-----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, QQPnleyhegAhyn/sDGhMmPCjh1HLrCKjNP6fG5pYcQ7rrpNq7axPaA7X+rR9FLbM jOHDwi3HXyjGG98gk0dtMA== 0000715165-05-000026.txt : 20050826 0000715165-05-000026.hdr.sgml : 20050826 20050826151157 ACCESSION NUMBER: 0000715165-05-000026 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050826 DATE AS OF CHANGE: 20050826 EFFECTIVENESS DATE: 20050826 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-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03668 FILM NUMBER: 051051821 BUSINESS ADDRESS: STREET 1: THE EATON VANCE BUILDING STREET 2: 255 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 617-482-8260 MAIL ADDRESS: STREET 1: THE EATON VANCE BUILDING STREET 2: 255 STATE STREET 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-CSRS 1 incncsr0605.txt INCOME TRUST SEMI-ANNUAL REPORTS 06/30/2005 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, 2005 ------------------------- Date of Reporting Period - ------------------------------------------------------------------------------- ITEM 1. REPORTS TO STOCKHOLDERS THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS SEMI-ANNUAL REPORT JUNE 30 , 2005 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 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 THREE FIXED INCOME FUNDS FROM THE WRIGHT MANAGED INCOME TRUST. EACH OF THE SIX 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 through price appreciation plus income. The fund's 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 through price appreciation plus income by providing management 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. THREE 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 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 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 SHAREHOLDER........................................................2 MANAGEMENT DISCUSSION........................................................3 FUND EXPENSES............................................................... 8 BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT......55 IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING......................................56 FINANCIAL STATEMENTS THE WRIGHT MANAGED EQUITY TRUST WRIGHT SELECTED BLUE CHIP EQUITIES FUND Portfolio of Investments..................12 Statement of Assets & Liabilities.........15 Statement of Operations...................15 Statement of Changes in Net Assets........16 Financial Highlights......................17 WRIGHT MAJOR BLUE CHIP EQUITIES FUND Portfolio of Investments..................18 Statement of Assets & Liabilities.........21 Statement of Operations...................21 Statement of Changes in Net Assets........22 Financial Highlights......................23 WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Portfolio of Investments..................24 Statement of Assets & Liabilities.........26 Statement of Operations...................26 Statement of Changes in Net Assets........27 Financial Highlights......................28 NOTES TO FINANCIAL STATEMENTS...............29 THE WRIGHT MANAGED INCOME TRUST WRIGHT U.S. GOVERNMENT NEAR TERM FUND Portfolio of Investments..................34 Statement of Assets & Liabilities.........35 Statement of Operations...................35 Statement of Changes in Net Assets........36 Financial Highlights......................37 WRIGHT TOTAL RETURN BOND FUND Portfolio of Investments..................38 Statement of Assets & Liabilities.........42 Statement of Operations...................42 Statement of Changes in Net Assets........43 Financial Highlights......................44 WRIGHT CURRENT INCOME FUND Portfolio of Investments..................45 Statement of Assets & Liabilities.........48 Statement of Operations...................48 Statement of Changes in Net Assets........49 Financial Highlights......................50 NOTES TO FINANCIAL STATEMENTS...............51 LETTER TO SHAREHOLDERS - ------------------------------------------------------------------------------ July 2005 Dear Shareholders: The U.S. stock market had a so-so second quarter, with most market averages marginally higher at midyear than when they began the quarter (a notable exception being the Dow Jones Industrials, which lost 2%). Once again, mid- and small-cap stocks outperformed big-cap equities during the second quarter. Energy stocks, clear winners in 2005's first quarter, were only marginally better than average in the second. Encouragingly, market breadth improved and was at post-1998 highs as the third quarter began. The U.S. bond market, as measured by the Lehman Aggregate, had a 3% return in the second quarter, beating the S&P 500's total return by more than 1.5% for a second straight quarter and demonstrating the merits of bonds in balanced portfolios - even in a low interest rate environment. U.S. economic growth appears to have moderated in Q2 from the close to 4% growth rates of the prior three quarters, due to high oil prices, higher interest rates from the Fed and the natural slowing that occurs in year four of an economic expansion. As the second quarter ended, the Federal Reserve bumped up its target fed funds rate to 3.25%, its ninth quarter-point increase in the past 12 months. Crude oil prices ended the second quarter little changed from where they began it ($56.50 a barrel vs $57), but the encouraging decline in prices seen in April and May reversed itself in June. In the face of ongoing supply-based pressures on oil prices and indications of more interest rate hikes ahead, consumer confidence ended the first half at the highest levels of the year. National purchasing manager surveys point to improving conditions in manufacturing and service industries. On balance, the U.S. business expansion appears to be on a 3.0%-3.5% growth track going into the second half. Despite high oil prices, underlying inflation pressures are contained, according to the Federal Reserve. In fact, the inflation rate implied by the difference between nominal and inflation-indexed Treasury bond yields fell by 40-50 basis points, to around 2.3%, during Q2. Energy costs may impede world economic growth and persuade other prices to rise in the second half of 2005, but ultimately high oil prices will cool demand enough to bring oil prices below this year's extraordinary levels. Geopolitical developments - renewed bouts of chaos in Iraq and the rejection of a new EU constitution by voters in France and the Netherlands - were not especially positive during the second quarter, nor was the trend of business in Europe. Nonetheless, foreign stocks have generally outdistanced U.S. shares so far in 2005, although the dollar's surprising appreciation (7% against the euro) in the second quarter caused returns to lag for dollar-based investors. In spite of the "conundrum" of falling long-term interest rates in the second quarter, the evidence indicates that the economy is still growing at close to its long-term trend of 3.5% and core inflation is not far from the Fed's 2% target. While we believe that the Fed will usher the fed funds rate higher (perhaps to 4%) over the next 12 months, the rise in long-term bond yields should be relatively modest. In such an environment, corporate profits should continue to impress, with earnings gains on the order of 10% expected for the S&P 500 in both 2005 and 2006. On the strength of rising profits and dividends and healthier balance sheets, stocks are expected to improve on the 6% return earned in the year ended June 30 over the coming 12 months. Bonds are unlikely to match the nearly 7% return achieved over the past 12 months, but they should keep ahead of inflation. As always, I invite your questions and suggestions on how we can better serve your investment needs. Sincerely, /s/Peter M. Donovan ------------------- Peter M. Donovan President MANAGEMENT DISCUSSION - ------------------------------------------------------------------------------- EQUITY FUNDS U.S. STOCKS EDGED INTO POSITIVE TERRITORY IN THE SECOND QUARTER OF 2005 AFTER RETREATING IN Q1. IN THE FIRST QUARTER, INVESTORS WORRIED ABOUT INCREASED INFLATION; IN THE SECOND, THEY FRETTED ABOUT THE POSSIBILITY THAT THE EXPANSION WAS ON SHAKY GROUND. IN BOTH QUARTERS, OIL PRICES WERE CENTRAL TO THESE CONCERNS. OIL PRICES ROSE TO PEAK ABOVE $57 A BARREL IN EARLY APRIL, THEN DECLINED 18% BEFORE SURGING AGAIN TO A NEW PEAK ABOVE $60 NEAR MIDYEAR. WITH OIL PRICES SEEN AS A THREAT TO ECONOMIC GROWTH, TOWARDS MID-YEAR SOME INVESTORS AND ECONOMISTS WORRIED THAT THE FED MIGHT BE GOING TOO FAR IN ITS REMOVAL OF MONETARY ACCOMMODATION. NEVERTHELESS, ON THE LAST DAY OF THE QUARTER, THE FED RAISED THE FED FUNDS RATE ANOTHER 25 BASIS POINTS TO 3.25%, EXPRESSED CONFIDENCE IN THE EXPANSION AND SIGNALED THERE WAS MORE TIGHTENING TO COME. HEALTHY PROFITS, REASONABLE VALUATIONS AND LOW INTEREST RATES WORKED IN THE STOCK MARKET'S FAVOR IN THE SECOND QUARTER. STOCKS HIT THEIR LOWS FOR THE YEAR IN APRIL AND CLAWED THEIR WAY BACK FROM THERE, WITH THE S&P 500 RECOVERING 5% FROM THIS BOTTOM. THE S&P 500'S 1.4% RETURN FOR THE SECOND QUARTER WAS NOT ENOUGH TO OFFSET THE FIRST QUARTER'S LOSS, LEAVING IT WITH A 0.8% LOSS FOR THE FIRST HALF. THE DOW JONES INDUSTRIALS LOST 1.6% FOR THE SECOND QUARTER ON A SELL-OFF LATE IN JUNE FOR WHICH THE SPIKE IN OIL PRICES GETS MOST OF THE BLAME. NASDAQ FARED BETTER IN THE SECOND QUARTER, RETURNING 3.1%, THOUGH IT STILL HAD THE LARGEST LOSS (ABOUT 5%) OF THE BIG-THREE MARKET AVERAGES FOR THE FIRST HALF. THE S&P MIDCAP 400 AND SMALLCAP 600 BOTH OUTPERFORMED THE S&P 500 IN Q2 WITH RETURNS OF ABOUT 4%; BOTH ARE IN THE BLACK FOR THE YEAR TO DATE. THE STRENGTH IN THE DOLLAR THIS YEAR HAS TAKEN A BITE OUT OF RETURNS TO U.S. INVESTORS FROM FOREIGN STOCKS. THE MSCI WORLD EX U.S. INDEX LOST 0.8% IN THE SECOND QUARTER AND 0.7% FOR THE FIRST HALF IN DOLLARS. WE FORESEE AN ECONOMIC ENVIRONMENT OF MODERATE GROWTH AND INFLATION OVER THE COMING YEAR. ALTHOUGH GROWTH IS LIKELY TO SLOW FROM THE PACE OF THE LAST 12 MONTHS AND INFLATION MAY BE A LITTLE HIGHER, THIS WOULD NEVERTHELESS BE AN ENVIRONMENT THAT COULD SUPPORT PROFIT GROWTH IN THE 8%-10% RANGE OVER THE COMING 12 TO 24 MONTHS. ALTHOUGH BUSINESSES ARE FEELING SOME PRESSURE FROM HIGHER RAW MATERIAL AND LABOR COSTS, SELLING PRICES ARE EDGING UP AND EFFORTS AT INCREASING EFFICIENCY CONTINUE. EVEN WITHOUT IMPROVEMENT IN P/E MULTIPLES, STOCKS SHOULD MOVE UP OVER THE COMING YEAR JUST ON THE BASIS OF HIGHER PROFITS. P/E MULTIPLES HAVE COME DOWN BY MORE THAN ONE POINT SINCE THE BEGINNING OF THE YEAR; IT IS POSSIBLE THAT SOME RETRACEMENT OF THIS DECLINE WILL BOOST RETURNS. ALTHOUGH WE WOULDN'T BE SURPRISED IF THE CAUTIOUS MOOD THAT HAS REINED IN MULTIPLES CONTINUES, WE WERE ENCOURAGED BY THE FACT THAT MARKET BREADTH HIT POST-1998 HIGHS AS THE THIRD QUARTER BEGAN. WE ALSO CONTINUE TO BELIEVE IN THE BENEFITS OF DIVERSIFICATION, PARTICULARLY IN A RISKY INVESTMENT ENVIRONMENT. THE AGGREGATE P/E OF THE S&P 400 MIDCAPS IS CURRENTLY HIGHER THAN THAT OF THE S&P 500, BUT IN EXCHANGE THE MIDCAPS OFFER BETTER GROWTH PROSPECTS. INTERNATIONAL EQUITIES LOOK RELATIVELY ATTRACTIVE ON A VALUATION BASIS. 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year - ------------------------------------------------------------------------------------------------------------------------------- WRIGHT SELECTED BLUE CHIP FUND (WSBC) 5.5% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1% 32.7% 18.6% 30.3% WRIGHT MAJOR BLUE CHIP FUND (WMBC) -1.4% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4% 33.9% 17.6% 29.0% WRIGHT INTERNATIONAL BLUE CHIP FUND (WIBC) 3.5% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1% 1.5% 20.7% 13.6%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND The S&P MidCap 400 did better than the S&P 500 in each of the first two quarters of 2005. The Wright Selected Blue Chip Fund (WSBC) took full advantage of its positioning as a mid-cap blend fund, returning 4.6% in the second quarter of 2005. This showing topped both the S&P MidCap 400's 4.3% and the 2.8% return for an average of 79 mid-cap blend funds in the Morningstar database. For the first half of 2005, the WSBC also outperformed, returning 5.5% compared to 3.9% for the S&P MidCaps and 1.6% for the Morningstar benchmark. WSBC returned nearly 16% over the last 12 months, topping the MidCaps (14%) and the Morningstar average (11%). In the first half of 2005, the larger stocks in the S&P MidCap 400 outperformed the smaller, and the WSBC Fund was correctly positioned for this. Contributing to the good showing by the larger issues in the second quarter was strength in home builders (e.g., D.R. Horton, since moved to the S&P 500, and Toll Brothers both returned 29% for the quarter), which are among the larger issues in the MidCaps. WSBC benefited from holding these issues and other larger cap issues that outperformed in the quarter such Legg Mason (+33%), Pacificare Health (+26%) and Equitable Resources (+19%). Also contributing to the strong results in the first half were the first quarter's surge in energy stocks, in which the Fund remains slightly overweighted, and a relatively strong showing by the Fund's stock selections in the health care sector. As the third quarter of 2005 was getting underway, the WSBC remained overweight in the consumer discretionary sector, which has been doing well; the Fund is underweight in financials due to our forecast of rising interest rates and underweight in technology due to lingering concerns about profit prospects. With the economic expansion maturing, WSBC should benefit from being positioned in the more substantial companies in the S&P MidCap 400. Additionally, the companies in the WSBC have a lower median P/E than the S&P MidCap 400. 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 Composite, selected with a bias toward the higher-quality issues in the index. In the second quarter of 2005, U.S. stocks posted modestly positive returns after losing ground in Q1. The WMBC returned 0.8% in the April-to-June period, lagging the 1.4% returns for both the S&P 500 and an average of 152 large-cap blend funds in the Morningstar data base. For the first half of 2005, WMBC lost 1.4% compared to losses of 0.8% for the S&P 500 and 0.7% for the Morningstar average. Though lagging modestly in 2005, the Fund's last 12 months' return of 8.4% exceeds both the S&P 500 (+6.3%) and the Morningstar peer group (+5.7%). In the second quarter of 2005, the WMBC's shortfall compared to the S&P 500 was due to a lagging performance in April which was largely recouped by the end of the quarter. During the quarter, the Fund benefited from the relatively strong showing of its selections in the consumer discretionary sector, including home builders (e.g., Centex +23%, KB Home +29%, Pulte Homes +14%) and some retailers (e.g., Best Buy +20%, Nordstrom +23%). Among the stocks whose results detracted from the Fund's relative performance were Molson Coors Brewing -19%, ExxonMobil -3% (one of the Fund's largest holdings) and IBM -19%. For the first half of the year, the Fund also benefited from an overweight position in the energy sector, which returned nearly 18% in the first quarter. As the economic expansion continues to age, profit growth is expected to slow. Sustainability of earning growth is becoming more important in stock performance, and the quality tilt in the WMBC Fund should work to its advantage in this regard. In addition, WMBC should also benefit from the historically low valuations currently accorded to high-quality stocks. The portfolio's median 12-month forward P/E multiple is more than a point lower than the S&P 500's, while its historical growth and forecast earnings growth are better, a combination that ought to drive above-market performance. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND After outperforming the S&P 500 in the first quarter of 2005 as well as for all of 2004, the MSCI World ex U.S. index (in dollars) lagged in the second quarter of 2005 as the appreciation of the dollar canceled a positive local currency return. Nevertheless, the Wright International Blue Chip Fund (WIBC) outperformed the S&P 500 as well as its international benchmarks in the quarter, returning 2.1% compared to losses of 0.8% for both the MSCI World ex U.S. index and an average of 127 international equity funds in the Morningstar database. For the first half of 2005, the WIBC Fund returned 3.5%, compared to losses of 0.7% for the MSCI benchmark and 1.2% for the Morningstar average. WIBC's 12-month return of 19% tops 15% for the MSCI benchmark and 13% for the Morningstar average. In international markets, the strong showing in energy stocks continued in the second quarter, and the WIBC continued to benefit from its overweight position in energy. In addition, an overweighting in utility stocks, another strong international sector, worked for the Fund in the quarter. The Fund was overweight in the Euro Bloc, which had relatively strong markets, while underweight in Japan, which was weak. On an absolute basis, a number of the Fund's weakest holdings were Japanese issues, reflecting the weakness of the Japanese market. Looking at first-half performance, several of the same factors that benefited the second quarter- strength in energy, overweighting in Europe and superior stock selection - contributed to the good showing; being underweight in technology also helped the WIBC Fund. WIS continues to believe that on a valuation basis, international stocks are attractive relative to U.S. stocks. The WIBC is still overweight in energy and utility stocks but has reduced its positions in these sectors by taking profits. The Fund has also further reduced its positioning in technology. The proceeds have been invested in industrials, including some in Japan as the economy shows signs of improving, and telecom, which looks attractive on a valuation basis. These actions have increased the Fund's holdings in Sweden and Hong Kong as well as Japan, but reduced its weight in Europe, the U.K. and Canada. FIXED-INCOME FUNDS AFTER RETREATING IN THE FIRST QUARTER, BONDS WERE SOLIDLY IN THE BLACK IN THE SECOND QUARTER OF 2005. EVEN THOUGH THE FED RAISED THE TARGET FED FUNDS RATE BY 50 BASIS POINTS IN THE SECOND QUARTER, JUST AS IT DID IN THE FIRST, LONG-TERM BOND YIELDS RETRACED ALL OF THE FIRST QUARTER'S RISE AND THEN SOME. SEVERAL FACTORS APPEARED TO BE AT WORK IN ENGINEERING THIS SOMEWHAT SURPRISING RALLY. WORRY ABOUT A SLOWDOWN IN U.S. ECONOMIC GROWTH FIGURED IN THE DECLINING LONG RATES, BUT THE PROSPECT OF 3%-3.5% GROWTH AND 2%-2.5% CORE INFLATION ALONE DOESN'T SEEM ENOUGH TO JUSTIFY THE EXTENT OF THE BOND MARKET RALLY. INVESTMENT STRATEGIES OF HEDGE FUNDS AND PENSION AND MORTGAGE MANAGERS PROBABLY ALSO PLAYED A ROLE. THE GLOBAL INVESTMENT FLOWS EXPLANATION, I.E., A GLOBAL SAVINGS GLUT FINDING ITS WAY TO THE U.S. BOND MARKET, SEEMED TO GAIN ADHERENTS; U.S. INTEREST RATES, AS LOW AS THEY ARE, LOOK ATTRACTIVE COMPARED TO THE EVEN LOWER RATES IN OTHER MARKETS. THE LEHMAN U.S. AGGREGATE BOND MARKET INDEX RETURNED 3.0% IN THE SECOND QUARTER, BRINGING ITS FIRST-HALF 2005 RETURN TO 2.5%. TREASURYS LED THE INVESTMENT GRADE MARKET WITH A 3.6% RETURN IN THE QUARTER AND 3.2% YEAR TO DATE. IN Q2, CORPORATES WERE ONLY A SHADE BEHIND WITH A 3.5% RETURN (2.4% YTD), AN IMPRESSIVE SHOWING SINCE THE CORPORATE SECTOR HAD TO OVERCOME THE DOWNGRADES OF FORD AND GM DEBT TO NONINVESTMENT GRADE. THE AGENCY, ASSET-BACKED AND MORTGAGE-BACKED SECTORS WERE ALSO IN THE BLACK FOR BOTH THE QUARTER AND THE HALF. LONG-MATURITY ISSUES OUTPERFORMED SHORTER IN THE QUARTER AND YTD AS THE YIELD CURVE CONTINUED TO FLATTEN. IN THE SECOND QUARTER, THE YIELD ON THE 10-YEAR T-BOND DECLINED BY 57 BASIS POINTS, THE TWO-YEAR DECLINED BY 15 BPS, AND THE ONE-YEAR ROSE BY 10 BPS. AT ABOUT 30 BASIS POINTS, THE SPREAD BETWEEN TWO- AND 10-YEAR TREASURY YIELDS WAS THE NARROWEST IN FOUR-AND-A-HALF YEARS. OUR OUTLOOK IS FOR BOND RETURNS TO LAG EQUITY RETURNS OVER THE COMING YEAR. IF THE GLOBAL INVESTMENT FLOWS ARGUMENT IS INDEED A REASON WHY BOND YIELDS ARE CURRENTLY SO LOW, THEN YIELDS ARE LIKELY TO STAY LOWER THAN WE FORECAST AT THE BEGINNING OF THE YEAR. WE EXPECT THAT RATES WILL MOVE SOMEWHAT HIGHER, HOWEVER. OUR EXPECTATION IS THAT THE FED WILL TIGHTEN BY AT LEAST ANOTHER 50 BASIS POINTS AND POSSIBLY 75 BY EARLY 2006, PUTTING THE FED FUNDS RATE AT 4.0%. THIS SHOULD PUSH UP RATES AT THE SHORT END OF THE YIELD CURVE AND IN COMBINATION WITH MODERATE GROWTH AND MODERATE INFLATION, PUSH LONG RATES HIGHER ALSO. THE RETURN ON THE LEHMAN U.S. AGGREGATE INDEX IS TARGETED AT ABOUT 3% OVER THE COMING YEAR. THE SECOND-QUARTER RALLY IN BONDS REMINDS US THAT EVEN WITH INTEREST RATES LOW, THE RISKS OF THE INVESTMENT ENVIRONMENT ARGUE FOR DIVERSIFIED INVESTMENT PORTFOLIOS THAT INCLUDE FIXED-INCOME SECURITIES. 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year - ---------------------------------------------------------------------------------------------------------------------------- WRIGHT U.S.GOV'T.NEAR-TERM BOND FUND (WNTB) 0.7% 0.4% 0.6% 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9% 11.9% WRIGHT TOTAL RETURN BOND FUND (WTRB) 2.0% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9% 22.0% WRIGHT CURRENT INCOME FUND (WCIF) 1.0% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4% 17.5%
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. The Fund may experience some mild price fluctuation, but it typically has less sensitivity to changes in interest rates than longer maturity funds. In the two-year maturity range, where the WNTB is positioned, Treasury yields declined about 15 basis points during the second quarter after rising in the first quarter. This contributed to the WNTB's 1.0% return in the second quarter, modestly behind the 1.2% for both the Lehman 1-3 year government bond index and an average of 60 Morningstar government bond funds with an average maturity between one and three years. An overall rise in rates for the first half of the year helped limit WNTB's gain to 0.7%, about the same as the Morningstar average but behind the 0.9% return for the Lehman benchmark. Over the past year, the WNTB Fund returned 1.7% compared to 2.1% for the Lehman benchmark and 2.2% for the Morningstar average. After the first quarter's rise in interest rates, at the start of the second quarter the WNTB was positioned with a duration of about 1.7 years, which just about matched the Lehman benchmark. As yields moved lower in Q2, the Fund's duration was shortened in anticipation of a reversal of the rally, a shift that proved to be early and worked against the Fund's performance in the quarter. To pick up extra yield, the Fund is overweight in mortgage-backed securities (30% of assets). The position in whole-loan adjustable rate mortgages was sold in Q2. The Fund is underweighting Treasuries (35% of assets) and is about neutral in Agency securities (34%). The Fund is expected to continue to underweight Treasury issues and as the third quarter began was positioned with a shorter-than-benchmark maturity and duration, consistent with our forecast that yields would be moving up from mid-year levels. The WNTB Fund had an indicated annual yield of 3.0% at the end of Q2. WRIGHT TOTAL RETURN BOND FUND As the bond market rallied in the second quarter of 2005, the Wright Total Return Bond Fund (WTRB), a diversified bond fund, returned 2.6% for the period. This was behind the Lehman U.S. Aggregate Bond Index's 3.0% return but a little better than the 2.5% return for an average of 174 total return bond funds in the Morningstar database. WTRB's second-quarter gain more than recovered its loss in the first quarter (when the bond market retreated). For the first half of 2005, WTRB returned 2.0%, ahead of the Morningstar average's 1.9% but behind the Lehman Aggregate's 2.5%. Over the last 12 months, the Fund (+5.9%) edged out the Morningstar peer group average (+5.8%) but lagged the Lehman Average (+6.8%) by just about the amount of fund expenses. The WTRB's indicated annual yield was 4.3% at the start of the third quarter. WTRB was moved from a short duration to neutral in the first quarter as interest rates rose; in response to the interest rate decline, in the second quarter the Fund's duration was shortened in anticipation that the rate decline would reverse. The move proved to be early, but the short position (about a quarter year compared to the Lehman Aggregate) was maintained at the start of the third quarter in anticipation that rates would move higher over the coming months. With corporate spreads staying tight, the Fund reduced its position in corporates during the first and second quarters, but is still moderately overweight (29% of Fund assets at quarter end) to pick up extra yield. Although corporates lagged the Aggregate in the first quarter, they outperformed in the second, partly offsetting the negative effect of the Fund's short duration. In the second quarter, the Fund moved to an overweight position in mortgage-backed securities (42% of assets), which have lagged so far this year but which should provide incremental return as rates rise going forward. The Fund ended the first half slightly underweight in agency issues (about 10% of assets) but is expecting to increase that position to neutral for the extra yield they provide. The position in Treasurys remains less than the benchmark weight. The Fund also holds small positions in commercial mortgage-backed securities (3%) and asset-backed issues (4%). Two whole-loan adjustable rate mortgages were sold in the quarter. WRIGHT CURRENT INCOME FUND The Wright Current Income Fund (WCIF) is generally managed to be almost entirely invested in GNMA issues - mortgage-based securities, known as Ginnie Maes, with explicit backing from the Federal government. The WCIF Fund is actively managed to maximize income and minimize principal fluctuation. (During the fourth quarter of 2004, the Wright U.S. Government Intermediate Fund was merged into the WCIF.) Mortgage-backed securities lagged the Lehman Aggregate in the second quarter of 2005 after outperforming in the first quarter. For the second quarter, WCIF returned 1.4%, behind the 2.0% for the Lehman GNMA bond index and the 1.9% for an average of all 61 government mortgage funds in the Morningstar database. For the first half of 2005, WCIF returned 1.0% compared to 2.1% for the Lehman benchmark and 1.5% for the Morningstar average. The Fund's 12-month return was 3.9% compared to 5.8% for the Lehman index and 4.5% for the Morningstar benchmark. With interest rates expected to rise modestly in 2005, reducing the risk of mortgage prepayments, the WCIF was positioned to be slightly overweight in higher-coupon issues during the first and second quarters of 2005. This allocation, which worked against the Fund in the second quarter, is being maintained as the third quarter gets underway since WIS is still expecting higher mortgage rates in the coming months. The overweighting of higher coupon issues has the advantage of providing extra income. The Fund's duration was targeted to be slightly shorter than the Lehman Ginnie Mae benchmark's. At the start of the third quarter, the WCIF Fund had an indicated annual yield of 4.4%, 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 12/31/96 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% 12/31/04 10,783.01 4.22% 12/31/05 10,274.97 3.92% FUND EXPENSES - ------------------------------------------------------------------------------- EXAMPLE: As a shareholder of a fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs including management fees; distribution or service fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2005-June 30, 2005). ACTUAL EXPENSES: The first line of the tables shown on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the fist line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES: The second line of the tables provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual return of the Fund. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if payable). Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. FUND EXPENSES - continued - ------------------------------------------------------------------------------- EQUITY FUNDS Wright Selected Blue Chip Equities Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,054.50 $6.37 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.60 $6.26 *Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. Wright Major Blue Chip Equities Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $ 985.60 $6.15 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.60 $6.26 *Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. Wright International Blue Chip Equities Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,034.90 $8.48 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,016.50 $8.40 *Expenses are equal to the Fund's annualized expense ratio of 1.68% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. FIXED INCOME FUNDS Wright U.S. Government Near Term Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,006.60 $4.73 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,020.10 $4.76 *Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. Wright Total Return Bond Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,020.40 $4.76 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,020.10 $4.76 *Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. Wright Current Income Fund Beginning Ending Expenses Paid Account Value Account Value During Period* (1/1/05) (6/30/05) (1/1/05-6/30/05) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,010.20 $4.73 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,020.10 $4.76 *Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2004. WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited) EQUITY INTERESTS -- 98.1% Shares Value AUTOMOBILES & COMPONENTS -- 2.9% BorgWarner, Inc..................... 14,840 $ 796,463 Copart, Inc.*....................... 24,860 591,668 Thor Industries, Inc................ 9,640 302,985 ------------ $ 1,691,116 ------------ BANKS -- 4.6% Associated Banc-Corp................ 8,735 $ 294,020 Astoria Financial Corp.............. 10,807 307,675 City National Corp.................. 5,175 371,099 Colonial Bancgroup Inc.............. 15,555 343,143 Hibernia Corp. - Class A............ 6,775 224,794 Independence Community Bank......... 14,460 534,008 Investors Financial Services Corp... 4,270 161,491 Webster Financial Corp.............. 8,230 384,259 ------------ $ 2,620,489 ------------ CAPITAL GOODS -- 4.3% AGCO Corp.* ........................ 13,765 $ 263,187 Alliant Techsystems, Inc.* ......... 9,545 673,877 Graco, Inc.......................... 7,037 239,751 Pentair, Inc........................ 5,320 227,749 Precision Castparts Corp............ 8,970 698,763 Thomas & Betts Corp.* .............. 12,335 348,340 ------------ $ 2,451,667 ------------ CHEMICALS -- 1.2% Lubrizol Corp...................... 5,175 $ 217,402 Lyondell Chemical Co................ 17,060 450,725 ------------ $ 668,127 ------------ COMMERCIAL SERVICES & SUPPLIES -- 2.9% Brink's Co., (The).................. 13,645 $ 491,220 Certegy, Inc........................ 3,555 135,872 ITT Educational Services, Inc.* .... 3,840 205,133 Manpower, Inc....................... 11,355 451,702 Republic Services, Inc. - Class A... 10,950 394,309 ------------ $ 1,678,236 ------------ COMMUNICATIONS EQUIPMENT -- 0.8% Plantronics, Inc.................... 9,495 $ 345,238 Polycom, Inc.* ..................... 9,350 139,408 ------------ $ 484,646 ------------ COMPUTERS & PERIPHERALS -- 2.2% CSG Systems International, Inc.* ... 7,540 $ 143,109 DST Systems, Inc.* ................. 6,225 291,330 Storage Technology Corp.* .......... 22,210 806,001 ------------ $ 1,240,440 ------------ CONSUMER DURABLES & APPAREL -- 7.6% D.R. Horton, Inc.................... 24,266 $ 912,644 Harman International................ 4,175 339,678 Hovnanian Enterprises,Inc.-Class A*. 4,605 300,246 Lennar Corp. - Class A.............. 11,860 752,517 Mohawk Industries, Inc.* ........... 9,615 793,238 Timberland Co. - Class A* .......... 10,070 389,910 Toll Brothers, Inc.* ............... 6,895 700,187 Tupperware Corp..................... 7,135 166,745 ------------ $ 4,355,165 ------------ DIVERSIFIED FINANCIALS -- 6.6% AmeriCredit Corp.* ................. 15,055 $ 383,903 Edwards, A.G., Inc.................. 6,585 297,313 I Shrs S&P Midcap 400 Index Fd-Mid Cap......................... 11,560 792,438 Jefferies Group, Inc................ 8,615 326,422 Legg Mason, Inc..................... 13,130 1,366,964 Raymond James Financial, Inc........ 11,550 326,288 Ryland Group, Inc................... 3,410 258,717 ------------ $ 3,752,045 ------------ EDUCATION -- 0.4% Career Education Corp.* ............ 6,420 $ 235,036 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS-- 3.7% Ametek, Inc......................... 7,780 $ 325,593 Arrow Electronics, Inc.* ........... 23,430 636,359 Avnet, Inc.* ....................... 10,975 247,267 Energizer Holdings, Inc.* .......... 5,915 367,736 Tech Data Corp.* ................... 14,365 525,903 ------------ 2,102,858 ------------ ENERGY -- 8.5% Forest Oil Corp.* .................. 3,985 $ 167,370 Murphy Oil Corp..................... 14,505 757,596 Newfield Exploration Company* ...... 24,910 993,660 Noble Energy, Inc................... 7,780 588,557 Plains Exploration & Production Co.* 29,370 1,043,516 Pogo Producing Co................... 13,575 704,814 Smith International, Inc............ 5,250 334,425 Western Gas Resources, Inc.......... 7,875 274,838 ------------ $ 4,864,776 ------------ FOOD, BEVERAGE & TOBACCO -- 2.8% Constellation Brands, Inc.-Class A*. 24,210 $ 714,195 PepsiAmericas, Inc.................. 7,920 203,227 Smithfield Foods, Inc.* ............ 18,875 514,721 Universal Corp...................... 4,055 177,528 ------------ $ 1,609,671 ------------ HEALTH CARE EQUIPMENT & SERVICES-- 10.6% Beckman Coulter, Inc................ 6,585 $ 418,608 Covance, Inc.* ..................... 6,320 283,578 Coventry Health Care, Inc.* ........ 18,370 1,299,678 Cytyc Corp.* ....................... 8,970 197,878 Health Net, Inc.* .................. 10,620 405,259 Inamed Corp.* ...................... 1,980 132,601 LifePoint Hospitals, Inc.* ......... 14,675 741,381 Lincare Holdings, Inc.* ............ 13,455 549,502 Pacificare Health Systems, Inc.* ... 11,215 801,312 Renal Care Group, Inc.* ............ 9,710 447,631 Triad Hospitals, Inc.* ............. 14,580 796,651 ------------ $ 6,074,079 ------------ HOTELS, RESTAURANTS & LEISURE -- 1.1% Boyd Gaming Corp.................... 12,145 $ 620,974 ------------ INSURANCE -- 5.6% Everest Re Group, Ltd............... 4,440 $ 412,920 Fidelity National Financial, Inc.... 5,012 178,878 First American Corp................. 20,280 814,039 Old Republic International Corp..... 10,115 255,808 PMI Group Inc., (The)............... 7,180 279,876 Protective Life Corp................ 9,140 385,891 Radian Group, Inc................... 11,645 549,877 Stancorp Financial Group............ 4,035 309,000 ------------ $ 3,186,289 ------------ MATERIALS -- 2.5% Cabot Corp.......................... 6,300 $ 207,900 Cytec Industries, Inc............... 9,590 381,682 FMC Corp.* ......................... 6,010 337,401 RPM International, Inc.............. 28,060 512,376 ------------ $ 1,439,359 ------------ MEDIA -- 1.1% Catalina Marketing Corp............. 25,055 $ 636,648 ------------ PHARMACEUTICALS & BIOTECHNOLOGY-- 0.6% Barr Laboratories, Inc.* ........... 6,020 $ 293,415 Perrigo Company..................... 6,105 85,104 ------------ $ 378,519 ------------ REAL ESTATE -- 0.4% New Plan Excel Realty Trust REIT.... 7,920 $ 215,186 ------------ RETAILING -- 10.6% Abercrombie & Fitch Co. - Class A... 9,685 $ 665,360 American Eagle Outfitters........... 21,640 663,266 Barnes & Noble, Inc.* .............. 10,190 395,372 BJ's Wholesale Club, Inc.* ......... 7,015 227,917 CDW Corp............................ 5,600 319,704 Chico's FAS, Inc.* ................. 9,710 332,859 Claire's Stores, Inc................ 18,110 435,546 Foot Locker, Inc.................... 18,155 494,179 Michaels Stores, Inc................ 4,985 206,229 Neiman Marcus Group, Inc. - Class A. 5,130 497,200 Pacific Sunwear of California, Inc.* 14,125 324,734 Petsmart, Inc....................... 8,445 256,306 United Rentals, Inc.* .............. 32,855 664,000 Urban Outfitters, Inc.* ............ 10,090 572,002 ------------ $ 6,054,674 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 2.9% Cree, Inc.* ........................ 31,290 $ 796,956 International Rectifier Corp.* ..... 7,730 368,876 Lam Research Corp.* ................ 9,400 272,036 Microchip Technology, Inc........... 6,705 198,602 ------------ $ 1,636,470 ------------ SOFTWARE & SERVICES -- 2.4% Activision, Inc.* .................. 34,565 $ 571,014 Cognizant Technology Solutions Corp.* 6,345 299,040 Fair Isaac, Inc..................... 5,800 211,700 Gtech Holdings Corp................. 3,005 87,866 Jack Henry & Associates, Inc........ 10,410 190,607 ------------ $ 1,360,227 ------------ TELECOMMUNICATION SERVICES -- 0.5% Cincinnati Bell, Inc.* ............. 32,510 $ 139,793 Telephone & Data Systems, Inc....... 3,625 147,936 ------------ $ 287,729 ------------ TRANSPORTATION -- 3.0% CNF Transporation, Inc.............. 6,610 $ 296,789 Hunt, J.B. Transport Services, Inc.. 40,665 784,835 Overseas Shipholding Group.......... 4,605 274,688 Yellow Roadway Corp.* .............. 6,990 355,092 ------------ $ 1,711,404 ------------ UTILITIES -- 8.3% Energy East Corp.................... 20,950 $ 607,131 Equitable Resources, Inc............ 16,250 1,105,000 MDU Resources Group, Inc............ 16,857 474,862 Oneok, Inc.......................... 17,490 571,049 Questar Corp........................ 12,930 852,087 Sierra Pacific Resources* .......... 46,165 574,754 Wisconsin Energy Corp............... 13,885 541,515 ------------ $ 4,726,398 ------------ TOTAL EQUITY INTERESTS-- 98.1% (identified cost, $44,578,791) $56,082,228 OTHER ASSETS, LESS LIABILITIES -- 1.9% 1,090,995 ------------ NET ASSETS -- 100% $57,173,223 ============ * Non-income-producing security. See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $44,578,791) (Note 1A). $ 56,082,228 Cash.................................... 972,854 Receivable for fund shares sold......... 102,667 Receivable from investment adviser...... 7,714 Dividends receivable.................... 24,054 Other assets............................ 16,300 ------------ Total assets............................ $ 57,205,817 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 15,333 Payable to affiliate for Trustees' fees. 881 Transfer agent fee payable.............. 2,022 Accrued expenses and other liabilities.. 14,358 ------------ Total liabilities....................... $ 32,594 ------------ NET ASSETS................................ $ 57,173,223 ============ 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................... $ 42,965,717 Accumulated undistributed net realized gain on investments (computed on the basis of identified cost)....................... 1,776,906 Unrealized appreciation on investments (computed on the basis of identified cost) 11,503,437 Undistributed net investment income..... 927,163 ----------- Net assets applicable to outstanding share................................. $ 57,173,223 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 4,237,396 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 13.49 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Dividend income......................... $ 259,556 Expenses - Investment adviser fee (Note 2):........ $ 128,810 Administrator fee (Note 2):............. 25,762 Compensation of Trustees who are not employees of the investment adviser or administrator 7,607 Custodian fee (Note 1D)................. 45,653 Distribution expenses (Note 3):......... 53,671 Transfer and dividend disbursing agent fees 11,784 Printing................................ 1,629 Interest expense........................ 1,773 Shareholder communications.............. 4,570 Audit services.......................... 12,836 Legal services.......................... 3,348 Registration costs...................... 8,556 Miscellaneous .......................... 3,373 ------------ Total expenses.......................... $ 309,372 Deduct - Reduction of custodian fee (Note 1D):... $ (5,981) Preliminary allocation of expenses to investment adviser (Note 2):........... (7,714) Preliminary reduction of distribution expenses by principal underwriter (Note 3):..... (26,837) ------------ Total deductions........................ $ (40,532) ------------ Net expenses............................ $ 268,840 ------------ Net investment loss..................... $ (9,284) ------------ REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 1,774,744 Change in unrealized appreciation of investments............................ 674,470 ------------ Net realized and unrealized gain of investments......................... $ 2,449,214 ------------ Net increase in net assets from operations $ 2,439,930 ============ 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, 2005 Dec. 31,2004 - ------------------------------------------------------------------------------------------------------------------------------ (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment loss........................................................ $ (9,284) $ (89,696) Net realized gain on investments........................................... 1,774,744 4,095,367 Change in unrealized appreciation of investments........................... 674,470 1,915,763 -------------- -------------- Net increase in net assets resulting from operations..................... $ 2,439,930 $ 5,921,434 -------------- -------------- Distributions to shareholders (Note 1F) - From net realized gain..................................................... $ (1,387,931) $ (1,597,259) -------------- -------------- Total distributions...................................................... $ (1,387,931) $ (1,597,259) -------------- -------------- Net increase in net assets from fund share transactions (Note 4)............. $ 12,623,366 $ 983,877 -------------- -------------- Net increase in net assets................................................... $ 13,675,365 $ 5,308,052 NET ASSETS: At beginning of period....................................................... 43,497,858 38,189,806 -------------- -------------- At end of period............................................................. $ 57,173,223 $ 43,497,858 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD................................................................ $ 927,163 $ 936,447 ============== ==============
See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - --------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003(6) 2002(6) 2001(6) 2000(6) - --------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430 $ 15.130 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss(1) ................ $ (0.003) $ (0.028) $ (0.023) $ (0.046) $ (0.045) $ (0.041) Net realized and unrealized gain (loss) 0.714 1.884 2.756 (1.831) (1.322) 1.638 --------- --------- --------- --------- --------- --------- Total income (loss) from investment operations......... $ 0.711 $ 1.856 $ 2.733 $ (1.877) $ (1.367) $ 1.597 --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from capital gains....... $ (0.444) $ (0.500) $ (0.133) $ (0.433) $ (0.483) $ (3.297) --------- --------- --------- --------- --------- --------- Total distributions................ $ (0.444) $ (0.500) $ (0.133) $ (0.433) $ (0.483) $ (3.297) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 13.493 $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430 ========= ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 5.45% 15.73% 30.06% (16.98%) (10.15%) 10.75% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of period (000 omitted) $ 57,173 $ 43,498 $ 38,190 $ 32,817 $ 45,883 $ 51,201 Ratio of net expenses to average net assets 1.28%(8) 1.26% 1.25% 1.26%(3) 1.26%(3) 1.26%(3) Ratio of net expenses after custodian fee reduction to average net assets(5)(7) 1.25%(8) 1.25% 1.25% 1.25%(3) 1.25%(3) 1.25%(3) Ratio of net investment (loss) to average net assets.......................... (0.04%)(8) (0.23%) (0.23%) (0.44%) (0.38%) (0.28%) Portfolio turnover rate .............. 37% 69% 106% 119%(4) 67%(4) 55%(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 loss per share and the ratios would have been as follows: 2005 2004 2003 2002 2001 2000 -------------------------------------------------------------------------- Net investment loss per share.......... $ (0.013) $ (0.050) $ (0.057) $ (0.064) $ (0.057) $ (0.051) ========= ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses........................... 1.44%(8) 1.44% 1.59% 1.43%(3) 1.37%(3) 1.33%(3) ========= ========= ========= ========= ========= ========= Expenses after custodian fee reduction(5) 1.41%(8) 1.43% 1.59% 1.42%(3) 1.36%(3) 1.32%(3) ========= ========= ========= ========= ========= ========= Net investment loss................ (0.20%)(8) (0.41%) (0.57%) (0.61%) (0.49%) (0.35%) ========= ========= ========= ========= ========= ========= - ------------------------------------------------------------------------------------------------------------------------------- (2)Total 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 (Note 1). (4)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1). (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)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. (8)Annualized.
See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited) EQUITY INTERESTS -- 99.8% Shares Value AEROSPACE & DEFENSE -- 0.3% Lockheed Martin Corp................ 2,820 $ 182,933 ------------ AUTOMOBILES & COMPONENTS -- 2.4% Harley-Davidson, Inc................ 2,110 $ 104,656 Paccar, Inc......................... 21,385 1,454,180 ------------ 1,558,836 ------------ BANKS -- 9.5% Bank of America Corp................ 61,458 $ 2,803,099 Capital One Financial Corp.......... 12,760 1,020,928 MBNA Corp........................... 40,805 1,067,459 Wells Fargo & Co.................... 21,025 1,294,719 ------------ $ 6,186,205 ------------ CAPITAL GOODS -- 2.2% Cummins, Inc........................ 9,115 $ 680,070 Tyco International, Ltd............. 8,875 259,150 United Technologies Corp............ 9,610 493,473 ------------ $ 1,432,693 ------------ COMMERCIAL SERVICES & SUPPLIES -- 0.3% H&R Block, Inc...................... 3,590 $ 209,476 ------------ COMMUNICATIONS EQUIPMENT -- 3.2% Cisco Systems, Inc.* ............... 10,476 $ 200,196 Qualcomm, Inc....................... 31,599 1,043,083 Scientific-Atlanta, Inc............. 24,270 807,463 ------------ $ 2,050,742 ------------ COMPUTERS & PERIPHERALS -- 3.9% Apple Computer, Inc.* .............. 9,980 $ 367,364 Computer Sciences Corp.* ........... 13,850 605,245 Dell, Inc.* ........................ 10,769 425,483 Hewlett-Packard Co.................. 36,470 857,410 Lexmark International, Inc.* ....... 4,490 291,087 ------------ $ 2,546,589 ------------ CONSUMER DURABLES & APPAREL -- 2.5% Brunswick Corp...................... 1,700 $ 73,644 Centex Corp......................... 3,395 239,925 Fortune Brands, Inc................. 9,895 878,676 KB Home Corp........................ 1,090 83,091 Liz Claiborne, Inc.................. 1,705 67,791 Pulte Homes, Inc.................... 3,310 278,867 ------------ $ 1,621,994 ------------ DIVERSIFIED FINANCIALS -- 6.0% Citigroup, Inc...................... 64,179 $ 2,966,995 Lehman Brothers Holdings, Inc....... 7,295 724,248 Providian Financial Corp.* ......... 11,155 196,663 ------------ $ 3,887,906 ------------ ELECTRIC UTILITIES -- 0.1% Duke Energy Corp.................... 2,690 $ 79,974 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS-- 0.2% Nvidia Corp.* ...................... 2,525 $ 67,468 PerkinElmer, Inc.................... 2,960 55,944 ------------ $ 123,412 ------------ ENERGY -- 11.3% Apache Corp......................... 5,548 $ 358,401 ChevronTexaco Corp.................. 21,375 1,195,290 ConocoPhillips Co................... 27,580 1,585,574 EOG Resources, Inc.................. 3,525 200,220 Exxon Mobil Corp.................... 51,355 2,951,372 Occidental Petroleum Corp........... 8,825 678,907 TXU Corp............................ 4,765 395,924 ------------ $ 7,365,688 ------------ FOOD, BEVERAGE & TOBACCO -- 4.4% Altria Group, Inc................... 14,730 $ 952,442 Archer-Daniels-Midland Co........... 44,820 958,252 Molson Coors Brewing Co. - Class B.. 12,415 769,730 Supervalu, Inc...................... 5,975 194,845 ------------ $ 2,875,269 ------------ FOREST PRODUCTS & PAPER -- 0.4% Georgia-Pacific Corp................ 7,860 $ 249,948 ------------ HEALTH CARE EQUIPMENT & SERVICES-- 8.0% Becton Dickinson & Co............... 1,875 $ 98,381 C.R. Bard, Inc...................... 5,354 356,095 Cigna Corp.......................... 4,175 446,850 Health Management Associates-Class A 37,365 978,216 Humana, Inc.* ...................... 8,965 356,269 Laboratory Corp.of America Holdings* 3,475 173,402 Manor Care, Inc..................... 2,400 95,352 Medco Health Solutions, Inc.* ...... 4,130 220,377 Quest Diagnostics, Inc.............. 8,200 436,814 St. Jude Medical, Inc.* ............ 2,400 104,664 UnitedHealth Group, Inc............. 34,316 1,789,236 Wellpoint, Inc.* ................... 2,110 146,940 ------------ $ 5,202,596 ------------ HEAVY MACHINERY -- 4.2% Black & Decker Corp................. 11,030 $ 991,046 Caterpillar, Inc.................... 11,045 1,052,699 Ingersoll-Rand Co. - Class A........ 10,005 713,857 ------------ $ 2,757,602 ------------ HOTELS, RESTAURANTS & LEISURE -- 2.9% Cendant Corp........................ 30,205 $ 675,686 Darden Restaurants, Inc............. 1,880 62,002 McDonald's Corp..................... 42,300 1,173,825 ------------ $ 1,911,513 ------------ INSURANCE -- 5.9% Aetna, Inc.......................... 2,770 $ 229,411 AFLAC, Inc.......................... 6,165 266,821 Allstate Corp....................... 7,730 461,868 AMBAC Financial Group, Inc.......... 3,015 210,326 Chubb Corp.......................... 4,925 421,629 Loews Corp.......................... 2,810 217,775 MGIC Investment Corp................ 2,690 175,442 Progressive Corp.................... 18,505 1,828,479 ------------ $ 3,811,751 ------------ MATERIALS -- 2.8% Ball Corp........................... 15,060 $ 541,558 Bemis Co., Inc...................... 2,265 60,113 Monsanto Co......................... 13,955 877,351 Nucor Corp.......................... 7,260 331,201 ------------ $ 1,810,223 ------------ PHARMACEUTICALS & BIOTECHNOLOGY-- 6.2% Gilead Sciences, Inc.* ............. 4,195 $ 184,538 Johnson & Johnson, Inc.............. 23,886 1,552,590 Pfizer, Inc......................... 83,830 2,312,031 ------------ $ 4,049,159 ------------ RETAILING -- 7.4% Best Buy Co., Inc................... 4,005 $ 274,543 CVS Corp............................ 4,800 139,536 Gap (The), Inc...................... 8,535 168,566 Home Depot, Inc..................... 53,225 2,070,453 J.C. Penney Co., Inc................ 4,250 223,465 Limited Brands, Inc................. 2,285 48,945 Nike, Inc. - Class B................ 1,040 90,064 Nordstrom, Inc...................... 6,360 432,289 Office Depot, Inc.* ................ 11,580 264,487 Safeway, Inc........................ 17,465 394,534 Sears Holdings Corp.* .............. 1,800 269,766 Staples, Inc........................ 20,550 438,126 ------------ $ 4,814,774 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.0% KLA-Tencor Corp..................... 1,375 $ 60,088 Texas Instruments, Inc.............. 21,265 596,909 ------------ $ 656,997 ------------ SOFTWARE & SERVICES -- 4.9% Autodesk, Inc....................... 32,490 $ 1,116,681 Automatic Data Processing, Inc...... 4,865 204,184 International Business Machines Corp. 6,113 453,585 Microsoft Corp...................... 23,419 581,728 NCR Corp.* ......................... 9,360 328,723 Oracle Corp.* ...................... 16,598 219,094 Symantec Corp.* .................... 12,060 262,184 ------------ $ 3,166,179 ------------ TELECOMMUNICATION SERVICES -- 4.5% Alltel Corp......................... 5,285 $ 329,150 AT&T Corp........................... 46,030 876,411 Bellsouth Corp...................... 12,935 343,683 Corning, Inc.* ..................... 8,660 143,929 Sprint Corp......................... 40,580 1,018,152 Verizon Communications, Inc......... 7,245 250,315 ------------ $2,961,640 ------------ TEXTILES, CLOTHING & FABRICS -- 0.1% VF Corp............................. 1,135 $ 64,945 ------------ TRANSPORTATION -- 0.9% Burlington Northern Santa Fe Corp... 2,125 $ 100,045 FedEx Corp.......................... 2,539 205,684 Norfolk Southern Corp............... 9,160 283,594 ------------ $ 589,323 ------------ UTILITIES -- 4.3% Exelon Corp......................... 47,586 $ 2,442,589 Sempra Energy....................... 9,095 375,714 ------------ $ 2,818,303 ------------ TOTAL EQUITY INTERESTS-- 99.8% (identified cost, $52,689,563).... $64,986,670 OTHER ASSETS, LESS LIABILITIES -- 0.2% 151,687 ------------ NET ASSETS -- 100% $65,138,357 ============ * Non-income-producing security. See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------ STATEMENT OF ASSETS AND LIABILITIES June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $52,689,563) (Note 1A). $ 64,986,670 Cash.................................... 103,212 Receivable for fund shares sold......... 10,431 Receivable from investment adviser...... 6,393 Dividends receivable.................... 55,094 Prepaid expenses........................ 17,323 ------------ Total assets............................ $ 65,179,123 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 19,035 Payable to affiliate for Trustees' fees. 881 Transfer agent fee...................... 2,248 Accrued expenses and other liabilities.. 18,602 ------------ Total liabilities....................... $ 40,766 ------------ NET ASSETS................................ $ 65,138,357 ============ 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................... $ 86,470,468 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost).................... (33,485,696) Unrealized appreciation on investments (computed on the basis of identified cost) 12,297,107 Distributions in excess of net investment income...................... (143,522) ------------ Net assets applicable to outstanding shares .............................. $ 65,138,357 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 5,626,560 ============ NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 11.58 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C): Dividend income......................... $ 559,030 ------------ Expenses - Investment adviser fee (Note 2):........ $ 192,345 Administrator fee (Note 2):............. 38,469 Compensation of Trustees not employees of the investment adviser or administrator.... 7,607 Custodian fee (Note 1D):................ 37,341 Distribution expenses (Note 3):......... 80,144 Transfer and dividend disbursing agent fees 12,789 Printing................................ 2,353 Interest expense........................ 955 Shareholder communications.............. 6,080 Audit services.......................... 13,356 Legal services.......................... 3,982 Registration costs...................... 9,866 Miscellaneous .......................... 6,170 ------------ Total expenses.......................... $ 411,457 ------------ Deduct - Reduction of custodian fee (Note 1D):... $ (4,353) Preliminary allocation of expenses to the investment adviser (Note 2):........... (6,393) ------------ Total deductions........................ $ (10,746) ------------ Net expenses............................ $ 400,711 ------------ Net investment income................... $ 158,319 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 552,892 Change in unrealized depreciation of investments............................ (1,649,412) ------------ Net realized and unrealized loss of investments............................ $ (1,096,520) ------------ Net decrease in net assets from operations............................ $ (938,201) ============ 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, 2005 December,31, 2004 - --------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income ..................................................... $ 158,319 $ 325,576 Net realized gain on investments........................................... 552,892 3,568,382 Change in unrealized appreciation (depreciation) on investments............ (1,649,412) 3,534,335 -------------- -------------- Net increase (decrease) in net assets resulting from operations.......... $ (938,201) $ 7,428,293 -------------- -------------- Distributions to shareholders - From net investment income................................................. $ (169,250) $ (289,970) -------------- -------------- Total distributions...................................................... $ (169,250) $ (289,970) -------------- -------------- Net increase (decrease) in net assets from fund share transactions (Note 4).. $ 742,950 $(13,174,341) -------------- -------------- Net decrease in net assets................................................... $ (364,501) $ (6,036,018) NET ASSETS: At beginning of period....................................................... 65,502,858 71,538,876 -------------- -------------- At end of period............................................................. $ 65,138,357 $ 65,502,858 -------------- -------------- DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................................. $ (143,522) $ (132,591) ============== ============== See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003(4) 2002(4) 2001(4) 2000(4) - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690 $ 16.290 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss)(1) ....... $ 0.028 $ 0.053 $ 0.029 $ 0.024 $ (0.009) $ (0.001) Net realized and unrealized gain (loss) (0.198) 1.247 1.958 (2.812) (2.301) (2.005) --------- --------- --------- --------- --------- --------- Total income (loss) from investment operations......... $ (0.170) $ 1.300 $ 1.987 $ (2.788) $ (2.310) $ (2.006) --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Dividends from investment income....... $ (0.030) $ (0.050) $ (0.027) $ (0.022) $ - $ (0.010) Distributions from capital gains....... - - - - - (0.584) --------- --------- --------- --------- --------- --------- Total distributions................ $ (0.030) $ (0.050) $ (0.027) $ (0.022) $ - $ (0.594) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 11.580 $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690 ========= ========= ========= ========= ========= ========= TOTAL RETURN(3) ............................ (1.44%) 12.36% 23.20% (24.50%) (16.87%) (12.49%) RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of period (000 omitted) $ 65,138 $ 65,503 $ 71,539 $ 66,609 $ 95,121 $ 135,262 Ratio of net expenses to average net assets 1.26%(7) 1.25% 1.25% 1.22% 1.13% 1.06% Ratio of net expenses after custodian fee reduction to average net assets(2)(6) 1.25%(7) 1.25% 1.25% 1.22% 1.13% 1.06% Ratio of net investment income (loss) to average net assets ................. 0.49%(7) 0.49% 0.31% 0.25% (0.08%) (0.00%)(5) Portfolio turnover rate................ 35% 74% 143% 130% 78% 88% - ----------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2005 and for the years ended December 31, 2004 and 2003, 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: 2005 2004 2003 ------------------------------- Net investment income per share........ $ 0.027 $ 0.050 $ 0.024 ========= ========= ========= Ratios (As a percentage of average net assets): Expenses............................. 1.28%(7) 1.28% 1.31% ========= ========= ========= Expenses after custodian fee reduction(2) 1.27%(7) 1.28% 1.31% ========= ========= ========= Net investment income................ 0.47%(7) 0.46% 0.26% ========= ========= ========= - --------------------------------------------------------------------------------------------------------------------------------- (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 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 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. (7)Annualized.
See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (UNAUDITED) EQUITY INTERESTS -- 101.1% Shares Value AUSTRALIA -- 4.0% Aristocrat Leisure, Ltd............ 92,019 $ 813,641 Boral, Ltd.......................... 72,129 356,273 Computershare, Ltd. (Ordinary)...... 6,581 29,396 CSR, Ltd............................264,368 540,059 QBE Insurance Group, Ltd............ 71,037 867,992 ------------ $ 2,607,361 ------------ AUSTRIA -- 1.5% OMV AG (Stammaktie)................. 2,210 $ 963,166 ------------ BELGIUM -- 0.9% Fortis.............................. 22,009 $ 611,507 ------------ CANADA -- 7.1% Canadian Natural Res, Ltd. (Common). 30,682 $ 1,112,248 Husky Energy, Inc................... 20,130 800,894 Manulife Financial Corp............. 17,733 847,124 Nexen Inc. (Common)................. 14,391 437,088 Nortel Networks Corp. (Common)* .... 27,699 72,142 Penn West Petroleum Ltd. (Common)... 11,153 263,891 Power Financial Corp. (Common)...... 43,621 1,163,892 ------------ $ 4,697,279 ------------ DENMARK -- 3.1% Danisco A/S......................... 97 $ 6,304 Danske Bank A/S..................... 57,130 1,719,385 TDC A/S............................. 4,900 210,160 Topdanmark A/S* .................... 1,772 129,259 ------------ $ 2,065,108 ------------ FINLAND -- 1.4% Cargotec Corp.* .................... 2,460 $ 68,707 Fortum Oyj.......................... 25,490 408,888 Kone Oyj* .......................... 2,940 176,186 Nokian Renkaat Oyj.................. 13,275 242,035 ------------ $ 895,816 ------------ FRANCE -- 5.9% Pernod Ricard SA (Actions Ordinaries)......................... 2,506 $ 400,473 Schneider Electric SA............... 20,784 1,568,860 Societe Generale.................... 7,281 741,761 Veolia Environment (Actions Ordinaries)........................ 1,767 66,466 Vinci............................... 13,306 1,108,293 ------------ 3,885,853 ------------ GERMANY -- 7.6% Allianz AG (Namensaktie)............ 3,526 $ 405,403 Bayer AG (Stammaktie)............... 14,542 485,730 Celesio AG.......................... 4,194 329,985 Continental AG (Stammaktie)......... 8,526 615,088 E. On AG (Stammaktie)............... 22,692 2,024,142 MAN AG (Stammaktie)................. 397 16,500 RWE AG.............................. 17,325 1,119,619 ------------ $ 4,996,467 ------------ GREECE -- 0.2% National Bank of Greece SA.......... 3,153 $ 107,186 ------------ HONG KONG -- 2.6% Cheung Kong Holdings, Ltd. (Ord).... 60,000 $ 584,694 CLP Holdings, Ltd. (Ordinary).......105,000 602,447 Wharf Holdings, Ltd................. 85,000 298,522 Yue Yuen Industrial Holdings, Ltd... 68,000 208,200 ------------ $ 1,693,863 ------------ IRELAND -- 1.3% Bank of Ireland (Cap. Stock)........ 5,903 $ 95,906 CRH PLC (Ordinary).................. 11,873 315,510 DCC PLC............................. 12,987 259,425 Grafton Group PLC* ................. 14,025 162,662 ------------ $ 833,503 ------------ ITALY -- 3.9% Banca Intesa Spa (Azioni Ordinarie). 10,872 $ 49,819 Enel Spa............................ 48,082 419,115 Eni Spa (Azioni Ordinarie).......... 80,314 2,072,017 ------------ $ 2,540,951 ------------ JAPAN -- 19.8% Acom Co., Ltd. (Common)............. 5,070 $ 325,311 Aiful Corp. (Common)................ 15,075 1,125,081 Asahi Glass Co., Ltd................ 22,000 231,495 Canon, Inc.......................... 16,100 848,516 Central Glass Co., Ltd.............. 45,000 281,428 Daito Trust Construct Co., Ltd...... 9,500 355,789 Eisai Co., Ltd. (Common)............ 26,300 885,290 Fuji Soft ABC, Inc. (Common)........ 21,200 677,267 Honda Motor Co., Ltd. (Common)...... 17,060 842,146 Konami Corp......................... 5,200 109,810 Kyocera Corp........................ 6,700 512,734 Mitsui OSK Lines, Ltd...............146,000 902,536 Nissan Chemical Industries, Ltd..... 22,000 237,054 Nissan Motor Co., Ltd. (Common)..... 86,000 852,161 Sankyo Co., Ltd. ................... 7,000 325,963 Sega Sammy Holdings, Inc............ 14,900 914,358 Takeda Chemicals Ind., Ltd. (Common) 15,300 759,408 Toyota Motor Corp. (Common)......... 35,700 1,279,027 Uniden Corp......................... 22,000 348,633 Yamada Denki Co., Ltd. (Common)..... 14,500 834,853 Yamaha Motor Co., Ltd............... 21,000 385,660 ------------ $13,034,520 ------------ NETHERLANDS -- 5.5% ABN Amro Holdings NV (Aandeel)...... 33,910 $ 835,431 ING Groep NV - ADR (Aandeel)........ 69,788 1,974,504 Koninklijke Philips Electronics NV.. 16,622 420,580 Royal Dutch Petroleum Co. (Aandeel). 3,953 258,428 TNT NV.............................. 4,451 112,891 ------------ $ 3,601,834 ------------ NORWAY -- 4.1% Norsk Hydro ASA (Ordinaere Aksje)... 6,084 $ 558,353 Orkla ASA........................... 25,100 925,250 Statoil ASA......................... 54,597 1,114,855 Telenor ASA......................... 17,079 136,495 ------------ $ 2,734,953 ------------ SINGAPORE -- 0.4% Jardine Cycle & Carriage, Ltd....... 19,000 $ 149,766 Keppel Corp., Ltd................... 14,000 103,716 ------------ $ 253,482 ------------ SPAIN -- 5.5% Acciona SA (Accion)................. 6,787 $ 673,768 ACS, Actividades de Construccion y Servicios SA................... 8,265 231,539 Banco Santander Central Hispano SA (Accion Nom)..................... 28,555 331,527 Fomento de Construcciones y Contratas SA (Accion)...................... 10,218 576,338 Grupo Ferrovial SA (Accion Al Portador)....................... 8,744 564,230 Repsol YPF SA (Accion).............. 47,484 1,216,414 Sociedad General de Aguas de Barcelona SA..................... 1,836 39,610 ------------ $ 3,633,426 ------------ SWEDEN -- 4.9% Getinge AB (B Aktie)................ 2,823 $ 38,501 Nordea Bank AB......................174,209 1,583,931 Skandia Forsakrings AB.............. 36,826 202,311 Telefonaktiebolaget LM Ericsson ADR*................... 19,200 613,440 TeliaSonera AB......................171,745 820,352 ------------ $ 3,258,535 ------------ SWITZERLAND -- 2.2% Micronas Semiconductor (Namenaktie)* ..................... 15,299 $ 579,191 Phonak Holding AG................... 8,620 323,645 Zurich Financial Services (Inhaberaktie)* ................. 3,124 538,427 ------------ $ 1,441,263 ------------ UNITED KINGDOM -- 19.2% Alliance Unichem PLC (Ordinary)..... 14,540 $ 221,399 Anglo American PLC (Ordinary)....... 35,000 821,211 Barclays PLC (Ordinary).............212,525 2,116,124 Barratt Developments PLC............ 49,537 636,199 Bellway PLC......................... 1,680 25,988 BP PLC.............................. 469 4,884 Cable & Wireless PLC (Ordinary).....374,396 999,918 Dixons Group PLC (Ordinary).........238,621 671,514 HBOS PLC............................103,723 1,599,827 Inchcape PLC........................ 12,979 478,545 Man Group PLC....................... 1,219 31,617 Persimmon PLC (Ordinary)............ 63,838 893,670 Shell Transport & Trading Co. PLC (Ordinary) (Registered)..........163,855 1,594,067 Tesco PLC (Ordinary)................220,783 1,261,429 Wolseley PLC (Ordinary)............. 60,652 1,276,322 ------------ $12,632,714 ------------ TOTAL EQUITY INTERESTS-- 101.1% (identified cost, $57,811,182)... $ 66,488,787 ------------ OTHER ASSETS, LESS LIABILITIES -- (1.1%) (717,797) ------------ NET ASSETS -- 100% $65,770,990 ============ * 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, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $57,811,182) (Note 1A) $ 66,488,787 Cash.................................... 97 Foreign currency, at value (cost $39,115) (Note 1)............................... 38,994 Receivable for fund shares sold......... 226,474 Dividends receivable.................... 65,996 Tax reclaim receivable.................. 69,449 Prepaid expenses........................ 21,928 Other assets............................ 5,203 ------------ Total assets.......................... $ 66,916,928 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 4,133 Demand note payable..................... 1,114,000 Payable to affiliate for Trustees' fees. 881 Transfer agent fee payable.............. 1,460 Accrued expenses and other liabilities.. 25,464 ------------ Total liabilities..................... $ 1,145,938 ------------ NET ASSETS................................ $ 65,770,990 ============ 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................... $ 71,581,205 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost).............. (16,449,420) Unrealized appreciation of investments and translation of assets and liabilities in foreign currencies (computed on the basis of identified cost)....................... 8,679,961 Undistributed net investment income..... 1,959,244 ------------ Net assets applicable to outstanding shares............................... $ 65,770,990 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 4,261,876 ============ NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 15.43 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1C): Dividend income......................... $ 1,284,123 Less: Foreign Taxes..................... (157,657) ------------ Investment income....................... $ 1,126,466 ------------ Expenses - Investment adviser fee (Note 2):........ $ 252,827 Administrator fee (Note 2):............. 53,726 Compensation of Trustees not employees of the investment adviser or administrator 7,607 Custodian fee (Note 1D):................ 79,131 Distribution expenses (Note 3):......... 79,008 Transfer and dividend disbursing agent fees 11,998 Printing................................ 2,081 Interest expense........................ 4,597 Shareholder communications.............. 5,430 Audit services.......................... 15,171 Legal services.......................... 3,620 Registration costs...................... 16,658 Miscellaneous .......................... 3,619 ------------ Total expenses.......................... $ 535,473 ------------ Deduct - Reduction of custodian fee (Note 1D):... $ (3,093) ------------ Net expenses............................ $ 532,380 ------------ Net investment income................... $ 594,086 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain - Investment transactions (identified cost basis)................................ $ 2,803,161 Foreign currency transactions.......... (23,178) ------------ Net realized gain....................... $ 2,779,983 Change in unrealized depreciation - Investments (identified cost basis).... (1,125,567) Foreign currency....................... (10,253) ------------ Net change in unrealized depreciation... $ (1,135,820) ------------ Net realized and unrealized gain of investments ........................... $ 1,644,163 ------------ Net increase in net assets from operations $ 2,238,249 ============ 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, 2005 December 31, 2004 - --------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income ..................................................... $ 594,086 $ 534,963 Net realized gain on investments and foreign currency transactions......... 2,779,983 8,968,316 Change in unrealized depreciation on investments and translation of assets and liabilities in foreign currencies ................................... (1,135,820) (73,598) -------------- -------------- Net increase in net assets resulting from operations..................... $ 2,238,249 $ 9,429,681 -------------- -------------- Distributions to shareholders From net investment income................................................. $ (704,313) $ (376,098) -------------- -------------- Total distributions...................................................... $ (704,313) $ (376,098) -------------- -------------- Net increase (decrease) in net assets from fund share transactions (Note 4) . $ 1,971,361 $ (1,373,901) -------------- -------------- Net increase in net assets................................................... $ 3,505,297 $ 7,679,682 NET ASSETS: At beginning of period....................................................... 62,265,693 54,586,011 -------------- -------------- At end of period............................................................. $ 65,770,990 $ 62,265,693 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD................................................................ $ 1,959,244 $ 2,069,471 ============== ==============
See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2005(4) 2004 2003(4) 2002(4) 2001(4) 2000(4) - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 15.070 $ 12.890 $ 9.840 $11.510 $15.180 $18.900 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss) .......... $ 0.140 $ 0.128 $ 0.073 $ 0.070 $ (0.023) $ 0.135 Net realized and unrealized gain (loss) 0.387 2.140 3.044 (1.740) (3.647) (3.455) --------- --------- --------- --------- --------- --------- Total income (loss) from investment operations...... $ 0.527 $ 2.268 $ 3.117 $ (1.670) $ (3.670) $ (3.320) --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Dividends from investment income....... $ (0.167) $ (0.088) $ (0.067) $ - $ - $ - Distributions from capital gains....... - - - - - (0.400) --------- --------- --------- --------- --------- --------- Total distributions................ $ (0.167) $ (0.088) $ (0.067) $ - $ - $ (0.400) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 15.430 $ 15.070 $12.890 $ 9.840 $11.510 $15.180 ========= ========= ========= ========= ========= ========= TOTAL RETURN(1) ............................ 3.49% 17.71% 31.96% (14.51%) (24.18%) (17.58%) RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000 omitted) $ 65,771 $ 62,266 $ 54,586 $ 50,835 $ 66,828 $110,868 Ratio of net expenses to average net assets 1.69%(6) 1.72% 1.80% 1.66%(2) 1.56%(2) 1.49%(2) Ratio of net expenses after custodian fee reduction to average net assets(5) 1.68%(6) 1.71% 1.80% 1.65%(2) - - Ratio of net investment income (loss) to average net assets 1.88%(6) 0.97% 0.81% 0.65% (0.18%) 0.76% Portfolio turnover rate .............. 42% 121% 77% 62%(3) 39%(3) 53%(3) - -------------------------------------------------------------------------------------------------------------------------------- (1)Total 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 the fund's share of its corresponding Portfolio's allocated expenses (Note 1). (3)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1). (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 (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, 2004, the Trust,for federal income tax purposes, had capital loss carryovers of $33,673,411 (WMBC) and $19,221,164 (WIBC) 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.Pursuan to the Code, such capital loss carryovers will expire as follows: 12/31 WSBC WMBC WIBC - ------------------------------------------------------------------------------ 2009 - $13,839,245 $ 3,647,716 2010 - 17,603,398 14,010,156 2011 - 2,230,768 1,563,292 - ------------------------------------------------------------------------------ At December 31, 2004, net capital losses of $15,195 for WIBC attributable to security transactions incurred after October 31, 2004 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, 2005 and for the six month period then ended have not been audited by an Independent Registered Public Accounting Firm 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, 2005, the effective annual rate was 0.80% for WIBC and 0.60% for WSBC and WMBC. Wright has been allocated expenses of $7,714, and $6,393 on behalf of WSBC and WMBC, 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, 2005, 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 reduction of its fees of $26,837 on behalf of WSBC. The investment adviser also assumed $7,714 and $6,393 of expenses on behalf of WSBC and WMBC, 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 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, 2005, 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, 2005 December 31, 2004 ------------------------------------------------------------ Shares Amount Shares Amount - -------------------------------------------------------------------------------------------------------------------------- WRIGHT SELECTED BLUE CHIP EQUITIES FUND-- Sold................................................... 1,349,870 $ 17,830,891 923,639 $ 11,222,820 Issued to shareholders in payment of distributions declared................................ 93,100 1,210,303 106,988 1,396,188 Redemptions............................................ (494,500) (6,417,828) (957,939) (11,635,131) ----------- -------------- ----------- -------------- Net increase ........................................ 948,470 $ 12,623,366 72,688 $ 983,877 =========== ============== =========== ============== WRIGHT MAJOR BLUE CHIP EQUITIES FUND Sold................................................... 427,460 $ 4,908,270 898,054 $ 9,604,327 Issued to shareholders in payment of distributions declared................................ 11,766 136,366 20,569 233,277 Redemptions............................................ (374,553) (4,301,686) (2,151,425) (23,011,945) ----------- -------------- ----------- -------------- Net increase (decrease).............................. 64,673 $ 742,950 (1,232,802) $ (13,174,341) =========== ============== =========== ============== WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Sold................................................... 492,839 $ 7,429,397 792,931 $ 10,418,061 Issued to shareholders in payment of distributions declared................................ 33,842 523,875 21,458 276,379 Redemptions............................................ (397,912) (5,981,911) (916,122) (12,068,341) ----------- -------------- ----------- -------------- Net increase (decrease).............................. 128,769 $ 1,971,361 (101,733) $ (1,373,901) =========== ============== =========== ==============
(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, 2005 - ------------------------------------------------------------------------------- WSBC WMBC WIBC - ------------------------------------------------------------------------------- Purchases..... $ 26,617,494 $ 23,087,805 $ 29,877,329 =========== =========== =========== Sales......... $ 16,421,254 $ 22,736,562 $ 26,674,855 =========== =========== =========== - ------------------------------------------------------------------------------- (6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2005, as computed on a federal income tax basis, are as follows: WSBC WMBC WIBC - ------------------------------------------------------------------------------- Aggregate cost $44,578,791 $52,689,563 $57,811,182 =========== =========== =========== Gross unrealized appreciation 11,899,495 12,936,511 8,962,641 Gross unrealized depreciation (396,058) (639,404) (285,036) ----------- ----------- ----------- Net unrealized appreciation $11,503,437 $12,297,107 $ 8,677,605 =========== =========== =========== - ------------------------------------------------------------------------------- The appreciation on currency for WIBC is $2,356. (7) LINE OF CREDIT The funds participate with other funds managed by Wright in a committed $10 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 $10 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 six months ended June 30, 2005. WIBC had $1,114,000 outstanding at June 30, 2005. (8) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Portfolio, political or financial instability or diplomatic and other developments which could affect such investments. WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - -------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED SECURITIES $ 69,077 FHLMC Gold Balloon #M90710 5.000% 03-01-07 $101.42 $ 70,059 4.9% 49,161 FHLMC Gold Balloon #M90724 5.500% 05-01-07 101.56 49,926 5.4% 210,994 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.52 212,096 4.5% 332,491 FHLMC Gold Balloon #M90802 4.000% 03-01-08 99.50 330,818 4.0% 1,165,485 FHLMC Gold Balloon #M90937 5.000% 08-01-09 101.45 1,182,442 4.9% 1,166,008 FHLMC Gold Balloon #M90941 4.500% 08-01-09 100.52 1,172,049 4.5% 398,164 FHLMC Gold Pool #M90796 4.000% 02-01-08 99.50 396,160 4.0% 397,964 FHLMC Pool #1B1291 4.397% 11-01-33 100.21 398,784 4.4% 849,783 FHLMC Pool #1G0233 5.018% 05-01-35 101.50 862,563 4.9% 85,036 FNMA Pool #254227 5.000% 02-01-09 101.08 85,953 4.9% 486,321 FNMA Pool #701043 4.056% 04-01-33 100.40 488,288 4.0% 836,590 FNMA Pool #809324 4.880% 02-01-35 101.05 845,415 4.8% U.S. GOVERNMENT AGENCIES $ 770,000 FFCB 2.500% 03-15-06 $ 99.17 $ 763,578 2.5% 3,135,000 FHLMC 3.250% 11-02-07 98.60 3,090,956 3.3% 795,000 FNMA 1.750% 06-16-06 98.14 780,196 1.8% 2,135,000 FNMA 3.000% 11-22-06 98.93 2,112,215 3.0% U.S. TREASURIES $ 5,435,000 U.S. Treasury Notes 4.625% 05-15-06 $100.97 $ 5,487,654 4.6% 1,535,000 U.S. Treasury Notes 3.000% 11-15-07 98.58 1,513,175 3.0% ----------- Total Investments (identified cost, $20,006,429)-- 98.5% $19,842,327 Other Assets, Less Liabilities-- 1.5% 309,545 ----------- Net Assets-- 100.0% $20,151,872 =========== FFCB - Federal Farm Credit Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association
See notes to financial statements WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of $20,006,429)(Note 1A) $ 19,842,327 Cash.................................... 190,335 Receivable for investments sold......... 13,195 Receivable for fund shares sold......... 4,842 Receivable from investment adviser...... 8,653 Interest receivable..................... 96,315 Prepaid expenses........................ 19,839 ------------ Total assets.......................... $ 20,175,506 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 1,862 Distributions payable................... 11,743 Payable to affiliate for Trustees' fees. 789 Transfer agent fee ..................... 1,713 Accrued expenses........................ 7,527 ------------ Total liabilities..................... $ 23,634 ------------ NET ASSETS................................ $ 20,151,872 ============ 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................... $ 21,841,116 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost)....................... (1,428,194) Unrealized depreciation on investments (computed on the basis of identified cost) (164,102) Distribution in excess of net investment income................................. (96,948) ------------ Net assets applicable to outstanding shares................................ $ 20,151,872 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING. 2,038,256 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST.................. $ 9.89 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 323,473 ------------ Expenses - - -- Investment adviser fee (Note 3)........ $ 46,145 Administrator fee (Note 3)............. 9,229 Compensation of Trustees not employees of the investment adviser or administrator 7,842 Custodian fee (Note 1C)................ 23,681 Distribution expenses (Note 4)......... 25,636 Transfer and dividend disbursing agent fees 10,172 Printing............................... 1,810 Interest expense....................... 810 Shareholder communications............. 2,967 Audit services......................... 14,160 Legal services......................... 2,443 Registration costs..................... 7,731 Miscellaneous.......................... 3,810 ------------ Total expenses........................ $ 156,436 ------------ Deduct - Reduction of custodian fee (Note 1C):.. $ (1,694) Preliminary allocation of expenses to the investment adviser (Note 3)........... (8,653) Preliminary reduction of investment adviser fee (Note 3).............................. (23,073) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... (25,636) ------------ Total deductions...................... $ (59,056) ------------ Net expenses.......................... $ 97,380 ------------ Net investment income............... $ 226,093 ------------ REALIZED AND UNREALIZED LOSS ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (86,013) Change in unrealized depreciation of investments......................... (13,767) ------------ Net realized and unrealized loss of investments........................... $ (99,780) ------------ Net increase in net assets from operations........................... $ 126,313 ============ 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, 2005 December 31, 2004 - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 226,093 $ 327,655 Net realized loss on investments........................................... (86,013) (42,275) Change in unrealized depreciation on investments........................... (13,767) (185,876) -------------- -------------- Net increase in net assets resulting from operations..................... $ 126,313 $ 99,504 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income................................................. $ (323,041) $ (735,924) -------------- -------------- Total distributions...................................................... $ (323,041) $ (735,924) -------------- -------------- Net decrease in net assets from fund share transactions (Note 5)............. $ (1,224,071) $ (5,348,388) -------------- -------------- Net decrease in net assets............................................... $ (1,420,799) $ (5,984,808) NET ASSETS: At beginning of period....................................................... 21,572,671 27,557,479 -------------- -------------- At end of period............................................................. $ 20,151,872 $ 21,572,671 ============== ============== DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................... $ (96,948) $ -- ============== ==============
See notes to financial statements Wright U.S. Government Near Term Fund (WNTB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - --------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001 2000 - --------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080 $ 9.930 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) ............... $ 0.107 $ 0.123 $ 0.165 $ 0.349 $ 0.480(7) $ 0.525 Net realized and unrealized gain (loss).. (0.042) (0.080) (0.102) 0.200 0.195(7) 0.143 --------- --------- --------- --------- --------- --------- Total income from investment operations $ 0.065 $ 0.043 $ 0.063 $ 0.549 $ 0.675 $ 0.668 --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income... $ (0.155) $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518) --------- --------- --------- --------- --------- --------- Total distributions.................... $ (0.155) $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 9.890 $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080 ========= ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 0.66% 0.43% 0.61% 5.42% 6.82% 6.94% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of period (000 omitted).. $ 20,152 $ 21,573 $ 27,557 $ 33,839 $ 36,025 $ 39,198 Ratio of net expenses to average net assets 0.97%(8) 0.96% 0.95% 0.97%(3) 0.97%(3) 0.98%(3) Ratio of net expenses after custodian fee reduction to average net assets(4)(6) 0.95%(8) 0.95% 0.95% 0.95%(3) 0.95%(3) 0.95%(3) Interest expense ....................... 0.01%(8) _ 0.01% - - - Ratio of net investment income to average net assets............................ 2.21%(8) 1.38% 1.75% 3.10% 4.40% 5.27% Portfolio turnover rate ................ 63% 138% 165% 64%(5) 92%(5) 65%(5) - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2005 and the years ended December 31, 2004, 2003, 2002, 2001, and 2000, 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 administration fees, or a combination thereof. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2005 2004 2003 2002 2001 2000 ---------------------------------------------------------------------- Net investment income per share........ $ 0.081 $ 0.097 $ 0.134 $ 0.323 $ 0.452 $ 0.511 ========= ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses ............................ 1.53%(8) 1.38% 1.28% 1.20%(3) 1.22%(3) 1.13%(3) ========= ========= ========= =========== ========= ========= Expense after custodian fee reduction(4) 1.51%(8) 1.37% 1.28% 1.18%(3) 1.20%(3) 1.10%(3) ========= ========= ========= =========== ========= ========= Interest expense..................... 0.01%(8) - 0.01% - - - ========= ========= ========= =========== ========= ========= Net investment income................ 1.65%(8) 0.96% 1.42% 2.87% 4.15% 5.13% ========= ========= ========= =========== ========= ========= - ---------------------------------------------------------------------------------------------------------------------------------- (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 (Note 1). (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 (Note 1). (6)Under a written agreement, Wright waives all or a portion of 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 TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (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 $100.98 $ 434,204 6.8% 380,000 Citibank Credit Card Master Trust 5.875% 03-10-11 106.19 403,513 5.5% 340,000 Citigroup Commercial Mortgage Trust, Series 2004-C2 A5 4.733% 10-15-41 101.30 344,418 4.7% 565,000 JP Morgan Chase Commercial Mortgage Securities, Series 2004-C3 A5 4.878% 01-15-42 102.31 578,050 4.8% 220,000 JP Morgan Chase Commercial Mortgage Securities, Series 2004-CBX A6 4.899% 11-12-39 102.41 225,305 4.8% 610,000 MBNA Master Credit Card Trust, Series 1999-BA 5.900% 08-15-11 106.43 649,246 5.5% ----------- Total Asset Backed Securities (identified cost, $2,652,493)-- 6.4% $2,634,736 ----------- CORPORATE BONDS AUTO $ 190,000 DaimlerChrysler North America Holding Co. 7.200% 09-01-09 $108.95 $ 207,005 6.6% BANKS $ 205,000 Bank One Corp., Note 2.625% 06-30-08 $ 95.72 $ 196,229 2.7% 390,000 Bayerische Landesbank, MTN 2.600% 10-16-06 98.34 383,526 2.6% 335,000 CIT Group, Inc. 7.750% 04-02-12 117.44 393,428 6.6% 320,000 National Rural Utilities 7.250% 03-01-12 116.09 371,501 6.2% 325,000 Royal Bank of Scotland 7.648% 08-31-49 127.58 414,624 6.0% 390,000 SLM Corp 2.300% 01-26-09 100.30 391,182 2.3% 360,000 U.S. Bancorp 5.100% 07-15-07 102.02 367,273 5.0% BLDG - RESIDENTIAL/COMMER $ 170,000 Centex Corp. 7.875% 02-01-11 $114.45 $ 194,573 6.9% BUILDING MATERIALS $ 95,000 Lowes Co., Inc. 8.250% 06-01-10 $117.69 $ 111,806 7.0% CABLE TV $ 170,000 Comcast Cable Comm HLDGS 8.375% 03-15-13 $122.11 $ 207,595 6.9% DIVERSIFIED FINANCIALS $ 375,000 Bear Stearns Co., Inc. 1.770% 09-27-07 $101.23 $ 379,622 1.7% 340,000 Boeing Capital Corp., Senior Note 7.375% 09-27-10 114.51 389,348 6.4% 230,000 Cendant Corp. 6.250% 01-15-08 104.37 240,057 6.0% 190,000 First Union Corp. 6.400% 04-01-08 105.64 200,708 6.1% 415,000 General Electric Cap Corp. 6.125% 02-22-11 108.78 451,424 5.6% 300,000 Goldman Sachs Group, Inc. 6.600% 01-15-12 111.29 333,870 5.9% 375,000 International Lease Finance Corp. 5.875% 05-01-13 106.33 398,725 5.5% ELECTRIC - INTEGRATED $ 80,000 American Electric Power Co., Inc. 6.125% 05-15-06 $101.78 $ 81,422 6.0% 205,000 Dominion Resources, Inc. 6.300% 03-15-33 109.12 223,704 5.8% 190,000 PPL Electric Utilities 5.875% 08-15-07 103.57 196,775 5.7% FOOD - RETAIL $ 180,000 Albertson's, Inc. 7.500% 02-15-11 $112.76 $ 202,975 6.7% 200,000 Safeway, Inc., Note 5.800% 08-15-12 105.27 210,530 5.5% FOOD, BEVERAGE & TOBACCO $ 380,000 Pepsico, Inc. 3.200% 05-15-07 $ 98.75 $ 375,232 3.2% INSTRUMENTS - CONTROLS $ 345,000 Honeywell International, Inc. 7.000% 03-15-07 $104.70 $ 361,212 6.7% MEDICAL $ 110,000 Amgen, Inc. 6.500% 12-01-07 $105.44 $ 115,986 6.2% 205,000 Wyeth 5.500% 03-15-13 105.41 216,091 5.2% MEDICAL - HMO $ 380,000 UnitedHealth Group, Inc. 4.875% 04-01-13 $102.68 $ 390,184 4.7% MULTIMEDIA $ 155,000 Time Warner Companies, Inc. 9.125% 01-15-13 $126.55 $ 196,146 7.2% OIL & GAS $ 460,000 BP Capital Markets PLC 2.750% 12-29-06 $ 98.44 $ 452,807 2.8% 320,000 Phillips Petroleum 6.650% 07-15-18 118.24 378,375 5.6% 190,000 Repsol International Finance 7.450% 07-15-05 100.18 190,335 7.4% 175,000 Sempra Energy 6.000% 02-01-13 106.76 186,829 5.6% 180,000 Transocean Sedco Forex 7.500% 04-15-31 131.15 236,062 5.7% PIPELINES $ 185,000 Duke Capital Corp., Senior Note 7.500% 10-01-09 $111.31 $ 205,922 6.7% PROPERTY/CASUALTY INSURANCE $ 205,000 Fund American Cos., Inc., Guaranteed Senior Note 5.875% 05-15-13 $104.32 $ 213,854 5.6% RETAIL $ 135,000 TJX Cos., Inc. 7.450% 12-15-09 $112.19 $ 151,450 6.6% TELECOM $ 180,000 AT&T Wireless 7.875% 03-01-11 $116.35 $ 209,432 6.8% 145,000 British Telecom PLC 8.875% 12-15-30 141.60 205,317 6.3% 170,000 Deutsche Telekom International Finance 8.500% 06-15-10 116.01 197,223 7.3% 170,000 France Telecom SA 9.250% 03-01-11 116.18 197,511 8.0% 190,000 Sprint Capital Corp. 6.125% 11-15-08 105.43 200,317 5.8% 325,000 Verizon Global Funding Corp. 7.750% 12-01-30 129.53 420,986 6.0% ----------- Total Corporate Bonds (identified cost, $11,445,545)-- 28.4% $11,649,173 ----------- GOVERNMENT INTERESTS MORTGAGE-BACKED SECURITIES $ 159,049 FHLMC Gold Pool #A10798 5.500% 05-01-33 $101.52 $ 161,463 5.4% 548,866 FHLMC Gold Pool #A13645 6.000% 09-01-33 102.64 563,345 5.8% 349,310 FHLMC Gold Pool #A32600 5.500% 05-01-35 101.49 354,518 5.4% 125,723 FHLMC Gold Pool #C01646 6.000% 09-01-33 102.64 129,040 5.8% 83,792 FHLMC Gold Pool #C01702 6.500% 10-01-33 103.99 87,140 6.3% 39,783 FHLMC Gold Pool #E00903 7.000% 10-01-15 104.70 41,654 6.7% 401,200 FHLMC Pool #1B1291 4.397% 11-01-33 100.21 402,026 4.4% 1,009,743 FHLMC Pool #1G0233 5.018% 05-01-35 101.50 1,024,928 4.9% 48,507 FHLMC Pool #27663 7.000% 06-01-29 105.39 51,119 6.6% 558,623 FNMA Pool #254865 4.500% 08-01-18 99.65 556,659 4.5% 1,044,410 FNMA Pool #254904 5.500% 09-01-33 101.49 1,059,982 5.4% 1,354,569 FNMA Pool #254915 4.500% 09-01-23 99.03 1,341,420 4.5% 64,434 FNMA Pool #479477 6.000% 01-01-29 102.81 66,245 5.8% 58,709 FNMA Pool #489357 6.500% 03-01-29 103.88 60,989 6.3% 63,194 FNMA Pool #535332 8.500% 04-01-30 109.08 68,935 7.8% 274,896 FNMA Pool #545317 5.500% 11-01-16 102.76 282,486 5.4% 333,375 FNMA Pool #545407 5.500% 01-01-32 101.53 338,489 5.4% 90,614 FNMA Pool #545782 7.000% 07-01-32 105.52 95,612 6.6% 647,519 FNMA Pool #545993 6.000% 11-01-32 102.62 664,479 5.8% 485,294 FNMA Pool #555531 5.500% 06-01-33 101.49 492,529 5.4% 601,625 FNMA Pool #576524 5.500% 01-01-29 101.76 612,242 5.4% 89,688 FNMA Pool #597396 6.500% 09-01-31 103.76 93,061 6.3% 48,547 FNMA Pool #634823 6.500% 03-01-32 103.70 50,341 6.3% 475,240 FNMA Pool #663689 5.000% 01-01-18 101.23 481,085 4.9% 393,534 FNMA Pool #701043 4.056% 04-01-33 100.40 395,126 4.0% 234,015 FNMA Pool #725550 5.000% 05-01-19 101.23 236,893 4.9% 278,833 FNMA Pool #738630 5.500% 11-01-33 101.49 282,990 5.4% 350,285 FNMA Pool #739319 6.000% 10-01-33 102.59 359,363 5.8% 486,454 FNMA Pool #739372 4.121% 09-01-33 99.14 482,274 4.2% 299,035 FNMA Pool #807804 5.500% 03-01-35 101.46 303,400 5.4% 991,688 FNMA Pool #809324 4.880% 02-01-35 101.05 1,002,149 4.8% 798,166 FNMA Pool #815302 5.500% 05-01-35 101.46 809,816 5.4% 105,630 GNMA II Pool #2671 6.000% 11-20-28 103.19 108,997 5.8% 17,664 GNMA II Pool #2909 8.000% 04-20-30 107.62 19,009 7.4% 50,210 GNMA II Pool #2972 7.500% 09-20-30 106.72 53,582 7.0% 19,175 GNMA II Pool #2973 8.000% 09-20-30 107.62 20,636 7.4% 963,211 GNMA II Pool #3442 5.000% 09-20-33 100.61 969,090 5.0% 1,038,279 GNMA II Pool #3530 5.500% 03-20-34 102.03 1,059,405 5.4% 425,890 GNMA Pool #374892 7.000% 02-15-24 106.37 453,040 6.6% 86,967 GNMA Pool #376400 6.500% 02-15-24 104.90 91,225 6.2% 122,934 GNMA Pool #379982 7.000% 02-15-24 106.37 130,771 6.6% 140,497 GNMA Pool #410081 8.000% 08-15-25 108.24 152,073 7.4% 67,730 GNMA Pool #427199 7.000% 12-15-27 106.13 71,878 6.6% 71,133 GNMA Pool #436214 6.500% 02-15-13 104.69 74,468 6.2% 37,158 GNMA Pool #442996 6.000% 06-15-13 103.89 38,603 5.8% 174,711 GNMA Pool #448490 7.500% 03-15-27 107.37 187,587 7.0% 141,694 GNMA Pool #458762 6.500% 01-15-28 104.72 148,378 6.2% 140,705 GNMA Pool #460726 6.500% 12-15-27 104.75 147,395 6.2% 77,198 GNMA Pool #463839 6.000% 05-15-13 103.89 80,200 5.8% 89,588 GNMA Pool #478072 6.500% 05-15-28 104.72 93,814 6.2% 40,776 GNMA Pool #488924 6.500% 11-15-28 104.72 42,699 6.2% 33,920 GNMA Pool #510706 8.000% 11-15-29 108.15 36,685 7.4% 133,363 GNMA Pool #581536 5.500% 06-15-33 102.27 136,387 5.4% U.S. GOVERNMENT AGENCIES $ 415,000 FFCB 2.500% 03-15-06 $ 99.17 $ 411,539 2.5% 380,000 FHLMC 3.250% 11-02-07 98.60 374,661 3.3% 865,000 FNMA 3.000% 11-22-06 98.93 855,769 3.0% 900,000 FNMA 2.875% 05-19-08 97.32 875,866 3.0% 770,000 FNMA 3.875% 11-17-08 99.40 765,359 3.9% 275,000 FNMA 6.250% 05-15-29 124.17 341,468 5.0% 320,000 Tennessee Valley Authority 6.000% 03-15-13 112.43 359,763 5.3% U.S. TREASURIES $ 1,870,000 U.S. Treasury Bonds 7.250% 05-15-16 $128.08 $ 2,395,135 5.7% 1,175,000 U.S. Treasury Bonds 6.125% 11-15-27 126.32 1,484,265 4.8% 1,212,776 U.S. Treasury Inflation Index Note 2.000% 07-15-14 103.07 1,250,061 1.9% ----------- Total Government Interests (identified cost, $25,912,734)-- 63.7% $26,181,606 ----------- Total Investments (identified cost, $40,010,772)-- 98.5% $40,465,515 Other Assets, Less Liabilities-- 1.5% 637,070 ----------- Net Assets-- 100.0% $41,102,585 =========== 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, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of $40,010,772)(Note 1A) $ 40,465,515 Cash.................................... 321,653 Receivable for investments sold......... 13,342 Receivable for fund shares sold......... 19,953 Interest receivable..................... 335,209 Prepaid expenses........................ 16,574 ------------ Total assets.......................... $ 41,172,246 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 17,583 Distributions payable................... 30,799 Payable to affiliate for Trustees' fees. 786 Transfer agent fee ..................... 1,823 Accrued expenses and other liabilities.. 18,670 ------------ Total liabilities..................... $ 69,661 ------------ NET ASSETS................................ $ 41,102,585 ============ 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................... $ 42,714,283 Accumulated undistributed net realized loss on investments (computed on the basis of identified cost)....................... (1,947,711) Unrealized appreciation on investments (computed on the basis of identified cost) 454,743 Distributions in excess of net investment income...................... (118,730) ------------ Net assets applicable to outstanding shares................................ $41,102,585 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING............................. 3,220,374 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST..................... $ 12.76 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 909,466 ------------ Expenses - Investment adviser fee (Note 3)........ $ 88,372 Administrator fee (Note 3)............. 13,747 Compensation of Trustees not employees of the investment adviser or administrator 7,841 Custodian fee (Note 1C)................ 31,310 Distribution expenses (Note 4)......... 49,096 Transfer and dividend disbursing agent fees 10,205 Printing............................... 1,719 Interest expense....................... 789 Shareholder communications............. 2,677 Audit services......................... 13,091 Legal services......................... 3,070 Registration costs..................... 10,549 Miscellaneous.......................... 3,560 ------------ Total expenses........................ $ 236,026 ------------ Deduct - Reduction of custodian fee (Note 1C):.. $ (4,748) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... $ (44,632) ------------ Total deductions....................... $ (49,380) ------------ Net expenses.......................... $ 186,646 ------------ Net investment income............... $ 722,820 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (22,149) Change in unrealized appreciation of investments......................... 129,630 ------------ Net realized and unrealized gain of investments........................... $ 107,481 ------------ Net increase in net assets from operations $ 830,301 ============ See Notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December 31, 2004 - -------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 722,820 $ 1,429,546 Net realized gain (loss) on investments.................................... (22,149) 212,872 Change in unrealized appreciation (depreciation) of investments............ 129,630 (319,493) -------------- -------------- Net increase in net assets resulting from operations..................... $ 830,301 $ 1,322,925 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income................................................. $ (831,878) $ (1,696,335) -------------- -------------- Total distributions...................................................... $ (831,878) $ (1,696,335) -------------- -------------- Net increase (decrease) in net assets from fund share transactions (Note 5).. $ 2,890,991 $ (3,730,440) -------------- -------------- Net increase (decrease) in net assets.................................... $ 2,889,414 $ (4,103,850) NET ASSETS: At beginning of period....................................................... 38,213,171 42,317,021 -------------- -------------- At end of period............................................................. $ 41,102,585 $ 38,213,171 ============== ============== DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD...................................... $ (118,730) $ (9,672) ============== ==============
See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001 2000 - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) Net asset value, beginning of period........ $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630 $ 12.100 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) ................ $ 0.233 $ 0.453 $ 0.483 $ 0.639 $ 0.709 (4) $ 0.712 Net realized and unrealized gain (loss).. 0.024 (0.011) (0.066) 0.461 (0.090)(4) 0.530 --------- --------- --------- --------- --------- --------- Total income from investment operations $ 0.257 $ 0.442 $ 0.417 $ 1.100 $ 0.619 $ 1.242 --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income..... $ (0.267) $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712) --------- --------- --------- --------- --------- --------- Total distributions.................... $ (0.267) $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 12.760 $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630 ========= ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 2.04% 3.52% 3.25% 9.03% 4.96% 10.62% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of period (000 omitted).. $ 41,103 $ 38,213 $ 42,317 $ 39,404 $ 50,620 $ 65,775 Ratio of net expenses to average net assets 0.97%(6) 0.96% 0.95% 0.96% 0.96% 0.96% Ratio of net expenses after custodian fee reduction to average net assets(3) (5) 0.95%(6) 0.95% 0.95% 0.95% 0.95% 0.95% Ratio of net investment income to average net assets............................ 3.68%(6) 3.58% 3.67% 4.92% 5.44% 5.84% Portfolio turnover rate.................. 36% 64% 131% 68% 38% 61% - ---------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2005 and for the years ended December 31, 2004, 2003, 2002, and 2001, 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: 2005 2004 2003 2002 2001 --------------------------------------------------------- Net investment income per share.......... $ 0.217 $ 0.429 $ 0.455 $ 0.621 $ 0.701 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses............................... 1.20%(6) 1.18% 1.17% 1.09% 1.02% ========= ========= ========= ========= ========= Expenses after custodian fee reduction(3) 1.18%(6) 1.17% 1.17% 1.08% 1.01% ========= ========= ========= ========= ========= Net investment income.................. 3.45%(6) 3.36% 3.46% 4.78% 6.38% ========= ========= ========= ========= ========= - --------------------------------------------------------------------------------------------------------------------------------- (2)Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each 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, 2005 (unaudited)
Face Coupon Maturity Market Current Amount Description Rate Date Price Value Yield - --------------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED SECURITIES - 86.9% $ 750,000 FHLB Disc. Corp. 3.100% 07-14-05 $ 99.89 $ 749,160 3.1% 9,832 FHLMC Gold Balloon #M90724 5.500% 05-01-07 101.56 9,985 5.4% 210,994 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.52 212,096 4.5% 110,830 FHLMC Gold Balloon #M90802 4.000% 03-01-08 99.50 110,273 4.0% 1,197,720 FHLMC Pool #11636 5.000% 01-01-19 101.23 1,212,502 4.9% 42,518 FNMA Pool #254227 5.000% 02-01-09 101.08 42,977 4.9% 40,835 FNMA Pool #254505 5.000% 11-01-09 101.08 41,276 4.9% 980,205 FNMA Pool #254686 5.500% 04-01-18 102.75 1,007,121 5.4% 730,420 FNMA Pool #254907 5.000% 10-01-18 101.23 739,403 4.9% 166,485 FNMA Pool #535131 6.000% 03-01-29 102.81 171,165 5.8% 1,959,500 FNMA Pool #634187 6.000% 02-01-22 103.07 2,019,705 5.8% 158,413 FNMA Pool #663689 5.000% 01-01-18 101.23 160,362 4.9% 716,414 FNMA Pool #673315 5.500% 11-01-32 101.52 727,301 5.4% 210,624 FNMA Pool #701043 4.056% 04-01-33 100.40 211,476 4.0% 545,211 FNMA Pool #729950 6.000% 12-01-33 102.59 559,342 5.8% 65,855 FNMA Pool #733750 6.310% 10-01-32 103.26 68,005 6.1% 1,002,851 FNMA Pool #801357 5.500% 08-01-34 101.52 1,018,090 5.4% 998,940 FNMA Pool #816108 5.500% 05-01-35 101.46 1,013,522 5.4% 493,942 FNMA Pool #816468 5.000% 03-01-20 101.21 499,943 4.9% 2,824,027 FNMA Pool #817170 6.000% 05-01-35 102.59 2,897,105 5.8% 718,514 FNMA Pool #821574 6.000% 06-01-35 102.59 737,107 5.8% 4,451 GNMA II Pool #1596 9.000% 04-20-21 109.74 4,885 8.2% 96,557 GNMA II Pool #2268 7.500% 08-20-26 106.95 103,266 7.0% 13,712 GNMA II Pool #2855 8.500% 12-20-29 108.74 14,911 7.8% 785,055 GNMA II Pool #3259 5.500% 07-20-32 102.08 801,398 5.4% 511,018 GNMA II Pool #3284 5.500% 09-20-32 102.08 521,657 5.4% 117,927 GNMA II Pool #601135 6.310% 09-20-32 103.63 122,208 6.1% 135,655 GNMA II Pool #601255 6.310% 01-20-33 103.64 140,595 6.1% 115,358 GNMA II Pool #608120 6.310% 01-20-33 103.64 119,559 6.1% 62,316 GNMA II Pool #723 7.500% 01-20-23 107.37 66,910 7.0% 140 GNMA Pool #009106 8.250% 05-15-06 102.24 143 8.1% 134 GNMA Pool #009889 7.250% 02-15-06 101.46 136 7.1% 323 GNMA Pool #012526 8.000% 11-15-06 101.82 329 7.9% 6,299 GNMA Pool #172558 9.500% 08-15-16 110.47 6,958 8.6% 2,731 GNMA Pool #176992 8.000% 11-15-16 107.71 2,941 7.4% 4,025 GNMA Pool #177784 8.000% 10-15-16 107.71 4,335 7.4% 13,263 GNMA Pool #192357 8.000% 04-15-17 108.38 14,374 7.4% 20,117 GNMA Pool #194057 8.500% 04-15-17 109.23 21,973 7.8% 11,400 GNMA Pool #194287 9.500% 03-15-17 110.80 12,631 8.6% 1,631 GNMA Pool #196063 8.500% 03-15-17 109.23 1,781 7.8% 617 GNMA Pool #208076 8.000% 04-15-17 108.38 668 7.4% 8,111 GNMA Pool #211231 8.500% 05-15-17 109.23 8,860 7.8% 5,819 GNMA Pool #212601 8.500% 06-15-17 109.23 6,356 7.8% 6,183 GNMA Pool #220917 8.500% 04-15-17 109.23 6,754 7.8% 5,408 GNMA Pool #223133 9.500% 07-15-17 110.80 5,993 8.6% 9,493 GNMA Pool #223348 10.000% 08-15-18 113.47 10,771 8.8% 1,529 GNMA Pool #223588 10.000% 12-15-18 113.47 1,735 8.8% $ 13,831 GNMA Pool #228308 10.000% 01-15-19 $113.68 $ 15,722 8.8% 3,130 GNMA Pool #230223 9.500% 04-15-18 111.08 3,477 8.6% 1,217 GNMA Pool #247473 10.000% 09-15-18 105.72 1,287 9.5% 3,836 GNMA Pool #247872 10.000% 09-15-18 113.47 4,353 8.8% 4,850 GNMA Pool #251241 9.500% 06-15-18 111.08 5,387 8.6% 9,916 GNMA Pool #260999 9.500% 09-15-18 111.08 11,015 8.6% 9,341 GNMA Pool #263439 10.000% 02-15-19 113.68 10,619 8.8% 1,558 GNMA Pool #265267 9.500% 08-15-20 111.55 1,738 8.5% 2,046 GNMA Pool #266983 10.000% 02-15-19 113.68 2,326 8.8% 3,381 GNMA Pool #273690 9.500% 08-15-19 111.34 3,765 8.5% 9,018 GNMA Pool #286556 9.000% 03-15-20 109.98 9,918 8.2% 6,520 GNMA Pool #301366 8.500% 06-15-21 110.05 7,175 7.7% 835 GNMA Pool #302723 8.500% 05-15-21 110.05 918 7.7% 8,612 GNMA Pool #302933 8.500% 06-15-21 110.05 9,478 7.7% 6,150 GNMA Pool #306693 8.500% 09-15-21 110.05 6,768 7.7% 11,927 GNMA Pool #308792 9.000% 07-15-21 110.14 13,137 8.2% 3,737 GNMA Pool #314222 8.500% 04-15-22 110.18 4,118 7.7% 9,067 GNMA Pool #315187 8.000% 06-15-22 108.28 9,817 7.4% 15,308 GNMA Pool #315754 8.000% 01-15-22 108.28 16,576 7.4% 27,982 GNMA Pool #316240 8.000% 01-15-22 108.28 30,299 7.4% 31,236 GNMA Pool #319441 8.500% 04-15-22 110.18 34,416 7.7% 12,857 GNMA Pool #325165 8.000% 06-15-22 108.28 13,922 7.4% 16,363 GNMA Pool #335950 8.000% 10-15-22 108.28 17,718 7.4% 33,936 GNMA Pool #350659 7.500% 06-15-23 107.87 36,607 7.0% 155,256 GNMA Pool #352001 6.500% 12-15-23 104.94 162,920 6.2% 69,635 GNMA Pool #352110 7.000% 08-15-23 106.43 74,109 6.6% 2,733,786 GNMA Pool #3556 5.500% 05-20-34 102.03 2,789,410 5.4% 101,770 GNMA Pool #368238 7.000% 12-15-23 106.43 108,310 6.6% 52,551 GNMA Pool #372379 8.000% 10-15-26 108.24 56,878 7.4% 124,583 GNMA Pool #410215 7.500% 12-15-25 107.53 133,964 7.0% 29,532 GNMA Pool #414736 7.500% 11-15-25 107.53 31,756 7.0% 110,968 GNMA Pool #420707 7.000% 02-15-26 106.22 117,875 6.6% 50,122 GNMA Pool #421829 7.500% 04-15-26 107.45 53,855 7.0% 20,414 GNMA Pool #431036 8.000% 07-15-26 108.24 22,095 7.4% 97,776 GNMA Pool #431612 8.000% 11-15-26 108.24 105,827 7.4% 36,086 GNMA Pool #442190 8.000% 12-15-26 108.24 39,057 7.4% 59,279 GNMA Pool #449176 6.500% 07-15-28 104.72 62,076 6.2% 212,541 GNMA Pool #458762 6.500% 01-15-28 104.72 222,567 6.2% 71,229 GNMA Pool #462623 6.500% 03-15-28 104.72 74,589 6.2% 171,541 GNMA Pool #469615 6.500% 10-15-28 104.72 179,633 6.2% 2,089,009 GNMA Pool #471369 5.500% 05-15-33 102.27 2,136,363 5.4% 208,942 GNMA Pool #472028 6.500% 05-15-28 104.72 218,798 6.2% 383,661 GNMA Pool #486482 6.500% 09-15-28 104.72 401,759 6.2% 224,192 GNMA Pool #492705 6.500% 02-15-29 104.64 234,589 6.2% 85,424 GNMA Pool #538314 7.000% 02-15-32 105.95 90,505 6.6% 190,538 GNMA Pool #570141 6.500% 12-15-31 104.59 199,289 6.2% 420,234 GNMA Pool #587080 6.500% 05-15-32 104.58 439,486 6.2% 1,086,132 GNMA Pool #595606 6.000% 11-15-32 103.29 1,121,885 5.8% $ $ 898,016 GNMA Pool #603250 5.500% 04-15-34 $102.25 $ 918,255 5.4% 1,066,753 GNMA Pool #608639 5.500% 07-15-24 102.40 1,092,381 5.4% 721,741 GNMA Pool #616829 5.500% 01-15-25 103.33 745,750 5.3% 796,693 GNMA Pool #619718 6.000% 05-15-34 103.25 822,572 5.8% 988,419 GNMA Pool #631623 5.500% 08-15-34 102.25 1,010,695 5.4% 996,196 GNMA Pool #640225 5.500% 04-15-35 102.22 1,018,319 5.4% 2,096,381 GNMA Pool #640940 5.500% 05-15-35 102.25 2,143,591 5.4% 116,656 GNMA Pool #780429 7.500% 09-15-26 107.49 125,391 7.0% 232,578 GNMA Pool #780845 6.500% 08-15-28 104.72 243,563 6.2% 139,427 GNMA Pool #781029 6.500% 05-15-29 104.69 145,966 6.2% 2,123,767 GNMA Pool #781032 6.500% 04-15-29 104.69 2,223,372 6.2% ----------- Total Investments (identified cost, $34,658,336)-- 101.3% $36,048,049 Other Assets, Less Liabilities-- (1.3%) (463,533) ----------- Net Assets-- 100.0% $35,584,516 =========== FHLB - Federal Home Loan Bank 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, 2005 (unaudited) - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of ($34,658,336)(Note 1A) $ 36,048,049 Cash.................................... 170,433 Receivable for investments sold......... 8,472 Receivable for fund shares sold......... 24,878 Receivable from investment adviser...... 9,644 Interest receivable..................... 172,353 Prepaid expenses........................ 17,846 ------------ Total assets.......................... $ 36,451,675 ------------ LIABILITIES: Payable for investments purchased....... $ 738,932 Payable for fund shares reacquired...... 64,502 Distributions payable................... 51,149 Payable to affiliate for Trustees' fees. 816 Transfer agent fee ..................... 1,652 Accrued expenses and other liabilities.. 10,108 ------------ Total liabilities..................... $ 867,159 ------------ NET ASSETS................................ $ 35,584,516 ============ 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................... $ 34,052,343 Accumulated undistributed net realized gain on investments (computed on the basis of identified cost)....................... 180,121 Unrealized appreciation on investments (computed on the basis of identified cost) 1,389,713 Distributions in excess of net investment income...................... (37,661) ------------ Net assets applicable to outstanding shares $ 35,584,516 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING........................... 3,644,547 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................... $ 9.76 ============ STATEMENT OF OPERATIONS Six Months Ended June 30, 2005 (unaudited) - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B): Interest income........................ $ 889,275 ------------ Expenses - Investment adviser fee (Note 3)........ $ 79,896 Administrator fee (Note 3)............. 15,979 Compensation of Trustees not employees of the investment adviser or administrator 7,685 Custodian fee (Note 1C)................ 34,157 Distribution expenses (Note 4)......... 44,387 Transfer and dividend disbursing agent fees 9,621 Printing............................... 1,086 Interest expense....................... 2,841 Shareholder communications............. 1,763 Audit services......................... 13,062 Legal services......................... 2,534 Registration costs..................... 9,940 Miscellaneous.......................... 3,429 ------------ Total expenses........................ $ 226,380 ------------ Deduct - Reduction of custodian fee (Note 1C):.. $ (3,698) Preliminary allocation of expenses to investment adviser (Note 3)........... (9,616) Preliminary reduction of distribution expenses by principal underwriter (Note 4)..... (44,387) ------------ Total deductions...................... $ (57,701) ------------ Net expenses.......................... $ 168,679 ------------ Net investment income............... $ 720,596 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 468,252 Change in unrealized depreciation of investments......................... (780,297) ------------ Net realized and unrealized loss of investments........................ $ (312,045) ------------ Net increase in net assets from operations $ 408,551 ============ See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) - -------------------------------------------------------------------------------
Six Months Ended Year Ended STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December31, 2004 - ---------------------------------------------------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 720,596 $ 1,366,512 Net realized gain on investments........................................... 468,252 1,091,575 Change in unrealized depreciation on investments........................... (780,297) (1,418,533) -------------- -------------- Net increase in net assets resulting from operations..................... $ 408,551 $ 1,039,554 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income................................................. $ (764,575) $ (1,491,857) From net realized gain..................................................... (69,145) (1,243,047) -------------- -------------- Total distributions...................................................... $ (833,720) $ (2,734,904) -------------- -------------- Net increase in net assets from fund share transactions (Note 5)............. $ 996,782 $ 376,737 -------------- -------------- Net increase (decrease) in net assets.................................... $ 571,613 $ (1,318,613) NET ASSETS: At beginning of period....................................................... 35,012,903 36,331,516 -------------- -------------- At end of period............................................................. $ 35,584,516 $ 35,012,903 ============== ============== UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD............................................... $ (37,661) $ 6,318 ============== ==============
See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) - -------------------------------------------------------------------------------
Six Months Ended Year Ended December 31, - ------------------------------------------------------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001(4) 2000(4) - ------------------------------------------------------------------------------------------------------------------------------ (unaudited) Net asset value, beginning of period........ $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460 $ 10.090 --------- --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) ............... $ 0.198 $ 0.447 $ 0.417 $ 0.565 $ 0.616 $ 0.631 Net realized and unrealized gain (loss).. (0.098) (0.112) (0.235) 0.231 0.120 0.372 --------- --------- --------- --------- --------- --------- Total income from investment operations $ 0.100 $ 0.335 $ 0.182 $ 0.796 $ 0.736 $ 1.003 --------- --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income..... $ (0.210) $ (0.482) $ (0.502) $ (0.555) $ (0.616) $ (0.633) Distributions from capital gains......... (0.020) (0.453) - - -- -- Tax return of capital.................... - - - (0.011) -- -- --------- --------- --------- --------- --------- --------- Total distributions.................. $ (0.230) $ (0.935) $ (0.502) $ (0.566) $ (0.616) $ (0.633) --------- --------- --------- --------- --------- --------- Net asset value, end of period.............. $ 9.760 $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460 ========= ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 1.02% 3.29% 1.73% 7.70% 7.18% 10.31% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of period (000 omitted).. $ 35,585 $ 35,013 $ 36,332 $ 59,077 $ 54,966 $68,015 Ratio of net expenses to average net assets 0.97%(8) 0.97% 0.95% 0.97%(3) 0.95%(3) 0.95%(3) Ratio of net expenses after custodian fee reduction to average net assets(6) (7) 0.95%(8) 0.95% 0.95% 0.95%(3) -- -- Interest expense......................... 0.02% 0.02% 0.01% -- -- -- Ratio of net investment income to average net assets................. 4.06%(8) 4.29% 4.43% 5.28% 5.83% 6.22% Portfolio turnover rate ................. 72% 27% 20% 36%(5) 4%(5) 6%(5) - ----------------------------------------------------------------------------------------------------------------------------------- (1)For the six months ended June 30, 2005 and for the years ended December 31, 2004, 2003, 2002, 2001, and 2000, 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: 2005 2004 2003 2002 2001 2000 ---------------------------------------------------------------------- Net investment income per share........ $ 0.183 $ 0.410 $ 0.401 $ 0.555 $ 0.609 $ 0.629 ========= ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses ............................ 1.27%(8) 1.28% 1.12% 1.06%(3) 1.02%(3) 0.97%(3) ========= ========= ========= ========= ========= ========= Expenses after custodian fee reduction(7 1.25%(8) 1.25% 1.12% 1.04%(3) -- -- ========= ========= ========= ========= ========= ========= Interest expense..................... -- 0.02% 0.01% -- -- -- ========= ========= ========= ========= ========= ========= Net investment income................ 3.76%(8) 3.99% 4.26% 5.19% 5.76% 6.20% ========= ========= ========= ========= ========= ========= - ------------------------------------------------------------------------------------------------------------------------------ (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 (Note 1). (4)Certain of the per share data are based on average shares outstanding. (5)Represents portfolio turnover rate at the fund's corresponding portfolio (Note 1). (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 (unaudited) (1)SIGNIFICANT ACCOUNTING POLICIES The Wright Managed Income Trust (the Trust), issuer of Wright U.S. Government Near Term Fund (WNTB) 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. 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 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, 2004, the Trust, for federal income tax purposes, had capital loss carryovers of $1,114,851 (WNTB), $1,755,347 (WTRB) and $274,864 (WCIF) 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 WCIF - ------------------------------------------------------------------------------- 2006 $37,825 - - 2007 297,581 - - 2008 273,806 $1,246,741 - 2010 - 508,606 - 2012 505,639 - $274,864 At December 31, 2004, net capital losses of $32,603 for WNTB and $6,402 for WCIF, attributable to security transactions incurred after October 31, 2004, 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, 2005 and for the period then ended have not been audited by an Independent Registered Public Accounting Firm, 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, 2005, the effective annual rate for WNTB, 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 $23,073 on behalf of WNTB. In addition, Wright has been allocated expenses of $8,653 and $9,616 on behalf of WNTB 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, 2005, the effective annual rate was 0.09% for WNTB, 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, 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 $25,636, $44,632, and $44,387 for the benefit of WNTB, 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, 2005, 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:
For the Six Months Ended Year Ended June 30, 2005 December 31, 2004 - --------------------------------------------------------------------------------------------------------------------------- Shares Amount Shares Amount - --------------------------------------------------------------------------------------------------------------------------- Wright U.S. Government Near Term Fund-- Sold................................................. 194,447 $ 1,928,671 499,602 $ 5,040,521 Issued to shareholders in payment of distributions declared............................................ 24,977 247,338 52,428 529,329 Redemptions.......................................... (343,026) (3,400,080) (1,079,475) (10,918,238) ----------- -------------- ----------- -------------- Net decrease..................................... (123,602) $ (1,224,071) (527,445) $ (5,348,388) =========== ============== =========== ============== Wright Total Return Bond Fund-- Sold................................................. 388,464 $ 4,938,995 673,399 $ 8,596,949 Issued to shareholders in payment of distributions declared............................................ 52,518 667,398 108,451 1,384,717 Redemptions.......................................... (213,426) (2,715,402) (1,077,968) (13,712,106) ----------- -------------- ----------- -------------- Net increase/(decrease).......................... 227,556 $ 2,890,991 (296,118) $ (3,730,440) =========== ============== =========== ============== Wright Current Income Fund-- Sold................................................. 776,843 $ 7,599,326 1,231,990 $ 12,684,308 Issued to shareholders in payment of distributions declared............................................ 53,576 524,449 159,979 1,619,251 Redemptions.......................................... (726,996) (7,126,993) (2,153,390) (22,192,828) Issued to Wright U.S. Govt. Intermediate Fund shareholders - _ 837,488 8,266,006 ----------- -------------- ----------- -------------- Net increase..................................... 103,423 $ 996,782 76,067 $ 376,737 =========== ============== =========== ==============
(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, 2005 ------------------------------------- WNTB WTRB WCIF - ------------------------------------------------------------------------------ Purchases-- Non-U.S. Obligations $12,834,771 $ 589,682 - =========== ========== ========== U.S. Gov't Obligations - $16,287,993 $26,225,042 =========== =========== ========== Sales-- Non-U.S. Obligations $ 1,823,890 $ 3,236,883 - ========== =========== ========== U.S.Gov't Obligations $12,299,855 $10,844,642 $25,122,561 ========== =========== ========== - ------------------------------------------------------------------------------- (7)FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2005, as computed on a federal income tax basis, are as follows: WNTB WTRB WCIF - ------------------------------------------------------------------------------- Aggregate cost $20,016,696 $40,220,707 $34,658,337 =========== =========== =========== Gross unrealized appreciation 6,956 590,853 1,468,508 Gross unrealized depreciation (181,325) (346,045) (78,796) ----------- ----------- ----------- Net unrealized appreciation/ (depreciation) $ (174,369) $ 244,808 $ 1,389,712 =========== =========== =========== - ------------------------------------------------------------------------------- (8) LINE OF CREDIT The funds participate with other funds managed by Wright in a committed $10 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 $10 million line of credit, is allocated among the participating funds at the end of each quarter. The funds did not have significant borrowings or allocated fees during the six months ended June 30, 2005. (9) TRANSFER OF NET ASSETS Prior to the opening of business on December 29, 2004, the Wright Current Income Fund (WCIF) acquired the net assets of Wright U.S. Government Intermediate Fund (WUSGI) pursuant to an Agreement and Plan of Reorganization dated December 20, 2004. In accordance with the agreement, WCIF issued 837,488 shares having a value of $8,266,006. As a result, WCIF issued 1.303 shares for each share of WUSGI. The transaction was structured for tax purposes to qualify as a tax free reorganization under the Internal Revenue Code. WUSGI's net assets at the date of the transaction was $8,266,006, including $(41,372) of unrealized depreciation. Directly after the merger, the combined net assets of WCIF were $34,959,687 with a net asset value of $9.87. BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT IN EVALUATING THE INVESTMENT ADVISORY CONTRACTS, THE INDEPENDENT TRUSTEES MET SEPARATELY FROM THE INTERESTED TRUSTEES AND REVIEWED AND CONSIDERED MATERIALS FURNISHED BY WRIGHT, INCLUDING INFORMATION REGARDING WRIGHT, ITS AFFILIATES AND PERSONNEL, OPERATIONS AND FINANCIAL CONDITION. THE INDEPENDENT TRUSTEES DISCUSSED WITH REPRESENTATIVES OF WRIGHT THE PORTFOLIO MANAGEMENT AND OPERATIONS OF THE FUNDS AND THE CAPABILITIES OF WRIGHT TO PROVIDE ADVISORY AND OTHER SERVICES TO EACH FUND. THE INDEPENDENT TRUSTEES CONSIDERED, AMONG OTHER THINGS, THE FOLLOWING: EQUITY FUNDS AND INCOME FUNDS - ------------------------------------------------------------------------------- o Whether the advisory arrangements are fair and reasonable relative to possible alternative arrangements. The Trustees concluded that the advisory fees paid by the funds are reasonable. o Whether advisory services are being provided as agreed to. The Trustees concluded that the services being provided by the adviser are as agreed to in the advisory contract. o Whether compensation paid by a Fund to the adviser is fair and reasonable in relation to the services provided and the charges by other advisers for similar services. The Trustees concluded that the compensation paid by the funds to the adviser is in the average range of compensation charged by other advisers for similar services and is reasonable. o Fees and expense ratios compared to similar funds. The Trustees concluded that the expense ratios of the funds are lower than the average for similar funds. o Performance and relationship of fees and performance. The Trustees concluded that in most cases the performance results of the funds were at least in the mid-range of similar funds while their expense ratios were generally lower. o Analysis of each Fund's profitability to the adviser. The Trustees concluded that the profitability to the adviser of each fund was reasonable and not excessive. o The adviser's financial condition and the overall organization of the adviser. o Sales and redemption data. The Trustees reviewed the information which had been provided to them relating to sales and redemptions and Wright's marketing strategies to try to increase assets under management. o The economic outlook and the general investment outlook in the relevant investment markets. The Trustees have received a presentation on the overall economic outlook and investment outlook of both equity and income markets at each Board meeting. o The resources devoted to compliance efforts undertaken by the adviser and the record of compliance with investment policies and restrictions and with policies on personal securities transactions. The Trustees have approved and met separately with the fund's Chief Compliance Officer. ADDITIONAL CONSIDERATIONS FOR EQUITY FUNDS - ------------------------------------------------------------------------------ o The allocation of brokerage and any benefits received by the adviser as a result of brokerage allocation. The Trustees reviewed the Trading Analysis included in the material provided in advance of the meeting. The Independent Trustees' Committee did not consider any single factor as controlling in their consideration of the renewal of the Investment Advisory Contracts, nor are the considerations described above all encompassing. Based on their consideration of all factors which they considered material, and with the assistance of independent counsel, the Independent Trustees' Committee concluded that the renewal of the Investment Advisory Contract with its current fee structure is in the interests of the shareholders. IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING WRIGHT MANAGED INVESTMENT FUNDS WRIGHT INVESTORS SERVICE, INC. WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC. EATON VANCE MANAGEMENT PRIVACY POLICY ------------------- Wright is committed to ensuring your financial privacy. Each of the above financial institutions has the following policy in effect with respect to nonpublic personal information about its customers: o The only such information we collect is information received from customers, through application forms or otherwise, and information which we necessarily receive in connection with your Wright fund transactions. o We will not disclose this information to anyone except as required or permitted by law. Such disclosure includes that made to other companies such as transfer agents and their employees and to our employees, in each case as necessary to service your account. o We have adopted policies and procedures (including physical, electronic and procedural safeguards) that are designed to protect the confidentiality of this information. For more information about Wright's privacy policies please feel free to call 1-800-888-9471. IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDERS DOCUMENTS ------------------------------------------------------------------ The Securities and Exchange Commission permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called "householding" and it helps eliminate duplicate mailings to shareholders. Wright, or your financial adviser, may household the mailing of your documents indefinitely unless you instruct Wright, or your financial adviser, otherwise. If you would prefer that your Wright documents not be householded, please contact Wright at 1-800-888-9471, or your financial adviser. Your instructions that householding not apply to delivery of your Wright documents will be effective within 30 days of receipt by Wright or your financial adviser. PORTFOLIO HOLDINGS -------------------- Each Wright Fund will file a schedule of its portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Wright website www.wisi.com, by calling Wright at 1-800-888-9471 or in the EDGAR database on the SEC's website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC's public reference room in Washingto, D.C. (call 1-800-732-0330 or informaiton on the operation of the public reference room). PROXY VOTING POLICIES AND PROCEDURES ------------------------------------------- From time to time funds are required to vote proxies related to the securities held by the funds. The Wright Managed Funds vote proxies according to a set of policies and procedures approved by the Funds' Board. You may obtain a description of these policies and procedures and information on how the Funds voted proxies relating to Portfolio securities during the most recent 12-month period ended June 30 without charge, upon request, by calling 1-800-888-9471. This description is also available on the Securities and Exchange Commissions website at http://www.sec.gov. SEMI-ANNUAL REPORT OFFICERS AND TRUSTEES OF THE FUNDS Peter M. Donovan, President and Trustee A. M. Moody III, Vice President and Trustee Judith R. Corchard, Vice President James J. Clarke, Trustee Dorcas R. Hardy, Trustee Richard E. Taber, Trustee Janet Sanders, Secretary 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 06461 PRINCIPAL UNDERWRITER Wright Investors' Service Distributors, Inc. 440 Wheelers Farms Road Milford, Connecticut 06461 (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 The registrant has adopted a code of ethics applicable to its Principal Executive Officer and Principal Financial Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-888-9471. 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 Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not required in Filing. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not required in Filing ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not required in Filing ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Effective March 17,2005, the Governance Committee of the Board of Trustees revised the procedures by which a Fund's shareholders may recommend nominees to the registrant's board of Trustees to add the following (highlighted): The Governance Committee shall, when identifying candidates for the position of Independent Trustee, consider any such candidate recommended by a shareholder of a Fund if such recommendation contains (i) sufficient background information concerning the candidate, INCLUDING EVIDENCE THE CANDIDATE IS WILLING TO SERVE AS AN INDEPENDENT TRUSTEE IF SELECTED FOR THE POSITION; AND (II) is received in a sufficiently timely manner (and in any event no later than the date specified for receipt of shareholder proposals in any applicable proxy statement with respect to a Fund). Shareholders shall be directed to address any such recommendations IN WRITING to the attention of the Governance Committee, c/o the Secretary of the Fund. THE SECRETARY SHALL RETAIN COPIES OF ANY SHAREHOLDER RECOMMENDATIONS WHICH MEET THE FOREGOING REQUIREMENTS FOR A PERIOD OF NOT MORE THAN 12 MONTHS FOLLOWING RECEIPT. THE SECRETARY SHALL HAVE NO OBLIGATION TO ACKNOWLEDGE RECEIPT OF ANY SHAREHOLDER RECOMMENDATIONS. ITEM 11. 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 12. EXHIBITS (a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2). (a) (2) Treasurer's and President's Section 302 certification. (b) Combined 906 certification. 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 Total Return Bond Fund and Wright Current Income Fund) - ----------------------------------------------------------------------- By: /s/ Peter M. Donovan --------------------- Peter M. Donovan President Date:August 24, 2005 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, 2005 By: /s/ Peter M. Donovan --------------------- Peter M. Donovan President Date:August 24, 2005 EX-99.CERT 2 incncsr302cert0605.txt INCOME TRUST 302 CERTIFICATION FOR 06/30/2005 FORM N-CSR ITEM 12(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 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date:August 24, 2005 /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 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date:August 24, 2005 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President EX-99.906 CERT 3 incncsr906cert0605.txt INCOME TRUST 906 CERTIFICATION FOR 06/30/2005 FORM N-CSR ITEM 1211(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 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 Total Return Bond Fund and Wright Current Income Fund) on Form N-CSR for the period ended June 30, 2005 (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 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 Total Return Bond Fund and Wright Current Income Fund) Date:August 24, 2005 /s/ James L. O'Connor - ------------------------ James L. O'Connor Treasurer Date:August 24, 2005 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President -----END PRIVACY-ENHANCED MESSAGE-----