-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AR7UhO8xgv+izFnohzWnYWKhzHD9H3DvX43BbHeaxMfz7c8hNpGVBIwhl3Iz7Ven z8Om4jtrfhU48pZ7vPQ+zw== 0000715165-04-000016.txt : 20040826 0000715165-04-000016.hdr.sgml : 20040826 20040826150455 ACCESSION NUMBER: 0000715165-04-000016 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040826 DATE AS OF CHANGE: 20040826 EFFECTIVENESS DATE: 20040826 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRIGHT MANAGED INCOME TRUST CENTRAL INDEX KEY: 0000715165 IRS NUMBER: 042789493 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03668 FILM NUMBER: 04998759 BUSINESS ADDRESS: STREET 1: 255 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 617-482-8260 MAIL ADDRESS: STREET 1: 255 STATE STREET STREET 2: 7TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: WRIGHT MANAGED BOND TRUST DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BOND FUND FOR BANK TRUST DEPARTMENTS BFBT FUND DATE OF NAME CHANGE: 19880218 N-CSR 1 inncsr0604.txt JUNE 30, 2004 SEMI-ANNUAL FINANCIALS FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number: 811-3668 The Wright Managed Income Trust ------------------------------- (Exact Name of Registrant as Specified in Charter) The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 ----------------------------------------------------------------------- (Address of Principal Executive Offices) Alan R. Dynner The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 ----------------------------------------------------------------------- (Name and Address of Agent for Services) (617) 482-8260 -------------- (Registrant's Telephone Number) December 31 --------------- Date of Fiscal Year End June 30, 2004 ------------------ Date of Reporting Period ----------------------------------------------------------------------------- Item 1. REPORTS TO STOCKHOLDERS THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS SEMI-ANNUAL REPORT JUNE 30 , 2004 THE WRIGHT MANAGED EQUITY TRUST o Wright Selected Blue Chip Equities Fund o Wright Major Blue Chip Equities Fund o Wright International Blue Chip Equities Fund THE WRIGHT MANAGED INCOME TRUST o Wright U.S. Government Near Term Fund o Wright U.S. Government Intermediate 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 AND FOUR FIXED INCOME FUNDS FROM THE WRIGHT MANAGED INCOME TRUST. EACH OF THE SEVEN 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. APPROVED WRIGHT INVESTMENT LIST Securities selected for investment in these funds are chosen mainly from a list of "investment grade" companies maintained by Wright Investors' Service ("Wright" or the "Adviser"). All 25,000 global companies (covering 50 countries) in Wright's database are screened as new data becomes available to determine any eligible additions or deletions to the list. The qualifications for inclusion as "investment grade" are companies that meet Wright's Quality Rating criteria. This rating includes fundamental criteria for investment acceptance, financial strength, profitability & stability and growth. In addition, securities, which are not included in Wright's "investment grade" list, may also be selected from companies in the fund's specific benchmark (up to 20% of the market value of the portfolio) in order to achieve broad diversification. Different quality criteria may apply for the different funds. For example, the companies in the Major Blue Chip Fund would require a higher Investment Acceptance rating than the companies in the Selected Blue Chip Fund. THREE EQUITY FUNDS WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) seeks to enhance total investment return of price appreciation plus income. The funds portfolio is characterized as a blend of growth and value stocks. The market capitalization of the companies is typically between $1-$10 billion at the time of the fund's investment. The Adviser seeks to outperform the Standard & Poor's 400 Index (S&P 400) by selecting stocks using fundamental company analysis and company specific criteria such as valuation and earnings trends. The portfolio is then diversified across industries and sectors. 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 with market values of $10 billion or more. The Adviser seeks to outperform the Standard & Poor's 500 Index (S&P 500) by selecting stocks using fundamental company analysis and company specific criteria such as valuation and earnings trends. The portfolio is then diversified across industries and sectors. 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. 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. The Adviser seeks to outperform the MSCI Developed World ex U.S. Index by selecting stocks using fundamental company analysis and company specific criteria such as valuation and earnings trends. The portfolio is then diversified across industries and sectors. 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. The fund's benchmark is the Lehman U.S. Government 1-3 Year Bond Index. WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) seeks a high total return with an emphasis on income by investing in obligations of the U.S. Government and U.S. Government Agencies maintaining an average maturity 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 interest rates. Dividends are accrued daily and paid monthly. The fund's benchmark is the Lehman U.S. Government Intermediate Bond Index. 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. The fund's benchmark is the Lehman U.S. Aggregate Bond Index. 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. The funds benchmark is the Lehman GNMA Backed Bond Index. TABLE OF CONTENTS - ------------------------------------------------------------------------------- INVESTMENT OBJECTIVES...inside front & back cover LETTER TO SHAREHOLDERS..........................2 MANAGEMENT DISCUSSION...........................3 FINANCIAL STATEMENTS THE WRIGHT MANAGED EQUITY TRUST WRIGHT SELECTED BLUE CHIP EQUITIES FUND Portfolio of Investments..................10 Statement of Assets & Liabilities.........13 Statement of Operations...................13 Statement of Changes in Net Assets........14 Financial Highlights......................15 WRIGHT MAJOR 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 INTERNATIONAL BLUE CHIP EQUITIES FUND Portfolio of Investments..................22 Statement of Assets & Liabilities.........24 Statement of Operations...................24 Statement of Changes in Net Assets........25 Financial Highlights......................26 NOTES TO FINANCIAL STATEMENTS...............27 THE WRIGHT MANAGED INCOME TRUST WRIGHT U.S. GOVERNMENT NEAR TERM FUND Portfolio of Investments..................32 Statement of Assets & Liabilities.........33 Statement of Operations...................33 Statement of Changes in Net Assets........34 Financial Highlights......................35 WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND Portfolio of Investments..................36 Statement of Assets & Liabilities.........37 Statement of Operations...................37 Statement of Changes in Net Assets........38 Financial Highlights......................39 WRIGHT TOTAL RETURN BOND FUND Portfolio of Investments..................40 Statement of Assets & Liabilities.........44 Statement of Operations...................44 Statement of Changes in Net Assets........45 Financial Highlights......................46 WRIGHT CURRENT INCOME FUND Portfolio of Investments..................47 Statement of Assets & Liabilities.........50 Statement of Operations...................50 Statement of Changes in Net Assets........51 Financial Highlights......................52 NOTES TO FINANCIAL STATEMENTS...............53 LETTER TO SHAREHOLDERS - -------------------------------------------------------------------------------- July 2004 Dear Shareholders: The relative calm of the stock market in the first half of 2004 has been a welcome, if not totally satisfying, feature of the investment landscape this year. Welcome, since it is a big improvement on the extreme volatility of stock prices in 1998-02; disappointing, because the fundamentals would seem to deserve better than the 1.3% price increases achieved by the S&P 500 in each of 2004's first two quarters. (Annualized, with dividend income included, the S&P 500's first-half total return works out to 6.8%, about one-third short of the market's 10.4% long-term average). Mid-cap stocks fared better than big-caps by 2.6% over the first six months of 2004, despite lagging by some 75 bps in Q2. Likewise, foreign equities also averaged a better-than-S&P 500 total return for the first half in U.S. dollar terms, but lagged in Q2 due to weakness in the Pacific region and the stronger dollar. To some extent, the U.S. stock market's first-half shortfall relative to expectations is the result of uncertainty surrounding Federal Reserve monetary policy. The Fed's first interest rate hike in four years came on the final day of the second quarter but was anticipated by the market for most of the quarter (following the April 2 Labor Department report of 300,000 new jobs created during March). Concerns that the Fed was about to embark on a protracted tightening sent the 10-year Treasury bond yield up roughly 75 basis points in the second quarter. With the market's favorite discount rate rising so significantly, stock investors grew more cautious, reducing the market P/E multiple from around 18.5 times 12-month forward earnings at the market's February high to 16.5 times at midyear. In the fixed-income arena, the Lehman bond market aggregate lost 2.4% in Q2 (eking out a 0.2% return YTD), lagging the 0.2% return on three-month Treasury bills (0.5% YTD). By the measure of the Lehman aggregate, the second quarter was the worst for bonds in 10 years. The Fed's quarter-point increase in its fed funds target from a 45-year low of 1.0% is widely seen as the first of several interest rate hikes over the next 12 months. But the two-to-five year segment of the Treasury yield curve has seen interest rates rise almost 175 basis points from the June 2003 lows through midyear 2004, suggesting that bond prices already reflect a lot of Fed tightening to come. The model everyone is hoping to avoid, of course, is that of 1994, when the Fed launched a three-percentage-point increase in interest rates, pummeling bonds and depressing stock prices for much of that year. Few people actually think that Fed monetary tightening in 2004-05 will come to that. For one thing, improvement in the jobs market may not be that well established, as is suggested in the weaker-than-expected 112,000 new jobs created during June. Add to that the fact that inflation risks are more moderate today than they were 10 years ago. Labor productivity is trending higher, and as a result unit labor costs in nonfarm businesses are down 1% over the latest 12 months. Global competition is also more pervasive today, constraining firms' pricing power, while spare capacity is still more than adequate in most industries. The U.S. dollar appreciated about 2% against a trade-weighted basket of major foreign currencies in the second quarter (its second straight quarter in the black after declining five quarters in a row), which suggests that import price pressures might recede in the months ahead. Further out, it is hard to avoid concluding that the dollar will resume its downward trend under the weight of the U.S.'s half-trillion-dollar trade deficit, another reason to appreciate what global diversification brings to stock portfolios in the current environment. Despite the many missing pieces of the 2004 market puzzle - the Iraq transition, terrorism, energy prices, the extent of Fed tightening and the Presidential election - the picture that emerges is nevertheless seen to be favorable, particularly from the perspective of equity investors. An important reason for this positive view is the powerful momentum of corporate earnings, which increased an estimated 20% in the first half of 2004 and stand to increase another 8%-10% over the coming 12 months. For this period ahead, we continue to believe that equity returns on the order of the market's 10% long-term norm are feasible, well ahead of expected bond market returns and returns on short-term cash equivalents. As always, I invite your questions and suggestions on how we can better serve your investment needs. Sincerely, s/s Peter M. Donovan --------------------- Peter M. Donovan President MANAGEMENT DISCUSSION - ------------------------------------------------------------------------------- EQUITY FUNDS SEVERAL ISSUES COMBINED TO KEEP THE U.S. STOCK MARKET IN THE DOLDRUMS FOR THE SECOND STRAIGHT QUARTER. THE S&P 500'S PRICE RISE FOR THE SECOND QUARTER OF 2004 EXACTLY MATCHED THE FIRST-QUARTER'S 1.3%; NASDAQ DOUBLED THAT INCREASE, WHILE THE DOW EDGED INTO THE BLACK WITH AN 0.8% GAIN. SO FAR THIS YEAR, THE S&P 500 AND NASDAQ HAVE POSTED PRICE GAINS IN THE 2%-3% RANGE, WHILE THE DOW IS JUST ABOUT UNCHANGED. INVESTORS COULD HAVE DONE BETTER THAN THE MARKET IN THE FIRST HALF OF 2004 BY CONCENTRATING ON SMALL- AND MID-CAP STOCKS. THE S&P MIDCAP 400 AND SMALLCAP 600 ROSE 5.5% AND 9.6%, RESPECTIVELY, FOR THE SIX MONTHS. IN DOLLAR TERMS, FOREIGN MARKETS IN THE AGGREGATE LAGGED THE S&P 500 IN THE SECOND QUARTER WITH A 0.8% DECLINE BUT PERFORMED IN LINE WITH THE U.S. FOR THE FIRST HALF WITH A 2.9% PRICE RISE. OF THE SEVERAL ISSUES THAT COMBINED TO KEEP A LID ON STOCK PRICES IN THE SECOND QUARTER, THE PROSPECT OF A SHIFT IN MONETARY POLICY WAS THE MOST SIGNIFICANT. ON THE LAST DAY OF THE SECOND QUARTER, THE FEDERAL RESERVE AS EXPECTED RAISED ITS BENCHMARK FED FUNDS RATE BY 25 BASIS POINTS TO 1.25%, THE FIRST INCREASE IN FOUR YEARS. FOR ALL OF THE SECOND QUARTER INVESTORS FRETTED ABOUT THE FACT THAT THE FED WAS ABOUT TO EMBARK ON A TIGHTENING PROGRAM, WITH ALL THAT THE SHIFT IMPLIED ABOUT MARKET INTEREST RATES, THE STRENGTH OF THE EXPANSION AND THE INFLATION THREAT. AN ISSUE THAT ALSO COMMANDED A LOT OF ATTENTION WAS THE CONTINUING TURMOIL IN IRAQ AND THE MIDDLE EAST GENERALLY. PROBLEMS IN THIS REGION CONTRIBUTED TO ANOTHER CONCERN OF INVESTORS - THE RISE IN OIL PRICES TO A RECORD LEVEL IN EARLY JUNE. THESE ISSUES, PLUS THE EBB AND FLOW OF ELECTION-YEAR POLITICS AND THE FACT EQUITY VALUATIONS WEREN'T CHEAP WHEN THE YEAR BEGAN, OVERSHADOWED THE SIGNIFICANT PLUSES OF A HEALTHY ECONOMY AND STRONG GROWTH IN CORPORATE PROFITS. THE U.S. STOCK MARKET STARTED THE THIRD QUARTER ON A WEAK NOTE, BUT WIS EXPECTS THAT TO CHANGE. WHILE INVESTORS HAVE MANY UNCERTAINTIES TO DEAL WITH THIS YEAR, AT LEAST AS FAR AS THE ECONOMIC FUNDAMENTALS GO WE EXPECT CONDITIONS TO BE FAVORABLE FOR EQUITIES. OUR FORECAST CALLS FOR THE ECONOMY TO SETTLE IN A MODERATE GROWTH PATH, WITH GDP GROWTH IN A 3.5%-4.0% RANGE. WE ALSO EXPECT CORE INFLATION TO DROP BACK UNDER 2.5%, AND OIL PRICES ARE MORE LIKELY TO MOVE LOWER THAN HIGHER. THIS MEANS THAT THE FED SHOULD BE ABLE TO STICK TO ITS PLAN OF "MEASURED" REDUCTION IN MONETARY STIMULATION, AND THAT BOND YIELDS WON'T MOVE HIGH ENOUGH TO STALL THE RECOVERY. ALTHOUGH RECENT 20%+ GROWTH RATES IN CORPORATE PROFITS ARE UNSUSTAINABLE, PROFITS ARE EXPECTED TO CONTINUE TO ADVANCE OVER THE NEXT 12-18 MONTHS. ALSO ON THE PLUS SIDE: THE STOCK MARKET'S P/E MULTIPLE HAS COME DOWN SINCE THE BEGINNING OF THE YEAR. WITH ALL THIS CONSIDERED, WE EXPECT THAT STOCK MARKET RETURNS OVER THE NEXT 12 MONTHS COULD BE CLOSE TO 10%.
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year Year Year Year - -------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Fund (WSBC) 5.2% 30.1% -17.0%-10.2% 10.8% 5.8% 0.1% 32.7% 18.6% 30.3% -3.5% 2.1% 4.7% 36.0% Wright Major Blue Chip Fund (WMBC) 2.2% 23.2% -24.5%-16.9% -12.5% 24.0% 20.4% 33.9% 17.6% 29.0% -0.7% 1.0% 8.0% 38.9% Wright International Blue Chip Fund (WIBC) 2.4% 32.0% -14.5%-24.2% -17.6% 34.3% 6.1% 1.5% 20.7% 13.6% -1.6% 28.2% -3.9% 17.2%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND After four quarters of superiority, the S&P MidCap 400 lagged the S&P 500 in the second quarter of 2004, although it is still ahead in total return for the year to date. The Wright Selected Blue Chip Fund (WSBC), which is managed as a mid-cap blend fund, returned 0.2% in the second quarter of 2004, compared to 1.0% for both the S&P MidCap 400 and an average of 25 mid-cap blend funds in the Morningstar database. This shortfall offset a first-quarter performance that just about equaled the S&P MidCaps. For the first half of 2004, the WSBC returned 5.2%, compared to 6.1% for the S&P benchmark and 5.7% for the Morningstar average. For the first half of 2004, WSBC's strong stock selection in the majority of market sectors was offset by the effect of having underweight positions in industrials and consumer staples, two of the S&P MidCap's best-performing groups in the period. A slightly overweight position in energy stocks, another strong sector, helped performance. In the second quarter of 2004, the underweight position in industrials continued to be a drag on performance, offsetting overall good stock selection. Regarding specific issues, the Fund's second-quarter performance was hurt by the 42% price decline of New York Community Bank (one of the best stocks in the first quarter), which was hurt in the latest period by its mortgage exposure. J.B. Hunt Transport, up 37%, was the Fund's strongest performer in Q2. The WSBC Fund continues to experience relatively high turnover due to changes being made in the S&P MidCap 400 index, the WSBC's benchmark. For example, four of six sales from the Fund in the second quarter were the result of changes in the index. In adding new securities to the Fund, the Fund's portfolio manager targets companies with prospects for sustained earnings growth; new companies being added to the benchmark frequently meet this criteria. As of June 30, the stocks in the WSBC were on average more profitable and had achieved faster earnings growth than those in the S&P MidCap index, while still offering better value as measured by P/E multiple. WRIGHT MAJOR BLUE CHIP EQUITIES FUND The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the large-cap growth and value stocks in the S&P 500, selected with a bias toward the higher-quality issues in the index. After outperforming the S&P 500 and an average of its peer group in the first quarter of 2004, the WMBC gave up some ground in the second quarter with a 0.4% loss compared to returns of 1.7% for the S&P 500 and 1.5% for an average of 146 large-cap blend funds reported in the Morningstar database. For the first half of 2004, WMBC returned 2.2%, compared to 3.4% for the S&P 500 and 2.8% for the Morningstar benchmark. In the first half of 2004, investors' preference shifted from the marginal issues favored last year to higher-quality issues. This was a plus for the WMBC, particularly in the first quarter. In the first half overall, the company also benefited from good stock selection in the information technology and materials sectors. For the six months, stock selection was more of a factor in performance than sector weightings. In the second quarter, however, the Fund's relative performance compared to the S&P 500 was negatively affected by its overweight position in financial stocks, the S&P 500's weakest sector for the period. Problems in specific issues also hurt second-quarter performance. This was especially apparent in the Fund's health care holdings, with declines in Forest Laboratories (-11%), Guidant (-12%) and King Pharmaceuticals (-36%). As the economic recovery matures, we expect investors to favor companies with prospects for generating solid long-term profit growth, i.e. the types of stocks held in the WMBC. This switch was already becoming evident in the first half of 2004. Based on portfolio mean and median values, the stocks held in the WMBC are larger and have a lower debt-to-capitalization ratio than those in the S&P 500. The WMBC also selects stocks with better earnings momentum, return on equity and value, which over the long run provide the basis for superior investment returns. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Even with an appreciating dollar working against it, the MSCI World ex U.S. index (in dollars) edged out the S&P 500 in the first half of 2004, though it lost some ground in the second quarter. The Wright International Blue Chip Fund (WIBC) lost 0.5% in the second quarter of 2004, lagging the 0.1% gain for the MSCI World ex U.S. index but better than the 0.8% loss for an average of 114 international equity funds included in the Morningstar database. For the first half of 2004, WIBC returned 2.4% compared to 4.3% for the MSCI benchmark and 3.2% for the Morningstar average. In the first quarter of 2004, WIBC's performance was helped by the strong performance of the Japanese market and the strong yen. In the second quarter, the Japanese market was relatively weak and the yen depreciated vs the dollar; nevertheless, WIBC's performance compared to the MSCI benchmark was helped by its selection of quality Japanese stocks, which did better than the overall market. Strong stock selection in the technology sector was also a plus. On the negative side, WIBC's position in Europe continued to detract from its performance. In the first quarter, European markets lagged; they strengthened in the second quarter, but WIBC's relative showing was hurt by its overweight position in weak European financial stocks. By quarter end, the Fund had moved to underweight in financials. WIS continues to view international stock markets as attractive on a valuation basis. (After their second-quarter plunge, there appear to be some especially good values among financial issues.) A resumption of the downward correction in the dollar, which would benefit foreign market returns to U.S. investors, is also probable. While economic conditions outside of the U.S. are expected to improve, one caveat is the possible slowdown of economic growth in China, which could have large ramifications, especially in Asia. FIXED-INCOME FUNDS FOLLOWING A POSITIVE FIRST QUARTER, THE BOND MARKET RETREATED IN THE SECOND QUARTER OF 2004. THE LEHMAN U.S. AGGREGATE BOND MARKET INDEX LOST 2.4% IN THE SECOND QUARTER, REDUCING THE YEAR-TO DATE RETURN TO 0.2%; BY THIS MEASURE, THE SECOND QUARTER WAS THE WORST FOR THE U.S. BOND MARKET IN 10 YEARS. BOTH TREASURY AND CORPORATE ISSUES LOST MORE THAN 3% IN THE QUARTER, AND FOR LONGER MATURITIES IN BOTH SECTORS THE LOSS WAS MORE THAN 5%. GOVERNMENT AGENCY ISSUES LOST 2.6% IN THE QUARTER. A GOOD CHOICE FOR FIXED-INCOME INVESTORS IN THE SECOND QUARTER, BESIDES BEING IN SHORT MATURITY ISSUES, WAS THE MORTGAGE-BACKED SECTOR, WHICH LOST ONLY ABOUT 1% FOR THE PERIOD AND, UNLIKE THE TREASURY AND CORPORATE SECTORS, IS IN THE BLACK FOR THE YEAR TO DATE. AMONG INVESTMENT-GRADE CORPORATES, QUALITY WAS NOT A MAJOR FACTOR IN DETERMINING RETURNS IN THE LATEST QUARTER. YIELDS ROSE ALONG THE LENGTH OF THE TREASURY YIELD CURVE IN THE SECOND QUARTER, WITH SOME FLATTENING BETWEEN TWO AND 10 YEARS. ON THE LAST DAY OF THE SECOND QUARTER, THE FEDERAL RESERVE RAISED THE BENCHMARK FED FUNDS RATE FROM 1% TO 1.25%. THE U.S. SECURITIES MARKETS SPENT THE ENTIRE QUARTER ANTICIPATING THE MOVE. THE FED MADE CLEAR ITS INTENTIONS TO START MOVING OFF THE MOST ACCOMMODATIVE MONETARY POLICY IN 40 YEARS, AND EVEN IF IT HADN'T, THE STRENGTH OF THE ECONOMY AND UPTICK IN INFLATION SIGNALED THE NEED FOR THE MOVE. YIELDS FOR THE TWO-TO-FIVE-YEAR SEGMENT OF THE TREASURY YIELD CURVE ROSE ALMOST 175 BASIS POINTS FROM THEIR JUNE 2003 LOWS, SUGGESTING THAT THE BOND MARKET WAS ALREADY REFLECTING MUCH OF THE FED TIGHTENING TO COME. SO FAR THIS YEAR, THE YIELD ON THE TWO-YEAR TREASURY IS UP almost 90 BASIS POINTS, WHILE THE 10-YEAR YIELD IS UP OVER 30 BPS. BOND RETURNS ARE EXPECTED TO BE LIMITED IN THE NEAR-TERM. OUR FORECAST IS FOR MODERATE GROWTH AND MODERATE INFLATION FOR THE U.S. ECONOMY. WITH THE RETURN OF DAMAGING INFLATION UNLIKELY, IN OUR VIEW, IT IS POSSIBLE THAT THE WORST OF THE RISE IN BOND YIELDS IS BEHIND US. OVER THE COMING 12 MONTHS, WE SEE THE YIELD ON THE 10-YEAR TREASURY IN A RANGE OF 4.25%-5%. STILL, AFTER A RALLY THAT HAS TAKEN THE YIELD ON THE 10-YEAR TREASURY FROM ITS Q2 PEAK OF NEAR 4.9% TO UNDER 4.5%, THERE DOES NOT APPEAR TO BE MUCH UPSIDE POTENTIAL FOR BOND PRICES FOR THE REST OF THIS YEAR. ALTHOUGH CORPORATE SPREADS HAVE TIGHTENED, WE STILL LOOK FOR CORPORATES AND MORTGAGE-BACKED ISSUES TO MAKE POSITIVE CONTRIBUTIONS TO FIXED-INCOME PORTFOLIOS IN THE NEAR TERM.
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year Year Year Year - ---------------------------------------------------------------------------------------------------------------------------- Wright U.S. Gov't. Near-Term Bond Fund (WNTB) -0.6% 0.6% 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9% 11.9% -3.1% 8.0% 6.3% 13.1% Wright U.S. Gov't. Intermed. Bond Fund (WUSGI) -0.6% 1.4% 8.1% 5.4% 12.6% -4.0% 10.0% 9.1% -1.2% 28.2% -8.6% 15.9% 7.1% 17.6% Wright Total Return Bond Fund (WTRB) -0.3% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9% 22.0% -6.6% 11.0% 7.1% 15.4% Wright Current Income Fund (WCIF) 0.5% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4% 17.5% -3.3% 6.6% 6.7% 15.3%
WRIGHT U.S. GOVERNMENT NEAR TERM FUND The Wright U.S. Government Near-Term Fund (WNTB) is positioned to offer an alternative to money market funds with less sensitivity to changes in interest rates than longer maturity funds. With interest rates in the one-to-two-year maturity range rising around 100 basis points in the second quarter, WNTB lost 1.2%. This was in line with the loss of 1.1% for the Lehman 1-3 year government bond index and better than the 1.5% loss for an average of 54 Morningstar government bond funds with an average maturity between one and three years. For the first six months of the year, WNTB lost 0.6%, compared to a 0.1% loss for the Lehman benchmark and a 0.5% loss for the Morningstar average. WNTB started the second quarter with a slightly short duration compared to the Lehman benchmark, which served it well as interest rates rose, then moved to neutral duration, which was a positive when bonds rallied late in the quarter. In order to pick up extra yield, as of June 30 the WNTB Fund was underweight in government agency (29% of portfolio holdings) and overweight in mortgage-backed issues(13%),and underweight in Treasury issues (55%) compared to the Lehman benchmark. The Fund also held 3% in cash. WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND The Wright U.S. Government Intermediate Fund (WUSGI) is positioned as an intermediate maturity fund with little or no credit risk. As bond yields rose in the second quarter, the WUSGI gave back its first-quarter gain, losing 2.4% for the April-June period, about the same as the Lehman U.S. government intermediate index and an average of 138 intermediate government bond funds in the Morningstar database. For the first half of 2004, WUSGI lost 0.6%, compared to losses of about 0.2% for both the Lehman benchmark and the Morningstar peer-group average. In the first quarter of 2004, the WUSGI lagged the Lehman average due to an overweight in non-Treasury issues, which underperformed Treasuries, and a short duration in anticipation of rising interest rates. In the second quarter, this positioning helped the Fund overcome the effect of fund expenses and just about match the Lehman index's performance. Intermediate Agency and mortgage-backed issues outperformed Treasuries of similar maturity in the second quarter. Following the sharp rise in interest rates early in Q2, which made the Fund's short-duration an advantage, WUSGI moved to a neutral duration of about 3.4 years, which proved to be positive as bonds rallied late in the quarter. At June 30, the WUSGI Fund was invested 58% in Agency issues, 14% in mortgage-backed securities and 27% in Treasuries, with a small position in frictional cash. WRIGHT TOTAL RETURN BOND FUND As interest rates rose in the second quarter of 2004, the Wright Total Return Bond Fund (WTRB), a diversified bond fund, lost 2.5%, in line with the losses of 2.4% for the Lehman U.S. Aggregate Bond Composite and 2.5% for an average of 199 total return bond funds in the Morningstar database. In the second quarter, the WTRB essentially gave back its first-quarter gain; for the first six months of the year, the Fund lost 0.3%, compared to a positive return of 0.2% for the Lehman aggregate and a loss 0.1% for the Morningstar average. In the first quarter, the WTRB Fund's performance relative to the Lehman Aggregate was hurt by a slightly shorter-than-benchmark maturity and duration strategy, but this helped in the second quarter as interest rates rose. The Fund's sector position had a mixed effect in the first half. In the first quarter, an overweight position in corporates helped performance and overweighting in mortgages hurt. The Fund maintained this positioning in the second quarter, with the opposite effect, since mortgages were the strongest-performing sector of the Lehman aggregate in Q2 and corporates lagged. We still see mortgage-backed and corporate issues providing incremental return over the limited returns we anticipate from Treasury issues over the coming year or so, and remain overweight in these sectors. The position in corporates was reduced slightly to 33% of assets at June 30 from 36% three months earlier; Treasuries were increased to account for 12% of assets at quarter end. Mortgage-backed issues were 41%, agencies 10%, asset-backed issues 4%. The Fund moved to a neutral duration of 4.6 years after the second quarter's rise in interest rates. WRIGHT CURRENT INCOME FUND The Wright Current Income Fund (WCIF) is almost entirely invested in GNMA issues (mortgage-based securities, known as Ginnie Mae's, with explicit backing from the Federal government). The WCIF Fund is actively managed to maximize income and minimize principal fluctuation. In the second quarter of 2004, mortgage-backed securities outperformed the Lehman U.S. aggregate bond index as rising mortgage rates reduced the risk of mortgage prepayment. For the latest three months, WCIF lost 0.8%, less than the losses of 0.9% for the Lehman Ginnie Mae index and 1.3% for the average of all 61 Morningstar government mortgage funds. For the first half of 2004, WCIF returned 0.5%, behind the 0.7% return of the Lehman benchmark but slightly better than the 0.4% return of the Morningstar average. In the first quarter, WCIF's holdings were tilted towards higher coupon issues in anticipation of rising interest rates, which penalized the Fund's performance a bit compared to the Lehman benchmark. As interest rates rose in the second quarter, this positioning worked to the Fund's benefit. Based on our expectation that rates will be moving higher over the next year, the bias towards higher coupon issues will be maintained to pick up extra income. At June 30, the WCIF's indicated annual yield was 4.8%, with minimum 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 12/31/94 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% 12/31/03 10,453.92 4.25% 06/30/04 10,435.48 4.62% - -------------------------------------------------------------------------------- WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited) Shares Value EQUITY INTERESTS -- 99.9% AUTOMOBILES & COMPONENTS -- 3.9% BorgWarner, Inc..................... 12,670 $ 554,566 Copart Inc.*........................ 16,560 442,152 Lear Corp........................... 9,250 545,657 ----------- $ 1,542,375 ----------- BANKS -- 9.7% Associated Banc-Corp................ 13,630 $ 403,857 Astoria Financial Corp.............. 6,030 220,577 Banknorth Group Inc................. 14,055 456,506 City National Corp.................. 4,360 286,452 Compass Bancshares, Inc............. 9,615 413,445 Hibernia Corp.-Class A.............. 11,325 275,197 Independence Community Bank......... 8,310 302,484 New York Community Bancorp.......... 21,286 417,844 Silicon Valley Bancshares*.......... 4,460 176,839 Sovereign Bancorp, Inc.............. 27,360 604,656 Webster Financial Corp.............. 6,905 324,673 ----------- $ 3,882,530 ----------- BUILDING MATERIALS -- 1.1% Cytyc Corp.*........................ 17,255 $ 437,759 ----------- CAPITAL GOODS -- 4.4% Ametek, Inc......................... 6,520 $ 201,468 Donaldson Co., Inc.................. 4,520 132,436 Jacobs Engineering Group, Inc.*..... 7,535 296,728 L-3 Communications Holdings, Inc.... 4,440 296,592 Pentair, Inc........................ 11,650 391,906 SPX Corp............................ 4,460 207,122 Vishay Intertechnology, Inc.*....... 12,385 230,113 ----------- $ 1,756,365 ----------- CHEMICALS -- 2.2% Church & Dwight Co., Inc............ 3,220 $ 147,412 Cytec Industries, Inc............... 8,130 369,508 Minerals Technologies, Inc.......... 3,445 199,810 Scotts Company - Class A*........... 2,650 169,282 ----------- $ 886,012 ----------- COMMERCIAL SERVICES & SUPPLIES -- 2.5% Ceridian Corp.*..................... 8,965 $ 201,712 ITT Educational Services, Inc.*..... 5,970 226,979 Rent-A-Center Inc.*................. 9,185 274,907 United Rentals Inc.*................ 15,525 277,742 ----------- $ 981,340 ----------- COMPUTERS & PERIPHERALS -- 3.8% CDW Corp............................ 4,725 $ 301,266 Imation Corp........................ 4,215 179,601 Sandisk Corp.*...................... 17,010 368,947 Storage Technology Corp.*........... 13,320 386,280 Tech Data Corp.*.................... 6,825 267,062 ----------- $ 1,503,156 ----------- CONSUMER DURABLES & APPAREL -- 2.3% Mohawk Industries, Inc.*............ 8,025 $ 588,473 Timberland Co. - Class A*........... 5,010 323,596 ----------- $ 912,069 ----------- DIVERSIFIED FINANCIALS -- 2.9% AG Edwards, Inc..................... 5,500 $ 187,165 Legg Mason, Inc..................... 7,315 665,738 New Plan Excel Realty Trust REIT.... 13,280 310,221 ----------- $ 1,163,124 ----------- ELECTRIC UTILITIES -- 1.8% Alliant Energy Corp................. 15,155 $ 395,242 Black Hills Corp.................... 9,880 311,220 ----------- $ 706,462 ELECTRONIC EQUIPMENT & INSTRUMENTS-- 0.5% Energizer Holdings, Inc.*........... 4,300 $ 193,500 ----------- ELECTRONICS -- 2.7% Arrow Electronics, Inc.*............ 9,410 $ 252,376 Atmel Corp.*........................ 24,525 145,188 Avnet Inc.*......................... 13,045 296,121 Cree Inc.*.......................... 11,285 262,715 Silicon Laboratories Inc.*.......... 2,220 102,897 ----------- $ 1,059,297 ----------- ENERGY -- 10.0% Equitable Resources, Inc............ 7,335 $ 379,293 Forrest Oil Corp.*.................. 12,550 342,866 MDU Resources Group Inc............. 14,207 341,394 Murphy Oil Corp..................... 5,705 420,459 Oneok Inc........................... 10,960 241,010 Pogo Producing Co................... 16,295 804,973 Smith International, Inc.*.......... 4,420 246,459 XTO Energy, Inc..................... 23,351 695,626 ----------- $ 3,472,080 ----------- FOOD, BEVERAGE & TOBACCO -- 3.3% Constellation Brands, Inc.- Class A* 10,155 $ 377,055 Dean Foods Co.*..................... 13,182 491,820 Smithfield Foods Inc.*.............. 9,675 284,445 Universal Corp...................... 3,400 173,196 ----------- $ 1,326,516 ----------- FOREST PRODUCTS & PAPER -- 0.5% Potlatch Corp....................... 4,785 $ 199,247 ----------- HEALTH CARE EQUIPMENT & SERVICES-- 4.5% Coventry Health Care, Inc.*......... 14,310 $ 699,759 Health Net, Inc.*................... 11,265 298,523 Henry Schein, Inc.*................. 4,115 259,821 Lincare Holdings Inc.*.............. 8,170 268,466 Renal Care Group Inc.*.............. 8,290 274,648 ----------- $ 1,801,217 ----------- HEAVY CONSTRUCTION -- 0.3% Hovnanian Enterprises, Inc.- Class A* 3,870 $ 134,328 ----------- HEAVY MACHINERY -- 0.4% Dycom Industries, Inc.*............. 6,255 $ 175,140 ----------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES-- 4.6% D.R. Horton, Inc.................... 15,215 $ 432,106 Graco Inc........................... 8,582 266,471 Harman International................ 2,830 257,530 Hillenbrand Industries.............. 6,215 375,697 HNI Corp............................ 3,930 166,357 Lennar Corp......................... 7,580 338,978 ----------- $ 1,837,139 ----------- HOTELS, RESTAURANTS & LEISURE -- 2.8% Applebee's International, Inc....... 7,700 $ 177,254 Brinker International, Inc.*........ 5,520 188,342 Callaway Golf Company............... 4,805 54,489 Gtech Holdings Corp................. 9,250 428,368 Mandalay Resort Group............... 4,015 275,590 ----------- $ 1,124,043 ----------- INSURANCE -- 6.0% Allmerica Financial Corp.*.......... 4,420 $ 149,396 American Financial Group, Inc....... 4,135 126,407 Everest Re Group, Ltd............... 3,730 299,743 Fidelity National Financial, Inc.... 8,577 320,265 Old Republic International Corp..... 8,455 200,553 Pacificare Health Systems*.......... 9,390 363,017 Protective Life Corp................ 7,680 296,986 Radian Group, Inc................... 9,760 467,504 Stancorp Financial Group............ 2,365 158,455 ----------- $ 2,382,326 ----------- MATERIALS -- 1.9% Airgas, Inc......................... 12,100 $ 289,311 Precision Castparts Corp............ 8,965 490,296 ----------- $ 779,607 ----------- MEDIA -- 1.0% Macrovision Corp.*.................. 5,845 $ 146,300 Reader's Digest Associaition........ 15,340 245,287 ----------- $ 391,587 ----------- OIL & GAS -- 0.8% Newfield Exploration Company*....... 5,480 $ 305,455 ----------- PHARMACEUTICALS & BIOTECHNOLOGY-- 4.2% Barr Laboratories, Inc.*............ 7,585 $ 255,615 Beckman Coulter Inc................. 5,560 339,160 Millennium Pharmaceuticals*......... 10,065 138,897 Omnicare, Inc....................... 9,820 420,394 Par Pharmaceutical Cos Inc.*........ 3,300 116,193 Perrigo Company..................... 9,820 186,285 Sepracor Inc.*...................... 3,810 201,549 ----------- $ 1,658,093 ----------- RETAILING -- 8.4% Abercrombie & Fitch Co. - Class A... 8,210 $ 318,138 Ann Taylor Stores Corp.*............ 6,905 200,107 Barnes & Noble, Inc.*............... 8,660 294,267 Blyth, Inc.......................... 5,970 205,905 Chico's FAS, Inc.*.................. 10,595 478,470 Claire's Stores, Inc................ 11,040 239,568 Michaels Stores, Inc................ 8,900 489,500 Neiman-Marcus Group, Inc. - Class A. 5,440 302,736 Pacific Sunwear of California*...... 7,435 145,503 Pier 1 Imports, Inc................. 8,495 150,277 Ross Stores, Inc.................... 12,305 329,282 Williams-Sonoma, Inc.*.............. 6,580 216,877 ----------- $ 3,370,630 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.7% International Rectifier Corp.*...... 6,480 $ 268,402 Lam Research Corp.*................. 9,185 246,158 Semtech Corp.*...................... 6,925 163,015 ----------- $ 677,575 ----------- SOFTWARE & SERVICES -- 5.1% Activision Inc.*.................... 21,910 $ 348,369 Certegy Inc......................... 2,975 115,430 Fair Isaac, Inc..................... 10,450 348,821 Jack Henry & Associates, Inc........ 5,885 118,289 Macromedia, Inc.*................... 5,520 135,516 Mentor Graphics Corp.*.............. 14,055 217,431 Sybase, Inc.*....................... 18,385 330,930 Synopsys, Inc.*..................... 5,915 168,163 Transaction Sys.Architects, Inc.-Class A*..................... 12,630 271,924 ----------- $ 2,054,873 ----------- TELECOMMUNICATION SERVICES -- 2.4% Adtran, Inc......................... 8,190 $ 273,300 Cincinnati Bell, Inc.*.............. 27,140 120,502 Plantronics Inc.*................... 3,930 165,453 Polycom Inc.*....................... 7,800 174,798 Telephone & Data Systems, Inc....... 3,035 216,092 ----------- $ 950,145 ----------- TRANSPORTATION -- 2.3% J.B. Hunt Transport Services, Inc... 10,375 $ 400,268 Overseas Shipholding Group.......... 5,135 226,608 Thor Industries Inc................. 8,230 275,376 ----------- $ 902,252 ----------- UTILITIES -- 3.2% Energy East Corp.................... 5,460 $ 132,405 Great Plains Energy, Inc............ 4,565 135,581 Questar Corp........................ 10,795 417,119 SCANA Corp.......................... 6,050 220,039 Wisconsin Energy Corp............... 11,610 378,602 ----------- $ 1,283,746 ----------- TOTAL EQUITY INTERESTS-- 99.9% (identified cost, $31,832,231) $ 39,849,988 OTHER ASSETS, LESS LIABILITIES -- 0.1% 40,456 ----------- NET ASSETS -- 100% $ 39,890,444 ============ * Non-income-producing security. See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $31,832,231) (Note 1A). $39,849,988 Cash.................................... 59 Receivable for investments sold......... 432,359 Receivable for fund shares sold......... 35,523 Dividends Receivable.................... 24,274 Prepaid expenses........................ 17,754 ------------ Total assets............................ $40,359,957 ------------ LIABILITIES: Payable for investments purchased....... $ 420,853 Payable for fund shares reacquired...... 3,601 Demand note payable..................... 24,000 Payable to affiliate for Trustees' fees. 1,828 Transfer agent fee...................... 1,858 12b-1 fees payable...................... 1,899 Accrued expenses and other liabilities.. 15,474 ------------ Total liabilities....................... $ 469,513 ------------ NET ASSETS................................ $39,890,444 ============ 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................... $ 29,124,350 Accumulated undistributed net realized gain on investments (computed on the basis of identified cost)....................... 1,851,956 Unrealized appreciation on investments (computed on the basis of identified cost) 8,017,757 Undistributed net investment income..... 896,381 ------------ Net assets applicable to outstanding shares................................ $ 39,890,444 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 3,193,375 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 12.49 ============= See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Dividend income......................... $ 207,634 Expenses - Investment adviser fee (Note 2):........ $ 115,992 Administrator fee (Note 2):............. 23,198 Compensation of Trustees not employees of the investment adviser or administrator.... 7,686 Custodian fee........................... 32,521 Distribution expenses (Note 3):......... 48,330 Transfer and dividend disbursing agent fees 11,648 Printing................................ 1,736 Interest expense........................ 97 Shareholder communications.............. 4,186 Audit services.......................... 11,927 Legal services.......................... 4,484 Registration costs...................... 9,136 Miscellaneous .......................... 3,274 ------------- Total expenses.......................... $ 274,215 Deduct - Preliminary Reduction of custodian fee (Note 1D):............................. $ (971) Preliminary Reduction of distribution expenses by principal underwriter (Note 3):..... (31,542) ------------ Total deductions........................ $ (32,513) ------------ Net expenses............................ $ 241,702 ------------ Net investment (loss)................... $ (34,068) ------------ REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain on investment transactions (identified cost basis)................ $ 2,931,396 Change in unrealized depreciation of investments............................ (895,447) ------------ Net realized and unrealized gain of investments......................... $ 2,035,949 ------------ Net increase in net assets from operations $ 2,001,881 ============= See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment loss........................................................ $ (34,068) $ (77,006) Net realized gain (loss) on investments.................................... 2,931,396 (660,788) Change in unrealized appreciation (depreciation) of investments............ (895,447) 9,657,697 ------------ ------------ Net increase in net assets resulting from operations..................... $ 2,001,881 $ 8,919,903 ------------ ------------ Distributions to shareholders (Note 1F) - From net realized gain..................................................... $ - $ (470,550) ------------ ------------ Total distributions...................................................... $ - $ (470,550) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 4).. $ (301,243) $ (3,076,788) ------------ ------------ Net increase (decrease) in net assets........................................ $ 1,700,638 $ 5,372,565 NET ASSETS: At beginning of period....................................................... 38,189,806 32,817,241 ------------ ------------ At end of period............................................................. $ 39,890,444 $ 38,189,806 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD................................................................ $ 896,381 $ 930,450 ============== ============== See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS June 30, 2004 2003(6) 2002(6) 2001(6) 2000(6) 1999 - ----------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 11.870 $ 9.270 $ 11.580 $ 13.430 $ 15.130 $ 17.630 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment (loss) income(1) ....... $ (0.009) $ (0.023) $ (0.046) $ (0.045) $ (0.041) $ 0.181 Net realized and unrealized gain (loss) 0.629 2.756 (1.831) (1.322) 1.638 0.638 -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations......... $ 0.620 $ 2.733 $ (1.877) $ (1.367) $ 1.597 $ 0.819 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ - $ - $ - $ - $ - $ (0.055) Distributions from capital gains....... - (0.133) (0.433) (0.483) (3.297) (3.264) -------- -------- -------- -------- -------- -------- Total distributions................ $ - $ (0.133) $ (0.433) $ (0.483) $ (3.297) $ (3.319) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 12.490 $ 11.870 $ 9.270 $ 11.580 $ 13.430 $ 15.130 ========== ========== ========== ========== ========== ========== Total return(2) ............................ 5.22% 30.06% (16.98%) (10.15%) 10.75% 5.75% Ratios/Supplemental Data(1): Net assets, end of period (000 omitted) $ 39,890 $ 38,190 $ 32,817 $ 45,883 $ 51,201 $ 74,547 Ratio of net expenses to average net assets 1.25%(7) 1.25% 1.26%(3) 1.26%(3) 1.26%(3) 1.16%(3) Ratio of net expenses after custodian fee reduction to average net assets..... 1.25%(7) 1.25% 1.25%(3)(5) 1.25%(3)(5) 1.25%(3)(5 1.15%(3)(5) Ratio of net investment income (loss) to average net assets.......................... (0.18%)(7) (0.23%) (0.44%) (0.38%) (0.28%) 0.36% Portfolio turnover rate .............. 37% 106% 119%(4) 67%(4) 55%(4) 106%(4) - ---------------------------------------------------------------------------------------------------------------------------------- (1)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: 2004 2003 2002 2001 2000 1999 -------------------------------------------------------------------------- Net investment income (loss) per share. $ (0.190) $ (0.057) $ (0.064) $ (0.057) $ (0.051) $ 0.151 ========== ========== ========== ========== ========== ========== Ratios (As a percentage of average net assets): Expenses........................... 1.41%(7) 1.59% 1.43%(3) 1.37%(3) 1.33%(3) 1.22%(3) ========== ========== ========== ========== ========== ========== Expenses after custodian fee reduction 1.41%(7) 1.59% 1.42%(3)(5) 1.36%(3)(5) 1.32%(3)(5) 1.21%(3)(5) ========== ========== ========== ========== ========== ========== Net investment income (loss)....... (0.34%)(7) (0.57%) (0.61%) (0.49%) (0.35%) 0.30% ========== ========== ========== ========== ========== ========== - ---------------------------------------------------------------------------------------------------------------------------------- (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 invested at the net asset value on the reinvestment date. (3)Includes each fund's share of its corresponding portfolio's allocated expenses. (4)Represents portfolio turnover rate of the fund's corresponding portfolio. (5)Custodian fees were reduced by credits resulting from cash balances the fund and/or 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. (6)Certain per share amounts are based on average shares outstanding. (7) Annualized. See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited) Shares Value EQUITY INTERESTS -- 99.4% ADVERTISING -- 0.5% Omnicom Group....................... 4,155 $ 315,323 ----------- AEROSPACE & DEFENSE -- 0.9% Boeing Company...................... 11,130 $ 568,632 ----------- AUTOMOBILES & COMPONENTS -- 3.5% Ford Motor Company.................. 30,670 $ 479,985 Johnson Controls, Inc............... 13,505 720,897 Paccar Inc.......................... 17,785 1,031,352 ----------- $ 2,232,234 ----------- BANKS -- 10.5% Bank of America Corp................ 26,649 $ 2,255,038 Capital One Financial Corp.......... 9,455 646,533 Fannie Mae.......................... 8,420 600,851 MBNA Corp........................... 41,960 1,082,148 Washington Mutual, Inc.............. 17,868 690,420 Wells Fargo & Co.................... 25,390 1,453,070 ----------- $ 6,728,060 ----------- CAPITAL GOODS -- 3.8% 3M Co............................... 2,860 $ 257,429 Tyco International, Ltd............. 51,965 1,722,120 United Technologies Corp............ 4,620 422,638 ----------- $ 2,402,187 ----------- COMMERCIAL SERVICES & SUPPLIES -- 3.3% First Data Corp..................... 28,825 $ 1,283,289 H&R Block, Inc...................... 12,910 615,549 Monsanto Co......................... 6,135 236,197 ----------- $ 2,135,035 ----------- COMMUNICATIONS EQUIPMENT -- 5.2% Cisco Systems, Inc.*................ 58,781 $ 1,393,110 Qualcomm, Inc....................... 18,607 1,357,939 Scientific-Atlanta Inc.............. 17,245 594,952 ----------- $ 3,346,001 ----------- COMPUTER & PERIPHERALS -- 3.3% Computer Sciences Corp.*............ 5,375 $ 249,561 Dell Inc.*.......................... 14,214 509,145 Hewlett-Packard Co.................. 42,775 902,552 Lexmark International, Inc.*........ 4,920 474,928 ----------- $ 2,136,186 ----------- DIVERSIFIED FINANCIALS -- 7.3% Citigroup, Inc...................... 41,239 $ 1,917,613 Countrywide Credit Industries, Inc.. 7,245 508,961 J.P. Morgan Chase & Co.............. 12,995 503,816 Lehman Brothers Holdings, Inc....... 4,205 316,426 Merrill Lynch & Co Inc.............. 5,520 297,970 Morgan Stanley...................... 21,500 1,134,555 ----------- $ 4,679,341 ----------- ELECTRIC UTILITIES -- 0.3% Edison International................ 6,570 $ 167,995 ----------- ENERGY -- 8.3% Apache Corp......................... 8,028 $ 349,619 ChevronTexaco Corp.................. 12,270 1,154,730 ConocoPhillips Co................... 24,715 1,885,507 Exxon Mobil Corp.................... 33,100 1,469,971 Occidental Petroleum Corp........... 9,465 458,201 ----------- $ 5,318,028 ----------- ENTERTAINMENT & LEISURE -- 0.3% Time Warner Inc.*................... 11,420 $ 200,764 ----------- FOOD & DRUG RETAILING -- 0.2% Sysco Corp.......................... 4,060 $ 145,632 ----------- FOOD, BEVERAGE & TOBACCO -- 4.6% Altria Group Inc.................... 16,695 $ 835,585 Archer-Daniels-Midland Co........... 14,850 249,183 Brown-Forman Corp. - Class B........ 3,560 171,841 Coors Adolph Co.-Class B............ 4,770 345,062 Kellogg Co.......................... 18,430 771,295 Supervalu Inc....................... 17,890 547,613 ----------- $ 2,920,579 ----------- FOREST PRODUCTS & PAPER -- 0.9% Georgia-Pacific Corp................ 11,985 $ 443,205 Louisiana Pacific Corp.............. 5,610 132,676 ----------- $ 575,881 ----------- HEALTH CARE EQUIPMENT & SERVICES -- 5.4% C.R. Bard, Inc...................... 6,499 $ 368,168 Health Management Associates-Class A 13,435 301,213 Quest Diagnostics, Inc.............. 4,925 418,379 UnitedHealth Group, Inc............. 18,248 1,135,938 Wellpoint Health Networks, Inc.*.... 10,965 1,228,190 ----------- $ 3,451,888 ----------- HEAVY MACHINERY -- 2.5% Black & Decker Corp................. 7,630 $ 474,052 Caterpillar, Inc.................... 7,965 632,740 Centex Corp......................... 3,595 164,471 Ingersoll-Rand Co - Class A......... 4,410 301,247 ----------- $ 1,572,510 ----------- HOTELS, RESTAURANTS & LEISURE -- 3.0% Cendant Corp........................ 43,410 $ 1,062,677 McDonald's Corp..................... 32,140 835,640 ----------- $ 1,898,317 ----------- HOUSEHOLD & PERSONAL PRODUCTS -- 1.2% Clorox Co........................... 5,665 $ 304,664 Corning, Inc.*...................... 12,510 163,381 Procter & Gamble Co................. 6,070 330,451 ----------- $ 798,496 ----------- INSURANCE -- 6.3% AFLAC, Inc.......................... 8,680 $ 354,231 Allstate Corp....................... 5,960 277,438 AMBAC Financial Group, Inc.......... 6,910 507,470 American International Group, Inc... 7,055 502,880 Chubb Corp.......................... 2,870 195,677 Cigna Corp.......................... 1,965 135,212 MBIA Inc............................ 4,185 239,047 MGIC Investment Corp................ 8,765 664,913 Progressive Corp.................... 13,535 1,154,535 ----------- $ 4,031,403 ----------- MATERIALS -- 0.4% Ball Corp........................... 3,245 $ 233,802 ----------- MEDIA -- 1.5% Gannett Co., Inc.................... 10,990 $ 932,501 ----------- PHARMACEUTICALS & BIOTECHNOLOGY -- 7.4% Amgen, Inc.*........................ 8,938 $ 487,747 Becton Dickinson & Co............... 5,260 272,468 Cardinal Health Inc................. 10,230 716,611 Eli Lilly & Co...................... 7,475 522,577 Guidant Corp........................ 11,250 628,650 Johnson & Johnson, Inc.............. 26,101 1,453,826 King Pharmaceuticals Inc.*.......... 16,590 189,955 Merck & Co., Inc.................... 5,441 258,448 Waters Corp.*....................... 4,875 232,928 ----------- $ 4,763,210 ----------- RETAILING -- 7.2% Autozone, Inc.*..................... 2,340 $ 187,434 Best Buy Co, Inc.................... 12,471 632,779 CVS Corp............................ 11,160 468,943 eBay, Inc.*......................... 7,305 671,695 Federated Department Stores......... 2,155 105,811 Gap (The), Inc...................... 27,925 677,181 Ltd. Brands......................... 17,670 330,429 Staples, Inc........................ 14,395 421,917 Target Corp......................... 26,415 1,121,845 ----------- $ 4,618,034 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.1% Intel Corp.......................... 59,788 $ 1,650,149 National Semiconductor Corp.*....... 16,700 367,233 ----------- $ 2,017,382 ----------- SOFTWARE & SERVICES - 3.6% Autodesk, Inc....................... 7,830 $ 335,202 IMS Health Inc...................... 12,450 291,828 International Business Machines Corp. 4,188 369,172 Microsoft Corp...................... 33,119 945,879 Oracle Corp.*....................... 13,778 164,372 Symantec Corp.*..................... 4,150 181,687 ----------- $ 2,288,140 ----------- TELECOMMUNICATION SERVICES -- 2.8% Alltel Corp......................... 4,445 $ 225,006 Bellsouth Corp...................... 39,550 1,037,001 Nextel Communications,Inc.-Class A* 14,932 398,087 Sprint Corp. - Fon Group............ 9,160 161,216 ----------- $ 1,821,310 ----------- TRANSPORTATION -- 0.5% FedEx Corp.......................... 3,929 $ 320,960 ----------- UTILITIES -- 1.6% Exelon Corp......................... 21,451 $ 714,104 Sempra Energy....................... 9,590 330,184 ----------- $ 1,044,288 ----------- TOTAL EQUITY INTERESTS-- 99.4% (identified cost, $54,468,233).. $63,664,119 OTHER ASSETS, LESS LIABILITIES -- 0.6% 397,200 ----------- NET ASSETS -- 100% $64,061,319 ============ * Non-income-producing security. See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $54,468,233) (Note 1A). $63,664,119 Cash.................................... 350,923 Receivable for fund shares sold......... 14,302 Receivable from investment adviser...... 869 Dividends Receivable.................... 51,329 Prepaid expenses........................ 19,336 ------------ Total assets............................ $64,100,878 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 14,600 Payable to affiliate for Trustees' fees. 1,828 Transfer agent fee...................... 2,889 Accrued expenses and other liabilities.. 20,242 ------------ Total liabilities....................... $ 39,559 ------------ NET ASSETS................................ $64,061,319 ============ 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................... $89,990,084 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost).................... (34,956,318) Unrealized appreciation on investments (computed on the basis of identified cost) 9,195,886 Distributions in excess of net investment income...................... (168,333) ------------ Net assets applicable to outstanding share.................... $64,061,319 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 5,956,688 ============ NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 10.75 ============ See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Dividend income......................... $ 499,526 ------------ Expenses - Investment adviser fee (Note 2):........ $ 208,135 Administrator fee (Note 2):............. 41,627 Compensation of Trustees not employees of the investment adviser or administrator.... 7,686 Custodian fee (Note 1D):................ 44,248 Distribution expenses (Note 3):......... 86,723 Transfer and dividend disbursing agent fees 13,104 Printing................................ 2,036 Shareholder communications.............. 7,130 Interest expense........................ 2,678 Audit services.......................... 12,446 Legal services.......................... 5,490 Registration costs...................... 9,784 Miscellaneous .......................... 5,096 ------------ Total expenses.......................... $ 446,183 ------------ Deduct - Preliminary Reduction of custodian fee (Note 1D):............................. $ (748) Preliminary Allocation of expenses to the Investment Adviser (Note 2):........... (869) Preliminary Reduction of distribution expenses by principal underwriter (Note 3):..... (11,227) ------------ Total deductions........................ $ (12,844) ------------ Net expenses............................ $ 433,339 ------------ Net investment income................... $ 66,187 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 2,650,795 Change in unrealized depreciation of investments............................ (1,216,298) ------------ Net realized and unrealized gain of investments............................ $ 1,434,497 ------------ Net increase in net assets from operations $ 1,500,684 ============ See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income ..................................................... $ 66,187 $ 214,803 Net realized gain (loss) on investments.................................... 2,650,795 (498,392) Change in unrealized appreciation (depreciation) on investments............ (1,216,298) 14,590,659 ------------ ------------ Net increase in net assets resulting from operations..................... $ 1,500,684 $ 14,307,070 ------------ ------------ Distributions to shareholders - From net investment income................................................. $ (66,466) $ (187,155) ------------ ------------ Total distributions...................................................... $ (66,466) $ (187,155) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 4).. $ (8,911,775) $ (9,190,510) ------------ ------------ Net Increase (decrease) in net assets........................................ $ (7,477,557) $ 4,929,405 NET ASSETS: At beginning of period....................................................... 71,538,876 66,609,471 ------------ ------------ At end of period............................................................. $ 64,061,319 $ 71,538,876 ============== ============== DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD ............................................................ $ (168,333) $ (168,054) ============== ============== See notes to financial statements
Wright Major Blue Chip Equities Fund (WMBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2004 2003(4) 2002(4) 2001(4) 2000(4) 1999(4) - ------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 10.530 $ 8.570 $ 11.380 $ 13.690 $ 16.290 $ 13.670 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income (loss)(1) ....... $ 0.010 $ 0.029 $ 0.024 $ (0.009) $ (0.001) $ 0.042 Net realized and unrealized gain (loss) 0.220 1.958 (2.812) (2.301) (2.005) 3.202 -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations......... $ 0.230 $ 1.987 $ (2.788) $ (2.310) $ (2.006) $ 3.244 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from investment income....... $ (0.010) $ (0.027) $ (0.022) $ - $ (0.010) $ (0.045) Distributions from capital gains....... - - - - (0.584) (0.579) -------- -------- -------- -------- -------- -------- Total distributions................ $ (0.010) $ (0.027) $ (0.022) $ - $ (0.594) $ (0.624) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 10.750 $ 10.530 $ 8.570 $ 11.380 $ 13.690 $ 16.290 ========== ========== ========== ========== ========== ========== Total Return(3) ............................ 2.18% 23.20% (24.50%) (16.87%) (12.49%) 23.95% Ratios/Supplemental Data(1): Net assets, end of period (000 omitted) $ 64,061 $ 71,539 $ 66,609 $ 95,121 $ 135,262 $144,359 Ratio of net expenses to average net assets 1.25%(7) 1.25% 1.22% 1.13% 1.06% 1.05% Ratio of net expenses after custodian fee reduction to average net assets(2)(6) 1.25%(7) 1.25% 1.22% 1.13% 1.06% 1.05% Ratio of net investment income (loss) to average net assets ................. 0.19%(7) 0.31% 0.25% (0.08%) (0.00%)(5) 0.27% Portfolio turnover rate................ 34% 143% 130% 78% 88% 59% - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30,2004 and for the years ended December 31, 2003, 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 per share and the ratios would have been as follows: 2004 2003 1999 ----------------------------- --------------- Net investment income per share........ $ 0.008 $ 0.024 $ 0.034 ========== ========== ========== Ratios (As a percentage of average net assets): Expenses............................. 1.29%(7) 1.31% 1.10% ========== ========== ========== Expenses after custodian fee reduction(2) 1.29%(7) 1.31% 1.10% ========== ========== ========== Net investment income................ 0.15%(7) 0.26% 0.22% ========== ========== ========== - ---------------------------------------------------------------------------------------------------------------------------------- (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 assets. (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%. (7)Annualized. See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited) Shares Value EQUITY INTERESTS -- 99.7% AUSTRALIA -- 1.5% Australia & New Zealand Banking Group.............................. 40,000 $ 510,816 News Corp. LTD...................... 35,935 294,974 ----------- $ 805,790 ----------- BELGIUM -- 1.5% Colruyt SA.......................... 2,700 $ 334,094 Dexia............................... 26,900 447,307 ----------- $ 781,401 ----------- BRAZIL -- 0.6% Cia Vale Do Rio Doce - ADR.......... 5,900 $ 280,545 ----------- CANADA -- 2.5% Canadian Tire Corp.................. 3,634 $ 133,245 ----------- CHINA -- 0.4% Huaneng Power International Inc.....216,000 $ 192,466 ----------- FRANCE -- 12.6% Alcatel SA, ADR*.................... 31,314 $ 485,054 Aventis SA.......................... 10,100 764,016 BNP Paribas SA...................... 9,320 574,350 Compagnie De Saint-Gobain........... 7,000 349,626 France Telecom SA................... 12,700 331,637 Renault SA.......................... 4,860 370,894 Schneider Electric SA............... 8,019 548,432 Societe Generale.................... 5,100 434,286 STMicroelectronics NV............... 16,000 351,686 Thomson............................. 14,000 276,663 TotalFinaElf SA..................... 6,200 1,184,404 Veolia Environnement................ 10,000 282,709 Vivendi Universal SA*............... 17,623 489,840 Zodiac SA........................... 6,100 207,999 ----------- $ 6,651,596 ----------- GERMANY -- 6.8% Allianz AG.......................... 3,500 $ 379,878 BASF AG............................. 7,660 410,792 Bayerische Motoren Werke AG......... 10,000 443,387 Deutsche Bank AG.................... 8,250 649,518 E. On AG............................ 4,700 339,775 SAP AG.............................. 2,633 437,380 Siemens AG.......................... 8,200 590,900 Thyssen Krupp....................... 18,166 310,268 ----------- $ 3,561,898 ----------- HONG KONG -- 2.5% China Mobile, Ltd................... 77,000 $ 232,980 Esprit Holdings, Ltd................ 89,500 400,465 Hutchison Whampoa, Ltd.............. 57,000 389,145 Techtronic Industries Co., Ltd......170,000 271,353 ----------- $ 1,293,943 ----------- INDIA -- 0.5% Dr. Reddy's Laboratories Ltd. - ADR. 15,000 $ 260,700 ----------- IRELAND -- 1.9% Anglo Irish Bank Corp. PLC.......... 41,500 $ 651,426 Bank of Ireland..................... 26,000 348,029 ----------- $ 999,455 ----------- ISRAEL -- 0.6% Teva Pharmaceutical - Sponsored ADR. 4,687 $ 315,388 ----------- ITALY -- 1.7% Bulgari Spa......................... 18,000 $ 182,353 Eni Spa............................. 25,000 497,393 Mediaset Spa........................ 21,300 243,309 ----------- $ 923,055 ----------- JAPAN -- 21.7% Benesse Corp........................ 6,600 $ 217,179 Bridgestone Corp.................... 16,000 301,484 Canon, Inc.......................... 13,000 687,072 Daikin Industries, Ltd.............. 17,000 457,834 Daito Trust Construct Co., Ltd...... 9,100 351,303 Eisai Co., Ltd...................... 10,400 300,161 Gulliver International Co........... 1,600 185,156 Honda Motor Co., Ltd................ 9,260 447,701 Hoya Corp........................... 4,700 493,350 Mitsubishi Tokyo Financial.......... 65 603,428 Nissan Motor Co., Ltd............... 37,400 416,988 Nomura Holdings, Inc................ 24,000 356,266 NTT DoCoMo, Inc..................... 311 557,425 Olympus Corp........................ 6,000 113,608 ORIX Corp........................... 2,900 333,195 Pioneer Corp........................ 9,000 233,283 Promise Co., Ltd.................... 4,000 267,659 Ricoh Co., Ltd...................... 16,000 341,192 Secom Co., Ltd...................... 5,000 212,786 Seven - Eleven Japan Co., Ltd....... 8,000 261,777 Sharp Corp.......................... 26,000 416,545 SMC Corp............................ 3,500 379,613 Sony Corp........................... 10,300 389,108 Sumitomo Trust & Banking............ 53,000 378,519 Takeda Chemicals Industries, Ltd.... 7,800 343,417 Toppan Printing Co., Ltd............ 25,000 283,791 Toyota Motor Corp................... 25,800 1,048,173 USF Holdings Inc.*.................. 45 199,366 USS Co., Ltd........................ 3,160 272,737 Yamaha Motor Co., Ltd............... 18,000 281,097 Yamanouchi Pharmaceutical Co., Ltd.. 8,900 300,225 ----------- $11,431,438 ----------- MEXICO -- 1.8% America Movil S.A. de C.V. - ADR.... 18,000 $ 654,660 Grupo Televisa SA -Sponsored ADR.... 6,300 285,201 ----------- $ 939,861 ----------- NETHERLANDS -- 6.8% ABN Amro Holdings NV................ 23,000 $ 504,147 Aegon NV............................ 33,517 404,928 ASML Holdings NV - ADR*............. 31,000 530,410 ING Groep NV........................ 19,000 449,360 Koninklijke Philips Electronics NV.. 19,400 523,386 Royal Dutch Petroleum Co............ 15,340 788,808 TPG NV Post Group................... 16,000 366,315 ----------- $ 3,567,354 ----------- NORWAY -- 1.7% Norsk Hydro ASA..................... 7,664 $ 498,219 Statoil ASA......................... 27,190 345,272 Yara International ASA*............. 7,664 61,932 ----------- $ 905,423 ----------- SOUTH KOREA -- 0.5% POSCO - ADR......................... 8,521 $ 285,539 ----------- SPAIN -- 2.6% Banco Santander Central Hispano SA.. 24,900 $ 258,933 Endesa SA........................... 16,000 308,969 Grupo Ferrovial SA.................. 6,000 250,306 Telefonica SA....................... 39,200 580,633 ----------- $ 1,398,841 ----------- SWEDEN -- 2.2% Telefon. LM Ericsson, Sponsored ADR* 38,000 $ 1,136,960 ----------- SWITZERLAND -- 11.1% Cie Finance Richemont-A Unit........ 15,700 $ 410,876 Credit Suisse Group................. 18,400 655,302 Kuoni Reisen Holdings AG............ 570 245,882 Micronas Semiconductor - Registered* 5,700 259,796 Nestle SA........................... 3,488 932,367 Novartis AG......................... 29,476 1,303,361 Rieter Holdings AG.................. 1,000 265,706 SGS SA.............................. 500 273,709 Swiss Reinsurance AG................ 3,300 214,850 UBS AG.............................. 14,160 1,000,096 Zurich Financial Services*.......... 1,800 284,874 ----------- $ 5,846,819 ----------- UNITED KINGDOM -- 20.6% Anglo American PLC.................. 27,140 $ 556,928 Baa PLC............................. 40,400 406,799 BHP Billiton, Ltd................... 55,800 485,732 Boots Group PLC..................... 33,600 420,541 BP PLC..............................139,000 1,231,471 Diageo PLC.......................... 33,000 446,350 GlaxoSmithkline PLC................. 57,000 1,157,229 HSBC Holdings PLC (HK Registered)... 85,000 1,267,982 Johnson Matthey PLC................. 12,200 204,520 Johnston Press PLC.................. 27,000 278,256 Man Group PLC....................... 12,938 336,106 Royal Bank of Scotland Group PLC.... 43,770 1,264,467 Shell Transport & Trading Co. PLC...101,000 743,225 Tesco PLC...........................131,474 636,810 Vodafone Group PLC..................490,000 1,076,375 WPP Group PLC....................... 33,600 342,301 ----------- $10,855,092 ----------- TOTAL EQUITY INTERESTS-- 99.7% (identified cost, $42,998,188)... $52,566,809 ----------- OTHER ASSETS, LESS LIABILITIES -- 0.3% 152,606 ----------- NET ASSETS -- 100% $ 52,719,415 ============ * 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 June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $42,998,188) (Note 1A) $52,566,809 Cash.................................... 344 Foreign currency, at value (cost $21,257) (Note 1)............................... 21,173 Receivable for investments sold......... 397,101 Receivable for fund shares sold......... 4,668 Dividends Receivable.................... 116,150 Tax reclaim receivable.................. 93,041 Prepaid expenses........................ 28,001 Other assets............................ 5,973 ------------ Total assets.......................... $53,233,260 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 22,198 Demand note payable..................... 463,000 Payable to affiliate for Trustees' fees. 1,828 Transfer agent fee...................... 3,436 Accrued expenses and other liabilities.. 23,383 ------------ Total liabilities..................... $ 513,845 ------------ NET ASSETS................................ $52,719,415 ============ 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................... $ 68,223,919 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost).............. (26,956,769) Unrealized appreciation of investments and translation of assets and liabilities in foreign currencies (computed on the basis of identified cost)....................... 9,577,164 Undistributed net investment income..... 1,875,101 ------------ Net assets applicable to outstanding shares $ 52,719,415 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 4,021,731 ============= NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 13.11 ============= See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Dividend income......................... $ 878,441 Less: Foreign Taxes..................... (103,679) ------------ Investment income....................... $ 774,762 ------------ Expenses - Investment adviser fee (Note 2):........ $ 220,116 Administrator fee (Note 2):............. 46,775 Compensation of Trustees not employees of the investment adviser or administrator 7,686 Custodian fee (Note 1D):................ 73,059 Distribution expenses (Note 3):......... 68,786 Transfer and dividend disbursing agent fees 11,291 Printing................................ 1,982 Interest expense........................ 2,027 Shareholder communications.............. 6,006 Audit services.......................... 13,998 Legal services.......................... 5,105 Registration costs...................... 10,712 Miscellaneous .......................... 3,323 ------------ Total expenses.......................... $ 470,866 ------------ Deduct - Preliminary Reduction of custodian fee (Note 1D):............................. $ (259) ------------ Net expenses............................ $ 470,607 ------------ Net investment income................... $ 304,155 ------------ REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) - Investment transactions (identified cost basis................ $ 1,279,020 Foreign currency transactions.......... (1,632) ------------ Net realized gain....................... $ 1,277,388 Change in unrealized depreciation - Investments (identified cost basis).... (303,407) Foreign currency....................... (8,808) ------------ Net change in unrealized depreciation... $ (312,215) ------------ Net realized and unrealized gain of investments.................... $ 965,173 ------------ Net increase in net assets from operations $1,269,328 ============ See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) DECREASE IN NET ASSETS: From operations - Net investment income ..................................................... $ 304,155 $ 468,757 Net realized gain (loss) on investments and foreign currency transactions.. 1,277,388 (959,406) Change in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies ........... (312,215) 15,005,840 ------------ ------------ Net increase in net assets resulting from operations..................... $ 1,269,328 $ 14,515,191 ------------ ------------ Distributions to shareholders - From net investment income................................................. $ (376,098) From net investment income - Standard shares............................................................ - $ (338,309) Institutional shares....................................................... - (69,545) ------------ ------------ Total distributions...................................................... $ (376,098) $ (407,854) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 4).. $ (2,759,826) Net increase (decrease) in net assets from fund share transactions (Note 4) - Standard shares............................................................ $ _ $ (9,715,249) Institutional shares ...................................................... - (11,047,783) ------------ ------------ Net decrease in net assets from fund share transactions...................... $ (2,759,826) $(20,763,032) ------------ ------------ Net decrease in net assets................................................... $ (1,866,596) $ (6,655,695) NET ASSETS: At beginning of period....................................................... 54,586,011 61,241,706 ------------ ------------ At end of period............................................................. $ 52,719,415 $ 54,586,011 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD................................................................ $ 1,875,101 $ 1,947,044 ============== ============== See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2004 2003(4) 2002(4) 2001(4) 2000(4) 1999(4) - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 12.890 $ 9.840 $11.510 $15.180 $18.900 $16.020 --------- --------- --------- --------- --------- --------- Income (loss) from investment operations: Net investment income (loss) .......... $ 0.070 $ 0.073 $ 0.070 $ (0.023) $ 0.135 $ (0.004) Net realized and unrealized gain (loss) 0.238 3.044 (1.740) (3.647) (3.455) 5.181 --------- --------- --------- --------- --------- --------- Total income (loss) from investment operations...... $ 0.308 $ 3.117 $ (1.670) $ (3.670) $ (3.320) $ 5.177 --------- --------- --------- --------- --------- --------- Less distributions: Dividends from investment income....... $ (0.088) $ (0.067) $ - $ - $ - $ - Distributions from capital gains....... - - - - (0.400) (2.297) --------- --------- --------- --------- --------- --------- Total distributions................ $ (0.088) $ (0.067) $ - $ - $ (0.400) $ (2.297) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 13.110 $12.890 $ 9.840 $11.510 $15.180 $18.900 ========== ========== ========== ========== ========== ========== Total return(1) ............................ 2.40% 31.96% (14.51%) (24.18%) (17.58%) 34.26% Ratios/Supplemental Data Net assets, end of period (000 omitted) $ 52,719 $ 54,586 $ 50,835 $ 66,828 $110,868 $147,610 Ratio of net expenses to average net assets 1.71%(6) 1.80% 1.66%(2) 1.56%(2) 1.49%(2) 1.49%(2) Ratio of net expenses after custodian fee reduction to average net assets(5) 1.71%(6) 1.80% 1.65% - - - Ratio of net investment income (loss) to average net assets 1.11%(6) 0.81% 0.65% (0.18%) 0.76% (0.02%) Portfolio turnover rate .............. 17% 77% 62%(3) 39%(3) 53%(3) 105%(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/or 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. (6)Annualized. See notes to financial statements
WRIGHT MANAGED EQUITY TRUST - ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (unaudited) (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 fund. Subsequent to December 20, 2002, the Funds invest directly in securities rather than through the Portfolios and maintain the same investment objectives. 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 - Investors Bank & Trust Company (IBT) serves as custodian to the Funds. Pursuant to the custodian agreement, IBT receives a fee reduced by credits which are determined based on the average daily cash balance the Funds maintain with IBT. All credit balances used to reduce the Fund's custodian fees are reported as a reduction of total expenses on the 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, 2003, the Trust, for federal income tax purposes, had capital loss carryovers of $28,101,718(WIBC), and $1,112,648(WSBC) and $36,962,750(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: 12/31 WSBC WMBC WIBC ----------------------------------- 2009 - $17,128,584 $12,528,270 2010 - 17,603,398 14,010,156 2011 $1,112,648 2,230,768 1,563,292 At December 31, 2003, net capital losses of $2,972 for WIBC, and $141,920 for WMBC attributable to security transactions incurred after October 31, 2003 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. 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. Interim Financial Information- The interim financial statements relating to June 30, 2004 and for the six month period then ended have not been audited by independent certified public accountants, but in the opinion of the Trust's management, reflect all adjustments, consisting only of normally recurring adjustments, necessary for the fair presentation of the financial statements. (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 six months ended June 30, 2004, the effective annual rate was 0.80% for WIBC and 0.60% for WSBC and WMBC. Wright has been allocated expenses of $869 on a preliminary basis on behalf of WMBC. 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 six months ended June 30, 2004, the effective 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 for activities primarily intended to result in the sale of each fund's shares. Under a written agreement in effect through the current fiscal year, Wright waives a portion of its advisory fee and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 1.25% after custodian fee reductions, if any, for both WSBC and WMBC. Pursuant to this agreement, the principal underwriter made a preliminary reduction of its fees of $31,542 and $11,227 on behalf of WSBC and WMBC, respectively. The investment adviser also assumed on a preliminary basis $869 of expenses on behalf of WMBC. 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 six months ended June 30, 2004, 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:
For the Six Months Ended Year Ended June 30, 2004 December 31, 2003 ------------------ ------------------- (unaudited) Shares Amount Shares Amount - ----------------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund-- Sold................................................... 495,745 $ 6,013,651 1,288,153 $ 12,745,026 Issued to shareholders in payment of distributions declared - - 47,582 403,022 Redemptions............................................ (518,608) (6,314,894) (1,659,851) (16,224,836) ----------- -------------- ----------- -------------- Net decrease......................................... (22,863) $ (301,243) (324,116) $ (3,076,788) ============= =============== ============ =============== Wright Major Blue Chip Equities Fund Sold.................................................. 637,886 $ 6,812,181 1,487,609 $ 13,724,956 Issued to shareholders in payment of distributions declared 5,045 53,816 14,951 150,707 Redemptions............................................ (1,480,932) (15,777,772) (2,481,862) (23,066,173) ----------- -------------- ----------- -------------- Net decrease......................................... (838,001) $ (8,911,775) (979,302) $ (9,190,510) =========== ============== ============ =============== Wright International Blue Chip Equities Fund-- Standard Shares: Sold................................................... 298,269 $ 3,906,966 1,000,262 $ 10,448,947 Issued to shareholders in payment of distributions declared 21,458 276,379 25,450 231,084 Redemptions............................................ (532,836) (6,943,171) (1,956,708) (20,395,280) ----------- -------------- ----------- -------------- Net decrease......................................... (213,109) $ (2,759,826) (930,996) $ (9,715,249) =========== ============== ========== = ============== Wright International Blue Chip Equities Fund-- Institutional Shares: Issued to shareholders in payment of distributions declared - $ - 16,247 $ 69,545 Redemptions............................................ - - (2,259,640) (11,117,328) ----------- -------------- ----------- -------------- Net decrease........................................... - $ - (2,243,393) $ (11,047,783) =========== ============== ============= ===============
(5) INVESTMENT TRANSACTIONS Purchases and sales of investments, other than U.S. Government securities and short-term obligations were as follows: Six Months Ended June 30, 2004 (unaudited) ----------------------------------------------------------- WSBC WMBC WIBC - ------------------------------------------------------------------------------ Purchases..... $ 14,334,284 $ 23,724,455 $ 9,390,770 ============== ============== ============== Sales......... $ 14,22,039 $ 33,213,324 $ 12,785,465 ============== ============== ============== - ------------------------------------------------------------------------------ (6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2004, as computed on a federal income tax basis, are as follows: WSBC WMBC WIBC - ------------------------------------------------------------------------------- Aggregate cost $ 31,832,23 $54,468,233 42,998,188 ============ ============ ============ Gross unrealized appreciation 8,528,096 9,891,326 10,713,963 Gross unrealized depreciation (510,339) (695,440) (1,145,342) ------------- ------------- ------------- Net unrealized appreciation $ 8,017,757 $ 9,195,886 $ 9,568,621 ============== ============== ============== - ------------------------------------------------------------------------------- The appreciation on currency for WIBC is $8,543. (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 June 30, 2004. WSBC and WIBC have $24,000 and $463,000 outstanding, respectively, at June 30, 2004. (8) CLASS ELIMINATION The Institutional Share class of International Blue Chip Equities Fund was fully liquidated on May 20, 2003. WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) MORTAGE-BACKED SECURITIES $ 122,768 FHLMC Gold Balloon #M90710 5.000% 03-01-07 $101.88 $ 125,080 4.9% 83,721 FHLMC Gold Balloon #M90724 5.500% 05-01-07 102.54 85,848 5.4% 330,067 FHLMC Gold Pool #M90767 4.500% 11-01-07 101.34 334,507 4.4% 566,577 FHLMC Gold Pool #M90796 4.000% 02-01-08 100.02 566,687 4.0% 472,659 FHLMC Gold Pool #M90802 4.000% 03-01-08 100.02 472,751 4.0% 540,848 FHLMC Pool #1B1291 4.397% 11-01-33 100.61 544,126 4.4% 132,097 FNMA Pool #254227 5.000% 02-01-09 101.53 134,118 4.9% 696,353 FNMA Pool #701043 4.056% 04-01-33 99.11 690,148 4.1% U.S. GOVERNMENT AGENCIES $ 770,000 FFCB 2.500% 03-15-06 $ 99.53 $ 766,348 2.5% 2,105,000 FHLMC 2.875% 11-03-06 99.00 2,083,859 2.9% 3,095,000 FNMA 3.000% 02-03-06 100.27 3,103,437 3.0% 795,000 FNMA 1.750% 06-16-06 97.67 776,469 1.8% U.S. TREASURIES $ 3,025,000 U.S. Treasury Notes 6.750% 05-15-05 $104.08 $ 3,148,484 6.5% 6,335,000 U.S. Treasury Notes 4.625% 05-15-06 103.57 6,561,432 4.5% 3,000,000 U.S. Treasury Notes 4.375% 05-15-07 103.39 3,101,721 4.2% ----------- TOTAL INVESTMENTS (identified cost, $22,697,847) - 96.9% $22,495,015 Other Assets, Less Liabilities -- 3.1% 716,755 ----------- Net Assets -- 100.0% $23,211,770 ============ FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association FFCB - Federal Farm Credit Bank See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of $22,697,847) (Note 1A) $ 22,495,015 Cash.................................... 587,294 Receivable for investments sold......... 20,952 Receivable for fund shares sold......... 132 Receivable from investment adviser...... 7,074 Interest receivable..................... 146,716 Prepaid expenses........................ 17,731 ------------ Total assets.......................... $ 23,274,914 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 31,035 Distributions payable................... 14,621 Payable to affiliate for Trustees' fees. 1,224 Transfer agent fee ..................... 1,865 Accrued expenses........................ 14,399 ------------ Total liabilities..................... $ 63,144 ------------ NET ASSETS................................ $ 23,211,770 ============= 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................... $24,600,615 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost).............. (919,204) Unrealized depreciation on investments (computed on the basis of identified cost) (202,832) Distributions in excess of net investment income................................. (266,809) ------------ Net assets applicable to outstanding shares................................ $23,211,770 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING. 2,313,123 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST.................. $ 10.03 ============== See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 260,849 ------------ Expenses - Investment adviser fee (Note 3)........ $ 56,201 Administrator fee (Note 3)............. 11,240 Compensation of Trustees not employees of the investment adviser or administrator 5,024 Custodian fee (Note 1C)................ 24,410 Distribution expenses (Note 4)......... 31,223 Transfer and dividend disbursing agent fees 10,374 Printing............................... 2,002 Interest expense....................... 390 Shareholder communications............. 3,822 Audit services......................... 12,156 Legal services......................... 2,862 Registration costs..................... 8,032 Miscellaneous.......................... 2,982 ------------ Total expenses........................ $ 170,718 ------------ Deduct - Preliminary reduction of custodian fee (Note 3).......................... $ (612) Preliminary reduction of investment adviser fee(Note 3)................... (20,350) Preliminary reduction of distribution expenses by principal underwriter (Note 4).............................. (31,223) ------------ Total deductions...................... $ (52,185) ------------ Net expenses.......................... $ 118,533 ------------ Net investment income............... $ 142,316 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (27,567) Change in unrealized depreciation of investments......................... (238,373) ------------ Net realized and unrealized loss of investments........................... $ (265,940) ------------ Net decrease in net assets from operations $ (123,624) ============= See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 142,316 $ 545,906 Net realized gain (loss) on investments.................................... (27,567) 699,197 Change in unrealized appreciation (deprecation) on investments............. (238,373) (1,048,933) ------------ ------------ Net increase (decrease) in net assets resulting from operations.......... $ (123,624) $ 196,170 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (391,243) $ (914,896) ------------ ------------ Total distributions...................................................... $ (391,243) $ (914,896) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (3,830,842) $ (5,563,259) ------------ ------------ Net decrease in net assets............................................... $ (4,345,709) $ (6,281,985) NET ASSETS: At beginning of period....................................................... 27,557,479 33,839,464 ------------ ------------ At end of period............................................................. $ 23,211,770 $ 27,557,479 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................... $ (266,809) $ (17,880) ============= ============= See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, ----------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2004 2003 2002 2001 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 10.250 $ 10.490 $ 10.290 $ 10.080 $ 9.930 $ 10.270 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.049 $ 0.165 $ 0.349 $ 0.480(7) $ 0.525 $ 0.534 Net realized and unrealized gain (loss).. (0.111) (0.102) 0.200 0.195(7) 0.143 (0.343) -------- -------- -------- -------- -------- -------- Total income from investment operations $ (0.062) $ 0.063 $ 0.549 $ 0.675 $ 0.668 $ 0.191 -------- -------- -------- -------- -------- -------- Less distributions: Distributions from investment income... $ (0.158) $ (0.303) $ (0.349) $ (0.465) $ (0.518) $ (0.531) -------- -------- -------- -------- -------- -------- Total distributions.................... $ (0.158) $ (0.303) $ (0.349) $ (0.465) $ (0.518) $ (0.531) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 10.030 $ 10.250 $ 10.490 $ 10.290 $ 10.080 $ 9.930 ========= ========= ========= ========= ========= ======== Total return(2) ............................ (0.61%) 0.61% 5.42% 6.82% 6.94% 1.91% Ratios/Supplemental Data(1): Net assets, end of period (000 omitted).. $ 23,212 $ 27,557 $ 33,839 $ 36,025 $ 39,198 $ 52,825 Ratio of net expenses to average net assets 0.95%(8) 0.95% 0.97%(3) 0.97%(3) 0.98%(3) 0.91%(3) Ratio of net expenses after custodian fee reduction to average net assets ...... 0.95%(8) 0.95%(6) 0.95%(3)(4)(6) 0.95%(3)(4)(6)0.95%(3)(4)(6) 0.90%(3)(4) Interest expense ....................... _ 0.01% - - - - Ratio of net investment income to average net assets............................ 1.14%(8) 1.75% 3.10% 4.40% 5.27% 5.27% Portfolio turnover rate ................ 79% 165% 64%(5) 92%(5) 65%(5) 0%(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: 2004 2003 2002 2001 2000 1999 ---------------------------------------------------------------------------- Net investment income per share........ $ 0.037 $ 0.134 $ 0.323 $ 0.452 $ 0.511 $ 0.526 ========= ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses ............................ 1.36%(8) 1.28% 1.20%(3) 1.22%(3) 1.13%(3) 0.99%(3) ========= ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.36%(8) 1.28% 1.18%(3)(4) 1.20%(3)(4) 1.10%(3)(4) 0.98%(3)(4) ========= ========= ========= ========= ========= ========= Interest expense..................... - 0.01% - - - - ========= ========= ========= ========= ========= ========= Net investment income................ 0.73%(8) 1.42% 2.87% 4.15% 5.13% 5.19% ========= ========= ========= ========= ========= ========= - ---------------------------------------------------------------------------------------------------------------------------------- (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 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 are 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. (8)Annualized. See notes to financial statements
WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) MORTAGE-BACKED SECURITIES $ 16,744 FHLMC Gold Pool #M90724 5.500% 05-01-07 $102.54 $ 17,170 5.4% 330,067 FHLMC Gold Pool #M90767 4.500% 11-01-07 101.34 334,507 4.4% 157,553 FHLMC Gold Pool #M90802 4.000% 03-01-08 100.02 157,584 4.0% 285,814 FHLMC Pool #1B1291 4.397% 11-01-33 100.61 287,546 4.4% 66,049 FNMA Pool #254227 5.000% 02-01-09 101.53 67,059 4.9% 194,523 FNMA Pool #254546 5.500% 12-01-17 102.60 199,580 5.4% 189,159 FNMA Pool #663689 5.000% 01-01-18 100.39 189,891 5.0% 301,588 FNMA Pool #701043 4.056% 04-01-33 99.11 298,901 4.1% U.S. GOVERNMENT AGENCIES $ 1,030,000 FFCB 2.500% 03-15-06 $ 99.53 $1,025,115 2.5% 1,070,000 FHLMC 2.875% 11-03-06 99.00 1,059,254 2.9% 755,000 FNMA 3.000% 02-03-06 100.27 757,058 3.0% 1,175,000 FNMA 2.875% 05-19-08 96.36 1,132,198 3.0% 1,875,000 FNMA 3.875% 11-17-08 98.67 1,850,121 3.9% 390,000 Tennessee Valley Authority 6.000% 03-15-13 106.88 416,847 5.6% U.S. TREASURIES $ 380,000 U.S. Treasury Notes 6.750% 05-15-05 $ 104.08 $ 395,512 6.5% 170,000 U.S. Treasury Notes 4.625% 05-15-06 103.57 176,076 4.5% 480,000 U.S. Treasury Notes 3.000% 11-15-07 99.09 475,613 3.0% 1,940,000 U.S. Treasury Notes 3.875% 02-15-13 95.63 1,855,203 4.1% ----------- Total Investments (identified cost, $10,870,948) - 98.% $10,695,235 Other Assets, less Liabilities - 1.1% 117,311 ----------- Net Assets - 100.0% $10,812,546 ============ FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association FFCB - Federal Farm Credit Bank See notes to financial statements
WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of $10,870,948)(Note 1A) $ 10,695,235 Cash.................................... 20,080 Receivable for investments sold......... 11,072 Receivable for fund shares sold......... 2,294 Receivable from investment adviser...... 9,432 Interest receivable..................... 82,861 Prepaid expenses........................ 14,428 ------------ Total assets.......................... $ 10,835,402 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 700 Distributions payable................... 5,169 Payable to affiliate for Trustees' fees. 1,272 Transfer agent fee payable.............. 1,539 Accrued expenses and other liabilities.. 14,176 ------------ Total liabilities..................... $ 22,856 ------------ NET ASSETS................................ $ 10,812,546 ============= 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................... $ 11,150,950 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost).................... (107,232) Unrealized appreciation on investments (computed on the basis of identified cost) (175,713) Distributions in excess of net investment income................................. (55,459) ------------ Net assets applicable to outstanding shares................................ $ 10,812,546 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 847,740 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 12.75 ============= See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income ....................... $ 197,150 ------------ Expenses - Investment adviser fee (Note 3)........ $ 29,279 Administration fee (Note 3)............ 5,856 Compensation of Trustees not employees of the investment adviser or administrator 5,024 Custodian fee (Note 1C)................ 23,731 Distribution expenses (Note 4)......... 16,266 Transfer and dividend disbursing agent fees 8,554 Printing............................... 1,320 Interest expense....................... 386 Shareholder communications............. 2,002 Audit services......................... 10,940 Legal services......................... 2,537 Registration costs..................... 8,732 Miscellaneous.......................... 2,225 ------------ Total expenses........................ $ 116,852 ------------ Deduct - Preliminary reduction of custodian fee (Note 3).............................. $ (146) Preliminary allocation of expenses to investment adviser (Note 3)........... (9,432) Preliminary reduction of investment adviser fee (Note 3).............................. (29,279) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... (16,266) ------------ Total deductions...................... $ (55,123) ------------ Net expenses.......................... $ 61,729 ------------ Net investment income............... $ 135,421 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (16,819) Change in unrealized depreciation of investments......................... (195,056) ------------ Net realized and unrealized loss of investments........................... $ (211,875) ------------ Net decrease in net assets from operations........................... $ (76,454) ============= See notes to financial statements Wright U.S. Government Intermediate Fund (WUSGI) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31,2003 - ------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 135,421 $ 481,595 Net realized gain (loss) on investments.................................... (16,819) 725,050 Change in unrealized appreciation (depreciation) on investments............ (195,056) (1,003,483) ------------ ------------ Net increase (decrease) in net assets resulting from operations.......... $ (76,454) $ 203,162 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (189,685) $ (509,316) From net realized gain..................................................... - (525,743) ------------ ------------ Total distributions...................................................... $ (189,685) $ (1,035,059) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (2,875,521) $ (729,294) ------------ ------------ Net decrease in net assets............................................... $ (3,141,660) $ (1,561,191) NET ASSETS: At beginning of period....................................................... 13,954,206 15,515,397 ------------ ------------ At end of period............................................................. $ 10,812,546 $ 13,954,206 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................... $ (55,459) $ (1,194) ============= ============= See notes to financial statements
WRIGHT U.S. GOVERNMENT INTERMEDIATE FUND (WUSGI) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, --------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2004 2003 2002 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 13.020 $ 13.790 $ 13.630 $ 13.750 $ 12.890 $ 14.400 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.124 $ 0.422 $ 0.575 $ 0.651(7) $ 0.737 $ 0.722 Net realized and unrealized gain (loss).. (0.206) (0.235) 0.496 0.006(7) 0.842 (1.282) -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations............. $ (0.082) $ 0.187 $ 1.071 $ 0.657 $ 1.579 $ (0.560) -------- -------- -------- -------- -------- -------- Less distributions: Distributions from investment income..... $ (0.188) $ (0.451) $ (0.605) $ (0.701) $ (0.719) $ (0.716) Distributions from capital gains......... - (0.506) (0.306) (0.076) - (0.234) -------- -------- -------- -------- -------- -------- Total distributions.................... $ (0.188) $ (0.957) $ (0.911) $ (0.777) $ (0.719) $ (0.950) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 12.750 $ 13.020 $ 13.790 $ 13.630 $ 13.750 $ 12.890 ======== ========= ========= ========= ========= ========= Total return(2) ............................ (0.64%) 1.36% 8.07% 5.40% 12.61% (3.97%) Ratios/Supplemental Data(1): Net assets, end of period (000 omitted).. $ 10,813 $ 13,954 $ 15,515 $ 10,169 $ 16,498 $ 31,192 Ratio of net expenses to average net asset 0.95%(8) 0.95% 1.01%(3) 1.02%(3) 0.97%(3) 0.92%(3) Ratio of net expenses after custodian fee reduction to average net assets..... 0.95%(6)(8) 0.95%(6) 0.95%(3)(4)(6) 0.95%(3)(4)(6) 0.95%(3)(4)(6)0.90%(3)(4) Interest expense....................... 0.01% 0.01% - - - - Ratio of net investment income to average net assets............... 2.08%(8) 3.13% 3.95% 5.11% 5.55% 5.26% Portfolio turnover rate ................ 33% 167% 98%(5) 27%(5) 74%(5) 0%(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 investment adviser fees, 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: 2004 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- Net investment income per share............. $ 0.073 $ 0.326 $ 0.477 $ 0.547 $ 0.700 $ 0.703 ========= ========= ========= ========= ========= ========= Ratios (as a percentage of average net assets): Expenses ................................ 1.80%(8) 1.66% 1.62%(3) 1.84%(3) 1.26%(3) 1.06%(3) ========= ========= ========= ========= ========= ========= Expenses after custodian fee reduction... 1.80%(8) 1.66% 1.56%(3)(4) 1.77%(3)(4) 1.24%(3)(4) 1.04%(3)(4) ========= ========= ========= ========= ========= ========= Interest expense......................... 0.01% 0.01% - - - - ========= ========= ========= ========= ========= ========= Net investment income.................... 1.24%(8) 2.42% 3.28% 4.29% 5.27% 5.12% ========= ========= ========= ========= ========= ========= - -------------------------------------------------------------------------------------------------------------------------------- (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). (8)Annualized. See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2004 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) ASSET-BACKED SECURITIES FINANCIAL SERVICES $ 430,000 Citibank Credit Card Master Trust 6.900% 10-15-07 $ 105.44 $453,387 6.5% 380,000 Citibank Credit Card Master Trust 5.875% 03-10-11 106.97 406,503 5.5% 610,000 MBNA Master Credit Card Trust Ser. 1999-BA 5.900% 08-15-11 107.21 654,006 5.5% 140,000 MBNA Master Credit Card Trust, Ser. 2000-AA 7.350% 07-16-07 103.35 144,692 7.1% ---------- Total Asset-Backed Securities (identified cost, $1,1,661,891) - 4.3% $ 1,658,588 ---------- CORPORATE BONDS AUTO $ 190,000 DaimlerChrysler North America Holding Co. 7.200% 09-01-09 $ 108.97 $ 207,049 6.6% 195,000 General Motors Corp. 8.800% 03-01-21 109.86 214,227 8.0% BANKS $ 205,000 Bank One Corp., Note 2.625% 06-30-08 $ 94.26 $ 193,233 2.8% 390,000 Bayerische Landesbank, MTN 2.600% 10-16-06 98.65 384,746 2.6% 335,000 CIT Group, Inc. 7.750% 04-02-12 114.21 382,618 6.8% 320,000 National Rural Utilities 7.250% 03-01-12 113.73 363,939 6.4% 325,000 Royal Bank of Scotland 7.648% 08-31-49 112.62 366,007 6.8% 360,000 U.S. Bancorp 5.100% 07-15-07 104.31 375,513 4.9% BLDG - RESIDENTIAL/COMMER $ 170,000 Centex Corp. 7.875% 02-01-11 $ 113.23 $ 192,493 7.0% BUILDING MATERIALS $ 95,000 Lowes Co., Inc. 8.250% 06-01-10 $ 118.90 $ 112,958 6.9% CABLE TV $ 170,000 AT&T Broadband Corp. 8.375% 03-15-13 $ 117.58 $ 199,889 7.1% 180,000 Cox Communications, Inc. 7.125% 10-01-12 109.77 197,582 6.5% DIVERSIFIED FINANCIALS $ 375,000 Bear Stearns Co., Inc. 1.770% 09-27-07 $ 101.35 $ 380,063 1.7% 340,000 Boeing Capital Corp., Senior Note 7.375% 09-27-10 113.22 384,937 6.5% 230,000 Cendant Corp. 6.250% 01-15-08 106.73 245,469 5.9% 190,000 First Union Corp. 6.400% 04-01-08 107.84 204,897 5.9% 200,000 Ford Motor Credit Co. 7.375% 10-28-09 106.84 213,680 6.9% 415,000 General Electric Cap Corp. 6.125% 02-22-11 107.24 445,047 5.7% 300,000 Goldman Sachs Group, Inc. 6.600% 01-15-12 107.77 323,308 6.1% 390,000 SLM Corp. 1.390% 07-25-07 100.24 390,952 1.4% ELECTRIC - INTEGRATED $ 190,000 American Electric Power Co., Inc. 6.125% 05-15-06 $ 105.02 $ 199,543 5.8% 205,000 Dominion Resources, Inc. 6.300% 03-15-33 95.30 195,359 6.6% 190,000 PPL Electric Utilities 5.875% 08-15-07 105.88 201,167 5.5% 185,000 Progress Energy, Inc. 7.100% 03-01-11 109.73 202,992 6.5% 210,000 Scana Corp. 1.700% 11-15-06 100.12 210,254 1.6% FOOD-RETAIL $ 180,000 Albertson's, Inc. 7.500% 02-15-11 $ 112.84 $ 203,109 6.6% 200,000 Safeway, Inc., Note 5.800% 08-15-12 100.97 201,948 5.7% FOOD, BEVERAGE & TOBACCO $ 380,000 Pepsico, Inc. 3.200% 05-15-07 $ 99.50 $ 378,086 3.2% INSTRUMENTS-CONTROLS $ 345,000 Honeywell International, Inc. 7.000% 03-15-07 $108.81 $ 375,378 6.4% MEDICAL $ 110,000 Amgen, Inc. 6.500% 12-01-07 $109.12 $ 120,036 6.0% 205,000 Wyeth 5.500% 03-15-13 96.67 198,184 5.7% MEDICAL-HMO $ 380,000 UnitedHealth Group, Inc. 4.875% 04-01-13 $ 97.77 $ 371,518 5.0% MULTIMEDIA $ 185,000 AOL Time Warner, Inc. 6.750% 04-15-11 $107.85 $ 199,516 6.3% OIL & GAS $ 460,000 BP Capital Markets Plc 2.750% 12-29-06 $ 98.79 $ 454,412 2.8% 320,000 Phillips Petroleum 6.650% 07-15-18 109.34 349,890 6.1% 190,000 Repsol International Finance 7.450% 07-15-05 105.04 199,567 7.1% 180,000 Transocean Sedco Forex 7.500% 04-15-31 114.20 205,565 6.6% PAPER & RELATED PRODUCTS $ 190,000 Meadwestvaco Corp. 6.850% 04-01-12 $107.43 $ 204,123 6.4% PIPELINES $ 185,000 Duke Capital Corp., Senior Note 7.500% 10-01-09 $110.41 $ 204,261 6.8% PROPERTY/CASUALTY INSURANCE $ 205,000 Fund American Cos., Inc., Guar. Senior Note 5.875% 05-15-13 $ 99.96 $ 204,913 5.9% RETAIL $ 135,000 TJX Cos., Inc. 7.450% 12-15-09 $114.23 $ 154,205 6.5% TELECOM $ 165,000 Ameritech Capital Corp. 7.500% 04-01-05 $103.60 $ 170,935 7.2% 180,000 AT&T Wireless 7.875% 03-01-11 113.90 205,013 6.9% 145,000 British Telecom Plc 8.875% 12-15-30 123.73 179,402 7.2% 170,000 Deutsche Telekom International Finance 8.500% 06-15-10 117.00 198,892 7.3% 170,000 France Telecom SA 8.750% 03-01-11 116.03 197,255 8.0% 150,000 SBC Communications, Inc. 7.000% 07-15-04 100.13 150,201 7.0% 190,000 Sprint Capital Corp. 6.125% 11-15-08 105.21 199,903 5.8% 325,000 Verizon Global Funding Corp. 7.750% 12-01-30 112.65 366,126 6.9% ---------- Total Corporate Bonds (identified cost, $12,615,798) - 32.6% $12,480,360 ---------- GOVERNMENT INTERESTS MORTGAGE-BACKED SECURITIES $ 228,065 FHLMC Gold Pool #A10798 5.500% 05-01-33 $ 99.90 $ 227,840 5.5% 722,607 FHLMC Gold Pool #A13645 6.000% 09-01-33 102.29 739,180 5.9% 174,166 FHLMC Gold Pool #C01646 6.000% 09-01-33 102.29 178,160 5.9% 146,048 FHLMC Gold Pool #C01702 6.500% 10-01-33 104.71 152,928 6.2% 72,729 FHLMC Gold Pool #E00903 7.000% 10-01-15 106.14 77,193 6.6% 545,245 FHLMC Pool #1B1291 4.397% 11-01-33 100.61 548,550 4.4% 133,898 FHLMC Pool #27663 7.000% 06-01-29 105.89 141,790 6.6% 650,446 FNMA Pool #254865 4.500% 08-01-18 98.02 637,549 4.6% 1,336,097 FNMA Pool #254904 5.500% 09-01-33 99.84 1,333,982 5.5% 91,971 FNMA Pool #479477 6.000% 01-01-29 102.62 94,385 5.8% 77,079 FNMA Pool #489357 6.500% 03-01-29 104.38 80,456 6.2% 103,567 FNMA Pool #535332 8.500% 04-01-30 108.82 112,704 7.8% 369,252 FNMA Pool #545317 5.500% 11-01-16 102.66 379,078 5.4% 426,249 FNMA Pool #545407 5.500% 01-01-32 100.05 426,459 5.5% 124,465 FNMA Pool #545782 7.000% 07-01-32 105.57 131,401 6.6% 937,615 FNMA Pool #545993 6.000% 11-01-32 102.30 959,189 5.9% 608,661 FNMA Pool #555531 5.500% 06-01-33 99.84 607,698 5.5% 674,402 FNMA Pool #576524 5.500% 01-01-29 100.28 676,313 5.5% 137,616 FNMA Pool #597396 6.500% 09-01-31 104.32 143,557 6.2% 86,124 FNMA Pool #634823 6.500% 03-01-32 104.23 89,767 6.2% 567,476 FNMA Pool #663689 5.000% 01-01-18 100.39 569,674 5.0% 563,494 FNMA Pool #701043 4.056% 04-01-33 99.11 558,473 4.1% 284,688 FNMA Pool #725550 5.000% 05-01-19 100.39 285,790 5.0% 352,937 FNMA Pool #738630 5.500% 11-01-33 99.84 352,378 5.5% 600,452 FNMA Pool #739319 6.000% 10-01-33 102.24 613,903 5.9% 155,975 GNMA II Pool #2671 6.000% 11-20-28 102.74 160,254 5.8% 30,697 GNMA II Pool #2909 8.000% 04-20-30 109.26 33,539 7.3% 87,844 GNMA II Pool #2972 7.500% 09-20-30 107.81 94,704 7.0% 34,405 GNMA II Pool #2973 8.000% 09-20-30 109.26 37,591 7.3% 1,138,654 GNMA II Pool #3442 5.000% 09-20-33 97.11 1,105,726 5.1% 1,279,254 GNMA II Pool #3530 5.500% 03-20-34 99.95 1,278,588 5.5% 535,265 GNMA Pool #374892 7.000% 02-15-24 106.82 571,795 6.6% 112,944 GNMA Pool #376400 6.500% 02-15-24 105.24 118,864 6.2% 169,057 GNMA Pool #379982 7.000% 02-15-24 106.82 180,594 6.6% 214,415 GNMA Pool #410081 8.000% 08-15-25 110.15 236,180 7.3% 95,109 GNMA Pool #427199 7.000% 12-15-27 106.57 101,358 6.6% 101,478 GNMA Pool #436214 6.500% 02-15-13 106.21 107,784 6.1% 78,863 GNMA Pool #442996 6.000% 06-15-13 104.89 82,722 5.7% 208,302 GNMA Pool #448490 7.500% 03-15-27 108.00 224,966 6.9% 255,603 GNMA Pool #458762 6.500% 01-15-28 104.79 267,851 6.2% 185,776 GNMA Pool #460726 6.500% 12-15-27 104.90 194,882 6.2% 237,183 GNMA Pool #463839 6.000% 05-15-13 104.89 248,788 5.7% 179,597 GNMA Pool #478072 6.500% 05-15-28 104.79 188,203 6.2% 81,867 GNMA Pool #488924 6.500% 11-15-28 104.79 85,790 6.2% 58,137 GNMA Pool #510706 8.000% 11-15-29 109.73 63,791 7.3% 178,622 GNMA Pool #581536 5.500% 06-15-33 100.13 178,850 5.5% U.S. GOVERNMENT AGENCIES $ 415,000 FFCB 2.500% 03-15-06 $ 99.53 $ 413,032 2.5% 870,000 FHLMC 2.875% 11-03-06 99.00 861,263 2.9% 405,000 FNMA 3.000% 02-03-06 100.27 406,104 3.0% 900,000 FNMA 2.875% 05-19-08 96.36 867,216 3.0% 770,000 FNMA 3.875% 11-17-08 98.67 759,783 3.9% 275,000 FNMA 6.250% 05-15-29 105.54 290,230 5.9% 320,000 Tennessee Valley Authority 6.000% 03-15-13 106.88 342,028 5.6% U.S. TREASURIES $ 890,000 U.S. Treasury Bonds 7.250% 05-15-16 $ 120.93 $ 1,076,240 6.0% 1,355,000 U.S. Treasury Bonds 6.125% 11-15-27 109.61 1,485,260 5.6% 2,015,000 U.S. Treasury Notes 3.875% 02-15-13 95.63 1,926,924 4.1% ----------- Total Government Interests (identified cost, $24,215,394) - 63.0% $24,109,297 ----------- Total Investments (identified cost, $38,493,083) - 99.9% $38,248,245 Other assets, Less liabilities - 0.1% 38,723 ----------- Net Assets -- 100.0% $38,286,968 ============ FFCB - Federal Farm Credit Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments at value (identified cost, $38,493,083) (Note 1A) $ 38,248,245 Cash.................................... 4 Receivable for investments sold......... 21,123 Receivable for fund shares sold......... 233 Receivable from investment adviser...... 6,727 Interest receivable..................... 355,681 Prepaid expenses........................ 16,272 ------------ Total assets.......................... $ 38,648,285 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 254,100 Demand note payable..................... 63,000 Distributions payable................... 26,812 Payable to affiliate for Trustees' fees. 1,302 Transfer agent fee ..................... 2,027 Accrued expenses and other liabilities.. 14,076 ------------ Total liabilities..................... $ 361,317 ------------ NET ASSETS................................ $ 38,286,968 ============ 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................... $ 40,539,900 Accumulated net realized loss on investments (computed on the basis of identified cost) (1,836,911) Unrealized depreciation on investments (computed on the basis of identified cost) (244,838) Distributions in excess of net investment income................................. (171,183) ------------ Net assets applicable to outstanding shares................................ $ 38,286,968 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................. 3,049,227 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST..................... $ 12.56 ============= See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 928,066 ------------ Expenses - Investment adviser fee (Note 3)........ $ 92,757 Administrator fee (Note 3)............. 14,429 Compensation of Trustees not employees of the investment adviser or administrator 4,854 Custodian fee (Note 1C)................ 30,057 Distribution expenses (Note 4)......... 51,532 Transfer and dividend disbursing agent fees 10,328 Printing............................... 2,120 Interest expense....................... 756 Shareholder communications............. 2,368 Audit services......................... 12,156 Legal services......................... 2,943 Registration costs..................... 10,972 Miscellaneous.......................... 2,795 ------------ Total expenses........................ $ 238,067 ------------ Deduct - Preliminary reduction of custodian fee. $ (687) Preliminary allocation of expenses to the investment adviser (Note 3)........... (6,727) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... $ (34,933) ------------ Total deductions....................... $ (42,347) ------------ Net expenses.......................... $ 195,720 ------------ Net investment income............... $ 732,346 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 34,734 Change in unrealized depreciation of investments......................... (889,444) ------------ Net realized and unrealized loss of investments........................... $ (854,710) ------------ Net decrease in net assets from operations........................... $ (122,364) ============ See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 732,346 $ 1,491,343 Net realized gain on investments........................................... 34,734 1,652,885 Change in unrealized appreciation (depreciation) of investments............ (889,444) (1,854,914) ------------ ------------ Net increase (decrease) in net assets resulting from operations.......... $ (122,364) $ 1,289,314 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income................................................. $ (893,856) $ (1,734,662) ------------ ------------ Total distributions...................................................... $ (893,856) $ (1,734,662) ------------ ------------ Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (3,013,833) $ 3,358,788 ------------ ------------ Net increase (decrease) in net assets.................................... $ (4,030,053) $ 2,913,440 NET ASSETS: At beginning of period....................................................... 42,317,021 39,403,581 ------------ ------------ At end of period............................................................. $ 38,286,968 $ 42,317,021 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD...................................... $ (171,183) $ (9,673) ============= ============= See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, ------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS June 30, 2004 2003 2002 2001 2000 1999 - ----------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 12.870 $ 13.010 $ 12.550 $ 12.630 $ 12.100 $ 13.310 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.226 $ 0.483 $ 0.639 $ 0.709 (4)$ 0.712 $ 0.679 Net realized and unrealized gain (loss).. (0.260) (0.066) 0.461 (0.090)(4) 0.530 (1.190) -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations........................... $ (0.034) $ 0.417 $ 1.100 $ 0.619 $ 1.242 $ (0.511) -------- -------- -------- -------- -------- -------- Less distributions: Distributions from investment income..... $ (0.276) $ (0.557) $ (0.640) $ (0.699) $ (0.712) $ (0.680) Distributions from capital gains......... - - - - - (0.019) -------- -------- -------- -------- -------- -------- Total distributions.................... $ (0.276) $ (0.557) $ (0.640) $ (0.699) $ (0.712) $ (0.699) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 12.560 $ 12.870 $ 13.010 $ 12.550 $ 12.630 $ 12.100 ========= ========= ========= ========= ========= ========= Total return(2) ............................ (0.28%) 3.25% 9.03% 4.96% 10.62% (3.91%) Ratios/Supplemental Data(1): Net assets, end of period (000 omitted).. $ 38,287 $ 42,317 $ 39,404 $ 50,620 $ 65,775 $ 87,336 Ratio of net expenses to average net assets 0.95%(6) 0.95% 0.96% 0.96% 0.96% 0.90% Ratio of net expenses after custodian fee reduction to average net assets........ 0.95%(3)(5)(6)0.95%(5) 0.95%(3)(5) 0.95%(3)(5) 0.95%(3)(5) 0.90%(3) Ratio of net investment income to average net assets............................ 3.55%(6) 3.67% 4.92% 5.44% 5.84% 5.36% Portfolio turnover rate.................. 36% 131% 68% 38% 61% 31% - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2004 and for the years ended December 31, 2003, 2002, 2001 and 1999, the operating expenses of the fund were reduced by an allocation of expenses to the investment adviser, and/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: 2004 2003 2002 2001 1999 -------------------------------------------------------------------------- Net investment income per share.......... $ 0.213 $ 0.455 $ 0.621 $ 0.701 $ 0.678 ========== ========== ========== ========== ========== Ratios (As a percentage of average net assets): Expenses............................... 1.15%(6) 1.17% 1.09% 1.02% 0.91% ========== ========== ========== ========== ========== Expenses after custodian fee reduction. 1.15%(3)(6) 1.17% 1.08%(3) 1.01%(3) 0.91%(3) ========== ========== ========== ========== ========== Net investment income.................. 3.35%(6) 3.46% 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. (6)Annualized. See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) - ------------------------------------------------------------------------------- Portfolio of Investments - June 30, 2004 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - ----------------------------------------------------------------------------------------------------------------------------------- (unaudited) MORTGAGE-BACKED SECURITIES - 99.4% $1,472,681 FHLMC Pool #11636 5.000% 01-01-19 $100.35 $ 1,477,899 5.0% 181,157 FHLMC Pool #27663 7.000% 06-01-29 105.89 191,835 6.6% 875,353 FNMA Pool #254546 5.500% 12-01-17 102.60 898,111 5.4% 235,320 FNMA Pool #535131 6.000% 03-01-29 102.62 241,497 5.8% 968,127 FNMA Pool #673315 5.500% 11-01-32 99.90 967,143 5.5% 949,103 FNMA Pool #696828 5.000% 04-01-18 100.39 952,778 5.0% 814,175 FNMA Pool #729950 6.000% 12-01-33 102.24 832,413 5.9% 121,222 GNMA II Pool #1268 8.000% 07-20-23 110.15 133,521 7.3% 8,915 GNMA II Pool #1596 9.000% 04-20-21 112.65 10,042 8.0% 57,398 GNMA II Pool #1788 7.000% 07-20-24 106.70 61,244 6.6% 56,834 GNMA II Pool #2218 7.500% 05-20-26 107.94 61,344 6.9% 152,715 GNMA II Pool #2268 7.500% 08-20-26 107.94 164,833 6.9% 25,395 GNMA II Pool #2855 8.500% 12-20-29 109.48 27,803 7.8% 345,774 GNMA II Pool #3228 6.500% 04-20-32 104.39 360,960 6.2% 1,083,538 GNMA II Pool #3259 5.500% 07-20-32 100.03 1,083,842 5.5% 1,528,136 GNMA II Pool #3284 5.500% 09-20-32 100.03 1,528,564 5.5% 95,825 GNMA II Pool #545 7.500% 12-20-22 108.34 103,820 6.9% 128,519 GNMA II Pool #723 7.500% 01-20-23 108.24 139,106 6.9% 15 GNMA Pool #004433 9.000% 11-15-04 101.30 15 8.9% 105 GNMA Pool #005466 8.500% 03-15-05 102.95 108 8.3% 7 GNMA Pool #005687 7.250% 02-15-05 102.15 7 7.1% 52 GNMA Pool #005910 7.250% 02-15-05 102.15 53 7.1% 614 GNMA Pool #007003 8.000% 07-15-05 102.59 630 7.8% 413 GNMA Pool #009106 8.250% 05-15-06 104.63 432 7.9% 552 GNMA Pool #009889 7.250% 02-15-06 103.51 571 7.0% 600 GNMA Pool #012526 8.000% 11-15-06 104.30 625 7.7% 23,362 GNMA Pool #151443 10.000% 03-15-16 111.98 26,161 8.9% 2,836 GNMA Pool #153564 10.000% 04-15-16 111.98 3,175 8.9% 13,238 GNMA Pool #172558 9.500% 08-15-16 112.87 14,942 8.4% 17,970 GNMA Pool #176992 8.000% 11-15-16 110.19 19,801 7.3% 4,288 GNMA Pool #177784 8.000% 10-15-16 110.19 4,725 7.3% 207 GNMA Pool #190959 8.500% 02-15-17 111.54 231 7.6% 13,898 GNMA Pool #192357 8.000% 04-15-17 110.47 15,353 7.2% 21,047 GNMA Pool #194057 8.500% 04-15-17 111.54 23,475 7.6% 11,888 GNMA Pool #194287 9.500% 03-15-17 113.01 13,436 8.4% 68,442 GNMA Pool #194926 8.500% 02-15-17 111.54 76,338 7.6% 1,711 GNMA Pool #196063 8.500% 03-15-17 111.54 1,909 7.6% 47,471 GNMA Pool #206762 9.000% 04-15-21 113.05 53,667 8.0% 14,067 GNMA Pool #207019 8.000% 03-15-17 110.47 15,540 7.2% 1,036 GNMA Pool #208076 8.000% 04-15-17 110.47 1,144 7.2% 16,358 GNMA Pool #211013 9.000% 01-15-20 112.97 18,480 8.0% 16,948 GNMA Pool #211231 8.500% 05-15-17 111.54 18,904 7.6% 8,297 GNMA Pool #212601 8.500% 06-15-17 111.54 9,255 7.6% 32,254 GNMA Pool #219335 8.000% 05-15-17 110.47 35,631 7.2% 55,744 GNMA Pool #220703 8.000% 05-15-17 110.47 61,580 7.2% 7,270 GNMA Pool #220917 8.500% 04-15-17 111.54 8,109 7.6% 189,867 GNMA Pool #222112 8.000% 01-15-22 110.60 209,996 7.2% 21,872 GNMA Pool #223126 10.000% 08-15-17 112.10 24,519 8.9% 11,950 GNMA Pool #223133 9.500% 07-15-17 113.01 13,505 8.4% 10,075 GNMA Pool #223348 10.000% 08-15-18 112.23 11,307 8.9% $1,602 GNMA Pool #223588 10.000% 12-15-18 $112.23 $ 1,798 8.9% 14,486 GNMA Pool #228308 10.000% 01-15-19 112.32 16,271 8.9% 6,442 GNMA Pool #230223 9.500% 04-15-18 113.11 7,286 8.4% 1,543 GNMA Pool #247473 10.000% 09-15-18 108.37 1,672 9.2% 20,463 GNMA Pool #247681 9.000% 11-15-19 112.87 23,097 8.0% 4,028 GNMA Pool #247872 10.000% 09-15-18 112.23 4,520 8.9% 2,241 GNMA Pool #250412 8.000% 03-15-18 110.63 2,480 7.2% 5,263 GNMA Pool #251241 9.500% 06-15-18 113.11 5,953 8.4% 8,459 GNMA Pool #258911 9.500% 09-15-18 113.11 9,568 8.4% 15,531 GNMA Pool #260999 9.500% 09-15-18 113.11 17,567 8.4% 9,642 GNMA Pool #263439 10.000% 02-15-19 112.32 10,830 8.9% 1,803 GNMA Pool #265267 9.500% 08-15-20 113.14 2,040 8.4% 5,803 GNMA Pool #266983 10.000% 02-15-19 112.32 6,518 8.9% 3,562 GNMA Pool #273690 9.500% 08-15-19 113.11 4,029 8.4% 7,182 GNMA Pool #274489 9.500% 12-15-19 113.11 8,123 8.4% 28,024 GNMA Pool #285744 9.000% 05-15-20 112.97 31,658 8.0% 11,227 GNMA Pool #286556 9.000% 03-15-20 112.97 12,683 8.0 6,935 GNMA Pool #289092 9.000% 04-15-20 112.97 7,835 8.0% 9,494 GNMA Pool #301366 8.500% 06-15-21 111.48 10,584 7.6% 1,909 GNMA Pool #302723 8.500% 05-15-21 111.48 2,128 7.6% 9,376 GNMA Pool #302933 8.500% 06-15-21 111.48 10,453 7.6% 25,240 GNMA Pool #304512 8.500% 05-15-21 111.48 28,138 7.6% 61,547 GNMA Pool #305091 9.000% 07-15-21 113.05 69,581 8.0% 6,317 GNMA Pool #306693 8.500% 09-15-21 111.48 7,043 7.6% 12,229 GNMA Pool #308792 9.000% 07-15-21 113.05 13,825 8.0% 3,917 GNMA Pool #314222 8.500% 04-15-22 111.43 4,365 7.6% 17,697 GNMA Pool #315187 8.000% 06-15-22 110.60 19,573 7.2% 158,858 GNMA Pool #315388 8.000% 02-15-22 110.60 175,700 7.2% 16,336 GNMA Pool #315754 8.000% 01-15-22 110.60 18,068 7.2% 45,560 GNMA Pool #316240 8.000% 01-15-22 110.60 50,391 7.2% 5,037 GNMA Pool #317351 8.000% 05-15-22 110.60 5,571 7.2% 32,004 GNMA Pool #319441 8.500% 04-15-22 111.43 35,661 7.6% 21,079 GNMA Pool #321806 8.000% 05-15-22 110.60 23,314 7.2% 51,938 GNMA Pool #321807 8.000% 05-15-22 110.60 57,444 7.2% 29,645 GNMA Pool #321976 8.500% 01-15-22 111.43 33,032 7.6% 83,227 GNMA Pool #323226 8.000% 06-15-22 110.60 92,051 7.2% 68,550 GNMA Pool #323929 8.000% 02-15-22 110.60 75,818 7.2% 21,991 GNMA Pool #325165 8.000% 06-15-22 110.60 24,322 7.2% 21,713 GNMA Pool #325651 8.000% 06-15-22 110.60 24,015 7.2% 77,043 GNMA Pool #329540 7.500% 08-15-22 108.47 83,568 6.9% 216,959 GNMA Pool #329982 7.500% 02-15-23 108.36 235,103 6.9% 39,910 GNMA Pool #331361 8.000% 11-15-22 110.60 44,141 7.2% 27,090 GNMA Pool #335950 8.000% 10-15-22 110.60 29,962 7.2% 40,956 GNMA Pool #348213 6.500% 08-15-23 105.39 43,165 6.2% 34,755 GNMA Pool #350659 7.500% 06-15-23 108.36 37,662 6.9% 268,986 GNMA Pool #350938 6.500% 08-15-23 105.39 283,496 6.2% 220,228 GNMA Pool #352001 6.500% 12-15-23 105.39 232,107 6.2% 104,260 GNMA Pool #352110 7.000% 08-15-23 106.82 111,374 6.6% 3,192,192 GNMA Pool #3556 5.500% 05-20-34 99.95 3,190,529 5.5% 193,877 GNMA Pool #367806 6.500% 09-15-23 105.39 204,335 6.2% 132,103 GNMA Pool #368238 7.000% 12-15-23 106.82 141,117 6.6% 370,789 GNMA Pool #372050 6.500% 02-15-24 105.24 390,223 6.2% $ 53,431 GNMA Pool #372379 8.000% 10-15-26 $110.02 $ 58,785 7.3% 60,420 GNMA Pool #394805 7.500% 02-15-26 108.06 65,290 6.9% 93,198 GNMA Pool #405558 7.500% 01-15-26 108.06 100,710 6.9% 209,750 GNMA Pool #410215 7.500% 12-15-25 108.18 226,915 6.9% 50,046 GNMA Pool #414736 7.500% 11-15-25 108.18 54,141 6.9% 69,918 GNMA Pool #417225 7.500% 01-15-26 108.06 75,553 6.9% 169,533 GNMA Pool #420707 7.000% 02-15-26 106.67 180,839 6.6% 73,136 GNMA Pool #421829 7.500% 04-15-26 108.06 79,031 6.9% 72,580 GNMA Pool #424173 7.500% 03-15-26 108.06 78,430 6.9% 34,666 GNMA Pool #431036 8.000% 07-15-26 110.02 38,140 7.3% 211,977 GNMA Pool #431612 8.000% 11-15-26 110.02 233,219 7.3% 50,926 GNMA Pool #442190 8.000% 12-15-26 110.02 56,029 7.3% 273,148 GNMA Pool #448490 7.500% 03-15-27 108.00 295,000 6.9% 123,894 GNMA Pool #449176 6.500% 07-15-28 104.79 129,831 6.2% 480,846 GNMA Pool #457100 6.500% 11-15-28 104.79 503,887 6.2% 383,405 GNMA Pool #458762 6.500% 01-15-28 104.79 401,776 6.2% 185,776 GNMA Pool #460726 6.500% 12-15-27 104.90 194,882 6.2% 92,887 GNMA Pool #462444 6.500% 12-15-27 104.90 97,440 6.2% 127,231 GNMA Pool #462623 6.500% 03-15-28 104.79 133,328 6.2% 116,296 GNMA Pool #469226 6.500% 03-15-28 104.79 121,869 6.2% 295,120 GNMA Pool #469615 6.500% 10-15-28 104.79 309,261 6.2% 2,632,844 GNMA Pool #471369 5.500% 05-15-33 100.13 2,636,206 5.5% 306,203 GNMA Pool #472028 6.500% 05-15-28 104.79 320,875 6.2% 322,906 GNMA Pool #480030 6.500% 06-15-28 104.79 338,379 6.2% 1,141,243 GNMA Pool #486482 6.500% 09-15-28 104.79 1,195,928 6.2% 482,611 GNMA Pool #523002 6.500% 02-15-32 104.64 505,012 6.2% 185,275 GNMA Pool #538314 7.000% 02-15-32 106.29 196,936 6.6% 342,918 GNMA Pool #547605 6.500% 01-15-31 104.66 358,913 6.2% 299,376 GNMA Pool #552393 6.500% 02-15-32 104.64 313,273 6.2% 171,603 GNMA Pool #554203 7.000% 12-15-31 106.33 182,460 6.6% 330,922 GNMA Pool #570141 6.500% 12-15-31 104.66 346,357 6.2% 1,365,807 GNMA Pool #585467 6.000% 08-15-32 102.71 1,402,864 5.8% 677,784 GNMA Pool #587080 6.500% 05-15-32 104.64 709,245 6.2% 1,735,026 GNMA Pool #589580 5.500% 11-15-32 100.15 1,737,681 5.5% 1,338,626 GNMA Pool #595207 5.500% 12-15-32 100.15 1,340,674 5.5% 1,044,206 GNMA Pool #595455 5.500% 11-15-32 100.15 1,045,804 5.5% 1,345,641 GNMA Pool #595606 6.000% 11-15-32 102.71 1,382,151 5.8% 998,743 GNMA Pool #619718 6.000% 05-15-34 102.66 1,025,293 5.8% 179,720 GNMA Pool #780429 7.500% 09-15-26 108.12 194,314 6.9% ----------- TOTAL INVESTMENTS (identified cost, $31,497,810) - 99.4% $34,568,887 ----------- Other Assets, less Liabilities - 0.6% 212,872 ----------- Net Assets - 100.0% $34,781,759 ============ FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of ($31,497,810) (Note 1A) $ 34,568,887 Cash.................................... 103,396 Receivable for fund shares sold......... 585 Receivable from investment adviser...... 15,957 Interest receivable..................... 170,173 Prepaid expenses........................ 15,772 ------------ Total assets.......................... $ 34,874,770 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 9,791 Distributions payable................... 67,819 Payable to affiliate for Trustees' fees. 2,199 Transfer agent fee payable.............. 1,933 Accrued expenses and other liabilities.. 11,269 ------------ Total liabilities..................... $ 93,011 ------------ NET ASSETS................................ $ 34,781,759 ============= 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................... $ 31,893,765 Accumulated net realized loss on investments (computed on the basis of identified cost) (98,521) Unrealized appreciation on investments (computed on the basis of identified cost) 3,071,077 Distributions in excess of net investment incom.................................. (84,562) ------------ Net assets applicable to outstanding shares................................ $ 34,781,759 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING........................... 3,411,488 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................... $ 10.20 ============ See notes to financial statements STATEMENT OF OPERATIONS Six Months Ended June 30, 2004 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 970,452 ------------ Expenses - Investment adviser fee (Note 3)........ $ 76,567 Administrator fee (Note 3)............. 15,313 Compensation of Trustees not employees of the investment adviser or administrator 5,999 Custodian fee (Note 1C)................ 29,974 Distribution expenses (Note 4)......... 42,537 Transfer and dividend disbursing agent fees 6,953 Printing............................... 1,257 Interest expense....................... 997 Shareholder communications............. 2,824 Audit services......................... 12,156 Legal services......................... 3,086 Registration costs..................... 9,100 Miscellaneous.......................... 2,550 ------------ Total expenses........................ $ 209,313 ------------ Deduct - Preliminary reduction of custodian fee. $ (3,354) Preliminary allocation of expenses to investment adviser (Note 3)........... (15,957) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... (28,397) ------------ Total deductions...................... $ (47,708) ------------ Net expenses.......................... $ 161,605 ------------ Net investment income............... $ 808,847 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (97,012) Change in unrealized appreciation (depreciation) of investments......................... (517,466) ------------ Net realized and unrealized loss of investments........................ (614,478) ------------ Net increase in net assets from operations........................... $ 194,369 ============ (1) The Institutional share class of Current Income Fund was fully liquidated on May 20, 2003. See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2004 Dec. 31, 2003 - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 808,847 $ 2,448,956 Net realized gain (loss) on investments.................................... (97,012) 1,664,914 Change in unrealized appreciation (depreciation) on investments............ (517,466) (3,218,260) ------------ ------------ Net increase in net assets resulting from operations..................... $ 194,369 $ 895,610 ------------ ------------ Distributions to shareholders (Note 2) - From net investment income - Standard shares.......................................................... $ (808,849) $ (2,349,214) Institutional shares..................................................... - (333,233) From net realized gain..................................................... (297,830) -- ------------ ------------ Total distributions...................................................... $ (1,106,679) $ (2,682,447) ------------ ------------ Net increase (decrease) in net assets from Fund share transactions (Note 5) - Standard shares............................................................ $ (637,447) $(21,111,610) Institutional shares....................................................... - (15,550,021) ------------ ------------ Net decrease in net assets from fund share transactions.................. $ (637,447) $(36,661,631) ------------ ------------ Net decrease in net assets............................................... $(1,549,757) $(38,448,468) NET ASSETS: At beginning of period....................................................... 36,331,516 74,779,984 ------------ ------------ At end of period............................................................. $ 34,781,759 $ 36,331,516 ============= ============= DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................... $ (84,562) $ (84,560) ============= ============= See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, --------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2004 2003 2002 2001(4) 2000(4) 1999(4) - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 10.490 $ 10.810 $ 10.580 $ 10.460 $ 10.090 $ 10.660 -------- -------- -------- -------- -------- -------- Income (loss) from investment operations: Net investment income(1) ............... $ 0.245 $ 0.417 $ 0.565 $ 0.616 $ 0.631 $ 0.620 Net realized and unrealized gain (loss).. (0.197) (0.235) 0.231 0.120 0.372 (0.570) -------- -------- -------- -------- -------- -------- Total income from investment operations............. $ 0.048 $ 0.182 $ 0.796 $ 0.736 $ 1.003 $ 0.050 -------- -------- -------- -------- -------- -------- Less distributions: Distributions from investment income..... $ (0.245) $ (0.502) $ (0.555) $ (0.616) $ (0.633) $ (0.620) Distributions from capital gains......... (0.093) - - -- -- -- Tax return of capital.................... - - (0.011) -- -- -- -------- -------- -------- -------- -------- -------- Total distributions.................. $ (0.338) $ (0.502) $ (0.566) $ (0.616) $ (0.633) $ (0.620) -------- -------- -------- -------- -------- -------- Net asset value, end of period.............. $ 10.200 $ 10.490 $ 10.810 $ 10.580 $ 10.460 $ 10.090 ========= ========= ========= ========= ========= ========= Total return(2) ............................ 0.45% 1.73% 7.70% 7.18% 10.31% 0.52% Ratios/Supplemental Data(1): Net assets, end of period (000 omitted).. $ 34,782 $ 36,332 $ 59,077 $ 54,966 $ 68,015 $76,452 Ratio of net expenses to average net assets 0.97%(8) 0.95% 0.97%(3) 0.95%(3)(6) 0.95%(3)(6)0.91%(3) Ratio of net expenses after custodian fee reduction to average net assets(6) .... 0.95%(7)(8) 0.95% 0.95%(3)(7) -- -- Interest expense......................... - 0.01% -- -- -- -- Ratio of net investment income to average net assets................. 4.75%(8) 4.43% 5.28% 5.83% 6.22% 6.02% Portfolio turnover rate ................. 19% 20% 36%(5) 4%(5) 6%(5) 0%(5) - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2004 and for the years ended December 31, 2003, 2002, 2001, 2000, and 1999, 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: 2004 2003 2002 2001 2000 1999 ------------------------------------------------------------------------- Net investment income per share........ $ 0.232 $ 0.401 $ 0.555 $ 0.609 $ 0.629 $ 0.615 ========= ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses ............................ 1.25%(8) 1.12% 1.06%(3) 1.02%(3) 0.97%(3) 0.96%(3) ========= ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.23%(7)(8) 1.12% 1.04%(3)(7) -- -- -- ========= ========= ========= ========= ========= ========= Interest expense..................... - 0.01% -- -- -- -- ========= ========= ========= ========= ========= ========= Net investment income................ 4.49%(8) 4.26% 5.19% 5.76% 6.20% 5.97% ========= ========= ========= ========= ========= ========= - ---------------------------------------------------------------------------------------------------------------------------------- (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/or 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. (8)Annualized. 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. 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. 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. 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. 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. The income is accrued ratably to the date of maturity on the investments of the funds. C. Expense Reduction - Investors Bank & Trust Company (IBT) serves as custodian to the Funds. Pursuant to the custodian agreement, IBT receives a fee reduced by credits which are determined based on the average daily cash balance the Funds maintain with IBT. All credit balances used to reduce the Fund's custodian fees are reported as a reduction of total expenses on 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, 2003, the Trust, for federal income tax purposes, had capital loss carryovers of $609,212 (WNTB) and $1,759,664 (WTRB) which will reduce taxable income arising from future net 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 - ------------------------------------------------------------------------------- 2004 - - 2005 - - 2006 $37,825 - 2007 297,581 - 2008 273,806 $1,251,058 2009 - - 2010 508,606 - At December 31, 2003, net capital losses of $18,591 for WNTB and $25,907 for WUSGI attributable to security transactions incurred after October 31, 2003 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. Interim Financial Statements - The interim financial statements relating to June 30, 2004 and for the period then ended have not be audited by an independent certified public accountants, but in the opinion of the Trust's management reflect all recurring adjustments, necessary for the fair presentation of the financial statements. (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. (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 six months ended June 30, 2004, the effective annual rate for WNTB, WUSGI, WCIF, and WTRB was 0.45 %. Under a written agreement, Wright waives a portion of its advisory fee and/or distribution fees and assumes operating expenses to the extent necessary to limit expense ratios to 0.95% after custodian fee reductions, if any. Accordingly, Wright made a reduction of its investment adviser fee by $20,350 and $29,279 on behalf of WNTB and WUSGI, respectively. In addition, Wright has been allocated expenses of $9,432, $6,727, and $15,957 on behalf of WUSGI, WTRB 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 six months ended June 30, 2004, the effective annual rate was 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 will pay Wright Investors' Service Distributors, Inc. (Principal Underwriter), a wholly-owned subsidiary of Winthrop, a distribution fee at an annual rate of 0.25% of the average daily net assets of each fund for activities primarily intended to result in the sale of each fund's shares. Pursuant to a written agreement (Note 3), the Principal Underwriter made a reduction of its fee by $31,223, $16,266, $34,933, and $28,397 for the benefit of WNTB, WUSGI, WTRB, and WCIF, 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 each fund's shares. The amount of service fee payable under the Service Plan may not exceed 0.25% annually of each fund's average daily net assets. For the six months ended June 30, 2004, 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:
Six Months Ended Year Ended June 30, 2004 December 31, 2003 ------------------ --------------------- (unaudited) Shares Amount Shares Amount - --------------------------------------------------------------------------------------------------------------------------------- Wright U.S. Government Near Term Fund-- Sold................................................. 282,879 $ 2,863,423 1,235,965 $ 12,845,606 Issued to shareholders in payment of distributions declared............................................ 26,775 271,973 61,296 635,839 Redemptions.......................................... (685,834) (6,966,238) (1,835,158) (19,044,704) ----------- -------------- ----------- -------------- Net decrease..................................... (376,180) $ (3,830,842) (537,897) $ (5,563,259) ============= =============== =========== ============== Wright U.S. GOVERNMENT INTERMEDIATE Fund-- Sold................................................. 131,587 $ 1,696,674 339,323 $ 4,638,610 Issued to shareholders in payment of distributions declared............................................ 11,900 154,046 62,991 838,112 Redemptions.......................................... (367,629) (4,726,241) (455,254) (6,206,016) ----------- -------------- ----------- -------------- Net increase/(decrease).......................... (224,142) $ (2,875,521) (52,940) $ (729,294) =========== ============== =========== ============== Wright Total Return Bond Fund-- Sold................................................. 417,836 $ 5,340,263 1,205,393 $ 15,614,387 Issued to shareholders in payment of distributions declared............................................ 57,292 731,968 106,037 1,375,694 Redemptions.......................................... (714,837) (9,086,064) (1,051,037) (13,631,293) ----------- -------------- ----------- -------------- Net increase/(decrease).......................... (239,709) $ (3,013,833) 260,393 $ 3,358,788 =========== ============== =========== ============== Wright Current Income Fund -- Standard Shares Sold................................................. 820,161 $ 8,426,511 1,044,836 $ 11,086,467 Issued to shareholders in payment of distributions declare............................................. 55,251 572,363 103,674 1,101,063 Redemptions.......................................... (928,981) (9,636,321) (3,146,463) (33,299,140) ----------- -------------- ----------- -------------- Net increase/(decrease).......................... (53,569) $ (637,447) (1,997,953) $ (21,111,610) =========== ============= =========== ============== Wright Current Income Fund -- Institutional Shares Sold................................................. - $ - 394,118 $ 4,020,000 Issued to shareholders in payment of distributions declared............................................ - - 27,597 282,568 Redemptions.......................................... - - (1,948,242) (19,852,589) ----------- -------------- ----------- -------------- Net decrease..................................... - $ - (1,526,527) $ (15,550,021) ============ ============== =========== ==============
(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: Six Months Ended June 30, 2004 ----------------------------------------- WNTB WUSGI WTRB WCIF - ---------------------------------------------------------------------------- Purchases-- Non-U.S. Obligations $ - $ - $ 2,852,360 $ - =========== =========== =========== =========== U.S. Gov't Obligations$19,728,286 $ 4,240,290 $11,745,671 $ 6,578,795 =========== =========== =========== =========== Sales -- Non-U.S. Gov't Obligation $ - $ - $ 5,412,014 $ - =========== =========== =========== =========== U.S. Gov't Obligations$24,128,564 $ 7,030,941 $11,763,773 $ 7,375,401 =========== =========== =========== =========== - ---------------------------------------------------------------------------- (7)FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2004, as computed on a federal income tax basis, are as follows: WNTB WUSGI WTRB WCIF - ------------------------------------------------------------------------------ Aggregate cost.........$22,800,783 $10,885,324 $38,622,468 $31,497,810 =========== =========== =========== =========== Gross unrealized appreciation. 6,612 15,217 376,596 3,189,184 Gross unrealized depreciation. (312,380) (205,306) (750,819) (118,107) ---------- ---------- ---------- ---------- Net unrealized depreciation.$ (305,768) $ (190,089) $ (374,223) $3,071,077 ============ ============ ========== ============ (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. At June 30, 2004, WTRB had a balance outstanding of $63,000 pursuant to this line of credit. The funds did not have significant borrowings or allocated fees during the six months ended June 30, 2004. (9)CLASS ELIMINATION The Institutional Share class of the Current Income Fund was fully liquidated on May 20, 2003. WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC. 440 Wheelers Farms Road, Milford, CT 06460 SEMI-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 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. Item 2. CODE OF ETHICS Not Required in Filing. Item 3. AUDIT COMMITTEE FINANCIAL EXPERT Not Required in Filing. Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not Required in Filing. Items 5.AUDIT COMMITTEE OF LISTED REGISTRANTS Not Required in Filing Item 6. SCHEDULE OF INVESTMENTS Included in Financial Statements Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Required in Filing. Item 8. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not Required in Filing. Item 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A(17 CFR240.14a-101), or this Item. Item 10. CONTROLS AND PROCEDURES (a) It is the conclusion of the registrant's principal executive officer and principal financial officer that the effectiveness of the registrant's current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant's principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. (b) There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 11. EXHIBITS (a)(1) Code of Ethics Not required in Filing (a)(2) Certification of Principal Executive Officer and Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940(17CFR 270.30a-2(a)) is attached hereto as Exhibit 99Cert. (a)(3) Not required in Filing (b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as required by Rule 30a-2(b), under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)), Rule 15d-14(b) under the Securities Exchange Act of 1934 (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) is attached hereto as Exhibit 99.906Cert. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The Wright Managed Income Trust (On behalf of Wright U.S. Government Near Term - ------------------------------------------------------------------------------- Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund - ------------------------------------------------------------------------------- and Wright Current Income Fund. - ------------------------------- By: /s/Peter M. Donovan -------------------- Peter M. Donovan President Date: August 23, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/James L. O'Connor -------------------- James L. O'Connor Treasurer Date: August 24, 2004 By: /s/ Peter M. Donovan --------------------- Peter M. Donovan President Date: August 23, 2004 EX-99.906 CERT 2 inc906cert0604.txt INCOME TRUST 906 CERTIFICATION FOR JUNE 30, 2004 FORM N-CSR ITEM 11(B) EXHIBIT CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certify in their capacity as Treasurer and President, respectively, of The Wright Managed Income Trust (the "Trust") (on behalf of Wright U.S. Government Near Term Fund, Wright U. S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund), that: (a) the Semi-Annual Report of the Trust (on behalf of Wright U.S. Government Near Term Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund) on Form N-CSR for the period ended June 30, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (b) the information contained in the Report fairly presents, in all material respects, the financial condition and the results of operations of the Trust (on behalf of Wright U.S. Government Near Term Fund , Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund) for such period. A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO THE TRUST AND WILL BE RETAINED BY THE TRUST AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. The Wright Managed Income Trust (On behalf of Wright U.S. Government Near Term Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund) Date:August 24,2004 /s/ James L. O'Connor - ------------------------ James L. O'Connor Treasurer Date:August 23, 2004 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President EX-99.CERT 3 incexhibit11a10604.txt INCOME TRUST 302 CERTIFICATION FOR JUNE 30, 2004 FORM N-CSR ITEM 11(A)(1)EXHIBIT - ------------------------------- Registrant's Code of Ethics - Not required in filing FORM N-CSR ITEM 11(A)(2)EXHIBIT - -------------------------------- I, James L. O'Connor, certify that: 1. I have reviewed this report on Form N-CSR of The Wright Managed Income Trust (on behalf of Wright U.S. Government Near Term Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of the internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date:August 24, 2004 /s/ James L. O'Connor - ------------------------ James L. O'Connor Treasurer - ------------------------------------------------------------------------------- I, Peter M. Donovan, certify that: 1. I have reviewed this report on Form N-CSR of The Wright Managed Income Trust (on behalf of Wright U.S. Government Near Term Fund, Wright U.S. Government Intermediate Fund, Wright Total Return Bond Fund and Wright Current Income Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of the internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date:August 23, 2004 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President -----END PRIVACY-ENHANCED MESSAGE-----