-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V+sP31kRRQBivbKGEX0wwKF8TByYwRWMrUpf84+yH0nW/zhfKeYHmKGXm22yPEZ9 jfj1XZ+Wt7MmITpns6GZNA== 0000715165-09-000004.txt : 20090227 0000715165-09-000004.hdr.sgml : 20090227 20090227111016 ACCESSION NUMBER: 0000715165-09-000004 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090227 DATE AS OF CHANGE: 20090227 EFFECTIVENESS DATE: 20090227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WRIGHT MANAGED INCOME TRUST CENTRAL INDEX KEY: 0000715165 IRS NUMBER: 042789493 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03668 FILM NUMBER: 09640364 BUSINESS ADDRESS: STREET 1: THE EATON VANCE BUILDING STREET 2: 255 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 617-482-8260 MAIL ADDRESS: STREET 1: THE EATON VANCE BUILDING STREET 2: 255 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: WRIGHT MANAGED BOND TRUST DATE OF NAME CHANGE: 19910331 FORMER COMPANY: FORMER CONFORMED NAME: BOND FUND FOR BANK TRUST DEPARTMENTS BFBT FUND DATE OF NAME CHANGE: 19880218 0000715165 S000009473 WRIGHT U.S. Government Near Term Fund C000025925 Wright U.S. Government Near Term Fund WNTBX 0000715165 S000009581 Wright Total Return Bond Fund C000026173 Wright Total Return Bond Fund WTRBX 0000715165 S000009582 Wright Current Income Fund C000026174 Wright Current Income Fund WCIFX N-CSR 1 incncsr1208.txt INCOME TRUST AUDITED FINANCIALS - DEC.31, 2008 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, 2008 --------------------- Date of Reporting Period ---------------------------------------------------------------------------- Item 1. REPORTS TO STOCKHOLDERS THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS ANNUAL REPORT DECEMBER 31, 2008 ------------------------ 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) (the Fund) 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) (the Fund) 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) (the Fund) 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. (continued on inside back cover) TABLE OF CONTENTS - ----------------------------------------------------------------------------- INVESTMENT OBJECTIVES ................................INSIDE FRONT & BACK COVER LETTER TO SHAREHOLDERS .......................................................2 MANAGEMENT DISCUSSION ........................................................4 PERFORMANCE SUMMARIES ........................................................9 FUND EXPENSES ...............................................................14 MANAGEMENT AND ORGANIZATION .................................................64 BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT.......66 IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING .........................................67 FINANCIAL STATEMENTS THE WRIGHT MANAGED EQUITY TRUST WRIGHT SELECTED BLUE CHIP EQUITIES FUND Portfolio of Investments..................16 Statement of Assets and Liabilities.......19 Statement of Operations...................19 Statements of Changes in Net Assets.......20 Financial Highlights......................21 WRIGHT MAJOR BLUE CHIP EQUITIES FUND Portfolio of Investments..................22 Statement of Assets and Liabilities.......25 Statement of Operations...................25 Statements of Changes in Net Assets.......26 Financial Highlights......................27 WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Portfolio of Investments..................28 Statement of Assets and Liabilities.......31 Statement of Operations...................31 Statements of Changes in Net Assets.......32 Financial Highlights......................33 NOTES TO FINANCIAL STATEMENTS...............34 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................41 FEDERAL TAX INFORMATION.....................42 THE WRIGHT MANAGED INCOME TRUST WRIGHT TOTAL RETURN BOND FUND Portfolio of Investments..................43 Statement of Assets and Liabilities.......47 Statement of Operations...................47 Statements of Changes in Net Assets.......48 Financial Highlights......................49 WRIGHT CURRENT INCOME FUND Portfolio of Investments..................50 Statement of Assets and Liabilities.......53 Statement of Operations...................53 Statements of Changes in Net Assets.......54 Financial Highlights......................55 NOTES TO FINANCIAL STATEMENTS...............56 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................62 FEDERAL TAX INFORMATION.....................63 LETTER TO SHAREHOLDERS - ------------------------------------------------------------------------------- January 2009 Dear Shareholders: GLOBAL CREDIT CRUNCH AND BEAR MARKET - The year 2008 brought a once-in-a-lifetime collapse in global financial markets, with stock prices declining and credit conditions deteriorating virtually everywhere. No market, whether developed or emerging; oil producer or oil consumer; capital saver or capital spender; was spared. Storied firms like Lehman Brothers and Merrill Lynch breathed their last in 2008, victims of reckless lending and investing. Household net worth dwindled with house prices and stock values shrinking so precipitously as to put economic activity into a sharp decline in the fourth quarter. And in a cruel bit of irony, the year was punctuated by a $50 billion Ponzi scheme that further sapped confidence and faith in American capitalism. What the big bear markets of the postwar period did in two years (1973-74) or three years (2000-02), 2008 did in less than 12 months, producing more fear and volatility and negative returns than all but the most wizened of today's investors had ever experienced. This secular decline for equities represents the unwinding of the postwar build-up in debt throughout the U.S. financial system. FINANCIAL CONDITIONS SHOW SIGNS OF IMPROVEMENT AS 2009 BEGINS - While risk aversion was the order of the day last year, there were some signs as the new year began that investors might be a bit more inclined to take on risk in 2009. For one thing, last year's indiscriminate selling created some attractive opportunities in the stock and credit markets. Over the past month, credit spreads between risky securities and U.S. Treasuries have narrowed by some three-quarters of a percentage point, and the S&P 500's price/earnings multiple has bounced off of 20-year lows. It may take longer for economic activity and corporate profits to turn higher. Economic data for the month of December have been decidedly weak, and leading indictors suggest that economic activity is likely to stay soft at least through midyear. Given that the U.S. economy is judged to have peaked in December 2007, a decline longer than 16 months in duration (the case in 1973-75 and 1981-82) and deeper than the 3% peak-to-trough declines in GDP seen in those two recessions is possible. Fortunately, U.S. monetary and fiscal policy has become increasingly aggressive - which may set in motion inflation pressures down the road, but that is a worry for another day. THE ECONOMIC POLICY RESPONSE - The Federal Reserve (the "Fed") is having some success in lowering mortgage rates. House affordability has improved significantly due to the declines in rates and prices, and increased real estate traffic even in the softest markets suggests that the worst of the forecasts for how much more house prices need to decline are exaggerated. The European Central Bank is playing catch-up in the area of interest rate reductions, but further rate cutting is expected, and central banks everywhere are in easing mode. The Congressional Budget Office is projecting a $1.2 trillion deficit for the U.S. in fiscal 2009. The stimulus plan working its way toward President Obama's signature may produce a trillion dollar deficit in 2010 as well. In the 1980s, President Reagan's Budget Director, David Stockman famously predicted $200 billion budget deficits as far as the eye can see. Since Reagan's inauguration, the average federal deficit has in fact been $160 billion or about 2.5% of U.S. GDP. In today's bigger economy, a $1.2 trillion deficit equates to 8% of GDP, a postwar record, but not entirely out of line with our history in deep recessions - - e.g., 6% in fiscal 1983. While one wonders how many bridges to nowhere might be included in such a budget, there is reason to think it will produce a worthwhile stimulus for the U.S. economy. THE TOPSY-TURVY ENVIRONMENT OF 2009: VIRTUE AS A RISK - When an individual increases his savings, his financial condition improves. When too many individuals boost savings, the resulting downturn in spending can crimp the overall level of economic activity, having the perverse result of weakening everyone's finances. For the U.S., where savings rates have been in decline for 25 years, there may be no way around an increase in savings (deferred spending) ahead, since the Chinese and others that we have relied on to finance our growth may no longer be willing to invest as freely in U.S. dollar assets. While becoming more self reliant - whether it be in savings or in energy - may be a laudable long-term objective, realistically we can't get from here to there without a period of reduced economic growth. While the private sector is deleveraging, the government is rapidly adding debt - - including an unprecedented expansion of the Fed's balance sheet. Trying to cure the economy's excess of debt by throwing trillions of dollars in new credit facilities at the financial system is at the very least counterintuitive. The point of this expansion of the government sector is to mitigate some of the pain caused by the contraction in the private sector; the risk in this unbridled growth in the public sector is a return of inflation and debasement of the U.S. dollar. Investors have already endured a lot of pain, and workers and consumers are increasingly finding their finances strained by the recession of 2008-09, which stands to be the worst since 1973-75. It stands to reason in this environment that volatility will remain elevated. THE OUTLOOK FOR INFLATION AND THE ECONOMY - As 2009 gets under way, there is some reason to think that the economy will get back into a growth mode before the end of the year. The Fed's stimulation efforts and the bailout steps taken by the Fed and Treasury have put the financial system on a sounder footing. Policy efforts have provided new capital to financial institutions and brought down the short-term interest rates at which banks borrow. Bond issuance picked up late in the fourth quarter, also a signal that the credit markets are loosening. Mortgage rates have declined, with the rate on conventional mortgages down close to 5% in early 2009. In addition, spending power for both consumer and businesses has benefited from the drop in energy prices, which are less than one-third their peak levels. Before the economy returns to a growth mode, Wright expects that GDP will contract for at least the first two quarters of 2009 and that the recovery may be subpar for a while thereafter. With home values still falling and stock market values 40% below their peaks, consumer balance sheets are in need of strengthening. Add to this the prospect of a weak jobs market through 2009 and it looks like consumer spending, which constitutes 70% of U.S. economic activity, will be soft for several more quarters even with the benefits of lower energy prices and the Obama stimulus package. In the short run, we expect inflation to moderate, possibly by a good amount. The inflationary effects of increases in money supply resulting from the liquidity the Fed and Treasury continue to pump into the financial system are likely to be offset to a large extent by the deflationary pressures of a global economy operating well below its potential. During the first half of 2009, headline inflation will be depressed by the sharp decline in energy prices compared to a year ago, and sellers of most consumer goods are cutting prices as much as possible to stimulate demand. Eventually the huge increase in the nation's money supply may contribute to higher inflation, but that shouldn't be a problem in 2009. STOCK AND CORPORATE BONDS ARE PRICED AT ATTRACTIVE LEVELS - By virtue of the worst markets in over 60 years, stock prices and corporate bond yield spreads (the excess over Treasury yields) have reached levels that one would have to consider bargain basement cheap. At their lows, stocks were discounting severe economic distress, the worst conditions in perhaps 50 years. At their widest, corporate yield spreads were priced for depression. Investors struggling with what the losses of 2008 mean for their retirement plans are understandably doubtful about trusting stocks. The 2008 financial crisis and its resolution will have a significant impact on the U.S. economy and financial markets for some time to come. Certainly the effects of tight credit and a mood of risk avoidance will take a long time to be purged from the economy even after recovery begins. One likely positive is that, to the extent that excessively risky behavior is reduced through regulation or self-discipline, a stronger financial system will come out of this turmoil. Human nature being what it is, the risk/return (greed/fear) cycle will come round to these same mistakes again, but we hope not for a long time. We expect that over the next several years both stocks and bonds will provide investors with positive real investment returns. In our view, the 2007-08 financial crisis, like earlier ones, will create as many opportunities as challenges. While the bottom in stocks may not yet have been seen, we take encouragement from the cheapness of equities and the fact that credit conditions are starting to improve. Sincerely, /s/ Peter M. Donovan ---------------------- Peter M. Donovan Chairman & CEO MANAGEMENT DISCUSSION - ------------------------------------------------------------------------------- EQUITY FUNDS THE YEAR 2008 BROUGHT ONCE-IN-A-LIFETIME TURMOIL TO THE GLOBAL FINANCIAL MARKETS, WITH STOCK PRICES DECLINING AND CREDIT CONDITIONS DETERIORATING VIRTUALLY EVERYWHERE. LAST YEAR, THE WISDOM OF DIVERSITY IN INVESTMENT PORTFOLIOS WAS PROVEN AGAIN AS U.S EQUITIES HAD THEIR WORST YEAR IN DECADES AND INTERNATIONAL STOCK MARKETS ALSO FELL, WHILE THE BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX HAD A SOLIDLY POSITIVE RETURN. THE STOCK MARKET STABILIZED SOMEWHAT AFTER REACHING ITS LOW FOR THE YEAR IN LATE NOVEMBER, PERHAPS ENCOURAGED BY THE MYRIAD OF STEPS TAKEN BY GLOBAL POLICYMAKERS TO STEM AND EVENTUALLY REVERSE THE DAMAGE CAUSED BY THE FINANCIAL CRISIS. STIMULATION EFFORTS FROM CENTRAL BANKERS AROUND THE WORLD HAVE SHIFTED INTO HIGH GEAR, WITH THE U.S. FEDERAL RESERVE CUTTING THE FED FUNDS TARGET RATE ESSENTIALLY TO ZERO. INVESTORS MAY ALSO HAVE BEEN ENCOURAGED BY THE FACT THAT PRESIDENT-ELECT BARACK OBAMA WAS QUICK TO ANNOUNCE KEY APPOINTMENTS TO HIS FINANCIAL TEAM AND INDICATED THAT HE WILL MOVE QUICKLY TO ADDRESS THE FINANCIAL CRISIS. BUT WHILE THERE MAY BE SOME REASON TO THINK THAT THE WORST OF THE CRISIS IS OVER FOR FINANCIAL INSTITUTIONS AND THE CREDIT CRUNCH HAS EASED A BIT, THE EFFECTS OF THE CRISIS ON THE REAL ECONOMY DEEPENED DURING THE FOURTH QUARTER. GDP DECLINED SHARPLY IN Q4. WALL STREET CUT ITS FORECAST FOR Q4 OPERATING PROFITS FOR S&P 500 COMPANIES TO SHOW A DECLINE FOR THE QUARTER, COMPARED TO NEARLY A 50% INCREASE EXPECTED AS RECENTLY AS OCTOBER 1. EVEN WITH A RECOVERY OF 20% FROM ITS NOVEMBER LOW BY YEAR END, THE S&P 500 LOST 22% IN TOTAL RETURN TERMS IN THE FOURTH QUARTER AND 37% FOR THE YEAR. COMPARED TO ITS 2007 PEAK, THE S&P WAS DOWN 42% IN PRICE AT THE END OF 2008. FOR THE OTHER MARKET AVERAGES, THE RESULTS WERE JUST ABOUT AS BLEAK: THE DOW LOST 18% IN Q4 AND 32% FOR THE YEAR IN TOTAL RETURN, WHILE NASDAQ'S LOSSES WERE 24% AND 40%, RESPECTIVELY, FOR THE QUARTER AND YEAR. AS RISKS TO ECONOMIC GROWTH INCREASED AND THE OUTLOOK FOR CORPORATE PROFITS DETERIORATED, SMALLER STOCKS, WHICH IN THEORY HAVE FEWER RESOURCES TO WEATHER THE FINANCIAL STORM, LAGGED BIGGER ISSUES IN THE FOURTH QUARTER. THE S&P MIDCAP 400 LOST 26% AND THE S&P SMALLCAP 600 LOST 25%. BOTH EDGED OUT THE S&P 500 FOR ALL OF 2008 BUT THEIR LOSSES STILL TOPPED 30%. IF THERE IS A DOWNSIDE TO GLOBALIZATION, IT IS THAT FINANCIAL INSTITUTIONS AROUND THE WORLD HAVE SUFFERED FROM HOLDING TOXIC INVESTMENTS AND EXTREME LEVERAGE. THE SLOWDOWN IN THE REAL ECONOMY HAS CERTAINLY GONE GLOBAL. FOR THE YEAR, THE MSCI WORLD EX U.S. STOCK INDEX LOST ABOUT 40% IN LOCAL CURRENCY; THE OVERALL APPRECIATION OF THE DOLLAR DURING THE PERIOD INCREASED THE INDEX'S LOSS TO 44% IN DOLLARS, COMPARED TO THE S&P 500'S 37% LOSS. IN THE FOURTH QUARTER, THE MSCI INDEX LOST 21% IN DOLLAR TERMS, SIMILAR TO THE S&P 500'S LOSS. AS 2009 GOT UNDERWAY, THERE WAS SOME REASON FOR OPTIMISM THAT THE ECONOMY WOULD GET BACK INTO A GROWTH MODE BEFORE THE END OF THE YEAR. NEVERTHELESS, WRIGHT INVESTORS' SERVICE (WIS) EXPECTS THAT THE ECONOMY WILL CONTRACT FOR AT LEAST THE FIRST TWO QUARTERS OF 2009 AND THAT THE SUBSEQUENT RECOVERY WILL BE SUBPAR. IT WILL TAKE SOME TIME BEFORE EFFORTS TO COMPLETELY THAW THE CREDIT MARKETS AND GET THE ECONOMY MOVING AGAIN REVERSE THE TREND OF DECLINING PROFIT FORECASTS, AT THIS POINT, IT LOOKS LIKE S&P 500 COMPANY PROFITS IN 2009 WILL AT BEST MATCH THE 2008 LEVEL, BUT 2010 SHOULD SEE SIGNIFICANT PROFIT GROWTH. INVESTOR CONFIDENCE MAY SLOWLY IMPROVE OVER THE COURSE OF 2009 AS PROFIT EXPECTATIONS BOTTOM BUT THE DAMAGE TO CONFIDENCE CAUSED BY THE RISKY BEHAVIOR OF BANKS, INVESTMENT BANKS, HEDGE FUNDS AND OTHERS IS GOING TO TAKE A WHILE TO BE FULLY REPAIRED. THE S&P 500'S YEAR-END P/E OF ABOUT 12 TIMES NEXT 12 MONTHS' EARNINGS WAS CLOSER TO ITS AVERAGE DURING THE DEPRESSED MARKETS OF THE 1970S AND EARLY 1980S THAN TO THE AVERAGE OF THE LAST 20 YEARS. ONCE CONFIDENCE IS RESTORED, THERE IS ROOM FOR SIGNIFICANT PRICE APPRECIATION IN STOCKS, AND WE EXPECT 2009 TO SEE A MODESTLY POSITIVE REAL RETURN FROM EQUITIES. 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Total Return Year Year Year Year Year Year Year Year Year Year -------------------------------------------------------------------------------------------------------------------- Wright Selected Blue Chip Equities Fund (WSBC) -39.8% 11.6% 3.8% 11.1% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% Wright Major Blue Chip Equities Fund (WMBC) -34.9% 6.0% 11.6% 6.2% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% Wright International Blue Chip Equities Fund (WIBC) -47.7% 5.5% 28.5% 21.1% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND The S&P MidCap 400 outperformed the S&P 500 in the first half of 2008 but lagged in the second half as economic conditions deteriorated. The Wright Selected Blue Chip Fund (WSBC), which is a mid-cap blend fund, lagged the S&P MidCap 400 benchmark in each of the first three quarters of 2008. In the fourth quarter, however, WSBC's loss of 24.8% was smaller than the S&P MidCap's 25.6% loss. For all of 2008, the WSBC lost 39.8% compared to a 36.2% loss for the S&P MidCaps. For all of 2008, the smaller stocks in the S&P MidCap 400 outperformed the bigger ones, and this hurt the Fund's performance for the year since it is biased toward the more substantial stocks in the index. Reflecting this big-stock bias, stock selection overall was a negative factor for WSBC during the past year, with its holdings in energy, consumer staples and utilities in particular detracting from Fund performance. In the fourth quarter, however, the Fund was able to outperform the MidCap benchmark on strong stock selection. This was especially positive in the industrial sector, where WSBC's airline holdings (e.g., Alaska Air Group, JetBlue, AirTran) had strong showings as they benefited from lower fuel prices. The S&P MidCap 400's P/E in terms of forward earnings was higher than the S&P 500's at December 30, but despite the higher valuation, mid-cap stocks still look attractive because of better forecast earnings growth. We expect that the pattern of 2008 is reversing, and that WSBC's tilt toward the more substantial companies in the S&P MidCap 400 will serve it well in the period of economic uncertainty ahead. In the aggregate, WSBC companies have a lower forward P/E than those in the MidCap 400 with similar expected earnings growth. WIS continues to advise diversity in investment portfolios as the best way to navigate difficult economic times. 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. After lagging in the first quarter of 2008 with a bigger loss than the S&P 500's, WMBC more than made up the ground in the second, third and fourth quarters, with smaller losses in each period than the benchmark index. In the fourth quarter of 2008, which was the worst for stocks in more than 20 years, WMBC lost 19.5% compared to a 21.9% loss for the S&P 500. In all of 2008, WMBC lost 34.9% compared to a 37.0% loss for the S&P 500. Stock selection was the key to WMBC's favorable performance compared to the S&P 500 in both the fourth quarter and the full year 2008. In the fourth quarter, stock selection resulted in WMBC's outperformance in eight of ten industry sectors. For the year, the Fund was stronger than the S&P in six of ten sectors. For the year as a whole, the Fund's showing was particularly strong in the financial sector. Though this was the weakest sector in the S&P 500 with a loss of more than 55% in 2008, WMBC's loss in the sector was significantly smaller (less than 40%) even though it was overweight in financials because of some of the attractive values there. Among the Fund's holdings in the financial sector with relatively strong showings were Wells Fargo, CB Richard Ellis and Assurant. Stock selection in the consumer discretionary sector (e.g., McDonalds, Hasbro) and information technology (e.g., Applied Materials, Computer Sciences) also contributed significantly to the Fund's relatively good showing. For the year, the most negative impact on relative performance came from stock selection in health care, but in the fourth quarter this turned favorable also. We expect that the next five years will provide steadfast investors with positive real returns from equities, but it may take a while for confidence in the markets to be restored. The new year started with continued volatility in the stock market. Given the high level of uncertainty about the health of the financial system and the economic environment, along with the prospect of downward revisions of earnings estimates, 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 and attractive valuations, the WMBC is well positioned for a relatively risk-averse environment that may persist for a while. At the end of 2008, WMBC holdings were priced at lower current and forward P/E multiples than the S&P 500 with similar expected earnings prospects. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND U.S. investors benefited from including international stocks in diversified portfolios for each year from 2002 through 2007. But in 2008, the MSCI World ex U.S. Index lost 43.6% compared to the S&P 500's 37% loss for the year. The bulk of the MSCI Index's loss for the year compared to the S&P 500 reflected the currency effect, i.e., the dollar's appreciation against the aggregate of currencies in the index. After matching the MSCI benchmark's performance in the first half of the year, the Wright International Blue Chip Fund (WIBC) lagged in the second half. In the fourth quarter, WIBC lost 24.3% compared to a 21.2% loss for the MSCI benchmark. For all of 2008, WIBC lost 47.7% compared to 43.6% for the benchmark. In the first half of 2008, WIBC's relative performance was helped by overweight positions in energy and materials stocks, which were strong performers early in the year. But in the second half of the year, WIBC was hurt by an overall pattern in international markets in which low-quality stocks performed better than high quality and small stocks outperformed big. (Both of these trends may have reflected the closing out of hedge fund positions and international mutual fund redemptions.) Another factor that worked against WIBC's 2008 performance was the appreciation of the yen while other major currencies depreciated against the dollar. The increased value of the yen, which resulted from demand for the Japanese currency in response to the unwinding of the yen carry trade as interest rates in the U.S. declined, gave a boost to the dollar returns of Japanese stocks. The WIBC was underweight in Japanese stocks based on their earnings outlook and for macroeconomic reasons. With the global recession deepening as 2008 was winding down, WIBC took a more defensive stance, adding to its positions in consumer staples and health care while reducing its holdings in energy and materials stocks. Because of some attractive values, WIBC also added some industrial positions and brought the consumer discretionary sector up to neutral. WIBC remains underweight in the financial sector. WIBC reduced its overweight position in the Eurozone and added to its Japanese positions, though it remains underweight in Japan. Foreign stocks offer attractive valuations relative to U.S. stocks, allowing for significant appreciation potential once confidence in the financial markets improves. WIBC holdings are valued at a discount to the MSCI World ex U.S. Index. We continue to see the inclusion of international stocks as likely to enhance returns in diversified investment portfolios over the long term. FIXED-INCOME FUNDS THE YEAR 2008 BROUGHT ONCE-IN-A LIFETIME TURMOIL TO THE GLOBAL FINANCIAL MARKETS, WITH STOCK PRICES DECLINING AND CREDIT CONDITIONS DETERIORATING VIRTUALLY EVERYWHERE. LAST YEAR, THE VALUE OF DIVERSITY IN INVESTMENT PORTFOLIOS WAS PROVEN AGAIN AS U.S EQUITIES HAD THEIR WORST YEAR IN DECADES AND INTERNATIONAL STOCK MARKETS ALSO FELL, WHILE BARCLAYS CAPITAL U.S. AGGREGATE BOND INDEX HAD A SOLIDLY POSITIVE RETURN. THE BOND MARKET'S GAIN, MOST OF WHICH CAME IN THE FOURTH QUARTER, WAS ACTUALLY SENDING A NEGATIVE SIGNAL ON ECONOMIC CONDITIONS, AT LEAST THROUGH NOVEMBER, SINCE IT PRIMARILY REFLECTED WORRIED INVESTORS SEEKING THE SAFETY OF TREASURY BONDS, SENDING THEIR PRICES SOARING. LATE IN THE YEAR, SPREADS ON NON-TREASURY SECTORS OF THE BOND MARKET TIGHTENED A LITTLE FROM RECORD LEVELS, PERHAPS, LIKE THE STOCK MARKET'S LATE RALLY, SIGNALING A GLIMMER OF HOPE FOR BETTER TIMES AHEAD. BUT WHILE THERE MAY BE SOME REASON TO THINK THAT THE WORST OF THE CREDIT CRISIS IS OVER, THE EFFECTS OF THE CRISIS ON THE REAL ECONOMY DEEPENED DURING THE FOURTH QUARTER. GDP DECLINED SHARPLY IN Q4. THE FEDERAL RESERVE'S REDUCTION OF THE FED FUNDS TARGET RATE ESSENTIALLY TO ZERO IN DECEMBER INDICATED JUST HOW SEVERE THE CURRENT ECONOMIC SLOWDOWN HAS BECOME. WITH LITTLE AMMUNITION LEFT TO CUT RATES, THE FED SAID THAT IF NEEDED IT WOULD INJECT MONEY INTO THE SYSTEM BY BUYING TREASURY BONDS OUTRIGHT, ALSO IMPLYING THAT IT WOULD BUY AGENCY, MORTGAGE AND CORPORATE SECURITIES IF NEEDED. THE SPEED AND MAGNITUDE OF THE RETREAT IN COMMODITY PRICES (OIL WAS TRADING UNDER $40 A BARREL FOR A WHILE IN DECEMBER COMPARED TO A PEAK OF $147 IN JULY) ALSO ARE TESTAMENT TO THE DEPTH OF THE GLOBAL SLOWDOWN. THE CONSUMER PRICE INDEX TURNED LOWER IN OCTOBER AND NOVEMBER, WHILE THE CORE CPI WAS ESSENTIALLY FLAT IN THE LATEST THREE MONTHS. THE BARCLAYS CAPITAL (FORMERLY LEHMAN BROTHERS) U.S. AGGREGATE BOND INDEX RETURNED 4.6% IN THE FOURTH QUARTER OF 2008, WHICH ACCOUNTED FOR ALMOST ALL OF ITS 5.2% RETURN FOR THE YEAR. TREASURY BONDS LED THE AGGREGATE HIGHER WITH A RETURN OF NEARLY 9% FOR THE QUARTER AND 14% FOR THE YEAR. THE BUBBLE-LIKE SURGE IN TREASURIES, WHICH TOOK THE YIELD ON THE 10-YEAR TREASURY TO A RECORD LOW OF 2.08% NEAR THE END OF THE YEAR, REFLECTED THE SEARCH FOR SAFETY IN DIFFICULT TIMES AND ALSO A DECLINE IN INFLATION EXPECTATIONS. THE YIELD ON THE 90-DAY TREASURY BILL WAS CLOSE TO ZERO AT YEAR END; THE YIELD ON THE TWO-YEAR TREASURY WAS UNDER 1%. ALONG WITH TREASURY BONDS, AGENCY AND MORTGAGE-BACKED DEBT HAD POSITIVE RETURNS FOR THE YEAR, WHILE CORPORATE, ASSET-BACKED AND COMMERCIAL MORTGAGE DEBT DECLINED. IN THE FOURTH QUARTER, CORPORATE BONDS ALSO HAD POSITIVE RETURNS ON THE COATTAILS OF TREASURY BONDS, THOUGH RETURNS ON ALL SECTORS LAGGED THOSE OF TREASURIES. IN DECEMBER, HOWEVER, SPREAD SECTORS, WITH THE EXCEPTION OF ASSET-BACKED SECURITIES, HAD POSITIVE EXCESS RETURNS COMPARED TO TREASURIES AS SPREADS TIGHTENED. IN THE SHORT-RUN, WE EXPECT INFLATION TO MODERATE. IN THE COMING MONTHS, THE INFLATIONARY EFFECTS OF THE INCREASE IN THE MONEY SUPPLY THAT RESULTS FROM THE LIQUIDITY THAT THE FED AND TREASURY CONTINUE TO PUMP INTO THE FINANCIAL SYSTEM ARE LIKELY TO BE OFFSET TO A LARGE EXTENT BY THE DEFLATIONARY PRESSURES OF AN ECONOMY TAKING A LONG TIME GETTING BACK TO TREND GROWTH. (EVENTUALLY THE HUGE INCREASE IN MONEY SUPPLY MAY CONTRIBUTE TO HIGHER INFLATION, BUT THAT SHOULDN'T BE A PROBLEM IN 2009, IN OUR VIEW.) LIKE STOCKS, BONDS COULD CONTINUE TO BE VOLATILE FOR A WHILE. WITH YIELDS NEAR RECORD LOWS, WE DON'T SEE MUCH UPSIDE POTENTIAL FOR TREASURY BONDS, THOUGH SKITTISH INVESTORS MAY CONTINUE TO FAVOR TREASURIES IN THE NEAR TERM. THERE IS POTENTIAL FOR SIGNIFICANT SPREAD TIGHTENING TO GENERATE VERY ATTRACTIVE RETURNS IN SPREAD PRODUCTS AS INVESTOR CONFIDENCE IMPROVES, BUT THE TIMING ON THIS IS UNCERTAIN, SINCE, AS WITH EQUITY INVESTORS, IT MAY TAKE A WHILE FOR FIXED-INCOME INVESTORS' CONFIDENCE TO RECOVER FROM ITS RECENT BATTERING. WIS EXPECTS THAT FOR 2009, THE BARCLAYS U.S. AGGREGATE WILL GENERATE A POSITIVE REAL RETURN DUE TO SPREAD TIGHTENING, AND WE CONTINUE TO RECOMMEND HOLDING A MIX OF ASSET CLASSES IN LONG-TERM INVESTMENT PORTFOLIOS. 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 Total Return Year Year Year Year Year Year Year Year Year Year --------------------------------------------------------------------------------------------------------------------- Wright Total Return Bond Fund (WTRB) 1.7% 5.6% 3.3% 1.5% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% Wright Current Income Fund (WCIF) 6.1% 5.8% 3.9% 1.8% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5%
WRIGHT TOTAL RETURN BOND FUND In 2008, the return on the Barclays Capital U.S. Aggregate Bond Index was 5.2%, well ahead of the S&P 500's 37% loss for the year. The Wright Total Return Bond Fund (WTRB) (the Fund), a diversified bond fund, lagged the Barclays Aggregate during 2008, returning 1.7%. In the fourth quarter of 2008, WTRB returned 3.2% compared to 4.6% for the Barclays benchmark. WTRB had a yield of 5.1% calculated according to SEC guidelines for December 2008. Dividends paid by this Fund may be more or less than implied by this yield. WTRB's duration position had a positive impact on performance in the first quarter of 2008. A neutral position was maintained through the second quarter, with the result that duration had no impact on performance relative to the Barclays benchmark in Q2. The neutral duration was maintained through the early part of the third quarter, then in mid-September as Treasury yields moved to low levels and appeared to be due for a correction, the Fund's duration was shortened by a quarter of a year compared to the benchmark. This move allowed the Fund's performance to benefit from the sell-off in Treasuries that ensued. By the start of the fourth quarter, the duration position was moved back to neutral, where it remained for the rest of the year. Throughout 2008, WTRB has been positioned to benefit from a steepening yield curve and for the year as a whole this worked to the Fund's advantage. For the year, the Fund's sector weights offset the positive effect of duration and yield curve positioning. Early in the year, spreads on non-Treasury sectors of the fixed-income market widened compared to Treasuries. To take advantage of the attractive values created by this widening, the Fund increased its overweight position in corporate bonds and the overweight was maintained through the rest of the year. This benefited the Fund in Q2, but detracted for the year as a whole as corporate spreads widened significantly in the third and fourth quarters (though this began to reverse in December). A specific corporate holding that hurt performance in the third quarter was the Fund's small position in a Lehman Brothers issue. The Fund benefited from being overweight in mortgage-backed issues in the second half of the year, but being underweight in Treasury and Agency issues dampened performance. An overweight position in commercial mortgages, which were the worst performing fixed-income sector for both the fourth quarter and the year, significantly detracted from the Fund's showing relative to its benchmark. As 2009 got underway, the Fund maintained its overweight position in corporate bonds (32% of net assets) and mortgage-backed issues (46% of net assets), which appear to be valued at levels that offer significant appreciation potential once investor confidence improves. The Fund was also overweight in commercial mortgages (7%) and asset-backed (1%) securities. At December 31, the Fund was underweight in Treasury securities (6%), which appeared to have little upside potential after their strong Q4 rally, and in Agency issues (6%). WRIGHT CURRENT INCOME FUND In 2008, the mortgage-backed sector of the bond market lagged behind Treasury bonds but had a better return (8.3%) than the Barclays Capital U.S. Aggregate Bond Index (5.2%). In the fourth quarter, the MBS sector returned 4.3% compared to a return of 4.6% for the Barclays Aggregate. 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. WCIF is actively managed to maximize income and minimize principal fluctuation. After matching the return of the Barclays GNMA Bond Index in the first half of 2008, in the second half WCIF lagged. In the fourth quarter, WCIF returned 3.1% compared to 4.1% for the Barclays benchmark. For all of 2008, WCIF returned 6.1%, compared to 7.9% for the Barclays GNMA Bond Index. For December 2008, WCIF had a yield of 5.0% as calculated by SEC guidelines. Dividends paid by this Fund may be more or less than implied by this yield. In addition to its holdings in Ginnie Maes (about 55% of net assets at year end), WCIF also held MBS securities backed by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These issues outperformed Ginnie Maes in the third and fourth quarters, as the government strengthened its backing of these issues by placing Fannie Mae and Freddie Mac in temporary conservatorship. WCIF's second-half shortfall in performance compared to the Barclays Ginnie Mae Bond Index in part reflected its overweighting of higher-coupon issues, which underperformed lower-coupon issues. Fund expenses also figured in the WCIF's modest 2008 shortfall in performance compared to the Barclays GNMA Bond Index. 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 12/31/99 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% 12/31/08 8,776.39 2.24% 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 1/1/99 Through 12/31/08 Average Annual Total Return ------------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs - -------------------------------------------------------------------------------------------------------------------- WSBC - Return before taxes -39.81% -2.17% 0.18% - Return after taxes on distributions -40.65% -3.76% -1.69% - Return after taxes on distributions and sales of fund shares -40.65% -3.76% -1.69% S&P MidCap 400* -36.23% -0.08% 4.46%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED BLUE CHIP EQUITIES FUND on 12/31/98 would have grown to $10,181 by December 31, 2008. 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 12/31/1998 $10,000 $10,000 12/31/1999 $10,575 $11,472 12/31/2000 $11,712 $13,481 12/31/2001 $10,523 $13,399 12/31/2002 $ 8,737 $11,454 12/31/2003 $11,363 $15,534 12/31/2004 $13,151 $18,094 12/31/2005 $14,608 $20,367 12/31/2006 $15,159 $22,469 12/31/2007 $16,916 $24,262 12/31/2008 $10,181 $15,471 * 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 @ 12/31/08 Insurance 9.7% Real Estate 3.0% Energy 9.1% Household & Personal Products 2.8% Electronic Equipment&Instruments 7.4% Computers & Peripherals 2.0% Materials 6.7% Food, Beverage & Tobacco 1.8% Retailing 6.7% Consumer Durables & Apparel 1.3% Utilities 5.7% Consumer Products 1.3% Banks 5.3% Automobiles & Components 1.2% Health Care Equipment & Services 5.1% Education 1.0% Software & Services 5.0% Machinery 1.0% Transportation 4.1% Communications Equipment 0.8% Pharmaceuticals & Biotechnology 3.9% Aerospace & Defense 0.4% Commercial Services & Supplies 3.8% Chemicals 0.3% Capital Goods 3.4% Telecommunication Services 0.3% Diversified Financials 3.1% Semiconductor Equip. & Prods. 0.3% Ten Largest Stock Holdings - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 W.R. Berkley Corp. 2.7% HCC Insurance Holdings, Inc. 2.5% Lincare Holdings, Inc. 2.5% MDU Resources Group, Inc. 2.4% Dollar Tree, Inc. 2.1% StanCorp Financial Group, Inc. 2.0% Oneok, Inc. 1.8% Alaska Air Group, Inc. 1.8% Perrigo Co. 1.6% Energen Corp. 1.5% WRIGHT MAJOR BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/99 Through 12/31/08 Average Annual Total Return ----------------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs - ------------------------------------------------------------------------------------------------------------------------- WMBC - Return before taxes -34.85% -1.67% -2.58% - Return after taxes on distributions -35.14% -1.92% -2.92% - Return after taxes on distributions and sales of fund shares -35.14% -1.92% -2.92% S&P 500* -37.00% -2.19% -1.38%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT MAJOR BLUE CHIP EQUITIES FUND on 12/31/98 would have been $7,702 by December 31, 2008. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Major Blue Chip Fund S&P 500 12/31/1998 $10,000 $10,000 12/31/1999 $12,395 $12,104 12/31/2000 $10,839 $11,002 12/31/2001 $ 9,010 $ 9,695 12/31/2002 $ 6,802 $ 7,552 12/31/2003 $ 8,380 $ 9,718 12/31/2004 $ 9,417 $10,776 12/31/2005 $10,000 $11,305 12/31/2006 $11,157 $13,091 12/31/2007 $11,822 $13,810 12/31/2008 $ 7,702 $ 8,700 * 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. Industry Weightings - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 Energy 13.7% Pharmaceuticals & Biotechnology 10.1% Computers & Peripherals 8.4% Insurance 8.2% Software & Services 6.4% Capital Goods 5.8% Banks 5.6% Retailing 5.1% Health Care Equipment & Services 4.5% Food, Beverage & Tobacco 3.9% Diversified Financials 3.0% Entertainment & Leisure 2.8% Aerospace 2.6% Telecommunication Services 2.6% Utilities 2.4% Hotels, Restaurants & Leisure 2.3% Household Durables 2.0% Transportation 1.9% Communications Equipment 1.4% Materials 1.1% Metals 1.0% Construction & Engineering 0.6% Education 0.5% Electronics 0.4% Heavy Machinery 0.4% Automobiles & Components 0.3% Media 0.3% Office Electronics 0.1% Semiconductor Equipment & Prods. 0.1% Ten Largest Stock Holdings - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 Exxon Mobil Corp. 4.8% Chevron Corp. 3.5% Hewlett-Packard Co. 3.5% Int'l. Business Machines Corp. 3.3% Pfizer, Inc. 3.0% Johnson & Johnson, Inc. 3.0% Microsoft Corp. 2.6% Lockheed Martin Corp. 2.4% McDonald's Corp. 2.3% AT&T, Inc. 2.3% WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Growth of $10,000 Invested 1/1/99 Through 12/31/08 Average Annual Total Return ----------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs - --------------------------------------------------------------------------------------------------------------------- WIBC - Return before taxes -47.74% 0.20% -0.45% - Return after taxes on distributions -48.93% -0.78% -1.26% - Return after taxes on distributions and sales of fund shares -48.93% -0.78% -1.26% MSCI World ex U.S. Index* -43.56% 1.91% 1.18%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT INT'L BLUE CHIP EQUITIES FUND on 12/31/98 would have been $ 9,561 by December 31, 2008. 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 12/31/1998 $10,000 $10,000 12/31/1999 $13,426 $12,793 12/31/2000 $11,066 $11,082 12/31/2001 $ 8,390 $ 8,711 12/31/2002 $ 7,173 $ 7,335 12/31/2003 $ 9,466 $10,226 12/31/2004 $11,142 $12,310 12/31/2005 $13,497 $14,092 12/31/2006 $17,342 $17,715 12/31/2007 $18,296 $19,918 12/31/2008 $ 9,561 $11,243 * The Fund's average annual return is compared with that of the MSCI 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 World ex U.S. Index, unlike that of the Fund, reflects no deductions for fees, expenses, or taxes. Country Weightings - ------------------------------------------------------------------------------ % of net assets @ 12/31/08 Japan 16.3% United Kingdom 15.8% Germany 10.6% France 9.5% Spain 8.0% Canada 7.8% Switzerland 6.3% Hong Kong 5.9% Italy 3.9% Netherlands 3.4% Australia 3.2% United States 3.2% Singapore 1.4% Norway 1.3% Greece 1.2% Denmark 1.2% Finland 1.2% Sweden 0.8% Ireland 0.4% Austria 0.3% Ten Largest Stock Holdings - ------------------------------------------------------------------------------ % of net assets @ 12/31/08 Telefonica SA 3.8% Eni SpA (Azioni Ordinarie) 3.5% CLP Holdings, Ltd. (Ordinary) 2.9% Zurich Financial Services (Inhaberaktie) 2.9% E.On AG (Stammaktie) 2.8% Royal Dutch Shell PLC 2.7% Groupe Danone 2.3% BASF AG (Stammaktie) 2.2% AstraZeneca PLC 2.1% Astellas Pharma, Inc. 2.1% WRIGHT TOTAL RETURN BOND FUND Growth of $10,000 Invested 1/1/99 Through 12/31/08 Average Annual Total Return ---------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs - -------------------------------------------------------------------------------------------------------------------- WTRB - Return before taxes 1.69% 3.14% 3.90% - Return after taxes on distributions -0.05% 1.52% 2.05% - Return after taxes on distributions and sales of fund shares -0.05% -1.24% 0.88% Barclays Capital U.S. Aggregate Bond Index* 5.24% 4.65% 5.63%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT TOTAL RETURN BOND FUND on 12/31/98 would have grown to $14,655 by December 31, 2008. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Total Retun Barclays Capital U.S. Bond Fund Aggregate Bond Index 12/31/1998 $10,000 $10,000 12/31/1999 $ 9,609 $ 9,918 12/31/2000 $10,629 $11,071 12/31/2001 $11,156 $12,006 12/31/2002 $12,164 $13,237 12/31/2003 $12,559 $13,780 12/31/2004 $13,001 $14,378 12/31/2005 $13,201 $14,727 12/31/2006 $13,642 $15,365 12/31/2007 $14,411 $16,436 12/31/2008 $14,655 $17,297 * The Fund's average annual return is compared with that of the Barclays Capital 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 Barclays Capital U.S. Aggregate Bond Index, unlike the Fund, reflects no deductions for fees, expenses, or taxes. Holdings by Sector - ------------------------------------------------------------------------------ % of net assets @ 12/31/08 Asset-Backed Securities 1.4% Corporate Bonds 31.9% Mortgage-Backed Securities 52.3% U.S. Treasuries 6.4% U.S. Government Agencies 5.9% Holdings by Credit Quality* - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 AAA 2% AA 3% A 20% BBB 8% Average Annual Total Return ------------------------------------------------- Last 1 Yr Last 5 Yrs Last 10 Yrs - ----------------------------------------------------------------------------------------------------------------------- WCIF - Return before taxes 6.10% 4.16% 4.79% - Return after taxes on distributions 4.34% 2.33% 2.75% - Return after taxes on distributions and sales of fund shares 4.20% 2.33% 2.75% Barclays Capital GNMA Backed Bond Index* 7.87% 5.39% 5.94% The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT INCOME FUND on 12/31/98 would have grown to $15,963 by December 31, 2008. The following plotting points are used for comparison in the total investment return mountain chart. Date Wright Current Lehman GNMA Income Fund Index 12/31/98 $10,000 $10,000 12/31/99 $10,052 $10,193 12/31/2000 $11,088 $11,325 12/31/2001 $11,885 $12,256 12/31/2002 $12,800 $13,321 12/31/2003 $13,022 $13,701 12/31/2004 $13,451 $14,297 12/31/2005 $13,688 $14,755 12/31/2006 $14,224 $15,435 12/31/2007 $15,044 $16,512 12/31/2008 $15,963 $17,812 * The Fund's average annual return is compared with that of the Barclays Capital GNMA Backed Bond Index. While the Fund does not seek to match the returns of the Barclays Capital GNMA Backed Bond Index, Wright believes that this unmanaged index generally indicates the performance of government and corporate mortgage-backed bond markets. The Barclays Capital GNMA Backed Bond Index, unlike the Fund, reflects no deductions for fees, expenses, or taxes. Holdings by Sector - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 Mortgage-Backed Securities 98.1% Weighted Average Maturity @ 12/31/08 3.3 Years Five Largest Bond Holdings - ------------------------------------------------------------------------------- % of net assets @ 12/31/08 GNMA II Pool #3747 5.00% 08/20/35 5.6% GNMA II Pool #696908 4.50% 07/20/38 5.4% GNMA Series 2002-47 6.50% 07/16/32 4.9% FNMA Series 2002-T4, Class A2 7.00% 12/25/41 3.2% GNMA Series 1999-4 6.00% 02/20/29 3.1% 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, 2008 - December 31, 2008). 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 tables 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 tables 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 (7/1/08- (7/1/08) (12/31/08) 12/31/08) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $649.50 $5.18 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.90 $6.34 *Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied by the average account value over the period, multiplied by 184/366 (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, 2008. WRIGHT MAJOR BLUE CHIP EQUITIES FUND Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/08- (7/1/08) (12/31/08) 12/31/08) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $751.10 $5.50 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,018.90 $6.34 *Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied by the average account value over the period, multiplied by 184/366 (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, 2008. WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/08- (7/1/08) (12/31/08) 12/31/08) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $579.40 $6.31 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,017.10 $8.06 *Expenses are equal to the Fund's annualized expense ratio of 1.59% multiplied by the average account value over the period, multiplied by 184/366 (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, 2008. FIXED INCOME FUNDS WRIGHT TOTAL RETURN BOND FUND Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/08- (7/1/08) (12/31/08) 12/31/08) - ------------------------------------------------------------------------------ Actual Fund Shares $1,000.00 $1,021.90 $3.59 - ------------------------------------------------------------------------------ Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,021.60 $3.61 *Expenses are equal to the Fund's annualized expense ratio of 0.71% multiplied by the average account value over the period, multiplied by 184/366 (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, 2008. WRIGHT CURRENT INCOME FUND Expenses Paid Beginning Ending During Period* Account Value Account Value (7/1/08- (7/1/08) (12/31/08) 12/31/08) - ------------------------------------------------------------------------------- Actual Fund Shares $1,000.00 $1,042.60 $4.88 - ------------------------------------------------------------------------------- Hypothetical (5% return per year before expenses) Fund Shares $1,000.00 $1,020.40 $4.82 *Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied by the average account value over the period, multiplied by 184/366 (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, 2008. WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008 Shares Value EQUITY INTERESTS - 96.5% AEROSPACE & DEFENSE -- 0.4% Alliant Techsystems, Inc. * 685 $ 58,746 ------------ AUTOMOBILES & COMPONENTS -- 1.2% Advance Auto Parts, Inc. 2,825 $ 95,061 BorgWarner, Inc. 3,100 67,487 ------------ $ 162,548 ------------ BANKS -- 5.3% Bank of Hawaii Corp. 3,345 $ 151,094 Commerce Bancshares, Inc. 2,139 94,009 Cullen/Frost Bankers, Inc. 3,090 156,601 New York Community Bancorp, Inc. 5,375 64,285 SVB Financial Group * 6,185 162,233 Westamerica Bancorporation 625 31,969 Wilmington Trust Corp. 1,955 43,479 ------------ $ 703,670 ------------ CAPITAL GOODS -- 3.4% AGCO Corp. * 6,775 $ 159,822 SPX Corp. 4,505 182,678 Thomas & Betts Corp. * 4,620 110,972 ------------ $ 453,472 ------------ CHEMICALS -- 0.3% Cytec Industries, Inc. 2,215 $ 47,002 ------------ COMMERCIAL SERVICES& SUPPLIES -- 3.8% Charles River Laboratories International* 3,540 $ 92,748 FirstMerit Corp. 3,845 79,169 Global Payments, Inc. 2,795 91,648 Harsco Corp. 2,300 63,664 Manpower, Inc. 3,845 130,691 Navigant Consulting, Inc. * 2,860 45,388 ------------ $ 503,308 ------------ COMMUNICATIONS EQUIPMENT -- 0.8% CommScope, Inc. * 2,255 $ 35,043 Plantronics, Inc. 5,785 76,362 ------------ $ 111,405 ------------ COMPUTERS & PERIPHERALS -- 2.0% Jack Henry & Associates, Inc. 4,600 $ 89,286 Western Digital Corp. * 15,630 178,964 ------------ $ 268,250 ------------ CONSUMER DURABLES & APPAREL -- 1.3% Herman Miller, Inc. 4,560 $ 59,417 Mohawk Industries, Inc. * 2,660 114.300 ------------ $ 173,717 ------------ CONSUMER PRODUCTS -- 1.3% John Wiley & Sons, Inc. - Class A 1,530 $ 54,437 Priceline.com, Inc. * 1,540 113,421 ------------ $ 167,858 ------------ DIVERSIFIED FINANCIALS -- 3.1% Eaton Vance Corp. 4,595 $ 96,541 Raymond James Financial, Inc. 10,112 173,219 SEI Investments Co. 9,050 142,175 ------------ $ 411,935 ------------ EDUCATION -- 1.0% Career Education Corp. * 1,930 $ 34,624 DeVry, Inc. 1,720 98,745 ------------ $ 133,369 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS-- 7.4% Ametek, Inc. 3,485 $ 105,282 Arrow Electronics, Inc. * 7,985 150,437 Avnet, Inc. * 7,995 145,589 Hubbell, Inc. 4,570 149,348 Ingram Micro, Inc. - Class A* 3,240 43,384 Lincoln Electric Holdings, Inc. 2,525 128,598 Pentair, Inc. 5,025 118,942 Synopsys, Inc. * 2,870 53,152 Tech Data Corp. * 2,330 41,567 Vishay Intertechnology, Inc. * 15,010 51,334 ------------ $ 987,633 ------------ ENERGY -- 9.1% Cimarex Energy Co. 3,875 $ 103,772 Cliffs Natural Resources, Inc. 1,945 49,811 Denbury Resources, Inc. * 8,100 88,452 Energen Corp. 6,925 203,110 FMC Technologies, Inc. * 7,355 175,270 Forest Oil Corp. * 7,320 120,707 Helmerich & Payne, Inc. 3,365 76,554 Patterson-UTI Energy, Inc. 6,070 69,866 SCANA Corp. 3,890 138,484 Superior Energy Services, Inc. * 1,835 29,232 Tidewater, Inc. 2,415 97,252 UGI Corp. 2,665 65,079 ------------ $ 1,217,589 ------------ FOOD, BEVERAGE & TOBACCO -- 1.8% Corn Products International, Inc. 2,365 $ 68,230 PepsiAmericas, Inc. 4,580 93,249 Ralcorp Holdings, Inc. * 1,350 78,840 ------------ $ 240,319 ------------ HEALTH CARE EQUIPMENT & SERVICES-- 5.1% Community Health Systems, Inc. * 3,390 $ 49,426 Health Management Associates, Inc. - Class A* 36,305 64,986 LifePoint Hospitals, Inc. * 2,600 59,384 Lincare Holdings, Inc. * 12,190 328,277 STERIS Corp. 4,070 97,232 WellCare Health Plans, Inc. * 6,495 83,526 ------------ $ 682,831 ------------ HOUSEHOLD & PERSONAL PRODUCTS -- 2.8% Church & Dwight Co., Inc. 2,595 $ 145,631 NetFlix, Inc. * 4,765 142,426 Tupperware Brands Corp. 3,515 79,791 ------------ $ 367,848 ------------ INSURANCE -- 9.7% American Financial Group Inc. 5,325 $ 121,836 Everest Re Group, Ltd. 1,765 134,387 Hanover Insurance Group, Inc. 800 34,376 HCC Insurance Holdings, Inc. 12,700 339,725 Horace Mann Educators Corp. 2,345 21,550 Protective Life Corp. 1,305 18,727 StanCorp Financial Group, Inc. 6,375 266,284 W.R. Berkley Corp. 11,497 356,407 ------------ $ 1,293,292 ------------ MACHINERY -- 1.0% IDEX Corp. 1,425 $ 34,414 Wabtec Corp. 2,350 93,412 ------------ $ 127,826 MATERIALS -- 6.7% Airgas, Inc. 3,415 $ 133,151 Carpenter Technology Corp. 1,255 25,778 Crane Co. 3,105 53,530 FMC Corp. 1,675 74,923 Joy Global, Inc. 3,225 73,820 Kennametal, Inc. 995 22,079 Lubrizol Corp. 3,635 132,278 Matthews International Corp. - Class A 1,790 65,657 Reliance Steel & Aluminum Co. 2,795 55,732 Sonoco Products Co. 4,035 93,451 Steel Dynamics, Inc. 5,730 64,061 Terra Industries, Inc. 4,360 72,681 Worthington Industries, Inc. 3,010 33,170 ------------ $ 900,311 ------------ PHARMACEUTICALS & BIOTECHNOLOGY -- 3.9% Endo Pharmaceuticals Holdings, Inc. * 7,410 $ 191,771 Omnicare, Inc. 1,820 50,523 Perrigo Co. 6,545 211,469 Pharmaceutical Product Development, Inc. 2,430 70,494 ------------ $ 524,257 ------------ REAL ESTATE -- 3.0% NVR, Inc. * 310 $ 141,437 Toll Brothers, Inc. * 8,725 186,977 UDR, Inc. 5,095 70,260 ------------ $ 398,674 ------------ RETAILING -- 6.7% Aeropostale, Inc. * 3,277 $ 52,760 American Eagle Outfitters, Inc. 8,952 83,791 BJ's Wholesale Club, Inc. * 4,020 137,725 Dollar Tree, Inc. * 6,855 286,539 Phillips-Van Heusen Corp. 3,220 64,818 Regis Corp. 3,745 54,415 Rent-A-Center Inc. * 2,490 43,948 Ross Stores, Inc. 5,860 174,218 ------------ $ 898,214 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS -- 0.3% Intersil Corp. - Class A 3,825 $ 35,152 ------------ SOFTWARE & SERVICES -- 5.0% Alliance Data Systems Corp. * 2,340 $ 108,880 Ansys, Inc. * 4,835 134,848 Mantech International Corp. - Class A *1,670 90,497 McAfee, Inc. * 4,385 151,590 Sybase, Inc. * 7,550 187,014 ------------ $ 672,829 ------------ TELECOMMUNICATION SERVICES -- 0.3% Telephone & Data Systems, Inc. 1,345 $ 42,704 ------------ TRANSPORTATION -- 4.1% AirTran Holdings, Inc. * 28,310 $ 125,696 Alaska Air Group, Inc. * 8,015 234,439 Con-way, Inc. 1,345 35,777 JetBlue Airways Corp. * 21,345 151,550 ------------ $ 547,462 ------------ UTILITIES -- 5.7% MDU Resources Group, Inc. 14,863 $ 320,745 Northeast Utilities 8,365 201,262 Oneok, Inc. 8,260 240,531 ------------ $ 762,538 ------------ TOTAL EQUITY INTERESTS - 96.5% (identified cost, $16,295,643) $ 12,894,759 OTHER ASSETS, LESS LIABILITIES - 3.5% 469,049 ------------ NET ASSETS - 100.0% $ 13,363,808 ============ Industry classifications included in the Portfolio of Investments are unaudited. * Non-income-producing security. See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2008 - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $16,295,643) (Note 1A) $ 12,894,759 Cash 475,445 Receivable for fund shares sold 3,433 Receivable from affiliates 5,749 Dividends receivable 22,646 Other assets 3,440 ------------ Total assets $ 13,405,472 ------------ LIABILITIES: Payable for fund shares reacquired $ 16,774 Payable to affiliate for investment adviser fee 1,153 Payable to affiliate for distribution expenses 87 Accrued expenses and other liabilities 23,650 ------------ Total liabilities $ 41,664 ------------ NET ASSETS $ 13,363,808 ============ NET ASSETS CONSIST OF: Paid-in capital $ 18,184,581 Accumulated net realized loss on investments (computed on the basis of identified cost) (1,419,889) Unrealized appreciation (depreciation) of investments(computed on the basis of identified cost) (3,400,884) ------------ Net assets applicable to outstanding shares $ 13,363,808 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING 2,205,103 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST $ 6.06 ============ STATEMENT OF OPERATIONS For the Year Ended December 31, 2008 - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Dividend income $ 197,911 ------------ Expenses - Investment adviser fee (Note 3) $ 108,213 Administrator fee (Note 3) 21,643 Compensation of Trustees who are not employees of the investment adviser or administrator 12,961 Custodian fee (Note 1F) 63,992 Distribution expenses (Note 4) 45,089 Transfer and dividend disbursing agent fees 23,878 Printing 2,106 Interest expense 3,567 Shareholder communications 1,750 Audit services 27,685 Legal services 4,270 Registration costs 19,181 Miscellaneous 7,918 ------------ Total expenses $ 342,253 ------------ Deduct - Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) $ (115,081) Reduction of custodian fee (Note 1F) (1,728) ------------ Total deductions $ (116,809) ------------ Net expenses $ 225,444 ------------ Net investment loss $ (27,533) ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis) $(1,371,940) Net change in unrealized appreciation (depreciation) on investments (6,810,349) ------------ Net realized and unrealized loss on investments $ (8,182,289) ------------ Net decrease in net assets from operations $(8,209,822) ============ See notes to financial statements WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- Year Ended December 31, ------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS 2008 2007 - -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment loss $ (27,533) $ (28,028) Net realized gain (loss) on investment transactions (1,371,940) 6,519,033 Net change in unrealized appreciation (depreciation) on investments (6,810,349) (3,232,243) -------------- -------------- Net increase (decrease) in net assets from operations $ (8,209,822) $ 3,258,762 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income $ - $ (33,344) From net realized gains (1,863,251) (5,034,405) -------------- -------------- Total distributions $ (1,863,251) $ (5,067,749) -------------- -------------- Net decrease in net assets from fund share transactions (Note 6) $ (486,111) $(12,619,826) -------------- -------------- Net decrease in net assets $(10,559,184) $(14,428,813) NET ASSETS: At beginning of year 23,922,992 38,351,805 -------------- -------------- At end of year $ 13,363,808 $ 23,922,992 ============== ============== See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) - ------------------------------------------------------------------------------- Year Ended December 31, - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year $ 11.100 $ 12.270 $ 13.030 $ 13.226 $ 11.870 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment loss(1) $ (0.013) $ (0.013) $ (0.034) $ (0.053) $ (0.028) Net realized and unrealized gain (loss) (4.121) 1.340 0.529 1.476 1.884 --------- --------- --------- --------- --------- Total income (loss) from investment operations $ (4.134) $ 1.327 $ 0.495 $ 1.423 $ 1.856 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: From net investment income $ - $ (0.016) $ - $ - - From net realized gains (0.906) (2.481) (1.255) (1.619) $ (0.500) --------- --------- --------- --------- --------- Total distributions $ (0.906) $ (2.497) $ (1.255) $ (1.619) $ (0.500) --------- --------- --------- --------- --------- Net asset value, end of year $ 6.060 $ 11.100 $ 12.270 $ 13.030 $ 13.226 ========= ========= ========= ========= ========= TOTAL RETURN(2) (39.81)% 11.59% 3.77% 11.09% 15.73% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted) $ 13,364 $ 23,923 $ 38,352 $ 47,652 $ 43,498 Ratios (As a percentage of average daily net assets): Net expenses 1.26% 1.26% 1.26% 1.27% 1.26% Net expenses after custodian fee reduction 1.25% 1.25% 1.25% 1.25% 1.25% Net investment loss (0.15)% (0.10)% (0.27)% (0.18)% (0.23)% Portfolio turnover rate 72% 67% 66% 110% 69% - -------------------------------------------------------------------------------------------------------------------------------- (1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the operating expenses of the Fund were reduced by a waiver of fees and/or an allocation of expenses to the principal underwriter and/or investment adviser. Had such action not been undertaken, net investment loss per share and the ratios would have been as follows: 2008 2007 2006 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net investment loss per share $ (0.068) $ (0.064) $ (0.058) $ (0.111) $ (0.050) ========= ========= ========= ========= ========= Ratios (As a percentage of average daily net assets): Expenses 1.90% 1.66% 1.46% 1.45% 1.44% ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.89% 1.66% 1.44% 1.43% 1.43% ========= ========= ========= ========= ========= Net investment loss (0.79)% (0.51)% (0.46)% (0.38)% (0.41)% ========= ========= ========= ========= ========= - -------------------------------------------------------------------------------------------------------------------------------- (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 MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008 Shares Value EQUITY INTERESTS - 97.5% AEROSPACE -- 2.6% General Dynamics Corp. 4,630 $ 266,642 Honeywell International, Inc. 8,885 291,694 Northrop Grumman Corp. 2,345 105,619 Raytheon Co. 3,540 180,682 ------------ $ 844,637 ------------ AUTOMOBILES & COMPONENTS -- 0.3% Cooper Industries, Ltd. - Class A 3,135 $ 91,636 ------------ BANKS -- 5.6% Bank of America Corp. 12,905 $ 181,703 Bank of New York Mellon Corp. 25,155 712,641 Hudson City Bancorp, Inc. 13,605 217,136 M&T Bank Corp. 1,230 70,614 Wells Fargo & Co. 21,185 624,534 ------------ $ 1,806,628 ------------ CAPITAL GOODS -- 5.8% Caterpillar, Inc. 9,830 $ 439,106 Cummins, Inc. 1,775 47,446 Deere & Co. 4,580 175,505 General Electric Co. 10,215 165,483 Illinois Tool Works, Inc. 3,075 107,779 Lockheed Martin Corp. 9,155 769,752 Parker Hannifin Corp. 3,955 168,246 ------------ $ 1,873,317 ------------ COMMUNICATIONS EQUIPMENT -- 1.4% Cisco Systems, Inc. * 13,290 $ 216,627 L-3 Communications Holdings, Inc. 3,155 232,776 ------------ $ 449,403 ------------ COMPUTERS & PERIPHERALS -- 8.4% Affiliated Computer Services, Inc. - Class A* 2,930 $ 134,633 Apple, Inc. * 4,220 360,177 Hewlett-Packard Co. 30,930 1,122,450 International Business Machines Corp. 12,720 1,070,515 Lexmark International, Inc. - Class A *1,690 45,461 ------------ $ 2,733,236 ------------ CONSTRUCTION & ENGINEERING -- 0.6% Fluor Corp. 4,325 $ 194,063 ------------ DIVERSIFIED FINANCIALS -- 3.0% American Express Co. 7,840 $ 145,432 Capital One Financial Corp. 7,570 241,407 Citigroup, Inc. 10,191 68,382 Federated Investors, Inc. - Class B 6,365 107,950 Goldman Sachs Group, Inc. (The) 1,325 111,817 PNC Financial Services Group, Inc. 6,005 294,245 ------------ $ 969,233 ------------ EDUCATION -- 0.5% Apollo Group, Inc. - Class A* 2,205 $ 168,947 ------------ ELECTRONICS -- 0.4% Emerson Electric Co. 3,930 $ 143,877 ------------ ENERGY -- 13.7% Apache Corp. 1,250 $ 93,162 Chesapeake Energy Corp. 3,375 54,574 Chevron Corp. 15,470 1,144,316 ConocoPhillips Co. 12,630 654,234 ENSCO International, Inc. 1,920 54,509 Exxon Mobil Corp. 19,660 1,569,458 Hess Corp. 1,625 87,165 National Oilwell Varco, Inc. * 3,520 86,029 Noble Energy, Inc. 1,740 85,643 Occidental Petroleum Corp. 9,790 587,302 Transocean, Inc. * 625 29,531 ------------ $ 4,445,923 ------------ ENTERTAINMENT & LEISURE -- 2.8% Hasbro, Inc. 5,315 $ 155,039 Walt Disney Co. (The) 32,550 738,559 ------------ $ 893,598 ------------ FOOD, BEVERAGE & TOBACCO -- 3.9% Altria Group, Inc. 32,970 $ 496,528 Molson Coors Brewing Co. - Class B 5,860 286,671 PepsiCo, Inc. 3,085 168,966 Philip Morris International, Inc. 7,115 309,574 ------------ $ 1,261,739 ------------ HEALTH CARE EQUIPMENT & SERVICES-- 4.5% Aetna, Inc. 8,050 $ 229,425 Baxter International, Inc. 2,965 158,894 Express Scripts, Inc. * 6,480 356,270 Laboratory Corp of America Holdings * 2,210 142,346 Medtronic, Inc. 7,775 244,291 WellPoint, Inc. * 8,105 341,464 ------------ $ 1,472,690 ------------ HEAVY MACHINERY -- 0.4% Dover Corp. 3,270 $ 107,648 Manitowoc Co., Inc. (The) 2,480 21,477 ------------ $ 129,125 ------------ HOTELS, RESTAURANTS & LEISURE -- 2.3% McDonald's Corp. 12,175 $ 757,163 ------------ HOUSEHOLD DURABLES -- 2.0% Fortune Brands, Inc. 2,085 $ 86,069 Leggett & Platt, Inc. 11,205 170,204 Procter & Gamble Co. 5,730 354,229 Stanley Works, (The) 1,455 49,615 ------------ $ 660,117 ------------ INSURANCE -- 8.2% Aflac, Inc. 12,495 $ 572,771 Assurant, Inc. 2,220 66,600 Chubb Corp. 11,265 574,515 Hartford Financial Services Group, Inc. 6,185 101,558 MetLife, Inc. 19,920 694,411 Progressive Corp. 5,175 76,642 Torchmark Corp. 2,955 132,088 Travelers Cos, Inc. (The) 4,790 216,508 Unum Group 11,590 215,574 ------------ $ 2,650,667 ------------ MATERIALS -- 1.1% CF Industries Holdings, Inc. 1,645 $ 80,868 Nucor Corp. 6,285 290,367 ------------ $ 371,235 ------------ MEDIA -- 0.3% Omnicom Group, Inc. 3,330 $ 89,644 ------------ METALS -- 1.0% AK Steel Holding Corp. 2,435 $ 22,694 Freeport-McMoRan Copper & Gold, Inc. 5,005 122,322 Newmont Mining Corp. 2,880 117,216 United States Steel Corp. 1,830 68,076 ------------ $ 330,308 ------------ OFFICE ELECTRONICS -- 0.1% Xerox Corp. 5,765 $ 45,947 ------------ PHARMACEUTICALS & BIOTECHNOLOGY-- 10.1% Amgen, Inc. * 10,900 $ 629,475 Biogen Idec, Inc. * 3,135 149,320 Forest Labs * 5,825 148,363 Johnson & Johnson, Inc. 16,470 985,400 King Pharmaceuticals, Inc. * 11,010 116,926 Pfizer, Inc. 55,825 988,661 Watson Pharmaceuticals, Inc. * 9,565 254,142 ------------ $ 3,272,287 ------------ RETAILING -- 5.1% Best Buy Co., Inc. 6,355 $ 178,639 Big Lots, Inc. * 7,175 103,966 CVS/Caremark Corp. 5,415 155,627 eBay, Inc. * 3,110 43,416 GameStop Corp. - Class A* 7,125 154,327 Sherwin-Williams Co. 5,860 350,135 SUPERVALU, Inc. 4,245 61,977 TJX Cos., Inc. 6,015 123,729 Wal-Mart Stores, Inc. 8,835 495,290 ------------ $ 1,667,106 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 0.1% QLogic Corp. * 2,810 $ 37,766 ------------ SOFTWARE & SERVICES -- 6.4% BMC Software, Inc. * 8,250 $ 222,007 Computer Sciences Corp. * 1,910 67,117 Compuware Corp. * 14,665 98,989 EMC Corp. * 12,865 134,697 Microsoft Corp. 43,065 837,184 Oracle Corp. * 36,525 647,588 Symantec Corp. * 5,330 72,062 ------------ $ 2,079,644 ------------ TELECOMMUNICATION SERVICES -- 2.6% AT&T, Inc. 26,205 $ 746,842 CenturyTel, Inc. 3,760 102,761 ------------ $ 849,603 ------------ TRANSPORTATION -- 1.9% Boeing Co. (The) 3,030 $ 129,290 Burlington Northern Santa Fe Corp. 4,135 313,061 CSX Corp. 1,900 61,693 Norfolk Southern Corp. 2,345 110,332 ------------ $ 614,376 ------------ UTILITIES -- 2.4% Integrys Energy Group, Inc. 14,605 $ 627,723 Public Service Enterprise Group, Inc. 4,900 142,933 ------------ $ 770,656 ------------ TOTAL EQUITY INTERESTS - 97.5% (identified cost, $40,243,137) $ 31,674,571 ------------ INVESTMENT FUNDS -- 1.3% CAPITAL MARKETS -- 1.3% SPDR Trust Series 1 4,535 $ 409,238 ------------ TOTAL INVESTMENT FUNDS - 1.3% (identified cost, $399,352) $ 409,238 ------------ TOTAL INVESTMENTS - 98.8% (identified cost, $40,642,489) $ 32,083,809 OTHER ASSETS, LESS LIABILITIES - 1.2% 399,775 ------------ NET ASSETS - 100.0% $ 32,483,584 ============ Industry classifications included in the Portfolio of Investments are unaudited. * Non-income-producing security. See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------ STATEMENT OF ASSETS AND LIABILITIES December 31, 2008 - ------------------------------------------------------------------------------ ASSETS: Investments, at value (identified cost $40,642,489) (Note 1A) $ 32,083,809 Cash 244,676 Receivable for fund shares sold 126,052 Receivable from affiliates 2,361 Dividends receivable 65,678 Other assets 2,840 ------------ Total assets $ 32,525,416 ------------ LIABILITIES: Payable for fund shares reacquired $ 4,484 Payable to affiliate for investment adviser fee 1,502 Payable to affiliate for distribution expenses 5,183 Accrued expenses and other liabilities 30,663 ------------ Total liabilities $ 41,832 ------------ NET ASSETS $ 32,483,584 ============ NET ASSETS CONSIST OF: Paid-in capital $ 58,659,125 Accumulated net realized loss on investments (computed on the basis of identified cost) (17,624,522) Unrealized appreciation (depreciation) of investments (computed on the basis of identified cost) (8,558,680) Accumulated undistributed net investment income 7,661 ------------ Net assets applicable to outstanding shares $ 32,483,584 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,478,991 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST $ 9.34 ============ STATEMENT OF OPERATIONS For the Year Ended December 31, 2008 - ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1C) Dividend income $ 961,590 ------------ Expenses - Investment adviser fee (Note 3) $ 274,083 Administrator fee (Note 3) 54,817 Compensation of Trustees who are not employees of the investment adviser or administrator 12,961 Custodian fee (Note 1F) 67,506 Distribution expenses (Note 4) 114,201 Transfer and dividend disbursing agent fees 19,657 Printing 3,195 Interest expense 5,055 Shareholder communications 1,865 Audit services 30,003 Legal services 10,366 Registration costs 20,536 Miscellaneous 8,901 ------------ Total expenses $ 623,146 ------------ Deduct - Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) $ (50,060) Reduction of custodian fee (Note 1F) (2,081) ------------ Total deductions $ (52,141) ------------ Net expenses $ 571,005 ------------ Net investment income $ 390,585 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis) $ (2,313,558) Net change in unrealized appreciation (depreciation on investments (17,276,483) ------------ Net realized and unrealized loss on investments $(19,590,041) ------------ Net decrease in net assets from operations $(19,199,456) ============ See notes to financial statements WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------- Year Ended December 31, ------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS 2008 2007 - -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income $ 390,585 $ 381,955 Net realized gain (loss) on investment transactions (2,313,558) 5,221,457 Net change in unrealized appreciation (depreciation) on investments (17,276,483) (1,973,444) -------------- -------------- Net increase (decrease) in net assets from operations $(19,199,456) $ 3,629,968 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income $ (399,235) $ (362,113) -------------- -------------- Total distributions $ (399,235) $ (362,113) -------------- -------------- Net decrease in net assets from fund share transactions (Note 6) $ (5,667,495) $ (8,794,028) -------------- -------------- Net decrease in net assets $(25,266,186) $ (5,526,173) NET ASSETS: At beginning of year 57,749,770 63,275,943 -------------- -------------- At end of year $ 32,483,584 $ 57,749,770 ============== ============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ 7,661 $ 19,267 ============== ============== See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) - ------------------------------------------------------------------------------ Year Ended December 31, - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year $ 14.520 $ 13.790 $ 12.420 $ 11.780 $ 10.530 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) $ 0.104 $ 0.091 $ 0.062 $ 0.077 $ 0.053 Net realized and unrealized gain (loss) (5.169) 0.728 1.374 0.651 1.247 --------- --------- --------- --------- --------- Total income (loss) from investment operations $ (5.065) $ 0.819 $ 1.436 $ 0.728 $ 1.300 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: From net investment income $ (0.115) $ (0.089) $ (0.066) $ (0.088) $ (0.050) --------- --------- --------- --------- --------- Total distributions $ (0.115) $ (0.089) $ (0.066) $ (0.088) $ (0.050) --------- --------- --------- --------- --------- Net asset value, end of year $ 9.340 $ 14.520 $ 13.790 $ 12.420 $ 11.780 ========= ========= ========= ========= ========= TOTAL RETURN(2) (34.85)% 5.96% 11.57% 6.20% 12.36% ========= ========= ========= ========= ========= RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted) $ 32,484 $ 57,750 $ 63,276 $ 66,742 $ 65,503 Ratios (As a percentage of average daily net assets): Net expenses 1.26% 1.26% 1.26% 1.26% 1.25% Net expenses after custodian fee reduction 1.25% 1.25% 1.25% 1.25% 1.25% Net investment income 0.86% 0.63% 0.48% 0.66% 0.49% Portfolio turnover rate 58% 55% 97% 82% 74% - -------------------------------------------------------------------------------------------------------------------------------- (1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the operating expenses of the Fund were reduced by a waiver of fees and/or an allocation of expenses to the principal underwriter and/or investment adviser. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2008 2007 2006 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net investment income per share $ 0.091 $ 0.088 $ 0.062 $ 0.077 $ 0.050 ========= ========= ========= ========= ========= Ratios (As a percentage of average daily net assets): Expenses 1.37% 1.28% 1.28% 1.26% 1.28% ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.36% 1.27% 1.27% 1.25% 1.28% ========= ========= ========= ========= ========= Net investment income 0.75% 0.61% 0.46% 0.66% 0.46% ========= ========= ========= ========= ========= - -------------------------------------------------------------------------------------------------------------------------------- (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 INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------ PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008 Shares Value EQUITY INTERESTS - 98.5% AUSTRALIA -- 3.2% BHP Billiton, Ltd. 34,756 $ 722,210 BlueScope Steel, Ltd. 52,563 127,089 Caltex Australia, Ltd. (1) 20,461 101,094 QBE Insurance Group, Ltd. 40,597 724,371 Sims Metal Management, Ltd. 9,087 108,772 Westpac Banking Corp. 30,204 352,018 ------------ $ 2,135,554 ------------ AUSTRIA -- 0.3% Voestalpine AG 8,557 $ 184,503 ------------ CANADA -- 7.8% Canadian National Railway Co. 18,198 $ 662,762 Canadian Natural Resources, Ltd. 3,095 122,118 Canadian Pacific Railway, Ltd. 11,330 379,443 CGI Group, Inc. - Class A * 74,788 581,758 Encana Corp. 24,223 1,130,750 Husky Energy, Inc. 23,742 586,861 Manulife Financial Corp. 13,104 220,674 Methanex Corp. 34,407 392,924 Petro-Canada 12,483 272,713 Potash Corp. of Saskatchewan, Inc. 4,934 368,289 Toronto-Dominion Bank 15,519 545,802 ------------ $ 5,264,094 ------------ DENMARK -- 1.2% Danske Bank A/S (Stammaktie) 4,161 $ 41,622 Novo Nordisk A/S - Series B 14,826 772,889 ------------ $ 814,511 ------------ FINLAND -- 1.2% Nokia Oyj 49,306 $ 784,617 ------------ FRANCE -- 9.5% AXA (Actions Ordinaires) (1) 14,810 $ 331,219 BNP Paribas 10,763 462,903 Casino Guichard-Perrachon SA 7,678 577,886 Compagnie Generale des Etablisssements Michelin - Class B 4,009 213,803 France Telecom SA 12,645 365,736 Groupe Danone 24,337 1,515,452 Sanofi-Aventis (1) 11,893 780,041 Schneider Electric SA 4,301 328,834 Total SA 22,636 1,272,099 Vallourec SA 4,355 501,472 ------------ $ 6,349,445 ------------ GERMANY -- 10.6% Allianz AG Holding (Namensaktie) 3,537 $ 380,305 BASF AG (Stammaktie) 37,967 1,509,355 Bayer AG 10,957 652,676 Bayerische Motoren Werke AG 7,851 243,229 Deutsche Bank AG (Stammaktie) 11,881 474,025 Deutsche Lufthansa AG 18,850 302,396 E.On AG (Stammaktie) 46,138 1,881,151 MAN AG 6,634 368,253 Muenchener Rueckversicherungs- Gesellschaft AG 4,365 694,612 Porsche AG (Preferred Stock) 2,887 227,017 ThyssenKrupp AG 13,318 362,003 ------------ $ 7,095,022 ------------ GREECE -- 1.2% Alpha Bank A.E. 24,324 $ 236,428 Coca Cola Hellenic Bottling Co. SA 18,688 273,274 National Bank of Greece SA 16,822 325,572 ------------ $ 835,274 ------------ HONG KONG -- 5.9% BOC Hong Kong Holdings, Ltd. 186,000 $ 208,952 Cheung Kong Holdings, Ltd. 40,000 371,415 CLP Holdings, Ltd. (Ordinary) 285,000 1,964,248 Hang Seng Bank, Ltd. 41,500 558,475 Henderson Land Development Co., Ltd. 110,000 404,240 Sun Hung Kai Properties, Ltd. 58,000 489,247 ------------ $ 3,996,577 ------------ IRELAND -- 0.4% CRH PLC 10,670 $ 275,342 ------------ ITALY -- 3.9% Eni SpA (Azioni Ordinarie) 97,644 $ 2,343,345 Saipem SpA 14,773 250,335 ------------ $ 2,593,680 ------------ JAPAN -- 16.3% Aisin Seiki Co., Ltd. 18,400 $ 255,401 Astellas Pharma, Inc. 34,400 1,403,469 Daihatsu Motor Co., Ltd. 9,000 79,203 Denso Corp. 10,000 165,217 Honda Motor Co., Ltd. 28,500 610,528 Kirin Holdings Co., Ltd. 13,000 171,826 Komatsu, Ltd. 18,000 226,179 Makita Corp. 28,000 619,013 Marubeni Corp. 43,000 162,385 Mitsubishi Corp. 28,000 389,598 Mitsubishi Electric Corp. 29,000 179,918 Mitsubishi Gas Chemical Co., Inc. 45,000 183,087 Mitsui & Co., Ltd. 23,000 232,911 Mitsui OSK Lines, Ltd. 175,000 1,066,044 Nintendo Company, Ltd. 1,200 455,190 Nippon Oil Corp. 59,000 296,413 Nippon Steel Corp. 157,000 511,723 Nippon Yusen Kabushiki Kaisha 132,000 808,552 Nisshin Steel Co., Ltd. (1) 245,000 501,158 Omron Corp. 11,200 150,930 Panasonic Corp. 8,000 100,074 Sankyo Co., Ltd. 4,400 222,537 Sumitomo Corp. (1) 80,000 701,330 Tokai Rika Co., Ltd. 26,000 227,348 Tokyo Electron, Ltd. 4,100 142,851 Toyota Motor Corp. 33,900 1,106,836 ------------ $ 10,969,721 ------------ NETHERLANDS -- 3.4% ING Groep NV (Aandeel) 78,733 $ 870,593 Koninklijke (Royal) KPN NV 49,376 733,349 Koninklijke Philips Electronics NV (Aandeel) 35,244 702,826 ------------ $ 2,306,768 ------------ NORWAY -- 1.3% StatoilHydro ASA 12,500 $ 206,122 Telenor Group ASA * 96,973 650,014 ------------ $ 856,136 ------------ SINGAPORE -- 1.4% Jardine Cycle & Carriage, Ltd. (1) 89,000 $ 606,831 Overseas-Chinese Banking Corp., Ltd. 100,000 355,003 ------------ $ 961,834 ------------ SPAIN -- 8.0% Acciona SA (1) 2,682 $ 342,203 Banco Bilbao Vizcaya Argentaria SA 14,523 180,306 Banco Santander SA 104,004 1,006,443 Iberdrola Renovables SA * 90,000 393,530 Mapfre SA 117,796 405,300 Repsol YPF SA (Accion) 21,258 460,187 Telefonica SA 112,959 2,566,760 ------------ $ 5,354,729 ------------ SWEDEN -- 0.8% TeliaSonera AB 109,718 $ 558,659 ------------ SWITZERLAND -- 6.3% ABB, Ltd. * 14,982 $ 224,825 Holcim, Ltd. 3,540 205,603 Nestle SA 13,350 534,913 Roche Holding AG 4,228 661,754 Swatch Group AG 1,922 269,910 Swiss Re AG 7,961 385,695 Zurich Financial Services (Inhaberaktie) 8,859 1,936,952 ------------ $ 4,219,652 ------------ UNITED KINGDOM -- 15.8% Anglo American PLC (Ordinary) 16,052 $ 365,030 AstraZeneca PLC 35,899 1,442,673 Barclays PLC (Ordinary) 99,680 217,202 BG Group PLC 10,637 150,734 BHP Billiton PLC 40,865 763,750 BP PLC 45,872 348,835 British Airways PLC 95,143 246,970 British American Tobacco PLC 19,696 515,585 Centrica PLC 48,246 184,502 GlaxoSmithKline PLC 10,700 197,005 HSBC Holdings PLC 43,538 413,221 Legal & General Group (Ordinary) 361,748 396,768 Lloyds TSB Group PLC 219,116 405,353 Lloyds TSB Group PLC Rights 95,249 -- Man Group PLC 157,944 542,223 Next PLC 14,886 237,940 Rio Tinto PLC 11,165 236,426 Royal Bank of Scotland Group PLC (Ordinary) 190,836 134,517 Royal Dutch Shell PLC 72,317 1,825,366 Tate & Lyle PLC 17,424 100,969 Unilever PLC 59,165 1,366,205 Vodafone Group PLC 254,799 507,136 ------------ $ 10,598,410 ------------ TOTAL EQUITY INTERESTS - 98.5% (identified cost, $93,692,893) $ 66,154,528 ------------ SHORT-TERM INVESTMENTS - 3.2% State Street Navigator Securities Lending Prime Portfolio, 2.17%(2) 2,105,799 $ 2,105,799 ------------ TOTAL SHORT-TERM INVESTMENTS - 3.2% (identified cost, $2,105,799) $ 2,105,799 ------------ TOTAL INVESTMENTS - 101.7% (identified cost, $95,798,692) $ 68,260,327 OTHER ASSETS, LESS LIABILITIES - (1.7)% (1,114,793) ------------ NET ASSETS - 100.0% $ 67,145,534 ============ * Non-income-producing security. (1) All or a portion on these securities were on loan at December 31, 2008. (2) The amount invested in State Street Navigator Securities Lending Prime Portfolio represents cash collateral received for securities on loan as of December 31, 2008. Other Assets, Less Liabilities includes an equal and offsetting liability of the Fund to repay collateral amounts upon the return of loaned securities. Portfolio Composition By Sector ----------------------------------- % of net assets at 12/31/08 (Unaudited) Financial............................21.3% Energy...............................14.2% Industrials..........................11.3% Materials............................10.3% Health Care...........................9.0% Other................................32.4% See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2008 - ------------------------------------------------------------------------------- ASSETS: Investments, at value including $1,977,119 of securities loaned (identified cost $95,798,692) (Note 1A) $ 68,260,327 Foreign currency, at value (cost $58,591) (Note 1A) 58,562 Cash 127 Receivable for investments sold 1,110,063 Receivable for fund shares sold 167,680 Dividends receivable 95,630 Receivable for securities lending 2,147 Tax reclaims receivable 117,987 Other assets 657 ------------ Total assets $ 69,813,180 ------------ LIABILITIES: Demand note payable (Note 8) $ 244,000 Payable for investments purchased 189,914 Payable for fund shares reacquired 34,247 Collateral for securities loaned 2,105,799 Payable to affiliate for distribution expenses 17,887 Accrued expenses and other liabilities 75,799 ------------ Total liabilities $ 2,667,646 ------------ NET ASSETS $ 67,145,534 ============ NET ASSETS CONSIST OF: Paid-in capital $130,629,404 Accumulated net realized loss on investments and foreign currency (computed on the basis of identified cost) (35,983,173) Unrealized appreciation (depreciation) of investments and foreign currency (computed on the basis of identified cost) (27,500,697) ------------ Net assets applicable to outstanding shares $ 67,145,534 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING 6,211,095 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST $ 10.81 ============ STATEMENT OF OPERATIONS For the Year Ended December 31, 2008 - ------------------------------------------------------------------------------ INVESTMENT INCOME (Note 1C) Dividend income (net of foreign taxes, $595,667) $ 5,302,207 Income from securities lending 246,977 Other income 12,621 ------------ Total Investment Income $ 5,561,805 ------------ Expenses - Investment adviser fee (Note 3) $ 1,045,198 Administrator fee (Note 3) 184,837 Compensation of Trustees who are not employees of the investment adviser or administrator 12,965 Custodian fee (Note 1F) 272,753 Distribution expenses (Note 4) 329,057 Transfer and dividend disbursing agent fees 47,672 Printing 4,675 Interest expense 28,129 Shareholder communications 1,640 Audit services 40,265 Legal services 14,248 Registration costs 24,180 Miscellaneous 11,774 ------------ Total expenses $ 2,017,393 ------------ Deduct - Reduction of custodian fee (Note 1F) $ (9,613) ------------ Total deductions $ (9,613) ------------ Net expenses $ 2,007,780 ------------ Net investment income $ 3,554,025 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss - Investment transactions (identified cost basis) $(34,577,073) Foreign currency transactions (103,013) ------------ Net realized loss $(34,680,086) ------------ Change in unrealized appreciatio (depreciation) - Investments (identified cost basis) $(46,861,298) Foreign currency (29,277) ------------ Net change in unrealized appreciation (depreciation) $(46,890,575) ------------ Net realized and unrealized loss on investments $(81,570,661) ------------ Net decrease in net assets from operations $(78,016,636) ============= See notes to financial statements WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------- Year Ended December 31, --------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2008 2007 - ------------------------------------------------------------------------------------------------------------------------------ INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income $ 3,554,025 $ 4,142,249 Net realized gain (loss) on investment and foreign currency transactions (34,680,086) 32,400,973 Net change in unrealized appreciation (depreciation) of investments and foreign currency (46,890,575) (25,176,405) --------------- -------------- Net increase (decrease) in net assets from operations $(78,016,636) $ 11,366,817 --------------- -------------- Distributions to shareholders (Note 2) - From net investment income $ (3,451,012) $ (4,294,177) From net realized gains (4,298,181) (8,544,757) Tax return of capital (48,984) -- --------------- -------------- Total distributions $ (7,798,177) $(12,838,934) --------------- -------------- Net decrease in net assets from fund share transactions (Note 6) $(30,647,579) $(33,121,129) --------------- -------------- Net decrease in net assets $(116,462,392) $(34,593,246) NET ASSETS: At beginning of year 183,607,926 218,201,172 --------------- -------------- At end of year $ 67,145,534 $183,607,926 =============== ============== See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) - ------------------------------------------------------------------------------ Year Ended December 31, - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2008(1) 2007(1) 2006(1) 2005(1) 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year $ 22.470 $ 22.830 $ 18.060 $ 15.070 $12.890 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income $ 0.483 $ 0.434 $ 0.255 $ 0.129 $ 0.128 Net realized and unrealized gain (loss) (11.002) 0.755 4.859 3.028 2.140 ---------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations $ (10.519) $ 1.189 $ 5.114 $ 3.157 $ 2.268 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS: From net investment income $ (0.575) $ (0.491) $ (0.320) $ (0.167) $(0.088) From net realized gains (0.558) (1.058) (0.024) - - Tax return of capital (0.008) - - - - ---------- ---------- ---------- ---------- ---------- Total distributions $ (1.141) $ (1.549) $ (0.344) $ (0.167) $(0.088) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 10.810 $ 22.470 $ 22.830 $ 18.060 $15.070 ========== ========== ========== ========== ========== TOTAL RETURN(2) (47.74)% 5.50% 28.49% 21.13% 17.71% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000 omitted) $ 67,146 $ 183,608 $ 218,201 $ 109,897 $ 62,266 Ratios (As a percentage of average daily net assets): Net expenses 1.54% 1.49% 1.46% 1.66% 1.72% Net expenses after custodian fee reduction 1.53% 1.47% 1.37% 1.62% 1.71% Net investment income 2.71% 1.82% 1.26% 0.81% 0.97% Portfolio turnover rate 82% 138% 116% 99% 121% - -------------------------------------------------------------------------------------------------------------------------------- (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 reinvested 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 - Equity securities listed on a U.S. securities exchange generally are valued at the last sale price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and asked prices therefore on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and asked prices or, in the case of preferred equity securities that are not listed or traded in the over-the-counter market, by an independent pricing service. Investments in open-end mutual funds are valued at net asset value. Short-term debt securities with a remaining maturity of sixty days or less are valued at amortized cost, which approximates market value. If short-term debt securities are acquired with a remaining maturity of more than sixty days, they will be valued by a pricing service. The daily valuation of exchange-traded foreign securities generally is determined as of the close of trading on the principal exchange on which such securities trade. Events occurring after the close of trading on foreign exchanges are monitored by the investment adviser and may result in adjustments to the valuation of foreign securities to more accurately reflect their fair value as of the close of regular trading on the New York Stock Exchange. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by an independent quotation service. The independent service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. Investments for which valuations or market quotations are not readily available are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Funds considering relevant factors, data and information including the market value of freely tradable securities of the same class in the principal market on which such securities are normally traded. B. Investment Transactions - Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. C. Income - Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. 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. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Funds' understanding of applicable countries' tax rules and rates. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium and accretion of discount. D. Federal Taxes - Each Fund's policy is to comply with the provisions of the Internal Revenue Code (the Code) applicable to regulated investment companies and to distribute to shareholders each year substantially all of its taxable income and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. At December 31, 2008, WSBC, WMBC and WIBC, for federal income tax purposes, had capital loss carryovers of $640,031, $15,844,437 and $18,850,926, respectively, which will reduce the respective Fund's 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 distributions to shareholders which would otherwise be necessary to relieve the respective Fund of any liability for federal income or excise tax. The amounts and expiration dates of the capital loss carryforwards are as follows: December 31, WSBC WMBC WIBC - ------------------------------------------------------------------------------- 2010 $ - $ 12,738,080 $ - 2011 - 2,230,768 - 2016 640,031 875,589 18,850,926 - ------------------------------------------------------------------------------- Additionally, at December 31, 2008, WSBC, WMBC and WIBC had net capital losses of $593,005, $1,749,806 and $12,196,103, respectively, attributable to security transactions incurred after October 31, 2008. These net capital losses are treated as arising on the first day of the Funds' taxable year ending December 31, 2009. As of December 31, 2008, the Funds had 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, 2008 remains subject to examination by the Internal Revenue Service. E. Expenses - The majority of expenses of the Trust are directly identifiable to an individual Fund. Expenses which are not readily identifiable to a specific Fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the Funds. F. 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 each Fund's custodian fees are reported as a reduction of expenses in the Statements of Operations. G. Foreign Currency Translation - Investment 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 denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions. Recognized gains or losses on investment transactions attributable to changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed. 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 income and expense during the reporting period. Actual results could differ from those estimates. I. Indemnifications - Under the Trust's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Funds, and shareholders are indemnified against personal liability for the obligations of the Funds. Additionally, in the normal course of business, the Funds enter into agreements with service providers that may contain indemnification clauses. Each Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. 2. Distributions to Shareholders --------------------------------- It is the present policy of the Trust to make annual distributions of all or substantially all of the net investment income of the Funds and to distribute annually all or substantially all of the net realized capital gains (reduced by available capital loss carryforwards from prior years, if any). Distributions to shareholders are recorded on the ex-dividend date. Shareholders may reinvest income and capital gain distributions in additional shares of the same Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions 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 reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income. The tax character of distributions paid for the year ended December 31, 2008 and December 31, 2007 was as follows: Year Ended 12/31/08 WSBC WMBC WIBC - ------------------------------------------------------------------------------- Distributions declared from: Ordinary income $ 115,945 $ 399,235 $ 3,451,012 Long-term capital gains 1,747,306 - 4,298,181 Tax return of capital - - 48,984 - ------------------------------------------------------------------------------- Year Ended 12/31/07 WSBC WMBC WIBC - ------------------------------------------------------------------------------- Distributions declared from: Ordinary income $ 33,344 $ 362,113 $ 4,294,177 Long-term capital gains 5,034,405 - 8,544,757 - ------------------------------------------------------------------------------- During the year ended December 31, 2008, the following amounts were reclassified due to differences between book and tax accounting, primarily for net operating losses, foreign currency gain (loss), distributions from real estate investment trusts, and return of capital distributions from securities. Increase (decrease): WSBC SMBC WIBC - ------------------------------------------------------------------------------- Paid-in capital $ (30,141) $ - $ 8,532 Accumulated net realized gain (loss) 2,608 2,956 94,481 Accumulated undistributed net investment income (loss) 27,533 (2,956) (103,013) - ------------------------------------------------------------------------------- These reclassifications had no effect on the net assets or net asset value per share of the Funds. As of December 31, 2008, the components of distributable earnings (accumulated losses) on a tax basis were as follows: WSBC WMBC WIBC - ------------------------------------------------------------------------------- Undistributed ordinary income $ - $ 7,661 $ - Capital loss carryforward and post October losses (1,233,036) (17,594,243) (31,047,029) Net unrealized depreciation (3,587,737) (8,588,959) (32,436,841) - ------------------------------------------------------------------------------- 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. 3. Investment Adviser Fee and Other Transactions with Affiliates --------------------------------------------------------------- The investment adviser fee is earned by Wright Investor Services, Inc. (Wright) as compensation for investment advisory services rendered to the Funds. For WIBC, the fee is computed at an annual rate of 0.80% of its average daily net assets up to $100 million and at reduced rates as net assets exceed that level, and is payable monthly. For WSBC and WMBC, the fee is computed at an annual rate of 0.60% of their average daily net assets up to $100 million and at reduced rates as net assets exceed that level, and is payable monthly. For the year ended December 31, 2008, the fee and the effective annual rate, as a percentage of average daily net assets for each of the Funds were as follows: Fund Investment Adviser Fee Effective Annual Rate -------------------------------------------------------------------------- WSBC $ 108,213 0.60% WMBC 274,083 0.60% WIBC 1,045,198 0.80% - ------------------------------------------------------------------------------- The administrator fee is earned by Eaton Vance Management (Eaton Vance) for administering the business affairs of each Fund. The fee is computed at an annual rate of 0.17% of WIBC's average daily net assets up to $100 million and 0.07% of average daily net assets over $100 million. The fee is computed at an annual rate of 0.12% of WSBC's and WMBC's average daily net assets up to $100 million and 0.07% of average daily net assets over $100 million. For the year ended December 31, 2008, the administrator fee for WSBC, WMBC and WIBC amounted to $21,643, $54,817 and $184,837, respectively. Wright also waived and/or reimbursed expenses for WSBC and WMBC (see Note 4). Certain of the Trustees and officers of the Trust are Trustees or officers of the above organizations and/or of the Funds' principal underwriter. 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 fees paid to Eaton Vance and Wright. 4. Distribution and Service Plans --------------------------------- The Trust has in effect a Distribution Plan (the Plan) pursuant to Rule 12b-1 of the 1940 Act. The Plan provides that each Fund will pay Wright Investors' Service Distributors, Inc. (WISDI), the principal underwriter, a wholly-owned subsidiary of The Winthrop Corporation and an affiliate of Wright, a distribution fee of 0.25% of the average daily net assets of each Fund for distribution services and facilities provided to the Funds by WISDI. Distribution fees paid or accrued to WISDI for the year ended December 31, 2008 for WSBC, WMBC and WIBC were $45,089, $114,201, and $329,057, 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, 2008, the Funds did not accrue or pay any service fees. Pursuant to an Expense Limitation Agreement, Wright and WISDI have agreed to waive all or a portion of their fees and reimburse expenses to the extent that total annual operating expenses after custodian fee reductions, if any, exceed 1.25% of the average daily net assets of each of WSBC and WMBC through April 30, 2009. Thereafter, the waiver and reimbursement may be changed or terminated at any time. Pursuant to this agreement, Wright and WISDI waived and/or reimbursed expenses in the aggregate of $115,081 and $50,060 for WSBC and WMBC, respectively. 5. Investment Transactions ----------------------------- Purchases and sales of investments, other than short-term obligations, were as follows: Year Ended December 31, 2008 -------------------------------------- WSBC WMBC WIBC - ------------------------------------------------------------------------------ Purchases $ 13,200,747 $ 26,718,651 $ 108,451,665 ============== ============== ============== Sales $ 16,019,794 $ 32,687,333 $ 140,326,162 ============== ============== ============== - ------------------------------------------------------------------------------- 6. 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, 2008 December 31, 2007 ---------------------- ---------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------------------------------------------- WRIGHT SELECTED BLUE CHIP EQUITIES FUND Sold 427,666 $ 2,870,659 131,958 $ 1,665,341 Issued to shareholders in payment of distributions declared 192,784 1,704,210 401,088 4,525,042 Redemptions (571,344) (5,060,980) (1,501,608) (18,810,209) ------------ ---------------- ------------ ---------------- Net increase (decrease) 49,106 $ (486,111) (968,562) $ (12,619,826) ============ ================ ============ ================ WRIGHT MAJOR BLUE CHIP EQUITIES FUND Sold 604,845 $ 7,164,833 393,484 $ 5,670,384 Issued to shareholders in payment of distributions declared 34,851 314,669 21,159 299,544 Redemptions (1,138,917) (13,146,997) (1,023,623) (14,763,956) ------------ ---------------- ------------ ---------------- Net decrease (499,221) $ (5,667,495) (608,980) $ (8,794,028) ============ ================ ============ ================ WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND Sold 1,072,677 $ 19,169,564 4,830,446 $ 115,578,462 Issued to shareholders in payment of distributions declared 435,264 6,310,860 504,859 11,019,992 Redemptions (3,468,134) (56,133,850) (6,722,679) (159,773,243) Redemption fees - 5,847 - 53,660 ------------ ---------------- ------------ ---------------- Net decrease (1,960,193) $ (30,647,579) (1,387,374) $ (33,121,129) ============ ================ ============ ================ - --------------------------------------------------------------------------------------------------------------------------------
7. Federal Income Tax Basis of Investments ------------------------------------------- The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2008, as determined on a federal income tax basis, were as follows: Year Ended December 31, 2008 --------------------------------------------------------- WSBC WMBC WIBC - -------------------------------------------------------------------------------------------------------------------------------- Aggregate cost $ 16,482,496 $ 40,672,768 $ 100,734,836 ================ ================ ================ Gross unrealized appreciation 287,020 1,843,681 2,077,657 Gross unrealized depreciation (3,874,757) (10,432,640) (34,552,166) ---------------- ---------------- ---------------- Net unrealized depreciation $ (3,587,737) $ (8,588,959) $ (32,474,509) ================ ================ ================= - --------------------------------------------------------------------------------------------------------------------------------
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, 2008, WIBC had a balance outstanding pursuant to this line of credit of $244,000 at an interest rate of 1%. The average borrowings and average interest rate for the year ended December 31, 2008 were follows: WSBC WMBC WIBC - ------------------------------------------------------------------------------- Average borrowings $ 58,598 $ 143,964 $ 920,667 Average interest rate 3.0% 2.2% 2.9% - ------------------------------------------------------------------------------- 9. 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. 10. Securities 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 a broker 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 Portfolio). The Fund earns interest on the amount invested in the 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 $779 for the year ended December 31, 2008. At December 31, 2008, the value of the securities loaned and the value of the collateral amounted to $1,977,119 and $2,105,799, 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. The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand. 11. Fair Value Measurements ------------------------- The Funds adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 (FAS 157), "Fair Value Measurements", effective January 1, 2008. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below. o Level 1 - quoted prices in active markets for identical investments o Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) o Level 3 - significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. At December 31, 2008, the inputs used in valuing each Fund's investments, which are carried at value, were as follows: WSBC WMBC WIBC ------------------------------------------------------------- Valuation Inputs --------------------------------------------------------------------------------------------------------- Level 1 Quoted Prices $ 12,894,759 $ 32,083,809 $ 68,260,327 Level 2 Other Significant Observable Inputs - - - Level 3 Significant Unobservable Inputs - - - --------------------------------------------------------------------------------------------------------- Total $ 12,894,759 $ 32,083,809 $ 68,260,327
The Funds held no investments or other financial instruments as of December 31, 2007 whose fair value was determined using Level 3 inputs. 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, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the 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, 2008, 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 positions of Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and Wright International Blue Chip Equities Fund as of December 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 16, 2009 WRIGHT MANAGED EQUITY TRUST AS OF DECEMBER 31, 2008 - ------------------------------------------------------------------------------ FEDERAL TAX INFORMATION (UNAUDITED) The Form 1099-DIV you received in January 2009 showed the tax status of all distributions paid to your account in calendar 2008. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Funds. As required by the Internal Revenue Code regulations, shareholders must be notified within 60 days of a Fund's fiscal year end regarding capital gain dividends, and the status of qualified dividend income for individuals, the dividends received deduction for corporations and the foreign tax credit. CAPITAL GAIN DIVIDENDS - Wright Selected Blue Chip Equities Fund and Wright International Blue Chip Equities Fund designate $1,863,310 and $4,306,699, respectively, as a capital gain dividend. DIVIDENDS RECEIVED DEDUCTION - Corporate shareholders are generally entitled to take the dividends received deduction on the portion of a fund's dividend distribution that qualifies under tax law. For the Wright Selected Blue Chip Equities Fund's, Wright Major Blue Chip Equities Fund's and Wright International Blue Chip Equities Fund's fiscal 2008 ordinary income dividends, 99.49%, 100% and 1.30%, respectively, qualifies for the corporate dividends received deduction. QUALIFIED DIVIDEND INCOME - Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund and Wright International Blue Chip Equities Fund designate approximately $177,714, $937,409 and $6,154,751, 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%. FOREIGN TAX CREDIT - Wright International Blue Chip Equities Fund paid foreign taxes of $595,667 and recognized foreign source income of $5,897,874. WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------ Portfolio of Investments - As of December 31, 2008 Face Coupon Maturity Amount Description Rate Date Value - --------------------------------------------------------------------------------------------------------------------------- ASSET-BACKED SECURITIES - 1.4% $ 155,000 AEP Texas Central Transition Funding LLC, Series 2006-A, Class A2 4.980% 07/01/13 $ 153,565 180,000 PSE&G Transition Funding LLC, Series 2001-1, Class A7 6.750% 06/15/16 183,012 ------------ Total Asset-Backed Securities (identified cost, $348,198) $ 336,577 ------------ COMMERCIAL MORTGAGE-BACKED SECURITIES - 6.8% $ 220,000 Citigroup Commercial Mortgage Trust, Series 2004-C2, Class A5 4.733% 10/15/41 $ 181,777 285,000 CS First Boston Mortgage Securities Corp., Series 2003-C3, Class A5 3.936% 05/15/38 243,081 330,000 JP Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A5 4.878% 01/15/42 265,413 265,000 Lehman Brothers UBS, Series 2006-C6, Class A4 5.372% 09/15/39 208,691 270,000 Merrill Lynch Mortgage Trust, Series 2005-LC1 Class A4 5.291% (1) 01/12/44 222,275 420,000 Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4 5.909% (1) 06/12/46 337,839 126,645 Salomon Brothers Mortgage Securities VII, Series 2002-KEY2, Class A2 4.467% 03/18/36 118,091 ----------- Total Commercial Mortgage-Backed Securities (identified cost, $1,888,442) $ 1,577,167 ----------- NON-AGENCY MORTGAGE-BACKED SECURITIES - 1.3% $ 238,491 First Horizon Alternative Mortgage Securities, Series 2005-AA10, Class 1A2 5.707% (1) 12/25/35 $ 71,425 367,643 First Horizon Asset Securities Inc, Series 2007-AR2, Class 1A1 5.846% (1) 06/25/37 239,778 ------------ Total Non-Agency Mortgage-Backed Securities (identified cost, $606,134) $ 311,203 ------------ CORPORATE BONDS - 31.9% AEROSPACE -- 0.5% - ----------------- $ 115,000 Lockheed Martin Corp. 8.200% 12/01/09 $ 119,520 BANKS & MISCELLANEOUS FINANCIAL-- 3.7% - -------------------------------------- $ 60,000 American Express Credit Corp. 7.300% 08/20/13 $ 61,475 250,000 Capital One Bank USA NA 2.278% (1) 02/23/09 249,016 110,000 Credit Suisse USA, Inc. 6.125% 11/15/11 111,177 235,000 HSBC Finance Corp. 6.375% 10/15/11 231,350 200,000 Royal Bank of Scotland Group PLC 7.648% (1) 08/31/49 96,845 110,000 Wells Fargo & Co. 4.375% 01/31/13 107,813 CABLE TV-- 0.9% - --------------- $ 100,000 Comcast Cable Communications Holdings 5.875% 02/15/18 $ 94,924 125,000 Time Warner, Inc. 5.875% 11/15/16 112,231 COMMUNICATIONS EQUIPMENT-- 0.5% - ------------------------------- $ 140,000 Harris Corp. 5.000% 10/01/15 $ 116,490 COMPUTERS & PERIPHERALS-- 0.5% - ------------------------------ $ 105,000 International Business Machines Corp. 7.625% 10/15/18 $ 126,141 DIVERSIFIED FINANCIALS-- 7.9% - ----------------------------- $ 240,000 Ameriprise Financial, Inc. 5.350% 11/15/10 $ 216,366 115,000 Bank of America Corp. 5.650% 05/01/18 115,890 125,000 Bear Stearns Cos. Inc. (The) 4.550% 06/23/10 124,858 75,000 CIT Group, Inc. 7.625% 11/30/12 63,363 115,000 Citigroup, Inc. 6.125% 11/21/17 116,410 110,000 Daimler Finance North America LLC 6.500% 11/15/13 85,885 225,000 General Electric Capital Corp. 6.750% 03/15/32 239,945 90,000 Genworth Global Funding Trusts 5.200% 10/08/10 71,098 235,000 Goldman Sachs Group, Inc. (The) 6.150% 04/01/18 226,216 245,000 International Lease Finance Corp. 5.875% 05/01/13 163,705 125,000 Merrill Lynch & Co., Inc. 6.050% 05/16/16 117,104 100,000 Morgan Stanley 5.300% 03/01/13 90,771 210,000 National Rural Utilities Cooperative Finance Corp. 7.250% 03/01/12 216,372 ELECTRIC UTILITIES-- 3.0% - ------------------------- $ 115,000 American Electric Power 5.250% 06/01/15 $ 106,284 110,000 Consolidated Edison Co. of New York, Inc. 7.125% 12/01/18 118,492 90,000 Dominion Resources, Inc. 6.300% 03/15/33 81,130 100,000 Duke Cap Corp. 7.500% 10/01/09 99,201 115,000 FPL Group Capital Inc. 7.300% (1) 09/01/67 64,485 50,000 Pacific Gas & Electric Co. 8.250% 10/15/18 60,178 115,000 PSI Energy, Inc. 5.000% 09/15/13 109,123 60,000 Public Service Electric & Gas Co. 5.300% 05/01/18 58,384 FOOD - RETAIL-- 0.7% - -------------------- $ 115,000 Kraft Foods, Inc. 6.000% 02/11/13 $ 116,971 50,000 Safeway, Inc. 6.500% 03/01/11 50,172 FOOD, BEVERAGE & TOBACCO-- 1.8% - ------------------------------- $ 55,000 Altria Group, Inc. 9.700% 11/10/18 $ 59,541 55,000 Diageo Capital PLC 7.375% 01/15/14 58,650 55,000 General Mills, Inc. 6.000% 02/15/12 57,096 100,000 PepsiCo, Inc. 7.900% 11/01/18 122,784 105,000 Philip Morris International, Inc. 6.875% 03/17/14 110,463 INFORMATION TECHNOLOGY-- 0.9% - ----------------------------- $ 195,000 Oracle Corp. 5.000% 01/15/11 $ 200,357 INSURANCE -- 2.0% - -------------------- $ 130,000 Fund American Cos., Inc. 5.875% 05/15/13 $ 94,697 125,000 MetLife, Inc. 5.000% 06/15/15 117,244 130,000 PartnerRe Finance II 6.440% (1) 12/01/66 51,737 200,000 St. Paul Travelers 5.500% 12/01/15 191,917 MEDICAL -- 2.1% - ------------------- $ 245,000 Bristol-Myers Squibb Co. 5.875% 11/15/36 $ 261,463 115,000 WellPoint, Inc. 5.875% 06/15/17 104,834 115,000 Wyeth 5.500% 02/01/14 116,944 MINING -- 0.3% - ------------------ $ 80,000 Barrick Gold Financeco LLC 6.125% 09/15/13 $ 75,933 OIL & GAS-- 2.8% - ---------------- $ 105,000 Baker Hughes, Inc. 7.500% 11/15/18 $ 116,616 110,000 Canadian Natural Resources, Ltd. 5.700% 05/15/17 96,087 120,000 EnCana Corp. 5.900% 12/01/17 100,281 80,000 Halliburton Co. 6.700% 09/15/38 86,828 100,000 Sempra Energy 6.000% 02/01/13 96,089 170,000 TransCanada Pipelines, Ltd. 6.500% 08/15/18 167,074 RETAIL -- 0.5% - ---------------- $ 120,000 Home Depot, Inc. 5.200% 03/01/11 $ 116,741 SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 0.7% - ----------------------------------------- $ 165,000 Applied Materials, Inc. 7.125% 10/15/17 $ 152,342 TELECOMMUNICATIONS -- 2.6% - ----------------------------- $ 95,000 AT&T Wireless Services, Inc. 7.875% 03/01/11 $ 98,397 70,000 British Telecom PLC 9.125% 12/15/30 74,588 100,000 Deutsche Telekom International Finance BV 8.000% 06/15/10 103,042 120,000 France Telecom SA 7.750% 03/01/11 126,339 175,000 Verizon Global Funding Corp. 7.750% 12/01/30 194,593 TRANSPORTATION -- 0.5% - ------------------------ $ 125,000 Burlington Northern Santa Fe Corp. 5.650% 05/01/17 $ 120,218 ------------ Total Corporate Bonds (identified cost, $7,903,739) $ 7,412,280 ------------ U.S. GOVERNMENT INTERESTS - 56.5% AGENCY MORTGAGE-BACKED SECURITIES-- 44.2% - ----------------------------------------- $ 243,144 FHLMC Gold Pool #A32600 5.500% 05/01/35 $ 249,233 65,536 FHLMC Gold Pool #C01646 6.000% 09/01/33 67,741 45,564 FHLMC Gold Pool #C27663 7.000% 06/01/29 47,968 146,244 FHLMC Gold Pool #C47318 7.000% 09/01/29 155,064 555,206 FHLMC Gold Pool #C55780 6.000% 01/01/29 576,743 352,059 FHLMC Gold Pool #C66878 6.500% 05/01/32 367,406 239,977 FHLMC Gold Pool #C91046 6.500% 05/01/27 249,631 83,550 FHLMC Gold Pool #D66753 6.000% 10/01/23 85,380 14,220 FHLMC Gold Pool #E00903 7.000% 10/01/15 14,916 345,702 FHLMC Gold Pool #G01035 6.000% 05/01/29 358,248 252,230 FHLMC Gold Pool #G02478 5.500% 12/01/36 258,507 290,469 FHLMC Gold Pool #H19018 6.500% 08/01/37 299,546 243,017 FHLMC Gold Pool #K30262 5.000% 11/01/47 238,129 134,242 FHLMC Gold Pool #N30514 5.500% 11/01/28 138,853 365,812 FHLMC Gold Pool #P00024 7.000% 09/01/32 379,609 59,833 FHLMC Gold Pool #P50031 7.000% 08/01/18 62,787 50,719 FHLMC Gold Pool #P50064 7.000% 09/01/30 53,224 127,256 FHLMC Pool #1B1291 4.998% (1) 11/01/33 127,700 554,647 FHLMC Pool #1G0233 5.001% (1) 05/01/35 559,882 123,554 FHLMC Pool #781071 5.183% (1) 11/01/33 122,850 98,222 FHLMC Pool #781804 5.056% (1) 07/01/34 98,620 49,606 FHLMC Pool #781884 5.141% (1) 08/01/34 50,236 117,995 FHLMC Pool #782862 5.002% (1) 11/01/34 122,661 301,343 FHLMC Series 1983 Z 6.500% 12/15/23 300,972 283,696 FHLMC Series 2044 PE 6.500% 04/15/28 301,516 130,170 FNMA Pool #253057 8.000% 12/01/29 137,900 40,516 FNMA Pool #254845 4.000% 07/01/13 41,242 40,423 FNMA Pool #254863 4.000% 08/01/13 41,002 24,530 FNMA Pool #479477 6.000% 01/01/29 25,427 28,014 FNMA Pool #489357 6.500% 03/01/29 29,323 26,112 FNMA Pool #535332 8.500% 04/01/30 28,258 190,843 FNMA Pool #545407 5.500% 01/01/32 196,577 45,398 FNMA Pool #545782 7.000% 07/01/32 48,192 38,697 FNMA Pool #597396 6.500% 09/01/31 40,505 557,340 FNMA Pool #725515 5.000% 04/01/19 574,396 64,823 FNMA Pool #725866 4.500% 09/01/34 65,878 162,897 FNMA Pool #727374 4.000% 08/01/18 167,195 163,826 FNMA Pool #738630 5.500% 11/01/33 168,363 396,081 FNMA Pool #745467 5.770% (1) 04/01/36 406,193 557,999 FNMA Pool #745755 5.000% 12/01/35 570,926 197,963 FNMA Pool #747529 4.500% 10/01/33 201,310 691,054 FNMA Pool #781893 4.500% 11/01/31 707,875 69,614 FNMA Pool #809888 4.500% 03/01/35 70,704 149,132 FNMA Pool #906455 5.978% (1) 01/01/37 152,603 155,883 GNMA II Pool #2630 6.500% 08/20/28 164,115 7,071 GNMA II Pool #2909 8.000% 04/20/30 7,509 17,880 GNMA II Pool #2972 7.500% 09/20/30 18,883 6,341 GNMA II Pool #2973 8.000% 09/20/30 6,734 70,705 GNMA II Pool #3095 6.500% 06/20/31 74,478 199,545 GNMA Pool #374892 7.000% 02/15/24 211,516 44,356 GNMA Pool #376400 6.500% 02/15/24 46,484 67,138 GNMA Pool #379982 7.000% 02/15/24 71,165 198,012 GNMA Pool #393347 7.500% 02/15/27 209,896 72,367 GNMA Pool #410081 8.000% 08/15/25 77,016 36,026 GNMA Pool #427199 7.000% 12/15/27 38,184 16,876 GNMA Pool #436214 6.500% 02/15/13 17,793 101,886 GNMA Pool #448490 7.500% 03/15/27 108,001 51,971 GNMA Pool #458762 6.500% 01/15/28 54,634 72,952 GNMA Pool #460726 6.500% 12/15/27 76,631 26,606 GNMA Pool #463839 6.000% 05/15/13 28,08 16,258 GNMA Pool #488924 6.500% 11/15/28 17,091 15,750 GNMA Pool #510706 8.000% 11/15/29 16,808 77,285 GNMA Pool #581536 5.500% 06/15/33 79,887 U.S. GOVERNMENT AGENCIES-- 5.9% - ------------------------------- $ 225,000 Citigroup, Inc. (FDIC guaranteed) 2.875% 12/09/11 $ 232,176 150,000 Federal Home Loan Bank 5.000% 11/17/17 172,289 325,000 Federal National Mortgage Association 3.250% 04/09/13 338,988 200,000 Federal National Mortgage Association 6.250% 05/15/29 273,957 110,000 JPMorgan Chase & Co. (FDIC guaranteed) 3.125% 12/01/11 114,358 220,000 Regions Bank (FDIC guaranteed) 3.250% 12/09/11 229,039 U.S. TREASURIES-- 6.4% - ---------------------- $ 815,000 U.S. Treasury Notes 3.500% 02/15/10 $ 844,226 625,000 U.S. Treasury Strip 0.000% 02/15/18 480,850 275,000 U.S. Treasury Strip 0.000% 02/15/27 156,722 ------------ Total U.S. Government Interests (identified cost, $12,707,529) $13,128,803 ------------ TOTAL INVESTMENTS (identified cost, $23,454,042)-- 97.9% $22,766,030 OTHER ASSETS, LESS LIABILITIES-- 2.1% 496,373 ------------ NET ASSETS-- 100.0% $23,262,403 ============ Industry classifications included in the Portfolio of Investments are unaudited. 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 December 31, 2008. See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2008 - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $23,454,042) (Note 1A) $ 22,766,030 Cash 266,114 Receivable for fund shares sold 12,102 Receivable from affiliates 25,118 Interest receivable 206,147 Other assets 180,390 ------------ Total assets $ 23,455,901 ------------ LIABILITIES: Payable for investments purchased $ 146,979 Payable for fund shares reacquired 4,351 Distributions payable 16,308 Payable to affiliate for distribution expenses 478 Accrued expenses and other liabilities 25,382 ------------ Total liabilities $ 193,498 ------------ NET ASSETS $ 23,262,403 ============ NET ASSETS CONSIST OF: Paid-in capital $ 26,109,560 Accumulated net realized loss on investments (computed on the basis of identified cost) (2,142,837) Unrealized appreciation (depreciation) of investments(computed on the basis of identified cost) (688,012) Accumulated distributions in excess of net investment income (16,308) ------------ Net assets applicable to outstanding shares $ 23,262,403 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,940,235 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST $ 11.99 ============ STATEMENT OF OPERATIONS For the Year Ended December 31, 2008 - ------------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Interest income $ 1,278,987 ------------ Expenses - Investment adviser fee (Note 3) $ 105,943 Administrator fee (Note 3) 16,480 Compensation of Trustees who are not employees of the investment adviser or administrator 19,420 Custodian fee (Note 1F) 65,754 Distribution expenses (Note 4) 58,857 Transfer and dividend disbursing agent fees 18,178 Printing 2,834 Interest expense 2,100 Shareholder communications 1,322 Audit services 28,436 Legal services 5,908 Registration costs 22,663 Miscellaneous 8,927 ------------ Total expenses $ 356,822 ------------ Deduct - Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) $ (189,917) Reduction of custodian fee (Note 1F) (2,052) ------------ Total deductions $ (191,969) ------------ Net expenses $ 164,853 ------------ Net investment income $ 1,114,134 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investment transactions (identified cost basis) $ 224,053 Net change in unrealized appreciation (depreciation) on investments $ (922,629) ------------ Net realized and unrealized loss on investments $ (698,576) ------------ Net increase in net assets from operations $ 415,558 ============ See notes to financial statements WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- Year Ended December 31, -------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2008 2007 - --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income $ 1,114,134 $ 1,258,878 Net realized gain (loss) on investment transactions 224,053 (96,499) Net change in unrealized appreciation (depreciation) on investments (922,629) 300,776 -------------- -------------- Net increase in net assets from operations $ 415,558 $ 1,463,155 -------------- -------------- Distributions to shareholders (Note 2) - From net investment income $ (1,166,826) $ (1,291,075) -------------- -------------- Total distributions $ (1,166,826) $ (1,291,075) -------------- -------------- Net decrease in net assets from fund share transactions (Note 6) $ (975,127) $ (6,049,001) -------------- -------------- Net decrease in net assets $ (1,726,395) $ (5,876,921) NET ASSETS: At beginning of year 24,988,798 30,865,719 -------------- -------------- At end of year $ 23,262,403 $ 24,988,798 ============== ============== ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ (16,308) $ (10,011) ============== ============== See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB) - ------------------------------------------------------------------------------- Year Ended December 31, - -------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year $ 12.390 $ 12.290 $ 12.430 $ 12.770 $ 12.870 --------- --------- --------- --------- --------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) $ 0.573 $ 0.558 $ 0.483 $ 0.465 $ 0.453 Net realized and unrealized gain (loss) (0.373) 0.115 (0.082) (0.271) (0.011) --------- --------- --------- --------- --------- Total income from investment operations $ 0.200 $ 0.673 $ 0.401 $ 0.194 $ 0.442 --------- --------- --------- --------- --------- LESS DISTRIBUTIONS: From net investment income $ (0.600) $ (0.573) $ (0.541) $ (0.534) $ (0.542) --------- --------- --------- --------- --------- Total distributions $ (0.600) $ (0.573) $ (0.541) $ (0.534) $ (0.542) --------- --------- --------- --------- --------- Net asset value, end of year $ 11.990 $ 12.390 $ 12.290 $ 12.430 $ 12.770 ========= ========= ========= ========= ========= TOTAL RETURN(2) 1.69% 5.64% 3.34% 1.54% 3.52% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted) $ 23,262 $ 24,989 $ 30,866 $ 41,288 $ 38,213 Ratios (As a percentage of average daily net assets): Net expenses 0.71% 0.87% 0.99% 0.98% 0.96% Net expenses after custodian fee reduction 0.70% 0.85% 0.95% 0.95% 0.95% Net investment income 4.73% 4.56% 3.96% 3.66% 3.58% Portfolio turnover rate 125% 119% 90% 86% 64% - -------------------------------------------------------------------------------------------------------------------------------- (1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the operating expenses of the Fund were reduced by a waiver of fees and/or an allocation of expenses to the principal underwriter and/or investment adviser. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2008 2007 2006 2005 2004 ------------------------------------------------------------------ Net investment income per share $ 0.475 $ 0.490 $ 0.453 $ 0.439 $ 0.429 ========= ========= ========= ========= ========= Ratios (As a percentage of average daily net assets): Expenses 1.52% 1.41% 1.23% 1.18% 1.18% ========= ========= ========= ========= ========= Expenses after custodian fee reduction 1.51% 1.38% 1.19% 1.15% 1.17% ========= ========= ========= ========= ========= Net investment income 3.93% 4.03% 3.72% 3.46% 3.36% ========= ========= ========= ========= ========= - -------------------------------------------------------------------------------------------------------------------------------- (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 - AS OF DECEMBER 31, 2008 Face Coupon Maturity Amount Description Rate Date Value - -------------------------------------------------------------------------------------------------------------------------------- NON-AGENCY MORTGAGE-BACKED SECURITIES -- 3.2% $ 240,917 Bear Stearns Adj. Rate Mortgage Trust, Series 2003-4, Class 3A1 4.960%(1) 07/25/33 $ 191,676 729,434 Chase Mortgage Finance Corporation, Series 2003-S13, Class A16 5.000% 11/25/33 687,389 462,697 Countrywide Home Loans, Series 2006-J1, Class 3A1 6.000% 02/25/36 357,929 ------------ Total Non-Agency Mortgage-Backed Securities (identified cost $1,374,142) - 3.2% $1,236,994 ------------ AGENCY MORTGAGE-BACKED SECURITIES -- 94.9% $ 38,950 FHLMC Gold Pool #C00548 7.000% 08/01/27 $ 41,004 118,360 FHLMC Gold Pool #C00778 7.000% 06/01/29 124,605 180,655 FHLMC Gold Pool #C47318 7.000% 09/01/29 191,550 354,274 FHLMC Gold Pool #C90580 6.000% 09/01/22 366,956 75,689 FHLMC Gold Pool #D81642 7.500% 08/01/27 79,960 152,318 FHLMC Gold Pool #D82572 7.000% 09/01/27 160,350 85,557 FHLMC Gold Pool #E00678 6.500% 06/01/14 88,393 89,382 FHLMC Gold Pool #E00721 6.500% 07/01/14 92,362 89,015 FHLMC Gold Pool #E81704 8.500% 05/01/15 102,288 475,331 FHLMC Gold Pool #E88471 7.500% 01/01/17 499,268 134,264 FHLMC Gold Pool #E90181 6.500% 06/01/17 139,519 95,596 FHLMC Gold Pool #G00812 6.500% 04/01/26 100,301 662,105 FHLMC Gold Pool #G02478 5.500% 12/01/36 678,582 198,919 FHLMC Pool #2176 OJ 7.000% 08/15/29 208,253 110,276 FHLMC Pool #2201 C 8.000% 11/15/29 116,699 241,457 FHLMC Pool #2259 ZM 7.000% 10/15/30 254,033 218,385 FHLMC Pool #2410 NG 6.500% 02/15/32 228,870 232,686 FHLMC Pool #2457 PE 6.500% 06/15/32 241,997 84,706 FHLMC Pool #845830 5.738%(1) 07/01/24 85,518 338,649 FHLMC Series 15 7.000% 07/25/23 357,061 759,454 FNMA Pool #252034 7.000% 09/01/28 805,366 15,386 FNMA Pool #254227 5.000% 02/01/09 15,331 92,205 FNMA Pool #254305 6.500% 05/01/22 96,371 14,594 FNMA Pool #254505 5.000% 11/01/09 14,640 315,643 FNMA Pool #254588 6.000% 12/01/22 326,688 151,614 FNMA Pool #255068 6.000% 01/01/24 156,819 539,239 FNMA Pool #255958 5.000% 10/01/35 536,482 1,034,186 FNMA Pool #256600 5.500% 02/01/27 1,062,911 223,879 FNMA Pool #313953 7.000% 12/01/17 237,164 174,417 FNMA Pool #532204 7.000% 02/01/20 184,616 86,478 FNMA Pool #535131 6.000% 03/01/29 89,644 123,509 FNMA Pool #535817 7.000% 04/01/31 130,722 112,191 FNMA Pool #545133 6.500% 12/01/28 117,704 441,861 FNMA Pool #673315 5.500% 11/01/32 454,583 802,199 FNMA Pool #725419 4.500% 10/01/33 815,759 235,836 FNMA Pool #727374 4.000% 08/01/18 242,058 62,575 FNMA Pool #733750 6.310% 10/01/32 65,06 546,876 FNMA Pool #735861 6.500% 09/01/33 572,425 264,346 FNMA Pool #745630 5.500% 01/01/29 273,940 339,877 FNMA Pool #801357 5.500% 08/01/34 349,663 415,586 FNMA Pool #871394 7.000% 04/01/21 433,811 453,729 FNMA Pool #888129 5.500% 02/01/37 465,730 672,007 FNMA Pool #888339 4.500% 04/01/37 682,527 661,172 FNMA Series 2000-T6, Class A1 7.500% 06/25/30 686,702 1,218,091 FNMA Series 2002-T4, Class A2 7.000% 12/25/41 1,255,688 288,159 FNMA Series 2003-W3, Class 2A5 5.356% 06/25/42 290,699 389,915 FNMA Series G93-5, Class Z 6.500% 02/25/23 413,484 106,217 GNMA I Pool #448970 8.000% 08/15/27 113,437 449,014 GNMA I Pool #487108 6.000% 04/15/29 465,848 728,805 GNMA I Pool #675363 6.000% 01/15/35 753,510 305,184 GNMA I Pool #780492 7.000% 09/15/24 323,885 3,091 GNMA II Pool #1596 9.000% 04/20/21 3,298 41,168 GNMA II Pool #2268 7.500% 08/20/26 43,493 133,490 GNMA II Pool #2442 6.500% 06/20/27 140,522 4,688 GNMA II Pool #2855 8.500% 12/20/29 5,055 247,950 GNMA II Pool #3284 5.500% 09/20/32 255,744 527,207 GNMA II Pool #3388 4.500% 05/20/33 533,072 116,656 GNMA II Pool #3401 4.500% 06/20/33 117,953 95,270 GNMA II Pool #3484 3.500% 09/20/33 88,270 174,220 GNMA II Pool #3554 4.500% 05/20/34 176,258 919,901 GNMA II Pool #3556 5.500% 05/20/34 947,797 504,007 GNMA II Pool #3689 4.500% 03/20/35 510,125 2,124,067 GNMA II Pool #3747 5.000% 08/20/35 2,181,125 355,304 GNMA II Pool #4149 7.500% 05/20/38 369,172 1,000,000 GNMA II pool #4308 5.000% 12/20/38 1,005,000 112,020 GNMA II Pool #601135 6.310% 09/20/32 117,514 128,281 GNMA II Pool #601255 6.310% 01/20/33 134,136 109,042 GNMA II Pool #608120 6.310% 01/20/33 114,019 475,684 GNMA II Pool #648541 6.000% 10/20/35 489,988 2,087,896 GNMA II Pool #696908 4.500% 07/20/38 2,110,754 27,261 GNMA II Pool #723 7.500% 01/20/23 28,794 89,265 GNMA II Pool #81161 5.500% 11/20/34 89,037 1,487 GNMA Pool #176992 8.000% 11/15/16 1,589 2,144 GNMA Pool #177784 8.000% 10/15/16 2,290 10,517 GNMA Pool #192357 8.000% 04/15/17 11,253 9,018 GNMA Pool #194057 8.500% 04/15/17 9,653 2,267 GNMA Pool #194287 9.500% 03/15/17 2,461 1,199 GNMA Pool #196063 8.500% 03/15/17 1,283 6,517 GNMA Pool #211231 8.500% 05/15/17 6,975 1,246 GNMA Pool #212601 8.500% 06/15/17 1,333 1,712 GNMA Pool #220917 8.500% 04/15/17 1,833 6,320 GNMA Pool #223348 10.000% 08/15/18 7,032 5,571 GNMA Pool #228308 10.000% 01/15/19 6,197 2,614 GNMA Pool #230223 9.500% 04/15/18 2,843 3,370 GNMA Pool #251241 9.500% 06/15/18 3,666 3,727 GNMA Pool #260999 9.500% 09/15/18 4,054 5,276 GNMA Pool #263439 10.000% 02/15/19 5,853 1,371 GNMA Pool #265267 9.500% 08/15/20 1,494 1,683 GNMA Pool #266983 10.000% 02/15/19 1,867 776 GNMA Pool #286556 9.000% 03/15/20 832 3,581 GNMA Pool #301366 8.500% 06/15/21 3,831 4,506 GNMA Pool #302933 8.500% 06/15/21 4,822 10,610 GNMA Pool #308792 9.000% 07/15/21 11,362 1,846 GNMA Pool #314222 8.500% 04/15/22 1,975 3,375 GNMA Pool #315187 8.000% 06/15/22 3,591 10,955 GNMA Pool #315754 8.000% 01/15/22 11,653 25,626 GNMA Pool #319441 8.500% 04/15/22 27,411 7,764 GNMA Pool #325165 8.000% 06/15/22 8,259 9,006 GNMA Pool #335950 8.000% 10/15/22 9,580 170,409 GNMA Pool #346987 7.000% 12/15/23 180,927 74,062 GNMA Pool #352001 6.500% 12/15/23 77,294 27,032 GNMA Pool #352110 7.000% 08/15/23 28,700 48,993 GNMA Pool #368238 7.000% 12/15/23 52,016 48,503 GNMA Pool #372379 8.000% 10/15/26 51,642 58,372 GNMA Pool #396537 7.490% 03/15/25 61,903 43,589 GNMA Pool #399726 7.490% 05/15/25 46,226 133,104 GNMA Pool #399788 7.490% 09/15/25 141,156 29,432 GNMA Pool #399958 7.490% 02/15/27 31,190 31,757 GNMA Pool #399964 7.490% 04/15/26 33,668 62,956 GNMA Pool #410215 7.500% 12/15/25 66,781 7,345 GNMA Pool #414736 7.500% 11/15/25 7,791 37,141 GNMA Pool #420707 7.000% 02/15/26 39,358 20,276 GNMA Pool #421829 7.500% 04/15/26 21,502 11,277 GNMA Pool #431036 8.000% 07/15/26 12,007 14,678 GNMA Pool #431612 8.000% 11/15/26 15,628 29,381 GNMA Pool #438004 7.490% 11/15/26 31,149 8,484 GNMA Pool #442190 8.000% 12/15/26 9,033 14,844 GNMA Pool #449176 6.500% 07/15/28 15,605 33,215 GNMA Pool #462623 6.500% 03/15/28 34,917 289,594 GNMA Pool #471369 5.500% 05/15/33 299,344 27,941 GNMA Pool #475149 6.500% 05/15/13 29,458 138,597 GNMA Pool #489377 6.375% 03/15/29 145,203 37,920 GNMA Pool #524811 6.375% 09/15/29 39,728 29,356 GNMA Pool #538314 7.000% 02/15/32 30,876 285,564 GNMA Pool #595606 6.000% 11/15/32 295,734 33,431 GNMA Pool #602377 4.500% 06/15/18 34,762 38,435 GNMA Pool #603377 4.500% 01/15/18 39,965 175,543 GNMA Pool #609452 4.000% 08/15/33 172,870 205,555 GNMA Pool #616829 5.500% 01/15/25 217,510 471,694 GNMA Pool #624600 6.150% 01/15/34 489,091 107,947 GNMA Pool #640940 5.500% 05/15/35 111,480 97,397 GNMA Pool #658267 6.500% 02/15/22 102,670 50,451 GNMA Pool #780429 7.500% 09/15/26 53,509 172,954 GNMA Pool #780977 7.500% 12/15/28 183,385 443,413 GNMA Pool #781120 7.000% 12/15/29 469,478 1,180,054 GNMA Series 1999-4, Class 2B 6.000% 02/20/29 1,218,109 423,158 GNMA Series 2000-14, Class PD 7.000% 02/16/30 448,195 762,690 GNMA Series 2001-2, Class GD 7.500% 07/20/28 818,798 375,495 GNMA Series 2001-4, Class PM 6.500% 03/20/31 393,461 466,714 GNMA Series 2002-22, Class GF 6.500% 03/20/32 488,836 318,796 GNMA Series 2002-40, Class UK 6.500% 06/20/32 333,953 254,686 GNMA Series 2002-45, Class QE 6.500% 06/20/32 266,676 1,800,830 GNMA Series 2002-47, Class PG 6.500% 07/16/32 1,886,931 209,641 GNMA Series 2002-7, Class PG 6.500% 01/20/32 225,924 366,038 Vendee Mortgage Trust, Series 1998-1, Class 2E 7.000% 09/15/27 383,681 452,019 Vendee Mortgage Trust, Series 1996-1, Class 1Z 6.750% 02/15/26 476,903 ------------ Total Agency Mortgage-Backed Securities (identified cost $35,269,675)-- 94.9% $36,821,980 ------------ TOTAL INVESTMENTS (identified cost $36,643,817)-- 98.1% $38,058,974 OTHER ASSETS, LESS LIABILITIES-- 1.9% 747,235 ------------ NET ASSETS-- 100.0% $38,806,209 ============ Industry classifications included in the Portfolio of Investments are unaudited. 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 CURRENT INCOME FUND (WCIF) - ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES December 31, 2008 - ------------------------------------------------------------------------------- ASSETS: Investments, at value (identified cost $36,643,817) (Note 1A) $ 38,058,974 Cash 567,368 Receivable for fund shares sold 64,692 Receivable from affiliates 7,119 Interest receivable 189,801 Other assets 2,840 ------------ Total assets $ 38,890,794 ------------ LIABILITIES: Payable for fund shares reacquired $ 5,627 Distributions payable 52,131 Accrued expenses and other liabilities 26,827 ------------ Total liabilities $ 84,585 ------------ NET ASSETS $ 38,806,209 ============ NET ASSETS CONSIST OF: Paid-in capital $ 38,769,198 Accumulated net realized loss on investments (computed on the basis of identified cost) (1,497,882) Unrealized appreciation of investments (computed on the basis of identified cost) 1,415,157 Accumulated undistributed net investment income 119,736 ------------ Net assets applicable to outstanding shares $ 38,806,209 ============ SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,999,928 ============ NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST $ 9.70 ============= STATEMENT OF OPERATIONS For the Year Ended December 31, 2008 - ----------------------------------------------------------------------------- INVESTMENT INCOME (Note 1C) Interest income $ 2,221,982 ------------ Expenses - Investment adviser fee (Note 3) $ 178,144 Administrator fee (Note 3) 35,629 Compensation of Trustees who are not employees of the investment adviser or administrator 19,426 Custodian fee (Note 1F) 63,405 Distribution expenses (Note 4) 98,969 Transfer and dividend disbursing agent fees 21,727 Printing 3,660 Interest expense 2,138 Shareholder communications 1,534 Audit services 28,966 Legal services 6,296 Registration costs 22,321 Miscellaneous 9,278 ------------ Total expenses $ 491,493 ------------ Deduct - Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) $ (111,340) Reduction of custodian fee (Note 1F) (4,073) ------------ Total deductions $ (115,413) ------------ Net expenses $ 376,080 ------------ Net investment income $ 1,845,902 ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investment transactions (identified cost basis) $ (20,196) Net change in unrealized appreciation (depreciation)on investments 476,154 ------------ Net realized and unrealized gain on investments $ 455,958 ------------ Net increase in net assets from operations $ 2,301,860 ============ See notes to financial statements WRIGHT CURRENT INCOME FUND (WCIF) - ------------------------------------------------------------------------------- Year Ended December 31, --------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS 2008 2007 - -------------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS: From operations - Net investment income $ 1,845,902 $ 1,897,291 Net realized loss on investment transactions (20,196) (186,065) Net change in unrealized appreciation (depreciation) on investments 476,154 512,985 -------------- -------------- Net increase in net assets from operations $ 2,301,860 $ 2,224,211 -------------- -------------- Distributions to shareholders (Note 2) From net investment income $ (1,894,445) $ (1,853,630) From net realized gain - (36,891) -------------- -------------- Total distributions $ (1,894,445) $ (1,890,521) -------------- -------------- Net decrease in net assets from fund share transactions (Note 6) $ (1,300,367) $ (1,108,939) -------------- -------------- Net decrease in net assets $ (892,952) $ (775,249) NET ASSETS: At beginning of year 39,699,161 40,474,410 -------------- -------------- At end of year $ 38,806,209 $ 39,699,161 ============== ============== ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ 119,736 $ 95,076 ============== ============== See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF) - ------------------------------------------------------------------------------- Year Ended December 31, ---------------------------------------------------------------------- FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year $ 9.590 $ 9.510 $ 9.610 $ 9.890 $ 10.490 ---------- ---------- ---------- ---------- ---------- INCOME (LOSS) FROM INVESTMENT OPERATIONS: Net investment income(1) $ 0.447 $ 0.455 $ 0.427 $ 0.400 $ 0.447 Net realized and unrealized gain (loss) 0.122 0.078 (0.063) (0.230) (0.112) ---------- ---------- ---------- ---------- ---------- Total income from investment operations $ 0.569 $ 0.533 $ 0.364 $ 0.170 $ 0.335 ---------- ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS: From net investment income $ (0.459) $ (0.444) $ (0.447) $ (0.430) $ (0.482) From net realized gains - (0.009) (0.017) (0.020) (0.453) ---------- ---------- ---------- ---------- ---------- Total distributions $ (0.459) $ (0.453) $ (0.464) $ (0.450) $ (0.935) ---------- ---------- ---------- ---------- ---------- Net asset value, end of year $ 9.700 $ 9.590 $ 9.510 $ 9.610 $ 9.890 ========== ========== ========== ========== ========== TOTAL RETURN(2) 6.10% 5.77% 3.92% 1.76% 3.29% RATIOS/SUPPLEMENTAL DATA(1): Net assets, end of year (000 omitted) $ 38,806 $ 39,699 $40,474 $33,861 $35,013 Ratios (As a percentage of average daily net assets): Net expenses 0.96% 0.96% 0.96% 0.97% 0.97% Net expenses after custodian fee reduction 0.95% 0.95% 0.95% 0.95% 0.95% Net investment income 4.66% 4.80% 4.47% 4.12% 4.29% Portfolio turnover rate 57% 47% 75% 103% 27% - -------------------------------------------------------------------------------------------------------------------------------- (1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the operating expenses of the Fund were reduced by a waiver of fees and/or an allocation of expenses to the principal underwriter and/or investment adviser. Had such action not been undertaken, net investment income per share and the ratios would have been as follows: 2008 2007 2006 2005 2004 - -------------------------------------------------------------------------------------------------------------------------------- Net investment income per share $ 0.420 $ 0.429 $ 0.391 $ 0.369 $ 0.410 ========== ========== ========== ========== ========== Ratios (As a percentage of average daily net assets): Expenses 1.24% 1.23% 1.31% 1.30% 1.28% ========== ========== ========== ========== ========== Expenses after custodian fee reduction 1.23% 1.22% 1.30% 1.28% 1.25% ========== ========== ========== ========== ========== Net investment income 4.38% 4.52% 4.13% 3.80% 3.99% ========== ========== ========== ========== ========== - -------------------------------------------------------------------------------------------------------------------------------- (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 - Debt obligations, including listed securities and securities for which quotations are readily available, will normally be valued on the basis of reported trades or market quotations obtained by independent pricing services, when in the services' judgment, these prices are representative of the securities' market values. For debt securities where market quotations are not readily available, the pricing services will use various techniques that consider factors including, but not limited to, prices or yields of securities with similar characteristics, benchmark yields, broker/dealer quotes, issuer spreads, as well as industry and economic events. Short-term debt securities with a remaining maturity of sixty days or less are valued at amortized cost, which approximates market value. If short-term debt securities are acquired with a remaining maturity of more than sixty days, they will be valued by a pricing service. Investments for which valuations or market quotations are not readily available are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Funds considering relevant factors, data and information including the market value of freely tradable securities of the same class in the principal market on which such securities are normally traded. B. Investment Transactions - Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. C. Interest Income - Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount. D. Federal Taxes - Each Fund's policy is to comply with the provisions of the Internal Revenue Code (the Code) applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. At December 31, 2008, WTRB and WCIF, for federal income tax purposes, had capital loss carryovers of $2,067,378 and $1,302,373, respectively, which will reduce the respective Fund's 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 distributions 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: December 31, WTRB WCIF - ------------------------------------------------------------------------------ 2010 $ 508,606 $ - 2011 - 476,275 2012 - 469,640 2013 270,953 196,117 2014 1,088,772 - 2015 199,047 160,341 - ------------------------------------------------------------------------------- Additionally, at December 31, 2008, WCIF had net capital losses of $98,225, attributable to security transactions incurred after October 31, 2008. The net capital losses are treated as arising on the first day of the Fund's taxable year ending December 31, 2009. A capital loss carryover of $1,302,373, 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. Utilization of this capital loss carryover may be limited in accordance with certain income tax regulations. As of December 31, 2008, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Funds' federal tax returns filed in the 3-year period ended December 31, 2008 remains subject to examination by the Internal Revenue Service. E. Expenses - The majority of expenses of the Trust are directly identifiable to an individual Fund. Expenses which are not readily identifiable to a specific Fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the Funds. F. 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 Funds' custodian fees are reported as a reduction of expenses in the Statements of Operations. G. 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. H. Indemnifications - Under the Trust's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Funds, and shareholders are indemnified against personal liability for the obligations of the Funds. Additionally, in the normal course of business, the Funds enter into agreements with service providers that may contain indemnification clauses. Each Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. 2. Distributions to Shareholders -------------------------------- The net investment income of each Fund is determined daily, and substantially all of the net investment income so determined is declared daily as a dividend to shareholders of record at the time of declaration. Distributions are generally paid monthly. Distributions of net realized capital gains (reduced by available capital loss carryforwards from prior years, if any) are made at least annually. Shareholders may reinvest income and capital gain distributions in additional shares of the same Fund at the net asset value as of the reinvestment date or, at the election of the shareholder, receive distributions 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 reclassified to paid-in capital. The tax character of distributions paid for the years ended December 31, 2008 and December 31, 2007 was as follows: Year Ended 12/31/08 WTRB WCIF - ------------------------------------------------------------------------------ Distributions declared from: Ordinary income $ 1,166,826 $ 1,894,445 - ------------------------------------------------------------------------------ Year Ended 12/31/07 WTRB WCIF - ------------------------------------------------------------------------------ Distributions declared from: Ordinary income $ 1,291,075 $ 1,853,836 Long-term capital gains - 36,685 - ------------------------------------------------------------------------------ During the year ended December 31, 2008, the following amounts were reclassified due to expired capital loss carryforwards and differences between book and tax accounting, primarily for premium amortization and paydown gain (loss). Increase (decrease): WTRB WCIF - ------------------------------------------------------------------------------ Paid-in capital $ (1,058,933) $ - Accumulated net realized gain (loss) $ 1,012,538 $ (73,203) Accumulated undistributed (distributions in excess of) net investment income $ 46,395 $ 73,203 - ------------------------------------------------------------------------------- These reclassifications had no effect on the net assets or net asset value per share of the Funds. As of December 31, 2008, the components of distributable earnings (accumulated losses) on a tax basis were as follows: WTRB WCIF - ------------------------------------------------------------------------------- Undistributed ordinary income $ - $ 119,736 Capital loss carryforward and post October losses (2,067,378) (1,400,598) Unrealized appreciation (depreciation) (763,471) 1,317,873 Other temporary differences (16,308) - - ------------------------------------------------------------------------------- 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, premium amortization and the timing of recognizing distributions to shareholders. 3. Investment Adviser Fee and Other Transactions With Affiliates --------------------------------------------------------------- The investment adviser fee is earned by Wright Investors' Service, Inc. (Wright) as compensation for investment advisory services rendered to the Funds. The fee is computed at an annual rate of 0.45% of the average daily net assets for WTRB and WCIF up to $100 million and at reduced rates as net assets exceed that level, and is payable monthly. For the year ended December 31, 2008, the fee and the effective annual rate as a percentage of average daily net assets for each of the Funds were as follows: Fund Investment Adviser Fee Effective Annual Rate --------------------------------------------------------------------------- WTRB $105,943 0.45% WCIF 178,144 0.45% - ------------------------------------------------------------------------------- The administrator fee is earned by Eaton Vance Management (Eaton Vance)for administering the business affairs of each Fund and is computed at an annual rate of 0.07% of the average daily net assets up to $100 million for WTRB and an annual rate of 0.09% of the average daily net assets up to $100 million for WCIF, and at reduced rates as net assets exceed that level. For the year ended December 31, 2008, the administrator fee for WTRB and WCIF amounted to $16,480 and $35,629, respectively. Wright also waived and/or reimbursed expenses for WTRB and WCIF (see Note 4). Certain of the Trustees and officers of the Trust are Trustees or officers of the above organizations and/or of the Funds' principal underwriter. 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 fees paid to Eaton Vance and Wright. 4. Distribution and Service Plans -------------------------------- The Trust has in effect a Distribution Plan (the Plan) pursuant to Rule 12b-1 of the 1940 Act. The Plan provides that each Fund will pay Wright Investors' Service Distributors, Inc. (WISDI), the principal underwriter, a wholly-owned subsidiary of The Winthrop Corporation and an affiliate of Wright, a distribution fee of 0.25% per annum of the average daily net assets of each Fund for distribution services and facilities provided to each Fund by WISDI. Distribution fees paid or accrued to WISDI for the year ended December 31, 2008 for WTRB and WCIF amounted to $58,857 and $98,969, 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, 2008, the Funds did not accrue or pay any service fees. Pursuant to an Expense Limitation Agreement, Wright and WISDI have agreed to waive all or a portion of their fees and reimburse expenses to the extent that total annual operating expenses after custodian fee reductions, if any, exceed 0.95% of the average daily net assets of each of WTRB and WCIF through April 30, 2009. Thereafter, the waiver and reimbursement may be changed or terminated at any time. In addition, Wright and WISDI have voluntarily agreed to further limit the total annual operating expenses after custodian fee reductions, if any, of WTRB to 0.70% of its average daily net assets. Such voluntary limitation may be terminated at any time. Pursuant to this agreement and voluntary limitation, Wright and WISDI waived and/or reimbursed expenses in the aggregate of $189,917 and $111,340 for WTRB and WCIF, respectively. 5. Investment Transactions -------------------------- Purchases and sales (including maturities and paydowns) of investments, other than short-term obligations, were as follows: Year Ended December 31, 2008 ------------------------------ WTRB WCIF - -------------------------------------------------------------------------------------------------------------------------------- Purchases - Non-U.S. Government & Agency Obligations $ 5,836,803 $ - ---------------- ---------------- U.S. Government & Agency Obligations $ 23,146,468 $ 22,099,840 ---------------- ---------------- Sales - Non-U.S. Government & Agency Obligations $ 3,590,550 $ 109,996 ---------------- ---------------- U.S. Government & Agency Obligations $ 26,213,867 $ 22,611,571 ---------------- ---------------- - --------------------------------------------------------------------------------------------------------------------------------
6. 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, 2008 December 31, 2007 -------------------- --------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------------------------------------------- WRIGHT TOTAL RETURN BOND FUND-- Sold 496,389 $ 5,923,634 298,879 $ 3,663,258 Issued to shareholders in payment of distributions declared 77,959 940,667 81,211 994,635 Redemptions (650,751) (7,839,428) (875,601) (10,706,894) ------------ --------------- ------------ --------------- Net decrease (76,403) $ (975,127) (495,511) $ (6,049,001) ============ =============== ============ =============== WRIGHT CURRENT INCOME FUND-- Sold 902,053 $ 8,661,740 788,878 $ 7,459,407 Issued to shareholders in payment of distributions declared 131,890 1,262,992 136,552 1,294,792 Redemptions (1,174,591) (11,225,099) (1,041,404) (9,863,138) ------------ --------------- ------------ --------------- Net decrease (140,648) $ (1,300,367) (115,974) $ (1,108,939) ============ =============== ============ ===============
7. Federal Income Tax Basis of Investments --------------------------------------------- The cost and unrealized appreciation (depreciation) of the investment securities owned at December 31, 2008, as computed on a federal income tax basis, were as follows: WTRB WCIF - -------------------------------------------------------------------------------------------------------------------------------- Aggregate cost $ 23,529,501 $ 36,741,101 ================ ================ Gross unrealized appreciation 542,806 1,432,612 Gross unrealized depreciation (1,306,277) (114,739) ---------------- ---------------- Net unrealized appreciation (depreciation) $ (763,471) $ 1,317,873 ================ ================ - --------------------------------------------------------------------------------------------------------------------------------
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, 2008, there were no outstanding balances pursuant to this line of credit. The average borrowings and average interest rate for the year ended December 31, 2008 were as follows: WTRB WCIF - ------------------------------------------------------------------------------ Average borrowings $ 7,282 $ 9,287 Average interest rate 3.7% 3.3% - ------------------------------------------------------------------------------- 9. Fair Value Measurements ------------------------- The Funds adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 (FAS 157), "Fair Value Measurements", effective January 1, 2008. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below. o Level 1 - quoted prices in active markets for identical investments o Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk etc.) o Level 3 - significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. At December 31, 2008, the inputs used in valuing each Fund's investments, which are carried at value, were as follows: WTRB WCIF -------------------------------------------- Valuation Inputs ------------------------------------------------------------------------------------------------------------ Level 1 Quoted Prices $ - $ - Level 2 Other Significant Observable Inputs 22,766,030 38,058,974 Level 3 Significant Unobservable Inputs - - ------------------------------------------------------------------------------------------------------------ Total $ 22,766,030 $ 38,058,974 ------------------------------------------------------------------------------------------------------------ The Funds held no investments or other financial instruments as of December 31, 2007 whose fair value was determined using Level 3 inputs.
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, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the 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, 2008, 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 positions of Wright Total Return Bond Fund and Wright Current Income Fund as of December 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Boston, Massachusetts February 16, 2009 WRIGHT MANAGED INCOME TRUST AS OF DECEMBER 31, 2008 - ------------------------------------------------------------------------------- FEDERAL TAX INFORMATION (UNAUDITED) The Form 1099-DIV you received in January 2009 showed the tax status of all distributions paid to your account in calendar 2008. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Funds. MANAGEMENT AND ORGANIZATION - ------------------------------------------------------------------------------ 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 Trusts 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 65 and and Trustee and Director of Wright and Winthrop; Wright and Trustee since Chief Investment Officer and Chairman Winthrop Inception of the Investment Committee;a Director of WISDI; President of 5 funds managed by Wright - -------------------------------------------------------------------------------------------------------------------------------- A.M. Moody, III*** Vice President Vice President President, AM Moody Consulting LLC 5 None Age 72 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 67 since consultant - financial management and December, 2002 strategic planning);Director - Reliance Bank, Altoona PA since August 1995; Director - Quaint Oak Bank, Southampton, PA since March 2007, Associate Professor of Finance at Villanova University 1972-2002 - -------------------------------------------------------------------------------------------------------------------------------- Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 5 None Age 62 since (a public policy and government relations December, 1998 firm) Spotsylvania, VA; Director, The Options Clearing Corporation 1997-2005; Director, First Coast Service Options since 1998 - -------------------------------------------------------------------------------------------------------------------------------- Richard E. Taber Trustee Trustee since Chairman and Chief Executive 5 None Age 60 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 70 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 73 and Assistant Trusts since Administrator for the funds; Officer of Treasurer March 17, 2005, 5 funds managed by Wright and 173 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 51 the Trusts Administrator for the funds; Officer of since 2005 5 funds managed by Wright and 173 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 Funds' 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 Contracts 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 ------------------------------- In accordance with rules established by the SEC, the funds send semi-annual and annual reports to shareholders that contain a complete list of portfolio holdings as of the end of the second and fourth quarters, respectively, within 60 days of quarter-end and after filing with the SEC. The funds also disclose complete portfolio holdings as of the end of the first and third fiscal quarters on Form N-Q, which is filed with the SEC within 60 days of quarter-end. The funds' complete portfolio holdings as reported in annual and semi-annual reports and on Form N-Q are available for viewing on the SEC website at http://www.sec.gov and may be reviewed and copied at the SEC's public reference room (information on the operation and terms of usage of the SEC public reference room is available at http://sec.gov/info/edgar/prrules.htm or by calling 1-800-SEC-0330). After filing, the funds' portfolio holdings as reported in annual and semi-annual reports are also available on Wright's website at www.wisi.com and are available upon request at no additional cost by contacting Wright at 800-888-9471. 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. THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS - ------------------------------------------------------------------------------- (continued from inside front cover) TWO FIXED-INCOME FUNDS WRIGHT TOTAL RETURN BOND FUND (WTRB) (the Fund) 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 Barclays Capital U.S. Aggregate Bond Index. WRIGHT CURRENT INCOME FUND (WCIF) (the Fund) 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 Barclays Capital GNMA Backed Bond WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC. 440 Wheelers Farms Road, Milford, CT 06461 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 E. Sanders, Secretary Barbara E. Campbell, 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 Atlantic Fund Administration, LLC P.O. Box 588 Portland, ME 04112 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: 2008: $61,200 and 2007: $60,700. (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 2008: $9,780 and 2007: $9,440. 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 26,2009 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 E. Campbell ------------------------ Barbara E. Campbell Treasurer Date: February 27,2009 By: /s/ Peter M.Donovan --------------------- Peter M. Donovan President Date: February 26,2009 EX-99.CERT 2 inc302cert1208.txt INCOME 302 CERTIFICATION - DEC. 2008 FORM N-CSR ITEM 12(A)(2) EXHIBIT I, Barbara E. Campbell, certify that: 1. I have reviewed this report on Form N-CSR of The Wright Managed Income Trust (on behalf of Wright Total Return Bond Fund and Wright Current Income Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 27, 2009 /s/ Barbara E. Campbell - ------------------------ Barbara E. Campbell Treasurer FORM N-CSR ITEM 12(A)(2) EXHIBIT I, Peter M. Donovan, certify that: 1. I have reviewed this report on Form N-CSR of The Wright Managed Income Trust (on behalf of Wright Total Return Bond Fund and Wright Current Income Fund); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedure, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 26, 2009 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President EX-99.906 CERT 3 inc906cert1208.txt INCOME 906 CERTIFICATION - DEC. 2008 FORM N-CSR ITEM 12 (B) EXHIBIT CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned hereby certify in their capacity as Treasurer and President, respectively, of The Wright Managed Income Trust (the "Trust") (on behalf of Wright Total Return Bond Fund and Wright Current Income Fund), that: (a) the Annual Report of the Trust (on behalf of Wright Total Return Bond Fund and Wright Current Income Fund) on Form N-CSR for the period ended December 31, 2008 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (b) the information contained in the Report fairly presents, in all material respects, the financial condition and the results of operations of the Trust (on behalf of Wright Total Return Bond Fund and Wright Current Income Fund) for such period. A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN PROVIDED TO THE TRUST AND WILL BE RETAINED BY THE TRUST AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. The Wright Managed Income Trust (On behalf of Wright Total Return Bond Fund and Wright Current Income Fund) Date: February 27, 2009 /s/ Barbara E. Campbell - ------------------------ Barbara E. Campbell Treasurer Date: February 26, 2009 /s/ Peter M. Donovan - ------------------------ Peter M. Donovan President -----END PRIVACY-ENHANCED MESSAGE-----