N-CSR 1 incformncsr1207a.txt INCOME TRUST AUDITED FINANCIALS - DEC. 31,2007 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) Janet E. Sanders --------------------- 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 December 31, 2007 --------------------- Date of Reporting Period ------------------------------------------------------------------------------ ITEM 1. REPORTS TO STOCKHOLDERS THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS ANNUAL REPORT DECEMBER 31, 2007 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 Total Return Bond Fund o Wright Current Income Fund THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS ------------------------------------------------------------------------------- THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS CONSIST OF THREE EQUITY FUNDS FROM THE WRIGHT MANAGED EQUITY TRUST AND TWO FIXED INCOME FUNDS FROM THE WRIGHT MANAGED INCOME TRUST. EACH OF THE FIVE 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"). Over 31,000 global companies (covering 63 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 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 Fund 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, sectors and countries. TWO FIXED-INCOME FUNDS 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 Fund's benchmark is the Lehman GNMA Backed Bond Index. TABLE OF CONTENTS ------------------------------------------------------------------------------ INVESTMENT OBJECTIVES................................inside front & back cover LETTER TO SHAREHOLDERS.......................................................2 MANAGEMENT DISCUSSION........................................................3 PERFORMANCE SUMMARIES........................................................8 FUND EXPENSES...............................................................13 MANAGEMENT AND ORGANIZATION ................................................57 BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT......59 IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING ........................................60 FINANCIAL STATEMENTS THE WRIGHT MANAGED EQUITY TRUST WRIGHT SELECTED BLUE CHIP EQUITIES FUND Portfolio of Investments..................15 Statement of Assets & Liabilities....... 18 Statement of Operations...................18 Statements of Changes in Net Assets.......19 Financial Highlights......................20 WRIGHT MAJOR BLUE CHIP EQUITIES FUND Portfolio of Investments..................21 Statement of Assets & Liabilities.........24 Statement of Operations...................24 Statements of Changes in Net Assets.......25 Financial Highlights......................26 WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Portfolio of Investments..................27 Statement of Assets & Liabilities.........29 Statement of Operations...................29 Statements of Changes in Net Assets.......30 Financial Highlights......................31 NOTES TO FINANCIAL STATEMENTS...............32 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................36 FEDERAL TAX INFORMATION.....................37 THE WRIGHT MANAGED INCOME TRUST WRIGHT TOTAL RETURN BOND FUND Portfolio of Investments..................38 Statement of Assets & Liabilities.........42 Statement of Operations...................42 Statements 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 Statements of Changes in Net Assets.......49 Financial Highlights......................50 NOTES TO FINANCIAL STATEMENTS...............51 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................55 FEDERAL TAX INFORMATION.....................56 LETTER TO SHAREHOLDERS ------------------------------------------------------------------------------- January 2008 Dear Shareholders: Considering the economic slowdown, housing's woes and credit market uncertainties, U.S. stocks still managed to post positive returns for all of 2007, ranging from 5.5% for the S&P 500 to 11% for NASDAQ - ahead of inflation if not up to their long-term norms. Markets outside the U.S. were also buffeted by concerns about credit markets and economic prospects in the fourth quarter, but they managed a double-digit rate of return last year (an average return of 4% in local currency terms plus 8% from the weaker dollar). Global economic growth was probably a bit better last year than was expected 12 months ago, and even in the fourth quarter, according to Federal Reserve Chairman Ben Bernanke, growth appeared to "have continued at a moderate pace." After the third quarter's nearly 5% growth, a slowdown was all but inevitable. The question is how far will this slowdown take the economy in 2008? December's surprisingly puny 18,000 increase in U.S. non-farm payroll employment suggests that this slowdown could reach the proportions of recession, although weather and other seasonal factors may have exaggerated this weakness. Our forecast is that the U.S. economy, with help from the Fed, will continue to advance through 2008, if at a below-trend growth rate. During the fourth quarter, the stock markets of the world saw a renewal of last summer's increased market volatility and stock price weakness. Unlike the third quarter, markets failed to rebound from their mid-quarter sell-off. As a result, the stock market averages suffered their first quarterly decline since 2006. The market's main concerns were really nothing new - declining house prices and tightening credit conditions - but as 2007 wound down investors were unable to shake fears that the effects of the mortgage meltdown and housing slump were going to cut more deeply into economic growth than previously expected. Though the Federal Reserve reduced interest rates by one percentage point in the final four months of the year and took other actions to ease the credit crunch, investors worried that it was too little, too late. Record oil prices were another reason to suspect that the U.S. economy might fall into recession, inflation or both. Due largely to losses for the banks and homebuilders, profits for S&P 500 companies declined in the third quarter of 2007 and Q4 earnings likely fell as well, the first back-to-back retreats in earnings in almost six years. U.S. bonds outperformed stocks in the fourth quarter of 2007 and for the full year, recording their best showing since 2002. Interest rate reductions by the Fed produced a significant steepening of the yield curve over the second half, with the spread between 10-year and two-year Treasuries reaching 100 basis points as 2008 began. Anxious investors sought the safety of Treasuries, which returned nearly 4% for the quarter and 9% for all of 2007, outpacing mortgages, corporates and other spread securities as well as the S&P 500. Early in 2008, it is clear that the "re-pricing of risk" that got under way last summer is not yet over and probably won't be until economic prospects begin to recover. In this regard, we believe that the Federal Reserve is beginning to get the better of the credit crunch, a process that will probably require another 100 basis points of interest rate cuts ahead. Other pluses for stocks are the relatively attractive price/earnings multiples that prevail in the market today and the expectation that investors will soon begin to look beyond the current economic travails to improving economic and profit prospects out in the second half and in 2009. If so, stock returns can still be expected to approximate 10% in over the coming 12 months, despite their awkward start in January. In any case, investors will be well served by keeping sight of their long-term objectives and keeping faith in high-quality long-term securities; that has been a profitable course through U.S. history. As always, I invite your suggestions on how we can better serve your investment and wealth management needs. Sincerely, /s/ Peter M. Donovan ---------------------- Peter M. Donovan President MANAGEMENT DISCUSSION ------------------------------------------------------------------------------- EQUITY FUNDS IN THE FOURTH QUARTER OF 2007, U.S. STOCKS HAD THEIR FIRST LOSS SINCE THE SECOND QUARTER OF 2006, BUT THEY STILL PROVIDED INVESTORS WITH POSITIVE REAL RETURNS FOR THE YEAR. AFTER A GOOD FIRST HALF OF THE YEAR, IN THE SECOND HALF OF 2007 MARKET VOLATILITY PICKED UP AS INVESTORS' ENTHUSIASM FOR EQUITIES WAS DAMPENED BY CONCERNS ABOUT THE SUB-PRIME MORTGAGE CRISIS AND THE HOUSING SLUMP. IN THE THIRD QUARTER, INVESTORS WERE ABLE TO MUSTER ENOUGH CONFIDENCE TO SEND STOCKS HIGHER FOR THE PERIOD. BUT AS 2007 WOUND DOWN, IT BECAME CLEARER THAT THE MORTGAGE AND HOUSING MELTDOWNS WERE GOING TO LAST LONGER AND CUT DEEPER INTO ECONOMIC GROWTH THAN WAS PREVIOUSLY EXPECTED. THOUGH THE FED CONTINUED TO REDUCE INTEREST RATES AND TAKE OTHER ACTIONS TO EASE THE EFFECTS OF THE CREDIT CRUNCH, THERE WERE CONCERNS THAT IT WAS TOO LITTLE, TOO LATE. RECORD OIL PRICES PROVIDED ECONOMISTS ANOTHER REASON TO WORRY ABOUT THE SUSTAINABILITY OF THE EXPANSION AS 2007 DREW TO A CLOSE. PROFITS FOR S&P 500 COMPANIES DECLINED IN THE THIRD QUARTER OF 2007 AND PROBABLY FELL IN Q4 AS WELL, THE FIRST BACK-TO-BACK RETREATS IN EARNINGS IN ALMOST SIX YEARS. EVEN WITH THESE NEGATIVE DEVELOPMENTS, THE MOOD IN THE STOCK MARKET WAS NOT ENTIRELY BLEAK IN THE FOURTH QUARTER. THE DOW JONES INDUSTRIAL AVERAGE AND THE S&P 500 REACHED ALL-TIME HIGHS IN OCTOBER AND THE NASDAQ CLOSED OCTOBER AT A HIGH FOR THE BULL MARKET THAT STARTED IN 2002. BUT BY NOVEMBER 26, THE S&P 500 WAS DOWN 10% IN PRICE FROM ITS OCTOBER PEAK. BY THE END OF THE QUARTER, THE S&P HAD RECOVERED 4% FROM THAT LOW POINT BUT RETURNS WERE STILL NEGATIVE FOR THE QUARTER: THE S&P 500 LOST 3.3% (TOTAL RETURN), THE DOW A LITTLE MORE AND NASDAQ ABOUT HALF AS MUCH. THE S&P MIDCAP 400 LOST LESS THAN 3% IN Q4, BUT THE SMALLCAP 600 LOST 6.4%. WITH THE EXCEPTION OF THE SMALLCAP 600, WHICH WAS JUST ABOUT UNCHANGED FOR THE YEAR, THESE U.S. MARKET AVERAGES ACHIEVED RESPECTABLE (IF SOMEWHAT BELOW NORMAL) RETURNS FOR ALL OF 2007, RANGING FROM 5.5% FOR THE S&P 500 TO 10.7% FOR NASDAQ. MARKETS OUTSIDE THE UNITED STATES ALSO SUFFERED FROM CONCERNS ABOUT CREDIT MARKETS AND ECONOMIC PROSPECTS, BUT THE DEPRECIATION OF THE DOLLAR WORKED TO THE BENEFIT OF U.S. INVESTORS IN FOREIGN STOCKS. THE MSCI WORLD EX U.S. INDEX LOST 2.8% IN LOCAL CURRENCIES IN THE FOURTH QUARTER, BUT IN DOLLAR TERMS THE LOSS WAS CUT TO 1.6%, ABOUT HALF THE S&P 500'S. FOR ALL OF 2007, THE MSCI WORLD EX U.S. INDEX'S RETURN OF 4.0% LOCAL WAS BOOSTED TO 12.4% IN DOLLARS, MORE THAN TWICE THE S&P 500'S 5.5% RETURN. WE BELIEVE AT THIS TIME THAT THE U.S. ECONOMY WILL BE ABLE TO AVOID A RECESSION IN 2008, BUT EARLY IN THE YEAR IT COULD BE A CLOSE CALL. MORE RATE CUTS ARE LIKELY FROM THE FED IN 2008, WHICH WILL HELP SUSTAIN THE EXPANSION OR LIMIT ANY DOWNTURN. BUT EVEN IF THE ECONOMY CONTINUES TO GROW, WE EXPECT THAT THE TREND OF DOWNWARD REVISIONS TO PROFIT EXPECTATIONS WILL CONTINUE FOR A WHILE AND THAT EARNINGS IN THE FIRST TWO QUARTERS OF 2008 WILL DECLINE MODESTLY. BUT BEFORE 2008 GETS TOO OLD, INVESTORS SHOULD BEGIN LOOKING FORWARD TO BETTER EARNINGS LATE IN THE YEAR AND IN 2009. ANOTHER PLUS FOR STOCKS IS THEIR REASONABLE VALUATION AFTER INVESTORS PUSHED THE FORWARD P/E MULTIPLE DOWN TO NEAR ITS CYCLE LOW IN 2007. WITH THE FULL IMPACT OF CREDIT PROBLEMS STILL UNCERTAIN AND FURTHER REDUCTIONS IN PROFIT EXPECTATIONS LIKELY, THE HEIGHTENED VOLATILITY SEEN IN THE MARKETS IN LATE 2007 PERSISTED IN EARLY 2008. AFTER STOCKS RETREATED IN JANUARY, THIS BUMPY RIDE COULD PRODUCE U.S. EQUITY RETURNS IN THE RANGE OF 10%, MOSTLY FROM EARNINGS GROWTH AND DIVIDENDS, OVER THE NEXT 12 MONTHS. MANY INTERNATIONAL MARKETS ARE CURRENTLY ATTRACTIVELY VALUED AND THE INCLUSION OF INTERNATIONAL EQUITIES IN PORTFOLIOS IS LIKELY TO ENHANCE RETURNS. FOR LONG-TERM INVESTORS, WE CONTINUE TO RECOMMEND A STRATEGY THAT INCLUDES DIFFERENT ASSET CLASSES AS THE MOST PRUDENT COURSE IN A RISKY INVESTMENT ENVIRONMENT. 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Total Return Year Year Year Year Year Year Year Year Year Year -------------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund (WSBC) 11.6% 3.8% 11.1% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1% Wright Major Blue Chip Equities Fund (WMBC) 6.0% 11.6% 6.2% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4% Wright International Blue Chip Equities Fund (WIBC) 5.5% 28.5% 21.1% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND The S&P MidCap 400 outperformed the S&P 500 for the full year and fourth quarter of 2007. The Wright Selected Blue Chip Fund (WSBC), which is a mid-cap blend fund, outperformed the S&P MidCap 400 in the first half of 2007, lagged slightly in Q3, and then came back with a smaller loss than the index in Q4. WSBC lost 2.4% in the fourth quarter of 2007 compared to a loss of 2.7% for the MidCap 400. For all of 2007, WSBC returned 11.6% compared to 8.0% for the S&P MidCap 400. For the quarter and the year, the bigger stocks in the S&P MidCap 400 generally outperformed the smaller ones, a plus for the WSBC, which has a larger median market cap than the benchmark. Another plus for the quarter and the year was the Fund's superior stock selection in the financial and technology sectors. Although the benchmark's financial sector posted losses of more than 10% for the quarter and the year, the WSBC's financial holdings had positive returns for both periods as it reduced its holdings of issues with exposure to real estate and subprime mortgages. For the full year, the Fund also benefited from strong stock selection in the consumer discretionary sector (reflecting the early sale of homebuilders) and overweight positions in energy and industrials, two of the best sectors in the S&P MidCap 400. The S&P MidCap 400's P/E in terms of forward earnings was higher than the S&P 500's at the end of 2007, but despite the higher valuation, mid-cap stocks still look attractive because of their better forecast earnings growth. WSBC is well positioned in the mid-cap area with a tilt toward the more substantial companies in the S&P MidCap 400. WSBC companies have a lower forward P/E than those in the MidCap 400 as well as better expected long-term earnings growth. WIS continues to advise diversity in investment portfolios and sees mid-cap stocks as likely to make a positive contribution to total portfolio returns going forward. 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. For all of 2007, WMBC returned 6.0%, exceeding the 5.5% return for the S&P 500. The year's outperformance compared to the S&P benchmark mostly reflects a smaller loss in the fourth quarter for the WMBC (-2.4%) than incurred by the S&P 500 (-3.3%). For the fourth quarter and the full year, the big stocks in the S&P 500 outperformed the small stocks, and this worked to WMBC's advantage, since the Fund's holdings have a larger median market cap than the S&P 500. WMBC's strong showing in the fourth quarter, which was key to its outperformance for the year, was largely due to its relatively good showings in the weak financial and consumer discretionary sectors, where the Fund had smaller losses than the S&P 500. This reflected superior stock selection, since the Fund's sector weights were fairly close to the index's. In the consumer discretionary sector, an underweighting in home builders helped performance, while the financial sector benefited from timely purchases of Freddie Mac and Fannie Mae, which rebounded late in the quarter. Another factor in the Fund's outperformance in 2007 was its strong stock selection in the industrial sector, which was evident throughout the year. Among specific securities contributing to WMBC's outperformance in this sector were Cummins, which returned more than 100% for the year, Paccar (+30%) and Deere (+56%). The stock market has gotten off to a shaky start in 2008. Given the high level of uncertainty about the economic environment as the year began, along with the prospect of a couple more quarters of unfavorable profit comparisons, we wouldn't be surprised to see more bouts of market volatility in the months ahead. With its bias toward the higher-quality issues in the S&P 500, the WMBC is well positioned for a more risk-averse environment. At the end of the fourth quarter, WMBC holdings were priced at lower current and forward P/E multiples than the S&P 500, with similar expected earnings growth. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND U.S. investors benefited from including international stocks in diversified portfolios in 2007. The MSCI World ex U.S. stock index outperformed the S&P 500 in dollar terms in each quarter of last year. The Wright International Blue Chip Fund (WIBC) lost 3.9% in the fourth quarter of 2007, a larger loss than that of the MSCI World ex U.S. index (-1.6%). For all of 2007, over which period the S&P 500 returned 5.5%, WIBC returned 5.5%, compared to 12.4% for the MSCI benchmark. In the fourth quarter and the full year of 2007, WIBC's relative results were hampered primarily by weakness in the consumer discretionary and financial sectors. Financial stocks were weak globally because of the fallout from the sub-prime mortgage crisis, but into the fourth quarter the Fund remained slightly overweight in financials because of their attractive valuations. While the stocks held in the Fund did not have writedown-related issues, they were hurt by the negative sentiment. WIBC's exposure in U.K. homebuilders and Japanese blue-chip auto companies hurt in the consumer discretionary sector. On the plus side for the quarter and the year, the Fund benefited from the strong showing of its holdings in the energy and material sectors, which did well. Late in the year, holdings in defensive names such as telecom companies also helped offset some of the weakness in the financial sector, while in the first half of the year, takeover news and speculation gave a boost to some of the Fund's holdings. Going into the new year, WIBC had reduced its holdings in the financial and consumer discretionary sectors, which are now underweight compared to the MSCI benchmark. The Fund has taken a more defensive stance by investing in the telecom, utilities and consumer staples sectors. These changes resulted in reduced holdings in Canada and the U.K., with increased weighting in the Eurozone and Hong Kong. Although the global economy is likely to slow in the first half of 2008, earnings prospects for foreign companies look relatively good for the coming 12 months. In addition, foreign stocks offer attractive valuations, with an aggregate P/E multiple lower than the S&P 500's. We continue to see the inclusion of international stocks as likely to enhance returns in diversified investment portfolios. FIXED-INCOME FUNDS FOR THE U.S. BOND MARKET, 2007 WAS THE BEST YEAR SINCE 2002. IN THE FIRST HALF OF THE YEAR, BONDS RETURNED JUST 1.0%. IN THE SECOND HALF, HOWEVER, BONDS RALLIED AS INVESTORS' ENTHUSIASM FOR EQUITIES WANED IN THE FACE OF CONCERNS THAT THE MORTGAGE MELTDOWN AND HOUSING SLUMP WERE GOING TO DRIVE THE ECONOMY INTO RECESSION. IN THE THIRD QUARTER, THE FED BEGAN TO CUT INTEREST RATES (A TOTAL OF 100 BASIS POINTS ON THE FED FUNDS TARGET BY YEAR END) AND TAKE OTHER STEPS TO EASE THE CREDIT CRUNCH (INCLUDING INSTITUTING A "TERM AUCTION FACILITY" DESIGNED TO IMPROVE BANKS' SHORT-TERM LIQUIDITY). BUT INVESTORS WERE CONCERNED THAT THE FED WAS BEHIND THE CURVE. CONSUMER PRICE INFLATION MOVED UP TOWARD THE END OF 2007, EDGING ABOVE 2.0% (THE CEILING ON THE FED'S COMFORT ZONE), BUT BY AND LARGE INVESTORS WERE MORE CONCERNED ABOUT THE POSSIBILITY OF RECESSION THAN ABOUT THE RISK OF HIGHER INFLATION. BONDS OUTPERFORMED STOCKS IN THE FOURTH QUARTER AND IN THE FULL YEAR 2007. THE YIELD CURVE MOVED LOWER ALONG ITS ENTIRE LENGTH IN 2007; THE FED'S EASING ACTIONS ALSO CONTRIBUTED TO A STEEPENING OF THE YIELD CURVE FOR THE FOURTH QUARTER AND THE YEAR. BY THE END OF THE YEAR, THE SPREAD BETWEEN THE YIELDS ON THE 10-YEAR TREASURY BOND (4.03%) AND THE TWO-YEAR TREASURY BOND (3.05%) WAS CLOSE TO 100 BASIS POINTS, COMPARED TO AN ESSENTIALLY FLAT CURVE A YEAR AGO. THE YIELD ON THE 90-DAY T-BILL WAS IN THE 3% RANGE FOR PERIODS DURING THE SECOND HALF OF THE YEAR WHEN INVESTOR FEARS ABOUT THE CREDIT CRISIS WERE AT THEIR PEAK. THE LEHMAN U.S AGGREGATE BOND INDEX RETURNED 7.0% FOR ALL OF 2007 (COMPARED TO 5.5% FOR THE S&P 500), LED BY TREASURY BONDS WHICH RETURNED 9.0%. IN THE SECOND HALF OF THE YEAR, WORRY ABOUT THE HEALTH OF THE CREDIT MARKET AND THE ECONOMY IN GENERAL CAUSED SPREADS ON MORTGAGE AND CORPORATE BONDS TO WIDEN; THEIR RETURNS WERE POSITIVE FOR THE YEAR, BUT THEY LAGGED TREASURIES. IN THE FOURTH QUARTER, THE LEHMAN AGGREGATE RETURNED 3.0% COMPARED TO A LOSS OF 3.3% FOR THE S&P 500. LIKE THE STOCK MARKET, BONDS COULD SEE SOME VOLATILITY IN THE NEAR TERM AS PROBLEMS IN HOUSING AND THE MORTGAGE SECTORS PLAY OUT. WITH ADDITIONAL RATE CUTS FROM THE FED AND AN UPTICK IN INFLATION ALREADY PRICED IN, RATES AT THE SHORT END OF THE YIELD CURVE ARE LIKELY TO MOVE SLIGHTLY LOWER OVER THE COMING MONTHS, WHILE LONGER YIELDS ARE EXPECTED TO EDGE HIGHER. CORPORATES, AGENCIES, MORTGAGE-BACKED AND ASSET-BACKED ISSUES MAY BENEFIT FROM SOME SPREAD TIGHTENING OVER THE NEXT YEAR, ASSUMING THE SITUATION IN HOUSING DOESN'T DETERIORATE MORE THAN WE EXPECT. THE RETURN ON THE LEHMAN U.S. AGGREGATE BOND INDEX IS EXPECTED TO BE IN THE 4%-4.5% RANGE OVER THE NEXT 12 MONTHS. AFTER THEIR STRONG SHOWING OF 2007, BOND RETURNS ARE LIKELY TO LAG STOCK RETURNS IN 2008; NEVERTHELESS, THE EXPERIENCE OF 2007 POINTS UP THE ADVANTAGE OF INCLUDING BONDS IN DIVERSIFIED INVESTMENT PORTFOLIOS. 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Total Return Year Year Year Year Year Year Year Year Year Year -------------------------------------------------------------------------------------------------------------------------------- Wright Total Return Bond Fund (WTRB) 5.6% 3.3% 1.5% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% Wright Current Income Fund (WCIF) 5.8% 3.9% 1.8% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5%
WRIGHT TOTAL RETURN BOND FUND In 2007, bond yields declined and the Treasury yield curve steepened. Returns for the Lehman Aggregate U.S. bond index topped those of the S&P 500 for both the full year and the fourth quarter. The Wright Total Return Bond Fund (WTRB), a diversified bond fund, returned 3.0% in the fourth quarter, matching the return of the Lehman U.S. Aggregate Bond Index. For all of 2007, WTRB (+5.6%) lagged the Lehman Aggregate's 7.0%. WTRB had a yield of 4.5%, calculated according to SEC guidelines for December 2007. Dividends paid by this Fund may be more or less than implied by this yield. WTRB's duration position had a slightly positive impact on performance in the first half of 2007. Duration was neutral with the Lehman benchmark's at midyear. After Treasury bonds rallied early in the third quarter, the Fund's duration was reduced in three steps to a maximum of 0.75 years shorter than the Lehman benchmark in anticipation that rates would move higher. This positioning worked against WTRB in the second half of the year as bond yields generally moved lower. Duration positioning for the full year detracted from performance. Some of this effect was mitigated by the Fund's positioning along the yield curve in anticipation of a steeper curve. Wright Investors' Service's economic forecast calls for further fed rate cuts, which should raise inflation expectations somewhat. But the increased chance of an economic slowdown could work to keep rates lower than WIS previously expected. Based on this view, toward the end of the year the duration was moved back to within 0.2 years of neutral. During the second quarter of 2007, the Fund reduced its weighting in corporate bonds compared to the Lehman Aggregate, anticipating that increased credit risk would cause spreads to widen. This widening did occur in the quarter, and the underweight positioning benefited the Fund's performance for the rest of the year. In September, WTRB began moving its weighting in corporate bonds back towards neutral to take advantage of the value created by the widening in corporate spreads. For the year, the contribution to return from the Fund's corporate holdings was hampered by the poor performance of two individual issues (Countrywide, sold in September, and Centex, sold in October). Shifting funds from corporate bonds to mortgage-backed securities (including commercial mortgages and hybrid ARMs) in WTRB was positive since mortgage-backed issues outperformed corporate bonds for the fourth quarter and the year. However, the Fund's underweight position in Treasury bonds, the best-performing sector of the market for the year and Q4, worked against Fund performance. At the end of 2007, WTRB had moved to an overweight position in corporate bonds compared to the Lehman Aggregate in terms of percentage held (23% of holdings compared to 22% for the Lehman Aggregate), but was still underweight in terms of contribution to total duration. By both measures, the Fund was overweight in mortgages and commercial mortgages anticipating that attractive valuations in these sectors should benefit the Fund as conditions in the credit market slowly improve. After asset-backed issues considered risky were sold in Q3, a small position in high-quality utility-related asset backs was added in Q4. The Fund was underweight in Treasury bonds and Agencies at year end. WRIGHT CURRENT INCOME FUND In 2007, the mortgage-backed sector of the bond market performed in line with the Lehman U.S. Aggregate bond index. In the third quarter, however, as investors became more concerned about risk, spread products lost favor and mortgages lagged before returning a little more than the Aggregate in Q4. For all of 2007, mortgage-backed issues in the Lehman Aggregate returned 6.9%, slightly behind the 7.0% return for the Aggregate as a whole. The Wright Current Income Fund (WCIF) is managed to be primarily invested in GNMA issues (mortgage-based securities, known as Ginnie Maes, guaranteed by the full faith and credit of the U.S. government) and other mortgage-based securities. The WCIF Fund is actively managed to maximize income and minimize principal fluctuation. In the fourth quarter of 2007, WCIF returned 3.0%, a little behind the Lehman GNMA bond index's 3.2% return. For all of 2007, WCIF returned 5.8% compared to Lehman benchmark's 7.0%. At December 31, 2007, WCIF had a yield of 4.5% as calculated by SEC guidelines. Dividends paid by this Fund may be more or less than implied by this yield. For most of the year, WCIF's maturity and duration were slightly shorter than the Lehman benchmark. Because interest rates declined in 2007, this worked against the Fund for most of the year. By the end of the year, the Fund's positioning had shifted to be neutral in both duration and maturity. For most of 2007, WCIF was underweight in issues with the middle-range coupons and overweight in issues with higher and lower coupons. This "barbelled" weighting was a result of the Fund's positioning in sectors of the market that offered relatively good value. THE VIEWS EXPRESSED THROUGHOUT THIS REPORT ARE THOSE OF THE PORTFOLIO MANAGERS AND ARE CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS, AND THE INVESTMENT ADVISER DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE INVESTMENT DECISIONS FOR A FUND ARE BASED ON MANY FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY OF THE WRIGHT MANAGED INVESTMENT FUNDS. 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 12/31/98 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 10,717.50 4.39% 12/31/06 12,463.15 4.71% 12/31/07 13,264.82 4.03% PERFORMANCE SUMMARIES ------------------------------------------------------------------------------- IMPORTANT The Total Investment Return is the percent return of an initial $10,000 investment made at the beginning of the period to the ending redeemable value assuming all dividends and distributions are reinvested. After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. Wright SELECTED BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/97 Through 12/31/07 Average Annual Total Return ----------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WSBC - Return before taxes 11.59% 14.13% 5.41% - Return after taxes on distributions 8.25% 12.54% 3.40% - Return after taxes on distributions and sales of fund shares 7.02% 10.99% 3.40% S&P MidCap 400* 7.98% 16.20% 11.20%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED BLUE CHIP EQUITIES FUND on 12/31/97 would have grown to $16,939 by December 31, 2007. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Selected S&P MidCap Blue Chip Fund 400 12/31/97 $10,000 $10,000 12/31/98 $10,014 $11,912 12/31/99 $10,590 $13,665 12/31/2000 $11,728 $16,057 12/31/2001 $10,538 $15,960 12/31/2002 $ 8,749 $13,644 12/31/2003 $11,379 $18,504 12/31/2004 $13,169 $21,553 12/31/2005 $14,629 $24,260 12/31/2006 $15,180 $26,764 12/31/2007 $16,939 $28,899 * The Fund's average annual return is compared with that of the S&P Mid-Cap 400, an unmanaged index of stocks in a broad range of industries with a market capitalization of a few billion or less. The performance of the S&P Mid-Cap 400, unlike that of the Fund, reflects no deductions for fees, expenses or taxes. INDUSTRY WEIGHTINGS ------------------------------------------------------------------------------- % of net assets @ 12/31/07 Materials 11.7% Transportation 3.0% Energy 8.1% Computers & Peripherals 2.9% Electronic Equipment & Services 7.5% Automobiles & Components 2.8% Insurance 6.8% Household & Personal Prods. 2.3% Utilities 6.2% Communications Equipment 2.1% Diversified Financials 5.6% Pharmaceuticals & Biotech. 1.7% Health Care Equipment/Services 5.6% Banks 1.7% Retailing 5.6% Consumer Durables & Apparel 1.6% Capital Goods 5.3% Heavy Machinery 1.6% Software & Services 4.3% Telecommunication Services 1.4% Commercial Services & Supplies 3.8% Education 0.8% Semiconductor Equipment 3.4% Real Estate 0.7% Food, Beverage & Tobacco 3.2% Hotels, Restaurants & Leisure0.2% TEN LARGEST STOCK HOLDINGS ------------------------------------------------------------------------------- % of net assets @ 12/31/07 Eaton Vance Corp. 2.9% Oneok Inc 2.8% Cameron International 2.7% MDU Resources Group Inc. 2.5% Western Digital 2.4% SPX Corp. 2.2% Borg-Warner Automative 2.1% AGCO Corp. 2.1% Energizer Holdings Inc. 1.8% Albemarle Corp. 1.8% WRIGHT MAJOR BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/97 Through 12/31/07 Average Annual Total Return --------------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WMBC - Return before taxes 5.96% 11.69% 3.60% - Return after taxes on distributions 5.72% 11.49% 3.15% - Return after taxes on distributions and sales of fund shares 4.87% 10.05% 2.88% S&P 500* 5.49% 12.83% 5.91%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT MAJOR BLUE CHIP EQUITIES FUND on 12/31/97 would have grown to $14,237 by December 31, 2007. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Major Blue Chip Fund S&P 500 12/31/97 $10,000 $10,000 12/31/98 $12,043 $12,858 12/31/99 $14,927 $15,563 12/31/2000 $13,053 $14,146 12/31/2001 $10,850 $12,465 12/31/2002 $ 8,192 $ 9,710 12/31/2003 $10,092 $12,496 12/31/2004 $11,340 $13,855 12/31/2005 $12,043 $14,535 12/31/2006 $13,436 $16,831 12/31/2007 $14,237 $17,756 * The Fund's average annual return is compared with that of the S&P 500, an unmanaged index of 500 widely held common stocks that generally indicates the performance of the market. The performance of the S&P 500, unlike that of the Fund, reflects no deductions for fees, expenses or taxes. Wright major blue chip Equities Fund Growth of $10,000 Invested 1/1/97 Through 12/31/07 INDUSTRY WEIGHTINGS ------------------------------------------------------------------------------- % of net assets @ 12/31/07 Energy 13.1% Communications Equipment 2.3% Retailing 1.8% Hotels, Restaurants & Leisure 1.5% Consumer Durables & Apparel 1.5% Automobiles & Components 1.3% Real Estate 0.7% Media 0.6% Electronics 0.5% Office Electronics 0.5% Transportation 0.5% Metals 0.4% Travel 0.2% Insurance 10.9% Capital Goods 10.4% Computers & Peripherals 7.8% Diversified Financials 6.1% Pharmaceuticals & Biotechnology 5.6% Food, Beverage & Tobacco 5.2% Health Care Equipment & Services4.9% Software & Services 4.6% Semiconductor Equip. & Prods. 3.9% Telecommunications Services 3.9% Banks 3.2% Utilities 2.8% Entertainment & Leisure 2.8% Materials 2.6% TEN LARGEST STOCK HOLDINGS ------------------------------------------------------------------------------- % of net assets @ 12/31/07 Exxon Mobil Corp. 4.8% AT&T Inc. 3.6% Hewlett-Packard Co. 3.4% Chevron Corp. 2.9% Wells Fargo & Co. New 2.7% Pfizer, Inc. 2.6% Altria Group Inc. 2.5% International Business Machines 2.5% Lockheed Martin Corp. 2.3% Disney (Walt) Prdtns. 2.2% WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/97 Through 12/31/07 Average Annual Total Return ------------------------------------------------ Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WIBC - Return before taxes 5.50% 20.60% 6.86% - Return after taxes on distributions 5.12% 19.91% 6.10% - Return after taxes on distributions and sales of fund shares 5.12% 19.91% 6.10% MSCI World ex US Index* 12.44% 22.12% 8.99%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT INT'L BLUE CHIP EQUITIES FUND on 12/31/97 would have grown to $19,419 by December 31, 2007. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Int'l Blue Chip MSCI World Ex U.S. Equities Fund Index 12/31/97 $10,000 $10,000 12/31/98 $10,614 $11,876 12/31/99 $14,250 $15,193 12/31/2000 $11,745 $13,162 12/31/2001 $ 8,905 $10,345 12/31/2002 $ 7,613 $ 8,711 12/31/2003 $10,047 $12,145 12/31/2004 $11,826 $14,620 12/31/2005 $14,325 $16,736 12/31/2006 $18,406 $21,038 12/31/2007 $19,419 $23,656 * The Fund's average annual return is compared with that of the MSCI Developed World ex U.S. Index. While the Fund does not seek to match the returns of this index, this unmanaged index generally indicates foreign stock market performance. The performance of the MSCI Developed World ex U.S. Index, unlike that of the Fund, reflects no deductions for fees, expenses or taxes. Country Weightings ------------------------------------------------------------------------------ % of net assets @ 12/31/07 United Kingdom 16.7% Japan 16.3% Germany 10.2% France 9.2% Canada 6.8% Sweden 4.3% Netherlands 4.2% Australia 4.0% Italy 4.0% Spain 3.5% Switzerland 3.4% Hong Kong 3.3% Denmark 2.9% Norway 2.8% Finland 1.6% Belgium 1.3% Singapore 1.2% Austria 1.1% Ireland 0.5% Portugal 0.2% New Zealand 0.2% Ten Largest Stock Holdings ------------------------------------------------------------------------------- % of net assets @ 12/31/07 E. On AG 3.6% Eni S.P.A. 3.2% Barclays 2.5% ING Groep N.V. 2.3% QBE Insurance Group 2.2% Man Group 2.2% Royal Dutch Shell 2.2% Zurich Financial Services 2.0% BASF AG 2.0% CLP Holdings 1.9% WRIGHT TOTAL RETURN BOND FUND Growth of $10,000 Invested 1/1/97 Through 12/31/07 Average Annual Total Return ---------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WTRB - Return before taxes 3.34% 4.11% 5.03% - Return after taxes on distributions 1.76% 2.46% 3.05% - Return after taxes on distributions and sales of fund shares 1.49% 2.46% 3.05% Lehman Aggregate Bond Index* 4.33% 5.06% 6.24% --------------------------------------------------------------------------------------------------------------------------------
The cumulative total return of a U.S. $10,000 investment in the WRIGHT TOTAL RETURN BOND FUND on 12/31/97 would have grown to $15,790 by December 31, 2007. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Total Retun Lehman Aggregate Bond Bond Fund Index 12/31/97 $10,000 $10,000 12/31/98 $10,956 $10,869 12/31/99 $10,528 $10,779 12/31/2000 $11,646 $12,033 12/31/2001 $12,223 $13,049 12/31/2002 $13,327 $14,387 12/31/2003 $13,760 $14,977 12/31/2004 $14,244 $15,627 12/31/2005 $14,464 $16,007 12/31/2006 $14,947 $16,700 12/31/2007 $15,790 $17,864 * The Fund's average annual return is compared with that of the Lehman U.S. Aggregate Bond Index, an unmanaged index that is a broad representation of the investment-grade fixed income market in the U.S. The Lehman U.S. Aggregate Bond Index, unlike that of the Fund, reflects no deductions for fees, expenses or taxes. Holdings by Sector ------------------------------------------------------------------------------ % of net assets @ 12/31/07 Asset-backed Securities 1.0% Corporate Bonds 23.0% Mortgage-Backed Securities 60.0% U.S. Treasuries 11.0% U.S. Government Agencies 2.0% Holdings by Credit Quality* ------------------------------------------------------------------------------ % of net assets @ 12/31/07 AAA 2% AA 3% A 11% BBB 8% WRIGHT CURRENT INCOME FUND Growth of $10,000 Invested 1/1/97 Through 12/31/07 Average Annual Total Return ------------------------------------------ Last 1 Yr Last 5 Yrs Last 10 Yrs -------------------------------------------------------------------------------------------------------------------------------- WCIF - Return before taxes 5.77% 3.28% 4.83% - Return after taxes on distributions 4.04% 1.47% 2.71% - Return after taxes on distributions and sales of fund shares 3.91% 1.47% 2.71% Lehman GNMA Index* 6.98% 4.39% 5.85%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT INCOME FUND on 12/31/97 would have grown to $16,024 by December 31, 2007. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Current Lehman GNMA Income Fund Index 12/31/97 $10,000 $10,000 12/31/98 $10,651 $10,693 12/31/99 $10,706 $10,898 12/31/2000 $11,810 $12,109 12/31/2001 $12,658 $13,104 12/31/2002 $13,633 $14,243 12/31/2003 $13,870 $14,650 12/31/2004 $14,327 $15,287 12/31/2005 $14,579 $15,777 12/31/2006 $15,150 $16,504 12/31/2007 $16,024 $17,655 * The Fund's average annual return is compared with that of the Lehman GNMA Backed Bond Index. While the Fund does not seek to match the returns of the Lehman GNMA Backed Bond Index, Wright believes that this unmanaged index generally indicates the performance of government and corporate mortgage- backed bond markets. The Lehman GNMA Backed Bond Index, unlike the Fund, reflects no deductions for fees, expenses or taxes. Holdings by Sector ------------------------------- % of net assets @ 12/31/07 Mortgage-Backed Securities 96.0% Weighted Average Maturity ------------------------------- @12/31/07 6.0 Years Five Largest Bond Holdings -------------------------------- % of net assets @ 12/31/07 GNMA II Pool 3747 5.000% 08/20/35 5.9% GNMA Pool 3556 5.500% 05/20/34 4.2% GNMA Series 1999-04 Class ZB 6.000% 02/20/29 3.6% GNMA Series 2001-02 7.500% 07/20/28 2.4% FNCL Pool 892522 6.187% 08/01/36 2.3% 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 (July 1, 2007 - December 31, 2007). 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 first 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. EQUITY FUNDS -------------------------------------- WRIGHT SELECTED BLUE CHIP EQUITIES FUND Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/07- (7/1/07) (12/31/07) 12/31/07) ----------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $965.30 $6.19 ----------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.90 $6.36 *Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied by the average account value over the period, multiplied by 184/365 (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 June 30, 2007. Wright Major Blue Chip Equities Fund Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/07- (7/1/07) (12/31/07) 12/31/07) ------------------------------------------------------------------------------ Actual Fund Shares $1,000.00 $991.70 $6.33 ------------------------------------------------------------------------------ Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.90 $6.41 *Expenses are equal to the Fund's annualized expense ratio of 1.26% multiplied by the average account value over the period, multiplied by 184/365 (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 June 30, 2007. Wright International Blue Chip Equities Fund Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/07- (7/1/07) (12/31/07) 12/31/07) ------------------------------------------------------------------------------ Actual Fund Shares $1,000.00 $966.50 $7.63 ------------------------------------------------------------------------------ Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,017.40 $7.83 *Expenses are equal to the Fund's annualized expense ratio of 1.54% multiplied by the average account value over the period, multiplied by 184/365 (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 June 30, 2007. FIXED INCOME FUNDS --------------------------------- Wright Total Return Bond Fund Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/07- (7/1/07) (12/31/07) 12/31/07) ------------------------------------------------------------------------------ Actual Fund Shares $1,000.00 $1,051.10 $3.83 ------------------------------------------------------------------------------ Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,021.50 $3.77 *Expenses are equal to the Fund's annualized expense ratio of 0.74% multiplied by the average account value over the period, multiplied by 184/365 (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 June 30, 2007. Wright Current Income Fund Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/07- (7/1/07) (12/31/07) 12/31/07) ------------------------------------------------------------------------------ Actual Fund Shares $1,000.00 $1,047.50 $4.85 ------------------------------------------------------------------------------ Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,020.50 $4.79 *Expenses are equal to the Fund's annualized expense ratio of 0.94% multiplied by the average account value over the period, multiplied by 184/365 (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 June 30, 2007. WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - DECEMBER 31, 2007 Shares Value Equity Interests --99.9% AUTOMOBILES & COMPONENTS -- 2.8%.... Borg Warner, Inc.................... 10,230 $ 495,234 Oshkosh Truck Corp.................. 3,635 171,790 ------------ $ 667,024 ------------ BANKS -- 1.7% Associated Banc Corp................ 1,825 $ 49,439 First Community Bancorp............. 1,600 65,984 SVB Financial Group *............... 3,065 154,476 Wilmington Trust Corp............... 3,595 126,544 ------------ $ 396,443 ------------ CAPITAL GOODS -- 5.3% AGCO Corp.*......................... 7,220 $ 490,816 SPX Corp............................ 5,185 533,277 Thomas & Betts Corp.*............... 4,905 240,541 ------------ $ 1,264,634 ------------ COMMERCIAL SERVICES & SUPPLIES -- 3.8% Belo Corp........................... 1,425 $ 24,852 Charles River Laboratories International*.................... 3,720 244,776 Deluxe Corp......................... 1,610 52,953 Harsco Corp......................... 2,025 129,742 Republic Services, Inc.............. 5,912 185,341 Sotheby's, Inc. - Class A........... 2,910 110,871 Stericycle, Inc. *.................. 2,740 162,756 ------------ $ 911,291 ------------ COMMUNICATIONS EQUIPMENT -- 2.1% CommScope, Inc.*.................... 4,470 $ 219,969 Harris Corp......................... 2,850 178,638 Plantronics, Inc.................... 3,605 93,730 ------------ $ 492,337 ------------ COMPUTERS & PERIPHERALS -- 2.9% Jack Henry & Associates, Inc........ 4,780 $ 116,345 Western Digital Corp.*.............. 19,225 580,787 ------------ $ 697,132 ------------ CONSUMER DURABLES & APPAREL -- 1.6% Callaway Golf Co.................... 3,465 $ 60,395 Mohawk Industries, Inc.*............ 2,940 218,736 The Warnaco Group, Inc. *........... 3,205 111,534 ------------ $ 390,665 ------------ DIVERSIFIED FINANCIALS -- 5.6% Eaton Vance Corp.(1)................ 15,075 $ 684,556 Raymond James Financial, Inc........ 10,792 352,466 SEI Investments Co.................. 9,675 311,245 ------------ $ 1,348,267 ------------ EDUCATION -- 0.8% DeVry, Inc.......................... 445 $ 23,122 Scholastic Corp. *.................. 4,915 171,485 ------------ $ 194,607 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS -- 7.5% Ametek, Inc......................... 2,080 $ 97,427 Amphenol Corp. - Class A............ 4,365 202,405 Arrow Electronics, Inc.*............ 8,450 331,916 Avnet, Inc.*........................ 8,515 297,770 Hubbell, Inc........................ 440 22,704 Ingram Micro, Inc. - Class A*....... 3,330 60,073 Lincoln Electric Holdings, Inc...... 3,360 239,165 Pentair, Inc........................ 3,440 119,746 Teleflex, Inc....................... 3,325 209,508 ValueClick, Inc.*................... 5,910 129,429 Vishay Intertechnology, Inc.*....... 8,260 94,247 ------------ $ 1,804,390 ------------ ENERGY -- 8.1% Cameron International Corp.*........ 13,400 $ 644,942 Denbury Resources, Inc.*............ 7,560 224,910 FMC Technologies, Inc. *............ 3,700 209,790 Frontier Oil Corp................... 5,880 238,610 Helmerich & Payne, Inc.............. 3,515 140,846 Overseas Shipholding Group, Inc..... 1,530 113,878 Patterson-UTI Energy, Inc........... 6,440 125,709 Tidewater, Inc...................... 4,260 233,704 ------------ $ 1,932,389 ------------ FOOD, BEVERAGE & TOBACCO -- 3.2% Hansen Natural Corp.*............... 5,590 $ 247,581 PepsiAmericas, Inc.................. 6,950 231,574 Smucker Co. (J.M.).................. 3,175 163,322 Universal Corp...................... 2,195 112,428 ------------ $ 754,905 ------------ HEALTH CARE EQUIPMENT & SERVICES -- 5.6% Apria Healthcare Group, Inc.*....... 5,505 $ 118,743 DENTSPLY International, Inc......... 2,930 131,909 Gen-Probe, Inc.*.................... 750 47,197 Health Net, Inc.*................... 1,730 83,559 Hologic, Inc. *..................... 765 52,510 Intuitive Surgical, Inc.*........... 975 316,387 LifePoint Hospitals, Inc.*.......... 2,620 77,919 Lincare Holdings, Inc.*............. 3,130 110,051 Ventana Medical Systems, Inc.*...... 830 72,401 WellCare Health Plans Inc.*......... 7,550 320,195 ------------ $ 1,330,871 ------------ HEAVY MACHINERY -- 1.6% Grant Prideco, Inc.*................ 6,700 $ 371,917 ------------ HOTELS, RESTAURANTS & LEISURE -- 0.2% Ruby Tuesday, Inc................... 4,200 $ 40,950 ------------ HOUSEHOLD & PERSONAL PRODUCTS -- 2.3% Energizer Holdings, Inc.*........... 3,835 $ 430,019 Tupperware Brands Corp.............. 3,735 123,367 ------------ $ 553,386 ------------ INSURANCE -- 6.8% American Financial Group, Inc....... 2,420 $ 69,890 Everest Re Group, Ltd............... 2,305 231,422 First American Corp................. 5,275 179,983 HCC Insurance Holdings, Inc......... 13,620 390,622 Horace Mann Educators Corp.......... 2,480 46,971 Old Republic International Corp..... 4,753 73,244 StanCorp Financial Group, Inc....... 5,450 274,571 W.R. Berkley Corp................... 12,287 366,275 ------------ $ 1,632,978 ------------ MATERIALS -- 11.7% Airgas, Inc......................... 3,130 $ 163,104 Albemarle Corp...................... 10,190 420,337 CF Industries Holdings, Inc......... 2,095 230,576 Commercial Metals Co................ 6,065 178,614 FMC Corp............................ 1,425 77,734 Kennametal, Inc..................... 4,810 182,107 Lubrizol Corp....................... 3,775 204,454 Martin Marietta Materials, Inc...... 1,050 139,230 Precision Castparts Corp............ 2,860 396,682 Reliance Steel & Aluminum Co........ 1,620 87,804 RPM International, Inc.............. 7,435 150,931 Sonoco Products Co.................. 5,775 188,727 Steel Dynamics, Inc................. 2,975 177,221 Terra Industries, Inc.*............. 4,165 198,920 ------------ $ 2,796,441 ------------ PHARMACEUTICALS & BIOTECHNOLOGY -- 1.7% Endo Pharmaceuticals Holdings, Inc.* 7,690 $ 205,092 NBTY Inc.*.......................... 4,805 131,657 Par Pharmaceutical Cos., Inc.*...... 3,200 76,800 ------------ $ 413,549 ------------ REAL ESTATE -- 0.7% Jones Lang LaSalle, Inc............. 895 $ 63,688 NVR Inc............................. 210 110,040 ------------ $ 173,728 ------------ RETAILING -- 5.6% Aeropostale, Inc.*.................. 1,203 $ 31,866 American Eagle Outfitters, Inc...... 12,172 252,812 Charming Shoppes, Inc.*............. 7,310 39,547 Collective Brands, Inc.*............ 6,585 114,513 Dollar Tree Stores, Inc. *.......... 7,120 184,550 GameStop Corp. - Class A*........... 4,055 251,856 Guess?, Inc......................... 2,385 90,368 Phillips-Van Heusen Corp............ 5,525 203,652 Regis Corp.......................... 3,810 106,528 Rent-A-Center, Inc.*................ 4,010 58,225 ------------ $ 1,333,917 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS -- 3.4% Cree, Inc.*......................... 3,820 $ 104,935 Cypress Semiconductor Corp.*........ 6,655 239,780 International Rectifier Corp.*...... 2,470 83,906 Intersil Corp. - Class A............ 4,010 98,165 Lam Research Corp.*................. 5,310 229,551 RF Micro Devices, Inc.*............. 8,515 48,621 ------------ $ 804,958 ------------ SOFTWARE & SERVICES -- 4.3% Activision, Inc. *.................. 7,770 $ 230,769 Alliance Data Systems Corp.*........ 2,445 183,350 Cadence Design Systems, Inc.*....... 6,685 113,712 F5 Networks, Inc.*.................. 1,525 43,493 McAfee, Inc.*....................... 5,840 219,000 Parametric Technology Corp.*........ 13,840 247,044 ------------ $ 1,037,368 ------------ TELECOMMUNICATION SERVICES -- 1.4% Cincinnati Bell, Inc.*.............. 17,230 $ 81,843 NeuStar Inc. - Class A*............. 4,290 123,037 Telephone & Data Systems, Inc....... 2,260 141,476 ------------ $ 346,356 ------------ TRANSPORTATION -- 3.0% AirTran Holdings Inc.*.............. 14,015 $ 100,347 Alaska Air Group, Inc.*............. 8,735 218,462 J.B. Hunt Transport Services, Inc... 4,680 128,934 JetBlue Airways Corp.*.............. 24,205 142,810 Trinity Industries, Inc............. 2,525 70,094 YRC Worldwide, Inc.*................ 3,190 54,517 ------------ $ 715,164 ------------ UTILITIES -- 6.2% AGL Resources, Inc.................. 4,750 $ 178,790 MDU Resources Group, Inc............ 21,218 585,829 OGE Energy Corp..................... 1,815 65,866 Oneok, Inc.......................... 14,785 661,925 ------------ $ 1,492,410 ------------ TOTAL EQUITY INTERESTS-- 99.9% (identified cost, $20,488,612) $23,898,077 OTHER ASSETS, LESS LIABILITIES -- 0.1% 24,915 ------------ NET ASSETS-- 100% $23,922,992 ============ * Non-income producing security. (1) Affiliated investment. See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $19,973,609) (Note 1A) $ 23,213,521 Affiliated investments, at value (identified cost $515,003)............. 684,556 Cash.................................... 113,191 Receivable for fund shares sold......... 335 Dividends receivable.................... 15,083 Other assets............................ 5,800 ------------ Total assets............................ $ 24,032,486 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 77,079 Payable to affiliate for Trustees' fees. 39 Investment adviser fee payable.......... 945 Accrued expenses and other liabilities.. 31,431 ------------ Total liabilities....................... $ 109,494 ------------ NET ASSETS................................ $ 23,922,992 ============== NET ASSETS CONSIST OF: Paid-in capital......................... $ 18,700,833 Accumulated undistributed net realized gain on investments and foreign currency (computed on the basis of identified cost)....... 1,812,694 Unrealized appreciation on investments (computed on the basis of identified cost) 3,409,465 ------------ Net assets applicable to outstanding shares................................ $ 23,922,992 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 2,155,997 ============== NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 11.10 ============== STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2007 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Dividend income......................... $ 305,737 Dividend income from affiliated investment 7,185 ------------ Total income............................ $ 312,922 ------------ Expenses - Investment adviser fee (Note 2)......... $ 164,183 Administrator fee (Note 2).............. 32,775 Compensation of Trustees who are not employees of the investment adviser or administrator 13,000 Custodian fee (Note 1D)................. 68,188 Distribution expenses (Note 3).......... 67,750 Transfer and dividend disbursing agent fees 26,820 Printing................................ 2,840 Interest expense........................ 13,971 Shareholder communications.............. 505 Audit services.......................... 28,250 Legal services.......................... 9,924 Registration costs...................... 17,771 Miscellaneous .......................... 7,881 ------------ Total expenses.......................... $ 453,858 ------------ Deduct - Reduction of custodian fee (Note 1D).... $ (1,298) Reduction of investment adviser fee (Note 2) (43,860) Reduction of distribution expenses by principal underwriter (Note 3)...... (67,750) ------------ Total deductions........................ $ (112,908) ------------ Net expenses............................ $ 340,950 ------------ Net investment income (loss)............ $ (28,028) ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 6,501,493 Realized gain on affiliated investment transactions........................... 17,540 Change in unrealized depreciation on investments............................ (3,392,450) Change in unrealized apreciation on affiliated investments................. 160,207 ------------ Net realized and unrealized gain on investments......................... $ 3,286,790 ------------ Net increase in net assets from operations $ 3,258,762 ============= See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------ Year Ended December 31, ----------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment loss........................................................ $ (28,028) $ (116,768) Net realized gain on investments........................................... 6,519,033 4,175,456 Change in unrealized depreciation of investments........................... (3,232,243) (2,770,820) -------------- -------------- Net increase in net assets resulting from operations..................... $ 3,258,762 $ 1,287,868 -------------- -------------- Distributions to shareholders (Note 1F) - From net investment income................................................. $ (33,344) $ -- From net realized gain..................................................... (5,034,405) (4,229,388) -------------- -------------- Total distributions...................................................... $ (5,067,749) $ (4,229,388) -------------- -------------- Net decrease in net assets from fund share transactions (Note 4)............. $(12,619,826) $(6,358,299) -------------- -------------- Net decrease in net assets................................................... $(14,428,813) $(9,299,819) NET ASSETS: At beginning of year......................................................... 38,351,805 47,651,624 -------------- -------------- At end of year............................................................... $ 23,922,992 $ 38,351,805 ============== ============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR........................................... $ -- $ 3,858 ============== ==============
See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) ------------------------------------------------------------------------------ Year Ended December 31, -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2007(3) 2006(3) 2005 2004 2003(3) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 12.270 $ 13.030 $ 13.226 $ 11.870 $ 9.270 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss.................... $ (0.013) $ (0.034) $ (0.053) $ (0.028) $ (0.023) Net realized and unrealized gain....... 1.340 0.529 1.476 1.884 2.756 --------- --------- --------- --------- --------- Total income from investment operations......... $ 1.327 $ 0.495 $ 1.423 $ 1.856 $ 2.733 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income... $ (0.016) $ -- $ -- $ -- $ -- Distributions from capital gains....... (2.481) (1.255) (1.619) (0.500) (0.133) -------- --------- --------- --------- --------- Total distributions................ $ (2.497) $ (1.255) $ (1.619) $ (0.500) $ (0.133) --------- --------- --------- --------- --------- Net asset value, end of year................ $ 11.100 $ 12.270 $ 13.030 $ 13.226 $ 11.870 ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 11.59% 3.77% 11.09% 15.73% 30.06% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted).. $ 23,923 $ 38,352 $ 47,652 $ 43,498 $ 38,190 Ratios (As a percentage of average daily net assets): Net expenses.......................... 1.26% 1.26% 1.27% 1.26% 1.25% Net expenses after custodian fee reduction(4) 1.25% 1.25% 1.25% 1.25% 1.25% Interest expense...................... 0.05% -- -- -- -- Net investment loss................... (0.10)% (0.27)% (0.18)% (0.23)% (0.23)% Portfolio turnover rate .............. 67% 66% 110% 69% 106% -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: 2007 2006 2005 2004 2003 ------------------------------------------------------------ Net investment loss per share.......... $ (0.064) $ (0.058) $ (0.111) $ (0.050) $ (0.057) ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses........................... 1.66% 1.46% 1.45% 1.44% 1.59% ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.66% 1.44% 1.43% 1.43% 1.59% ========= ========= ========= ========= ========= Interest expense................... 0.05% -- -- -- -- ========= ========= ========= ========= ========= Net investment loss................ (0.51)% (0.46)% (0.38)% (0.41)% (0.57)% ========= ========= ========= ========= ========= -------------------------------------------------------------------------------------------------------------------------------- (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 Certain per share amounts are based on average shares outstanding. (4)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 the expense ratio to 1.25% after custodian fee reductions, if any.
See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - December 31, 2007 Shares Value Equity Interests - 99.8% AUTOMOBILES & COMPONENTS - 1.3% Cooper Industries Ltd. - Class A.... 3,670 $ 194,070 Johnson Controls, Inc............... 15,675 564,927 ------------ $ 758,997 ------------ BANKS - 3.3% Bank of America Corp................ 7,625 $ 314,607 Wells Fargo & Co.................... 51,620 1,558,408 ------------ $ 1,873,015 ------------ CAPITAL GOODS - 10.4% Caterpillar, Inc.................... 8,020 $ 581,931 Cummins, Inc........................ 8,825 1,124,040 Deere & Co.......................... 5,300 493,536 General Electric Co................. 15,505 574,770 Illinois Tool Works, Inc............ 3,535 189,264 Lockheed Martin Corp................ 12,760 1,343,118 Paccar, Inc......................... 22,556 1,228,824 Parker Hannifin..................... 3,000 225,930 Terex Corp.*........................ 4,025 263,919 ------------ $ 6,025,332 ------------ COMMUNICATIONS EQUIPMENT - 2.3% Cisco Systems, Inc.*................ 34,150 $ 924,440 JDS Uniphase Corp.*................. 7,790 103,607 L-3 Communications Holdings, Inc.... 2,340 247,900 Tellabs, Inc.*...................... 10,825 70,796 ------------ $ 1,346,743 ------------ COMPUTERS & PERIPHERALS - 7.8% Affiliated Computer Services, Inc.-Class A*...................... 3,435 $ 154,919 Apple, Inc.*........................ 4,715 933,947 Hewlett-Packard Co.................. 39,100 1,973,768 International Business Machines Corp............................... 13,430 1,451,783 ------------ $ 4,514,417 ------------ CONSUMER DURABLES & APPAREL - 1.5% Ball Corp........................... 5,580 $ 251,100 NIKE, Inc. - Class B................ 6,255 401,821 Polo Ralph Lauren Corp.............. 3,520 217,501 ------------ $ 870,422 ------------ DIVERSIFIED FINANCIALS - 6.1% Capital One Financial Corp.......... 7,135 $ 337,200 Citigroup, Inc...................... 1 29 FNMA................................ 3,990 159,520 Franklin Resources, Inc............. 7,065 808,448 Goldman Sachs Group, Inc. (The)..... 4,940 1,062,347 Morgan Stanley...................... 12,245 650,332 Prudential Financial, Inc........... 1,815 168,868 Regions Financial Corp.............. 12,900 305,085 ------------ $3,491,829 ------------ ELECTRONICS - 0.5% MEMC Electronic Materials, Inc.*.... 3,490 $ 308,830 ------------ ENERGY - 13.1% Chevron Corp........................ 18,060 $ 1,685,540 ConocoPhillips Co................... 13,110 1,157,613 ENSCO International, Inc............ 2,995 178,562 Exxon Mobil Corp.................... 29,355 2,750,270 National Oilwell Varco, Inc.*....... 2,115 155,368 Occidental Petroleum Corp........... 13,800 1,062,462 Valero Energy Corp.................. 4,165 291,675 XTO Energy, Inc..................... 5,256 269,961 ------------ $ 7,551,451 ------------ ENTERTAINMENT & LEISURE - 2.8% CBS Corp. - Class B................. 6,725 $ 183,256 Hasbro, Inc......................... 6,400 163,712 Mattel, Inc......................... 7,215 137,374 Walt Disney Co. (The)............... 39,125 1,262,955 ----------- $ 1,609,923 ------------ FOOD, BEVERAGE & TOBACCO - 5.3% Altria Group, Inc................... 19,325 $ 1,460,584 Coca-Cola Enterprises, Inc.......... 7,545 196,396 General Mills, Inc.................. 6,525 371,925 Molson Coors Brewing Co. - Class B.. 2,170 112,015 Pepsi Bottling Group, Inc........... 5,540 218,608 PepsiCo, Inc........................ 3,575 271,343 Reynolds American, Inc.............. 4,190 276,372 Tyson Foods, Inc.................... 7,875 120,724 ------------ $ 3,027,967 ------------ HEALTH CARE EQUIPMENT & SERVICES - 4.9% Aetna, Inc.......................... 9,695 $ 559,692 AmerisourceBergen Corp.............. 7,240 324,859 Cigna Corp.......................... 6,460 347,096 Coventry Health Care, Inc.*......... 4,980 295,065 Humana, Inc.*....................... 3,665 276,011 Laboratory Corp of America Holdings* 4,520 341,396 UnitedHealth Group, Inc............. 9,431 548,884 Zimmer Holdings, Inc.*.............. 2,400 158,760 ------------ $2,851,763 ------------ HOTELS, RESTAURANTS & LEISURE - 1.5% McDonald's Corp..................... 14,590 $ 859,497 ------------ INSURANCE - 10.9% ACE, Ltd............................ 3,460 $ 213,759 AFLAC, Inc.......................... 4,600 288,098 Allstate Corp. (The)................ 7,700 402,171 Chubb Corp.......................... 7,395 403,619 Hartford Financial Services Group, Inc. ....................... 6,955 606,407 Lincoln National Corp............... 6,205 361,255 MetLife, Inc........................ 18,985 1,169,856 Progressive Corp.................... 38,535 738,331 Torchmark Corp...................... 3,365 203,683 Travelers Cos., Inc. (The).......... 9,550 513,790 Unum Group.......................... 6,960 165,478 WellPoint, Inc.*.................... 13,350 1,171,196 XL Capital, Ltd. - Class A.......... 1,185 59,617 ------------ $ 6,297,360 ------------ MATERIALS - 2.6% Allegheny Technologies, Inc......... 1,650 $ 142,560 Nucor Corp.......................... 7,495 443,854 Precision Castparts Corp............ 6,375 884,212 ------------ $ 1,470,626 ------------ MEDIA - 0.6% McGraw-Hill Companies, Inc. (The)... 2,955 $ 129,459 Omnicom Group, Inc.................. 3,910 185,842 ----------- $ 315,301 ------------ METALS - 0.4% Freeport-McMoRan Copper & Gold, Inc................................ 2,100 $ 215,124 ------------ OFFICE ELECTRONICS - 0.5% Xerox Corp.......................... 16,455 $ 266,406 ------------ PHARMACEUTICALS & BIOTECHNOLOGY - 5.6% Gilead Sciences, Inc.*.............. 8,050 $ 370,380 Johnson & Johnson, Inc.............. 12,510 834,417 King Pharmaceuticals, Inc.*......... 12,520 128,205 Merck & Co., Inc.................... 6,890 400,378 Pfizer, Inc......................... 66,475 1,510,977 ------------ $3,244,357 ------------ REAL ESTATE - 0.7% CB Richard Ellis Group Inc. - Class A*........................... 19,660 $ 423,673 ------------ RETAILING - 1.8% Autozone, Inc.*..................... 3,045 $ 365,126 RadioShack Corp..................... 2,820 47,545 Sherwin-Williams Co................. 5,045 292,812 SUPERVALU, Inc...................... 8,800 330,176 ------------ $1,035,659 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.9% Applied Materials, Inc.............. 34,385 $ 610,677 Intel Corp.......................... 21,000 559,860 Novellus Systems, Inc. *............ 11,080 305,476 Nvidia Corp.*....................... 22,300 758,646 ------------ $2,234,659 ------------ SOFTWARE & SERVICES - 4.6% BMC Software, Inc.*................. 9,585 $ 341,610 Computer Sciences Corp.*............ 2,185 108,092 Compuware Corp.*.................... 16,955 150,560 EMC Corp.*.......................... 14,980 277,579 Google Inc. - Class A*.............. 410 283,507 Microsoft Corp...................... 22,305 794,058 Oracle Corp.*....................... 31,135 703,028 ------------ $2,658,434 ------------ TELECOMMUNICATION SERVICES - 3.9% AT&T, Inc........................... 49,485 $2,056,597 CenturyTel, Inc..................... 4,325 179,314 ------------ $2,235,911 ------------ TRANSPORTATION - 0.5% Boeing Co. (The).................... 3,490 $ 305,235 ------------ TRAVEL - 0.2% Expedia, Inc.*...................... 3,750 $ 118,575 ------------ UTILITIES - 2.8% Entergy Corp........................ 10,275 $1,228,068 Exelon Corp......................... 4,478 365,584 ------------ $1,593,652 ------------ TOTAL EQUITY INTERESTS--99.8% (identified cost, 48,924,729) $57,642,532 OTHER ASSETS, LESS LIABILITIES - 0.2% 107,238 ------------ NET ASSETS - 100% $57,749,770 ============= * Non-income producing security. See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $48,924,729) (Note 1A). $ 57,642,532 Cash.................................... 19,739 Receivable for fund shares sold......... 36,699 Dividends receivable.................... 104,052 Other assets............................ 7,219 ------------ Total assets............................ $ 57,810,241 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 18,028 Payable to affiliate for Trustees' fees. 39 Payable to affiliate for distribution fees 5,192 Investment adviser fee payable.......... 2,059 Accrued expenses and other liabilities.. 35,153 ------------ Total liabilities....................... $ 60,471 ------------ NET ASSETS................................ $ 57,749,770 ============= NET ASSETS CONSIST OF: Paid-in capital......................... $ 64,326,620 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost).................... (15,313,920) Unrealized appreciation on investments (computed on the basis of identified cost) 8,717,803 Accumulated undistributed net investment income................................. 19,267 ------------ Net assets applicable to outstanding shares................................ $ 57,749,770 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 3,978,212 ============= NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 14.52 ============== STATEMENT OF OPERATIONS Year Ended December 31, 2007 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Dividend income......................... $ 1,136,969 ------------ Expenses - Investment adviser fee (Note 2)......... $ 362,566 Administrator fee (Note 2).............. 72,498 Compensation of Trustees who are not employees of the investment adviser or administrator 13,000 Custodian fee (Note 1D)................. 69,968 Distribution expenses (Note 3).......... 151,037 Transfer and dividend disbursing agent fees 24,001 Printing................................ 2,695 Interest expense........................ 9,783 Shareholder communications.............. 800 Audit services.......................... 29,082 Legal services.......................... 8,729 Registration costs...................... 17,665 Miscellaneous .......................... 9,002 ------------ Total expenses.......................... $ 770,826 ------------ Deduct - Reduction of distribution expenses by principal underwriter............... $ (12,880) Reduction of custodian fee.............. (2,932) ------------ Total deductions........................ $ (15,812) ------------ Net expenses............................ $ 755,014 ------------ Net investment income................... $ 381,955 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis)................ $ 5,221,457 Change in unrealized depreciation on investments............................ (1,973,444) ------------ Net realized and unrealized gain on investments............................ $ 3,248,013 ------------ Net increase in net assets from operations $ 3,629,968 ============= See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUNd (WMBC) ----------------------------------------------------------------------------- Year Ended December 31, --------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income ..................................................... $ 381,955 $ 312,895 Net realized gain on investments........................................... 5,221,457 9,867,709 Change in unrealized depreciation on investments........................... (1,973,444) (3,314,951) -------------- -------------- Net increase in net assets resulting from operations..................... $ 3,629,968 $ 6,865,653 -------------- -------------- Distributions to shareholders (Note 1F) - From net investment income................................................. $ (362,113) $ (314,151) -------------- -------------- Total distributions...................................................... $ (362,113) $ (314,151) -------------- -------------- Decrease in net assets from fund share transactions (Note 4)................. $ (8,794,028) $(10,017,143) -------------- -------------- Net decrease in net assets................................................... $ (5,526,173) $(3,465,641) NET ASSETS: At beginning of year......................................................... 63,275,943 66,741,584 -------------- -------------- At end of year............................................................... $ 57,749,770 $ 63,275,943 ============== ============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR........................................ $ 19,267 $ 13,395 ============== ==============
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) ------------------------------------------------------------------------------- Year Ended December 31, ------------------------------------------------------------------ FINANCIAL HIGHLIGHTS 2007(3) 2006(3) 2005 2004 2003(3) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 13.790 $ 12.420 $ 11.780 $ 10.530 $ 8.570 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income (loss)........... $ 0.091 $ 0.062(1) $ 0.077(1) $ 0.053(1) $ 0.029(1) Net realized and unrealized gain (loss) 0.728 1.374 0.651 1.247 1.958 --------- --------- --------- --------- --------- Total income (loss) from investment operations......... $ 0.819 $ 1.436 $ 0.728 $ 1.300 $ 1.987 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Dividends from investment income....... $ (0.089) $ (0.066) $ (0.088) $ (0.050) $ (0.027) --------- --------- --------- --------- --------- Total distributions................ $ (0.089) $ (0.066) $ (0.088) $ (0.050) $ (0.027) --------- --------- --------- --------- --------- Net asset value, end of year................ $ 14.520 $ 13.790 $ 12.420 $ 11.780 $ 10.530 ========= ========= ========= ========= ========= TOTAL RETURN(2)............................. 5.96% 11.57% 6.20% 12.36% 23.20% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted).. $ 57,750 $ 63,276 $ 66,742 $ 65,503 $ 71,539 Ratios (As a percentage of average daily net assets): Net expenses.......................... 1.26% 1.26% 1.26% 1.25% 1.25% Net expenses after custodian fee reduction(4) 1.25% 1.25% 1.25% 1.25% 1.25% Interest expense...................... 0.02% -- -- -- -- Net investment income (loss).......... 0.63% 0.48% 0.66% 0.49% 0.31% Portfolio turnover rate................ 55% 97% 82% 74% 143% -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2007, 2006, 2005, 2004 and 2003, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: 2007 2006 2005 2004 2003 --------------------------------------------------------------------- Net investment income per share........ $ 0.088 $ 0.062 $ 0.077 $ 0.050 $ 0.024 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses............................. 1.28% 1.28% 1.26% 1.28% 1.31% ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.27% 1.27% 1.25% 1.28% 1.31% ========= ========= ========= ========= ========= Interest expense..................... 0.02% -- -- -- -- ========= ========= ========= ========= ========= Net investment income................ 0.61% 0.46% 0.66% 0.46% 0.26% ========= ========= ========= ========= ========= -------------------------------------------------------------------------------------------------------------------------------- (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)Certain per share amounts are based on average shares outstanding. (4)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. See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - DECEMBER 31, 2007 Shares Value Equity Interests - 97.8% AUSTRALIA - 4.0% BHP Billiton Ltd.................... 38,143 $ 1,344,347 BlueScope Steel Ltd................. 58,224 493,343 Caltex Australia, Ltd............... 25,091 426,743 Centro Properties Group............. 40,018 35,489 QBE Insurance Group Ltd............. 134,423 3,935,125 Westfield Group..................... 62,389 1,150,394 ------------ $ 7,385,441 ------------ AUSTRIA - 1.1% Andritz AG.......................... 9,668 $ 585,900 Voestalpine AG...................... 19,731 1,426,519 ------------ $ 2,012,419 ------------ BELGIUM - 1.3% Colruyt SA.......................... 1,952 $ 459,567 Fortis.............................. 71,901 1,893,263 ------------ $ 2,352,830 ------------ CANADA - 6.8% Canadian Imperial Bank of Commerce (1)...................... 17,113 $ 1,223,286 CGI Group, Inc. - Class A*.......... 77,463 909,667 Encana Corp......................... 34,286 2,344,906 Husky Energy, Inc. (1).............. 64,337 2,906,719 Jean Coutu Group, Inc. - Class A (1) 77,708 879,476 Methanex Corp. (1).................. 43,027 1,201,504 Petro-Canada........................ 14,383 776,022 Potash Corp. of Saskatchewan, Inc... 8,330 1,211,076 Power Financial Corp. (1)........... 23,056 952,422 ------------ $12,405,078 ------------ DENMARK - 2.9% Danske Bank Aq (Stammaktie)......... 56,742 $ 2,222,373 Novo Nordisk A/S Series B........... 27,558 1,810,165 Topdanmark A/S* (1)................. 9,434 1,357,743 ------------ $ 5,390,281 ------------ FINLAND - 1.6% Nokia OYJ........................... 56,289 $ 2,182,526 Rautaruukki Oyj..................... 16,419 711,760 ------------ $ 2,894,286 ------------ FRANCE - 9.2% AXA (Actions Ordinaires)............ 14,104 $ 564,802 BNP Paribas......................... 27,305 2,962,958 Carrefour SA........................ 11,605 904,176 Casino Guichard - Perrachon SA...... 9,695 1,054,447 Compagnie de Saint-Gobain........... 1,930 181,975 Compagnie Generale des Establissments Micheli.............. 2,955 339,148 PPR................................. 3,829 615,801 Sanofi-Aventis...................... 11,814 1,087,832 Schneider Electric SA............... 5,338 723,314 Societe Generale de France (Actions Ord.)..................... 15,614 2,258,419 Total SA............................ 23,048 1,915,020 Unibail-Rodamco..................... 11,505 2,521,788 Vallourec SA........................ 6,816 1,845,082 ------------ $16,974,762 ------------ GERMANY - 10.3% Allianz Ag Holding (Namensaktie).... 2,599 $ 562,191 BASF AG (Stammaktie)................ 23,898 3,543,273 Celesio AG.......................... 7,610 472,864 Continental AG (Stammaktie)......... 11,641 1,514,586 Daimler AG.......................... 8,401 816,798 Deutsche Bank AG (Stammaktie)....... 6,319 825,939 E.On AG (Stammaktie)................ 29,959 6,377,070 MAN AG.............................. 10,838 1,803,241 Porsche AG (Preferred Stock)........ 553 1,120,511 ThyssenKrupp AG (1)................. 24,445 1,370,622 Volkswagen AG....................... 1,816 414,458 ------------ $18,821,553 ------------ HONG KONG - 3.3% CLP Holdings Ltd. (Ordinary)........ 510,500 $ 3,486,306 Sun Hung Kai Properties Ltd......... 123,000 2,612,256 ------------ $ 6,098,562 ------------ IRELAND - 0.5% Allied Irish Banks PLC.............. 39,186 $ 897,821 ------------ ITALY - 4.0% Eni S.p.A (Azioni Ordinarie)........ 157,729 $ 5,776,724 Intesa Sanpaolo..................... 192,508 1,522,679 ------------ $ 7,299,403 ------------ JAPAN - 16.3% Asahi Breweries, Ltd. (1)........... 11,300 $ 191,376 Astellas Pharma, Inc................ 26,500 1,155,216 Canon, Inc. (1)..................... 25,150 1,170,658 Daido Steel Co., Ltd................ 39,000 292,897 Hitachi High-Technologies Corp...... 14,500 317,348 Kawasaki Kisen Kaisha Ltd. (1)...... 125,000 1,228,573 Kddi Corp........................... 50 372,376 Kobe Steel, Ltd..................... 211,000 687,499 Makita Corp......................... 9,000 381,865 Mitsubishi Corp..................... 28,600 783,386 Mitsui OSK Lines, Ltd............... 214,000 2,731,630 Nintendo Company Ltd................ 5,000 2,994,226 Nippon Steel Corp................... 438,000 2,713,118 Nippon Yusen Kabushiki Kaisha....... 191,000 1,518,221 Nissan Motor Co., Ltd............... 119,900 1,320,118 Nisshin Steel Co., Ltd.............. 305,000 1,072,954 OKUMA Corp.......................... 30,000 323,323 Sumitomo Corp....................... 101,400 1,440,467 Sumitomo Metal Industries, Ltd...... 312,000 1,449,474 TDK Corp............................ 11,600 863,913 Tokai Rika Co., Ltd................. 15,100 473,079 Toyota Boshoku Corp................. 61,200 1,988,596 Toyota Motor Corp................... 49,800 2,692,494 Yamaha Motor Co., Ltd. (1).......... 74,500 1,803,898 ------------ $29,966,705 ------------ NETHERLANDS - 4.2% Heineken NV......................... 18,507 $ 1,196,512 ING Groep NV ADR (Aandeel)......... 104,444 4,084,788 Koninklijke Philips Electronics N.V. (Aandeel)........ 54,993 2,373,483 ------------ $ 7,654,783 ------------ NEW ZEALAND - 0.2% Fletcher Building Limited........... 41,122 $ 363,922 ------------ NORWAY - 2.8% Norsk Hydro ASA (Ordinaere Aksje)... 26,624 $ 380,493 Schibsted ASA....................... 22,040 955,905 Tandberg ASA........................ 20,738 433,486 Telenor Group ASA................... 126,301 3,018,049 Yara International ASA.............. 7,577 350,952 ------------ $ 5,138,885 ------------ PORTUGAL - 0.2% Energias de Portugal SA............. 56,038 $ 366,229 ------------ SINGAPORE - 1.2% Cosco Corp. (Singapore), Ltd........ 31,000 $ 124,478 Overseas Chinese Town Group Corp.... 181,000 1,042,405 Singapore Petroleum Co., Ltd. (1)... 109,000 573,226 Singapore Telecommunications, Ltd... 175,000 486,297 ------------ $ 2,226,406 ------------ SPAIN - 3.5% Acciona SA.......................... 2,341 $ 742,204 ACS, Actividades de Construccion y Servicios SA..................... 29,675 1,763,655 Promotora de Informaciones SA....... 3,139 58,928 Repsol YPF SA (Accion).............. 40,381 1,439,372 Telefonica SA....................... 73,251 2,379,687 ------------ $ 6,383,846 ------------ SWEDEN - 4.3% Kungsleden AB....................... 17,749 $ 197,724 Nordea Bank AB...................... 182,100 3,042,889 Scania AB Class B................... 42,711 1,017,684 TeliaSonera AB...................... 362,313 3,391,499 Volvo AB............................ 17,324 290,824 ------------ $ 7,940,620 ------------ SWITZERLAND - 3.4% Credit Suisse Group................. 17,867 $ 1,074,719 Rieter Holdigs AG................... 555 245,109 Swatch Group AG..................... 4,007 1,207,781 Zurich Financial Services (Inhaberaktie)..................... 12,468 3,661,714 ------------ $ 6,189,323 ------------ UNITED KINGDOM - 16.7% Anglo American PLC (Ordinary)....... 28,720 $ 1,760,837 AstraZeneca PLC..................... 21,630 931,747 Barclays PLC (Ordinary)............. 439,024 4,404,564 Barratt Developments PLC............ 101,064 916,366 Bellway PLC (Ordinary).............. 35,619 590,978 BHP Billiton PLC ................... 46,625 1,434,869 British Airways PLC *............... 82,128 506,392 Centrica PLC........................ 419,803 2,997,930 Hammerson PLC....................... 15,332 312,829 Legal & General Group (Ordinary).... 482,077 1,253,267 Man Group PLC....................... 345,027 3,907,954 Next PLC............................ 12,576 406,549 Persimmon PLC (Ordinary)............ 113,210 1,802,847 Rio Tinto PLC....................... 10,339 1,094,282 Royal Bank of Scotland Group PLC (Ordinary).............. 24,555 217,024 Royal Dutch Shell PLC............... 93,401 3,885,813 Travis Perkins PLC.................. 47,104 1,128,933 Unilever PLC........................ 83,755 3,151,060 ------------ $30,704,241 ------------ TOTAL EQUITY INTERESTS-- 97.8% (identified cost, $160,144,463) $179,467,396 ------------ SHORT-TERM INVESTMENTS - 7.2% State Street Navigator Securities Lending Prime Portfolio(2) $ 13,258,575 ------------ TOTAL SHORT-TERM INVESTMENTS-- 7.2% (identified cost, 13,258,575) $ 13,258,575 ------------ TOTAL INVESTMENTS-- 105.0% (identified cost, $173,403,038) $192,725,971 OTHER ASSETS, LESS LIABILITIES -- (5.0)% (9,118,045) ------------ NET ASSETS -- 100% $183,607,926 ============= * Non-income producing security; (1)All or a portion on these securities were on loan at December 31, 2007; (2)The amount invested in State Street Navigator Securities Lending Prime Portfolio represents cash collateral received for securities on loan as of December 31,2007. Other Assets, Less Liabilities includes an equal and offsetting liability of the Fund to repay collateral amounts upon the return of loaned securities. TOP HOLDINGS BY INDUSTRY ----------------------------------- % of net assets at 12/31/07 Materials....13.3% Banks.......13.9% Energy.......11.1% Other.......61.7% See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ------------------------------------------------------------------------------ ASSETS: Investments, at value including $12,622,867 of securities loaned (identified cost $173,403,038) (Note 1A).............................. $192,725,971 Cash.................................... 5,220,624 Receivable for investments sold......... 1,065,926 Receivable for fund shares sold......... 145,233 Dividends receivable.................... 750,883 Receivable for securities lending....... 4,873 Tax reclaims receivable................. 199,525 Other assets............................ 8,300 ------------ Total assets.......................... $200,121,335 ------------ LIABILITIES: Payable for investments purchased....... $ 2,680,658 Payable for fund shares reacquired...... 411,469 Collateral for securities loaned........ 13,258,575 Payable to affiliate for Trustees' fees. 35 Foreign currency overdraft, at value (cost $74,325) (Note 1)................ 49,685 Accrued expenses and other liabilities.. 112,987 ------------ Total liabilities..................... $ 16,513,409 ------------ NET ASSETS................................ $183,607,926 ============== NET ASSETS CONSIST OF: Paid-in capital......................... $161,317,435 Accumulated undistributed net realized gain on investments and foreign currency (computed on the basis of identified cost).......... 2,900,613 Unrealized appreciation of investments (computed on the basis of identified cost) 19,389,878 ------------ Net assets applicable to outstanding shares $183,607,926 ============= SHARES OF BENEFICIAL INTEREST OUTSTANDING............................ 8,171,288 ============= NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................. $ 22.47 ============= STATEMENT OF OPERATIONS Year Ended December 31, 2007 ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Dividend income......................... $ 8,212,314 Miscellaneous Income.................... 17,935 Income from security lending............ 4,873 Less: Foreign taxes..................... (766,868) ------------ Investment income....................... $ 7,468,254 ------------ Expenses - Investment adviser fee (Note 2)......... $ 1,790,901 Administrator fee (Note 2).............. 259,000 Compensation of Trustees who are not employees of the investment adviser or administrator 13,000 Custodian fee (Note 1D)................. 421,913 Distribution expenses (Note 3).......... 567,848 Transfer and dividend disbursing agent fees 60,120 Printing................................ 25,476 Interest expense........................ 147,987 Shareholder communications.............. 8,383 Audit services.......................... 33,172 Legal services.......................... 9,800 Registration costs...................... 21,389 Miscellaneous .......................... 22,059 ------------ Total expenses.......................... $ 3,381,048 ------------ Deduct - Reduction of custodian fee.............. $ (55,043) ------------ Total deductions...................... $ (55,043) ------------ Net expenses........................... $ 3,326,005 ------------ Net investment income.................. $ 4,142,249 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain - Investment transactions (identified cost basis)............. $ 32,489,277 Foreign currency transactions.......... (88,304) ------------ Net realized gain....................... $ 32,400,973 ------------ Change in unrealized depreciation on Investments (identified cost basis).... (25,233,170) Foreign currency....................... 56,765 ------------ Net unrealized loss..................... $(25,176,405) ------------ Net realized and unrealized gain on investments......................... $ 7,224,568 ------------ Net increase in net assets from operations $ 11,366,817 ============== See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------- Year Ended December 31, ----------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income ..................................................... $ 4,142,249 $ 2,161,397 Net realized gain on investment and foreign currency transactions.......... 32,400,973 12,241,322 Change in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies........... (25,176,405) 28,024,106 --------------- --------------- Net increase in net assets resulting from operations..................... $ 11,366,817 $ 42,426,825 --------------- --------------- Distributions to shareholders (Note 1F) - From net investment income................................................. $ (4,294,177) $ (2,603,140) From net realized gain..................................................... (8,544,757) (227,144) --------------- --------------- Total distributions...................................................... $(12,838,934) $ (2,830,284) --------------- --------------- Net increase (decrease) in net assets from fund share transactions (Note 4) . $(33,121,129) $ 68,707,253 --------------- --------------- Net increase (decrease) in net assets........................................ $(34,593,246) $108,303,794 NET ASSETS: At beginning of year......................................................... 218,201,172 109,897,378 --------------- -------------- At end of year............................................................... $ 183,607,926 $218,201,172 =============== =============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR.................................................................. $ -- $ 55,481 =============== ===============
See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) ------------------------------------------------------------------------------ Year Ended December 31, ------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2007(1) 2006(1) 2005 (1) 2004 2003(1) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $22.830 $18.060 $15.070 $12.890 $ 9.840 --------- --------- --------- --------- --------- INCOME FROM INVESTMENT OPERATIONS: Net investment income.................. $ 0.434 $ 0.255 $ 0.129 $ 0.128 $ 0.073 Net realized and unrealized gain....... 0.755 4.859 3.028 2.140 3.044 --------- --------- --------- --------- --------- Total income from investment operations...... $ 1.189 $ 5.114 $ 3.157 $ 2.268 $ 3.117 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income... $ (0.491) $ (0.320) $ (0.167) $ (0.088) $ (0.067) Distributions from capital gains....... (1.058) (0.024) - - - --------- --------- --------- --------- --------- Total distributions................ $ (1.549) $ (0.344) $ (0.167) $(0.088) $ (0.067) --------- --------- --------- --------- --------- Net asset value, end of year................ $22.470 $22.830 $18.060 $15.070 $12.890 ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 5.50% 28.49% 21.13% 17.71% 31.96% RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000 omitted).. $183,608 $218,201 $109,897 $ 62,266 $ 54,586 Ratios (As a percentage of average daily net assets): Net expenses.......................... 1.49% 1.46% 1.66% 1.72% 1.80% Net expenses after custodian fee reduction 1.47% 1.37% 1.62% 1.71% 1.80% Interest expense...................... 0.07% -- -- -- -- Net investment income................. 1.82% 1.26% 0.81% 0.97% 0.81% Portfolio turnover rate .............. 138% 116% 99% 121% 77% -------------------------------------------------------------------------------------------------------------------------------- (1)Certain per share amounts are based on average shares outstanding. (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. See notes to financial statements
WRIGHT MANAGED EQUITY TRUST ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTING POLICIES The Wright Managed Equity Trust (the Trust), issuer of Wright Select 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 (the 1940 Act), as a diversified, open-end, management investment company. The Funds seek to provide total return consisting of price appreciation and current income. 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 Global or Global Select Market are generally valued at the NASDAQ official closing price, 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. 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. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium and discount. D. Expense Reduction - State Street Bank & Trust Company (SSBT) serves as custodian to the Funds. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits which are determined based on the average daily cash balance the Funds maintain with SSBT. All credit balances, if any, used to reduce the Fund's custodian fees are reported as a reduction of expenses in 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, 2007, WMBC, for federal income tax purposes, had capital loss carryovers of $14,968,848 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 Fund of any liability for federal income or excise tax. Pursuant to the Code, such capital loss carryovers will expire as follows: 12/31 -------------------------------------------------------------------- 2010 $12,738,080 2011 2,230,768 -------------------------------------------------------------------- At December 31, 2007, net capital losses of $343,585 for WMBC, attributable to security transactions incurred after October 31, 2007, were treated as arising on the first day of the Fund's current taxable year ending 12/31/08. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, "Accounting for Income Taxes". This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective on the last business day of the first required financial reporting period for fiscal years beginning after December 15, 2006. Management has concluded that as of December 31, 2007, there are no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund's federal tax returns filed in the 3-year period ended December 31, 2007 remains subject to examination by the Internal Revenue Service. F. Distributions to Shareholders - The Trust's policy is to distribute quarterly substantially all of the net investment income of WSBC and WMBC and to distribute annually the net investment income of WIBC. Net realized capital gains will be distributed at least annually. Distributions are paid in the form of additional shares of the Fund or at the election of the shareholder, in cash. The Funds distinguish between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are classified to paid-in capital. During the year ended December 31, 2007, the following amounts were reclassified due to differences between book and tax accounting created primarily by the deferral of certain losses for tax purposes and character reclassifications between net investment income and net realized capital gains. Accumulated Undistributed Undistributed Net Net Paid-In Realized Gain Investment Capital on Investments Income ------------------------------------------------------------------------------- WSBC $1,917,507 ($1,975,021) $ 57,514 WMBC (348) 14,318 (13,970) WIBC 21,368,421 (21,464,868) 96,447 ------------------------------------------------------------------------------- The tax character of distributions paid for the year ended December 31, 2007 and December 31, 2006 was as follows: Year Ended 12/31/07 WSBC WMBC WIBC ------------------------------------------------------------------------------- Distributions declared from: Long-term capital gains $5,034,405 - $8,544,757 Ordinary income 33,344 362,113 4,294,177 ------------------------------------------------------------------------------- Year Ended 12/31/06 WSBC WMBC WIBC ------------------------------------------------------------------------------- Distributions declared from: Ordinary income - $314,151 $2,603,140 Capital gains $4,229,388 - 227,144 ------------------------------------------------------------------------------- As of December 31, 2007, the components of distributable earnings (accumulated losses) on a tax basis were as follows: WSBC WMBC WIBC ------------------------------------------------------------------------------- Undistributed income $ 115,945 $ 19,267 $ - Undistributed gain 1,747,365 - 4,309,699 Capital loss carryforwards - (14,968,848) - Unrealized appreciation 3,358,849 8,716,316 17,983,790 Other temporary differences - (343,585) - ------------------------------------------------------------------------------- The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to wash sales and post October losses. G. Other - Investment transactions are accounted for on a trade-date basis. Dividends to shareholders are recorded on the ex-dividend date. 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. (2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as investment adviser to the Funds pursuant to an Investment Advisory Contract. Wright furnishes the Funds with investment management, investment advisory, and other services. For its services, Wright is compensated based upon a percentage of average daily net assets which rate is adjusted as average daily net assets exceed certain levels. For the year ended December 31, 2007, the effective annual rate was 0.79% for WIBC and 0.60% for WSBC and WMBC. Under a written agreement in effect through April 30, 2008, Wright has agreed to waive a portion of its advisory fee 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, Wright waived adviser fees of $43,860 on behalf of WSBC. The Trust also has engaged Eaton Vance Management (Eaton Vance) to act as administrator of the Trust. Under the Administration Agreement, Eaton Vance is responsible for managing the business affairs of the Trust and is compensated based upon a percentage of average daily net assets which rate is reduced as average daily net assets exceed certain levels. For the year ended December 31, 2007, the effective rate was 0.12% for WSBC and WMBC, and 0.11% for WIBC. An affiliate of Wright also received distribution and service fees (See Note 3). 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 and an affiliate of Wright, 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 April 30, 2008, Wright has agreed to waive a portion of its 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 $67,750 and $12,880 on behalf of WSBC and WMBC. In addition, the Trustees have adopted a service plan (the Service Plan) which allows the funds to reimburse the Principal Underwriter for payments to intermediaries for providing account administration and account maintenance services to their customers who are beneficial owners of shares. The combined amount of service fee payable under the Service Plan and Rule 12b-1 distribution may not exceed 0.25% annually of the average daily net assets of a Funds. For the year ended December 31, 2007, the funds did not accrue or pay any service fees. (4) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in fund shares were as follows: Year Ended Year Ended December 31, 2007 December 31, 2006 ----------------- ----------------- Shares Amount Shares Amount -------------------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund Sold................................................... 131,958 $ 1,665,341 536,776 $ 6,889,335 Issued to shareholders in payment of distributions declared 401,088 4,525,042 297,905 3,759,968 Redemptions............................................ (1,501,608) (18,810,209) (1,367,163) (17,007,602) ------------ ---------------- ------------ ---------------- Net increase (decrease).............................. (968,562) $ (12,619,826) (532,482) $ (6,358,299) ============ ================ ============ ================ Wright Major Blue Chip Equities Fund Sold.................................................. 393,484 $ 5,670,384 600,054 $ 7,758,465 Issued to shareholders in payment of distributions declared 21,159 299,544 18,825 257,085 Redemptions............................................ (4,023,623) (14,763,956) (1,403,539) (18,032,693) ------------ ---------------- ------------ ---------------- Net decrease......................................... (608,980) $ (8,794,028) (784,660) $(10,017,143) ============ ================ ============ ================ Wright International Blue Chip Equities Fund Sold................................................... 4,830,446 $ 115,578,462 6,330,093 $?126,455,231 Issued to shareholders in payment of distributions declared 504,859 11,019,992 109,592 2,341,138 Redemptions............................................ (6,722,679) (159,773,243) (2,964,763) (60,089,116) Redemption fees........................................ - 53,660 - - ------------ ---------------- ------------ ---------------- Net increase (decrease).............................. (1,387,374) $ (33,121,129) 3,474,922 $ 68,707,253 =========== ================ ============ =================
(5) INVESTMENT TRANSACTIONS Purchases and sales of investments, other than short-term obligations were as follows: Year Ended December 31, 2007 ------------------------------------------------------------------------------ WSBC WMBC WIBC ------------------------------------------------------------------------------ Purchases $18,270,198 $33,351,856 $312,041,145 ============ ============ ============ Sales $35,597,477 $42,298,284 $354,460,949 ============ ============ ============ Purchases and sales of affiliated investments: Purchases $ 131,911 - - ============ ============ ============ Sales $ 295,702 - - ============ ============ ============ (6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2007, as computed on a federal income tax basis, are as follows: WSBC WMBC WIBC ----------------------------------------------------------------------------- Aggregate Cost $20,539,228 $48,926,216 $174,809,126 =========== =========== =========== Gross unrealized appreciation $ 5,264,339 $11,025,210 $ 27,216,626 Gross unrealized depreciation (1,905,490) (2,308,894) (9,299,781) ----------- ----------- ----------- Net unrealized appreciation (depreciation) $ 3,358,849 $8,716,316 $17,916,845 =========== =========== ============ The net unrealized appreciation on foreign currency for WIBC is $66,945 at December 31, 2007 . (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. At December 31, 2007, there were no outstanding balances pursuant to this line of credit. The average borrowings and average interest rate for the year ended December 31, 2007 are follows: WSBC WMBC WIBC ------------------------------------------------------------------------------- Average borrowing $ 213,317 $ 129,310 $ 2,478,132 Average interest rate 6% 6% 6% ------------------------------------------------------------------------------- (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. Certain 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 Funds, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers and issuers than in the United States. (9) FINANCIAL INSTRUMENTS The Funds may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities to assist in managing exposure to various market risks. These financial instruments may include written options, forward foreign currency exchange contracts and financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Fund has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. The Funds did not have any open obligations under these financial instruments at December 31, 2007. (10) SECURITY LENDING AGREEMENT The Wright International Blue Chip Fund has established a securities lending agreement with SSBT as securities lending agent in which the Fund lends portfolio securities to qualified borrowers in exchange for collateral consisting of cash in an amount at least equal to the market value of the securities on loan. Cash collateral is invested in State Street navigator securities lending Prime Portfolio. The Fund earns interest on the amount invested in State Street navigator securities lending Prime Portfolio, but it must pay the broker a loan rebate fee computed as a varying percentage of the collateral received. The loan rebate fee paid by the Fund amounted to $21,761 for the year ended December 31, 2007. At December 31, 2007, the value of the securities loaned and the value for the collateral amounted to $12,622,867 and $13,258,575, respectively. In the event of counterparty default, the Fund is subject to potential loss if it is delayed or prevented from exercising its right to dispose of the collateral. The Fund bears risk in the event that invested collateral is not sufficient to meet obligations due on loans. (11) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (FAS 157), "Fair Value Measurements". FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of December 31, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures may be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements on changes in net assets for the period. WRIGHT MANAGED EQUITY TRUST ------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees of Wright Managed Equity Trust and the Shareholders of Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and Wright International Blue Chip Equities Fund: We have audited the accompanying statements of assets and liabilities of Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and Wright International Blue Chip Equities Fund (collectively, the "Funds") (together comprising Wright Managed Equity Trust), including the portfolios of investments, as of December 31, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the funds constituting the Wright Managed Equity Trust as of December 31, 2007, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 20, 2008 WRIGHT MANAGED EQUITY TRUST AS OF DECEMBER 31, 2007 ------------------------------------------------------------------------------- FEDERAL TAX INFORMATION The Form 1099-DIV you received in January 2008 showed the tax status of all distributions paid to your account in calendar 2007. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code regulations, shareholders must be notified within 60 days of the Fund's fiscal year end regarding gains dividends, the status of the qualified dividend income for individuals and the foreign tax credit. CAPITAL GAINS DIVIDENDS - Wright Selected Blue Chip Equities Fund and Wright International Blue Chip Equities Fund designates $5,034,405 and $8,544,757, respectively, as capital gain dividend. FOREIGN TAX CREDIT. The Wright International Blue Chip Equities Fund designates a foreign tax credit of $766,868 and recognizes foreign source income of $8,212,314. QUALIFIED DIVIDEND INCOME. The Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund and Wright International Blue Chip Equities Fund designate approximately $209,904, $811,053 and $6,446,294, respectively, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%. DIVIDENDS RECEIVED DEDUCTION. Corporate shareholders are generally entitled to take the dividends received deduction on the portion of the fund's dividend distribution that qualifies under tax law. For the Wright Selected Blue Chip Equities Fund's and Wright Major Blue Chip Equities Fund's fiscal 2007 ordinary income dividends, 99.49% and 100%, respectively, qualifies for the corporate dividends received deduction. WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - DECEMBER 31, 2007 Face Coupon Maturity Current Amount Description Rate Date Value Yield -------------------------------------------------------------------------------------------------------------------------------- (unaudited) ASSET-BACKED SECURITIES - 1.4% $ 155,000 AEP Texas Central Transition Funding LLC 4.980% 07/01/13 $ 156,268 5.0% 180,000 PSE&G Transition Funding LLC, Series 2001-1 A7 6.750% 06/15/16 195,537 7.3% ----------- Total Asset-Backed Securities (identified cost, $195,739) $ 351,805 ---------- COMMERCIAL MORTGAGE-BACKED SECURITIES - 7.8% $ 220,000 Citigroup Commercial Mortgage Trust, Series 2004-C2 A5 4.733% 10/15/41 $ 216,329 4.7% 285,000 CS First Boston Mortgage Securities Corp., Series 2003-C3 A5 3.936% 05/15/38 272,342 3.8% 330,000 JP Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3 A5 4.878% 01/15/42 326,855 4.8% 265,000 Lehman Brothers UBS, Series 2006-C6 A4 5.372% 09/15/39 266,404 5.4% 270,000 Merrill Lynch Mortgage Trust, Series 2005-LC1 A4 5.291% 01/12/44 269,688 5.3% 420,000 Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2 A4 5.910% 06/12/46 439,127 6.2% 148,449 Salomon Brothers Mortgage Securities VII, Series 2002-KEY2 A2 4.467% 03/18/36 147,717 4.4% ------------ Total Commercial Mortgage-Backed Securities (identified cost, $1,909,218) $1,938,462 ------------ NON-AGENCY MORTGAGE-BACKED SECURITIES - 1.1% $ 274,965 First Horizon Alternative Mortgage Securities, Series 2005-AA10, 1A2 5.714% 12/25/35 $ 273,176 5.7% ------------ Total Non-Agency Mortgage-Backed Securities (identified cost, $274,965) $ 273,176 ------------ CORPORATE BONDS -23.0% AEROSPACE - 0.5% ----------------- $ 115,000 Lockheed Martin Corp. 8.200% 12/01/09 $ 123,702 8.8% AUTOMOBILE - 0.5% ---------------- $ 125,000 DaimlerChrysler North America Holding Co. 7.200% 09/01/09 $ 128,948 7.4% BANKS & MISCELLANEOUS FINANCIAL - 1.8% -------------------------------------- $ 235,000 HSBC Finance Corp. 6.375% 10/15/11 $ 242,328 6.6% 200,000 Royal Bank of Scotland Group PLC 7.648% 08/29/49 206,919 7.9% CABLE TV - 0.9% --------------- $ 100,000 Comcast Cable Communications Holdings 5.875% 02/15/18 $ 99,887 5.9% 125,000 Time Warner, Inc. 5.875% 11/15/16 124,444 5.8% COMMUNICATIONS EQUIPMENT - 0.5% ------------------------------- $ 140,000 Harris Corp. 5.000% 10/01/15 $ 132,432 4.7% DIVERSIFIED FINANCIALS - 4.8% ----------------------------- $ 230,000 General Electric Capital Corp. 5.875% 02/15/12 $ 239,856 6.1% 225,000 Genworth Global Funding Trusts 5.200% 10/08/10 228,375 5.3% 245,000 International Lease Finance Corp. 5.875% 05/01/13 249,339 6.0% 265,000 Lehman Brothers Holdings Capital Trust V 5.857% 11/29/49 236,403 5.2% 235,000 National Rural Utilities Cooperative Finance Corp. 7.250% 03/01/12 254,848 7.9% ELECTRIC UTILITIES - 1.9% ------------------------- $ 130,000 American Electric Power 5.250% 06/01/15 $ 126,429 5.1% 90,000 Dominion Resources, Inc. 6.300% 03/15/33 87,914 6.2% 135,000 Exelon Corp. 4.900% 06/15/15 127,272 4.6% 120,000 Spectra Energy Capital LLC 7.500% 10/01/09 125,144 7.8% FOOD - RETAIL -0.5% -------------------- $ 120,000 Kellogg Co. 5.125% 12/03/12 $ 121,135 5.2% INFORMATION TECHNOLOGY - 1.9% ----------------------------- $ 235,000 Cisco Systems, Inc. 5.500% 02/22/16 $ 239,377 5.6% 220,000 Oracle Corp. 5.000% 01/15/11 223,065 5.1% INSURANCE - 1.3% ----------------- $ 130,000 Fund American Cos., Inc. 5.875% 05/15/13 $ 130,429 5.9% 200,000 St. Paul Travelers 5.500% 12/01/15 198,937 5.5% MEDICAL - 1.9% -------------- $ 245,000 Bristol-Myers Squibb Co. 5.875% 11/15/36 $ 244,303 5.9% 125,000 Hospira, Inc. 4.950% 06/15/09 125,438 5.0% 115,000 WellPoint, Inc. 5.875% 06/15/17 115,991 5.9% OIL & GAS - 2.5% ---------------- $ 125,000 Canadian Natural Resources, Ltd. 5.700% 05/15/17 $ 124,462 5.7% 120,000 EnCana Corp. 5.900% 12/01/17 122,986 6.0% 125,000 Marathon Oil Corp. 6.000% 10/01/17 127,525 6.1% 130,000 Oneok, Inc. 5.510% 02/16/08 129,914 5.5% 115,000 Sempra Energy 6.000% 02/01/13 118,928 6.2% SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.8% ----------------------------------------- $ 165,000 Applied Materials, Inc. 7.125% 10/15/17 $ 187,944 8.1% TELECOMMUNICATIONS - 2.7% -------------------------- $ 110,000 AT&T Wireless Services, Inc. 7.875% 03/01/11 $ 119,210 8.5% 70,000 British Telecom PLC 9.125% 12/15/30 92,913 12.1% 120,000 Deutsche Telekom International Finance BV 8.000% 06/15/10 128,182 8.5% 120,000 France Telecom SA 7.750% 03/01/11 129,069 8.3% 175,000 Verizon Global Funding Corp. 7.750% 12/01/30 205,845 9.1% TRANSPORTATION - 0.5% ---------------------- $ 125,000 Burlington Northern Santa Fe Corp. 5.650% 05/01/17 $ 124,497 5.6% ------------ Total Corporate Bonds (identified cost, $5,864,336) $ 5,744,390 ------------ GOVERNMENT INTERESTS - 64.7% MORTGAGE-BACKED SECURITIES - 51.2% ---------------------------------- $ 247,454 FHLMC Gold Pool #A32600 5.500% 05/01/35 $ 247,077 5.5% 741,774 FHLMC Gold Pool #A35363 5.000% 07/01/35 724,334 4.9% 74,664 FHLMC Gold Pool #C01646 6.000% 09/01/33 75,947 6.1% 46,483 FHLMC Gold Pool #C27663 7.000% 06/01/29 48,880 7.4% 162,588 FHLMC Gold Pool #C47318 7.000% 09/01/29 172,800 7.4% 595,223 FHLMC Gold Pool #C55780 6.000% 01/01/29 608,959 6.1% 287,516 FHLMC Gold Pool #C91046 6.500% 05/01/27 295,905 6.7% 123,531 FHLMC Gold Pool #D66753 6.000% 10/01/23 126,269 6.1% 19,429 FHLMC Gold Pool #E00903 7.000% 10/01/15 20,271 7.3% 408,963 FHLMC Gold Pool #G01035 6.000% 05/01/29 417,897 6.1% 264,892 FHLMC Gold Pool #H10194 6.000% 09/01/37 269,114 6.1% 407,065 FHLMC Gold Pool #H19018 6.500% 08/01/37 415,334 6.6% 132,992 FHLMC Gold Pool #M30297 4.000% 09/01/18 128,877 3.9% 139,158 FHLMC Gold Pool #N30514 5.500% 11/01/28 140,841 5.6% 424,874 FHLMC Gold Pool #P00024 7.000% 09/01/32 440,867 7.3% 66,580 FHLMC Gold Pool #P50031 7.000% 08/01/18 69,763 7.3% 52,640 FHLMC Gold Pool #P50064 7.000% 09/01/30 55,157 7.3% 194,174 FHLMC Pool #1B1291 4.394% 11/01/33 193,498 4.4% 610,638 FHLMC Pool #1G0233 5.000% 05/01/35 611,759 5.0% 143,043 FHLMC Pool #781071 5.186% 11/01/33 143,351 5.2% 115,029 FHLMC Pool #781804 5.068% 07/01/34 114,999 5.1% 58,827 FHLMC Pool #781884 5.149% 08/01/34 58,933 5.2% 137,310 FHLMC Pool #782862 5.006% 11/01/34 137,558 5.0% 301,343 FHLMC Series 1983 Z 6.500% 12/15/23 311,174 6.7% 346,623 FHLMC Series 2044 PE 6.500% 04/15/28 357,480 6.7% 134,960 FNMA Pool #253057 8.000% 12/01/29 144,770 8.6% 164,655 FNMA Pool #254232 6.500% 03/01/22 170,379 6.7% 55,486 FNMA Pool #254845 4.000% 07/01/13 55,085 4.0% 55,430 FNMA Pool #254863 4.000% 08/01/13 55,022 4.0% 442,780 FNMA Pool #254904 5.500% 10/01/33 443,178 5.5% 192,206 FNMA Pool #255958 5.000% 10/01/35 184,721 4.8% 34,688 FNMA Pool #479477 6.000% 01/01/29 35,480 6.1% 38,505 FNMA Pool #489357 6.500% 03/01/29 39,906 6.7% 30,502 FNMA Pool #535332 8.500% 04/01/30 32,850 9.2% 219,338 FNMA Pool #545407 5.500% 01/01/32 219,761 5.5% 51,120 FNMA Pool #545782 7.000% 07/01/32 54,142 7.4% 48,412 FNMA Pool #597396 6.500% 09/01/31 50,070 6.7% 310,212 FNMA Pool #705118 4.922% 05/01/33 310,626 4.9% 204,144 FNMA Pool #709423 4.516% 06/01/33 202,954 4.5% 250,283 FNMA Pool #721618 5.000% 07/01/33 244,616 4.9% 69,347 FNMA Pool #725866 4.500% 09/01/34 65,685 4.3% 181,503 FNMA Pool #738630 5.500% 11/01/33 181,666 5.5% 535,016 FNMA Pool #745467 5.801% 04/01/36 538,085 5.8% 211,685 FNMA Pool #747529 4.500% 10/01/33 200,641 4.3% 265,725 FNMA Pool #753189 4.000% 12/01/33 245,359 3.7% 421,376 FNMA Pool #765218 4.000% 01/01/34 389,080 3.7% 727,201 FNMA Pool #781893 4.500% 11/01/31 696,716 4.3% 237,957 FNMA Pool #807804 5.500% 03/01/35 237,849 5.5% 77,276 FNMA Pool #809888 4.500% 03/01/35 73,202 4.3% 171,738 FNMA Pool #906455 5.996% 01/01/37 173,026 6.0% 187,405 GNMA II Pool #2630 6.500% 08/20/28 194,600 6.7% 57,021 GNMA II Pool #2671 6.000% 11/20/28 58,412 6.1% 8,290 GNMA II Pool #2909 8.000% 04/20/30 8,944 8.6% 21,149 GNMA II Pool #2972 7.500% 09/20/30 22,484 8.0% 8,070 GNMA II Pool #2973 8.000% 09/20/30 8,706 8.6% 83,137 GNMA II Pool #3095 6.500% 06/20/31 86,195 6.7% 206,618 GNMA Pool #374892 7.000% 02/15/24 219,401 7.4% 51,807 GNMA Pool #376400 6.500% 02/15/24 53,824 6.8% 75,260 GNMA Pool #379982 7.000% 02/15/24 79,916 7.4% 227,904 GNMA Pool #393347 7.500% 02/15/27 243,447 8.0% 92,275 GNMA Pool #410081 8.000% 08/15/25 99,785 8.7% 36,875 GNMA Pool #427199 7.000% 12/15/27 39,169 7.4% 24,331 GNMA Pool #436214 6.500% 02/15/13 25,220 6.7% 23,701 GNMA Pool #442996 6.000% 06/15/13 24,295 6.2% 104,838 GNMA Pool #448490 7.500% 03/15/27 111,988 8.0% 54,017 GNMA Pool #458762 6.500% 01/15/28 56,073 6.7% 76,406 GNMA Pool #460726 6.500% 12/15/27 79,377 6.8% 32,032 GNMA Pool #463839 6.000% 05/15/13 32,836 6.2% 16,673 GNMA Pool #488924 6.500% 11/15/28 17,308 6.7% 18,198 GNMA Pool #510706 8.000% 11/15/29 19,696 8.7% 88,745 GNMA Pool #581536 5.500% 06/15/33 89,452 5.5% U.S. GOVERNMENT AGENCIES - 2.4% ------------------------------- $ 550,000 Tennessee Valley Authority, Series C 6.000% 03/15/13 $ ?598,591 6.5% U.S. TREASURIES - 11.1% ----------------------- $ 595,000 U.S. Treasury Bonds 6.250% 08/15/23 $ ?712,560 7.5% 955,000 U.S. Treasury Notes 3.375% 11/15/08 955,224 3.4% 590,000 U.S. Treasury Notes 5.000% 08/15/11 625,216 5.3% 250,000 U.S. Treasury Notes 4.625% 02/15/17 261,446 4.8% 400,000 U.S. Treasury Strip 0.000% 02/15/21 219,104 0.0% ------------ Total Government Interests (identified cost, $16,004,140) $16,175,182 ------------ TOTAL INVESTMENTS (identified cost, $24,248,398) -- 98.0% $24,483,015 OTHER ASSETS, LESS LIABILITIES -- (2.0%) 505,783 ------------ NET ASSETS-- 100.0% $24,988,798 ============ FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association (1) Adjustable rate security. Rate shown is the rate at period end. See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of $24,248,398) (Note 1A) $ 24,483,015 Cash.................................... 354,672 Receivable for investments sold......... 1,033,618 Receivable for fund shares sold......... 60,922 Receivable from investment adviser...... 10,367 Interest receivable..................... 226,780 Other assets............................ 7,993 ------------ Total assets.......................... $ 26,177,367 ------------ LIABILITIES: Payable for investments purchased....... $ 1,132,418 Payable for fund shares reacquired...... 1,158 Distributions payable................... 26,586 Payable to affiliate for Trustees' fees. 80 Payable to affiliate for distribution fees 478 Accrued expenses and other liabilities.. 27,849 ------------ Total liabilities..................... $ 1,188,569 ------------ NET ASSETS................................ $ 24,988,798 ============= NET ASSETS CONSIST OF: Paid-in capital......................... $ 28,143,620 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost)........................ (3,379,428) Unrealized appreciation on investments (computed on the basis of identified cost) 234,617 Distributions in excess of net investment income..................... (10,011) ------------ Net assets applicable to outstandin shares............................. $ 24,988,798 ============== SHARES OF BENEFICIAL INTEREST OUTSTANDING............................. 2,016,638 ============== NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST..................... $ 12.39 ============== STATEMENT OF OPERATIONS Year Ended December 31, 2007 ----------------------------------------------------------------------------- INVESTMENT INCOME (Note 1B) Interest income........................ $ 1,492,693 Less: Foreign Taxes.................... (53) ------------ Investment Income..................... $ 1,492,640 ------------ Expenses - Investment adviser fee (Note 3)........ $ 124,152 Administrator fee (Note 3)............. 19,324 Compensation of Trustees who are not employees of the investment adviser or administrator 19,500 Custodian fee (Note 1C)................ 66,103 Distribution expenses (Note 4)......... 68,973 Transfer and dividend disbursing agent fees 20,427 Printing............................... 1,590 Interest expense....................... 2,569 Shareholder communications............. 850 Audit services......................... 32,275 Legal services......................... 5,852 Registration costs..................... 18,982 Miscellaneous.......................... 7,325 ------------ Total expenses........................ $ 387,922 ------------ Deduct - Allocation of expenses to the investment adviser (Note 3).............................. $ (10,367) Reduction of investment adviser fee (Note 3) (69,860) Reduction of distribution expenses by principal underwriter (Note 4)........ (67,945) Reduction of custodian fee (Note 1C)... (5,988) ------------ Total deductions....................... $ (154,160) ------------ Net expenses.......................... $ 233,762 ------------ Net investment income................ $ 1,258,878 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (96,499) Change in unrealized appreciation on investments......................... 300,776 ------------ Net realized and unrealized gain on investments........................... $ 204,277 ------------ Net increase in net assets from operation $ 1,463,155 =============== See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------ Year Ended December 31, ---------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 ----------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 1,258,878 $ 1,453,692 Net realized loss on investments........................................... (96,499) (647,060) Change in unrealized appreciation on investments........................... 300,776 193,494 -------------- -------------- Net increase in net assets resulting from operations..................... $ 1,463,155 $ 1,000,126 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income................................................. $ (1,291,075) $ (1,629,189) -------------- -------------- Total distributions...................................................... $ (1,291,075) $ (1,629,189) -------------- -------------- Net decrease in net assets from fund share transactions (Note 5)............. $ (6,049,001) $ (9,793,330) -------------- -------------- Net decrease in net assets............................................... $ (5,876,921) $(10,422,393) NET ASSETS: At beginning of year......................................................... 30,865,719 41,288,112 -------------- -------------- At end of year............................................................... $ 24,988,798 $ 30,865,719 ============== ============== DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR........................................ $ (10,011) $ (7,083) ============== ============== See notes to financial tables
WRIGHT TOTAL RETURN BOND FUND (WTRB) ------------------------------------------------------------------------------- Year Ended December 31, -------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2007(3) 2006 2005 2004 2003 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 12.290 $ 12.430 $ 12.770 $ 12.870 $ 13.010 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income ................... $ 0.558 $ 0.483 $ 0.465 $ 0.453 $ 0.483 Net realized and unrealized gain (loss).. 0.115 (0.082) (0.271) (0.011) (0.066) --------- --------- --------- --------- --------- Total income from investment operations $ 0.673 $ 0.401 $ 0.194 $ 0.442 $ 0.417 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: Distributions from investment income..... $ (0.573) $ (0.541) $ (0.534) $ (0.542) $ (0.557) --------- --------- --------- --------- --------- Total distributions.................... $ (0.573) $ (0.541) $ (0.534) $ (0.542) $ (0.557) --------- --------- --------- --------- --------- Net asset value, end of year................ $ 12.390 $ 12.290 $ 12.430 $ 12.770 $ 12.870 ========= ========= ========= ========= ========= TOTAL RETURN(2) ............................ 5.64% 3.34% 1.54% 3.52% 3.25% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted).... $ 24,989 $ 30,866 $ 41,288 $ 38,213 $ 42,317 Ratios (As a percentage of average daily net assets): Net expenses............................ 0.87% 0.99% 0.98% 0.96% 0.95% Net expenses after custodian fee reduction 0.85% 0.95% 0.95% 0.95% 0.95% Interest expense.......................... 0.01% -- -- -- -- Net investment income................... 4.56% 3.96% 3.66% 3.58% 3.67% Portfolio turnover rate.................. 119% 90% 86% 64% 131% -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: 2007 2006 2005 2004 2003 -------------------------------------------------------------- Net investment income per share.......... $ 0.490 $ 0.453 $ 0.439 $ 0.429 $ 0.455 ========= ========= ========= ========= ========= Ratios (As a percentage of average net assets): Expenses............................... 1.41% 1.23% 1.18% 1.18% 1.17% ========= ========= ========= ========= ========= Expenses after custodian fee reduction. 1.38% 1.19% 1.15% 1.17% 1.17% ========= ========= ========= ========= ========= Interest expense....................... 0.01% -- -- -- -- ========== ========== ========== ========== ========== Net investment income.................. 4.03% 3.72% 3.46% 3.36% 3.46% ========= ========= ========= ========= ========= -------------------------------------------------------------------------------------------------------------------------------- (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 reinvested at the net asset value on the reinvestment date. (3)Certain per share amounts are based on average shares outstanding. See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - DECEMBER 31, 2007 Face Coupon Maturity Current Amount Description Rate Date Value Yield -------------------------------------------------------------------------------------------------------------------------------- (unaudited) NON-AGENCY MORTGAGE-BACKED SECURITIES - 6.3% $ 262,794 Bear Stearns Adj. Rate Mortgage Trust, Series 2003-4, Class 3A1 4.962%(1) 07/25/33 $ 257,338 4.9% 771,908 Chase Mortgage Finance Corporation, Series 2003-S13, Class A16 5.000% 11/25/33 751,229 4.9% 508,342 Countrywide Home Loans, Series 2006-J1, Class 3A1 6.000% 02/25/36 500,797 5.9% 507,860 Vendee Mortgage Trust, Series 1996-1, Class 1Z 6.750% 02/15/26 543,278 7.2% 421,373 Vendee Mortgage Trust, Series 1998-1, Class 2E 7.000% 09/15/27 444,699 7.4% ------------ Total Non-Agency Mortgage-Backed Securities $ 2,497,341 (identified cost, $2,451,804)-- 6.3% -------------- MORTGAGE-BACKED SECURITIES - 90.2% $ 397,087 FHLMC Series 15 7.000% 07/25/23 $ 416,739 7.3% 45,223 FHLMC Gold Pool #C00548 7.000% 08/01/27 47,553 7.4% 136,182 FHLMC Gold Pool #C00778 7.000% 06/01/29 143,202 7.4% 200,844 FHLMC Gold Pool #C47318 7.000% 09/01/29 213,458 7.4% 98,918 FHLMC Gold Pool #D81642 7.500% 08/01/27 105,946 8.0% 172,051 FHLMC Gold Pool #D82572 7.000% 09/01/27 180,917 7.4% 115,133 FHLMC Gold Pool #E00678 6.500% 06/01/14 119,352 6.7% 120,045 FHLMC Gold Pool #E00721 6.500% 07/01/14 124,452 6.7% 114,573 FHLMC Gold Pool #E81704 8.500% 05/01/15 126,299 9.4% 550,578 FHLMC Gold Pool #E88471 7.500% 01/01/17 576,382 7.9% 152,645 FHLMC Gold Pool #E90181 6.500% 06/01/17 157,919 6.7% 115,583 FHLMC Gold Pool #G00812 6.500% 04/01/26 120,097 6.8% 200,000 FHLMC Pool #2176 OJ 7.000% 08/15/29 208,560 7.3% 132,050 FHLMC Pool #2201 C 8.000% 11/15/29 139,529 8.5% 286,219 FHLMC Pool #2259 ZM 7.000% 10/15/30 294,552 7.2% 257,173 FHLMC Pool #2410 NG 6.500% 02/15/32 269,804 6.8% 276,686 FHLMC Pool #2457 PE 6.500% 06/15/32 287,102 6.7% 115,506 FHLMC Pool #765183 5.991%(1) 08/01/24 117,680 6.1% 218,483 FHLMC Pool #845802 7.436%(1) 06/01/24 220,342 7.5% 102,677 FHLMC Pool #845830 7.388%(1) 07/01/24 103,363 7.4% 477,942 FNMA Series G93-5, Class Z 6.500% 02/25/23 499,694 6.8% 428,287 FNMA Pool #251891 7.000% 08/01/18 451,798 7.4% 398,837 FNMA Pool #253849 7.000% 06/01/21 420,461 7.4% 56,054 FNMA Pool #254227 5.000% 02/01/09 56,253 5.0% 433,593 FNMA Pool #254232 6.500% 03/01/22 448,665 6.7% 111,147 FNMA Pool #254305 6.500% 05/01/22 115,010 6.7% 20,673 FNMA Pool #254505 5.000% 11/01/09 20,747 5.0% 567,880 FNMA Pool #255958 5.000% 10/01/35 545,767 4.8% 905,583 FNMA Pool #259796 4.500% 08/01/33 858,338 4.3% 277,306 FNMA Pool #313953 7.000% 12/01/17 292,497 7.4% 286,616 FNMA Pool #532204 7.000% 02/01/20 302,369 7.4% 100,950 FNMA Pool #535131 6.000% 03/01/29 103,255 6.1% 147,198 FNMA Pool #535817 7.000% 04/01/31 155,286 7.4% 131,791 FNMA Pool #545133 6.500% 12/01/28 136,935 6.8% 86,188 FNMA Pool #663689 5.000% 01/01/18 86,417 5.0% 464,328 FNMA Pool #673315 5.500% 11/01/32 465,227 5.5% 330,893 FNMA Pool #705118 4.922%(1) 05/01/33 331,334 4.9% 63,593 FNMA Pool #733750 6.310% 10/01/32 65,338 6.5% 401,262 FNMA Pool #745467 5.801%(1) 04/01/36 403,564 5.8% 307,580 FNMA Pool #745630 5.500% 01/01/29 309,873 5.5% 526,193 FNMA Pool #764388 4.957%(1) 03/01/34 529,841 5.0% 941,161 FNMA Pool #765218 4.000% 01/01/34 869,026 3.7% 422,837 FNMA Pool #801357 5.500% 08/01/34 423,656 5.5% 444,646 FNMA Pool #820972 5.011% 05/01/35 446,392 5.0% 298,166 FNMA Pool #825395 4.842%(1) 07/01/35 299,464 4.9% 466,042 FNMA Pool #871394 7.000% 04/01/21 482,969 7.3% 896,443 FNMA Pool #892522 6.186%(1) 08/01/36 905,724 6.3% 1,381,587 GNMA Series 1999-4 6.000% 02/20/29 1,415,258 6.1% 496,141 GNMA Series 2000-14 7.000% 02/16/30 523,271 7.4% 907,609 GNMA Series 2001-2 7.500% 07/20/28 958,797 7.9% 456,081 GNMA Series 2001-4 6.500% 03/20/31 474,026 6.8% 565,220 GNMA Series 2002-22 6.500% 03/20/32 593,039 6.8% 386,364 GNMA Series 2002-40 6.500% 06/20/32 405,003 6.8% 302,452 GNMA Series 2002-45 6.500% 06/20/32 317,356 6.8% 750,000 GNMA Series 2002-47 6.500% 07/16/32 788,343 6.8% 252,468 GNMA Series 2002-7 6.500% 01/20/32 261,137 6.7% 3,278 GNMA II Pool #1596 9.000% 04/20/21 3,543 9.7% 49,843 GNMA II Pool #2268 7.500% 08/20/26 53,046 8.0% 147,536 GNMA II Pool #2442 6.500% 06/20/27 153,251 6.8% 5,966 GNMA II Pool #2855 8.500% 12/20/29 6,468 9.2% 501,607 GNMA II Pool #3053 6.500% 03/20/31 520,059 6.7% 459,484 GNMA II Pool #3259 5.500% 07/20/32 461,066 5.5% 296,779 GNMA II Pool #3284 5.500% 09/20/32 297,800 5.5% 588,075 GNMA II Pool #3388 4.500% 05/20/33 558,040 4.3% 126,823 GNMA II Pool #3401 4.500% 06/20/33 120,346 4.3% 97,866 GNMA II Pool #3484 3.500% 09/20/33 84,856 3.0% 192,496 GNMA II Pool #3554 4.500% 05/20/34 182,651 4.3% 1,671,518 GNMA II Pool #3556 5.500% 05/20/34 1,675,870 5.5% 888,438 GNMA II Pool #3734 4.500% 07/20/35 843,145 4.3% 2,381,066 GNMA II Pool #3747 5.000% 08/20/35 2,326,864 4.9% 295,270 GNMA II Pool #3920 6.000% 11/20/36 301,439 6.1% 113,853 GNMA II Pool #601135 6.310% 09/20/32 117,106 6.5% 130,786 GNMA II Pool #601255 6.310% 01/20/33 134,450 6.5% 111,002 GNMA II Pool #608120 6.310% 01/20/33 114,112 6.5% 597,965 GNMA II Pool #648541 6.000% 10/20/35 609,862 6.1% 34,830 GNMA II Pool #723 7.500% 01/20/23 37,019 8.0% 90,722 GNMA II Pool #81161 5.500% 11/20/34 92,609 5.6% 1,865 GNMA Pool #176992 8.000% 11/15/16 1,997 8.6% 2,369 GNMA Pool #177784 8.000% 10/15/16 2,537 8.6% 11,385 GNMA Pool #192357 8.000% 04/15/17 12,219 8.6% 15,251 GNMA Pool #194057 8.500% 04/15/17 16,538 9.2% 2,436 GNMA Pool #194287 9.500% 03/15/17 2,661 10.4% 1,343 GNMA Pool #196063 8.500% 03/15/17 1,456 9.2% 7,021 GNMA Pool #211231 8.500% 05/15/17 7,614 9.2% 1,349 GNMA Pool #212601 8.500% 06/15/17 1,463 9.2% 2,434 GNMA Pool #220917 8.500% 04/15/17 2,639 9.2% 7,353 GNMA Pool #223348 10.000% 08/15/18 8,523 11.6% 11,978 GNMA Pool #228308 10.000% 01/15/19 13,935 11.6% 2,780 GNMA Pool #230223 9.500% 04/15/18 3,045 10.4% 262 GNMA Pool #247473 10.000% 09/15/18 269 10.3% 3,579 GNMA Pool #251241 9.500% 06/15/18 3,920 10.4% 3,945 GNMA Pool #260999 9.500% 09/15/18 4,321 10.4% 5,556 GNMA Pool #263439 10.000% 02/15/19 6,464 11.6% 1,431 GNMA Pool #265267 9.500% 08/15/20 1,573 10.4% 1,790 GNMA Pool #266983 10.000% 02/15/19 2,082 11.6% 2,728 GNMA Pool #273690 9.500% 08/15/19 2,993 10.4% 814 GNMA Pool #286556 9.000% 03/15/20 882 9.8% 3,802 GNMA Pool #301366 8.500% 06/15/21 4,142 9.3% 4,712 GNMA Pool #302933 8.500% 06/15/21 5,133 9.3% 11,031 GNMA Pool #308792 9.000% 07/15/21 11,967 9.8% 1,921 GNMA Pool #314222 8.500% 04/15/22 2,095 9.3% 3,559 GNMA Pool #315187 8.000% 06/15/22 3,840 8.6% 12,333 GNMA Pool #315754 8.000% 01/15/22 13,307 8.6% 27,212 GNMA Pool #319441 8.500% 04/15/22 29,674 9.3% 8,492 GNMA Pool #325165 8.000% 06/15/22 9,163 8.6% 14,402 GNMA Pool #335950 8.000% 10/15/22 15,539 8.6% 181,338 GNMA Pool #346987 7.000% 12/15/23 192,574 7.4% 86,656 GNMA Pool #352001 6.500% 12/15/23 90,023 6.8% 30,696 GNMA Pool #352110 7.000% 08/15/23 32,598 7.4% 50,748 GNMA Pool #368238 7.000% 12/15/23 53,893 7.4% 49,739 GNMA Pool #372379 8.000% 10/15/26 53,813 8.7% 60,116 GNMA Pool #396537 7.490% 03/15/25 64,200 8.0% 44,847 GNMA Pool #399726 7.490% 05/15/25 47,894 8.0% 174,439 GNMA Pool #399788 7.490% 09/15/25 186,292 8.0% 30,210 GNMA Pool #399958 7.490% 02/15/27 32,260 8.0% 65,428 GNMA Pool #399964 7.490% 04/15/26 69,873 8.0% 73,103 GNMA Pool #410215 7.500% 12/15/25 78,095 8.0% 9,475 GNMA Pool #414736 7.500% 11/15/25 10,122 8.0% 44,395 GNMA Pool #420707 7.000% 02/15/26 47,165 7.4% 24,574 GNMA Pool #421829 7.500% 04/15/26 26,252 8.0% 12,162 GNMA Pool #431036 8.000% 07/15/26 13,158 8.7% 37,293 GNMA Pool #431612 8.000% 11/15/26 40,348 8.7% 61,367 GNMA Pool #438004 7.490% 11/15/26 65,537 8.0% 9,422 GNMA Pool #442190 8.000% 12/15/26 10,194 8.7% 22,152 GNMA Pool #449176 6.500% 07/15/28 22,995 6.7% 34,042 GNMA Pool #462623 6.500% 03/15/28 35,337 6.7% 328,658 GNMA Pool #471369 5.500% 05/15/33 331,278 5.5% 63,196 GNMA Pool #475149 6.500% 05/15/13 65,503 6.7% 141,709 GNMA Pool #489377 6.375% 03/15/29 146,317 6.6% 134,799 GNMA Pool #524811 6.375% 09/15/29 139,183 6.6% 36,688 GNMA Pool #538314 7.000% 02/15/32 38,903 7.4% 324,441 GNMA Pool #595606 6.000% 11/15/32 332,815 6.2% 43,461 GNMA Pool #602377 4.500% 06/15/18 42,794 4.4% 581,105 GNMA Pool #603250 5.500% 04/15/34 585,613 5.5% 42,339 GNMA Pool #603377 4.500% 01/15/18 41,689 4.4% 841,374 GNMA Pool #608639 5.500% 07/15/24 854,796 5.6% 179,379 GNMA Pool #609452 4.000% 08/15/33 165,873 3.7% 315,029 GNMA Pool #616829 5.500% 01/15/25 323,155 5.6% 479,491 GNMA Pool #624600 6.150% 01/15/34 489,289 6.3% 641,375 GNMA Pool #631623 5.500% 08/15/34 646,350 5.5% 668,224 GNMA Pool #640225 5.500% 04/15/35 673,416 5.5% 134,191 GNMA Pool #640940 5.500% 05/15/35 135,234 5.5% 149,050 GNMA Pool #658267 6.500% 02/15/22 153,616 6.7% 63,491 GNMA Pool #780429 7.500% 09/15/26 67,825 8.0% 207,685 GNMA Pool #780977 7.500% 12/15/28 221,860 8.0% 510,492 GNMA Pool #781120 7.000% 12/15/29 541,842 7.4% ------------ Total Mortgage-Backed Securities (identified cost, $34,897,479)-- 90.2% $35,790,945 ------------ SHORT-TERM INVESTMENT - 1.6% ---------------------------- $ 650,000 Federal Home Loan Discount Note 0.000% 01/03/08 $ 649,851 4.1% ------------ TOTAL INVESTMENTS (identified cost, $37,999,134) -- 98.1% $38,938,137 OTHER ASSETS, LESS LIABILITIES -- 1.9% 761,024 ------------ NET ASSETS -- 100.0% $39,699,161 ============== FHLB - Federal Home Loan Bank; FHLMC - Federal Home Loan Mortgage Corporation; FNMA - Federal National Mortgage Association; GNMA - Government National Mortgage Association; (1) Adjustable rate security. Rate shown is rate at period end. See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2007 ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost of ($37,999,134) (Note 1A) $ 38,938,137 Cash.................................... 656,815 Receivable for fund shares sold......... 5,481 Interest receivable..................... 194,601 Other assets............................ 7,346 ------------ Total assets.......................... $ 39,802,380 ------------ LIABILITIES: Payable for fund shares reacquired...... $ 15,115 Distributions payable................... 54,306 Payable to affiliate for Trustees' fees. 74 Accrued expenses and other liabilities.. 33,724 ------------ Total liabilities..................... $ 103,219 ------------ NET ASSETS................................ $ 39,699,161 ============= NET ASSETS CONSIST OF: Paid-in capital......................... $ 40,069,565 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost)....................... (1,404,483) Unrealized appreciation on investments (computed on the basis of identified cost) 939,003 Accumulated undistributed net investment income................................. 95,076 ------------ Net assets applicable to outstandin shares............................... $ 39,699,161 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING........................... 4,140,576 ============= NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST................... $ 9.59 =============== STATEMENT OF OPERATIONS Year Ended December 31, 2007 ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1B) Interest income........................ $ 2,272,896 ------------ Expenses - Investment adviser fee (Note 3)........ $ 177,915 Administrator fee (Note 3)............. 35,583 Compensation of Trustees who are not employees of the investment adviser or administrator 19,500 Custodian fee (Note 1C)................ 60,960 Distribution expenses (Note 4)......... 98,843 Transfer and dividend disbursing agent fees 21,028 Printing............................... 2,275 Interest expense....................... 5,983 Shareholder communications............. 775 Audit services......................... 33,455 Legal services......................... 5,542 Registration costs..................... 17,859 Miscellaneous.......................... 7,245 ------------ Total expenses........................ $ 486,963 ------------ Deduct - Reduction of investment adviser fee (Note 3)......................... $ (19,965) Reduction of distribution expenses by principal underwriter (Note 4)..... (88,553) Reduction of custodian fee............. (2,840) ------------ Total deductions...................... $ (111,358) ------------ Net expenses.......................... $ 375,605 ------------ Net investment income................ $ 1,897,291 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis)................ $ (186,065) Change in unrealized appreciation on investments......................... 512,985 ------------ Net realized and unrealized gain on investments........................ $ 326,920 ------------ Net increase in net assets from operations........................... $ 2,224,211 ============== See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- Year Ended December 31, -------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2007 2006 -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income...................................................... $ 1,897,291 $ 1,472,758 Net realized gain (loss) on investments.................................... (186,065) 161,110 Change in unrealized appreciation (depreciation) on investments............ 512,985 (511,826) -------------- -------------- Net increase in net assets resulting from operations..................... $ 2,224,211 $ 1,122,042 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income................................................. $ (1,853,630) $ (1,548,362) From net realized gain..................................................... (36,891) (59,861) -------------- -------------- Total distributions...................................................... $ (1,890,521) $ (1,608,223) -------------- -------------- Net increase (decrease) in net assets from fund share transactions (Note 5) $ (1,108,939) $ 7,099,679 -------------- -------------- Net increase (decrease) in net assets........................................ $ (775,249) $ 6,613,498 NET ASSETS: At beginning of year......................................................... 40,474,410 33,860,912 -------------- -------------- At end of year............................................................... $ 39,699,161 $ 40,474,410 ============== ============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR................................................. $ 95,076 $ 71,218 ============== ============== See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) ------------------------------------------------------------------------------- Year Ended December 31, -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2007(3) 2006 2005 2004 2003 -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year.......... $ 9.510 $ 9.610 $ 9.890 $ 10.490 $ 10.810 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income(1) ................ $ 0.455 $ 0.427 $ 0.400 $ 0.447 $ 0.417 Net realized and unrealized gain (loss).. 0.078 (0.063) (0.230) (0.112) (0.235) ---------- ---------- ---------- ---------- ---------- Total income from investment operations $ 0.53 $ 0.364 $ 0.170 $ 0.335 $ 0.182 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from investment income..... $ (0.444) $ (0.447) $ (0.430) $ (0.482) $ (0.502) Distributions from capital gains......... (0.009) (0.017) (0.020) (0.453) - ---------- ---------- ---------- ---------- ---------- Total distributions.................. $ (0.453) $ (0.464) $ (0.450) $ (0.935) $ (0.502) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year................ $ 9.590 $ 9.510 $ 9.610 $ 9.890 $ 10.490 ========== ========== ========== ========== ========== Total return(2) ............................ 5.77% 3.92% 1.76% 3.29% 1.73% Ratios/Supplemental Data(1): Net assets, end of year (000 omitted)... $ 39,699 $ 40,474 $ 33,861 $ 35,013 $ 36,332 Ratios (As a percentage of average daily net assets): Net expenses............................ 0.96% 0.96% 0.97% 0.97% 0.95% Net expenses after custodian fee reduction 0.95% 0.95% 0.95% 0.95% 0.95% Interest expense........................ 0.02% 0.02% 0.01% 0.02% 0.01% Net investment income................... 4.80% 4.47% 4.12% 4.29% 4.43% Portfolio turnover rate ................. 47% 75% 103% 27% 20% -------------------------------------------------------------------------------------------------------------------------------- (1)For the years ended December 31, 2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: 2007 2006 2005 2004 2003 -------------------------------------------------------------------------------------------------------------------------------- Net investment income per share........... $ 0.429 $ 0.391 $ 0.369 $ 0.410 $ 0.401 ========== ========== ========== ========== ========== Ratios (As a percentage of average net assets): Expenses............................... 1.23% 1.31% 1.30% 1.28% 1.12% ========== ========== ========== ========== ========== Expenses after custodian fee reduction.... 1.22% 1.30% 1.28% 1.25% 1.12% ========== ========== ========== ========== ========== Interest expense......................... 0.02% 0.02% 0.01% 0.02% 0.01% ========== ========== ========== ========== ========== Net investment income..................... 4.52% 4.13% 3.80% 3.99% 4.26% ========== ========== ========== ========== ========== -------------------------------------------------------------------------------------------------------------------------------- (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 reinvested at the net asset value on the reinvestment date. (3)Certain per share amounts are based on average shares outstanding. See notes to financial statements
WRIGHT MANAGED INCOME TRUST ------------------------------------------------------------------------------ NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTING POLICIES The Wright Managed Income Trust (the Trust), issuer of Wright 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 (the 1940 Act), as a diversified, open-end, management investment company. 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. 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 fair value. B. Interest Income - Interest Income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. C. Expense Reduction - State Street Bank & Trust Company (SSBT) serves as custodian to the Funds. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits which are determined based on the average daily cash balance the Funds maintain with SSBT. All credit balances, if any, used to reduce the Fund's custodian fees are reported as a reduction of expenses in the Statement of Operations. D. Federal Taxes - The Trust's policy is to comply with the provisions of the Internal Revenue Code (the Code) available to regulated investment companies and to distribute to shareholders each year all of its taxable income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is necessary. At December 31, 2007, the Trust, for federal income tax purposes, had capital loss carryovers of $3,311,851 (WTRB) and $1,331,737 (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 WTRB WCIF ------------------------------------------------------------------------------- 2008 $1,244,473 $ - 2010 508,606 - 2011 - 505,639 2012 - 469,640 2013 270,953 196,117 2014 1,088,772 - 2015 199,047 160,341 ------------------------------------------------------------------------------- At December 31, 2007, net capital losses of $6,758 for WTRB and $277 for WCIF, attributable to security transactions incurred after October 31, 2007, were treated as arising on the first day of the Fund's current taxable year ending December 31, 2008. A capital loss carryover of $1,171,396,included in WCIF's amount in the table above, is available to the Fund as a result of the reorganization of Wright U.S.Government Near Term Fund on December 9, 2006 (see Note 9). Utilization of this capital loss carryover may be limited in accordance with certain income tax regulations. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, "Accounting for Income Taxes". This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective on the last business day of the first required financial reporting period for fiscal years beginning after December 15, 2006. Management has concluded that as of December 31, 2007, there are no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund's federal tax returns filed in the 3-year period ended December 31, 2007 remains subject to examination by the Internal Revenue Service. 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 income and expense during the reporting period. Actual results could differ from those estimates. F. Other - Investment transactions are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. (2) DISTRIBUTIONS TO SHAREHOLDERS 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 Funds requires that differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over distributions 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, if any, are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting for certain items may result in reclassification of these items. During the year ended December 31, 2007, the following amounts were reclassified due to differences between book and tax accounting created primarily by the deferral of certain losses for tax purposes and character reclassifications between net investment income and net realized capital gain. Accumulated Undistributed Undistributed Net Net Paid-In Realized Gain Investment Capital on Investments Income ------------------------------------------------------------------------------- WTRB $ - $( 29,269) $ 29,269 WCIF (273,805) 293,608 (19,803) ------------------------------------------------------------------------------- The tax character of distributions paid for the year ended December 31,2007 and December 31, 2006 was as follows: Year Ended 12/31/07 WTRB WCIF ------------------------------------------------------------------------------- Distributions declared from: Ordinary income $1,291,075 $1,853,836 Capital gains - 36,685 ------------------------------------------------------------------------------- Year Ended 12/31/06 WTRB WCIF ------------------------------------------------------------------------------- Distributions declared from: Ordinary income $1,629,188 $1,548,362 Capital gains - 59,861 ------------------------------------------------------------------------------- As of December 31, 2007, the components of distributable earnings (accumulated losses) on a tax basis were as follows: Year Ended 12/31/07 WTRB WCIF ------------------------------------------------------------------------------ Undistributed income $ 16,575 $ 95,076 Undistributed gains - - Capital loss carryforwards (3,311,851) (1,331,737) Unrealized appreciation 173,798 866,534 Other temporary differences (33,344) (277) ------------------------------------------------------------------------------- The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to wash sales and post-October losses. (3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as investment adviser to the Funds pursuant to the respective Investment Advisory Contracts. Wright furnishes each Fund with investment management, investment advisory, and other services. For its services, Wright is compensated based upon a percentage of average daily net assets which rate is adjusted as average daily net assets exceed certain levels. For the year ended December 31, 2007, the effective annual rate for WCIF and WTRB was 0.45%. Under a written agreement, Wright Investors' Service and/or Wright Investors' Service Distributors, Inc., waive a portion of their advisory fee and/or distribution fees and assume operating expenses to the extent necessary to limit each Fund's expense ratios to 0.95% after custodian fee reductions, if any. The expense limitation is in effect through April 30, 2008 and may be terminated at any time thereafter. In addition, effective March 22, 2007 and August 28, 2007, Wright and Wright Investors' Service Distributors, Inc. have voluntarily agreed to limit the operating expenses of WTRB to 0.90% and 0.70%, respectively, after custodian fee reductions. Such voluntary limitation may be terminated at any time. Accordingly, Wright made a reduction of its investment adviser fee by $69,860 and $19,965 on behalf of WTRB and WCIF, respectively (Note 4), and was allocated expenses of $10,367 on behalf of WTRB. 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 of each Fund, which rate is reduced as average daily net assets exceed certain levels. For the year ended December 31, 2007, the effective annual rate was 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 1940 Act. 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 and an affiliate of Wright, 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 $67,945 and $88,553 for the benefit of 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 combined amount of service fees payable under the Service Plan and Rule 12b-1 distribution fees may not exceed 0.25% annually of each Fund's average daily net assets. For the year ended December 31, 2007, the Funds did not accrue or pay any service fees. (5) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in Fund shares were as follows: Year Ended Year Ended December 31, 2007 December 31, 2006 ----------------- ----------------- Shares Amount Shares Amount -------------------------------------------------------------------------------------------------------------------------------- Wright Total Return Bond Fund-- Sold................................................. 298,879 $ 3,663,258 483,580 $ 5,863,658 Issued to shareholders in payment of distributions declare............................................ 81,211 994,635 98,578 1,246,056 Redemptions.......................................... (875,601) (10,706,894) (1,391,653) (16,903,044) ------------ --------------- ------------ --------------- Net decrease..................................... (495,511) $ (6,049,001 (809,495) $ (9,793,330) ============ =============== ============ =============== Wright Current Income Fund-- Sold................................................. 788,878 $ 7,459,407 747,630 $ 7,169,560 Issued to shareholders in payment of distributions declared........................................... 136,552 1,294,792 108,681 1,028,796 Redemptions.......................................... (1,041,404) (9,863,138) (1,351,796) (12,808,666) Issued to Wright U.S. Government Near Term Fund...... - - 1,227,175 11,709,989 ------------ --------------- ------------ --------------- Net increase (decrease).......................... (115,974) $ (1,108,939) 731,690 $ 7,099,679 ============ =============== ============ ===============
(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 (including maturities and paydowns) of investments, other than short-term obligations, were as follows: Year Ended December 31, 2007 -------------------------------- WTRB WCIF ------------------------------------------------------------------------------- Purchases-- Non-U.S. Gov't & Agency Obligation $ 4,666,647 $ 1,026,153 =========== =========== U.S. Gov't & Agency Obligations $27,576,765 $17,208,213 =========== =========== Sales-- Non-U.S. Gov't & Agency Obligations $ 6,761,989 $ 274,024 =========== =========== U.S. Gov't & Agency Obligations $31,759,224 $20,317,621 =========== =========== (7) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2007, as computed on a federal income tax basis, are as follows: WTRB WCIF ------------------------------------------------------------------------------ Aggregate cost $24,309,217 $38,071,603 =========== =========== Gross unrealized appreciation $ 273,551 $ 961,898 Gross unrealized depreciation (99,753) (95,364) ----------- ----------- Net unrealized appreciation (depreciation) $ 173,798 $ 866,534 =========== =========== (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. At December 31, 2007, there were no outstanding balances pursuant to this line of credit. The average borrowings and average interest rate for the year ended December 31, 2007 are as follows: WTRB WCIF ------------------------------------------------------------------------------ Average borrowing $ 11,716 $ 74,312 Average interest rate 6% 6% ------------------------------------------------------------------------------ (9) TRANSFER OF NET ASSETS Prior to the opening of business on December 9, 2006, the Wright Current Income Fund (WCIF) acquired the net assets of Wright U.S. Government Near Term Fund (WNTB) pursuant to an Agreement and Plan of Reorganization dated December 20, 2004. In accordance with the agreement, WCIF issued 1,227,175 shares having a value of $11,709,989. As a result, WCIF issued 1.028 shares for each share of WNTB. The transaction was structured for tax purposes to qualify as a tax free reorganization under the Internal Revenue Code. WNTB's net assets at the date of the transaction was $11,709,989, including $(88,124) of unrealized depreciation. Directly after the merger, the combined net assets of WCIF were $43,266,523 with a net asset value of $9.54. (10) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (FAS 157), "Fair Value Measurements". FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of December 31, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements; however, additional disclosures may be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements on changes in net assets for the period. WRIGHT MANAGED INCOME TRUST ------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees of Wright Managed Income Trust and the Shareholders of Wright Total Return Bond Fund and Wright Current Income Fund: We have audited the accompanying statements of assets and liabilities of Wright Total Return Bond Fund and Wright Current Income Fund (collectively, the "Funds") (together comprising Wright Managed Income Trust), including the portfolios of investments, as of December 31, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the funds constituting the Wright Managed Income Trust as of December 31, 2007, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 20, 2008 WRIGHT MANAGED INCOME TRUST AS OF DECEMBER 31, 2007 ------------------------------------------------------------------------------ FEDERAL TAX INFORMATION The Form 1099-DIV you received in January 2008 showed the tax status of all distributions paid to your account in calendar 2007. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code regulations, shareholders must be notified within 60 days of the Fund's fiscal year end regarding exempt-interest dividends and capital gains dividends. Capital Gains Dividends - The Wright Current Income Fund designates $36,891 as a capital gain dividend. MANAGEMENT AND ORGANIZATION (UNAUDITED) ------------------------------------------------------------------------------- FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall management and supervision of the affairs of the Trust. The Trustees and principal officers of the Trusts are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. The business address of each Trustee and principal officer is 255 State Street, Boston, Massachusetts 02109. Definitions: ----------- "WISDI" means Wright Investors' Service Distributors, Inc., the principal underwriter of the fund. "Winthrop" means The Winthrop Corporation, a holding company which owns all of the shares of Wright and WISDI. Number of Other Trustee/ Term* Funds in Director/ Name, Position(s) of Office Fund Complex Partnership/ Address with the and Length Principal Occupation Overseen Employment and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held -------------------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEES Peter M. Donovan** President President Chairman, Chief Executive Officer 5 Director of Age 64 and and Trustee and Director of Wright and Winthrop; Wright and Trustee since Chief Investment Officer and Chairman Winthrop Inception of the Investment Committee; Director of WISDI; Authorized Representative of Cheswick Wright Wealth Management LLC; President of 5 funds managed by Wright -------------------------------------------------------------------------------------------------------------------------------- A.M. Moody, III*** Vice President Vice President President, AM Moody Consulting LLC 5 None Age 71 and of the Trusts (compliance and administrative services Trustee since December, to the mutual fund industry)since 1990; Trustee of July 1,2003; President and Director the Trusts since of the WISDI since 2005; Vice President January 1990 of 5 funds managed by Wright; Retired Senior Vice President of Wright and Winthrop; Retired President of WISDI June 30, 2003 to May 2005 -------------------------------------------------------------------------------------------------------------------------------- * Trustees serve an indefinite term. Officers are elected annually. ** Mr. Donovan is an interested person of the Trusts because of his positions as President of the Trusts, Chairman, Chief Executive Officer and Director of Wright and Winthrop and Director of WISDI. *** Mr. Moody is an interested person of the Trusts because of his positions as Vice President of the Trusts, President and Director of WISDI, and his affiliation as a consultant to Wright. -------------------------------------------------------------------------------------------------------------------------------- Number of Other Trustee/ Term* Funds in Director/ Name, Position(s) of Office Fund Complex Partnership/ Address with the and Length Principal Occupation Overseen Employment and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held -------------------------------------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES James J. Clarke Trustee Trustee President, Clarke Consulting (bank 5 None Age 66 since consultant - financial management and December, 2002 strategic planning); Director - Chester Valley Bancorp, Inc., Downingtown, PA since April 2004, Director - Reliance Bank, Altoona PA since August 1995; Director - First Financial Bank, Downingtown, PA since April 2004, Associate Professor of Finance at Villanova University 1972-2002 -------------------------------------------------------------------------------------------------------------------------------- Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 5 None Age 61 since (a public policy and government relations December, 1998 firm) Spotsylvania, VA; Director, The Options Clearing Corporation -------------------------------------------------------------------------------------------------------------------------------- Richard E. Taber Trustee Trustee since Chairman and Chief Executive 5 None Age 59 March, 1997 Officer of First County Bank, Stamford, CT -------------------------------------------------------------------------------------------------------------------------------- PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES Judith R. Corchard Vice President Vice President Executive Vice President, Investment Age 69 of the Trusts Management; Senior Investment Officer since June, 1998 and Director of Wright and Winthrop; Vice President of 5 funds managed by Wright, Fund Chief Compliance Officer since 2004 -------------------------------------------------------------------------------------------------------------------------------- Janet E. Sanders Secretary Secretary of the Vice President Eaton Vance Management, Age 72 and Assistant Trusts since Administrator for the funds; Officer of Treasurer March 17, 2005, 5 funds managed by Wright and 170 Ass't. Secretary funds managed by Eaton Vance and 1983 to 2005, its affiliates Ass't. Treasurer since 1989 -------------------------------------------------------------------------------------------------------------------------------- Barbara E. Campbell Treasurer Treasurer of Vice President Eaton Vance Management; Age 50 the Trusts Administrator for the funds; Officer of since 2005 5 funds managed by Wright and 170 funds managed by Eaton Vance and its affiliates -------------------------------------------------------------------------------------------------------------------------------- * Trustees serve an indefinite term. Officers are elected annually. Additional information about the Funds' Trustees is available in the Statement of Additional Information, which is available without charge, upon request, by calling 1-800-888-9471.
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. 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 Barbara E. Campbell, Treasurer William J. Austin, Jr., Assistant Treasurer ADMINISTRATOR Eaton Vance Management 255 State Street Boston, Massachusetts 02109 INVESTMENT ADVISER Wright Investors' Service, Inc. 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: wright@wisi.com CUSTODIAN State Street Bank and Trust Company 200 Clarendon Street Boston, Massachusetts 02116 TRANSFER AND DIVIDEND DISBURSING AGENT Citigroup Fund Services, LLC Two Portland Square Portland, ME 04101 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 200 Berkeley Street Boston, Massachusetts 02116-5022 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of a mutual fund unless accompanied or preceded by a Fund's current prospectus. 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 The registrant's Board has designated James J. Clarke, an independent trustee, as its audit committee financial expert. Mr. Clarke is the Principal of Clarke Consulting, a financial management and strategic planning firm. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees ------------ The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and filings or engagements for those fiscal years were as follows: 2007:$60,700 and 2006: $54,200. (b) Audit-Related Fees ------------------- None (c) Tax Fees -------- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were 2007: $9,440 and 2006: $11,325. The nature of the services comprising these fees was tax compliance, tax advice and tax planning including fees for tax return preparation. (d) All Other Fees --------------- None. (e) (1) The registrant's audit committee has adopted an Audit Committee Charter which contains policies and procedures relating to the pre-approval of services provided by the registrant's principal accountant (the "Pre-Approval Policies"). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees with the exception of any de minimus engagement meeting applicable requirements. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the registrant's audit committee. The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant's audit committee at least annually. The registrant's audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant's principal accountant. (2) Not applicable. (f) Not applicable. (g) Not applicable. (h) Not applicable. 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. There have been no material changes to the procedures by which a Fund's shareholders may recommend nominees to the registrant's board of Trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A(17 CFR240.14a-101), or this item. ITEM 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 Total Return Bond Fund ----------------------------------------------------------------------------- and Wright Current Income Fund) -------------------------------- By: /s/Peter M. Donovan -------------------- Peter M. Donovan President Date: February 21,2008 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/ Barbara R. Campbell ------------------------ Barbara E. Campbell Treasurer Date: February 26,2008 By: /s/ Peter M. Donovan ------------------- Peter M. Donovan President Date: February 21,2008