N-30D 1 n30d1202.txt COMBINED EQUITY AND INCOME TRUSTS AUDITED REPORT THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS ANNUAL REPORT DECEMBER 31 , 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. Treasury Money Market Fund o Wright U.S. Government Near Term Fund o Wright U.S. Government Intermediate Fund (formerly Wright U.S. Treasury Fund) o Wright Total Return Bond Fund o Wright Current Income Fund THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS ------------------------------------------------------------------------------- The Wright Managed Blue Chip Investment Funds consists of three equity funds from The Wright Managed Equity Trust, a money market fund and four other fixed income funds from The Wright Managed Income Trust. Each of the eight funds have distinct investment objectives and policies. They can be used individually or in combination to achieve virtually any objective. Further, as they are all "no-load" funds (no commissions or sales charges), portfolio allocation strategies can be altered as desired to meet changing market conditions or changing requirements without incurring any sales charges. Some of the funds offer two classes of shares designated as Institutional Shares and Standard Shares. APPROVED WRIGHT INVESTMENT LIST Securities selected for equity portfolios are drawn from investment lists developed by Wright Investors' Service (Wright). Using bottom-up fundamental analysis, Wright first identifies companies suitable for fiduciary use as "investment grade." These investment grade companies are further screened against Wright's quality standards which have evolved since the 1960s. Those meeting or exceeding these standards are promoted to the Approved Wright Investment List or AWIL. These companies, in Wright's opinion, exhibit superior investment characteristics. There are separate lists for U.S. companies, non-U.S. companies, and fixed income securities. All the companies on the AWIL are soundly financed "Blue Chips" with established records of earnings profitability and equity growth. All have established investment acceptance and active, liquid markets. Companies which do not meet this quality criteria, but which are included in a major stock market index and which meet acceptable marketability and financial strength standards may be used when necessary to reduce benchmark tracking error but a majority of the stocks in any portfolio are selected from the AWIL. THREE EQUITY FUNDS WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) seeks to enhance total investment return of price appreciation plus income by providing active management of equities of well-established companies meeting strict quality standards. Equities selected are limited to those companies whose current operations reflect defined, quantified characteristics which have been determined to offer comparatively superior total investment returns over the intermediate term. The fund attempts to outperform the Standard & Poor's Mid-Cap 400 Index. WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) seeks to enhance total investment return of price appreciation plus income by providing management of a broadly diversified portfolio of equities of larger well-established companies meeting strict quality standards. In selecting companies for this portfolio, Wright selects, based on quantitative formulae, those companies which are expected to do better over the intermediate term. The quantitative formulae takes into consideration factors such as over/under valuation and compatibility with current market trends. Investments in the portfolio are control weighted in the selected securities and industries. The fund attempts to outperform the Standard & Poor's 500 Index. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) seeks total return consisting of price appreciation plus income by investing in a broadly diversified portfolio of equities of well-established, non-U.S. companies meeting strict quality standards. The portfolio may buy common stocks traded on the securities exchange of the country in which the company is based or it may purchase American Depositary Receipts (ADR's) traded in the United States. The portfolio is denominated in U.S. dollars and investors should understand that fluctuations in foreign exchange rates may impact the value of their investment. A MONEY MARKET FUND WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) seeks a high rate of current income but with added safety that comes from limiting its investments to securities of the U.S. Government and its agencies. There may be an added advantage to investors that reside in states and municipalities that do not tax dividend income from mutual funds investing exclusively in U.S. Government securities. FOUR FIXED-INCOME FUNDS WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) is a diversified portfolio concentrating on bonds and other obligations of the U.S. Government and U.S. Government Agencies with an average weighted maturity of between one and three years. This portfolio 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 money market instruments and who is also tolerant of modest fluctuation in capital (i.e. compared with somewhat greater fluctuation likely with longer term fixed income securities). Dividends are accrued daily and paid monthly. WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) seeks a high total return with an emphasis on income by investing in U.S. government obligations and maintaining an average maturity of from two to six years. The fund does not invest in derivatives. Assets are allocated on the basis of Wright's economic outlook and expected trend in short-term interest rates. Dividends are accrued daily and paid monthly. WRIGHT TOTAL RETURN BOND FUND (WTRB) is a diversified portfolio of investment grade government and corporate bonds and other debt securities of varying maturities which, in the Adviser's opinion, will achieve the portfolio objective of best total return (i.e. the best total of ordinary income plus capital appreciation). Accordingly, investment selections and maturities may differ depending on the particular phase of the interest rate cycle. Dividends are accrued daily and paid monthly. WRIGHT CURRENT INCOME FUND (WCIF) may be invested in a variety of securities and may use a number of strategies including GNMAs to produce a high level of income with reasonable stability of principal. The fund reinvests all principal payments. Dividends are accrued daily and paid monthly. TABLE OF CONTENTS ------------------------------------------------------------------------------ INVESTMENT OBJECTIVES...................................inside front cover LETTER TO SHAREHOLDERS...................................................2 MANAGEMENT DISCUSSION....................................................3 PERFORMANCE SUMMARIES....................................................8 MANAGEMENT AND ORGANIZATION.............................................70 FINANCIAL STATEMENTS THE WRIGHT MANAGED EQUITY TRUST WRIGHT SELECTED BLUE CHIP EQUITIES FUND Portfolio of Investments..................16 Statement of Assets & Liabilities.........19 Statement of Operations...................19 Statement of Changes in Net Assets........20 Financial Highlights......................21 WRIGHT MAJOR BLUE CHIP EQUITIES FUND Portfolio of Investments..................22 Statement of Assets & Liabilities.........25 Statement of Operations...................25 Statement of Changes in Net Assets........26 Financial Highlights......................27 WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Portfolio of Investments..................28 Statement of Assets & Liabilities.........30 Statement of Operations...................30 Statement of Changes in Net Assets........31 Financial Highlights......................32 NOTES TO FINANCIAL STATEMENTS...............34 INDEPENDENT AUDITORS' REPORT................38 THE WRIGHT MANAGED INCOME TRUST WRIGHT U.S. TREASURY MONEY MARKET FUND Portfolio of Investments..................40 Statement of Assets & Liabilities.........41 Statement of Operations...................41 Statement of Changes in Net Assets........42 Financial Highlights......................43 WRIGHT U.S. GOVERNMENT NEAR TERM FUND Portfolio of Investments..................44 Statement of Assets & Liabilities.........45 Statement of Operations...................45 Statement of Changes in Net Assets........46 Financial Highlights......................47 WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND Portfolio of Investments..................48 Statement of Assets & Liabilities.........49 Statement of Operations...................49 Statement of Changes in Net Assets........50 Financial Highlights......................51 WRIGHT TOTAL RETURN BOND FUND Portfolio of Investments..................52 Statement of Assets & Liabilities.........54 Statement of Operations...................54 Statement of Changes in Net Assets........55 Financial Highlights......................56 WRIGHT CURRENT INCOME FUND Portfolio of Investments..................57 Statement of Assets & Liabilities.........61 Statement of Operations...................61 Statement of Changes in Net Assets........62 Financial Highlights......................63 NOTES TO FINANCIAL STATEMENTS...............65 INDEPENDENT AUDITORS' REPORT................69 LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------- January, 2003 Dear Shareholders: I'm sure you join me in celebrating the end of 2002 and the start of what we think will be a better year for investors. In the category of dubious distinctions, the 2000-02 stock market decline became the worst bear market since the 1930s during Q4, surpassing 1973-74's 48% decline when it tipped down to 49% on October 9. With any luck, October 9 will hold as the market low, although it seems a stretch to think the ensuing rally might measure up to the robust post-1974 liftoff from that earlier double bottom. Still, after three years in which share prices declined during eight out of twelve quarters, 2002's fourth-quarter market rebound is a start. One disturbing aspect of the Q4 market rebound was that its leadership was unsatisfactorily skewed toward low-priced, low-quality stocks and away from the higher-quality sector, where fundamentals were more favorable entering 2003. It is doubtful that the "rubbish rally" that characterized the fourth-quarter rebound can last long in 2003. For the most part, the stocks that excelled in Q4 represented good values only in the sense that they had been the biggest losers during the first three quarters of the year. As an example, the S&P 500's best performer off the October low was Corning, which isn't expected to be profitable until 2004; nevertheless, the stock tripled by year-end 2002 (which still leaves it down an incredible 97% from its 2000 peak). We look for better, more fundamentally based, leadership to emerge if the fourth-quarter rally is to evolve into a sustainable bull market advance. We expect this to be a big advantage in 2003 for the higher-quality equities that are included in Wright stock portfolios. Bonds had a positive return in the fourth quarter, led by corporate securities, which benefited from a significant narrowing in yield spreads relative to Treasuries. The safe-haven appeal of Treasuries, which earned them double-digit percentage returns for the first nine months of 2002, proved to be more of a handicap during Q4, particularly as stock prices firmed. Despite talk of deflation, credit spreads between triple B's and Treasuries narrowed by more than 70 basis points in the latest three months, reversing the prior quarter's widening move. We think corporate spreads will continue to narrow but in general doubt that bond market returns will come up to the strong results of the past three years during 2003. Despite last year's weak stock market, the U.S. economy emerged from recession in 2002, beating last year's low expectations. Still, the expansion was irregular and, considering the amount of monetary and fiscal stimulus, fairly lackluster - particularly with respect to corporate profits. Notwithstanding some nasty geo-uncertainties, our view is that the New Year offers investors legitimate hope for a stronger economy, modest inflation and interest rates, higher corporate profits and an improved climate for stocks. We note with great sadness the passing of Mildred Wright, wife of WIS founder John Winthrop Wright. Since 1996, Mildred served as Chairman of the Board of Wright Investors' Service and was a Trustee of the School for Ethical Education. On a happier note, I am pleased to report that Eugene Helm, who has been Chief Financial Officer and a member of our Executive Committee since 1989, has been named President of Wright Investors' Service. Gene has earned this appointment with his hard work, excellent business skills and dedication to achieving the company's goals. I will remain CEO and fill the role of Chairman. I would also like to take this opportunity to reiterate Gene's and my commitment to the School for Ethical Education, which owns 40% of the Wright shares. In an age when many firms have been rocked by corporate governance and conflict of interest scandals, we are proud of our affiliation with the School for Ethical Education and its dedication to the mission of building character in the nation's elementary and secondary education system. On a different note, your trustees elected a new member, Jim Clarke, Associate Professor of Finance at Villanova University, at their December meeting. Lloyd Pierce and James Biggs retired at the end of December, bringing the total of independent trustees to four. There are now seven trustees, the majority of whom are independent. Finally, I invite you to visit the Wright web site, www.wrightinvestors.com, where we provide weekly market commentaries. Let me know if there is any way that we can better serve your investment needs. Sincerely, /s/Peter M. Donovan ---------------------- Peter M. Donovan President MANAGEMENT DISCUSSION ----------------------------------------------------------------------------- EQUITY FUNDS For the second year in a row, a dismal year for stocks has ended with a fourth-quarter rally. The final quarter of 2002 saw stocks move up for two months after hitting bear market lows on October 9, with stocks giving back some of their gains in the last weeks of the quarter. The Dow Jones Industrials closed the year up 14% from its low, while the S&P 500 recovered 13%, and the Nasdaq Composite gained 22%. For the quarter as a whole, price gains ranged from about 5% for the S&P SmallCaps and MidCaps to 8% for the S&P 500 to 18% for the Nasdaq 100. All S&P 500 sectors rose for the quarter, but the rally was built on rising technology and telecom stocks. To some extent, the move off October's rally can be called a "rubbish rally," reflecting the gains in low-priced, low-quality issues, which appear to have attracted the interest of turn-around speculators. The MSCI world ex U.S. price index rose about 6% in dollar terms in the fourth quarter but lost 17% for the year compared to a decline of 23% for the S&P 500. The market seemed to maintain a cautious tone even as stocks were rising in Q4. The lower quality that was generally characteristic of the stocks leading the rally may have contributed to doubts about its staying power. Also, the economy seemed to be slowing after the third quarter's 4.0% growth rate. For a while this past fall there were even some deflation fears in the air. The prospect of war with Iraq, a new threat from North Korea and a strike in Venezuela that sent oil prices to two-year highs all worried investors. And yet investors found reasons to buy stocks in the quarter, among them the prospect of an improving economy in 2003. The Republicans' success in November raised hopes for a fiscal stimulus plan (which was, in fact, announced in early January) to augment the Fed's monetary stimulation. There was also a sense that the worst of the corporate scandals that sapped investor confidence in 2002 was behind us. Also, valuations favored stocks over bonds by the biggest margin in years; investors may have come around to the view that equity valuations finally were discounting the risky environment. The new year got off to a strong start in the equities market. The investment environment is not without risk, but we see a good chance that the improved investor confidence needed for a more constructive stock market environment in 2003 will develop. The economy is embarking on its second year of expansion, and this should have a beneficial effect on corporate profits. The elimination of the tax on dividends, proposed by the Administration, is likely to survive on a scaled-back basis, which could be enough to boost stock prices. We expect stocks to break their losing streak this year, with returns on the order of 10%, maybe higher if some of the so-called exogenous factors break positively. But investors should remember that P/E's are still high in absolute terms (although low in relation to bond yields) and are more likely to contract than expand going forward. In this climate, returns to equities will have to be earned, so investors expecting a resumption of 1990s-like performance from the stock market are likely to be disappointed.
2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 Total Return Year Year Year Year Year Year Year Year Year Year Year Year ---------------------------------------------------------------------------------------------------------------------------------- Selected Blue Chips (WSBC) -17.0% -10.2% 10.8% 5.8% 0.1% 32.7% 18.6% 30.3% -3.5% 2.1% 4.7% 36.0% Major Blue Chips (WMBC) Standard Shares -24.5% -16.9% -12.5% 24.0% 20.4% 33.9% 17.6% 29.0% -0.7% 1.0% 8.0% 38.9% Int'l Blue Chips (WIBC) Standard Shares -14.5% -24.2% -17.6% 34.3% 6.1% 1.5% 20.7% 13.6% -1.6% 28.2% -3.9% 17.2% Institutional Shares -14.6% -24.1% -17.6% 34.5% 7.5% -6.4%* - - - - - - ----------------------------------------------------------------------------------------------------------------------------------- *: For the period from July 7, 1997 (inception of offering of institutional shares) to December 31, 1997.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND Mid-Cap stocks outperformed bigger stocks for all of 2002, but in the fourth quarter the reverse was true. In the fourth quarter, the Wright Selected Blue Chip Fund (WSBC), which is managed as a mid-cap blend fund, returned 3.9%, lagging the results of the S&P MidCap 400 (+5.8%), the Russell MidCap Index (+7.9%) and an average of 21 Morningstar MidCap blend funds (+4.7%). For all of 2002, the WSBC Fund lost 17.0%, a smaller decline than the Morningstar fund average (-18.8%), but a little worse than the S&P (-14.5%) and Russell (-16.2%) benchmarks. The relatively strong performance of the lower-priced, lower-quality stocks in the S&P MidCap 400 contributed to the relative shortfall of the WSBC Fund, which is tilted toward the higher-quality stocks in the index. The Fund's stock selection in the industrials, financials and health care sectors hurt its relative performance, while it outperformed significantly in utilities and materials. In absolute terms, several technology stocks were among the Fund's best-performing issues for the quarter (led by Storage Technology with a 104% gain), while the list of laggards included a number of health care names. Even though investors' preference shifted toward lower-quality stocks in Q4, the WMBC Fund is maintaining its leaning toward high-quality stocks. Early in the year, the Fund made transactions that lowered its average market cap, which is still somewhat higher than the S&P 500's. At year-end 2002, the expected earnings growth of the companies in the WMBC was better than that of the S&P 500, while its P/E ratio was about the same. The Fund's sector weights are close to those of its S&P 500 benchmark. WRIGHT MAJOR BLUE CHIP EQUITIES FUND The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the mostly large-cap growth and value stocks in the S&P 500. In the final quarter of 2002, the WMBC Fund returned 3.0%, running behind the 8.4% return earned by the S&P 500, its primary benchmark, and 7.6% for an average of 190 Morningstar large-cap blend funds. For all of 2002, the WMBC Fund lost 24.5%, slightly more than the S&P 500 (-22.1%) and the Morningstar average (-22.6%). Its leaning toward the high-quality and larger companies in the S&P 500 hurt the WMBC Fund's performance relative to the S&P 500 in the fourth quarter, a period when low-quality, low-priced stocks typically led the market higher. (For example, stocks of firms expected to lose money in 2003 rose an average of 44% in price in November, the month when the Fund had its weakest relative performance.) An example of the Fund's high-quality holdings that underperformed in the quarter was Coca-Cola, which lost 8.2%; compare this with the shares of Corning, the S&P 500's best performer in Q4 when it tripled in price off its October low, which is expected to lose money in 2003. The Fund's performance was also hurt by its position in Tenet Healthcare (since sold), which declined almost 67% after questions arose about some of its billing practices. The biggest positive contributors to the Fund's Q4 performance were its positions in Microsoft (+18%) and Verizon (+43%). For the year, the Fund's efforts to control benchmark risk resulted in its performance tracking closely with that of the S&P 500. Even though investors' preference shifted toward lower-quality stocks in Q4, the WMBC Fund is maintaining its leaning toward high-quality stocks. Early in the year, the Fund made transactions that lowered its average market cap, which is still somewhat higher than the S&P 500's. At year-end 2002, the expected earnings growth of the companies in the WMBC was better than that of the S&P 500, while its P/E ratio was about the same. The Fund's sector weights are close to those of its S&P 500 benchmark. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND In the second half of 2002, international stocks in the aggregate lagged the performance of the U.S. stock market despite some help from a weakening dollar. For the full year, however, foreign markets provided better dollar returns than the U.S. market. The Wright International Blue Chip Fund (WIBC) returned 6.0% in the fourth quarter of 2002, a little behind the 6.5% return for the MSCI world ex U.S. index but better than the 5.3% average for 66 Morningstar international funds. For all of 2002, the WIBC Fund's loss of 14.5% was a better result than that of the MSCI benchmark (-15.8%) and the Morningstar average (-16.9%). In the fourth quarter, the Fund's modest shortfall compared to the MSCI reflected a lagging performance in the Fund's health care stocks relative to the benchmark as well as underperformance in telecom, a sector where lower quality stocks were strong performers for the period. In the euro region and the U.K., the WIBC Fund had overweight positions in some of the weaker sectors. On the plus side were relatively strong showings of the Fund's holdings in the financials sector, which emphasized banks, and from Japan, where holdings were concentrated in blue chip names that did relatively well in a weak market. WIBC remains underweighted in Japan due to its uncertain economic outlook. The Fund is overweighted in the euro region, anticipating a stronger currency and a positive response in European markets to improving U.S. economic conditions. FIXED-INCOME FUNDS For only the fourth time in the last 11 quarters, returns from the U.S. bond market lagged that of the stock market in the fourth quarter of 2002. In November, the Fed cut its fed funds target rate by 50 basis points to 1.25%, the lowest in 40 years, in an effort to help the economy pull out of what it called a "soft spot." In response, the short end of the Treasury yield curve moved lower in the quarter (-36 basis points for 90-day T-bills; -21 bps for one-year Treasuries). The long end saw a modest rise in yields (+22 bps for the ten-year Treasury, to 3.82%, although early in the quarter its yield reached a 40-year low under 3.60%). This action may have been due more to increased investor interest in stocks than to heightened inflation fears. A tightening of corporate spreads in the quarter was also in keeping with a more confident stock market. Lehman Brothers' U.S. Aggregate bond index had a 1.6% return in the quarter, led by a 3.3% return in corporate bonds. Within the corporate sector, lower-quality issues had the best returns. Treasuries lagged with a 0.5% return for the quarter, although for the year they were the top contributor to the Aggregate's stock-like 10.3% return. Mortgage-backed issues returned about 1.4% for the fourth quarter. WIS expects interest rates to move higher in 2003. Accelerating inflation is not expected to be a threat any time soon, in our view. (In fact, recently there has been more concern about the possibility of deflation, which we don't see as very likely either.) We do expect, however, that investors will begin to anticipate Fed tightening by as soon as mid-year. Although the Fed funds rate may move up by as little as 25-50 basis points this year, the short end of the yield curve could move up by as much as 100 bps. Bonds are not likely to match their strong 2002 performance this year. The yield on the benchmark ten-year Treasury will probably be closer to 5% than 4% by year-end, which would result in a flat to slightly negative return at that maturity. Spread products should do better, with the narrowing of corporate spreads that started in the fourth quarter continuing as confidence in the recovery takes hold.
2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 Total Return Year Year Year Year Year Year Year Year Year Year Year Year ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Money Market (WTMM) 1.6% 3.7% 5.4% 4.3% 4.7% 4.8% 4.9% 5.3% 3.6% 2.5% 3.3% n.a. U.S. Gov. Near-Term Bonds (WNTB) 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9% 11.9% -3.1% 8.0% 6.3% 13.1% U.S. Gov. Intermediate Bonds (WUSGI) 8.1% 5.4% 12.6% -4.0% 10.0% 9.1% -1.2% 28.2% -8.6% 15.9% 7.1% 17.6% Total Return Bonds (WTRB) 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9% 22.0% -6.6% 11.0% 7.1% 15.4% Current Income (WCIF) Standard Shares 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4% 17.5% -3.3% 6.6% 6.7% 15.3% Institutional Shares 8.1% 7.3% 10.6% 0.6% 6.6% 4.4%* - - - - - - ----------------------------------------------------------------------------------------------------------------------------------- *: For the period from July 7, 1997 (inception of offering of institutional shares) to December 31, 1997.
WRIGHT U.S. TREASURY MONEY MARKET FUND In the fourth quarter of 2002, the Federal Reserve cut its benchmark interest rate by 50 basis points to 1.25%, the lowest in 40 years. The yield on 90-day Treasury bills dropped to the 1.2% range in response to the Fed's move. The Wright U.S. Treasury Money Market Fund (WTMM) returned 0.4% for the period, about the same as 90-day T-bills and a little ahead of the 0.2% reported for an average of Treasury money market funds. For all of 2002, WTMM's 1.6% return compared to 1.7% for T-bills and 1.1% for the average Treasury money market fund. Another rate cut by the Fed is possible early in 2003, suggesting that the return on money market funds isn't likely to improve in the current quarter. Short-term rates could move higher, and money market returns improve, by the end of the year, however, as investors anticipate Fed tightening in a stronger economic environment. WRIGHT U.S. GOVERNMENT NEAR TERM FUND The Wright U.S. Government Near-Term Fund (WNTB) returned 0.8% in the third quarter of 2002, in line with the 0.9% return for both the Lehman 1-3 year government bond index and an average of 31 Morningstar government bond funds with an average maturity of 1-3 years. This Fund provides a good alternative to money market funds, which returned only about 0.2% (based on an average of about 900 funds) in the quarter. The WNTB returned 5.4% for all of 2002, compared to 6.0% for the Lehman benchmark, 5.5% for the Morningstar average and 1.2% for the average money market fund. This Fund is invested 24% in Treasury securities, 68% in Government Agency issues, and 6% in mortgage-backed issues, with 2% in cash and accrued interest. The Fund had a duration of 1.5 years at the end of 2002, a little shorter than the Lehman 1-3 year government index's 1.6 years. Low Treasury yields favor the continued use of spread products going forward. WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND The Wright U.S. Government Intermediate Fund (WUSGI), which is positioned as an intermediate maturity fund, returned 0.8% for the fourth quarter, compared to 1.0% for the Lehman U.S. government intermediate bond index and 0.9% for a Morningstar average of 57 Treasury bond funds. For all of 2002, this Fund (formerly called the Wright U.S. Treasury Bond Fund until Q2) returned 8.1%, compared to 9.6% for the Lehman government intermediate average and 9.4% for the Morningstar benchmark. The Fund, which until the second quarter of this year held only Treasury bonds, is now more than half invested in government agency issues and also has a small position in mortgage-backed issues. These positions in sectors that did better than Treasuries benefited the Fund in the quarter. Its slight shortfall compared to the Lehman benchmark for the period was due to the effect of fund fees, as well as a slightly long duration in its Treasury holdings during a period when shorter maturities performed better. The Fund's overall duration held steady at 2.9 years during the quarter, slightly shorter than the benchmark's 3.2 years. With bond yields expected to rise in 2003, the Fund is maintaining a bias toward short duration and spread products. WRIGHT TOTAL RETURN BOND FUND In the fourth quarter of 2002, the Wright Total Return Bond Fund (WTRB), a diversified bond fund, returned 1.4%, a little behind the Lehman U.S. Aggregate Bond Composite's 1.6% return (a difference that can be attributed to expenses and short-term cash holdings) but considerably better than the 1.0% return for Morningstar's average of 335 total return bond funds. For the year, WTRB returned 9.0%, behind the 10.3% return for the Lehman benchmark but exceeding the 8.3% return from the Morningstar average. The Fund's duration declined over the quarter to 3.4 years, compared to the Lehman Aggregate's 3.8 years. Compared to the Lehman benchmark, at quarter end WTRB was underweight in Treasuries (16% of portfolio holdings) and overweight in Corporate issues (32%). This allocation helped the Fund's performance during the quarter, as did a move to increase its holdings in carefully selected lower-quality corporate issues. The Fund also held mortgage-backed (32%), agency (14%), and asset-backed (5%) issues. Anticipating an improving economy and higher interest rates ahead, the Fund will maintain its tilt toward a short duration and spread products. WRIGHT CURRENT INCOME FUND The Wright Current Income Fund (WCIF) is invested almost entirely in GNMA issues (mortgage-based securities, known as Ginnie Maes with explicit backing from the Federal government). Returns on Ginnie Maes lagged the Lehman Aggregate return in the fourth quarter as low mortgage rates kept the prepayment risk high. For the latest three months, WCIF returned 1.4%, matching the return of the Lehman Ginnie Mae index and exceeding the 0.8% for an average of 86 Morningstar government mortgage funds. For the full year, WCIF returned 7.7%, behind the 8.7% return for the Lehman benchmark and the 8.1% for the Morningstar average. In the fourth quarter, the WCIF Fund increased its position in lower-coupon issues. This was a positive move as discount bonds outperformed during this period of prepayment risk. With the economy expected to improve, WIS anticipates that interest rates will rise in 2003. If this happens, the Fund would look for opportunities to shift to higher coupon issues, which do better in a rising rate environment. At year-end 2002, the WCIF Fund had an indicated annual yield of 4.9% with no credit risk, making it attractive for income-oriented investors. U.S. SECURITIES MARKETS ------------------------------------------------------- The Dow Jones Industrial Average chart shows the point changes in the average which consists of 30 major NYSE industrial companies and is a price-weighted arithmetic average, with the divisor adjusted for stock splits. The yield chart shows the basis point changes in the U.S. Treasury bond which is the benchmark U.S. Treasury bond with a maturity of 10 years. The following plotting points are used for comparison in the mountain charts. Date Dow Jones U.S. 10 Year Industrial Average Treasury Bond Yield 12/31/93 3754.09 5.83% 12/31/94 3834.44 7.84% 12/31/95 5117.12 5.58% 12/31/96 6448.27 6.43% 12/31/97 7908.25 5.75% 12/31/98 9181.43 4.65% 12/31/99 11,497.12 6.44% 12/31/00 10,786.85 5.11% 12/31/01 10,021.50 5.00% 12/31/02 8,341.63 3.82% -------------------------------------------------------------------------------- PERFORMANCE SUMMARIES -------------------------------------------------------------------------------- IMPORTANT *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. The Total Investment Return is the percent return of an initial $10,000 investment made at the beginning of the period to the ending redeemable value assuming all dividends and distributions are reinvested. After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Prior to March, 2002, the benchmark for the Wright International Blue Chip Equities Fund (WIBC) was the FT/S&P Actuaries World ex U.S. Index. This index has now been revamped to include all markets covered by FTSE which includes many emerging markets. The Fund has determined that since the information needed for proper comparison is no longer available for FT/S&P, the MSCI Developed World ex U.S. Index is now a more appropriate benchmark. Also prior to March 2002, the benchmark for the Wright U.S. Government Intermediate Fund (WUSGI) (formerly U.S. Treasury Fund) was the Lehman Treasury Bond Index. During the second quarter of 2002, the Fund was repositioned as an intermediate maturity fund and its name was changed accordingly. At the time, the benchmark was also changed to the Lehman Government Intermediate Bond Index. Indices reflect no deductions for fees, expenses or taxes. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. WRIGHT SELECTED BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ----------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs ----------------------------------------------------------------------------------------------------------------------------- WSBC - Return before taxes -16.98% -2.64% 5.86% - Return after taxes on distributions -17.57% -4.99% 3.33% - Return after taxes on distributions and sales of fund shares -17.57% -4.99% 3.33% S&P MidCap 400 -14.51% +6.41% +11.96%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED BLUE CHIP EQUITIES FUND on 12/31/92 would have grown to $17,668 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Selected S&P MidCap Blue Chip Fund 400 12/31/92 $10,000 $10,000 12/31/93 $10,206 $11,389 12/31/94 $ 9,847 $10,985 12/31/95 $12,835 $14,375 12/31/96 $15,218 $17,127 12/31/97 $20,194 $22,645 12/31/98 $20,222 $26,957 12/31/99 $21,386 $30,913 12/31/2000 $23,684 $36,312 12/31/2001 $21,280 $36,102 12/31/2002 $17,668 $30,864 ------------------------------------------------------------------------------- WRIGHT MAJOR BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return --------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs ------------------------------------------------------------------------------------------------------------------------------ WMBC - Return before taxes -24.50% -3.91% 5.25% - Return after taxes on distributions -24.58% -4.57% 2.56% - Return after taxes on distributions and sales of fund shares -24.58% -4.57% 2.56% S&P 500 -22.10% -0.59% 9.34%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT MAJOR BLUE CHIP EQUITIES FUND on 12/31/92 would have grown to $16,682 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Major Blue Chip Fund S&P 500 12/31/92 $10,000 $10,000 12/31/93 $10,100 $11,003 12/31/94 $10,026 $11,153 12/31/95 $12,933 $15,329 12/31/96 $15,213 $18,839 12/31/97 $20,365 $25,116 12/31/98 $24,524 $32,279 12/31/99 $30,398 $39,062 12/31/2000 $26,582 $35,504 12/31/2001 $22,096 $31,303 12/31/2002 $16,682 $24,385 -------------------------------------------------------------------------------- WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND-- Standard Shares Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ---------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs ------------------------------------------------------------------------------------------------------------------------------- WIBC - Return before taxes -14.51% -5.31% 2.95% - Return after taxes on distributions -14.51% -6.11% 2.10% - Return after taxes on distributions and sales of fund shares -14.51% -6.11% 2.10% MSCI World ex US Index -15.80% -2.72% 4.17%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT INT'L BLUE CHIP EQUITIES FUND - STANDARD SHARES on 12/31/92 would have grown to $13,370 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Int'l Blue Chip MSCI World Ex U.S. Equities Fund Index 12/31/92 $10,000 $10,000 12/31/93 $12,820 $13,220 12/31/94 $12,610 $14,190 12/31/95 $14,330 $15,810 12/31/96 $17,300 $16,900 12/31/97 $17,560 $17,280 12/31/98 $18,640 $20,520 12/31/99 $25,030 $26,260 12/31/2000 $20,630 $22,740 12/31/2001 $15,640 $17,880 12/31/2002 $13,370 $15,050 -------------------------------------------------------------------------------- WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND-- Institutional Shares Growth of $10,000 Invested 8/1/97* Through 12/31/02
Average Annual Total Return --------------------------------------------- Last 1 Yr Last 5 Yrs Since Inception* -------------------------------------------------------------------------------------------------------------------------------- WIBC - Return before taxes -14.55% -5.01% -5.72% - Return after taxes on distributions -14.55% -6.57% 7.29% - Return after taxes on distributions and sales of fund shares -14.55% -6.57% -7.29% MSCI World ex US Index -15.80% -2.72% -4.34%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT INT'L BLUE CHIP EQUITIES FUND - INSTITUTIONAL SHARES on 7/31/97 would have declined to $7,342 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Int'l Blue Chip MSCI World Ex U.S. Equities Fund Index 07/31/97 $10,000 $10,000 12/31/97 $9,495 $9,028 12/31/98 $10,211 $10,721 12/31/99 $13,733 $13,720 12/31/2000 $11,314 $11,881 12/31/2001 $ 8,592 $ 9,342 12/31/2002 $ 7,342 $ 7,863 -------------------------------------------------------------------------------- WRIGHT U.S. GOVERNMENT NEAR TERM FUND Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WNTB - Return before taxes 5.42% 5.40% 5.30% - Return after taxes on distributions 4.05% 3.43% 3.11% - Return after taxes on distributions and sales of fund shares 3.66% 3.33% 3.11% Lehman Govt. 1-3 Year 6.01% 6.51% 6.08%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT U.S.GOVERNMENT NEAR TERM FUND on 12/31/92 would have grown to $16,770 by December 31,2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright U.S. Government Lehman Gov't Near Term Bond Fund 1-3 Years 12/31/92 $10,000 $10,000 12/31/93 $10,800 $10,540 12/31/94 $10,460 $10,590 12/31/95 $11,710 $11,740 12/31/96 $12,170 $12,340 12/31/97 $12,890 $13,160 12/31/98 $13,660 $14,070 12/31/99 $13,920 $14,490 12/31/2000 $14,890 $15,680 12/31/2001 $15,910 $17,020 12/31/2002 $16,770 $18,040 -------------------------------------------------------------------------------- WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ------------------------------------------ Last 1 Yr Last 5 Yrs Last 10 Yrs ----------------------------------------------------------------------------------------------------------------------------------- WUSGI - Return before taxes 8.07% 6.25% 7.07% - Return after taxes on distributions 5.77% 3.88% 4.55% - Return after taxes on distributions nd sales of fund shares 5.53% 3.88% 4.48% Lehman Government Intermediate Bond Index 9.64% 7.44% 6.91% Lehman Treasury Bond Index 11.79% 7.75% 7.54%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND on 12/31/92 would have grown to $19,810 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright U.S. Lehman Treasury Lehman Government Government Bond Index Intermediate Fund Intermediate Fund 12/31/92 $10,000 $10,000 $10,000 12/31/93 $11,590 $11,070 $10,820 12/31/94 $10,590 $10,690 $10,630 12/31/95 $13,580 $12,660 $12,160 12/31/96 $13,400 $13,000 $12,650 12/31/97 $14,620 $14,240 $13,630 12/31/98 $16,080 $15,670 $14,790 12/31/99 $15,440 $15,270 $14,860 12/31/2000 $17,380 $17,330 $16,420 12/31/2001 $18,320 $18,500 $17,800 12/31/2002 $19,810 $20,690 $19,510 -------------------------------------------------------------------------------- WRIGHT TOTAL RETURN BOND FUND Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ------------------------------------------ Last 1 Yr Last 5 Yrs Last 10 Yrs ----------------------------------------------------------------------------------------------------------------------------- WTRB - Return before taxes 9.03% 5.91% 6.40% - Return after taxes on distributions 6.90% 3.64% 3.99% - Return after taxes on distributions and sales of fund shares 6.15% 3.60% 3.93% Lehman Aggregate Bond Index 10.26% 7.55% 7.51%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT TOTAL RETURN BOND FUND on 12/31/92 would have grown to $18,590 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Total Retun Lehman Aggregate Bond Bond Fund Index 12/31/92 $10,000 $10,000 12/31/93 $11,100 $10,970 12/31/94 $10,370 $10,650 12/31/95 $12,650 $12,620 12/31/96 $12,770 $13,080 12/31/97 $13,950 $14,340 12/31/98 $15,280 $15,590 12/31/99 $14,680 $15,460 12/31/2000 $16,240 $17,260 12/31/2001 $17,050 $18,720 12/31/2002 $18,590 $20,640 -------------------------------------------------------------------------------- WRIGHT CURRENT INCOME FUND-- Standard Shares Growth of $10,000 Invested 1/1/92 Through 12/31/02
Average Annual Total Return ----------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs ------------------------------------------------------------------------------------------------------------------------------- WCIF - Return before taxes 7.70% 6.39% 6.46% - Return after taxes on distributions 5.51% 3.97% 3.88% - Return after taxes on distributions and sales of fund shares 5.07% 3.89% 3.85% Lehman GNMA Index 8.69% 7.33% 7.30%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT INCOME FUND - STANDARD SHARES on 12/31/92 would have grown to $18,700 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Current Lehman GNMA Income Fund Index 12/31/92 $10,000 $10,000 12/31/93 $10,660 $10,660 12/31/94 $10,310 $10,500 12/31/95 $12,110 $12,290 12/31/96 $12,640 $12,970 12/31/97 $13,720 $14,200 12/31/98 $14,610 $15,190 12/31/99 $14,690 $15,480 12/31/2000 $16,200 $17,200 12/31/2001 $17,360 $18,610 12/31/2002 $18,700 $20,230 -------------------------------------------------------------------------------- WRIGHT CURRENT INCOME FUND-- Institutional Shares Growth of $10,000 Invested 8/1/97* Through 12/31/02
Average Annual Total Return --------------------------------------- Last 1 Yr Last 5 Yrs Since Inception* -------------------------------------------------------------------------------------------------------------------------------- WCIF - Return before taxes 8.10% 6.59% 6.83% - Return after taxes on distributions 5.79% 4.09% 4.36% - Return after taxes on distributions and sales of fund shares 5.33% 4.01% 5.15% Lehman GNMA Index 8.69% 7.33% 7.30%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT INCOME BOND FUND - INSTITUTIONAL SHARES on 7/31/97 would have grown to $14,206 by December 31, 2002. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Current Lehman GNMA Income Fund Index 07/31/97 $10,000 $10,000 12/31/97 $10,323 $10,335 12/31/98 $11,000 $11,055 12/31/99 $11,065 $11,266 12/31/2000 $12,243 $12,518 12/31/2001 $13,142 $13,544 12/31/2002 $14,206 $14,723 -------------------------------------------------------------------------------- WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - December 31, 2002 Shares Value -------- ------- EQUITY INTERESTS -- 99.7% AUTOMOBILES & COMPONENTS -- 1.3% Superior Ind Int.................... 2,400 $ 99,264 Gentex Corp*........................ 10,325 326,683 ----------- $ 425,947 ----------- BANKS -- 8.3% City National Corp.................. 7,260 $ 319,367 Commerce Bancorp Inc/NJ............. 7,025 303,410 Greenpoint Financial Corp........... 10,360 468,065 Hibernia Corp Class A............... 8,995 173,244 M&T Bank Corporation................ 6,250 495,938 Natl Commerce Financial Corp........ 17,960 428,346 Roslyn Bancorp Inc.................. 8,910 160,647 Sovereign Bancorp Inc............... 26,260 368,953 ----------- $ 2,717,970 ----------- CAPITAL GOODS -- 7.3% Agco Corp*.......................... 7,275 $ 160,778 Ametek Inc New...................... 3,745 144,145 Donaldson Co. Inc................... 7,495 269,820 Fastenal Co......................... 5,625 210,319 Hubbell (Harvey) Inc................ 6,560 230,518 Jacobs Engineering*................. 8,680 309,008 L-3 Communications Hldgs*........... 8,455 379,714 Pentair Inc......................... 3,745 129,390 SPX Corp*........................... 6,525 244,361 Teleflex Inc........................ 2,805 120,306 Vishay Intertechnology Inc*......... 18,300 204,594 ----------- $ 2,402,953 ----------- COMMERCIAL SERVICES & SUPPLIES -- 3.6% Ceridan Corp-New*................... 10,325 $ 148,887 Choicepoint Inc*.................... 8,135 321,251 DST Systems Inc*.................... 7,325 260,404 Dun & Bradstreet Corp*.............. 5,625 194,006 Manpower Inc........................ 7,405 236,220 ----------- $ 1,160,768 ----------- COMMUNICATIONS EQUIPMENT -- 0.8% Advanced Fibre Communication*....... 7,015 $ 117,010 Harris Corp......................... 5,900 155,170 ----------- $ 272,180 ----------- COMPUTERS & PERIPHERALS -- 1.0% Storage Technology Corp*............ 15,945 $ 341,542 ----------- CONSUMER DURABLES & APPAREL -- 3.4% Coach Inc*.......................... 8,455 $ 278,339 Furniture Brands Intl Inc*.......... 6,100 145,485 Lennar Corp......................... 5,770 297,732 Mohawk Inds Inc*.................... 5,155 293,577 Timberland Company*................. 2,700 96,147 ----------- $ 1,111,280 ----------- DIVERSIFIED FINANCIALS -- 5.5% Compass Bancshares IN............... 11,080 $ 346,472 Eaton Vance Corp.................... 8,830 249,448 Edwards A.G. Inc.................... 11,715 386,126 LaBranche & CO Inc*................. 8,730 232,567 Legg Mason Inc...................... 7,495 363,807 New Plan Excel Realty............... 11,480 219,153 ----------- $ 1,797,573 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS-- 0.9% Arrow Electrs Inc Com*.............. 5,640 $ 72,136 Diebold, Inc........................ 5,155 212,489 ----------- $ 284,625 ----------- ENERGY -- 7.6% Ensco International Inc............. 17,820 $ 524,799 Equitable Resources Inc............. 8,455 296,263 Murphy Oil Corp..................... 5,610 240,389 Patterson-Uti Energy Inc*........... 7,025 211,944 Smith International Inc*............ 12,665 413,132 Weatherford Intl LTD*............... 9,845 393,111 Western Gas Resources............... 5,155 189,962 XTO Energy Inc...................... 9,280 229,216 ----------- $ 2,498,816 ----------- FOOD & DRUG RETAILING -- 0.6% Whole Foods Market Inc*............. 3,510 $ 185,082 ----------- FOOD, BEVERAGE & TOBACCO -- 4.4% Constellation Brands Inc-A*......... 8,520 $ 202,009 Dean Foods Co. New*................. 9,300 345,030 Dreyer's Grand Ice Cream Inc........ 2,790 197,978 FOOD, BEVERAGE & TOBACCO - continued Smucker Co. (J.M.) new.............. 9,310 370,631 Tyson Foods Inc-CL A................ 28,625 321,173 ----------- $ 1,436,821 ----------- HEALTH CARE EQUIPMENT & SERVICES-- 7.3% Apogent Tech Inc*................... 14,065 $ 292,552 Covance Inc*........................ 13,615 334,793 Dentsply Int'l Inc................. 6,375 237,150 Express Scripts Incl-CL A*.......... 7,495 360,060 First Health Group Corp*............ 7,025 171,059 Health Net Inc*..................... 8,920 235,488 Lifepoint Hospitals Inc*............ 4,915 147,111 Oxford Health Plans*................ 8,060 293,787 Schein Henry Inc*................... 2,575 115,875 Triad Hospitals Incorporated*....... 7,495 223,576 ----------- $ 2,411,451 ----------- HOTELS, RESTAURANTS & LEISURE -- 2.9% Brinker International*.............. 13,130 $ 423,443 Gtech Holdings Corp*................ 6,010 167,439 International Speedway Corp-Cl A.... 4,695 175,077 Park Place Entertainment*........... 23,465 197,106 ----------- $ 963,065 ----------- HOUSEHOLD & PERSONAL PRODUCTS -- 0.8% Dial Corporation.................... 12,675 $ 258,190 ----------- INSURANCE -- 4.5% American Financial Group, Inc....... 10,650 $ 245,696 Everest Re Group Ltd................ 6,560 362,768 Fidelity National Finl Inc.......... 6,560 215,365 Protective Life Corp................ 13,130 361,338 Radian Group Inc.................... 7,920 294,228 ----------- $ 1,479,395 ----------- MATERIALS -- 4.6% Airgas Inc*......................... 13,935 $ 240,379 H.B. Fuller Co...................... 8,775 227,097 Martin Marietta Materials*.......... 2,805 86,001 RPM International Inc............... 18,585 283,979 Schulman (A.) Inc................... 8,445 157,161 Sonoco Products..................... 7,260 166,472 Valspar Corp........................ 5,825 257,349 Wausau-Mosinee Paper Corp........... 7,635 85,665 ----------- $ 1,504,103 ----------- MEDIA -- 4.1% Entercom Communications Corp*....... 4,220 $ 198,002 Harte-Hanks Inc..................... 13,185 246,164 Macrovision Corp*................... 4,180 67,047 Scholastic Corp*.................... 3,285 118,096 Washington Post-Cl B................ 570 420,660 Westwood One Inc*................... 7,975 297,946 ----------- $ 1,347,915 ----------- PHARMACEUTICALS & BIOTECHNOLOGY -- 5.1% Barr Laboratories Inc*.............. 7,495 $ 487,850 Gilead Sciences Inc*................ 11,620 395,080 Idec Pharmaceuticals Corp*.......... 10,785 357,738 Ivax Corp*.......................... 15,655 189,895 Mylan Laboratories.................. 7,010 244,649 ----------- $ 1,675,212 ----------- RETAILING -- 5.9% 99 Cents Only Stores*............... 8,960 $ 240,666 Abercrombie & Fitch CO Cl A*........ 4,140 84,704 Barnes & Noble Inc*................. 8,455 152,782 CDW Computer Centers Inc*........... 7,495 328,656 Claire's Stores. Inc................ 5,335 117,743 Michaels Stores Inc*................ 2,380 74,494 Neiman Marcus Grp CL A*............. 5,155 156,660 Petsmart Inc*....................... 10,285 176,182 Ross Stores Inc.................... 7,640 323,860 Williams - Sonoma Inc*.............. 10,895 295,799 ----------- $ 1,951,546 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 2.6% Fairchild Semicon Intl-CL A*........ 7,495 $ 80,271 International Rectifier Corp*....... 4,685 86,485 Lam Research Corp*.................. 13,130 141,804 Microchip Technology Inc............ 16,430 401,714 Rf Micro Devices Inc*............... 17,350 127,176 ----------- $ 837,450 ----------- SOFTWARE & SERVICES -- 6.7% Affiliated Computer Services Inc*... 9,450 $ 497,543 Henry Jack & Assoc.................. 11,730 141,229 National Instruments Corp*.......... 5,535 179,832 Network Associates*................. 9,330 150,120 Reynolds & Reynolds................. 8,455 215,349 Sybase Inc*......................... 17,165 230,011 Symantec Corp*...................... 13,130 531,502 Synopsys Inc*....................... 5,805 267,901 ----------- $ 2,213,487 ----------- TELECOMMUNICATION SERVICES -- 0.7% Telephone & Data Systems............ 4,700 $ 220,994 ----------- TRANSPORTATION -- 2.8% C.H. Robinson Worldwide Inc......... 9,665 $ 301,548 Expeditors Intl Wash Inc............ 5,480 178,922 Hunt J.B. Transprt Svcs Inc*........ 5,960 174,628 Republic Services*.................. 12,285 257,739 ----------- $ 912,837 ----------- UTILITIES -- 7.0% Hawaiian Electric Inds.............. 6,560 $ 288,504 Northeast Utilities................. 6,100 92,537 Nstar............................... 8,455 375,317 Ocean Energy Inc.................... 10,780 215,277 Questar Corporation................. 16,885 469,741 Scana Corporation................... 17,270 534,679 Wisconsin Energy.................... 13,375 337,050 ----------- $ 2,313,105 ----------- TOTAL EQUITY INTERESTS-- 99.7% (identified cost, $33,468,800) $ 32,724,307 OTHER ASSETS, LESS LIABILITIES -- 0.3% 92,934 ----------- NET ASSETS -- 100% $ 32,817,241 ============ * Non-income-producing security. See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments at value (identified cost, $33,468,800) (Note 1A) $32,724,307 Cash.................................... 41,440 Receivable for fund shares sold......... 20,923 Receivable from investment adviser...... 32,077 Dividend receivable..................... 30,021 Other assets............................ 6,023 ------------ Total assets.......................... $32,854,791 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 25,924 Transfer agent fee payable.............. 2,472 Accrued expenses and other liabilities.. 9,154 ------------ Total liabilities..................... $ 37,550 ------------ NET ASSETS................................ $32,817,241 ============= NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $32,590,003 Accumulated undistributed net realized gain on investments (computed on the basis of identified cost)....................... 45,939 Unrealized depreciation of investments (computed on the basis of identified cost) (744,493) Undistributed net investment income..... 925,792 ------------ Net assets applicable to outstanding shares................................ $32,817,241 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 3,540,354 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 9.27 ============= (A) The portfolio was liquidated on December 20, 2002 (see Note 1). See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Income - Dividend income........................ $ 6,771 Income allocated from portfolio (A).... 326,628 Expenses allocated from portfolio (A) . (369,231) ------------ Investment loss....................... $ (35,832) ------------ Expenses - Investment adviser fee (Note 2)........ $ 5,981 Administrator fee (Note 2)............. 9,208 Compensation of Trustees not employees of the investment adviser or administrator... 4,867 Custodian fee.......................... 25,301 Distribution expenses (Note 3)......... 102,637 Transfer and dividend disbursing agent fees 28,270 Audit services......................... 15,713 Legal services......................... 3,807 Printing............................... 3,810 Registration costs .................... 13,275 Miscellaneous.......................... 6,272 ------------ Total expenses........................ $ 219,141 ------------ Deduct - Reduction of custodian fee (Note 1D)... $ (5,969) Reduction of distribution expenses by principal underwriter (Note 3) .... (37,143) Allocation of expenses to investment adviser.................... (32,077) ------------ Total deductions...................... $ (75,189) ------------ Net expenses........................ $ 143,952 ------------ Net investment loss............... $ (179,784) ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions from portfolio (identified cost basis) (A).. $ 3,548 Change in unrealized depreciation of investments ........................ (7,560,843) ------------ Net realized and unrealized loss of investments............................ $(7,557,295) ------------ Net decrease in net assets from operations .......................... $(7,737,079) ============= See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment loss........................................................ $ (179,784) $ (188,134) Net realized gain on investments........................................... 3,548 1,782,136 Change in unrealized depreciation of investments........................... (7,560,843) (7,272,772) ------------ ------------ Net decrease in net assets resulting from operations..................... $ (7,737,079) $ (5,678,770) ------------ ------------ Distributions to shareholders (Note 1F) - From net realized gain..................................................... $ (1,680,807) $ (2,013,498) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 4).. $ (3,647,530) $ 2,373,684 ------------ ------------ Net decrease in net assets................................................... $(13,065,416) $ (5,318,584) NET ASSETS: At beginning of year......................................................... 45,882,657 51,201,241 ------------ ------------ At end of year............................................................... $ 32,817,241 $ 45,882,657 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR.................................................................. $ 925,792 $ 924,379 ============== ==============
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS 2002(5) 2001(5) 2000(5) 1999 1998 ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of year.......... $ 11.580 $ 13.430 $ 15.130 $ 17.630 $ 19.200 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment (loss) income* ......... $ (0.046) $ (0.045) $ (0.041) $ 0.181 $ 0.095 Net realized and unrealized (loss) gain (1.831) (1.322) 1.638 0.638 (0.139) --------- ---------- -------- -------- -------- Total income (loss) from investment operations......... $ (1.877) $ (1.367) $ 1.597 $ 0.819 $ (0.044) --------- --------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ - $ - $ (0.055) $ (0.090) Distributions from capital gains....... (0.433) (0.483) (3.297) (3.264) (1.436) --------- --------- -------- -------- -------- Total distributions................ $ (0.433) $ (0.483) $ (3.297) $ (3.319) $ (1.526) --------- --------- -------- -------- -------- Net asset value, end of year................ $ 9.270 $ 11.580 $ 13.430 $ 15.130 $ 17.630 ========== ========== ========== ========== ========== Total return(1) ............................ (16.98%) (10.15%) 10.75% 5.75% 0.14% Ratios/Supplemental Data*: Net assets, end of year (000 omitted).. $ 32,817 $ 45,883 $ 51,201 $ 74,547 $220,965 Ratio of net expenses to average net assets (2) 1.26% 1.26% 1.26% 1.16% 1.11% Ratio of net expenses after custodian fee reduction to average net assets(4).. 1.25%(2) 1.25%(2) 1.25%(2) 1.15%(2) 1.11%(2) Ratio of net investment income (loss) to average net assets.......................... (0.44%) (0.38%) (0.28%) 0.36% 0.46% Portfolio turnover rate .............. 119%(3) 67%(3) 55%(3) 106%(3) 78%(3) --------------------------------------------------------------------------------------------------------------------------------- * For the years ended December 31, 2002, 2001, 2000 and 1999, 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 (loss) per share and the ratios would have been as follows: 2002(5) 2001 2000 1999 -------- - ------- ------ ------- Net investment (loss) income per share. $ (0.064) $ (0.057) $ (0.051) $ 0.151 ========== ========== ========== ========== Ratios (As a percentage of average net assets): Expenses........................... 1.43%(2) 1.37% 1.33% 1.22% ========== ========== ========== ========== Expenses after custodian fee reduction(4) 1.42%(2) 1.36%(2) 1.32%(2) 1.21%(2) ========== ========== ========== ========== Net investment income (loss)....... (0.61%)(2) (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)Includes each fund's share of its corresponding portfolio's allocated expenses. (3)Represents portfolio turnover rate of the fund's corresponding portfolio. (4)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio 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. (5)Certain per share amounts are based on average shares outstanding.
See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - December 31, 2002 Shares Value -------- -------- EQUITY INTERESTS -- 99.5% AUTOMOBILES & COMPONENTS -- 0.8% Cooper Industries Ltd-Cl A.......... 5,980 $ 217,971 Johnson Controls.................... 3,780 303,043 ----------- $ 521,014 ----------- BANKS -- 7.5% Bank of America Corp................ 34,220 $ 2,380,684 Bank One Corp....................... 19,480 711,994 BB&T Corporation.................... 7,340 271,507 Fleet Boston Financial Corp......... 17,880 434,484 Golden West Financial............... 3,750 269,288 Wachovia Corp....................... 16,960 618,022 Washington Mutual Inc............... 9,300 321,129 ----------- $ 5,007,108 ----------- CAPITAL GOODS -- 8.3% 3M Company.......................... 5,490 $ 676,917 American Standard Companies*........ 3,840 273,178 Deere and Company................... 4,430 203,116 Fortune Brands Inc.................. 4,735 220,225 General Electric Co................. 83,050 2,022,268 Illinois Tool Works................. 7,090 459,857 ITT Industries Inc.................. 3,970 240,939 Power One Inc*...................... 12,700 72,009 Tyco International Ltd.............. 19,010 324,691 United Technologies................. 17,180 1,064,129 ----------- $ 5,557,329 ----------- COMMERCIAL SERVICES & SUPPLIES -- 2.0% Apollo Group Inc - Cl A*............ 6,230 $ 274,120 Avery Dennison Corp................. 7,890 481,921 Cintas Corp......................... 4,070 186,201 Ecolab Inc.......................... 3,420 169,290 First Data Corporation.............. 6,810 241,142 ----------- $ 1,352,674 ----------- COMMUNICATIONS EQUIPMENT -- 2.0% Cisco System Inc*................... 77,050 1,009,354 Qualcomm Inc*....................... 8,280 301,309 ----------- $ 1,310,663 ----------- COMPUTER & PERIPHERALS -- 2.4% Dell Computer Corp*................. 49,330 $ 1,319,084 Xerox Corp*......................... 36,190 291,330 ----------- $ 1,610,414 ----------- CONSUMER DURABLES & APPAREL -- 1.1% Eastman Kodak....................... 7,460 $ 261,398 Liz Claiborne Inc................... 11,390 337,714 Reebok Intl Ltd*.................... 3,530 103,782 ----------- $ 702,894 ----------- DIVERSIFIED FINANCIALS -- 7.1% American Express Co................. 21,705 $ 767,271 Bear Stearns Companies Inc.......... 8,670 514,998 Citigroup Inc....................... 39,190 1,379,096 Countrywide Financial Corp.......... 10,250 529,413 Goldman Sachs Group Inc............. 6,300 429,030 JP Morgan Chase & Co................ 12,220 293,280 Providian Financial*................ 32,340 209,887 Schwab (Charles) Corp............... 14,160 153,636 State Street Corp................... 11,410 444,990 ----------- $ 4,721,601 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS -- 0.3% Sanmina-Sci Corp.................... 33,330 $ 149,651 ----------- ENERGY -- 6.9% Apache Corporation.................. 5,110 $ 291,219 BJ Services Co*..................... 6,150 198,707 Burlington Resources Inc............ 6,390 272,534 EOG Resources Inc................... 6,460 257,883 Exxon Mobil Corp.................... 73,502 2,568,160 Halliburton CO...................... 15,150 283,457 Occidental Petroleum................ 16,570 471,417 Schlumberger Ltd.................... 6,110 257,170 ----------- $ 4,600,547 ----------- FOOD & DRUG RETAILING -- 0.5% Sysco Corp.......................... 11,430 $ 340,500 ----------- FOOD, BEVERAGE & TOBACCO -- 6.1% Adolph Coors Company................ 2,360 $ 144,550 Anheuser Busch Cos Inc.............. 9,000 435,600 Coca Cola Co........................ 22,950 1,005,669 Coca-Cola Enterprises............... 9,540 207,209 Con Agra Inc........................ 12,070 301,871 Pepsico Inc......................... 15,770 665,809 Philip Morris Cos Inc............... 20,350 824,786 Wrigley Wm. Jr. Co.................. 9,080 498,310 ----------- $ 4,083,804 ----------- HEALTH CARE EQUIPMENT & SERVICES -- 2.9% Bard (C.R.) Inc..................... 3,420 $ 198,360 Boston Scientific Corp*............. 11,270 479,200 Thermo Electron*.................... 9,220 185,506 United Health Group Inc............. 4,950 413,325 Zimmer Holdings Inc*................ 16,090 668,057 ----------- $ 1,944,448 ----------- HOTELS, RESTAURANTS & LEISURE -- 0.4% Carnival Corporation................ 10,400 $ 259,480 ----------- HOUSEHOLD & PERSONAL PRODUCTS -- 2.8% Avon Products....................... 6,200 $ 333,994 Clorox Company...................... 7,565 312,056 Procter & Gamble.................... 14,190 1,219,489 ----------- $ 1,865,539 ----------- INSURANCE -- 5.4% AFLAC Inc.......................... 19,240 $ 579,509 Allstate Corp....................... 18,060 668,039 Amer Intl Group Inc................. 19,090 1,104,357 Anthem Inc.......................... 3,670 230,843 Marsh & McLennan Cos................ 9,790 452,396 Metlife Inc......................... 7,410 200,366 Progressive Corp.................... 7,080 351,380 ----------- $ 3,586,890 ----------- MATERIALS -- 2.1% Ball Corporation.................... 4,890 $ 250,319 Bemis Company Inc................... 5,760 285,869 E.I. Dupont de Nemours.............. 11,430 484,632 Int'l Flavors & Fragr............... 5,380 188,838 Sigma-Aldrich....................... 3,790 184,573 ----------- $ 1,394,231 ----------- MEDIA -- 3.6% AOL Time Warner Inc*................ 43,060 $ 564,086 Clear Channel Communications*....... 9,600 357,984 Gannett Co.Inc...................... 6,620 475,316 Viacom, Inc. Class B*............... 24,050 980,278 ----------- $ 2,377,664 ----------- PHARMACEUTICALS & BIOTECHNOLOGY -- 11.7% Amgen Inc........................... 10,805 $ 522,314 Bristol-Myers Squibb................ 20,080 464,852 Forest Labs......................... 3,470 340,823 Genzyme Corp........................ 6,280 185,700 Johnson & Johnson................... 38,650 2,075,892 Merck & Co Inc...................... 30,070 1,702,263 Pfizer Inc.......................... 46,220 1,412,945 Pharmacia Corporation............... 22,870 955,966 Watson Pharmaceuticals Inc.......... 5,200 147,004 ----------- $ 7,807,759 ----------- RETAILING -- 7.0% Bed Bath & Beyond Inc*.............. 6,950 $ 239,984 Ebay Inc*........................... 9,870 669,383 Kohl's Corp*........................ 7,970 445,922 Lowes Cos Inc....................... 14,510 544,125 Nordstrom Inc....................... 16,620 315,281 TJX Companies Inc................... 18,465 360,437 Walmart Stores...................... 41,405 2,091,367 ----------- $ 4,666,499 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.4% Broadcom Corp Cl A*................. 8,440 $ 127,106 Intel Corp.......................... 65,460 1,019,212 Q Logic Corp*....................... 13,020 449,320 ----------- $ 1,595,638 ----------- SOFTWARE & SERVICES - 8.8% Autodesk Inc....................... 9,430 $ 134,849 BMC Software Inc*................... 5,870 100,436 I B M*.............................. 16,140 1,250,850 Intuit Inc*......................... 6,040 283,397 Mercury Interactive Corp*........... 6,150 182,348 Microsoft Corp*..................... 54,980 2,842,466 Oracle Corp*........................ 47,880 517,104 Peoplesoft In*c..................... 10,720 196,176 Yahoo! Inc*......................... 21,290 348,092 ----------- $ 5,855,718 ----------- TELECOMMUNICATION SERVICES -- 4.2% Alltel Corp......................... 12,610 $ 643,110 AT&T Corp........................... 14,681 383,320 AT&T Wireless Services*............. 25,630 144,809 Nextel Comm*........................ 30,870 356,549 Qwest Comm Intl*.................... 26,570 132,850 Verizon Communications.............. 29,095 1,127,431 ----------- $ 2,788,069 ----------- TRANSPORTATION -- 1.4% Amr Corp Del Com*................... 18,390 $ 121,374 Fedex Corporation................... 3,710 201,156 United Parcel Service............... 9,860 621,969 ----------- $ 944,499 ----------- UTILITIES -- 1.8% Calpine Corp*...................... 16,560 $ 53,986 Consolidated Edison Inc............. 5,910 253,066 DTE Energy Company.................. 10,090 468,176 Entergy Corporation................. 4,660 212,449 Southern Company.................... 8,590 243,870 ----------- $ 1,231,547 ----------- TOTAL EQUITY INTERESTS -- 99.5% (identified cost, $70,454,655) $ 66,276,180 OTHER ASSETS, LESS LIABILITIES -- 0.5% 333,291 ----------- NET ASSETS -- 100% $ 66,609,471 ============ * Non-income-producing security. See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments at value (identified cost, $70,454,655) (Note 1A) $66,276,180 Cash.................................... 28,853 Receivable for investments sold......... 99,865 Receivable for fund shares sold......... 100,094 Dividends and interest receivable....... 127,381 Other assets............................ 6,826 ------------ Total assets.......................... $66,639,199 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 16,286 Transfer agent fee...................... 3,163 Accrued expenses and other liabilities.. 10,279 ------------ Total liabilities..................... $ 29,728 ------------ NET ASSETS................................ $66,609,471 ============ NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $108,092,369 Accumulated net realized loss on investments (computed on the basis of identified cost).................... (37,108,721) Unrealized depreciation of investments (computed on the basis of identified cost) (4,178,475) Distributions in excess of net investment income...................... (195,702) ------------ Net assets applicable to outstanding shares................................ $66,609,471 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 7,773,991 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 8.57 ============= See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Income - Dividend income........................ $ 1,134,949 Interest income........................ 3,112 ------------ Investment income..................... $ 1,138,061 ------------ Expenses - Investment adviser fee (Note 2)........ $ 467,848 Administrator fee - (Note 2)........... 93,569 Compensation of Trustees not employees of the investment adviser or administrator... 3,576 Custodian fee (Note 1D)................ 76,576 Distribution expenses (Note 3)........ 194,509 Transfer and dividend disbursing agent fees 45,772 Printing............................... 3,810 Audit services......................... 35,124 Legal services......................... 5,006 Registration costs..................... 16,103 Miscellaneous.......................... 10,022 ------------ Total expenses........................ $ 951,915 ------------ Deduct - Reduction of custodian fee (Note 1D)... $ (5,430) ------------ Net expenses........................ $ 946,485 ------------ Net investment income............. $ 191,576 ------------ REALIZED AND UNREALIZED LOSS ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $(16,457,346) Change in unrealized depreciation of investments......................... (5,662,120) ------------ Net realized and unrealized loss of investments......................... $(22,119,466) ------------ Net decrease in net assets from operations............................ $(21,927,890) ============= See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) -------------------------------------------------------------------------------
Year Ended December 31 --------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income (loss)............................................... $ 191,576 $ (85,383) Net realized loss on investments........................................... (16,457,346) (15,909,664) Change in unrealized depreciation of investments........................... (5,662,120) (6,477,084) ------------ ------------ Net decrease in net assets resulting from operations..................... $(21,927,890) $(22,472,131) ------------ ------------ Distributions declared to shareholders - From net investment income................................................. $ (171,114) $ - ------------ ------------ Total distributions...................................................... $ (171,114) $ - ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 4) - Standard shares............................................................ $ (5,030,351) $(19,372,869) Institutional shares (Note 8).............................................. (1,382,497) 246,637 ------------ ------------ Net decrease in net assets from fund share transactions...................... $ (6,412,848) $(19,126,232) ------------ ------------ Net decrease in net assets................................................... $(28,511,852) $(41,598,363) NET ASSETS: At beginning of year......................................................... 95,121,323 136,719,686 ------------ ------------ At end of year............................................................... $ 66,609,471 $ 95,121,323 ============== ============== DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR............................................................... $ (195,702) $ (212,487) ============== ============== See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) -------------------------------------------------------------------------------
Year Ended December 31, -------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002(4) 2001(4) 2000(4) 1999(4) 1998 ----------------------------------------------------------------------------------------------------------------------------- Standard Shares --------------------------------------------------------------- Net asset value, beginning of year.......... $ 11.380 $ 13.690 $ 16.290 $ 13.670 $ 12.020 -------- --------- -------- -------- -------- Income (loss) from investment operations: Net investment income (loss)(1) ....... $ 0.024 $ (0.009) $ (0.001) $ 0.042 $ 0.091 Net realized and unrealized gain (loss) (2.812) (2.301) (2.005) 3.202 2.324 --------- --------- -------- -------- -------- Total income (loss) from investment operations......... $ (2.788) $ (2.310) $ (2.006) $ 3.244 $ 2.415 --------- --------- -------- -------- -------- Less distributions: Dividends from investment income....... $ (0.022) $ - $ (0.010) $ (0.045) $ (0.055) Distributions from capital gains....... - - (0.584) (0.579) (0.710) --------- -------- --------- -------- -------- Total distributions................ $ (0.022) $ - $ (0.594) $ (0.624) $ (0.765) --------- -------- --------- -------- -------- Net asset value, end of year................ $ 8.570 $ 11.380 $ 13.690 $ 16.290 $ 13.670 ========== ========== ========== ========== ========== Total Return(3) ............................ (24.50%) (16.87%) (12.49%) 23.95% 20.43% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).. $ 66,609 $ 93,696 $ 135,262 $ 144,359 $ 50,878 Ratio of net expenses to average net assets 1.22% 1.13% 1.06% 1.05% 1.07%(2) Ratio of net expenses after custodian fee reduction to average net assets(2)(6) 1.22% 1.13% 1.06% 1.05% 1.05%(2) Ratio of net investment income (loss) to average net assets ................. 0.25% (0.08%) (0.00%)(5) 0.27% 0.49% Portfolio turnover rate................ 130% 78% 88% 59% 36% ---------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 1999 and 1998, 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 Net investment income per share. $ 0.034 $ 0.052 ========== ========== Ratios (As a percentage of average net assets): Expenses............................. 1.10% 1.28% ========== ========== Expenses after custodian fee reduction(2) 1.10% 1.26% ========== ========== Net investment income................ 0.22% 0.28% ========== ========== ---------------------------------------------------------------------------------------------------------------------------------- (2)Custodian fees were reduced by credits resulting from cash balances the fund 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%.
See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - December 31, 2002 Shares Value -------- ------- EQUITY INTERESTS -- 99.1% AUSTRALIA -- 2.1% Aust & Nz Bank Grp.................. 61,550 $ 601,330 Natl Australia Bk .................. 37,050 662,398 ----------- $ 1,263,728 ----------- BELGIUM -- 0.5% Colruyt NV ......................... 5,900 $ 325,050 ----------- CANADA -- 3.5% Bank Nova Scotia.................... 32,200 $ 1,073,332 Biovail Corp*....................... 7,200 190,152 Celestica Inc*...................... 7,900 111,390 Royal Bk Cda........................ 21,250 778,145 ----------- $ 2,153,019 ----------- FINLAND -- 2.4% Nokia Corp - Spon Adr*.............. 66,000 $ 1,023,000 Upm-Kymmene Oyj .................... 14,000 449,561 ----------- $ 1,472,561 ----------- FRANCE -- 8.2% Aventis............................. 8,100 $ 438,939 Axa................................. 28,625 384,199 Bnp Pariba.......................... 17,998 733,383 Carrefour As........................ 6,247 278,153 Groupe Danone ...................... 2,400 322,878 Seb Group........................... 7,233 642,137 Stmicroelectronics NV............... 12,488 244,799 Tf1 - Tv Francaise.................. 10,900 291,222 TotalFinaElf S...................... 7,155 1,021,895 Vivendi Universal SA................ 19,745 318,886 Zodiac SA........................... 15,500 315,391 ----------- $ 4,991,882 ----------- GERMANY -- 8.1% Altana Ag........................... 8,100 $ 368,054 Basf Ag............................. 8,770 330,395 Bayerische Motoren Werke Ag......... 11,400 346,332 Continental Ag...................... 8,940 137,440 Daimlerchrysler Ag - Reg............ 13,200 403,787 Deutsche Bank Ag - Reg.............. 9,300 428,436 Deutsche Telekom Ag................. 26,840 340,868 E.On Ag............................. 23,800 959,064 Gehe Ag............................. 13,300 515,010 Sap Ag.............................. 3,100 243,008 Schering Ag......................... 9,100 396,304 Siemens Ag - Reg.................... 12,100 514,256 ----------- $ 4,982,954 ----------- GREECE -- 0.8% Coca-Cola Hell Bot.................. 15,670 $ 217,719 Ote (Hellenic Tlcm)................. 24,900 274,363 ----------- $ 492,082 ----------- HONG KONG -- 1.3% China Mobile Ltd (Hk)*.............. 90,400 $ 215,035 Esprit Holdings Ltd................. 106,000 178,748 Hutchison Whampoa Ltd............... 65,900 412,383 ----------- $ 806,166 ----------- IRELAND -- 5.0% Allied Irish Banke Plc............... 53,400 $ 720,644 Anglo Irish Bank Plc ............... 61,600 438,278 Bk Of Ireland....................... 87,720 901,200 Eni S P A........................... 12,900 1,012,520 ----------- $ 3,072,642 ----------- JAPAN -- 14.8% Aderans Ltd......................... 6,400 $ 142,917 Belluna Co Ltd...................... 4,700 163,571 Canon Inc........................... 14,000 527,345 Daikin Industries Ltd............... 20,000 316,845 Eisai Co Ltd........................ 16,000 359,316 Familymart Co Ltd................... 7,600 148,900 Fanuc Ltd........................... 7,500 331,802 Fuji Photo Film Co Ltd.............. 9,000 293,503 Honda Motor Co Ltd.................. 24,000 887,840 Ito-Yokado Co Ltd................... 6,000 176,961 Kao Corp............................ 8,000 175,613 Keyence Corp........................ 1,000 174,012 Nissan Motor Co Ltd................. 42,000 327,732 Ntt Docomo Inc...................... 475 876,590 Ricoh Co Ltd........................ 21,000 344,544 Rohm Co Ltd ........................ 2,000 254,656 Shin-Etsu Chemical Co Ltd........... 22,000 721,159 Smc Corp............................ 4,000 375,495 Sony Corp........................... 12,600 526,637 Takeda Chem Inds.................... 18,000 752,338 Toyota Motor Corp................... 29,000 779,556 Yamanouchi Pharm.................... 13,700 397,135 ----------- $ 9,054,467 ----------- SOUTH KOREA -- 1.1% Kt Corp - Sp Adr.................... 20,100 $ 433,155 Sk Telecom Co Ltd - Adr............. 11,400 243,390 ----------- $ 676,545 ----------- MEXICO -- 2.0% Cemex SA - Spons Adr port cert...... 26,496 $ 569,929 Telefonos De Mexico SA.............. 409,300 651,278 ----------- $ 1,221,207 ----------- NETHERLANDS -- 4.0% Abn-Amro Hldgs Nv................... 24,200 $ 395,660 Asml Holdings Nv*................... 13,800 115,368 Dsm Nv.............................. 7,300 332,316 Ihc Caland Nv....................... 10,369 547,324 Ing Groep Nv -Cva................... 32,009 542,143 Philips Elec (Kon).................. 21,659 379,572 Royal Dutch Petroleum Co............ 4,280 188,415 ----------- $ 2,500,798 ----------- NEW ZEALAND -- 0.1% Telecom Corp Of Nz.................. 25,000 $ 59,236 ----------- NORWAY -- 1.4% Norsk Hydro As ..................... 19,100 $ 856,056 ----------- SINGAPORE -- 0.9% Flextronics Intl Ltd*............... 6,700 $ 54,873 Singapore Press Hd Ltd.............. 48,000 503,659 ----------- $ 558,532 ----------- SOUTH AFRICA -- 0.7% Sasol Beperk Ltd.................... 35,400 $ 433,445 ----------- SPAIN -- 7.7% Altadis Sa.......................... 13,900 $ 317,110 Amadeus Global Travel Dist-A........ 40,700 167,851 Hisp Banco Santander Central........ 96,100 659,534 Espanola de Petrolcoscepa Span...... 43,400 792,007 Corporacion Mapfre Sa............... 48,500 393,422 Endesa Sa........................... 52,100 609,612 Gas Natural Sdg Sa.................. 48,300 915,894 Grupo Dragados Sa................... 12,050 204,852 Grupo Ferrovial..................... 11,000 278,772 Telefonica Sa*...................... 42,968 384,619 ----------- $ 4,723,673 ----------- SWEDEN -- 0.3% Ericsson (L M) Tel - Sp Adr......... 25,240 $ 170,118 ----------- SWITZERLAND -- 6.5% Nestle Sa........................... 5,700 $ 1,207,854 Novartis Ag - Reg Shares............ 34,480 1,258,060 Sgs Soc General Surveillance Holding 1,450 436,250 Swiss Re - Reg...................... 4,590 301,088 Ubs Ag - Registered................. 16,000 777,612 ----------- $ 3,980,864 ----------- TAIWAN -- 0.6% Taiwan Semiconducto................. 26,290 $ 185,344 United Microelectronics - Adr....... 49,220 165,379 ----------- $ 350,723 ----------- UNITED KINGDOM -- 27.1% Amvescap Plc........................ 33,011 $ 211,515 Anglo American...................... 41,800 620,780 Astrazeneca Plc..................... 25,780 904,620 Barclays Plc........................ 166,368 1,031,166 Bhp Billiton Plc.................... 110,265 588,903 Bp Plc.............................. 206,651 1,420,560 British American Tobacco Plc........ 52,383 523,276 British Sky Broadcasting Plc*....... 40,000 411,490 Diageo Plc.......................... 91,349 992,670 Glaxosmithkline Plc................. 48,310 927,064 Gus Plc............................. 38,936 361,680 Hsbc Hldgs Plc...................... 122,833 1,357,538 Johnson Matthey Plc................. 14,000 180,309 Legal & General Gp Plc.............. 210,803 325,797 Lloyds Tsb Group Plc................ 87,765 630,160 Meggitt Plc........................ 119,723 341,151 Mitie Group Plc..................... 138,547 193,855 Persimmon Plc....................... 34,000 233,175 Reckitt Benckiser Plc............... 35,988 698,138 Royal Bk Scot Grp................... 49,055 1,175,122 Scottish Pwr Plc - Adr.............. 11,000 252,120 Shell Trnspt & Trdg Co Plc.......... 115,396 759,824 Unichem............................. 58,362 419,985 Unilever Pl......................... 47,036 447,524 Vodafone Group Plc.................. 854,310 1,557,578 ----------- $ 16,566,000 ----------- TOTAL EQUITY INTERESTS - 99.1% (identified cost, $65,833,445) $ 60,711,748 ----------- OTHER ASSETS, LESS LIABILITIES -- 0.9% 529,958 ----------- NET ASSETS -- 100% $ 61,241,706 ============ * Non-income-producing security. ADR: American Depository Receipts. See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investment at value (identified cost, $65,833,445) (Note 1A) $ 60,711,748 Cash.................................... 403,262 Receivable for fund shares sold......... 6,806 Dividends receivable.................... 64,158 Other assets............................ 104,462 ------------ Total assets.......................... $61,290,436 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 29,443 Transfer agent fee payable.............. 4,000 Accrued expenses and other liabilities.. 15,287 ------------ Total liabilities..................... $ 48,730 ------------ NET ASSETS................................ $61,241,706 ============= NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $91,611,139 Accumulated undistributed net realized loss on investments and foreign currency (computed on the basis of identified cost)....... (27,230,671) Unrealized depreciation of investments and translation of assets and liabilities in foreign currencies (computed on the basis of identified cost)....................... (5,116,461) Undistributed net investment income..... 1,977,699 ------------ Net assets applicable to outstanding shares................................ $ 61,241,706 ============= Computation of net asset value, offering and redemption price per share: Standard shares: -------------- Net assets............................ $50,835,202 ============ Shares of beneficial interest outstanding 5,165,836 ============= Net asset value, offering price, and redemption price per share of beneficial interest.................. $ 9.84 ============= Institutional shares: -------------------- Net assets............................ $10,406,504 ============= Shares of beneficial interest outstanding 2,243,393 ============= Net asset value, offering price, and redemption price per share of beneficial interest................ $ 4.64 ============= See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Income - Dividend income ....................... $ 8,189 Dividend income allocated from portfolio(A) 1,618,051 Less: Foreign taxes allocated from portfolio(A).......................... (1,329) Expenses allocated from portfolio (A).. (853,978) ------------ Investment income..................... $ 770,933 ------------ Expenses - Investment adviser fee................. $ 14,704 Administrator fee (Note 2)............. 16,858 Compensation of Trustees not employees of the investment adviser or administrator 4,867 Custodian fee - Standard shares..................... 15,503 - Institutional shares................ 10,926 Distribution expenses - Standard shares (Note 3)............ 147,808 Transfer and dividend disbursing agent fees - Standard shares..................... 36,398 - Institutional shares................ 11,829 Printing............................... 3,810 Audit services......................... 15,713 Legal services......................... 4,817 Registration costs - Standard shares..................... 11,190 - Institutional shares................ 11,355 Miscellaneous.......................... 5,258 ------------ Total expenses........................ $ 311,036 ------------ Deduct - Reduction of custodian fee (Note 1D) - Standard shares..................... $ (5,340) - Institutional shares................ (1,028) ------------ Total deductions...................... $ (6,368) ------------ Net expenses.......................... $ 304,668 ------------ Net investment income............. $ 466,265 ------------ REALIZED AND UNREALIZED LOSS ON INVESTMENTS: Net realized loss on investment and foreign currency transactions (identified cost basis)................ $(12,072,706) Change in unrealized appreciation of investments and translation of assets and liabilities in foreign currencies...... 793,286 ------------ Net realized and unrealized loss of investments............................ $(11,279,420) ------------ Net decrease in net assets from operations........................... $(10,813,155) ============= (A) The portfolio was liquidated on December 20, 2002 (see Note 1). See notes to financial statements Wright International Blue Chip Equities Fund (WIBC) -------------------------------------------------------------------------------
Year Ended December 31, ----------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ------------------------------------------------------------------------------------------------------------------------------ DECREASE IN NET ASSETS: From operations - Net investment income (loss)............................................... $ 466,265 $ (155,476) Net realized loss on investments and foreign currency transactions......... (12,072,706) (11,569,695) Change in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies .......... 793,286 (17,726,546) ------------ ------------ Net decrease in net assets resulting from operations..................... $(10,813,155) $(29,451,717) ------------ ------------ Net decrease in net assets from fund share transactions (Note 4) - Standard shares............................................................ $ (6,953,683) $(19,188,438) Institutional shares....................................................... (1,005,127) (143,595) ------------ ------------ Net decrease in net assets from fund share transactions...................... $ (7,958,810) $(19,332,033) ------------ ------------ Net decrease in net assets................................................... $(18,771,965) $(48,783,750) NET ASSETS: At beginning of year......................................................... 80,013,671 128,797,421 ------------ ------------ At end of year............................................................... $ 61,241,706 $ 80,013,671 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR.................................................................. $ 1,977,699 $ 1,571,758 ============== ==============
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002(4) 2001(4) 2000(4) 1999(4) 1998 ---------------------------------------------------------------------------------------------------------------------------------- Standard Shares ------------------------------------------------------------------- Net asset value, beginning of year.......... $11.510 $15.180 $18.900 $16.020 $16.020 --------- --------- --------- --------- --------- Income (loss) from investment operations: Net investment income (loss) .......... $ 0.070 $ (0.023) $ 0.135 $ (0.004) $ 0.078 Net realized and unrealized gain (loss) (1.740) (3.647) (3.455) 5.181 0.868(+) --------- --------- --------- --------- --------- Total income (loss) from investment operations...... $ (1.670) $ (3.670) $ (3.320) $ 5.177 $ 0.946 --------- --------- --------- --------- --------- Less distributions: Dividends from investment income....... $ - $ - $ - $ - $ (0.070) Distributions from capital gains....... - - (0.400) (2.297) (0.876) --------- --------- --------- --------- --------- Total distributions................ $ - $ - $ (0.400) $ (2.297) $ (0.946) --------- --------- --------- --------- --------- Net asset value, end of year................ $ 9.840 $11.510 $15.180 $18.900 $16.020 ========== ========== ========== ========== ========== Total return(1) ............................ (14.51%) (24.18%) (17.58%) 34.26% 6.14% Ratios/Supplemental Data Net assets, end of year (000 omitted).. $ 50,835 $ 66,828 $110,868 $147,610 $193,327 Ratio of total expenses to average daily net assets 1.66%(2) 1.56%(2) 1.49%(2) 1.49%(2) 1.35%(2) Ratio of net expenses after custodian fee reduction to average net assets(5) 1.65% - - - - Ratio of net investment income (loss) to average daily net assets 0.65% (0.18%) 0.76% (0.02%) 0.42% Portfolio turnover rate .............. 62%(3) 39%(3) 53%(3) 105%(3) 66%(3) -------------------------------------------------------------------------------------------------------------------------------- (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)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio 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. + 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.
See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) -------------------------------------------------------------------------------
Year Ended December 31, -------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002(4) 2001(4) 2000(4) 1999(4) 1998 ---------------------------------------------------------------------------------------------------------------------------------- Institutional Shares -------------------------------------------------------------------- Net asset value, beginning of year.......... $ 5.430 $ 7.150 $ 9.160 $ 8.750 $ 9.130 -------- -------- -------- -------- -------- Income (loss) from Investment Operations: Net investment income (loss) .......... $ 0.035 $ (0.001) $ 0.070 $ 0.014 $ 0.159 Net realized and unrealized gain (loss) (0.825) (1.719) (1.680) 2.693 0.487(+) --------- --------- -------- -------- -------- Total income (loss) from investment operations...... $ (0.790) $ (1.720) $ (1.610) $ 2.707 $ 0.646 --------- --------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ - $ - $ - $(0.150) Distributions from capital gains....... - - (0.400) (2.297) (0.876) -------- -------- -------- -------- -------- Total distribution................. $ - $ - $ (0.400) $ (2.297) $(1.026) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 4.640 $ 5.430 $ 7.150 $ 9.160 $ 8.750 ========= ========= ========= ========= ========= Total return(1) ............................ (14.55%) (24.06%) (17.62%) 34.49% 7.54% Ratios/Supplemental Data: Net assets, end of year (000 omitted).. $ 10,407 $ 13,186 $ 17,929 $ 24,254 $ 18,511 Ratio of total expenses to average net assets........................... 1.61%(2) 1.43%(2) 1.30%(2) 1.28%(2) 1.12%(2) Ratio of net expenses after custodian fee reduction to average net assets(5) 1.60% - - - - Ratio of net investment income (loss) to average net assets................... 0.70% (0.02%) 0.87% 0.16% 0.73% Portfolio turnover rate................ 62%(3) 39%(3) 53%(3) 105%(3) 66%(3) ----------------------------------------------------------------------------------------------------------------------------------- (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)Custodian fees were reduced by credits resulting from cash balances the fund and the portfolio 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. + 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.
See notes to financial satements WRIGHT MANAGED EQUITY TRUST ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTING POLICIES The Wright Managed Equity Trust (the Trust), issuer of Wright Selected Blue Chip Equities Fund (WSBC) series, Wright Major Blue Chip Equities Fund (WMBC) series, and Wright International Blue Chip Equities Fund (WIBC) series (collectively, the Funds), is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end, management investment company. The Funds seek to provide total return consisting of price appreciation and current income. Prior to December 20, 2002, WSBC and WIBC invested all of their investable assets in interests in a separate corresponding open-end management investment company (a Portfolio), a New York Trust, having the same investment objective as its corresponding funds. WSBC invested its assets in the Selected Blue Chip Equities Portfolio and WIBC invested its assets in the International Blue Chip Equities Portfolio. On December 20, 2002, the Funds received their prorata share of cash and securities from the Portfolios in a complete liquidation of their interest in the Portfolios. WSBC and WIBC reclassified $458,882 and $2,633,836, respectively, between unrealized appreciation (depreciation) and paid-in capital as a result of the increase or reduction in the cost of the Fund's investments related to such liquidation. Subsequent to December 20, 2002, the Funds invest directly in securities rather than through the Portfolios and maintain the same investment objective. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. A. Investment Valuations - Securities listed on securities exchanges or in the NASDAQ National Market are valued at closing sale prices, if those prices are deemed to be representative of market values at the close of business. Unlisted or listed securities for which closing sale prices are not available are valued at the mean between the latest bid and asked prices. Short-term obligations maturing in sixty days or less are valued at amortized cost, which approximates fair value. Securities for which market quotations are unavailable or deemed not to be representative of market values at the close of business are appraised at their fair value as determined in good faith by or at the direction of the Trustees. B. Foreign Currency Translation - Investment security valuations, other assets, and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Purchases and sales of foreign investment securities and income and expenses are translated into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. C. Income - Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded on the accrual basis. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the fund is informed of the ex-dividend date. D. Expense Reduction - The funds have entered into an arrangement with their custodian whereby interest earned on uninvested cash balances is used to offset custodian fees. All significant reductions are reported as a reduction of total expenses in the funds' Statement of Operations. E. Federal Taxes - The Trust's policy is to comply with the provisions of the Internal Revenue Code (the Code) available to regulated investment companies and distribute to shareholders each year all of its taxable income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is necessary. At December 31, 2002, the Trust, for federal income tax purposes, had capital loss carryovers of $26,538,426 (WIBC) and $34,731,982 (WMBC) which will reduce the Funds' taxable income arising from future net realized gain on investment transactions, if any, to the extent permitted by the Code, and thus will reduce the amount of the distribution to shareholders which would otherwise be necessary to relieve the respective fund of any liability for federal income or excise tax. Pursuant to the Code, such capital loss carryovers will expire as follows: WMBC WIBC 12/31/09 $17,128,584 $12,528,270 12/31/10 $17,603,398 $14,010,156 At December 31, 2002, net capital losses of $820,207 for WIBC, $405,959 for WSBC and $1,770,454 for WMBC attributable to security transactions incurred after October 31, 2002 are treated as arising on the first day of the fund's current taxable year. Withholding taxes on foreign dividends have been provided for in accordance with the Trust's understanding of the applicable country's tax rules and rates. F. Distributions - The Trust requires that differences in the recognition or classification of income between the financial statements and tax earnings and profits which result only in temporary overdistributions for financial statement purposes, are classified as distributions in excess of net investment income or accumulated net realized gains. Distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting for certain items may result in reclassification of these items. During the year ended December 31, 2002, the following amounts were reclassified due to differences between book and tax accounting created primarily by the deferral of certain losses for tax purposes and character reclassifications between net investment income and net realized capital gains. Accumulated Undistrib- uted Net Realized Gain (Loss) on Investment Undistributed Paid-In and Foreign Currency Net Investment Capital Transactions Income (Loss) ------------------------------------------------------------------------------- WSBC ($184,757) $3,560 $181,197 WMBC - 3,677 (3,677) WIBC (2) 60,326 (60,324) Net investment income, net realized gains (losses) and net assets were not affected by these reclassifications. G. Other - Investment transactions are accounted for on a trade-date basis. H. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. I. Multiple Classes of Shares of Beneficial Interest - Each fund is authorized to offer a standard share class and an institutional share class. The share classes differ in their respective distribution and service fees and other class specific expenses. All shareholders bear the common expenses of the fund pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. Each class has equal rights as to voting, redemption, dividends, and liquidation. At December 31, 2002, only WIBC had an institutional share class. J. Reclassifications - Certain amounts in the prior periods' financial statements have been reclassified to conform to the current year's presentation. (2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as investment adviser to the Funds pursuant to an Investment Advisory Contract. Wright furnishes the Funds with investment management, investment advisory, and other services. For its services, Wright is compensated based upon a percentage of average daily net assets which rate is adjusted as average daily net assets exceed certain levels. For the year ended December 31, 2002, the effective annual rate was 0.80% for WIBC and 0.60% for WSBC and WMBC. To enhance the net income of the fund, $32,077 of expenses were allocated to the investment adviser for WSBC. The Trust also has engaged Eaton Vance Management (Eaton Vance) to act as administrator of the Trust. Under the Administration Agreement, Eaton Vance is responsible for managing the business affairs of the Trust and is compensated based upon a percentage of average daily net assets which rate is reduced as average daily net assets exceed certain levels. For the year ended December 31, 2002, the effective annual rate was 0.12% for WSBC, 0.12% for WMBC, and 0.17% for WIBC. Certain of the Trustees and officers of the Trust are Trustees or officers of the above organizations. Except as to Trustees of the Trust who are not employees of Eaton Vance or Wright, Trustees and officers receive remuneration for their services to the Trust out of the fees paid to Eaton Vance and Wright. (3) DISTRIBUTION EXPENSES The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule 12b-1 of the Investment Company Act of 1940. The Plan provides that each of the funds will pay Wright Investors' Service Distributors, Inc. (Principal Underwriter), a wholly-owned subsidiary of The Winthrop Corporation, an annual rate of 0.25% of each fund's average daily net assets attributable to Standard shares for activities primarily intended to result in the sale of each fund's Standard shares. To enhance the net income of WSBC, the principal underwriter made a reduction of its fee of $37,143. In addition, the Trustees have adopted a service plan (the Service Plan) which allows the funds to reimburse the Principal Underwriter for payments to intermediaries for providing account administration and account maintenance services to their customers who are beneficial owners of shares. The amount of service fee payable under the Service Plan with respect to each class of shares may not exceed 0.25% annually of the average daily net assets attributable to the respective classes. For the year ended December 31, 2002, the funds did not accrue or pay any service fees. (4) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in fund shares were as follows:
Year Ended Year Ended December 31, 2002 December 31, 2001 -------------------------------------------------------------- Shares Amount Shares Amount --------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund-- Sold................................................... 1,216,462 $ 12,859,399 1,226,640 $ 15,073,784 Issued to shareholders in payment of distributions declared.............................................. 126,916 1,479,836 152,753 1,755,132 Reacquired............................................. (1,765,707) (17,986,765) (1,228,781) (14,455,232) ----------- -------------- ----------- -------------- Net increase/(decrease).............................. (422,329) $ (3,647,530) 150,612 $ 2,373,684 ============= ============== ============= =============== Wright Major Blue Chip Equities Fund - Standard Shares: Sold................................................... 2,407,645 $ 23,061,486 1,922,615 $ 23,607,686 Issued to shareholders in payment of distributions declare............................................... 16,073 140,477 - - Reacquired............................................. (2,884,658) (28,232,314) (3,569,321) (42,980,555) ----------- -------------- ----------- -------------- Net decrease......................................... (460,940) $ (5,030,351) (1,646,706) $ (19,372,869) ============ ============== ============ =============== Wright Major Blue Chip Equities Fund - Institutional Shares: Sold.................................................. - $ - 47,224 $ 360,037 Reacquired............................................. (206,264) (1,382,497) (16,459) (113,400) ----------- -------------- ----------- -------------- Net increase/(decrease).............................. (206,264) $ (1,382,497) 30,765 $ 246,637 ============ ============== ============= =============== Wright International Blue Chip Equities Fund-- Standard Shares: Sold................................................... 1,055,345 $ 11,115,594 1,422,001 $ 18,096,877 Reacquired............................................. (1,694,585) (18,069,277) (2,921,600) (37,285,315) ----------- -------------- ----------- -------------- Net decrease......................................... (639,240) $ (6,953,683) (1,499,599) $ (19,188,438) ============ ============== ============= =============== Wright International Blue Chip Equities Fund-- Institutional Shares: Sold................................................... - $ - 158,515 $ 1,025,000 Reacquired............................................. (186,188) (1,005,127) (235,080) (1,168,595) ----------- -------------- ----------- -------------- Net decrease........................................... (186,188) $ (1,005,127) (76,565) $ (143,595) ============ ============== ============= ===============
(5) INVESTMENT TRANSACTIONS Purchases and sales of investments, other than U.S. Government securities and short-term obligations were as follows: Year Ended December 31, 2002 ------------------------------------------ WSBC(+) WMBC WIBC(+) ------------------------------------------------------------------------------- Purchases..... $ 48,791,503 $ 94,265,713 $ 43,725,073 ============== ============== ============== Sales......... $ 54,064,241 $101,208,527 $ 52,680,794 ============== ============== ============== ------------------------------------------------------------------------------- (+): Includes activity of the fund's corresponding portfolio. (6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2002, as computed on a federal income tax basis, are as follows: WSBC WMBC WIBC ------------------------------------------------------------------------------- Aggregate cost... $33,569,323 $71,060,940 $65,840,799 ============ =========== ============ Gross unrealized appreciation... 2,549,294 3,149,362 3,504,834 Gross unrealized depreciation... (3,394,310) (7,934,122) (8,633,885) ------------- ------------- ------------- Net unrealized depreciation... $ (845,016) $(4,784,760) $(5,129,051) ============ ============ ============== ------------------------------------------------------------------------------- (7) LINE OF CREDIT The funds participate with other funds managed by Wright in a committed $20 million unsecured line of credit agreement with a bank. The funds may temporarily borrow from the line of credit to satisfy redemption requests or settle investment transactions. Interest is charged to each fund based on its borrowings at an amount above the federal funds rate. In addition, a fee computed at an annual rate of 0.10% on the average daily unused portion of the $20 million line of credit, is allocated among the participating funds at the end of each quarter. WSBC, WMBC, and WIBC did not have significant borrowings or allocated fees during the year ended December 31, 2002. (8) CLASS ELIMINATION The Institutional Share class of Major Blue Chip Equities Fund was fully liquidated on February 14, 2002. WRIGHT MANAGED EQUITY TRUST ------------------------------------------------------------------------------- INDEPENDENT AUDITORS' REPORT To the Trustees and Shareholders of The Wright Managed Equity Trust: We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of The Wright Managed Equity Trust (the "Trust"), comprising the Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and Wright International Blue Chip Equities Fund (the "Funds"), as of December 31, 2002, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned as of December 31, 2002, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds constituting The Wright Managed Equity Trust as of December 31, 2002, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 14, 2003 WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - December 31, 2002 Face Interest Maturity Amount Issuer Rate Date Value ------------------------------------------------------------------------------- $ 734,000 U.S. Treasury Bills 1.600% 1/23/03 $ 730,118 109,000 U.S. Treasury Bills 1.520% 1/23/03 108,475 240,000 U.S. Treasury Bills 1.530% 1/23/03 238,847 272,000 U.S. Treasury Bills 1.520% 1/23/03 270,714 77,000 U.S. Treasury Bills 1.550% 1/23/03 76,642 224,000 U.S. Treasury Bills 1.610% 1/23/03 223,078 1,330,000 U.S. Treasury Bills 1.550% 1/23/03 1,325,018 1,020,000 U.S. Treasury Bills 1.410% 1/30/03 1,016,365 203,000 U.S. Treasury Bills 1.400% 1/30/03 202,313 191,000 U.S. Treasury Bills 1.160% 1/30/03 190,563 273,000 U.S. Treasury Bills 1.510% 2/13/03 271,557 47,000 U.S. Treasury Bills 1.600% 2/13/03 46,749 1,722,000 U.S. Treasury Bills 1.620% 2/13/03 1,712,779 620,000 U.S. Treasury Bills 1.610% 2/13/03 616,728 111,000 U.S. Treasury Bills 1.630% 2/13/03 110,422 1,057,000 U.S. Treasury Bills 1.195% 2/27/03 1,053,702 $1,040,000 U.S. Treasury Bills 1.170% 2/27/03 1,037,600 3,179,000 U.S. Treasury Bills 1.200% 3/06/03 3,166,390 108,000 U.S. Treasury Bills 1.200% 3/06/03 107,611 175,000 U.S. Treasury Bills 1.180% 3/06/03 174,398 872,000 U.S. Treasury Bills 1.240% 4/24/03 867,705 1,720,000 U.S. Treasury Bills 1.190% 4/24/03 1,712,438 2,015,000 U.S. Treasury Bills 1.200% 5/15/03 2,005,128 ---------- Total Investments At Amortized Cost -- 99.4% $ 17,265,340 Other Assets, Less Liabilities -- 0.6% 103,321 ----------- Net Assets -- 100.0% $ 17,368,661 =========== See notes to financial statements WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Total investments, at amortized cost (Note 1A).............................. $17,265,340 Cash.................................... 8,386 Receivable from investment adviser...... 64,172 Interest receivable..................... 33,797 Other assets............................ 11,360 ------------ Total assets.......................... $17,383,055 ------------ LIABILITIES: Distributions payable................... $ 7,135 Accrued expenses and other liabilities.. 7,259 ------------ Total liabilities..................... $ 14,394 ------------ NET ASSETS (consisting of paid-in capital) $17,368,661 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................. 17,366,931 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST.................. $ 1.00 ============= See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 297,985 ------------ Expenses - Investment adviser fee (Note 3)........ $ 60,232 Administrative fee (Note 3)............ 12,046 Compensation of Trustees not employees of the investment adviser or administrator 2,920 Custodian fee (Note 1C)................ 39,756 Transfer and dividend disbursing agent fees 8,768 Printing............................... 3,531 Audit services......................... 34,187 Legal services......................... 1,927 Registration costs..................... 30,963 Miscellaneous.......................... 8,600 ------------ Total expenses........................ $ 202,930 ------------ Deduct - Reduction of custodian fee (Note 1C)............................. $ (1,170) Allocation of expenses to investment adviser (Note 3)...................... (64,172) Reduction of investment adviser fee (Note 3).............................. (60,148) ------------ Total deductions...................... $ (125,490) ------------ Net expenses.......................... $ 77,440 ------------ Net investment income............... $ 220,545 ------------ REALIZED LOSS ON INVESTMENTS: Net realized loss on investment sold.... $ (341) ------------ Net increase in net assets resulting from operations.......................... $ 220,204 ============= See notes to financial statements WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) -------------------------------------------------------------------------------
Year Ended December 31, ----------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ----------------------------------------------------------------------------------------------------------------------------------- DECREASE IN NET ASSETS: Net investment income...................................................... $ 220,545 $ 1,140,033 Net realized gain (loss) on investments sold............................... (341) 74,786 ------------ ------------ Net increase in net assets resulting from operations..................... $ 220,204 $ 1,214,819 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (279,831) $ (1,140,033) From net realized gain..................................................... -- (13,429) ------------ ------------ Total distributions...................................................... $ (279,831) $ (1,153,462) ------------ ------------ Fund share transactions+ - Proceeds from shares sold.................................................. $ 36,968,761 $ 61,026,684 Reinvestment of dividends.................................................. 156,734 769,217 Cost of shares reacquired.................................................. (38,281,095) (86,881,373) ------------ ------------ Net decrease in net assets from fund share transactions...................... $ (1,155,600) $(25,085,472) ------------ ------------ Net decrease in net assets............................................... $ (1,215,227) $(25,024,115) NET ASSETS: At beginning of year......................................................... 18,583,888 43,608,003 ------------ ------------ At end of year............................................................... $ 17,368,661 $ 18,583,888 ============= ============= + For WTMM, the Fund share transactions are at a net asset value of $1.00 per share.
See notes to financial statements WRIGHT U.S. TREASURY MONEY MARKET FUND (WTMM) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------ FINANCIAL HIGHLIGHTS 2002(5) 2001 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year............. $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 Income from investment operations: Net investment income(1)..................... 0.0130 0.0359 0.0530 0.0420 0.0460 Net realized gain on investments sold....... 0.0263(+) 0.0004 -- -- -- (+) -------- -------- -------- -------- -------- Total income from investment operations..... 0.0393 0.0363 0.0530 0.0420 0.0460 Less distributions: Dividends from net investment income........ (0.0393) (0.0359) (0.0530) (0.0420) (0.0460) Distributions from net realized gain........ -- (0.0004) -- -- -- -------- -------- -------- -------- -------- Total distributions......................... (0.0393) (0.0363) (0.0530) (0.0420) (0.0460) -------- -------- -------- -------- -------- Net asset value, end of year................... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 ========= ========= ========= ========= ========= Total return(2) ............................... 1.61% 3.70% 5.44% 4.29% 4.73% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted)....... $ 17,369 $ 18,523 $43,608 $62,527 $91,323 Ratio of net expenses to average net assets 0.46% 0.47% 0.46% 0.45% 0.45% Ratio of net expenses after custodian fee reduction to average net assets(3)(4) .... 0.45% 0.45% 0.45% 0.45% 0.45% Ratio of net investment income to average net assets 1.28% 3.93% 5.33% 4.19% 4.61% ------------------------------------------------------------------------------------------------------------------------------- (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................ $ 0.0056 $ 0.0330 $ 0.0505 $ 0.0402 $ 0.0444 ========= ========= ========= ========= ========= Ratios (as a percentage of average daily net assets): Expenses.................................... 1.18% 0.88% 0.71% 0.63% 0.61% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(3) .. 1.17% 0.86% 0.70% 0.63% 0.61% ========= ========= ========= ========= ========= Net investment income ...................... 0.55% 3.52% 5.08% 4.01% 4.45% ========= ========= ========= ========= ========= --------------------------------------------------------------------------------------------------------------------------------- (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% after custodian fee credits are applied. (5)Certain of the per share data 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.
See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - December 31, 2002
Face Coupon Maturity Market Current Yield To Amount Description Rate Date Price Value Yield Maturity --------------------------------------------------------------------------------------------------------------------------------- (unaudited)(unaudited) GOVERNMENT BONDS ------------------ $ 2,500,000 U.S. Treasury Notes 4.750% 02-15-04 $103.910 $ 2,597,853 4.60% 1.2% 1,750,000 U.S. Treasury Notes 3.625% 03-31-04 102.870 1,800,313 3.50% 1.3% 2,500,000 U.S. Treasury Notes 2.125% 08-31-04 101.110 2,527,831 2.10% 1.4% 1,000,000 U.S. Treasury Notes 4.625% 05-15-06 107.850 1,078,516 4.30% 2.2% AGENCIES ----------- $ 1,750,000 FNMA 3.125% 11-15-03 $101.590 $ 1,777,738 3.10% 1.3% 1,000,000 Freddie Mac 3.250% 12-15-03 101.880 1,018,886 3.20% 1.3% 2,000,000 FHLB 4.875% 04-16-04 104.370 2,087,316 4.70% 1.4% 1,000,000 FNMA 1.955% 07-15-04 100.000 1,000,000 0.00% 2.0% 750,000 FNMA 3.700% 09-10-04 101.040 757,808 3.70% 3.1% 2,270,000 FNMA 3.500% 09-15-04 103.090 2,340,188 3.40% 1.6% 450,000 FNMA 4.200% 10-01-04 102.370 460,672 4.10% 2.8% 2,000,000 FNMA 3.875% 03-15-05 104.470 2,089,448 3.70% 1.8% 500,000 FNMA 4.250% 05-30-05 101.190 505,998 4.20% 3.7% 1,500,000 Freddie Mac 3.875% 06-27-05 100.980 1,514,840 3.80% 3.5% 725,000 FHLB 5.000% 09-12-05 102.300 741,684 4.90% 4.1% 1,000,000 FHLMC 2.875% 09-26-05 100.720 1,007,197 2.90% 2.6% 500,000 FNMA 2.875% 10-15-05 101.890 509,500 2.80% 2.2% 850,000 FNMA 6.000% 12-15-05 110.720 941,200 5.40% 2.2% 2,000,000 FHLMC 5.250% 01-15-06 108.630 2,172,708 4.80% 2.3% 1,070,000 FNMA 5.250% 06-15-06 108.970 1,166,026 4.80% 2.5% 750,000 FNMA 4.375% 10-15-06 106.100 795,809 4.10% 2.7% 325,000 FNMA 4.500% 10-17-06 102.560 333,321 4.40% 3.8% 800,000 FNMA 5.125% 02-14-07 107.120 856,987 4.80% 3.3% 1,050,000 FHLMC 5.000% 03-13-07 100.720 1,057,623 5.00% 4.8% FNMA ------- $ 432,841 FNMA Pool #254227 5.000% 02-01-09 $103.020 $ 445,915 4.90% 4.4% FHLMC ------ $ 421,411 FHLMC Gold Balloon #M90710 5.000% 03-01-07 $104.110 $ 438,749 4.80% 2.0% 389,269 FHLMC Gold Pool #M90724 5.500% 05-01-07 104.106 405,253 5.30% 2.8% 749,101 FHLMC Gold Pool #M90767 4.500% 11-01-07 102.747 769,681 4.40% 2.6% ----------- TOTAL INVESTMENTS (identified cost, $31,105,638) - 98.1% $33,199,060 Other Assets, Less Liabilities -- 1.9% 640,404 ----------- Net Assets -- 100.0% $33,839,464 ============ Average Maturity -- 2.5 Years (unaudited)
See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments - Investments at value (identified cost of $31,105,638) (Note 1A) $33,199,060 Cash................................... 365,149 Receivable for fund shares sold........ 23,832 Interest receivable.................... 296,719 Other assets........................... 4,726 ------------ Total assets.......................... $33,889,486 ------------ LIABILITIES: Distribution fee payable................ $ 6,809 Distributions payable................... 30,263 Payable for fund shares reacquired...... 1,804 Transfer agent fee payable.............. 2,214 Accrued expenses and other liabilities.. 8,932 ------------ Total liabilities..................... $ 50,022 ------------ NET ASSETS................................ $33,839,464 ============ NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for Fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $32,986,157 Accumulated net realized loss on investments (computed on the basis of identified cost) (1,227,919) Unrealized appreciation on investments (computed on the basis of identified cost) 2,093,422 Distributions in excess of net investment income................................. (12,196) ------------ Net assets applicable to outstanding shares................................ $33,839,464 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING. 3,227,200 ============== NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST.................. $ 10.49 ============== (A) The portfolio was liquidated on December 20, 2002 (see Note 1). See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income allocated from portfolio(A) $ 1,365,300 Interest income........................ 34,920 Expenses allocated from portfolio (A).. (225,507) ------------ Investment income..................... $ 1,174,713 ------------ Expenses - Investment adviser fee(Note 3)......... $ 4,586 Administrator fee (Note 3)............. 7,646 Compensation of Trustees not employees of the investment adviser or administrator 2,920 Custodian fee (Note 1C)................ 23,919 Distribution expenses (Note 4)......... 86,429 Transfer and dividend disbursing agent fees 25,719 Printing............................... 3,645 Audit services......................... 15,956 Legal services......................... 2,496 Registration costs..................... 14,440 Miscellaneous.......................... 418 ------------ Total expenses........................ $ 188,174 ------------ Deduct - Reduction of custodian fee (Note 1C)... $ (5,862) Reduction of distribution expenses by principal underwriter (Note 4)........ (79,390) ------------ Total deductions...................... $ (85,252) ------------ Net expenses.......................... $ 102,922 ------------ Net investment income............... $ 1,071,791 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions from portfolio (identified cost basis). $ 300,660 Net change in unrealized appreciation of investments......................... 426,012 ------------ Net realized and unrealized gain of investments........................... $ 726,672 ------------ Net increase in net assets from operations $ 1,798,463 ============= See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) -------------------------------------------------------------------------------
Year Ended December 31, ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 1,071,791 $ 1,594,846 Net realized gain on investment transactions............................... 300,660 436,243 Change in unrealized appreciation of investments........................... 426,012 367,359 ------------ ------------ Net increase in net assets resulting from operations..................... $ 1,798,463 $ 2,398,448 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (1,163,783) $ (1,651,229) ------------ ------------ Net decrease in net assets from fund share transactions (Note 5)............. $ (2,820,387) $ (3,930,842) ------------ ------------ Net decrease in net assets............................................... $ (2,185,707) $ (3,183,623) NET ASSETS: At beginning of year......................................................... 36,025,171 39,208,794 ------------ ------------ At end of year............................................................... $ 33,839,464 $ 36,025,171 ============= ============= UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR................................................. $ (12,196) $ 21,649 ============= =============
See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) -------------------------------------------------------------------------------
Year Ended December 31, --------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 10.29 $ 10.080 $ 9.930 $ 10.270 $ 10.240 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.349 $ 0.480(7) $ 0.525 $ 0.534 $ 0.549 Net realized and unrealized gain (loss).. 0.200 0.195(7) 0.143 (0.343) 0.048+ -------- -------- -------- -------- -------- Total income from investment operations $ 0.549 $ 0.675 $ 0.668 $ 0.191 $ 0.597 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ (0.349) $ (0.465) $ (0.518) $ (0.531) $ (0.567) -------- -------- -------- -------- -------- Total distributions.................... $ (0.349) $ (0.465) $ (0.518) $ (0.531) $ (0.567) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.490 $ 10.290 $ 10.080 $ 9.930 $ 10.270 ========= ========= ========= ========= ======== Total return(2) ............................ 5.42% 6.82% 6.94% 1.91% 5.98% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 33,839 $ 36,025 $ 39,198 $ 52,825 $ 91,922 Ratio of net expenses to average net assets(3) 0.97% 0.97% 0.98% 0.91% 0.88% Ratio of net expenses after custodian fee reduction to average net assets(3)(4) 0.95%(6) 0.95%(6) 0.95%(6) 0.90% 0.87% Ratio of net investment income to average net assets............................ 3.10% 4.40% 5.27% 5.27% 5.38% Portfolio turnover rate................. 64% 92%(5) 65%(5) 0%(5) 10%(5) ----------------------------------------------------------------------------------------------------------------------------------- (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: 2002 2001 2000 1999 1998 -------------------------------------------------------------- Net investment income per share........ $ 0.323 $ 0.452 $ 0.511 $ 0.526 $ 0.546 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses(3) ......................... 1.20% 1.22% 1.13% 0.99% 0.91% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(3)(4) 1.18% 1.20% 1.10% 0.98% 0.90% ========= ========= ========= ========= ========= Net investment income................ 2.87% 4.15% 5.13% 5.19% 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)Includes each fund's share of its corresponding portfolio's allocated expenses. (4)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. (5)Represents portfolio turnover rate of the fund's corresponding portfolio. (6)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% after custodian fee credits have been applied. (7)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.
See notes to financial statements WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - December 31, 2002
Face Coupon Maturity Market Current Yield To Amount Description Rate Date Price Value Yield Maturity --------------------------------------------------------------------------------------------------------------------------------- (unaudited)(unaudited) GOVERNMENT BONDS ----------------- $ 250,000 U.S. Treasury Bonds 11.625% 11-15-04 $118.500 $ 296,231 9.80% 1.6% 400,000 U.S. Treasury Notes 6.500% 08-15-05 111.840 447,406 5.80% 1.9% 200,000 U.S. Treasury Notes 3.500% 11-15-06 104.060 208,125 3.40% 2.4% 750,000 U.S. Treasury Notes 6.125% 08-15-07 115.000 862,442 5.30% 2.7% 750,000 U.S. Treasury Notes 3.000% 11-15-07 101.190 759,023 3.00% 2.7% 250,000 U.S. Treasury Notes 4.750% 11-15-08 109.160 272,891 4.40% 3.0% 250,000 U.S. Treasury Notes 5.500% 05-15-09 113.470 283,643 4.80% 3.2% 700,000 U.S. Treasury Bonds 10.000% 05-15-10 118.440 828,953 8.40% 6.8% 850,000 U.S. Treasury Bonds 14.000% 11-15-11 142.160 1,208,428 9.80% 7.4% AGENCIES ---------- $ 500,000 FNMA 3.125% 11-15-03 $101.590 $ 507,925 3.10% 1.3% 850,000 FNMA 3.625% 04-15-04 102.780 873,650 3.50% 1.4% 300,000 FNMA 3.700% 09-10-04 101.030 303,123 3.70% 3.1% 1,200,000 FHLB 3.625% 10-15-04 103.440 1,241,093 3.50% 1.7% 850,000 FNMA 3.875% 03-15-05 104.470 888,015 3.70% 1.8% 250,000 FNMA 4.250% 05-30-05 101.190 252,999 4.20% 3.7% 250,000 FHLMC 3.875% 06-27-05 100.980 252,473 3.80% 3.5% 400,000 FHLMC 2.875% 09-26-05 100.720 402,879 2.90% 2.6% 1,250,000 FNMA 2.875% 10-15-05 101.910 1,273,749 2.80% 2.2% 450,000 FNMA 4.375% 10-15-06 106.090 477,485 4.10% 2.7% 500,000 FHLMC 4.875% 03-15-07 108.060 540,246 4.50% 2.8% 250,000 FNMA 4.250% 07-15-07 105.440 263,601 4.00% 3.0% 250,000 FNMA 5.375% 11-15-11 108.410 271,052 5.00% 4.2% 550,000 FHLMC 5.125% 07-15-12 106.440 585,385 4.80% 4.3% 500,000 FNMA 4.375% 09-15-12 100.280 501,381 4.40% 4.3% FNMA ----- $ 216,421 FNCX Pool #254227 5.000% 02-01-09 $103.020 $ 222,958 4.90% 4.4% 396,960 FNCI Pool #254546 5.500% 12-01-17 103.830 412,148 5.30% 3.7% FHLMC ------ $ 77,854 FGFB Pool #M90724 5.500% 05-01-07 $104.110 $ 81,050 5.30% 2.8% 749,101 FGFB Pool #M90767 4.500% 11-01-07 102.750 769,680 4.40% 2.6% ----------- Total Investments (identified cost, $14,591,554) - 98.5% $15,288,034 Other Assets, less Liabilities - 1.5% 227,363 ----------- Net Assets - 100.0% $15,515,397 ============ Average Maturity - 4.8 Years (unaudited)
See notes to financial statements WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments - Investments at value (identified cost of $14,591,554) (Note 1A) $15,288,034 Cash.................................... 45,888 Receivable from investment adviser...... 32,220 Receivable for fund shares sold......... 25,511 Interest receivable..................... 143,521 Other assets............................ 4,908 ------------ Total assets.......................... $15,540,082 ------------ LIABILITIES: Distributions payable................... $ 12,080 Payable for fund shares reacquired...... 2,441 Accrued expenses and other liabilities.. 8,712 Accrued transfer agent fee.............. 1,452 ------------ Total liabilities..................... $ 24,685 ------------ NET ASSETS................................ $15,515,397 ============ NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $15,073,117 Accumulated net realized loss on investments (computed on the basis of identified cost) (286,439) Unrealized appreciation on investments (computed on the basis of identified cost) 696,480 Undistributed net investment income..... 32,239 ------------ Net assets applicable to outstanding shares................................ $15,515,397 ============== SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 1,124,822 ============== NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 13.79 ============== (A) The portfolio was liquidated on December 20, 2002 (see Note 1). See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income ....................... $ 20,459 Income from portfolio (A).............. 518,020 Expenses allocated from portfolio (A).. (66,805) ------------ Investment income..................... $ 471,674 ------------ Expenses - Investment adviser fee(Note 3)......... $ 2,092 Administration fee (Note 3)............ 2,534 Custodian fee (Note 1C)................ 23,765 Compensation of Trustees not employees of the investment adviser or administrator 2,920 Distribution expenses (Note 4)......... 27,500 Transfer and dividend disbursing agent fees 13,373 Printing............................... 3,881 Audit services......................... 16,356 Legal services......................... 1,653 Registration costs..................... 18,316 Miscellaneous.......................... 1,015 ------------ Total expenses........................ $ 113,405 ------------ Deduct - Reduction of custodian fee (Note 1C)... $ (6,160) Reduction of distribution expenses by principal underwriter (Note 4)........ (27,426) Allocation of expenses to investment adviser (Note 3)........... (40,034) Reduction of investment adviser fee.... (2,092) ------------ Total deductions...................... $ (75,712) ------------ Net expenses.......................... $ 37,693 ------------ Net investment income............... $ 433,981 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions from portfolio (identified cost basis). $ 478,964 Net change in unrealized depreciation of investments......................... (78,322) ------------ Net realized and unrealized gain of investments........................... $ 400,642 ------------ Net increase in net assets from operations $ 834,623 ============ See notes to financial statements WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) -------------------------------------------------------------------------------
Year Ended December 31, ----------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 433,981 $ 625,271 Net realized gain on investment transactions............................... 478,964 170,578 Change in unrealized depreciation on investments........................... (78,322) (242,781) ------------ ------------ Net increase in net assets resulting from operations..................... $ 834,623 $ 553,068 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (474,533) $ (674,365) From net realized gain..................................................... (336,443) (56,599) ------------ ------------ Total distributions...................................................... $ (810,976) $ (730,964) ------------ ------------ Net decrease in net assets from fund share transactions (Note 5)............. $ 5,322,697 $ (6,150,565) ------------ ------------ Net decrease in net assets............................................... $ 5,346,344 $ (6,328,461) NET ASSETS: At beginning of year......................................................... 10,169,053 16,497,514 ------------ ------------ At end of year............................................................... $ 15,515,397 $ 10,169,053 ============= ============= UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR................................................. $ 32,239 $ (957) ============= =============
See notes to financial statements WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002 2001 2000 1999 1998 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 13.630 $ 13.750 $ 12.890 $ 14.400 $ 13.950 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.575 $ 0.651(7) $ 0.737 $ 0.722 $ 0.724 Net realized and unrealized gain (loss).. 0.496 0.006(7) 0.842 (1.282) 0.632 -------- -------- -------- -------- -------- Total income (loss) from investment operations............. $ 1.071 $ 0.657 $ 1.579 $ (0.560) $ 1.356 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income......... $ (0.605) $ (0.701) $ (0.719) $ (0.716) $ (0.741) Distributions from capital gains......... (0.306) (0.076) - (0.234) (0.165) -------- -------- -------- -------- -------- Total distributions.................... $ (0.911) $ (0.777) $ (0.719) $ (0.950) $ (0.906) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 13.790 $ 13.630 $ 13.750 $ 12.890 $ 14.400 ========= ========= ========= ========= ========= Total return(2) ............................ 8.07% 5.40% 12.61% (3.97%) 9.95% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 15,515 $ 10,169 $ 16,498 $ 31,192 $ 67,256 Ratio of net expenses to average net assets(3) 1.01% 1.02% 0.97% 0.92% 0.94% Ratio of net expenses after custodian fee reduction to average net assets(3)(4) 0.95%(6) 0.95%(6) 0.95%(6) 0.90% 0.90% Ratio of net investment income to average net assets............... 3.95% 5.11% 5.55% 5.26% 5.09% Portfolio turnover rate ................ 98%(5) 27%(5) 74%(5) 0%(5) 7%(5) ---------------------------------------------------------------------------------------------------------------------------------- (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: 2002 2001 2000 1999 1998 ---------------------------------------------------------------------------------------------------------------------------- Net investment income per share............. $ 0.477 $ 0.547 $ 0.700 $ 0.703 $ 0.721 ========= ========= ========= ========= ========= Ratios (as a percentage of average net assets): Expenses(3) ............................. 1.62% 1.84% 1.26% 1.06% 0.96% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(3)(4) 1.56% 1.77% 1.24% 1.04% 0.92% ========= ========= ========= ========= ========= Net investment income.................... 3.28% 4.29% 5.27% 5.12% 5.07% ========= ========= ========= ========= ========= ---------------------------------------------------------------------------------------------------------------------------------- (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)Includes each fund's share of its corresponding portfolio's allocated expenses. (4)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. (5)Represents portfolio turnover rate at the fund's corresponding portfolio. (6)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% after custodian fee credits are applied. (7)Reporting guidelines require the fund 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).
See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - December 31, 2002
Face Coupon Maturity Market Current Yield To Amount Description Rate Date Price Value Yield Maturity ------------------------------------------------------------------------------------------------------------------------------- (unaudited)(unaudited) CORPORATE BONDS FINANCIAL ------------ $ 550,000 Ameritech Cap Corp 6.150% 01-15-08 $109.960 $ 604,780 5.60% 3.9% 500,000 Bank Of New York Co 6.375% 04-01-12 112.420 562,119 5.70% 4.7% 550,000 Boeing Cap Corp 5.650% 05-15-06 104.780 576,300 5.40% 4.1% 340,000 CIT Group Inc 6.875% 11-01-09 107.570 365,722 6.40% 5.5% 315,000 Ford Motor Credit 7.375% 10-28-09 99.090 312,122 7.40% 7.5% 625,000 General Elec Cap Corp 5.000% 02-15-07 105.760 660,990 4.70% 3.5% 285,000 GMAC 7.750% 01-19-10 104.690 298,364 7.40% 6.9% 550,000 Household Finance CO 8.000% 07-15-10 112.970 621,328 7.10% 5.8% 700,000 Citibank Credit Card Issuance Trust 6.900% 10-15-07 111.720 782,031 6.20% 4.2% 500,000 Intl Lease Fin 5.125% 08-01-04 102.800 514,019 5.00% 3.3% 500,000 Lehman Brothers 7.750% 01-15-05 109.710 548,550 7.10% 2.8% 320,000 Meadwestvaco Cor 6.850% 04-01-12 110.960 355,081 6.20% 5.3% 540,000 Wells Fargo & CO 4.800% 07-29-05 106.020 572,514 4.50% 2.4% 935,000 MBNA Master 2000-AA 7.350% 07-16-07 110.540 1,033,542 6.60% 4.6% INDUSTRIALS ------------- $ 250,000 Albertson's Inc 7.500% 02-15-11 $115.050 $ 287,629 6.50% 5.2% 250,000 Amerada Hess 6.650% 08-15-11 109.230 273,069 6.10% 5.3% 330,000 Centex Corp 7.875% 02-01-11 112.670 371,798 7.00% 5.9% 160,000 Daimlerchrysler 7.200% 09-01-09 111.170 177,878 6.50% 5.2% 160,000 Deutsche Tel Fin 8.500% 06-15-10 115.170 184,277 7.40% 5.9% 155,000 France Telecom 7.750% 03-01-11 116.000 179,222 6.70% 5.4% 500,000 Honeywell Inc 7.000% 03-15-07 112.990 564,937 6.20% 3.6% 425,000 Kraft Foods Inc. 6.250% 06-01-12 111.830 475,265 5.60% 4.7% 190,000 Sprint Cap Corp 6.125% 11-15-08 91.000 172,900 6.70% 8.1% 430,000 Unitedhealth Group Inc 5.200% 01-17-07 105.840 455,097 4.90% 3.6% UTILITIES ---------- $ 180,000 American Electric Power 6.125% 05-15-06 $ 98.480 $ 177,264 6.20% 6.6% 185,000 AT & T Corp 6.500% 03-15-13 100.310 185,579 6.50% 6.5% 165,000 A T & T Broadband 8.375% 03-15-13 113.590 187,427 7.40% 6.5% 170,000 AT & T Wireless 7.875% 03-01-11 100.500 170,850 7.80% 7.8% 485,000 Bellsouth Telecom 6.375% 06-15-04 106.500 516,539 6.00% 1.8% 360,000 Conoco Inc 6.350% 04-15-09 112.330 404,375 5.70% 4.1% 160,000 Cox Communications Inc 7.125% 10-01-12 111.070 177,717 6.40% 5.6% 350,000 Philips Pete 6.375% 03-30-09 111.030 388,600 5.70% 4.3% 435,000 PPL Electric Util 5.875% 08-15-07 109.010 474,205 5.40% 3.7% 170,000 Progress Energy Inc 7.100% 03-01-11 110.210 187,357 6.40% 5.5% 955,000 Tennessee Valley Auth 6.000% 03-15-13 112.270 1,072,160 5.30% 4.5% 500,000 Verizon Global 6.750% 12-01-05 110.490 552,454 6.10% 3.0% ------------- Total Corporate Bonds (identified cost, $14,529,143) - 39.2% $15,444,061 ------------- GOVERNMENT INTERESTS U.S. GOVERNMENT AGENCIES --------------------------- $ 900,000 FNMA 7.125% 02-15-05 $110.910 $ 998,177 6.40% 1.9% 500,000 FHLB 5.125% 03-06-06 108.670 543,362 4.70% 2.3% 750,000 FHLMC 4.875% 03-15-07 108.050 810,368 4.50% 2.8% 40,000 FHLMC 5.750% 04-15-08 112.250 44,900 5.10 % 3.2% 530,000 FHLB 5.800% 09-02-08 112.590 596,702 5.20 % 3.3% 1,000,000 FNMA 5.250% 01-15-09 109.410 1,094,067 4.80% 3.5% 440,000 FNMA 5.740% 01-21-09 103.960 457,434 5.50% 5.0% FNMA ------ $ 320,683 Freddie Mac Pool #E00903 7.000% 10-01-15 $106.390 $ 341,165 6.60% 1.0% 303,304 FNMA Pool #479477 6.000% 01-01-29 103.790 314,793 5.80% 4.2% 278,131 FNMA Pool #489357 6.500% 03-01-29 104.190 289,790 6.20% 3.5% 287,095 FNMA Pool #WAM30.0 8.500% 04-01-30 107.510 308,662 7.90% 3.7% 773,645 FNCL Pool #597396 6.500% 09-01-31 104.170 805,902 6.20% 3.7% 871,320 FNMA Pool #545407 5.500% 01-01-32 102.160 890,158 5.40% 4.7% 516,805 FNCL Pool #634823 6.500% 03-01-32 104.170 538,345 6.20% 4.0% FHLMC ------ $ 364,124 FGLMC Pool #c27663 7.000% 06-01-29 $105.220 $ 383,131 6.70% 3.4% GNMA ------ $ 242,363 GNMA Pool #436214 6.500% 02-15-13 $106.290 $ 257,620 6.10% 3.0% 438,481 GNMA Pool #463839 6.000% 05-15-13 105.890 464,312 5.70 % 3.5% 286,042 GNMA Pool #442996 6.000% 06-15-13 105.890 302,893 5.70 % 3.5% 1,333,266 GNMA Pool #374892 7.000% 02-15-24 107.000 1,422,599 6.60% 3.3% 308,373 GNMA Pool #376400 6.500% 02-15-24 106.000 326,203 6.10% 3.9% 465,034 GNMA Pool #379982 7.000% 02-15-24 106.700 496,191 6.60% 3.3% 631,919 GNMA Pool #410081 8.000% 08-15-25 109.190 689,979 7.30% 2.4% 553,240 GNMA Pool #448490 7.500% 03-15-27 106.940 591,613 7.00% 3.6% 401,776 GNMA Pool #427199 7.000% 12-15-27 106.350 427,289 6.60% 3.4% 709,763 GNMA Pool #460726 6.500% 12-15-27 105.220 746,841 6.20 % 4.1% 854,822 GNMA Pool #458762 6.500% 01-15-28 105.120 898,580 6.20 % 4.1% 484,564 GNMA Pool #478072 6.500% 05-15-28 105.120 509,368 6.20% 4.1% 229,062 GNMA Pool #488924 6.500% 11-15-28 105.120 240,788 6.20% 4.1% 398,308 GNMA II Pool #2671 6.000% 11-20-28 104.160 414,886 5.80% 4.6% 201,031 GNMA Pool #8.0 8.000% 11-15-29 108.270 217,650 7.40% 1.7% 103,707 GNMA Pool #2909 8.000% 04-20-30 107.560 111,547 7.40% 2.4% 377,721 GNMA Pool #2972 7.500% 09-20-30 106.560 402,507 7.00% 3.3% 131,125 GNMA Pool #2973 8.000% 09-20-30 107.560 141,038 7.40% 2.5% U.S. TREASURIES ----------------- $ 350,000 U.S. Treasury Notes 4.625% 05-15-06 $107.850 $ 377,490 4.30% 2.2% 900,000 U.S. Treasury Notes 3.000% 11-15-07 101.200 910,828 3.00% 2.7% 700,000 U.S. Treasury Notes 4.750% 11-15-08 109.160 764,092 4.40% 3.0% 1,675,000 U.S. Treasury Notes 5.000% 08-15-11 109.660 1,836,741 4.60% 3.7% 1,750,000 U.S. Treasury Bonds 7.250% 05-15-16 128.050 2,240,821 5.70% 4.4% 200,000 U.S. Treasury Bonds 6.125% 08-15-29 117.400 234,797 5.20% 4.9% ------------- Total Government Interests (identified cost, $21,859,027) - 59.5% $23,443,629 ------------- Total Investments (identified cost, $36,388,170) - 98.7% $38,887,690 Other assets, Less liabilities - 1.3% 515,891 ----------- Net Assets -- 100.0% $39,403,581 ============ Average Maturity - 12.23 Years (unaudited)
See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments at value (identified cost, $36,388,170) (Note 1A)$ 38,887,690 Cash.................................... 115,699 Receivable for fund shares issued....... 6,133 Interest receivable..................... 471,161 Other assets............................ 6,353 ------------ Total assets.......................... $39,487,036 ------------ LIABILITIES: Distributions payable................... $ 34,779 Payable for fund shares reacquired...... 18,710 Accrued expenses and other liabilities.. 29,966 ------------ Total liabilities..................... $ 83,455 ------------ NET ASSETS................................ $39,403,581 ============ NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $40,194,945 Accumulated net realized loss on investments (computed on the basis of identified cost) (3,281,211) Unrealized appreciation on investments (computed on the basis of identified cost) 2,499,520 Distributions in excess of net investment income................................. (9,673) ------------ Net assets applicable to outstanding shares................................ $ 39,403,581 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................. 3,028,543 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST..................... $ 13.01 ============= See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1B): Interest income........................ $ 2,747,274 ------------ Expenses - Investment adviser fee (Note 3)........ $ 210,631 Administrator fee (Note 3)............. 32,765 Compensation of Trustees not employees of the investment adviser or administrator 2,920 Custodian fee (Note 1C)................ 46,410 Distribution expenses (Note 4)......... 117,017 Transfer and dividend disbursing agent fees 12,375 Printing............................... 3,590 Interest expense....................... 5,134 Audit services......................... 35,526 Legal services......................... 2,976 Registration costs..................... 21,322 Miscellaneous.......................... 18,577 ------------ Total expenses........................ $ 509,243 ------------ Deduct - Reduction of custodian fee (Note 1C)... $ (6,128) Reduction of distribution expenses by principal underwriter (Note 4)........ (58,450) ------------ Total deductions...................... $ (64,578) ------------ Net expenses.......................... $ 444,665 ------------ Net investment income............... $ 2,302,609 ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 509,400 Net change in unrealized appreciation of investments......................... 1,129,199 ------------ Net realized and unrealized gain of investments........................... $ 1,638,599 ------------ Net increase in net assets from operations........................... $ 3,941,208 ============= See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) -------------------------------------------------------------------------------
Year Ended December 31 ----------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ------------------------------------------------------------------------------------------------------------------------------ DECREASE IN NET ASSETS: From operations - Net investment income...................................................... $ 2,302,609 $ 3,184,961 Net realized gain on investment transactions............................... 509,400 (496,921) Change in unrealized appreciation of investments........................... 1,129,199 321,944 ------------ ------------ Net increase in net assets resulting from operations..................... $ 3,941,208 $ 3,009,984 ------------ ------------ Distributions to shareholders (Note 2) From net investment income................................................. $ (2,378,235) $ (3,220,354) ------------ ------------ Net decrease in net assets from fund share transactions (Note 5)............. $(12,779,874) $(14,943,795) ------------ ------------ Net decrease in net assets............................................... $(11,216,901) $(15,154,165) NET ASSETS: At beginning of year......................................................... 50,620,482 65,774,647 ------------ ------------ At end of year............................................................... $ 39,403,581 $ 50,620,482 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR........................................ $ (9,673) $ (8,815) ============= =============
See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002 2001 2000 1999 1998 ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 12.550 $ 12.630 $ 12.100 $ 13.310 $ 12.930 -------- --------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.639 $ 0.709(4) $ 0.712 $ 0.679 $ 0.680 Net realized and unrealized gain (loss).. 0.461 (0.090)(4) 0.530 (1.190) 0.524 -------- ----------- -------- -------- ------- Total income (loss) from investment operations $ 1.100 $ 0.619 $ 1.242 $ (0.511) $ 1.204 --------- ---------- -------- -------- ------- Less distributions: Dividends from investment income......... $ (0.640) $ (0.699) $ (0.712) $ (0.680) $ (0.690) Distributions from capital gains......... -- - - (0.019) (0.134) -------- -------- -------- -------- -------- Total distributions.................... $ (0.640) $ (0.699) $ (0.712) $ (0.699) $ (0.824) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 13.010 $ 12.550 $ 12.630 $ 12.100 $ 13.310 ========= ========= ========= ========= ========= Total return(2) ............................ 9.03% 4.96% 10.62% (3.91%) 9.56% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 39,404 $ 50,620 $ 65,775 $ 87,336 $115,937 Ratio of net expenses to average net assets 0.96% 0.96% 0.96% 0.90% 0.90% Ratio of net expenses after custodian fee reduction to average net assets(3) .... 0.95%(5) 0.95%(5) 0.95%(5) 0.90% 0.90% Ratio of net investment income to average net assets............................ 4.92% 5.44% 5.84% 5.36% 5.18% Portfolio turnover rate.................. 68% 38% 61% 31% 26% ------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2002, 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: 2002 2001 1999 ------------------------------------------------------- Net investment income per share.......... $ 0.621 $ 0.701 $ 0.678 ========== ========== ========== Ratios (As a percentage of average net assets): Expenses............................... 1.09% 1.02% 0.91% ========== ========== ========== Expenses after custodian fee reduction(3) 1.08% 1.01% 0.91% ========== ========== ========== Net investment income.................. 4.78% 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 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% after custodian fee credits are applied.
See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- Portfolio of Investments - December 31, 2002
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield --------------------------------------------------------------------------------------------------------------------------------- (unaudited) GOVERNMENT INTERESTS - 99.8% FNMA ------ $ 1,984,802 FNMA Pool #254546 5.500% 12-01-17 $103.83 $ 2,060,738 5.3% 806,803 FNMA Pool #535131 6.000% 03-01-29 103.79 837,364 5.8% 1,000,000 FNMA Pool #668199 4.235% 12-01-32 105.62 1,028,125 4..1% FHLMC ------ $ 492,640 FGLMC Pool #c27663 7.000% 06-01-29 $105.22 $ 518,356 6.7% GNMA ---- $ 351,115 GNMA II Pool #000723 7.500% 01-20-23 107.35 $ 376,932 7.0% 297,874 GNMA II Pool #001268 8.000% 07-20-23 108.76 323,982 7.4% 168,003 GNMA II Pool #1788 7.000% 07-20-24 106.04 178,153 6.6% 156,662 GNMA II Pool #2218 7.500% 05-20-26 106.92 167,498 7.0% 266,698 GNMA II Pool #545 7.500% 12-20-22 107.35 286,306 7.0% 102,449 GNMA Pool #002855 8.500% 12-20-29 108.22 110,868 7.9% 144 GNMA Pool #003026 8.000% 01-15-04 103.48 149 7.7% 97 GNMA Pool #003331 8.000% 01-15-04 103.48 100 7.8% 303 GNMA Pool #004183 8.000% 07-15-04 103.48 313 7.7% 289 GNMA Pool #004433 9.000% 11-15-04 103.66 300 8.7% 611,414 GNMA Pool #431612 8.000% 11-15-26 109.01 666,519 7.3% 489,053 GNMA Pool #046244 6.500% 12-15-27 105.22 514,601 6.2% 142 GNMA Pool #11191 7.250% 04-15-06 104.83 149 6.9% 973 GNMA Pool #12526 8.000% 11-15-06 106.37 1,035 7.5% 26,083 GNMA Pool #151443 10.000% 03-15-16 114.51 29,867 8.7% 6,207 GNMA Pool #153564 10.000% 04-15-16 114.51 7,108 8.7% 20,942 GNMA Pool #1596 9.000% 04-20-21 110.75 23,194 8.1% 24,740 GNMA Pool #172558 9.500% 08-15-16 112.34 27,793 8.5% 60,060 GNMA Pool #176992 8.000% 11-15-16 109.74 65,912 7.3% 5,613 GNMA Pool #177784 8.000% 10-15-16 109.74 6,160 7.3% 12,233 GNMA Pool #180033 9.500% 09-15-16 112.34 13,742 8.5% 4,392 GNMA Pool #188060 9.500% 10-15-16 112.34 4,934 8.5% 440 GNMA Pool #190959 8.500% 02-15-17 110.5 486 7.7% 14,755 GNMA Pool #192357 8.000% 04-15-17 109.77 16,197 7.3% 83,329 GNMA Pool #194057 8.500% 04-15-17 110.5 92,078 7.7% 32,436 GNMA Pool #194287 9.500% 03-15-17 112.42 36,466 8.5% 151,225 GNMA Pool #194926 8.500% 02-15-17 110.5 167,102 7.7% 3,868 GNMA Pool #196063 8.500% 03-15-17 110.5 4,274 7.7% 35,441 GNMA Pool #203369 8.000% 12-15-16 109.74 38,894 7.3% 14,164 GNMA Pool #206740 10.000% 10-15-17 114.6 16,232 8.7% 49,378 GNMA Pool #206762 9.000% 04-15-21 111.21 54,915 8.1% 26,457 GNMA Pool #207019 8.000% 03-15-17 109.77 29,043 7.3% 5,497 GNMA Pool #208076 8.000% 04-15-17 109.77 6,034 7.3% 4,899 GNMA Pool #210520 10.500% 08-15-17 115.93 5,679 9.1% 4,617 GNMA Pool #210618 9.500% 04-15-17 112.42 5,191 8.4% 21,850 GNMA Pool #211013 9.000% 01-15-20 111.27 24,314 8.1% 17,990 GNMA Pool #211231 8.500% 05-15-17 110.5 19,878 7.7% 15,544 GNMA Pool #212601 8.500% 06-15-17 110.5 17,176 7.7% 1,395 GNMA Pool #218420 8.500% 11-15-21 110.25 1,538 7.7% 55,419 GNMA Pool #219335 8.000% 05-15-17 109.77 60,835 7.3% 98,135 GNMA Pool #220703 8.000% 05-15-17 109.77 107,726 7.3% 9,755 GNMA Pool #220917 8.500% 04-15-17 110.5 10,779 7.7% 196,559 GNMA Pool #222112 8.000% 01-15-22 109.54 215,318 7.3% 23,144 GNMA Pool #223126 10.000% 08-15-17 114.6 26,522 8.7% 19,145 GNMA Pool #223133 9.500% 07-15-17 112.42 21,524 8.4% 10,991 GNMA Pool #223348 10.000% 07-15-18 114.64 12,600 8.7% $ 1,829 GNMA Pool #223588 10.000% 02-15-18 $114.64 $ 2,097 8.7% 4,549 GNMA Pool #224078 10.000% 07-15-18 114.64 5,215 8.7% 456,577 GNMA Pool #2268 7.500% 08-20-26 106.92 488,158 7.0% 17,937 GNMA Pool #228308 10.000% 01-15-19 114.68 20,570 8.7% 10,138 GNMA Pool #228483 9.500% 09-15-19 112.54 11,409 8.4% 12,401 GNMA Pool #230223 9.500% 04-15-18 112.49 13,950 8.4% 15,247 GNMA Pool #245580 9.500% 07-15-18 112.49 17,151 8.4% 6,342 GNMA Pool #247473 10.000% 09-15-18 114.64 7,025 9.0% 30,621 GNMA Pool #247681 9.000% 11-15-19 111.29 34,077 8.1% 6,008 GNMA Pool #247872 10.000% 09-15-18 114.64 6,888 8.7% 15,082 GNMA Pool #250412 8.000% 03-15-18 109.79 16,559 7.3% 11,790 GNMA Pool #251241 9.500% 06-15-18 112.49 13,262 8.4% 14,795 GNMA Pool #258911 9.500% 09-15-18 112.49 16,642 8.4% 16,237 GNMA Pool #260999 9.500% 09-15-18 112.49 18,265 8.4% 10,066 GNMA Pool #263439 10.000% 02-15-19 114.68 11,544 8.7% 6,886 GNMA Pool #265267 9.500% 08-15-20 112.57 7,752 8.4% 8,130 GNMA Pool #266983 10.000% 02-15-19 114.68 9,323 8.7% 6,540 GNMA Pool #273690 9.500% 08-15-19 112.54 7,360 8.4% 7,455 GNMA Pool #274489 9.500% 12-15-19 112.54 8,390 8.4% 2,460 GNMA Pool #275456 9.500% 08-15-19 112.54 2,768 8.4% 5,287 GNMA Pool #275538 9.500% 01-15-20 112.57 5,952 8.4% 6,439 GNMA Pool #277205 9.000% 12-15-19 111.29 7,166 8.1% 49,425 GNMA Pool #285744 9.000% 05-15-20 111.27 54,997 8.1% 20,393 GNMA Pool #286556 9.000% 03-15-20 111.27 22,692 8.1% 16,655 GNMA Pool #289092 9.000% 04-15-20 111.27 18,533 8.1% 194,208 GNMA Pool #2897 8.000% 03-20-30 107.56 208,890 7.4% 5,846 GNMA Pool #290700 9.000% 08-15-20 111.27 6,505 8.1% 544,711 GNMA Pool #2909 8.000% 04-20-30 107.56 585,891 7.4% 5,181 GNMA Pool #293666 8.500% 06-15-21 110.25 5,712 7.7% 277 GNMA Pool #294209 9.000% 07-15-21 111.21 308 8.1% 2,184 GNMA Pool #297345 8.500% 08-15-20 110.34 2,409 7.7% 662,487 GNMA Pool #3011 7.500% 12-20-30 106.56 705,960 7.0% 15,073 GNMA Pool #301366 8.500% 06-15-21 110.25 16,618 7.7% 7,395 GNMA Pool #302713 9.000% 02-15-21 111.21 8,157 8.2% 4,140 GNMA Pool #302723 8.500% 05-15-21 110.25 4,564 7.7% 11,402 GNMA Pool #302781 8.500% 06-15-21 110.25 12,571 7.7% 17,088 GNMA Pool #302933 8.500% 06-15-21 110.25 18,840 7.7% 41,006 GNMA Pool #304512 8.500% 05-15-21 110.25 45,210 7.7% 125,103 GNMA Pool #305091 9.000% 07-15-21 111.21 139,131 8.1% 35,649 GNMA Pool #306693 8.500% 09-15-21 110.25 39,303 7.7% 12,637 GNMA Pool #308792 9.000% 07-15-21 111.21 14,054 8.1% 12,949 GNMA Pool #311087 8.500% 07-15-21 110.25 14,277 7.7% 5,876 GNMA Pool #314222 8.500% 04-15-22 110.13 6,471 7.7% 10,331 GNMA Pool #314581 9.500% 10-15-21 112.59 11,631 8.4% 49,060 GNMA Pool #315187 8.000% 06-15-22 109.54 53,742 7.3% 209,353 GNMA Pool #315388 8.000% 02-15-22 109.54 229,334 7.3% 17,713 GNMA Pool #315754 8.000% 01-15-22 109.54 19,404 7.3% 139,973 GNMA Pool #316240 8.000% 01-15-22 109.54 153,332 7.3% 52,305 GNMA Pool #317069 8.500% 12-15-21 110.25 57,666 7.7% 91,871 GNMA Pool #317351 8.000% 05-15-22 109.54 100,639 7.3% 10,096 GNMA Pool #317358 8.000% 05-15-22 109.54 11,060 7.3% 51,672 GNMA Pool #318776 8.000% 02-15-22 109.54 56,604 7.3% 406 GNMA Pool #318793 8.500% 02-15-22 110.13 447 7.7% 81,809 GNMA Pool #319441 8.500% 04-15-22 110.13 90,097 7.7% 39,847 GNMA Pool #321806 8.000% 05-15-22 109.54 43,651 7.3% $123,692 GNMA Pool #321807 8.000% 05-15-22 $109.54 $ 135,497 7.3% 72,674 GNMA Pool #321976 8.500% 01-15-22 110.13 80,037 7.7% 148,205 GNMA Pool #323226 8.000% 06-15-22 109.54 162,350 7.3% 162,851 GNMA Pool #323929 8.000% 02-15-22 109.54 178,393 7.3% 80,481 GNMA Pool #325165 8.000% 06-15-22 109.54 88,162 7.3% 47,243 GNMA Pool #325651 8.000% 06-15-22 109.54 51,752 7.3% 1,972,455 GNMA Pool #3259 5.500% 07-20-32 102.35 2,018,837 5.4% 2,484,112 GNMA Pool #3284 5.500% 09-20-32 102.35 2,542,526 5.4% 121,759 GNMA Pool #329540 7.500% 08-15-22 107.49 130,883 7.0% 477,265 GNMA Pool #329982 7.500% 02-15-23 107.49 513,036 7.0% 45,103 GNMA Pool #331361 8.000% 11-15-22 109.54 49,408 7.3% 41,655 GNMA Pool #335746 8.000% 10-15-22 109.54 45,631 7.3% 98,873 GNMA Pool #335950 8.000% 10-15-22 109.54 108,310 7.3% 628,713 GNMA Pool #336488 7.000% 08-15-23 106.77 671,258 6.6% 627,510 GNMA Pool #348103 7.000% 06-15-23 106.77 669,974 6.6% 483,667 GNMA Pool #348213 6.500% 08-15-23 105.79 511,652 6.1% 245,867 GNMA Pool #350372 7.000% 04-15-23 106.77 262,505 6.6% 270,535 GNMA Pool #350659 7.500% 06-15-23 107.49 290,812 7.0% 617,323 GNMA Pool #350938 6.500% 08-15-23 105.79 653,042 6.1% 604,715 GNMA Pool #352001 6.500% 12-15-23 105.79 639,704 6.1% 352,854 GNMA Pool #352110 7.000% 08-15-23 106.77 376,732 6.6% 184,199 GNMA Pool #363429 7.000% 08-15-23 106.77 196,664 6.6% 440,113 GNMA Pool #367414 6.000% 11-15-23 105 462,141 5.7% 612,481 GNMA Pool #367806 6.500% 09-15-23 105.79 647,919 6.1% 645,580 GNMA Pool #368238 7.000% 12-15-23 106.77 689,266 6.6% 656,938 GNMA Pool #368502 7.000% 02-15-24 106.7 700,953 6.6% 1,313,656 GNMA Pool #372050 6.500% 02-15-24 105.78 1,389,616 6.1% 169,993 GNMA Pool #372379 8.000% 10-15-26 109.01 185,315 7.3% 314,206 GNMA Pool #372468 6.500% 12-15-27 105.22 330,620 6.2% 804,933 GNMA Pool #376218 7.500% 08-15-25 107.25 863,283 7.0% 400,885 GNMA Pool #376400 6.500% 02-15-24 105.78 424,064 6.1% 503,682 GNMA Pool #387189 7.000% 02-15-24 106.7 537,429 6.6% 118,748 GNMA Pool #394805 7.500% 02-15-26 107.06 127,131 7.0% 150,303 GNMA Pool #398251 7.500% 09-15-25 107.25 161,198 7.0% 307,883 GNMA Pool #405558 7.500% 01-15-26 107.06 329,617 7.0% 706,844 GNMA Pool #410215 7.500% 12-15-25 107.25 758,083 7.0% 1,381,399 GNMA Pool #413152 8.000% 10-15-25 109.19 1,508,318 7.3% 152,665 GNMA Pool #414736 7.500% 11-15-25 107.25 163,732 7.0% 184,291 GNMA Pool #417225 7.500% 01-15-26 107.06 197,301 7.0% 377,585 GNMA Pool #417276 7.000% 02-15-26 106.45 401,954 6.6% 1,106,557 GNMA Pool #420707 7.000% 02-15-26 106.45 1,177,970 6.6% 246,443 GNMA Pool #421829 7.500% 04-15-26 107.06 263,839 7.0% 38,386 GNMA Pool #423114 7.000% 09-15-27 106.35 40,823 6.6% 234,190 GNMA Pool #424173 7.500% 03-15-26 107.06 250,721 7.0% 201,329 GNMA Pool #427199 7.000% 12-15-27 106.35 214,113 6.6% 713,814 GNMA Pool #430279 7.000% 10-15-27 106.35 759,141 6.6% 83,992 GNMA Pool #431036 8.000% 07-15-26 109.01 91,563 7.3% 508,353 GNMA Pool #434505 7.500% 08-15-29 106.74 542,629 7.0% 403,939 GNMA Pool #436214 6.500% 02-15-13 106.29 429,367 6.1% 324,922 GNMA Pool #436723 7.500% 11-15-26 107.06 347,859 7.0% 1,138,293 GNMA Pool #436777 7.000% 04-15-27 106.35 1,210,575 6.6% 583,884 GNMA Pool #440166 7.000% 02-15-27 106.35 620,961 6.6% 384,242 GNMA Pool #442063 7.000% 10-15-26 106.45 409,041 6.6% 155,475 GNMA Pool #442190 8.000% 12-15-26 109.01 169,488 7.3% 155,112 GNMA Pool #442193 7.500% 12-15-26 107.06 166,062 7.0% $575,792 GNMA Pool #442996 6.000% 06-15-13 $105.89 $ 609,712 5.7% 294,725 GNMA Pool #446943 7.000% 04-15-27 106.35 313,440 6.6% 725,469 GNMA Pool #448490 7.500% 03-15-27 106.94 775,787 7.0% 662,061 GNMA Pool #449176 6.500% 07-15-28 105.12 695,952 6.2% 936,803 GNMA Pool #457100 6.500% 11-15-28 105.12 984,754 6.2% 555,715 GNMA Pool #458712 7.000% 11-15-27 106.35 591,003 6.6% 1,282,233 GNMA Pool #458762 6.500% 01-15-28 105.12 1,347,867 6.2% 263,911 GNMA Pool #460698 7.000% 10-15-27 106.35 280,669 6.6% 709,763 GNMA Pool #460726 6.500% 12-15-27 105.22 746,841 6.2% 548,557 GNMA Pool #462623 6.500% 03-15-28 105.12 576,637 6.2% 414,862 GNMA Pool #468173 7.000% 08-15-28 106.19 440,546 6.6% 405,606 GNMA Pool #469226 6.500% 03-15-28 105.12 426,369 6.2% 1,101,056 GNMA Pool #469615 6.500% 10-15-28 105.12 1,157,415 6.2% 1,036,052 GNMA Pool #472028 6.500% 05-15-28 105.12 1,089,087 6.2% 872,498 GNMA Pool #480030 6.500% 06-15-28 105.12 917,161 6.2% 1,163,587 GNMA Pool #484195 6.500% 08-15-28 105.12 1,223,147 6.2% 2,039,796 GNMA Pool #486482 6.500% 09-15-28 105.12 2,144,207 6.2% 370,134 GNMA Pool #510083 7.000% 07-15-29 106.10 392,708 6.6% 1,762,451 GNMA Pool #523002 6.500% 02-15-32 105.03 1,851,092 6.2% 926,765 GNMA Pool #538314 7.000% 02-15-32 106.01 982,503 6.6% 748 GNMA Pool #5466 8.500% 03-15-05 105.06 786 8.1% 1,191,865 GNMA Pool #547605 6.500% 01-15-31 105.03 1,251,792 6.2% 1,030,512 GNMA Pool #552393 6.500% 02-15-32 105.03 1,082,341 6.2% 723,770 GNMA Pool #554203 7.000% 12-15-31 106.01 767,269 6.6% 82 GNMA Pool #5561 8.500% 04-15-05 105.06 86 8.1% 284 GNMA Pool #5687 7.250% 02-15-05 103.96 296 7.0% 1,169,769 GNMA Pool #570141 6.500% 12-15-31 105.03 1,228,585 6.2% 2,981,771 GNMA POOL #585467 6.000% 08-15-32 104.25 3,108,526 5.8% 1,997,726 GNMA Pool #589580 5.500% 11-15-32 102.79 2,053,453 5.4% 393 GNMA Pool #5910 7.250% 02-15-05 103.96 408 7.0% 3,000,000 GNMA Pool #595207 5.500% 12-15-32 102.79 3,083,686 5.4% 2,005,235 GNMA Pool #595606 6.000% 11-15-32 104.25 2,090,478 5.8% 3,091 GNMA Pool #7003 8.000% 07-15-05 105.07 3,247 7.6% 147 GNMA Pool #7319 6.500% 10-15-04 101.65 150 6.4% 550,392 GNMA Pool #780429 7.500% 09-15-26 107.06 589,755 7.0% 297,589 GNMA Pool #780518 7.000% 06-15-26 106.45 316,934 6.6% 1,162 GNMA Pool #9106 8.250% 05-15-06 106.46 1,237 7.7% 1,578 GNMA Pool #9889 7.250% 02-15-06 104.83 1,655 6.9% 2,670,497 GNSF Pool #587080 6.500% 05-15-32 105.03 2,804,809 6.2% ----------- TOTAL INVESTMENTS (identified cost, $71,571,059) - 99.8% $74,612,869 ----------- Other Assets, less Liabilities - 0.2% 167,115 ----------- Net Assets - 100.0% $74,779,984 ============
See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2002 ------------------------------------------------------------------------------- ASSETS: Investments - Investments at value (identified cost of($71,571,059)(Note 1A) $74,612,869 Cash.................................. 864 Receivable for fund shares issued..... 19,585 Interest receivable................... 390,241 Receivable from investment adviser.... 33,448 Prepaid assets........................ 7,701 ------------ Total assets.......................... $75,064,708 ------------ LIABILITIES: Payables for fund shares reacquired..... $ 4,513 Distributions payable................... 123,000 Loans payable........................... 143,000 Accrued expenses and other liabilities.. 14,211 ------------ Total liabilities..................... $ 284,724 ------------ NET ASSETS................................ $74,779,984 ============ NET ASSETS CONSIST OF: Proceeds from sales of shares (including the market value of securities received in exchange for fund shares and shares issued to shareholders in payment of distributions declared), less cost of shares reacquired................... $ 72,957,836 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost)....................... (1,096,662) Unrealized appreciation on investments (computed on the basis of identified cost) 3,041,810 Distributions in excess of net investment income................................. (123,000) ------------ Net assets applicable to outstanding shares............................... $74,779,984 ============= Computation of net asset value, offering and redemption price per share: Standard Shares: --------------- Net assets............................. $ 59,076,548 ============== Shares of beneficial interest outstanding 5,463,010 ============== Net asset value, offering price, and redemption price per share of beneficial interest................... $ 10.81 ============== Institutional Shares: -------------------- Net assets............................. $15,703,436 ============== SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,526,527 ============== NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................... $ 10.29 ============== See notes to financial statements STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1B): Interest income allocated from portfolio(A) $ 4,504,197 Interest income........................ 127,831 Expenses allocated from portfolio (A).. (460,522) ------------ Investment income..................... $ 4,171,506 ------------ Expenses - Investment adviser fee (Note 3)........ $ 10,211 Administrator fee (Note 3)............. 16,473 Compensation of Trustees not employees of the investment adviser or administrator 2,220 Custodian fee - Standard shares (Note 1C)........... 20,788 - Institutional shares (Note 1C)...... 13,170 Distribution expenses - Standard shares (Note 4)............ 143,570 Transfer and dividend disbursing agent fees - Standard shares..................... 26,642 - Institutional shares................ 13,532 Printing............................... 3,514 Audit services......................... 15,956 Legal services......................... 3,933 Registration costs - Standard shares..................... 20,093 - Institutional shares................ 9,988 Miscellaneous.......................... 4,812 ------------ Total expenses........................ $ 304,902 ------------ Deduct - Reduction of custodian fee (Note 1C) - Standard shares................... $ (10,746) - Institutional shares.............. (3,141) Allocation of expenses to investment adviser - Institutional shares.............. (33,448) Reduction of distribution expenses by principal underwriter - Standard shares................... (54,089) ------------ Total deductions...................... $ (101,424) ------------ Net expenses.......................... $ 203,478 ------------ Net investment income............... $ 3,968,028 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions from portfolio (identified cost basis). $ (136,364) Change in unrealized appreciation on investments......................... 1,762,726 ------------ Net realized and unrealized gain on investments........................ 1,626,362 ------------ Net increase in net assets from operations $ 5,594,390 ============== (A) The portfolio was liquidated on December 20, 2002 (see Note 1). See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) -------------------------------------------------------------------------------
Year Ended December 31, --------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2002 2001 ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 3,968,028 $ 4,876,495 Net realized loss on investment transactions from portfolio................ (136,364) (177,947) Change in unrealized appreciation on investments........................... 1,762,726 1,195,719 ------------ ------------ Net increase in net assets resulting from operations..................... $ 5,594,390 $ 5,894,267 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income Standard shares............................................................ $ (2,850,468) $ (3,460,160) Institutional shares....................................................... (876,513) (1,415,785) Tax return of capital Standard shares............................................................ (184,992) -- Institutional shares....................................................... (56,884) -- ------------ ------------ Total distributions...................................................... $ (3,968,857) $ (4,875,945) ------------ ------------ Net increase (decrease) in net assets - From Fund share transactions (Note 5) Standard shares............................................................ $ 2,848,357 $(13,755,466) Institutional shares....................................................... (3,221,642) (7,445,173) ------------ ------------ Net increase (decrease) in net assets from fund share transactions....... $ (373,285) $(21,200,639) ------------ ------------ Net increase (decrease) in net assets.................................... $ 1,252,248 $(20,182,317) NET ASSETS: At beginning of year......................................................... 73,527,736 93,710,053 ------------ ------------ At end of year............................................................... $ 74,779,984 $ 73,527,736 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR................................................. $ (123,000) $ (346,953) ============= =============
See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) -------------------------------------------------------------------------------
Year Ended December 31, ------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002 2001(4) 2000(4) 1999(4) 1998 --------------------------------------------------------------------------------------------------------------------------------- Standard Shares --------------------------------------------------------------------- Net asset value, beginning of year.......... $ 10.580 $ 10.460 $ 10.090 $ 10.660 $ 10.630 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.565 $ 0.616 $ 0.631 $ 0.620 $ 0.646 Net realized and unrealized gain (loss).. 0.231 0.120 0.372 (0.570) 0.028 -------- -------- -------- -------- -------- Total income from investment operations............. $ 0.796 $ 0.736 $ 1.003 $ 0.050 $ 0.674 -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income..... $ (0.555) $ (0.616) $ (0.633) $ (0.620) $ (0.644) Tax return of capital.................... (0.011) -- -- -- -- -------- -------- -------- -------- -------- Total distributions.................. $ (0.566) $ (0.616) $ (0.633) $ (0.620) $ (0.644) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.810 $ 10.580 $ 10.460 $ 10.090 $ 10.660 ========= ========= ========= ========= ========= Total return(2) ............................ 7.70% 7.18% 10.31% 0.52% 6.51% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted).... $ 59,077 $ 54,966 $ 68,015 $ 76,452 $90,262 Ratio of net expenses to average net assets(3) 0.97% 0.95%(6) 0.95%(6) 0.91% 0.90% Ratio of net expenses after custodian fee reduction to average net assets(3)(6)(7) 0.95% -- -- -- -- Ratio of net investment income to average net assets................. 5.28% 5.83% 6.22% 6.02% 6.03% Portfolio turnover rate ................. 36%(5) 4%(5) 6%(5) 0%(5) 1%(5) ---------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2002, 2001, 2000, 1999, and 1998, the operating expenses of the fund were reduced by an allocation of expenses to the investment adviser 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: 2002 2001 2000 1999 1998 --------------------------------------------------------------- Net investment income per share........ $ 0.555 $ 0.609 $ 0.629 $ 0.615 $ 0.644 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses(3) ......................... 1.06% 1.02%(3) 0.97%(3) 0.96%(3) 0.92%(3) ========= ========= ========= ========= ========= Expenses after custodian fee reduction(3)(7) 1.04% -- -- -- -- ========= ========= ========= ========= ========= Net investment income................ 5.19% 5.76% 6.20% 5.97% 6.01% ========= ========= ========= ========= ========= --------------------------------------------------------------------------------------------------------------------------------- (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)Includes each fund's share of its corresponding portfolio's allocated expenses. (4)Certain of the per share data are based on average shares outstanding. (5)Represents portfolio turnover rate at the fund's corresponding portfolio. (6)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% after custodian fee credits are applied. (7)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.
See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) -------------------------------------------------------------------------------
Year Ended December 31, ----------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2002 2001(3) 2000(3) 1999(3) 1998 --------------------------------------------------------------------------------------------------------------------------------- Institutional Shares ------------------------------------------------------------------- Net asset value, beginning of year.......... $ 10.060 $ 9.960 $ 9.600 $ 10.150 $ 10.120 -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income .................. $ 0.565 $ 0.622 $ 0.625 $ 0.620 $ 0.619 Net realized and unrealized gain (loss).. 0.230 0.094 0.359 (0.560) 0.026 -------- -------- -------- -------- -------- Total income from investment operations............. $ 0.795 $ 0.716 $ 0.984 $ 0.060 $ 0.645 -------- -------- -------- -------- -------- Less distributions: Dividends from investment income......... $ (0.453) $ (0.616) $ (0.624) $ (0.610) $ (0.615) Tax return of capital.................... (0.112) -- -- -- -- -------- -------- -------- -------- -------- Total distributions.................. $ (0.565) $ (0.616) $ (0.624) $ (0.610) $ (0.615) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 10.290 $ 10.060 $ 9.960 $ 9.600 $ 10.150 ========= ========= ========= ========= ========= Total return(6) ............................ 8.10% 7.34% 10.63% 0.60% 6.56% Ratios/Supplemental Data:(1) Net assets, end of year (000 omitted).... $ 15,703 $ 18,562 $ 25,695 $ 23,374 $ 23,231 Ratio of net expenses to average net assets(2) 0.70%(5) 0.70%(5) 0.70%(5) 0.70% 0.75% Ratio of net expenses after custodian fee reduction to average net assets(2)(5)(7) 0.68% -- -- -- -- Ratio of net investment income to average net assets................. 5.56% 6.11% 6.46% 6.23% 6.11% Portfolio turnover rate ................. 36%(4) 4%(4) 6%(4) 0%(4) 1%(4) ---------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2002, 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: 2002 2001 2000 ------------------------------------------ Net investment income per share.......... $ 0.543 $ 0.603 $ 0.619 ========== ========== ========== Ratios (As a percentage of average net assets): Expenses(2) ........................... 0.92% 0.82% 0.76% ========== ========== ========== Expenses after custodian fee reduction(2)(7) 0.90% -- -- ========= ========= ========= Net investment income.................. 5.34% 5.99% 6.40% ========== ========== ========== --------------------------------------------------------------------------------------------------------------------------------- (2)Includes each fund's share of its corresponding portfolio's allocated expenses. (3)Certain of the per share data are based on average shares outstanding. (4)Represents portfolio turnover rate at the fund's corresponding portfolio. (5)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% after custodian fee credits are applied. (6)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. (7)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.
See notes to financial statements WRIGHT MANAGED INCOME TRUST ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTING POLICIES The Wright Managed Income Trust (the Trust), issuer of Wright U.S. Treasury Money Market Fund (WTMM) series, Wright U.S. Government Near Term Fund (WNTB) series, Wright U.S. Government Intermediate Fund (WUSGI) series, Wright Total Return Bond Fund (WTRB) series, and Wright Current Income Fund (WCIF) series (collectively, the Funds), is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end, management investment company. WTMM seeks to provide as high a rate of current income as possible consistent with the presentation of capital and maintenance of liquidity. WNTB seeks a high level of income, which is normally above that available from short-term money market instruments or funds. WUSGI seeks a high total return with an emphasis on income. WTRB seeks a superior rate of total return, consisting of a high level of income plus price appreciation. WCIF seeks a high level of current income consistent with moderate fluctuations of principal. Prior to December 20, 2002, WNTB, WUSGI, and WCIF invested all of their investable assets in interests in a separate corresponding open-end management investment company (a Portfolio), a New York Trust, having the same investment objective as its corresponding fund. WNTB invested its assets in the Near Term Portfolio, WUSGI invested its assets in the U.S. Government Intermediate Portfolio, and WCIF invested its assets in the Current Income Portfolio. On December 20, 2002, each Fund received its prorata share of cash and securities from the Portfolio in complete liquidation of its interest in the Portfolio. WUSGI, WNTB and WCIF reclassified $94,481, $1,094,234, and $235,643, respectively, between unrealized appreciation (depreciation) and paid-in capital as a result of the increase or reduction in the cost of the Fund's investments related to such liquidation. Subsequent to December 20, 2002, the Funds invest directly in securities rather than through the Portfolio and maintain the same investment objective. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. A. Investment Valuations - Investments for which market quotations are readily available are valued at current market value as furnished by a pricing service. Investments for which valuations are not readily available will be appraised at their fair value as determined in good faith by or at the direction of the Trustees. Short-term obligations maturing in sixty days or less are valued at amortized cost, which approximates market value. WTMM's money market instruments are valued at amortized cost, which the Trustees have determined in good faith constitutes market value. Use of amortized cost is subject to the fund's compliance with certain conditions as specified under Rule 2a-7 of the Investment Company Act of 1940. B. Interest Income - Interest income consists of interest accrued and discount earned (including both original issue and market discount) and amortization of premium or discount on long-term debt securities when required for federal income tax purposes. The income is accrued ratably to the date of maturity on the investments of the funds. C. Expense Reduction - The funds have entered into an arrangement with their custodian agent whereby interest earned on uninvested cash balances is used to offset custodian fees. All significant reductions are reported as a reduction of total expenses in the Statement of Operations. D. Federal Taxes - The Trust's policy is to comply with the provisions of the Internal Revenue Code (the Code) available to regulated investment companies and to distribute to shareholders each year all of its taxable income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is necessary. At December 31, 2002, the Trust, for federal income tax purposes, had capital loss carryovers of $1,199,399 (WNTB), $3,238,502 (WTRB), $1,066,805 (WCIF), and $341 (WTMM) which will reduce taxable income arising from future ne realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distribution to shareholders which would otherwise be necessary to relieve the respective fund of any liability for federal income or excise tax. Pursuant to the Code, such capital loss carryovers will expire as follows: 12/31 WNTB WTRB WCIF WTMM ------------------------------------------------------------------------------- 2003 $376,568 $ - $215,933 $ - 2004 - - 113,252 - 2005 188,862 - 19,428 - 2006 62,582 - - - 2007 297,581 - 66,159 - 2008 273,806 2,729,896 289,504 - 2009 - - 251,102 - 2010 - 508,606 111,427 341 ------------------------------------------------------------------------------- At December 31, 2002, net capital losses of $3,266 for WNTB and $29,857 for WCIF attributable to security transactions incurred after October 31, 2002 are treated as arising on the first day of the fund's current taxable year. E. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. F. Other - Investment transactions are accounted for on the date the investments are purchased or sold. G. Multiple Classes of Shares of Beneficial Interest - Each fund is authorized to offer a standard share class and an institutional share class. The share classes differ in their respective distribution, service fees and other class specific expenses. All shareholders bear the common expenses of the fund pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. Each class has equal rights as to voting, redemption, dividends, and liquidation. At December 31, 2002, only WCIF had an institutional share class. H. Reclassifications - Certain amounts in the prior periods' financial statements have been reclassified to conform to the current year's presentation. (2) DISTRIBUTIONS Each fund's policy is to determine net income once daily, as of the close of the New York Stock Exchange and the net income so determined is substantially declared as a dividend to shareholders of record at the time of such determination. Distributions of realized capital gains are made at least annually. Shareholders may reinvest capital gain distributions in additional shares of the same fund at the net asset value as of the ex-dividend date. Dividends may be reinvested in additional shares of the same fund at the net asset value as of the payable date. The Trust requires that differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary overdistributions for financial statement purposes be classified as distributions in excess of net investment income or accumulated net realized gains. Distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting for certain items may result in reclassification of these items. During the year ended December 31, 2002, the following amounts were reclassified due to differences between book and tax accounting created primarily by the deferral of certain losses for tax purposes and character reclassifications between net investment income and net realized capital gain. Accumulated Undistributed Undistributed Net Net Paid-In Realized Gain (Loss) Investment Capital on Investments Income ------------------------------------------------------------------------------ WTRB $ - $ (74,768) $ 74,768 WCIF (918,658) 693,876 224,782 WUSGI (10,635) (63,113) 73,748 WNTB (6,417,445) 6,359,298 58,147 WTMM (868) - 868 ------------------------------------------------------------------------------ Net investment income, net realized gains (losses) and net assets were not affected by these reclassifications. (3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as investment adviser to the funds pursuant to the respective Investment Advisory Contracts. Wright furnishes each fund with investment management, investment advisory, and other services. For its services, Wright is compensated based upon a percentage of average daily net assets which rate is adjusted as average daily net assets exceed certain levels. For the year ended December 31, 2002, the effective annual rate for WTMM was 0.35% and for WNTB, WUSGI, WCIF, and WTRB was 0.45%. To enhance the net income of WTMM, Wright made a reduction of its investment adviser fee by $60,148. In addition, Wright has been allocated expenses of $64,172, $40,034, and $33,448 on behalf of WTMM, WUSGI, and WCIF, respectively. The Trust also has engaged Eaton Vance Management (Eaton Vance) to act as administrator of the Trust. Under the Administration Agreement, Eaton Vance is responsible for managing the business affairs of the Trust and is compensated based upon a percentage of average daily net assets which rate is reduced as average daily net assets exceed certain levels. For the year ended December 31, 2002, the effective annual rate was 0.07% for WTMM, 0.09% for WNTB, 0.09% for WUSGI, 0.07% for WTRB, and 0.09% for WCIF. Certain of the Trustees and officers of the Trust are directors/trustees and/or officers of the above organizations. Except as to Trustees of the Trust who are not employees of Eaton Vance or Wright, Trustees and officers received remuneration for their services to the Trust out of fees paid to Eaton Vance and Wright. (4) DISTRIBUTION EXPENSES The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule 12b-1 of the Investment Company Act of 1940. The Plan provides that each of the funds, except WTMM, will pay Wright Investors' Service Distributors, Inc. (Principal Underwriter), a wholly-owned subsidiary of Winthrop, at an annual rate of 0.25% of the Standard shares average daily net assets of each fund for activities primarily intended to result in the sale of each fund's Standard shares. To enhance the net income of WNTB, WUSGI, WTRB, and WCIF, the Principal Underwriter made a reduction of its fee by $79,390, $27,426, $58,450, and $54,089, respectively. In addition, the Trustees have adopted a service plan (the Service Plan) which allows the funds to reimburse the Principal Underwriter for payments to intermediaries for providing account administration and personal and account maintenance services to their customers who are beneficial owners of shares. The amount of service fee payable under the Service Plan with respect to each class of shares may not exceed 0.25% annually of the average daily net assets attributable to the respective classes. For the year ended December 31, 2002, the funds did not accrue or pay any service fees. (5) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in fund shares were as follows:
Year Ended Year Ended December 31, 2002 December 31, 2001 ------------------------------------------------------------- Shares Amount Shares Amount --------------------------------------------------------------------------------------------------------------------------- Wright U.S. Government Near Term Fund-- Sales................................................ 1,167,139 $ 12,125,339 1,365,316 $ 13,985,447 Issued to shareholders in payment of distributions declared.............................. 75,264 780,133 103,978 1,063,991 Redemptions.......................................... (1,515,316) (15,725,859) (1,858,949) (18,980,280) ----------- -------------- ----------- -------------- Net decrease..................................... (272,913) $ (2,820,387) (389,655) $ (3,930,842) =========== =============== ============ ============= Wright U.S. GOVERNMENT INTERMEDIATE Fund-- Sales................................................ 595,408 $ 8,310,825 307,197 $ 4,219,756 Issued to shareholders in payment of distributions declared.............................. 41,876 575,858 33,008 454,921 Redemptions.......................................... (258,594) (3,563,986) (794,193) (10,825,242) ----------- -------------- ----------- -------------- Net increase (decrease).......................... 378,690 $ 5,322,697 (453,988) $(6,150,565) =========== =============== =========== ============== Wright Total Return Bond Fund-- Sales................................................ 649,865 $ 8,208,631 575,009 $ 7,333,087 Issued to shareholders in payment of distributions declared.............................. 150,168 1,897,860 191,328 2,438,952 Redemptions.......................................... (1,805,464) (22,886,365) (1,941,125) (24,715,834) ----------- -------------- ----------- -------------- Net decrease..................................... (1,005,431) $(12,779,874) (1,174,788) $(14,943,795) =========== =============== ============ =============== Wright Current Income Fund -- Standard Shares Sales................................................ 1,753,958 $ 18,765,516 1,418,663 $ 15,022,486 Issued to shareholders in payment of distributions declared............................................ 139,397 1,492,961 171,018 1,813,111 Redemptions.......................................... (1,627,469) (17,410,120) (2,893,478) (30,591,063) ----------- -------------- ----------- -------------- Net increase (decrease).......................... 265,886 $ 2,848,357 (1,303,797) $ (13,755,466) ============= ============== ============ =============== Wright Current Income Fund -- Institutional Shares Sales................................................ - $ - - $ - Issued to shareholders in payment of distributions declared............................................ 91,650 933,035 140,115 1,414,140 Redemptions.......................................... (409,996) (4,154,677) (875,313) (8,859,313) ----------- -------------- ----------- -------------- Net decrease..................................... (318,346) $ (3,221,642) (735,198) $ (7,445,173) ============= ================= ============= =================
------------------------------------------------------------------------------- (6) INVESTMENT TRANSACTIONS The Trust invests primarily in debt securities. The ability of the issuers of the debt securities held by the Trust to meet their obligations may be affected by economic developments in a specific industry or municipality. Purchases and sales and maturities of investments, other than short-term obligations, were as follows: Year Ended December 31, 2002 --------------------------------------------------- WNTB(+) WUSGI(+) WTRB WCIF(+) ------------------------------------------------------------------------------- Purchases-- Non-U.S. Obligations $17,526,830 $10,725,005 $23,773,409 $26,775,454 =========== =========== =========== =========== U.S. Gov't Obligations $ 4,250,000 $ 4,250,000 $ 7,275,000 $-- =========== =========== =========== =========== Sales -- Non-U.S. Gov't Obligation $15,437,735 $ 1,403,894 $23,128,714 $25,616,700 =========== =========== =========== =========== U.S. Gov't Obligations $ 8,700,000 $ 9,975,000 $13,325,000 $-- =========== =========== =========== =========== ------------------------------------------------------------------------------- (+): Includes activity of the fund's corresponding portfolio. (7) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2002, as computed on a federal income tax basis, are as follows: WNTB WUSGI WTRB WCIF ------------------------------------------------------------------------------- Aggregate cost..........$31,130,892 $14,886,986 $36,430,879 $71,571,059 ============ =========== =========== =========== Gross unrealized appreciation..$ 2,068,422 $ 401,302 $ 2,459,616 $ 3,041,820 Gross unrealized depreciation.. (254) (254) (2,805) (10) ------------- ----------- ------------- ----------- Net unrealized appreciation..$ 2,068,168 $ 401,048 $ 2,456,811 $ 3,041,810 ============ ========== =========== =========== (8) LINE OF CREDIT The funds participate with other funds managed by Wright in a committed $20 million unsecured line of credit agreement with a bank. The funds may temporarily borrow from the line of credit to satisfy redemption requests or settle investment transactions. Interest is charged to each fund based on its borrowings at an amount above the federal funds rate. In addition, a fee computed at an annual rate of 0.10% on the average daily unused portion of the $20 million line of credit, is allocated among the participating funds at the end of each quarter. The funds did not have significant borrowings or allocated fees during the year ended December 31, 2002. WCIF has $143,000 outstanding at December 31, 2002. WRIGHT MANAGED INCOME TRUST ------------------------------------------------------------------------------ INDEPENDENT AUDITORS' REPORT To the Trustees and Shareholders of The Wright Managed Income Trust: We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of The Wright Managed Income Trust (the "Trust"), comprising the Wright U.S. Treasury Money Market Fund, Wright U.S. Government Near Term Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund, and Wright Current Income Fund (the "Funds"), as of December 31, 2002, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at December 31, 2002, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds constituting The Wright Managed Income Trust as of December 31, 2002, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 14, 2003 MANAGEMENT AND ORGANIZATION (unaudited) ------------------------------------------------------------------------------- Fund Management. The Trustees of the Trust are responsible for the overall management and supervision of the affairs of the Trust. The Trustees and principal officers of the Trusts 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 Other Trustee/ Term* Portfolios in Director/ Name, Position(s) of Office Fund Complex Partnership/ Address with the and Length Principal Occupation Overseen Employment and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held ---------------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES H. Day Brigham, Jr.** Vice President,Vice President, Director of Wright and Winthrop since 8 Director of Age 76 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 9 funds managed by Wright ----------------------------------------------------------------------------------------------------------------------------------- Peter M. Donovan*** President President Chairman and Chief Executive Officer and 9 Director of Age 59 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 9 funds managed by Wright ---------------------------------------------------------------------------------------------------------------------------------- A.M. Moody, III**** Vice President Vice President Senior Vice President of Wright and 8 None Age 66 and of the Trusts Winthrop; President of WISDI; Vice Trustee since December, President of 9 funds managed by 1990; Trustee of Wright the Trusts since January, 1990 -----------------------------------------------------------------------------------------------------------------------------------
* Trustees serve an indefinite term. Officers are elected annually. ** Mr. Brigham is an interested person of the Trusts because of his positions as Vice President and Secretary of the Trusts and a Director of Wright and Winthrop. *** Mr. Donovan is an interested person of the Trusts because of his positions as President of the Trusts, Chairman, Chief Executive Officer and Director of Wright and Winthrop and Vice President, Treasurer and a Director of WISDI. **** Mr. Moody is an interested person of the Trusts because of his positions as Vice President of the Trusts, Senior Vice President of Wright and Winthrop and President of WISDI. ------------------------------------------------------------------------------
Number of Other Trustee/ Term* Portfolios in Director/ Name, Position(s) of Office Fund Complex Partnership/ Address with the and Length Principal Occupation Overseen Employment and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held ---------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES James J. Clarke Trustee Trustee Principal, Clarke Consulting 8 None Age 61 since (financial management and December, strategic planning) 2002 ---------------------------------------------------------------------------------------------------------------------------------- Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 9 None Age 56 since (a public policy and government relations December, firm) Spotsylvania, VA; Director, The 1998 Options Clearing Corporation and First Coast Service Options, Jacksonville, FL; 1996-1998 - Chairman and CEO of Work Recovery, Inc. (an advanced rehabilitation technology firm) Tucson, AZ ---------------------------------------------------------------------------------------------------------------------------------- Leland Miles Trustee Trustee President Emeritus, University of 9 None Age 79 since Bridgeport (1987 to present); President 1988 Emeritus of the International Association of University Presidents (1984-present) ----------------------------------------------------------------------------------------------------------------------------------- Richard E. Taber Trustee Trustee since Chairman and Chief Executive 8 None Age 54 March, 1997 Officer of First County Bank, Stamford, CT ---------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES Judith R. Corchard Vice President Vice President Executive Vice President, Investment Age 64 of the Trusts Management; Senior Investment Officer since June, 1998; and Director of Wright and Winthrop; Vice President of 9 funds managed by Wright --------------------------------------------------------------------------------------------------------------------------------- James L. O'Connor Treasurer Treasurer of Vice President Eaton Vance Management; Age 57 the Trusts Administrator for the funds; since April 1989; Officer of 9 funds managed by Wright and 112 funds managed by Eaton Vance and its affiliates. ---------------------------------------------------------------------------------------------------------------------------------
Wright Managed Investment Funds Wright Investors Service, Inc. Wright Investors' Service Distributors, Inc. Eaton Vance Management PRIVACY POLICY -------------------- Wright is committed to ensuring your financial privacy. Each of the above financial institutions has the following policy in effect with respect to nonpublic personal information about its customers: o The only such information we collect is information received from customers, through application forms or otherwise, and information which we necessarily receive in connection with your Wright fund transactions. o We will not disclose this information to anyone except as required or permitted by law. Such disclosure includes that made to other companies such as transfer agents and their employees and to our employees, in each case as necessary to service your account. o We have adopted policies and procedures (including physical, electronic and procedural safeguards) that are designed to protect the confidentiality of this information. For more information about Wright's privacy policies please feel free to call 1-800-888-9471. WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC. 440 WHEELERS FARMS ROAD, MILFORD, CT 06460 ANNUAL REPORT OFFICERS AND TRUSTEES OF THE FUNDS Peter M. Donovan, President and Trustee H. Day Brigham, Jr., Vice President , Secretary and Trustee A. M. Moody III, Vice President and Trustee Judith R. Corchard, Vice President James J. Clarke, Trustee Dorcas R. Hardy, Trustee Leland Miles, Trustee Richard E. Taber, Trustee James L. O'Connor, Treasurer William J. Austin, Jr., Assistant Treasurer ADMINISTRATOR Eaton Vance Management 255 State Street Boston, Massachusetts 02109 INVESTMENT ADVISER Wright Investors' Service 440 Wheelers Farms Road Milford, Connecticut 06460 PRINCIPAL UNDERWRITER Wright Investors' Service Distributors, Inc. 440 Wheelers Farms Road Milford, Connecticut 06460 (800) 888-9471 e-mail: funds@wrightinvestors.com CUSTODIAN Investors Bank & Trust Company 200 Clarendon Street Boston, Massachusetts 02116 TRANSFER AND DIVIDEND DISBURSING AGENT Forum Shareholder Services, LLC Two Portland Square Portland, ME 04101 INDEPENDENT AUDITORS Deloitte & Touche LLP 200 Berkeley Street Boston, Massachusetts 02116-5022 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a mutual fund unless accompanied or preceded by a Fund's current prospectus.