRUST Amendment of Establishment and Designation of Series of Shares of Beneficial Interest, Without Par Value (as amended and restated effective May 1, 2002) WHEREAS, the Trustees of The Wright Managed Income Trust, a Massachusetts business trust (the "Trust"), have previously designated separate series (or "Funds"); and WHEREAS, the Trustees now desire to change the name of one existing series, i.e., Wright U.S. Treasury Fund to Wright U.S. Government Intermediate Fund, and to redesignate the series or Funds pursuant to Section 5.1 of Article V of the Trust's Amended and Restated Declaration of Trust dated April 28, 1997 (the "Declaration of Trust"); NOW, THEREFORE, the undersigned, being at least a majority of the duly elected and qualified Trustees presently in office of the Trust, hereby divide the shares of beneficial interest of the Trust into the following separate series ("Funds"), each Fund to have the following special and relative rights: 1. The Funds shall be designated as follows effective May 1, 2002: Wright Current Income Fund Wright Total Return Bond Fund Wright U.S. Government Intermediate Fund Wright U.S. Government Near Term Fund Wright U.S. Treasury Money Market Fund 2. Each Fund shall be authorized to invest in cash, securities, instruments and other property as from time to time described in the Trust's then currently effective registration statements under the Securities Act of 1933 and the Investment Company Act of 1940. Each share of beneficial interest of each Fund ("share") shall be redeemable, shall be entitled to one vote (or fraction thereof in respect of a fractional share) on matters on which shares of that Fund shall be entitled to vote and shall represent a pro rata beneficial interest in the assets allocated to that Fund, all as provided in the Declaration of Trust. The proceeds of sales of shares of each Fund, together with any income and gain thereon, less any diminution or expenses thereof, shall irrevocably belong to such Fund, unless otherwise required by law. Each share of a Fund shall be entitled to receive its pro rata share of net assets of that Fund upon liquidation of that Fund. 3. Shareholders of each Fund shall vote separately as a class to the extent provided in Rule 18f-2, as from time to time in effect, under the Investment Company Act of 1940. 4. The assets and liabilities of the Trust shall be allocated among the above-referenced Funds as set forth in Section 5.5 of Article V of the Declaration of Trust, except as provided below: (a) Costs incurred by each Fund in connection with its organization and start-up, including Federal and state registration and qualification fees and expenses of the initial public offering of such Fund's shares, shall (if applicable) be borne by such Fund and deferred and amortized over the five year period beginning on the date that such Fund commences operations. (b) Reimbursement required under any expense limitation applicable to the Trust shall be allocated among those Funds whose expense ratios exceed such limitation on the basis of the relative expense ratios of such Funds. (c) The liabilities, expenses, costs, charges and reserves of the Trust (other than the management and investment advisory fees or the organizational expenses paid by the Trust) which are not readily identifiable as belonging to any particular Fund shall be allocated among the Funds on an equitable basis as determined by the Trustees. 5. The Trustees (including any successor Trustees) shall have the right at any time and from time to time to reallocate assets and expenses or to change the designation of any Fund now or hereafter created, or to otherwise change the special and relative rights of any such Fund, and to terminate any Fund or add additional Funds as provided in the Declaration of Trust. 6. Any Fund may merge or consolidate with any other corporation, association, trust or other organization or may sell, lease or exchange all or substantially all of its property, including its good will, upon such terms and conditions and for such consideration when and as authorized by the Trustees; and any such merger, consolidation, sale, lease or exchange shall be deemed for all purposes to have been accomplished under and pursuant to the statutes of the Commonwealth of Massachusetts. The Trustees may also at any time sell and convert into money all the assets of any Fund. Upon making provision for the payment of all outstanding obligations, taxes and other liabilities, accrued or contingent, of such Fund, the Trustees shall distribute the remaining assets of such Fund ratably among the holders of the outstanding shares. Upon completion of the distribution of the remaining proceeds or the remaining assets as provided in this paragraph 6, the Fund shall terminate and the Trustees shall be discharged of any and all further liabilities and duties hereunder with respect to such Fund and the right, title and interest of all parties with respect to such Fund shall be canceled and discharged. 7. The Declaration of Trust authorizes the Trustees to divide each Fund and any other series of shares into two or more classes and to fix and determine the relative rights and preferences as between, and all provisions applicable to, each of the different classes so established and designated by the Trustees. Wright U.S. Government Intermediate Fund, Wright U.S. Government Near Term Fund and Wright Total Return Bond Fund consist of a single class of shares - - Standard Shares. Wright Current Income Fund consist of two classes of shares - - Standard Shares and Institutional Shares. . Wright U.S. Treasury Money Market Fund consists of a single class of shares of no specific designation, and the Trustees may designate additional classes in the future. For purposes of allocating liabilities among classes, each class of that Fund shall be treated in the same manner as a separate series. Dated: February 26, 2002 /s/Peter M. Donovan - --------------------- Peter M. Donovan /s/James P. Biggs - --------------------- James P. Biggs /s/H. Day Brigham, Jr. - --------------------- H. Day Brigham, Jr. /s/Judith R. Corchard - ---------------------- Judith R. Corchard /s/Dorcas R. Hardy - -------------------- Dorcas R. Hardy /s/Leland Miles - ------------------- Leland Miles /s/A.M. Moody, III - ----------------- A. M. Moody, III /s/Lloyd F. Pierce - -------------------- Lloyd F. Pierce /s/ Richard E. Taber - --------------------- Richard E. Taber EX-2 4 incta0402.txt TRANSFER AGENCY AGREEMENT Exhibit (h)(1) THE WRIGHT MANAGED INCOME TRUST TRANSFER AGENCY AND SERVICES AGREEMENT AGREEMENT made as of the 14th day of June, 2002, by and between The Wright Managed Income Trust, a Massachusetts business trust, with its principal office and place of business at 255 State Street, Boston, Massachusetts 02109 (the "Trust""), and Forum Shareholder Services, LLC, a Delaware limited liability company with its principal office and place of business at Two Portland Square, Portland, Maine 04101 ("Forum"). WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company and may issue shares of beneficial interest with no par value, in separate series and classes; and WHEREAS, the Trust offers shares in various series as listed in Appendix A hereto (each such series, together with all other series subsequently established by the Trust and made subject to this Agreement in accordance with Section 12, being herein referred to as a "Fund," and collectively as the "Funds") and the Trust offer shares of various classes of each Fund as listed in Appendix A hereto (each such class together with all other classes subsequently established by the Trust in a Fund being herein referred to as a "Class," and collectively as the "Classes"); WHEREAS, the Trust desires that Forum perform as the transfer agent and dividend disbursing agent for each Fund and Forum is willing to provide these services on the terms and conditions set forth in this Agreement; NOW THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, the Trust and Forum hereby agree as follows: SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS (a) The Trust, on behalf of the Funds, hereby appoints Forum to act as, and Forum agrees to act as, (i) transfer agent for the authorized and issued shares of beneficial interest of the Trust representing interests in each of the respective Funds and Classes thereof ("Shares"), (ii) dividend disbursing agent and (iii) agent in connection with any accumulation, open-account or similar plans provided to the registered owners of shares of any of the Funds ("Shareholders") and set out in the currently effective prospectuses and statements of additional information of the applicable Fund, including, without limitation, any periodic investment plan or periodic withdrawal program. (b) In connection therewith, the Trust has delivered to Forum copies of: (i) the Trust's Declaration of Trust and Bylaws (collectively, as amended from time to time, "Organic Documents"); (ii) the Trust's current Prospectus and Statement of Additional Information of each Fund (collectively, as currently in effect and as amended or supplemented, the "Prospectus"); (iii) each current plan of distribution or similar document adopted by the Trust under Rule 12b-1 ("Plan") under the Investment Company Act of 1940, as amended (the "1940 Act") and each current shareholder service plan or similar document adopted by the Trust ("Service Plan"); and (iv) all applicable procedures adopted by the Trust with respect to the Funds, and shall promptly furnish Forum with all amendments of or supplements to the foregoing. The Trust shall deliver to Forum a certified copy of the resolution of the Board of Trustees of the Trust (the "Board") appointing Forum and authorizing the execution and delivery of this Agreement. Forum recognizes that the Trust's Registration Statement and amendments thereto filed with the U.S. Securities and Exchange Commission ("SEC") pursuant to the Securities Act of 1933, as amended (the"Securities Act") and the 1940 Act may be obtained from the SEC archives. SECTION 2. DUTIES OF FORUM (a) Forum agrees that in accordance with procedures established from time to time by agreement between the Trust on behalf of each of the Funds, as applicable, and Forum, Forum will perform the following services: (i) provide the services of a transfer agent,dividend disbursing agent and, as relevant, agent in connection with accumulation, open-account or similar plans (including without limitation any periodic investment plan or periodic withdrawal program) that are customary for open-end management investment companies including: (A) maintaining all Shareholder accounts, (B) preparing Shareholder meeting lists, (C) mailing proxies and related materials to Shareholders, (D)mailing Shareholder reports and prospectuses to current Shareholders, (E) mailing privacy notices to Shareholders, (F) withholding taxes on U.S. resident and non-resident alien accounts, (G) preparing and filing U.S. Treasury Department Forms 1099 and other appropriate forms required by federal authorities with respect to distributions for Shareholders, (H) preparing and mailing confirmation forms and statements of account to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, (I) responding to Shareholder telephone calls and Shareholder correspondence in consultation with the Trust, (J)preparing and mailing activity statements for Shareholders, and (K) providing Shareholder account information; (ii) receive for acceptance orders for the purchase of Shares and promptly deliver payment and appropriate documentation therefor to the custodian of the applicable Fund (the "Custodian") or, in the case of Fund's operating in a master-feeder or fund of funds structure, to the transfer agent or interestholder recordkeeper for the master portfolio in which the Fund invests; (iii) pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account; (iv) receive for acceptance redemption requests and deliver the appropriate documentation therefore to the Custodian or, in the case of Fund's operating in a master-feeder structure, to the transfer agent or interestholder recordkeeper for the master fund in which the Fund invests; (v) as and when it receives monies paid to it by the Custodian with respect to any redemption, pay the redemption proceeds as required by the prospectus pursuant to which the redeemed Shares were offered and as instructed by the redeeming Shareholders; (vi) effect transfers of Shares upon receipt of appropriate instructions from Shareholders; (vii) prepare and transmit to Shareholders (or credit the appropriate Shareholder accounts) payments for all distributions declared by the Trust with respect to Shares; (viii) for those Funds that issue share certificates, issue share certificates and replacement share certificates for those share certificates alleged to have been lost, stolen, or destroyed upon receipt by Forum of indemnification satisfactory to Forum and protecting Forum and the Trust and, at the option of Forum, issue replacement certificates in place of mutilated share certificates upon presentation thereof without requiring indemnification; (ix) receive from Shareholders or debit Shareholder accounts for sales commissions, including contingent deferred, deferred and other sales charges, and service fees (i.e., wire redemption charges) and prepare and transmit payments to underwriters, selected dealers and others for commissions and service fees received; (x) track shareholder accounts by financial intermediary source and otherwise as reasonably requested by the Trust and provide periodic reporting to the Trust or its administrator or other agent; (xi) maintain records of account for and provide reports and statements to the Trust and Shareholders as to the foregoing; (xii) record the issuance of Shares of the Trust and maintain pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934, as amended ("1934 Act"), a record of the total number of Shares of the Trust, each Fund and each Class thereof, that are authorized, based upon data provided to it by the Trust, and are issued and outstanding and provide the Trust on a regular basis a report of the total number of Shares that are authorized and the total number of Shares that are issued and outstanding; (xiii) provide a system which will enable the Trust to calculate the total number of Shares of each Fund and Class thereof sold in each State; (xiv) monitor and make appropriate filings with respect to the escheatment laws of the various states and territories of the United States; and (xv) oversee the activities of proxy solicitation firms. (b) Forum shall receive and tabulate proxy votes, coordinate the tabulation of proxy and shareholder meeting, votes and perform such other additional services as may be specified from time to time by the Trust, all pursuant to mutually acceptable compensation and implementation agreements. (c) The Trust or its administrator or other agent (i) shall identify to Forum in writing those transactions and assets to be treated as exempt from reporting for each state and territory of the United States and for each foreign jurisdiction (collectively "States") and (ii) shall monitor the sales activity with respect to Shareholders domiciled or resident in each State. The responsibility of Forum for the Trust's State registration status is solely limited to the reporting of transactions to the Trust, and Forum shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Trust or its administrator or other agent. (d) Forum shall establish and maintain facilities and procedures reasonably acceptable to the Trust and in accordance with industry standards for the safekeeping, control, preparation and use of share certificates, check forms, and facsimile signature imprinting devices. Forum shall establish and maintain facilities and procedures reasonably acceptable to the Trust and in accordance with industry standards for safekeeping of all records maintained by Forum pursuant to this Agreement. (e) Forum shall cooperate with each Fund's independent public accountants and shall take reasonable action to make all necessary information available to the accountants for the performance of the accountants' duties. (f) Forum shall cooperate with each Fund's administrator and shall take reasonable action to make all necessary information available to the administrator for the performance of the administrator's duties. (g) Forum shall implement reasonable procedures and controls to ensure that the Trust will be in compliance with the USA Patriot Act in connection with the transfer agency activities undertaken by Forum on behalf of the Trust pursuant to this Agreement; provided, however, that Forum shall not be responsible for any recordkeeping, reporting, customer vetting or other requirements of the USA Patriot Act with respect to (A) customers the records about whom are established and/or maintained by a broker-dealer or other financial intermediary and (B) customer transactions transmitted by omnibus account from such broker-dealers or other financial intermediaries. (h) Except with respect to Forum's duties as set forth in this Section 2 and except as otherwise specifically provided in this Agreement, the Trust assumes all responsibility for ensuring that the Trust complies with all applicable requirements of the Securities Act, the 1940 Act and any laws, rules and regulations of governmental authorities with jurisdiction over the Trust. All references to any law in this Agreement shall be deemed to include reference to the applicable rules and regulations promulgated under authority of the law and all official interpretations of such law or rules or regulations. SECTION 3. RECORDKEEPING (a) Prior to the commencement of Forum's responsibilities under this Agreement, if applicable, the Trust shall deliver or cause to be delivered over to Forum (i) an accurate list of Shareholders of the Trust, showing each Shareholder's address of record, number of Shares owned and whether such Shares are represented by outstanding share certificates and (ii) all Shareholder records, files, and other materials that are necessary o appropriate and reasonably available to the Trust for proper performance of the functions assumed by Forum under this Agreement (collectively referred to as the "Materials"). The Trust shall on behalf of each applicable Fund or Class indemnify and hold Forum harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributable to any error, omission, inaccuracy or other deficiency of the Materials, or out of the failure of the Trust to provide any portion of the Materials. (b) Forum shall maintain records showing for each Shareholder's account the following: (i) names, addresses and tax identification numbers; (ii) numbers of Shares held; (iii) historical information (as available from prior transfer agents)regarding the account of each Shareholder, including dividends paid and date and price of all transactions on a Shareholder's account; (iv) any stop or restraining order placed against a Shareholder's account; (v) information with respect to withholdings; (vi) any capital gain or dividend reinvestment order, plan application, dividend address and correspondence relating to the current maintenance of a Shareholder's account; (vii) certificate numbers and denominations for any Shareholders holding certificates; (viii) any information required in order for Forum to perform the calculations contemplated or required by this Agreement; and (ix) such other information and data as may be required by applicable law. (c) Forum shall keep records relating to the services to be performed under this Agreement, in the form and manner as it may deem advisabl provided that it maintains all such records in accordance with the requirements of applicable law. To the extent required by Section 31 of the 1940 Act, and the rules thereunder, Forum agrees that all such records prepared or maintained by Forum relating to the services to be performed by Forum under this Agreement are the property of the Trust and will be preserved, maintained and made available in accordance with Section 31 of the 1940 Act and the rules thereunder, and will be surrendered promptly to the Trust on and in accordance with the Trust's request. The Trust and the Trust's authorized representatives shall have access to Forum's records relating t the services to be performed under this Agreement at all times during Forum's normal business hours. Upon the reasonable request of the Trust, copies of any such records shall be provided promptly by Forum to the Trust or the Trust's authorized representatives. Forum shall maintain all such records irrespective of the retention period prescribed in Rule 31a-2; provided, however, Forum shall deliver such records to the Trust upon termination of this Agreement. (d) Forum and the Trust agree that all books, records, information, and data pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement, including, without limitation, the information described in Section 3(b) of this Agreement, shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law, and shall not be used other than to carry out the purposes for which it was disclosed. (e) In case of any requests or demands for the inspection of the Shareholder records of the Trust, Forum will notify the Trust and will endeavor to secure instructions from an authorized officer of the Trust as to such inspection. Forum shall abide by the Trust's instructions for granting or denying the inspection; provided, however, that Forum may grant the inspection without instructions if Forum is advised by counsel to Forum that failure to do so will result in liability to Forum. SECTION 4. ISSUANCE AND TRANSFER OF SHARES (a) Forum shall make original issues of Shares of each Fund and Class thereof in accordance with the Trust's then current prospectus only upon receipt of (i) instructions requesting the issuance, (ii) a certified copy of a resolution of the Board authorizing the issuance, (iii) necessary funds for the payment of any original issue tax applicable to such Shares, and (iv) an opinion of the Trust's counsel as to the legality and validity of the issuance, which opinion may provide that it is contingent upon the filing by the Trust of an appropriate notice with the SEC, as required by Section 24 of the 1940 Act or the rules thereunder. If the opinion described in (iv)above is contingent upon a filing under Section 24 of the 1940 Act, the Trust shall indemnify Forum for any liability arising from the failure of the Trust to comply with that section or the rules thereunder. (b) Transfers of Shares of each Fund and Class thereof shall be registered on the Shareholder records maintained by Forum. In registering transfers of Shares, Forum may rely upon the Uniform Commercial Code as in effect in the State of Delaware or any other statutes that, in the opinion of Forum's counsel, protect Forum and the Trust from liability arising from (i) not requiring complete documentation, (ii) registering a transfer without an adverse claim inquiry, (iii) delaying registration for purposes of such inquiry or (iv) refusing registration whenever an adverse claim requires such refusal. As transfer agent, Forum will be responsible for delivery to the transferor and transferee of such documentation as is required by the Uniform Commercial Code. SECTION 5. SHARE CERTIFICATES (a) The Trust shall furnish to Forum a supply of blank share certificates of each Fund and Class thereof for which share certificates are issued and, from time to time, will renew such supply upon Forum's request. Blank share certificates shall be signed manually or by facsimile signatures of officers of the Trust authorized to sign by the Organic Documents of the Trust and, if required by the Organic Documents, shall bear the Trust's seal or a facsimile thereof. Unless otherwise directed by the Trust, Forum may issue or register Share certificates reflecting the manual or facsimile signature of an officer who has died, resigned or been removed by the Trust. (b) New Share certificates shall be issued by Forum upon surrender of outstanding Share certificates in the form deemed by Forum to be properly endorsed for transfer and satisfactory evidence of compliance with all applicable laws relating to the payment or collection of taxes. Forum shall forward Share certificates in "non-negotiable" form by first-class or registered mail, or by whatever means Forum deems equally reliable and expeditious. Forum shall not mail Share certificates in "negotiable" form unless requested in writing by the Trust and fully indemnified by the Trust to Forum's satisfaction. (c) For any Fund or Class thereof that the Trust informs Forum does not issue share certificates, Forum shall not issue any such share certificates and the provisions of this Agreement relating to share certificates shall not be applicable with respect to those Funds or Classes thereof. SECTION 6. SHARE PURCHASES; ELIGIBILITY TO RECEIVE DISTRIBUTIONS (a) Shares shall be issued in accordance with the terms of a Fund's or Class' Prospectus after Forum or its agent receives either: (i) (A) an instruction directing investment in a Fund or Class, (B) a check (other than a third party check) or a wire or other electronic payment in the amount designated in the instruction and (C), in the case of an initial purchase, a completed account application; or (ii) the information required for purchases pursuant to a selected dealer agreement, processing organization agreement, or a similar contract with a financial intermediary. (b) Shares issued in a Fund after receipt of a completed purchase order shall be eligible to receive distributions of the Fund at the time specified in the Prospectus pursuant to which the Shares are offered. (c) Shareholder payments shall be considered Federal Funds no later than on the day indicated below unless other times are noted in the Prospectus of the applicable Class or Fund: (i) for a wire received, at the time of the receipt of the wire; (ii) for a check drawn on a member bank of the Federal Reserve System, on the next Fund business day following receipt of the check; and (iii) for a check drawn on an institution that is not a member of the Federal Reserve System, at such time as Forum is credited with Federal Funds with respect to that check. SECTION 7. COMPENSATION AND EXPENSES (a) For the services provided by Forum pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to pay Forum the fees set forth in Clauses (i) and (ii) of Appendix B hereto. Fees will begin to accrue for each Fund on the latter of the date of this Agreement or the date of commencement of operations of the Fund. If fees begin to accrue in the middle of a month or if this Agreement terminates before the end of any month, all fees for the period from that date to the end of that month or from the beginning of that month to the date of termination, as the case may be, shall be prorated according to the proportion that the period bears to the full month in which the effectiveness or termination occurs. Upon the termination of this Agreement with respect to a Fund, the Trust shall pay to Forum such compensation as shall be payable prior to the effective date of termination and Forum shall reimburse the Fund for any advanced fees paid with respect to the period on or after the date of termination. The Trust acknowledges that Forum may from time to time earn money on amounts in the deposit accounts maintained by Forum to service the Funds (and other clients serviced by Forum). (b) In connection with the services provided by Forum pursuant to this Agreement, the Trust, on behalf of each Fund, agrees to reimburse Forum for the expenses set forth in Appendix B hereto. In addition, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all reasonable incurred expenses and employee time that are (i) billed to the Trust by Forum and (ii) attributable to any review of the Trust's accounts and records by the Trust's independent accountants or any regulatory body outside of routine and normal periodic reviews or examinations. Should the Trust exercise its right to terminate this Agreement, the Trust, on behalf of the applicable Fund, shall reimburse Forum for all reasonable incurred out-of-pocket expenses and employee time that are (i) billed to the Trust by Forum and (ii) associated with the copying and movement of records and material to any successor person and providing assistance to any successor person in the establishment of the accounts and records necessary to carry out the successor's responsibilities; provided, however, that the Trust shall not be required to reimburse Forum for any employee time if the Trust has terminated this Agreement because Forum has breached any material representation, warranty, covenant or obligation and has failed to cure such breach within a reasonable time after notice thereof from the Trust. (c) All fees and reimbursements shall be payable monthly. The Trust, on behalf of the applicable Fund, agrees to pay all fees and reimbursable expenses within thirty (30) business days. SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS (a) Forum represents, warrants and covenants to the Trust that: (i) It is a limited liability company duly organized and existing and in good standing under the laws of the State of Delaware; (ii) It is duly qualified to carry on its business in the State of Maine; (iii) It is empowered under applicable laws and by its Operating Agreement to enter into this Agreement and perform its duties under this Agreement; (iv) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement; (v) It has and will continue to have access to the necessary facilities, equipment, and personnel to perform its duties and obligations under this Agreement; (vi) This Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of Forum, enforceable against Forum in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; (vii) It is and will remain registered as a transfer agent under Section 17A of the 1934 Act; and (viii) It has and will retain all licenses, permits and registrations necessary to perform its duties under this Agreement; and (ix) It shall promptly notify the Trust if any representation, warranty or covenant contained in this Section 8 becomes untrue in any material respect. (b) The Trust represents, warrants and covenants to Forum that: (i) It is a business trust duly organized and existing and in good standing under the laws of Massachusetts; (ii) It is empowered under applicable laws and by its Organic Documents to enter into this Agreement and perform its duties under this Agreement; (iii) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement and perform its duties under this Agreement; (iv) It is and will remain an open-end management investment company registered under the 1940 Act; (v) This Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of the Trust, enforceable against the Trust in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties; and (vi) A registration statement under the Securities Act is currently effective and will remain effective, and appropriate State securities law filings have been made and will continue to be made, with respect to all Shares of the Funds and Classes of the Trust being offered for sale. SECTION 9. PROPRIETARY INFORMATION (a) The Trust acknowledges that the databases, computer programs, screen formats, report formats, interactive design techniques, and documentation manuals maintained by Forum on databases or in connection with electronic interfaces under the control and ownership of Forum or a third party constitute copyrighted, trade secret, or other proprietary information (collectively, "Proprietary Information") of substantial value to Forum or the third party. The Trust agrees to treat all Proprietary Information as proprietary to Forum and further agrees that it shall not divulge any Proprietary Information to any person or organization except as may be provided under this Agreement. (b) Forum acknowledges that the Shareholder list and all information related to Shareholders furnished to Forum by the Trust, any Shareholder or any agent of the Trust or Shareholder in connection with this Agreement (collectively, "Customer Data") constitute proprietary information of substantial value to the Trust. In no event shall Customer Data (as such, and as maintained and/or delivered according to standard industry formats) be deemed Proprietary Information. Forum agrees to treat all Customer Data as proprietary to the Trust and further agrees that it shall not divulge any Customer Data to any person or organization except as may be provided under this Agreement or as may be directed in writing by the Trust. SECTION 10. INDEMNIFICATION (a) Forum shall be under no duty to take any action except as specifically set forth herein or as may be specifically agreed to by Forum in writing. Forum shall use its best judgment and efforts in rendering the services described in this Agreement. Forum shall not be liable to the Trust for any action or inaction of Forum relating to any event whatsoever in the absence of negligence, bad faith, or willful misfeasance in the performance of Forum's duties or obligations under this Agreement or by reason of Forum's reckless disregard of its duties and obligations under this Agreement. (b) Forum shall not be responsible for, and the Trust shall on behalf of each applicable Fund or Class thereof indemnify and hold Forum, its employees, directors, officers and managers and any person who controls Forum within the meaning of section 15 of the Securities Act or section 20 of the 1934 Act ("Forum Indemnitees") harmless from and against, any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributable to: (i) all actions of Forum or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions (or omissions to act) are taken in good faith and without negligence or reckless disregard by Forum of its duties and obligations under this Agreement; (ii) the Trust's lack of good faith or the Trust's negligence or willful misconduct; (iii) the reasonable reliance on or use by Forum or its agents or subcontractors of information, records, documents or services which have been prepared, maintained or performed by the Trust or any other person or firm (other than Forum or its agents or subcontractors) on behalf of the Trust, including but not limited to any previous transfer agent or registrar; (iii) the reasonable reliance on any instructions or requests of the Trust on behalf of the applicable Fund; and (iv) the offer or sale of Shares in violation of any requirement under the Federal securities laws or regulations or the securities laws or regulations of any State that such Shares be registered in such State or in violation of any stop order or other determination or ruling by any federal agency or any State with respect to the offer or sale of such Shares in such State. (c) Forum shall indemnify and hold the Trust and each Fund or Class thereof armless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributed to any action or failure or omission to act by Forum as a result of Forum's negligence, bad faith, willful misfeasance or reckless disregard of its duties and obligations under this Agreement. (d) At any time Forum may apply to any officer of the Trust for instructions, and may consult with legal counsel to the Trust or to Forum with respect to any matter arising in connection with the services to be performed by Forum under this Agreement, and, notwithstanding anything herein to the contrary, Forum and any Forum Indemnitee shall not be liable and shall be indemnified by the Trust on behalf of the applicable Fund for any action taken or omitted by it in reasonable reliance upon such instructions or upon the advice of such counsel. Forum, its agents and subcontractors shall be protected and indemnified in acting upon (i) any paper or document furnished by or on behalf of the Trust, reasonably believed by Forum to be genuine and to have been signed by the proper person or persons, (ii) any instruction, information, data, records or documents provided to Forum or its agents or subcontractors by (A) electronic message, machine readable input, telex, CRT data entry or (B) other similar means authorized by the Trust, and (iii) any authorization, instruction, approval, item or set of data, or information of any kind transmitted to Forum in person or by telephone, vocal telegram, electronic message or other electronic means, reasonably believed by Forum to be genuine and to have been given by the proper person or persons. Forum shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust or other actual notice thereof. Forum, its agents and subcontractors shall also be protected and indemnified in recognizing share certificates which are reasonably believed to bear the proper manual or facsimile signatures of the officers of the Trust, and the proper counter- signature of any former transfer agent or former registrar or of a co-transfer agent or co-registrar of the Trust. (e) If the Trust has the ability to originate electronic instructions to Forum in order to (i) effect the transfer or movement of cash or Shares or (ii) transmit Shareholder information or other information, then in such event Forum shall be entitled to rely on the validity and authenticity of such instruction without undertaking any further inquiry as long as such instruction is undertaken in conformity with reasonable security procedures established by Forum from time to time. (f) The Trust has authorized or in the future may authorize Forum to act as a "Mutual Fund Services Member" for the Trust or various Funds. Fund/SERV and Networking are services sponsored by the National Securities Clearing Corporation ("NSCC") and as used herein have the meanings as set forth in the then current edition of NSCC Rules and Procedures published by NSCC or such other similar publication as may exist from time to time. The Trust shall indemnify and hold Forum harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising directly or indirectly out of or attributed to any action or failure or omission to act by NSCC. Forum shall comply in all material respects with NSCC Rules and Procedures to the extent applicable in performing its services under this Agreement. (g) In order that the indemnification provisions contained in this Section shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such claim or to defend against said claim in its own name or in the name of the other party. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party's prior written consent, nor shall the indemnifying party compromise or settle any claim without the other party's written consent which shall not be unreasonably withheld, conditioned or delayed. SECTION 11. EFFECTIVENESS, DURATION AND TERMINATION (a) This Agreement shall become effective with respect to each Fund or Class on the earlier of (i) execution and delivery of this agreement by the parties hereto and conversion from prior transfer agent and services agreements, (ii) the date on which the Trust's Registration Statement relating to the Shares of the Fund or Class becomes effective or (iii) the date of the commencement of operations of the Fund or Class. Upon effectiveness of this Agreement, it shall supersede all previous agreements between the parties hereto covering the subject matter hereof insofar as such Agreement may have been deemed to relate to the Funds. (b) This Agreement shall continue in effect with respect to a Fund until terminated. (c) This Agreement may be terminated with respect to a Fund at any time, without the payment of any penalty, (i) by the Board on sixty (60) days' written notice to Forum or (ii) by Forum on sixty (60) days' written notice to the Trust. Any termination shall be effective as of the date specified in the notice. Upon notice of termination of this Agreement by either party, Forum shall promptly transfer to the successor transfer agent the original or copies of all books and records maintained by Forum under this Agreement including, in the case of records maintained on computer systems, copies of such records in machine-readable form, and shall cooperate with, and provide reasonable assistance to, the successor transfer agent in the establishment of the books and records necessary to carry out the successor transfer agent's responsibilities. (d) The provisions of Sections 3, 7, 8, 9, 10, 14, 15, and 17 shall survive any termination of this Agreement. SECTION 12. ADDITIONAL FUNDS AND CLASSES In the event that the Trust establishes one or more series of Shares or one or more classes of Shares after the effectiveness of this Agreement, such series of Shares or classes of Shares, as the case may be, shall become Funds and Classes under this Agreement. Forum or the Trust may elect not to make any such series or classes subject to this Agreement. SECTION 13. ASSIGNMENT Except as otherwise provided in this Agreement, neither this Agreement nor any rights or obligations under this Agreement may be assigned by either party without the written consent of the other party; provided, however, that no such consent shall be required if Forum assigns this Agreement to any affiliate of Forum provided however, that Forum shall be as fully responsible to the Trust for the acts and omissions of any permitted assignee as Forum is for its own acts and omissions. For purposes of this Section 13, any transfer or series of transfers of a controlling equity interest in Forum to a non-affiliate, acquisition or series of acquisitions by a non-affiliate of all or substantially all of Forum's assets, or merger of Forum and a non-affiliate in which the equity investors of Forum do not control the surviving entity shall be deemed an assignment; provided, however, that the transfer of ownership of all or part the equity interest in Forum to Forum's management staff or the devisees or heirs of John Keffer shall not be deemed to be an assignment. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns. SECTION 14. FORCE MAJEURE Forum shall not be responsible or liable for any failure or delay in performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdowns beyond its reasonable control, flood or catastrophe, acts of God, insurrection, war, terrorism, riots or failure of the mails or any transportation medium, communications medium not within Forum's control or power supply. SECTION 15. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY The Trust is a Massachusetts Business Trust. The Trustees of the Trust and the shareholders of each Fund shall not be liable for any obligations of the Trust or of the Funds under this Agreement, and Forum agrees that, in asserting any rights or claims under this Agreement, it shall look only to the assets and property of the Trust or the Fund to which Forum's rights or claims relate in settlement of such rights or claims, and not to the Trustees of the Trust or the shareholders of the Funds. Notwithstanding any other provision of this Agreement, the parties agree that the assets and liabilities of each Fund of the Trust are separate and distinct from the assets and liabilities of each other Fund and that no Fund shall be liable or shall be charged for any debt, obligation or liability of any other Fund, whether arising under this Agreement or otherwise. SECTION 16. TAXES Forum shall not be liable for any taxes, assessments or governmental charges that may be levied or assessed on any basis whatsoever in connection with the Trust or any Shareholder or any purchase of Shares, excluding taxes assessed against Forum for compensation received by it under this Agreement. SECTION 17. MISCELLANEOUS (a) Notwithstanding any other provisions hereof to the contrary, neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement. There are no third party beneficiaries to this Agreement. (b) Except for Appendix A to add new Funds and Classes in accordance with Section 12, no provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by both parties hereto. (c) This Agreement shall be governed by, and the provisions of this Agreement shall be construed and interpreted under and in accordance with, the laws of the State of Delaware. (d) This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written. (e) This Agreement may be executed by the parties hereto on any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument. (f) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid. This Agreement shall be construed as if drafted jointly by both Forum and Trust and no presumptions shall arise favoring any party by virtue of authorship of any provision of this Agreement. (g) Section and paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. (h) Notices, requests, instructions and communications received by the parties at their respective principal addresses, or at such other address as a party may have designated in writing, shall be deemed to have been properly given. (i) Nothing contained in this Agreement is intended to or shall require Forum, in any capacity hereunder, to perform any functions or duties on any day other than a Fund business day. Functions or duties normally scheduled to be performed on any day which is not a Fund business day shall be performed on, and as of, the next Fund business day, unless otherwise required by law. (j) No affiliated person (as that term is defined in the 1940 Act), employee, agent, director, officer or manager of Forum shall be liable at law or in equity for Forum's obligations under this Agreement. (k) Each of the undersigned expressly warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms hereof and each party hereto warrants and represents that this Agreement, when executed and delivered, will constitute a legal, valid and binding obligation of the party, enforceable against the party in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. (l) The terms and "affiliated person," "assignment" and "vote of a majority of the outstanding voting securities" shall have the meanings ascribed thereto in the 1940 Act. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized persons, as of the day and year first above written. WRIGHT MANAGED INCOME TRUST By:/s/A.M. Moody III --------------------- A. M. MOODY III Vice President and Trustee FORUM SHAREHOLDER SERVICES, LLC By: /s/Lisa J. Weymouth ----------------------- Lisa J. Weymouth Director WRIGHT MANAGED INCOME TRUST TRANSFER AGENCY AND SERVICES AGREEMENT Appendix A Funds and Classes of the Trust
Fund Name Class Name CUSIP Symbol ------------------------------------------------------------------------------------------ Wright U.S. Government Intermediate Fund (WUSGI Standard Shares 982349102 WGOBX Wright U.S. Government Near Term Fund (WNTB) Standard Shares 982349201 WNTBX Wright Total Return Bond Fund (WTRB) Standard Shares 982349300 WTRBX Wright Current Income Fund (WTRB) Standard Shares 982349607 WCIFX Institutional Shares 982349870 WCIIY* Wright U.S. Treasury Money Market Fund 982349706 WUSXX *Un-official symbol. Non-NASDAQ fund
THE WRIGHT MANAGED INCOME TRUST By:/s/ A. M. Moody III ----------------------- A. M. MOODY III Vice President and Trustee FORUM SHAREHOLDER SERVICES, LLC By:/s/ Lisa J. Weymouth ---------------------- Lisa J. Weymouth Director WRIGHT MANAGED INCOME TRUST TRANSFER AGENCY AND SERVICES AGREEMENT Appendix B Fees and Expenses (i) Base Fees $1,000 per month per CUSIP. (Subject to renegotiation if the total number of CUSIPs is less than 12 or more than 20.) (ii) Account Fees $1.00 per month per open shareholder account/Non-NSCC Networked Level 3. $0.75 per month per open shareholder account/NSCC Networked Level 3. $0.25 per month per closed shareholder account. (iii) Internet Fees Client and Financial Intermediary Remote Inquiry provided at no cost. Shareholder Remote Inquiry/Trading/Account Opening - $500 per CUSIP per year. (iv) Out-Of-Pocket Expenses The Trust, on behalf of the applicable Fund, shall reimburse Forum for all reasonable out-of-pocket or advances incurred in providing the services described in this Agreement, including but not limited to the reasonable cost of (or appropriate share of the cost of): (i) statement, confirmation, envelope and stationary stock, (ii) share certificates, (iii) printing of checks and drafts, (iv) postage, (v) telecommunications, (vi) NSCC Mutual Fund Service Member fees and expenses, (vii) banking charges, (viii) outside proxy solicitors and tabulators, (ix) proxy solicitation fees and (x) record storage, document imaging, microfilm and microfiche. In addition, any other expenses incurred by Forum at the request or with the consent of the Trust, will be reimbursed by the Trust on behalf of the applicable Fund. Notwithstanding the foregoing, the Trust shall not be required to reimburse Forum for Forum's out-of-pocket costs relating to banking services (DDA account, wire and ACH, check and draft clearing and lock box fees and charges). EX-3 5 incexi20402.txt CONSENT OF COUNSEL Exhibit (i)(2) HALE AND DORR LLP 60 STATE STREET BOSTON, MASSACHUSETTS 02109 617-526-6000 Fax 617-526-5000 April 26, 2002 Securities and Exchange Commission 450 Fifth Street Washington, D.C. 20549 Re: Post-Effective Amendment No. 31 to the Registration Statement of The Wright Managed Income Trust (Trust) File Nos. 2-81915; 811-3668 (PEA no. 31) Gentlemen: Hale and Dorr LLP hereby consents to the incorporation by reference into PEA no. 31 of its opinion, dated April 7, 1998, filed with the Securities and Exchange Commission on April 29, 1998, as exhibit no. 10 to post-effective amendment no. 23. The consent may not be used for any purpose other than as set forth above without our further consent. Very truly yours, /s/ Hale and Dorr LLP ------------------- Hale and Dorr LLP EX-4 6 inaudconsent0402.txt INDEPENDENT AUDITORS' CONSENT Exhibit j INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Post-Effective Amendment No. 31 to the Registration Statement of The Wright Managed Income Trust (1933 Act File No. 2-81915) on behalf of the Wright U.S. Treasury Fund, U.S. Treasury Portfolio, Wright U.S. Government Near Term Fund, U.S. Government Near Term Portfolio, Wright Total Return Bond Fund, Wright Current Income Fund, Current Income Portfolio, and Wright U.S. Treasury Money Market Fund of our reports dated February 15, 2002, relating to the Funds referenced above, included in the Annual Report to Shareholders for the year ended December 31, 2001, in the Statement of Additional Information which is part of such Registration Statement. We also consent to the reference to our Firm under the heading "Financial Highlights" in the Prospectus and under the caption "Independent Certified Public Accountants" in the Statement of Additional Information. /s/ Deloitte & Touche - ----------------------- DELOITTE & TOUCHE LLP Boston, Massachusetts April 25, 2002 -----END PRIVACY-ENHANCED MESSAGE-----