As filed with the Securities and Exchange Commission on August 26, 2010
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3489
THE WRIGHT MANAGED EQUITY TRUST
440 Wheelers Farm Road
Milford, Connecticut 06461
Christopher A. Madden
Three Canal Plaza, Suite 600
Portland, ME 04101
207-347-2000
Date of fiscal year end: December 31
Date of reporting period: January 1, 2010 – June 30, 2010
| ITEM 1. | REPORT TO STOCKHOLDERS. |
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
SEMI-ANNUAL REPORT
June 30, 2010
THE WRIGHT MANAGED EQUITY TRUST
| | • | | Wright Selected Blue Chip Equities Fund |
| | • | | Wright Major Blue Chip Equities Fund |
| | • | | Wright International Blue Chip Equities Fund |
THE WRIGHT MANAGED INCOME TRUST
| | • | | Wright Total Return Bond Fund |
| | • | | 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
FINANCIAL STATEMENTS
1
Letter to Shareholders
July 2010
Dear Shareholders:
After the steep downtrend of 2008 and the nearly-as-steep rebound of 2009, 2010 is proving to be a mix of both up and down for the stock market. Following a generally satisfactory opening quarter, the second quarter of 2010 saw global stock market averages correct lower, leaving U.S. stocks down about 7% for the first half. Japan and other Asian markets also suffered corrections in the second quarter and their first-half declines were mostly of a kind with those in North America. The exceptional region in 2010 has been Europe, where returns were negative in both first and second quarters in both local currency and (especially) U.S. dollar terms. Emerging markets have held up to the selling pressures reasonably well with the notable exception of Shanghai, where prices have declined roughly 25% this year. The possibility that Shanghai might be the “canary in the coal mine” has added to global market anxiety, particularly given signs that China’s growth engine may be starting to sputter.
European sovereign debt woes have been the major theme in 2010’s markets. Markets have become increasingly concerned that Europe’s debt growth is out of control or alternately that getting it under control will tip Europe’s sluggish economic recovery back into recession. Speculation that one of the Euro nations might default, a possibility that, according to trading in credit default swaps, grew more likely over the course of the second quarter, sent the euro down roughly 9% against the dollar during Q2 (and 15% for the first half). Against Asian currencies, the dollar was mixed during the second quarter, losing ground vis-a-vis the yen and appreciating against other Asian currencies. Interbank financial tensions increased a bit during Q2, but liquidity measures are nowhere near the levels they got to in the panic of 2008.
The U.S. economy expanded at a 2.4% annual rate in Q2, and leading indicators point to a continuation of modest growth for the rest of 2010. Revised figures show that U.S. real GDP increased at a 3.7% annual rate in the March 2010 quarter. Consumer spending on goods has largely been up to expectations, which is why manufacturing has had a more V-shaped recovery than other economic sectors. But spending on consumer services, which is nearly 50% of GDP, has failed to reach even a 1% growth rate since March of 2008. A positive swing in business inventories has boosted GDP growth, although this effect has been offset to some extent by a worsening foreign trade account. Growth in both GDP and final sales of domestic product has been lackluster as compared with the growth rates seen in previous important economic cycles. While disappointing, the recent downdraft in economic momentum is not, in our view, the start of the dreaded double dip, which we continue to rate a less than 25% probability.
The first week of July brought reports on manufacturing and employment that showed an economy whose growth is being constrained by increasing savings rates and the ongoing repair of consumer finances. Federal Reserve figures released in June showed that the economy’s private sector continued to reduce its debt in the March quarter, even as government credit expanded at an annual rate of 16%. The U.S. personal saving rate rose to 6.4% in June, the highest rate in a year, suggesting that consumers remain skeptical that all of the stimulus will produce the economic growth and job opportunities as advertised. For much of the past three decades, it was difficult to overestimate the spending power of the U.S. consumer; now, the soft tone of retail sales and the big drop in the Conference Board’s consumer confidence index suggest that consumers have finally met their match in the jobless economic recovery engineered by Congress and the Federal Reserve.
On the bright side, corporate profits increased significantly in the latest quarter despite the downward shift in economic growth. Pretax profits from current production rose a revised 38% in 2010’s first quarter, the second quarter in a row with year-over-year growth greater than 35%. Pretax earnings were equal to 12.7% of GDP, the highest profit margin since before the recession began in late 2007. The Q2 profit tally of S&P 500 companies’ earnings shows actual earnings topping analysts’ estimates by 10%, according to Bloomberg, after Q1 results beat estimates by a whopping 14%. While these measures of profitability are impressive, we suspect that a more balanced mix of corporate profits and personal income would be more conducive to sustained economic expansion. Another noteworthy aspect of the second quarter’s profit report was the 1% year-on-year increase in corporate dividends, which we take to mean that, after eight quarters of decline, firms’ boards are no longer trying to shore up balance sheets at the expense of dividends.
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Inflation continues to register only a low-level threat for the near term, and the Federal Reserve’s two policy meetings of the second quarter left the Fed’s target for overnight interest rate essentially at zero. Inflation readings remain extremely tame, so much so that the prospect of deflation occasionally rears its head. Over the past six months, the CPI has registered an inflation reading of 0.3%; the core CPI rate (ex food and energy) has been just 0.4%. Long-term inflation expectations, as reflected in the market for nominal and real 10-year Treasury notes, have fallen over 50 basis points since the April high of 2.4% to 1.9% as June was ending.
With inflation expectations muted, the U.S. bond market, as measured by the Barclays U.S. bond market aggregate, produced a better-than-3% return in the second quarter; the aggregate’s 5% return for the first half of 2010 exceeded our full-year target for bond returns. The Treasury yield curve declined broadly during the second quarter: the 10-year Treasury yield declined about 90 basis points and two-year T-note yield fell 40 bps. Since its peak of nearly three percentage points in February, the twos/tens Treasury yield curve has flattened by more than half a percentage point. Concerns about the safety of European sovereign debt in a slowing global economic recovery produced a flight from risk to the presumed safety of Treasury securities and the dollar. Looking forward, it is difficult to see merit in low-yield Treasury securities except under dire economic conditions; assuming even a moderately respectable global recovery stays on track, aggregate bond returns may be only slightly positive over the next two years, with coupon income and a resumption of spread tightening offsetting higher Treasury yields.
The long-awaited stock market correction has arrived, allowing earnings and economic growth a chance to catch up with last year’s stock price advance. The S&P 500’s pullback since its late-April high reached 15% as the second quarter came to a close. Considering that its rise over the March 2009 to April 2010 rally was 80%, steepest 13-month rebound since the 1930s, the magnitude of the current correction isn’t out of the ordinary. With stock prices at only 12 times forecast earnings (S&P 500), we continue to regard stock prices as attractive, provided that the current economic slowdown is, like the one experienced in 2003, just a temporary interruption of an economy gathering momentum. We take encouragement from the fact that high-quality stocks and investment-grade bonds have held up better in the market correction than their lower-quality counterparts. If you have any questions or suggestions on how we can better serve your investment and wealth management needs, please let us know.
Sincerely,
Peter M. Donovan
Chairman & CEO
3
Management Discussion
Equity Funds
The first half of 2010 was a mix of up and down for the stock market. After rising without interruption for more than a year, stocks reversed course in the second quarter of 2010. European sovereign debt woes appeared to be the trigger for the stock market correction. After a recovery that had stocks up 80% from the March 2009 low to the April 2010 peak, a correction was probably overdue. But even if it wasn’t entirely unexpected, the correction was accompanied by an increase in investor anxiety. Investors have become increasingly concerned that getting Europe’s debt under control will seriously dampen the region’s economic growth. As the Fed noted after its June policy meeting, “Financial conditions have become less supportive of growth on balance, largely reflecting developments abroad.” In addition to a worsening of Europe’s debt issues, the second quarter brought signs of a slowdown in economic momentum in the U.S. The recoveries in jobs and consumer spending have been lackluster at best, and with the expiration of the home buyers’ tax credit, the recovery in housing appears to have stalled. The good news has come from manufacturing and corporate profits. Inflation remains tame, a positive to be sure but also an indication that growth is less than robust.
On a total return basis, the S&P 500 lost 11.4% in the quarter, more than erasing its first-quarter gain of 5.4% to put it down 6.7% year to date. The S&P 500’s pull back from its late April high reached 15% as the second quarter came to a close. Over the course of the second quarter, expectations for year-ahead earnings edged slightly lower, but the bulk of the S&P 500’s retreat came from a contraction in its P/E multiple (a proxy for investor confidence) by more than two points, to under 12 times earnings. Nasdaq’s returns for the quarter and the first half of 2010 were similar to the S&P 500’s, while the Dow Jones Industrials’ were just a little better — losses of 9.4% for Q2 and 5.0% for the half. Investors showed some preference for the higher quality stocks within the S&P 500 in the second quarter, but somewhat contrarily they also favored the S&P MidCap 400 and SmallCap 600 over the big-cap S&P 500. The MidCaps lost 9.6% in Q2 and 1.4% for the first half of 2010, while the SmallCap index lost 8.7% for the quarter and less than 1% for the six months. In the first half of 2010, international stocks lagged U.S. equities: the MSCI World ex U.S. index lost 12.5% in dollar terms in the first six months of the year, with a 13.6% loss in Q2 offsetting a modestly positive first half return. In the aggregate, the dollar returns were depressed by the appreciation of the dollar against the currencies represented in the index, with the Euro particularly weak with a 15% loss against the dollar in the first half of the year.
The U.S. economy probably expanded at a 3%-3.5% annual rate in Q2, and leading indicators point to a continuation of modest growth for the rest of 2010. While disappointing, the recent loss of economic momentum will not turn into a new recession in our view. Growth will continue to be limited by cautious spending by consumers. Slow jobs growth, depressed home values and two bear markets in 10 years have consumers concentrating on improving their balance sheets. Even so, there is enough momentum from stimulus spending to keep the recovery going, and we see exports as a plus also. Even with lackluster GDP growth, we expect a solid increase in corporate profits over the next 12 months. Cost reduction efforts are enabling companies to take full advantage of even modest sales growth. With the S&P 500’s P/E at 12 times year-ahead earnings, stocks have priced in much of the risk in the near-term environment, so long as the current slowdown does not turn into something worse. Even if P/E’s remain at these levels, earnings growth alone could make for attractive returns from equities over the coming 12 months. In the shorter-term, however, the increased investor anxiety evident in the second quarter may persist for a while, keeping stocks volatile.
Major Blue Chip 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. The WMBC Fund lagged the S&P 500 slightly in the first half of 2010 with a loss of 7.9% compared to a 6.7% loss for the benchmark. After matching the S&P 500’s 5.4% return in the first quarter, the WMBC Fund lost 12.7% in Q2 compared to the S&P 500’s 11.4% loss.
In the first quarter of 2010, WMBC’s emphasis on quality worked against it as investors continued to prefer low-quality issues; however, this was offset by superior stock selection in seven of 10 industry sectors. In the second quarter of the year, increased uncertainty about the economy appeared to send investors back to quality. Investors also preferred more defensive industry sectors in the quarter. Being underweight in utilities, telecom and
4
consumer staples, which were the S&P 500’s best-performing groups (i.e., they had the smallest losses) hurt the relative performance of the Fund. This was partially offset by strong stock selection in such cyclical groups as consumer discretionary, technology and materials. In addition, WMBC took a cash reserve position of about 5% during the second quarter as a response to the more uncertain outlook for equities; this reserve position was a plus for quarterly performance. Looking at individual securities, Apple Computer, D.R Horton, Dover and Family Dollar Stores were among the biggest positive contributors to the Fund’s performance in both the second quarter and first half of 2010. For the quarter and the half, tech stocks Hewlett Packard and Oracle detracted from performance; in the second quarter, General Electric was also a laggard.
Going into the second half of 2010, WMBC was maintaining its modest cash reserve position. However, we expect that equities will continue to be supported by solid profit growth; technology stocks in particular look attractive in terms of potential earnings and current valuations. In addition, corporations have accumulated significant cash on their balance sheets, setting the stage for possible stock buybacks and dividend increases. WMBC is well positioned to take advantage of an environment in which stock performance is driven by fundamentals, with its bias toward the higher-quality and more substantial issues in the S&P 500 and an attractive valuation. As the second half of 2010 got underway, WMBC holdings in the aggregate were priced at lower current and forward P/E multiples than the S&P 500 despite better historical earnings growth and similar forecast earnings growth.
Selected Blue Chip Fund
Mid-cap stocks have continued their comparatively strong performance of 2009 into 2010: the S&P MidCap 400 outperformed the S&P 500 in the first half of 2010 with a loss of 1.4% compared to the 500’s 6.7% loss. The Wright Selected Blue Chip Fund (WSBC) lost 1.7% in the first half of 2010 compared to a 1.4% loss for the S&P MidCap 400 benchmark. In the first quarter of the year, the WSBC Fund was ahead of the benchmark with a 9.4% gain compared to 9.1%, but the Fund’s second quarter loss of 10.1% was slightly worse than the benchmark’s 9.6% loss.
In the first quarter of 2010, strong stock selection, particularly in the health care, materials, and consumer discretionary groups, accounted for WSBC’s outperformance compared to the S&P MidCap 400. In Q2, stock selection accounted for the bulk of the WSBC Fund’s downside divergence from its benchmark, particularly in the industrial sector. Partially offsetting this was strong stock selection in information technology. Sector positioning had a smaller impact for both periods. Being underweight in utilities was positive in Q1 but negative in Q2 as investors became more defensive. The Fund’s overweight position in consumer discretionary stocks was also negative in Q2. A cash reserve position taken in the second quarter as market sentiment turned negative benefitted performance. Among individual holdings, positive contributors in the second quarter and the first half of 2010 were technology company Sybase, Cimarex Energy and healthcare company Lincare Holdings; laggards included tech stock Avnet, energy company Oceaneering International and retailer American Eagle.
In the second quarter of 2010, investors shifted toward a preference for quality stocks, which we expect will continue in the uncertain environment of the second half. The WSBC Fund is positioned in the mid-cap universe to take advantage of a preference for quality. WSBC continues to be biased to the larger companies in the index and its holdings have better historical earnings growth than the index constituents. In the aggregate, WSBC stocks had lower current and forward P/E multiples than those in the MidCap 400 with slightly better expected earnings growth. WIS continues to advise diversity in investment portfolios as the best way to navigate difficult economic times.
International Blue Chip Fund
The MSCI World ex U.S. Index lagged the S&P 500 in the first half of 2010 with a 12.5% loss in dollars compared to a 6.7% loss for the S&P 500. The Wright International Blue Chip Fund (WIBC) lagged the MSCI benchmark in the first half of the year with a loss of 15.5%. In the first quarter WIBC had a slightly smaller gain (0.8%) than the MSCI index (1.4%), while in the second quarter its 16.2% loss was larger than the benchmark’s 13.6% shortfall.
In the first quarter of 2010, WIBC was helped by being overweight in the strong industrial sector and good stock selection in materials; but these positives were offset by unfavorable stock selection in a number of other sectors.
5
In the second quarter, WIBC was negatively affected by a lagging performance in its industrial company holdings in Japan, which were affected by concerns about slowing growth in China. Additionally, holdings of mining companies in Australia were affected by a proposed new mining tax. (The proposal has since been modified to be less burdensome.) There was also some weakness in European financial stock holdings in Q2; the companies have been reviewed and found to be in sound condition. On the plus side was the positive effect of a cash reserve position taken in the quarter and a solid performance by the Fund’s IT holdings. Although overall the Fund’s selections in energy also had a positive effect, its position in BP detracted from results in the quarter. Other detracting stocks for the quarter were Japanese industrial Mitsui and Spanish telecom company Telefonica. Contributing positively were health care stocks AstraZeneca and Shionogi and tech stock Itochu Techno-Solutions. For the first half, tech company Grupo CGI and Toronto Dominion Bank were positive contributors, while BP and Telefonica detracted.
Moving into the second half of the year, WIBC remains overweight in technology because of the good earnings prospects and valuations offered by this sector. The Fund’s positioning also reflects the view that despite market concerns, emerging markets such as China will continue to drive global growth. WIBC is well positioned to benefit from a trend back toward quality and also offers attractive value. In the aggregate, its holdings are priced at significant discounts to the MSCI World ex U.S. index in terms of current and forward price/earnings ratios and price/cash flow ratios. We continue to see the inclusion of international stocks as likely to enhance returns in diversified investment portfolios.
Fixed Income Funds
After holding steady in the first quarter, Treasury bond yields fell significantly in the second quarter of 2010. Fears about Europe’s finances sent global investors to the relatively safety of U.S. Treasury bonds as Q2 progressed. The perceived need for a safe haven, indications of slowing growth in the U.S. and the low near-term inflation threat offset the prospect of increased Treasury issuance to fund rising budget deficits. Over the past six months, the CPI has registered an inflation reading of close to zero; the core CPI rate (ex food and energy) has been just 0.6%. Long-term inflation expectations, as reflected in the market for nominal and real 10-year Treasury notes, have fallen over 50 basis points since the April high. The 10-year Treasury yield fell 90 basis points in the second quarter to 2.93%, the lowest since April 2009. Two-year yields fell 40 basis points. Since its peak of nearly three percentage points in February, the Treasury curve between two-year and 10-year yields has flattened by more than half a percentage point. The yield on the 90-day Treasury bill rate has stayed under 0.2% for the first half of this year as the expected date for the first Federal Reserve tightening was pushed further out on the investment horizon. In its latest policy statement, the Fed reiterated its position that “economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” The fed funds futures market is forecasting that the Fed’s first rate hike won’t come until the second quarter of 2011; three months ago, the futures market was forecasting a rate hike late this year.
The Barclays Capital U.S. Aggregate Bond Index returned 3.5% in the second quarter of 2010, pushing its first-half return to 5.3%. In the first quarter of 2010, Treasurys were the weakest sector of the investment-grade universe with a 1.1% return and the Aggregate return benefitted from the spread tightening on non-Treasury sectors. In contrast, Treasury bonds led the way in Q2 with a 4.7% return. Other sectors’ returns were positive in Q2, but lagged Treasurys. Spreads on corporate bonds edged out a bit in Q2, but corporates still managed a respectable 3.4% return for the quarter, which combined with their better-than-2% return in Q1 had them just about matching Treasury’s 5.9% return for the six months. Agency issues returned 2.5% in Q2 and 3.8% YTD. Mortgage-backed, asset-backed and commercial mortgage-backed issues had returns in the 2.5%-3.0% range in the latest three months; for the year-to-date, the CMBS sector led the Aggregate with a 12% return.
We believe it is unlikely that the Fed will change its near-zero interest rate policy until 2011. The slowdown in economic momentum and increased risk emanating from Europe argue against a near-term rate hike. It also should be a while before inflation starts to put upward pressure on interest rates. Looking forward, however, it is difficult to see much near-term upside potential in low-yielding Treasury securities except under dire economic conditions; if, as we expect, we avoid that outcome, rates should be heading higher by the end of the year as confidence sends investors toward riskier investments and Fed tightening draws closer. Assuming global recovery stays on track, aggregate bond returns may be anemic over the next two years, with coupon income and a resumption of spread tightening offsetting the price effects of higher Treasury yields. In the interim we may see some continued volatility in stocks, which will work to the bond market’s favor.
6
Current Income Fund
In the first half of 2010, the mortgage-backed sector of the bond market returned 4.6%, lagging both Treasury bonds, which returned 5.9%, and the Barclays Capital U.S. Aggregate Bond Index, which returned 5.3%. In the second quarter, the MBS sector returned 2.9% compared to 3.5% for the Barclays Aggregate and 4.7% for Treasurys. The Wright Current Income Fund (WCIF) is managed to be primarily invested in GNMA issues (mortgage-based securities, known as Ginnie Maes, guaranteed by the full faith and credit of the U.S. government) and other mortgage-based securities. The WCIF Fund is actively managed to maximize income and minimize principal fluctuation. In the first half of 2010, WCIF returned 4.6% compared to 5.3% for the Barclay’s Capital GNMA bond index. In Q1 the Fund lagged the index’s 1.9% with a 1.5% return, while in Q2, WCIF returned 3.1% compared to 3.3% for the benchmark. WCIF had a yield of 4.2% at June 2010 calculated according to 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 60% of assets at mid-year), WCIF also held MBS securities backed by Fannie Mae (FNMA) and Freddie Mac (FHLMC). These issues had returns that were slightly behind Ginnie Mae returns in both the first and second quarters of 2010. At mid-2010, about 3% of the WCIF portfolio was invested in non-Agency mortgages. The Fund’s selection of mortgages had a slightly shorter duration than the GNMA index during the first half. This worked against the Fund in both quarters. In keeping with its goal of providing high income, the WCIF Fund was overweight in higher coupon issues (average coupon of 5.9% at mid-year vs 5.1% for the GNMA index). The Fund’s holdings of higher-coupon, well-seasoned bonds contributed to the Fund’s having less negative convexity than the Barclays benchmark, which contributes to a more stable performance when interest rates are volatile.
Total Return Bond Fund
In the first half of 2010, the return on the Barclays Capital U.S. Aggregate bond index was 5.3%. In the first quarter, the Aggregate’s positive return was led by spread products, in the second by Treasury bonds. The Wright Total Return Bond Fund (WTRB), a diversified bond fund, returned 4.8% for the first half of 2010 compared to the benchmark’s 5.3% return. In the first quarter of 2010, WTRB returned 1.9% compared to 1.8% for its benchmark, while for Q2 WTRB returned 2.9% compared to 3.5% for the Barclay’s index. WTRB had a yield of 2.8% at June 2010 calculated according to SEC guidelines. Dividends paid by this Fund may be more or less than implied by this yield.
Sector allocation played a major role in the TRB Fund’s first half performance. In the first quarter of 2010, as spreads tightened, WTRB benefitted from being significantly overweight in corporate bonds and slightly overweight in commercial mortgages and asset-backed securities. In the second quarter of 2010, being overweight in these sectors (especially corporate bonds, which accounted for 42% of WTRB’s assets at mid year compared to 22% for the Aggregate) contributed to the underperformance of the Fund. In Q2, all three of these sectors underperformed Treasury bonds, where the Fund is relatively underweight. The Fund was also underweight in agencies and mortgage-backed securities, which were lagging sectors.
WTRB’s duration position was shorter than the Barclays Aggregate throughout the first half of 2010. This had a negative effect on the Fund’s relative performance, more so in the second quarter, when interest rates fell sharply, than in the first, when rates were relatively steady. The Fund was about 0.1 years shorter than the index at mid year and was also positioned relatively neutral to its Aggregate benchmark along the yield curve. This positioning reflects our view that given the current low level of interest rates, the next significant move in rates is likely to be higher. However, with economic growth likely to remain modest and inflation posing no near-term threat, it may be some time before anticipation of Fed tightening triggers that upward move.
7
The U.S. Securities Markets
8
Fund Expenses
Example:
As a shareholder of a fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs including management fees; distribution or service fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2010 — June 30, 2010).
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 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.
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EQUITY FUNDS
Wright Selected Blue Chip Equities Fund
| | | | | | | | | |
| | | Beginning
Account
Value
(1/1/10) | | Ending Account
Value
(6/30/10) | | Expenses
Paid During
Period* (1/1/10-
6/30/10) |
| Actual Fund Shares | | $ | 1,000.00 | | $ | 983.05 | | $ | 6.88 |
| Hypothetical (5% return per year before expenses) |
| Fund Shares | | $ | 1,000.00 | | $ | 1,017.85 | | $ | 7.00 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.40% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2009. |
Wright Major Blue Chip Equities Fund
| | | | | | | | | |
| | | Beginning
Account
Value
(1/1/10) | | Ending Account
Value
(6/30/10) | | Expenses
Paid During
Period* (1/1/10-
6/30/10) |
| Actual Fund Shares | | $ | 1,000.00 | | $ | 920.96 | | $ | 6.72 |
| Hypothetical (5% return per year before expenses) |
| Fund Shares | | $ | 1,000.00 | | $ | 1,017.80 | | $ | 7.05 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.41% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2009. |
Wright International Blue Chip Equities Fund
| | | | | | | | | |
| | | Beginning
Account
Value
(1/1/10) | | Ending Account
Value
(6/30/10) | | Expenses
Paid During
Period* (1/1/10-
6/30/10) |
| Actual Fund Shares | | $ | 1,000.00 | | $ | 845.02 | | $ | 7.50 |
| Hypothetical (5% return per year before expenses) |
| Fund Shares | | $ | 1,000.00 | | $ | 1,016.66 | | $ | 8.20 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.64% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2009. |
FIXED INCOME FUNDS
Wright Total Return Bond Fund
| | | | | | | | | |
| | | Beginning
Account
Value
(1/1/10) | | Ending Account
Value
(6/30/10) | | Expenses
Paid During
Period* (1/1/10-
6/30/10) |
| Actual Fund Shares | | $ | 1,000.00 | | $ | 1,047.97 | | $ | 3.55 |
| Hypothetical (5% return per year before expenses) |
| Fund Shares | | $ | 1,000.00 | | $ | 1,021.32 | | $ | 3.51 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.70% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2009. |
Wright Current Income Fund
| | | | | | | | | |
| | | Beginning
Account
Value
(1/1/10) | | Ending Account
Value
(6/30/10) | | Expenses
Paid During
Period* (1/1/10-
6/30/10) |
| Actual Fund Shares | | $ | 1,000.00 | | $ | 1,045.75 | | $ | 4.57 |
| Hypothetical (5% return per year before expenses) |
| Fund Shares | | $ | 1,000.00 | | $ | 1,020.33 | | $ | 4.51 |
| * | Expenses are equal to the Fund’s annualized expense ratio of 0.90% multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on December 31, 2009. |
10
Wright Selected Blue Chip Equities Fund (WSBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited)
| | | | | |
| | | Shares | | Value |
| | | | | | |
| EQUITY INTERESTS — 97.1% |
|
| AEROSPACE & DEFENSE — 0.7% |
| BE Aerospace, Inc.* | | 4,750 | | $ | 120,792 |
| | | | |
|
|
|
| AUTOMOBILES & COMPONENTS — 1.9% |
| Advance Auto Parts, Inc. | | 4,420 | | $ | 221,796 |
| Oshkosh Corp.* | | 3,310 | | | 103,140 |
| | | | |
|
|
| | | | | $ | 324,936 |
| | | | |
|
|
|
| BANKS — 2.8% |
| Commerce Bancshares, Inc. | | 4,720 | | $ | 169,873 |
| Fulton Financial Corp. | | 7,135 | | | 68,853 |
| SVB Financial Group* | | 5,875 | | | 242,226 |
| | | | |
|
|
| | | | | $ | 480,952 |
| | | | |
|
|
|
| CAPITAL GOODS — 2.8% |
| SPX Corp. | | 4,310 | | $ | 227,611 |
| Thomas & Betts Corp.* | | 6,990 | | | 242,553 |
| | | | |
|
|
| | | | | $ | 470,164 |
| | | | |
|
|
|
| CHEMICALS — 1.8% |
| Albemarle Corp. | | 1,680 | | $ | 66,713 |
| Ashland, Inc. | | 1,680 | | | 77,986 |
| Cytec Industries, Inc. | | 2,125 | | | 84,979 |
| Olin Corp. | | 4,140 | | | 74,893 |
| | | | |
|
|
| | | | | $ | 304,571 |
| | | | |
|
|
|
| COMMERCIAL SERVICES & SUPPLIES — 2.7% |
| Global Payments, Inc. | | 4,250 | | $ | 155,295 |
| Manpower, Inc. | | 3,635 | | | 156,959 |
| Teleflex, Inc. | | 2,740 | | | 148,727 |
| | | | |
|
|
| | | | | $ | 460,981 |
| | | | |
|
|
|
| CONSUMER PRODUCTS — 0.7% |
| Mohawk Industries, Inc.* | | 2,690 | | $ | 123,094 |
| | | | |
|
|
|
| DIVERSIFIED FINANCIALS — 3.1% |
| Affiliated Managers Group, Inc.* | | 2,420 | | $ | 147,063 |
| Lender Processing Services, Inc. | | 2,210 | | | 69,195 |
| Raymond James Financial, Inc. | | 7,217 | | | 178,188 |
| SEI Investments Co. | | 6,210 | | | 126,436 |
| | | | |
|
|
| | | | | $ | 520,882 |
| | | | |
|
|
|
| EDUCATION — 0.4% |
| ITT Educational Services, Inc.* | | 805 | | $ | 66,831 |
| | | | |
|
|
|
| ELECTRONIC EQUIPMENT & INSTRUMENTS — 8.0% |
| Arrow Electronics, Inc.* | | 7,610 | | | 170,083 |
| Avnet, Inc.* | | 10,850 | | | 261,593 |
| Hubbell, Inc. — Class B | | 4,365 | | | 173,247 |
| Lincoln Electric Holdings, Inc. | | 2,405 | | | 122,631 |
| Pentair, Inc. | | 4,810 | | | 154,882 |
| Rovi Corp.* | | 2,685 | | | 101,788 |
| Synopsys, Inc.* | | 4,305 | | | 89,845 |
| Tech Data Corp.* | | 2,235 | | | 79,611 |
| Vishay Intertechnology, Inc.* | | 14,265 | | | 110,411 |
| | | | | |
| | | Shares | | Value |
| | | | | | |
| ELECTRONIC EQUIPMENT & INSTRUMENTS — continued |
| Woodward Governor Co. | | 3,775 | | $ | 96,376 |
| | | | |
|
|
| | | | | $ | 1,360,467 |
| | | | |
|
|
|
| ENERGY — 5.3% |
| Cimarex Energy Co. | | 3,690 | | $ | 264,130 |
| Energen Corp. | | 6,600 | | | 292,578 |
| FMC Technologies, Inc.* | | 2,180 | | | 114,799 |
| Helix Energy Solutions Group, Inc.* | | 7,170 | | | 77,221 |
| Oceaneering International, Inc.* | | 3,470 | | | 155,803 |
| | | | |
|
|
| | | | | $ | 904,531 |
| | | | |
|
|
|
| FOOD, BEVERAGE & TOBACCO — 0.8% |
| Ralcorp Holdings, Inc.* | | 2,515 | | $ | 137,822 |
| | | | |
|
|
|
| HEALTH CARE EQUIPMENT & SERVICES — 9.1% |
| Community Health Systems, Inc.* | | 2,795 | | $ | 94,499 |
| Health Management Associates, Inc. — Class A* | | 16,565 | | | 128,710 |
| Henry Schein, Inc.* | | 2,795 | | | 153,445 |
| Kinetic Concepts, Inc.* | | 4,585 | | | 167,398 |
| LifePoint Hospitals, Inc.* | | 5,875 | | | 184,475 |
| Lincare Holdings, Inc.* | | 17,370 | | | 564,699 |
| Owens & Minor, Inc. | | 3,020 | | | 85,708 |
| Service Corp. International | | 10,860 | | | 80,364 |
| STERIS Corp. | | 2,760 | | | 85,781 |
| | | | |
|
|
| | | | | $ | 1,545,079 |
| | | | |
|
|
|
| HOUSEHOLD & PERSONAL PRODUCTS — 1.7% |
| Church & Dwight Co., Inc. | | 2,405 | | $ | 150,818 |
| Tupperware Brands Corp. | | 3,355 | | | 133,697 |
| | | | |
|
|
| | | | | $ | 284,515 |
| | | | |
|
|
| | |
| INDUSTRIAL — 2.7% | | | | | |
| Joy Global, Inc. | | 3,915 | | $ | 196,102 |
| Timken Co. | | 5,815 | | | 151,132 |
| Valmont Industries, Inc. | | 1,510 | | | 109,717 |
| | | | |
|
|
| | | | | $ | 456,951 |
| | | | |
|
|
| | |
| INSURANCE — 8.0% | | | | | |
| American Financial Group, Inc. | | 5,055 | | $ | 138,103 |
| Everest Re Group, Ltd. | | 935 | | | 66,123 |
| HCC Insurance Holdings, Inc. | | 12,085 | | | 299,225 |
| Horace Mann Educators Corp. | | 8,070 | | | 123,471 |
| Protective Life Corp. | | 4,360 | | | 93,260 |
| Reinsurance Group of America, Inc. | | 2,405 | | | 109,933 |
| StanCorp Financial Group, Inc. | | 6,095 | | | 247,091 |
| W.R. Berkley Corp. | | 10,962 | | | 290,055 |
| | | | |
|
|
| | | | | $ | 1,367,261 |
| | | | |
|
|
| | |
| MACHINERY — 1.7% | | | | | |
| Bucyrus International, Inc. | | 1,640 | | $ | 77,818 |
| Regal-Beloit Corp. | | 1,600 | | | 89,248 |
| Wabtec Corp. | | 3,075 | | | 122,662 |
| | | | |
|
|
| | | | | $ | 289,728 |
| | | | |
|
|
See notes to financial statements
11
Wright Selected Blue Chip Equities Fund (WSBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | |
| | | Shares | | Value |
| | | | | | |
| MATERIALS — 6.1% | | | | | |
| Airgas, Inc. | | 1,665 | | $ | 103,563 |
| Crane Co. | | 2,965 | | | 89,573 |
| FMC Corp. | | 1,620 | | | 93,037 |
| Lubrizol Corp. | | 2,910 | | | 233,702 |
| Packaging Corp. of America | | 2,300 | | | 50,646 |
| Reliance Steel & Aluminum Co. | | 2,575 | | | 93,086 |
| Sonoco Products Co. | | 3,855 | | | 117,500 |
| Steel Dynamics, Inc. | | 5,470 | | | 72,149 |
| Temple-Inland, Inc. | | 9,005 | | | 186,133 |
| | | | |
|
|
| | | | | $ | 1,039,389 |
| | | | |
|
|
| | |
| MEDIA — 0.4% | | | | | |
| Harte-Hanks, Inc. | | 5,650 | | $ | 59,043 |
| | | | |
|
|
| | |
| OIL & GAS — 2.1% | | | | | |
| Newfield Exploration Co.* | | 3,970 | | $ | 193,974 |
| Southern Union Co. | | 3,500 | | | 76,510 |
| Unit Corp.* | | 2,180 | | | 88,486 |
| | | | |
|
|
| | | | | $ | 358,970 |
| | | | |
|
|
|
| PHARMACEUTICALS & BIOTECHNOLOGY — 2.9% |
| Endo Pharmaceuticals Holdings, Inc.* | | 9,900 | | $ | 216,018 |
| Medicis Pharmaceutical Corp. — Class A | | 5,370 | | | 117,496 |
| Perrigo Co. | | 2,760 | | | 163,033 |
| | | | |
|
|
| | | | | $ | 496,547 |
| | | | |
|
|
| | |
| REAL ESTATE — 5.8% | | | | | |
| Hospitality Properties Trust (REIT) | | 10,855 | | $ | 229,040 |
| Jones Lang LaSalle, Inc. | | 4,700 | | | 308,508 |
| NVR, Inc.* | | 390 | | | 255,462 |
| UDR, Inc. (REIT) | | 10,211 | | | 195,336 |
| | | | |
|
|
| | | | | $ | 988,346 |
| | | | |
|
|
| | |
| RETAILING — 11.3% | | | | | |
| Aeropostale, Inc.* | | 9,935 | | $ | 284,538 |
| American Eagle Outfitters, Inc. | | 10,185 | | | 119,674 |
| Dick’s Sporting Goods, Inc.* | | 6,600 | | | 164,274 |
| Dollar Tree, Inc.* | | 3,863 | | | 160,796 |
| Foot Locker, Inc. | | 7,165 | | | 90,422 |
| Fossil, Inc.* | | 3,690 | | | 128,043 |
| Guess?, Inc. | | 2,975 | | | 92,939 |
| Hanesbrands, Inc.* | | 5,030 | | | 121,022 |
| PetSmart, Inc. | | 2,295 | | | 69,240 |
| Phillips-Van Heusen Corp. | | 3,190 | | | 147,601 |
| Rent-A-Center, Inc.* | | 5,550 | | | 112,443 |
| Ross Stores, Inc. | | 6,375 | | | 339,724 |
| Warnaco Group, Inc. (The)* | | 2,480 | | | 89,627 |
| | | | |
|
|
| | | | | $ | 1,920,343 |
| | | | |
|
|
| | |
| SOFTWARE & SERVICES — 10.4% | | | | | |
| Acxiom Corp.* | | 17,950 | | $ | 263,685 |
| F5 Networks, Inc.* | | 3,915 | | | 268,452 |
| Factset Research Systems, Inc. | | 1,400 | | | 93,786 |
| Fair Isaac Corp. | | 3,695 | | | 80,514 |
| Ingram Micro, Inc.* | | 8,935 | | | 135,723 |
| McAfee, Inc.* | | 2,100 | | | 64,512 |
| | | | | | |
| | | Shares | | Value | |
| | | | | | | |
|
| SOFTWARE & SERVICES — continued | |
| Parametric Technology Corp.* | | 11,020 | | $ | 172,683 | |
| Sybase, Inc.* | | 9,340 | | | 603,924 | |
| ValueClick, Inc.* | | 8,165 | | | 87,284 | |
| | | | |
|
|
|
| | | | | $ | 1,770,563 | |
| | | | |
|
|
|
|
| TELECOMMUNICATION SERVICES — 1.1% | |
| NeuStar, Inc. — Class A* | | 5,090 | | $ | 104,956 | |
| Syniverse Holdings, Inc.* | | 3,685 | | | 75,358 | |
| | | | |
|
|
|
| | | | | $ | 180,314 | |
| | | | |
|
|
|
| | |
| UTILITIES — 2.8% | | | | | | |
| MDU Resources Group, Inc. | | 14,153 | | $ | 255,179 | |
| Oneok, Inc. | | 5,260 | | | 227,495 | |
| | | | |
|
|
|
| | | | | $ | 482,674 | |
| | | | |
|
|
|
| TOTAL EQUITY INTERESTS — 97.1% | | | | | | |
| (identified cost, $15,006,831) | | | | $ | 16,515,746 | |
|
| SHORT-TERM INVESTMENTS — 2.9% | |
| Fidelity Government Money Market Fund, 0.05% | | 496,208 | | $ | 496,208 | |
| | | | |
|
|
|
| TOTAL SHORT-TERM INVESTMENTS — 2.9% | | | | |
| (identified cost, $496,208) | | | | $ | 496,208 | |
| | | | |
|
|
|
| | |
| TOTAL INVESTMENTS — 100.0% (identified cost, $15,503,039) | | | | $ | 17,011,954 | |
| |
| OTHER ASSETS, LESS LIABILITIES — 0.0% | | | (669 | ) |
| | | | |
|
|
|
| | |
| NET ASSETS — 100.0% | | | | $ | 17,011,285 | |
| | | | |
|
|
|
REIT — Real Estate Investment Trust
| * | Non-income producing security. |
| | |
| Portfolio Composition by Sector |
| % of net assets at 06/30/10 |
| Financials | | 18.4% |
| Information Technology | | 17.6% |
| Consumer Discretionary | | 17.3% |
| Industrials | | 13.5% |
| Health Care | | 12.8% |
| Other | | 20.4% |
See notes to financial statements
12
Wright Selected Blue Chip Equities Fund (WSBC)
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2010 (Unaudited)
| | | | |
| ASSETS: | | | | |
| | | | | |
Investments, at value
(identified cost $15,503,039) (Note 1A) | | $ | 17,011,954 | |
Receivable for fund shares sold | | | 22,378 | |
Dividends receivable | | | 13,771 | |
Prepaid expenses and other assets | | | 26,644 | |
| | |
|
|
|
Total assets | | $ | 17,074,747 | |
| | |
|
|
|
| |
| LIABILITIES: | | | | |
Payable for fund shares reacquired | | $ | 50,300 | |
Accrued expenses and other liabilities | | | 13,162 | |
| | |
|
|
|
Total liabilities | | $ | 63,462 | |
| | |
|
|
|
| NET ASSETS | | $ | 17,011,285 | |
| | |
|
|
|
| |
| NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 17,422,668 | |
Accumulated net realized loss on investments | | | (1,881,566 | ) |
Distributions in excess of net investment income | | | (38,732 | ) |
Unrealized appreciation on investments | | | 1,508,915 | |
| | |
|
|
|
Net assets applicable to outstanding shares | | $ | 17,011,285 | |
| | |
|
|
|
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING | | | 2,061,245 | |
| | |
|
|
|
| |
| NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST | | $ | 8.25 | |
| | |
|
|
|
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
| | | | |
| INVESTMENT INCOME (Note 1C) | | | | |
| | | | | |
Dividend income | | $ | 88,402 | |
Interest income | | | 3 | |
| | |
|
|
|
Total investment income | | $ | 88,405 | |
| | |
|
|
|
| |
| Expenses – | | | | |
Investment adviser fee (Note 3) | | $ | 54,656 | |
Administrator fee (Note 3) | | | 10,931 | |
Compensation of Trustees who are not employees of the investment adviser or administrator | | | 7,649 | |
Custodian fee (Note 1F) | | | 771 | |
Accountant fees | | | 18,814 | |
Distribution expenses (Note 4) | | | 22,773 | |
Transfer and dividend disbursing agent fees | | | 16,474 | |
Printing | | | 110 | |
Shareholder communications | | | 1,441 | |
Audit services | | | 16,626 | |
Legal services | | | 3,350 | |
Registration costs | | | 5,155 | |
Miscellaneous | | | 4,849 | |
| | |
|
|
|
Total expenses | | $ | 163,599 | |
| | |
|
|
|
| |
| Deduct – | | | | |
Waiver and/or reimbursement by the principal underwriter and/or investment adviser
(Note 3 and 4) | | $ | (36,067 | ) |
| | |
|
|
|
Total deductions | | $ | (36,067 | ) |
| | |
|
|
|
Net expenses | | $ | 127,532 | |
| | |
|
|
|
Net investment loss | | $ | (39,127 | ) |
| | |
|
|
|
|
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |
Net realized gain on investment transactions | | $ | 351,978 | |
Net change in unrealized appreciation (depreciation) on investments | | | (623,775 | ) |
| | |
|
|
|
Net realized and unrealized loss on investments | | $ | (271,797 | ) |
| | |
|
|
|
Net decrease in net assets from operations | | $ | (310,924 | ) |
| | |
|
|
|
See notes to financial statements
13
Wright Selected Blue Chip Equities Fund (WSBC)
| | | | | | | | |
| STATEMENTS OF CHANGES IN NET ASSETS | | Six Months Ended
June 30, 2010
(Unaudited) | | | Year Ended
December 31, 2009 | |
| | |
| INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | |
From operations – | | | | | | | | |
Net investment income (loss) | | $ | (39,127 | ) | | $ | 21,795 | |
Net realized gain (loss) on investment transactions | | | 351,978 | | | | (818,298 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | (623,775 | ) | | | 5,533,574 | |
| | |
|
|
| |
|
|
|
Net increase (decrease) in net assets from operations | | $ | (310,924 | ) | | $ | 4,737,071 | |
| | |
|
|
| |
|
|
|
Distributions to shareholders (Note 2) | | | | | | | | |
From net investment income | | $ | (16,757 | ) | | $ | — | |
| | |
|
|
| |
|
|
|
Total distributions | | $ | (16,757 | ) | | $ | — | |
| | |
|
|
| |
|
|
|
| Net increase (decrease) in net assets from fund share transactions (Note 6) | | $ | 575,979 | | | $ | (1,337,892 | ) |
| | |
|
|
| |
|
|
|
| Net increase in net assets | | $ | 248,298 | | | $ | 3,399,179 | |
| | |
| NET ASSETS: | | | | | | | | |
At beginning of period | | | 16,762,987 | | | | 13,363,808 | |
| | |
|
|
| |
|
|
|
At end of period | | $ | 17,011,285 | | | $ | 16,762,987 | |
| | |
|
|
| |
|
|
|
| | |
| UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD | | $ | (38,732 | ) | | $ | 17,152 | |
| | |
|
|
| |
|
|
|
See notes to financial statements
14
Wright Selected Blue Chip Equities Fund (WSBC)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months
Ended
June 30, 2010
(Unaudited) | | | Year Ended December 31,
| |
| FINANCIAL HIGHLIGHTS | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| | | | | | |
| Net asset value, beginning of period | | $ | 8.402 | | | $ | 6.060 | | | $ | 11.100 | | | $ | 12.270 | | | $ | 13.030 | | | $ | 13.226 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss)(1) (2) | | $ | (0.019 | ) | | $ | 0.011 | | | $ | (0.013 | ) | | $ | (0.013 | ) | | $ | (0.034 | ) | | $ | (0.053 | ) |
Net realized and unrealized gain (loss) | | | (0.122 | ) | | | 2.331 | | | | (4.121 | ) | | | 1.340 | | | | 0.529 | | | | 1.476 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total income (loss) from investment operations | | $ | (0.141 | ) | | $ | 2.342 | | | $ | (4.134 | ) | | $ | 1.327 | | | $ | 0.495 | | | $ | 1.423 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | $ | (0.008 | ) | | $ | — | | | $ | — | | | $ | (0.016 | ) | | $ | — | | | $ | — | |
From net realized gains | | | — | | | | — | | | | (0.906 | ) | | | (2.481 | ) | | | (1.255 | ) | | | (1.619 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total distributions | | $ | (0.008 | ) | | $ | — | | | $ | (0.906 | ) | | $ | (2.497 | ) | | $ | (1.255 | ) | | $ | (1.619 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net asset value, end of period | | $ | 8.253 | | | $ | 8.402 | | | $ | 6.060 | | | $ | 11.100 | | | $ | 12.270 | | | $ | 13.030 | |
| | |
|
|
| |
|
|
| |
|
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| | | | | | |
| Total Return(3) | | | (1.69% | )(4) | | | 38.61% | | | | (39.81% | ) | | | 11.59% | | | | 3.77% | | | | 11.09% | |
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| Ratios/Supplemental Data(1): | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 17,011 | | | $ | 16,763 | | | $ | 13,364 | | | $ | 23,923 | | | $ | 38,352 | | | $ | 47,652 | |
Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses | | | 1.40% | (5) | | | 1.36% | | | | 1.26% | | | | 1.26% | | | | 1.26% | | | | 1.27% | |
Net expenses after custodian fee reduction | | | N/A | (5) | | | 1.36% | | | | 1.25% | | | | 1.25% | | | | 1.25% | | | | 1.25% | |
Net investment income (loss) | | | (0.43% | )(5) | | | 0.15% | | | | (0.15% | ) | | | (0.10% | ) | | | (0.27% | ) | | | (0.18% | ) |
| Portfolio turnover rate | | | 30% | (4) | | | 41% | | | | 72% | | | | 67% | | | | 66% | | | | 110% | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) For the six months ended June 30, 2010, and for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: | |
| | | 2010 | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| Net investment loss per share(2) | | $ | (0.036 | ) | | $ | (0.045 | ) | | $ | (0.068 | ) | | $ | (0.064 | ) | | $ | (0.058 | ) | | $ | (0.111 | ) |
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| Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.80% | (5) | | | 2.15% | | | | 1.90% | | | | 1.66% | | | | 1.46% | | | | 1.45% | |
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Expenses after custodian fee reduction | | | N/A | (5) | | | 2.15% | | | | 1.89% | | | | 1.66% | | | | 1.44% | | | | 1.43% | |
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Net investment loss | | | (0.83% | )(5) | | | (0.64% | ) | | | (0.79% | ) | | | (0.51% | ) | | | (0.46% | ) | | | (0.38% | ) |
| | |
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| | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | Computed using average shares outstanding. |
| (3) | Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. |
See notes to financial statements
15
Wright Major Blue Chip Equities Fund (WMBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited)
| | | | | |
| | | Shares | | Value |
| | | | | | |
| EQUITY INTERESTS — 96.6% |
|
| AEROSPACE — 4.3% |
| General Dynamics Corp. | | 4,305 | | $ | 252,101 |
| Honeywell International, Inc. | | 4,915 | | | 191,832 |
| Northrop Grumman Corp. | | 3,615 | | | 196,801 |
| Raytheon Co. | | 3,025 | | | 146,380 |
| United Technologies Corp. | | 2,060 | | | 133,715 |
| | | | |
|
|
| | | | | $ | 920,829 |
| | | | |
|
|
|
| AUTOMOBILES & COMPONENTS — 0.9% |
| Ford Motor Co.* | | 12,215 | | $ | 123,127 |
| Johnson Controls, Inc. | | 2,315 | | | 62,204 |
| | | | |
|
|
| | | | | $ | 185,331 |
| | | | |
|
|
| BANKS — 4.6% |
| Bank of America Corp. | | 19,495 | | $ | 280,143 |
| Bank of New York Mellon Corp. (The) | | 3,530 | | | 87,156 |
| US Bancorp | | 8,835 | | | 197,462 |
| Wells Fargo & Co. | | 15,865 | | | 406,144 |
| | | | |
|
|
| | | | | $ | 970,905 |
| | | | |
|
|
| CAPITAL GOODS — 4.5% |
| 3M Co. | | 2,345 | | $ | 185,232 |
| General Electric Co. | | 31,825 | | | 458,917 |
| Lockheed Martin Corp. | | 4,270 | | | 318,115 |
| | | | |
|
|
| | | | | $ | 962,264 |
| | | | |
|
|
| COMMUNICATIONS EQUIPMENT — 2.2% |
| Cisco Systems, Inc.* | | 3,530 | | $ | 75,224 |
| Harris Corp. | | 5,990 | | | 249,484 |
| L-3 Communications Holdings, Inc. | | 1,950 | | | 138,138 |
| | | | |
|
|
| | | | | $ | 462,846 |
| | | | |
|
|
| COMPUTERS & PERIPHERALS — 12.5% |
| Apple, Inc.* | | 4,035 | | $ | 1,014,924 |
| Hewlett-Packard Co. | | 17,045 | | | 737,708 |
| International Business Machines Corp. | | 7,300 | | | 901,404 |
| | | | |
|
|
| | | | | $ | 2,654,036 |
| | | | |
|
|
|
| CONSUMER DURABLES & APPAREL — 0.8% |
| Coach, Inc. | | 4,820 | | $ | 176,171 |
| | | | |
|
|
|
| DIVERSIFIED FINANCIALS — 8.5% |
| American Express Co. | | 6,685 | | $ | 265,394 |
| Fiserv, Inc.* | | 1,805 | | | 82,416 |
| Goldman Sachs Group, Inc. (The) | | 2,805 | | | 368,212 |
| JPMorgan Chase & Co. | | 19,145 | | | 700,898 |
| Mastercard, Inc. — Class A | | 735 | | | 146,655 |
| PNC Financial Services Group, Inc. | | 4,505 | | | 254,533 |
| | | | |
|
|
| | | | | $ | 1,818,108 |
| | | | |
|
|
|
| ENERGY — 7.4% |
| Apache Corp. | | 1,705 | | $ | 143,544 |
| Cameron International Corp.* | | 4,920 | | | 159,998 |
| Chevron Corp. | | 2,815 | | | 191,026 |
| Ensco PLC, ADR | | 5,295 | | | 207,988 |
| FMC Technologies, Inc.* | | 8,020 | | | 422,333 |
| National Oilwell Varco, Inc. | | 9,530 | | | 315,157 |
| | | | | |
| | | Shares | | Value |
| | | | | | |
| ENERGY — continued |
| Peabody Energy Corp. | | 3,580 | | $ | 140,085 |
| | | | |
|
|
| | | | | $ | 1,580,131 |
| | | | |
|
|
|
| FOOD, BEVERAGE & TOBACCO — 2.5% |
| Altria Group, Inc. | | 11,935 | | $ | 239,177 |
| Archer-Daniels-Midland Co. | | 4,905 | | | 126,647 |
| Tyson Foods, Inc. — Class A | | 6,320 | | | 103,585 |
| Whole Foods Market, Inc.* | | 1,885 | | | 67,898 |
| | | | |
|
|
| | | | | $ | 537,307 |
| | | | |
|
|
|
| HEALTH CARE EQUIPMENT & SERVICES — 4.4% |
| Aetna, Inc. | | 5,505 | | $ | 145,222 |
| Express Scripts, Inc.* | | 5,960 | | | 280,239 |
| Medtronic, Inc. | | 6,935 | | | 251,532 |
| UnitedHealth Group, Inc. | | 3,890 | | | 110,476 |
| WellPoint, Inc.* | | 2,820 | | | 137,983 |
| | | | |
|
|
| | | | | $ | 925,452 |
| | | | |
|
|
|
| HOTELS, RESTAURANTS & LEISURE — 0.4% |
| Wyndham Worldwide Corp. | | 4,660 | | $ | 93,852 |
| | | | |
|
|
|
| HOUSEHOLD DURABLES — 2.3% |
| Procter & Gamble Co. (The) | | 8,185 | | $ | 490,936 |
| | | | |
|
|
|
| INSURANCE — 7.6% |
| Aflac, Inc. | | 6,045 | | $ | 257,940 |
| Chubb Corp. | | 8,590 | | | 429,586 |
| CIGNA Corp. | | 2,260 | | | 70,196 |
| Genworth Financial, Inc.* | | 7,995 | | | 104,495 |
| MetLife, Inc. | | 2,615 | | | 98,742 |
| Prudential Financial, Inc. | | 2,110 | | | 113,223 |
| Torchmark Corp. | | 1,725 | | | 85,405 |
| Travelers Cos, Inc. (The) | | 5,620 | | | 276,785 |
| Unum Group | | 8,410 | | | 182,497 |
| | | | |
|
|
| | | | | $ | 1,618,869 |
| | | | |
|
|
|
| MATERIALS — 4.1% |
| Ball Corp. | | 1,775 | | $ | 93,773 |
| EI du Pont de Nemours & Co. | | 5,480 | | | 189,553 |
| Freeport-McMoRan Copper & Gold, Inc. | | 4,250 | | | 251,302 |
| Pactiv Corp.* | | 7,620 | | | 212,217 |
| PPG Industries, Inc. | | 895 | | | 54,067 |
| Precision Castparts Corp. | | 785 | | | 80,792 |
| | | | |
|
|
| | | | | $ | 881,704 |
| | | | |
|
|
|
| MEDIA — 3.2% |
| Comcast Corp. — Class A | | 15,925 | | $ | 276,617 |
| DIRECTV — Class A* | | 5,245 | | | 177,910 |
| Viacom, Inc. — Class B | | 7,205 | | | 226,021 |
| | | | |
|
|
| | | | | $ | 680,548 |
| | | | |
|
|
|
| PHARMACEUTICALS & BIOTECHNOLOGY — 7.5% |
| Amgen, Inc.* | | 6,485 | | $ | 341,111 |
| Forest Laboratories, Inc.* | | 2,935 | | | 80,507 |
| Johnson & Johnson | | 9,990 | | | 590,009 |
| McKesson Corp. | | 1,435 | | | 96,375 |
See notes to financial statements
16
Wright Major Blue Chip Equities Fund (WMBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | |
| | | Shares | | Value |
| | | | | | |
| PHARMACEUTICALS & BIOTECHNOLOGY — continued |
| Pfizer, Inc. | | 33,490 | | $ | 477,567 |
| | | | |
|
|
| | | | | $ | 1,585,569 |
| | | | |
|
|
|
| RETAILING — 9.0% |
| Big Lots, Inc.* | | 5,975 | | $ | 191,738 |
| CVS Caremark Corp. | | 12,000 | | | 351,840 |
| Darden Restaurants, Inc. | | 1,705 | | | 66,239 |
| Estee Lauder Cos., Inc. (The) | | 3,650 | | | 203,415 |
| Family Dollar Stores, Inc. | | 3,880 | | | 146,237 |
| Gap, Inc. (The) | | 3,460 | | | 67,332 |
| Mattel, Inc. | | 3,845 | | | 81,360 |
| Ross Stores, Inc. | | 2,290 | | | 122,034 |
| Sherwin-Williams Co. (The) | | 1,675 | | | 115,893 |
| Starbucks Corp. | | 9,680 | | | 235,224 |
| Urban Outfitters, Inc.* | | 4,145 | | | 142,547 |
| Wal-Mart Stores, Inc. | | 4,100 | | | 197,087 |
| | | | |
|
|
| | | | | $ | 1,920,946 |
| | | | |
|
|
|
| SOFTWARE & SERVICES — 6.4% |
| CA, Inc. | | 7,895 | | $ | 145,268 |
| EMC Corp.* | | 4,710 | | | 86,193 |
| Google, Inc. — Class A* | | 315 | | | 140,159 |
| Intel Corp. | | 6,160 | | | 119,812 |
| Microsoft Corp. | | 10,095 | | | 232,286 |
| Oracle Corp. | | 29,420 | | | 631,353 |
| | | | |
|
|
| | | | | $ | 1,355,071 |
| | | | |
|
|
|
| TELECOMMUNICATION SERVICES — 2.1% |
| AT&T, Inc. | | 8,085 | | $ | 195,576 |
| CenturyLink, Inc. | | 2,280 | | | 75,947 |
| Verizon Communications, Inc. | | 5,920 | | | 165,878 |
| | | | |
|
|
| | | | | $ | 437,401 |
| | | | |
|
|
|
| UTILITIES — 1.4% |
| Constellation Energy Group, Inc. | | 9,500 | | $ | 306,375 |
| | | | |
|
|
| TOTAL EQUITY INTERESTS — 96.6% | | | |
| (identified cost, $22,784,824) | | | | $ | 20,564,651 |
| | | | | | |
| | | Shares | | Value | |
| | | | | | | |
| INVESTMENT COMPANIES — 4.9% | |
| iShares Barclays 1-3 Year Treasury Bond Fund | | 12,355 | | $ | 1,039,303 | |
| | | | |
|
|
|
| |
| TOTAL INVESTMENT COMPANIES — 4.9% | | | | |
| (identified cost, $1,035,351) | | | | $ | 1,039,303 | |
| | | | |
|
|
|
| |
| TOTAL INVESTMENTS — 101.5% | | | | |
| (identified cost, $23,820,175) | | | | $ | 21,603,954 | |
| |
| OTHER ASSETS, LESS LIABILITIES — (1.5)% | | | (326,929 | ) |
| | | | |
|
|
|
| |
| NET ASSETS — 100.0% | | $ | 21,277,025 | |
| | | | |
|
|
|
ADR — American Depository Receipt
PLC — Public Limited Company
| * | Non-income producing security. |
| | |
| Portfolio Composition by Sector |
| % of portfolio at 06/30/10 |
| Information Technology | | 21.1% |
| Financials | | 19.0% |
| Health Care | | 11.9% |
| Consumer Discretionary | | 10.1% |
| Industrials | | 9.7% |
| Other | | 28.2% |
See notes to financial statements
17
Wright Major Blue Chip Equities Fund (WMBC)
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| ASSETS: | | | | |
Investments, at value
(identified cost $23,820,175) (Note 1A) | | $ | 21,603,954 | |
Receivable for fund shares sold | | | 15,871 | |
Dividends receivable | | | 20,861 | |
Prepaid expenses and other assets | | | 30,477 | |
| | |
|
|
|
Total assets | | $ | 21,671,163 | |
| | |
|
|
|
| |
| LIABILITIES: | | | | |
Demand note payable (Note 8) | | $ | 361,739 | |
Payable for fund shares reacquired | | | 21,500 | |
Accrued expenses and other liabilities | | | 10,899 | |
| | |
|
|
|
Total liabilities | | $ | 394,138 | |
| | |
|
|
|
| NET ASSETS | | $ | 21,277,025 | |
| | |
|
|
|
| |
| NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 43,649,424 | |
Accumulated net realized loss on investments | | | (20,214,887 | ) |
Undistributed net investment income | | | 58,709 | |
Unrealized depreciation on investments | | | (2,216,221 | ) |
| | |
|
|
|
Net assets applicable to outstanding shares | | $ | 21,277,025 | |
| | |
|
|
|
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING | | | 2,126,623 | |
| | |
|
|
|
| |
| NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST | | $ | 10.01 | |
| | |
|
|
|
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| INVESTMENT INCOME (Note 1C) | | | | |
Dividend income | | $ | 238,696 | |
Interest income | | | 6 | |
| | |
|
|
|
Total investment income | | $ | 238,702 | |
| | |
|
|
|
| |
| Expenses – | | | | |
Investment adviser fee (Note 3) | | $ | 76,511 | |
Administrator fee (Note 3) | | | 15,302 | |
Compensation of Trustees who are not employees of the investment adviser or administrator | | | 7,263 | |
Custodian fee (Note 1F) | | | 3,045 | |
Accountant fees | | | 18,165 | |
Distribution expenses (Note 4) | | | 31,879 | |
Transfer and dividend disbursing agent fees | | | 14,956 | |
Printing | | | 142 | |
Shareholder communications | | | 2,156 | |
Audit services | | | 16,439 | |
Legal services | | | 4,845 | |
Registration costs | | | 5,416 | |
Miscellaneous | | | 6,208 | |
| | |
|
|
|
Total expenses | | $ | 202,327 | |
| | |
|
|
|
| |
| Deduct – | | | | |
Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) | | $ | (22,430 | ) |
| | |
|
|
|
Total deductions | | $ | (22,430 | ) |
| | |
|
|
|
Net expenses | | $ | 179,897 | |
| | |
|
|
|
Net investment income | | $ | 58,805 | |
| | |
|
|
|
|
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |
Net realized gain on investment transactions | | $ | 580,347 | |
Net change in unrealized appreciation (depreciation) on investments | | | (2,445,635 | ) |
| | |
|
|
|
Net realized and unrealized loss on investments | | $ | (1,865,288 | ) |
| | |
|
|
|
Net decrease in net assets from operations | | $ | (1,806,483 | ) |
| | |
|
|
|
See notes to financial statements
18
Wright Major Blue Chip Equities Fund (WMBC)
| | | | | | | | |
| STATEMENTS OF CHANGES IN NET ASSETS | | Six Months Ended
June 30, 2010
(Unaudited) | | | Year Ended
December 31, 2009 | |
| | |
| INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | |
From operations – | | | | | | | | |
Net investment income | | $ | 58,805 | | | $ | 349,233 | |
Net realized gain (loss) on investment transactions | | | 580,347 | | | | (3,186,606 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | (2,445,635 | ) | | | 8,788,094 | |
| | |
|
|
| |
|
|
|
Net increase (decrease) in net assets from operations | | $ | (1,806,483 | ) | | $ | 5,950,721 | |
| | |
|
|
| |
|
|
|
Distributions to shareholders (Note 2) | | | | | | | | |
From net investment income | | $ | (2,147 | ) | | $ | (338,949 | ) |
| | |
|
|
| |
|
|
|
Total distributions | | $ | (2,147 | ) | | $ | (338,949 | ) |
| | |
|
|
| |
|
|
|
| Net decrease in net assets from fund share transactions (Note 6) | | $ | (4,251,700 | ) | | $ | (10,758,001 | ) |
| | |
|
|
| |
|
|
|
| Net decrease in net assets | | $ | (6,060,330 | ) | | $ | (5,146,229 | ) |
| | |
| NET ASSETS: | | | | | | | | |
At beginning of period | | | 27,337,355 | | | | 32,483,584 | |
| | |
|
|
| |
|
|
|
At end of period | | $ | 21,277,025 | | | $ | 27,337,355 | |
| | |
|
|
| |
|
|
|
| | |
| UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD | | $ | 58,709 | | | $ | 2,051 | |
| | |
|
|
| |
|
|
|
See notes to financial statements
19
Wright Major Blue Chip Equities Fund (WMBC)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months
Ended
June 30,
2010
(Unaudited)
| | | Year Ended December 31,
| |
| FINANCIAL HIGHLIGHTS | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| | | | | | |
| Net asset value, beginning of period | | $ | 10.868 | | | $ | 9.340 | | | $ | 14.520 | | | $ | 13.790 | | | $ | 12.420 | | | $ | 11.780 | |
| | |
|
|
| |
|
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| |
|
|
| |
|
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| |
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| |
|
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|
| | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(1) (2) | | $ | 0.025 | | | $ | 0.099 | | | $ | 0.104 | | | $ | 0.091 | | | $ | 0.062 | | | $ | 0.077 | |
Net realized and unrealized gain (loss) | | | (0.887 | ) | | | 1.562 | | | | (5.169 | ) | | | 0.728 | | | | 1.374 | | | | 0.651 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total income (loss) from investment operations | | $ | (0.862 | ) | | $ | 1.661 | | | $ | (5.065 | ) | | $ | 0.819 | | | $ | 1.436 | | | $ | 0.728 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | $ | (0.001 | ) | | $ | (0.133 | ) | | $ | (0.115 | ) | | $ | (0.089 | ) | | $ | (0.066 | ) | | $ | (0.088 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total distributions | | $ | (0.001 | ) | | $ | (0.133 | ) | | $ | (0.115 | ) | | $ | (0.089 | ) | | $ | (0.066 | ) | | $ | (0.088 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net asset value, end of period | | $ | 10.005 | | | $ | 10.868 | | | $ | 9.340 | | | $ | 14.520 | | | $ | 13.790 | | | $ | 12.420 | |
| | |
|
|
| |
|
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| |
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|
| |
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| |
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|
| | | | | | |
| Total Return(3) | | | (7.90% | )(4) | | | 17.83% | | | | (34.85% | ) | | | 5.96% | | | | 11.57% | | | | 6.20% | |
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| Ratios/Supplemental Data(1): | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 21,277 | | | $ | 27,337 | | | $ | 32,484 | | | $ | 57,750 | | | $ | 63,276 | | | $ | 66,742 | |
Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses | | | 1.41% | (5) | | | 1.36% | | | | 1.26% | | | | 1.26% | | | | 1.26% | | | | 1.26% | |
Net expenses after custodian fee reduction | | | N/A | (5) | | | 1.36% | | | | 1.25% | | | | 1.25% | | | | 1.25% | | | | 1.25% | |
Net investment income | | | 0.46% | (5) | | | 1.06% | | | | 0.86% | | | | 0.63% | | | | 0.48% | | | | 0.66% | |
| Portfolio turnover rate | | | 36% | (4) | | | 69% | | | | 58% | | | | 55% | | | | 97% | | | | 82% | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) For the six months ended June 30, 2010 and for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: | |
| | | 2010 | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| Net investment income per share(2) | | $ | 0.016 | | | $ | 0.081 | | | $ | 0.091 | | | $ | 0.088 | | | $ | 0.062 | | | $ | 0.077 | |
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| Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.59% | (5) | | | 1.55% | | | | 1.37% | | | | 1.28% | | | | 1.28% | | | | 1.26% | |
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|
Expenses after custodian fee reduction | | | N/A | (5) | | | 1.55% | | | | 1.36% | | | | 1.27% | | | | 1.27% | | | | 1.25% | |
| | |
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| |
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Net investment income | | | 0.29% | (5) | | | 0.86% | | | | 0.75% | | | | 0.61% | | | | 0.46% | | | | 0.66% | |
| | |
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| | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | Computed using average shares outstanding. |
| (3) | Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. |
See notes to financial statements
20
Wright International Blue Chip Equities Fund (WIBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited)
| | | | | |
| | | Shares | | Value |
| | | | | | |
| EQUITY INTERESTS — 97.2% | | | | | |
| | |
| AUSTRALIA — 3.9% | | | | | |
| BHP Billiton, Ltd. | | 22,069 | | $ | 701,818 |
| Commonwealth Bank of Australia | | 11,364 | | | 466,876 |
| QBE Insurance Group, Ltd. | | 25,724 | | | 395,446 |
| Toll Holdings, Ltd. | | 31,313 | | | 144,938 |
| Westpac Banking Corp. | | 13,139 | | | 235,607 |
| | | | |
|
|
| | | | | $ | 1,944,685 |
| | | | |
|
|
| | |
| BELGIUM — 1.4% | | | | | |
| Delhaize Group SA | | 9,349 | | $ | 684,004 |
| | | | |
|
|
| | |
| CANADA — 9.8% | | | | | |
| Agrium, Inc. | | 6,376 | | $ | 312,005 |
| Bank of Nova Scotia | | 9,857 | | | 454,981 |
| Canadian National Railway Co. | | 9,122 | | | 523,722 |
| Cenovus Energy, Inc. | | 12,272 | | | 316,429 |
| CGI Group, Inc. — Class A* | | 48,180 | | | 718,177 |
| EnCana Corp. | | 12,258 | | | 371,898 |
| Methanex Corp. | | 10,814 | | | 213,196 |
| Power Financial Corp. | | 12,454 | | | 319,715 |
| Sino-Forest Corp.* | | 18,442 | | | 262,577 |
| Teck Resources, Ltd. — Class B | | 9,637 | | | 285,487 |
| Toronto-Dominion Bank (The) | | 15,936 | | | 1,034,457 |
| | | | |
|
|
| | | | | $ | 4,812,644 |
| | | | |
|
|
| | |
| CHINA — 1.6% | | | | | |
| Baidu, Inc., ADR* | | 3,322 | | $ | 226,162 |
| Foxconn International Holdings, Ltd.* | | 246,000 | | | 161,427 |
| Sinopharm Group Co. — Class H | | 67,600 | | | 249,578 |
| Xinao Gas Holdings, Ltd. | | 62,000 | | | 138,854 |
| | | | |
|
|
| | | | | $ | 776,021 |
| | | | |
|
|
| | |
| DENMARK — 1.3% | | | | | |
| Carlsberg A/S — Class B | | 8,376 | | $ | 643,073 |
| | | | |
|
|
| | |
| FRANCE — 7.0% | | | | | |
| BNP Paribas | | 10,563 | | $ | 579,262 |
| Bouygues SA | | 10,371 | | | 405,557 |
| Lafarge SA | | 2,638 | | | 145,650 |
| PPR | | 2,224 | | | 279,364 |
| Schneider Electric SA | | 2,755 | | | 282,252 |
| Societe Generale | | 4,973 | | | 208,936 |
| Technip SA | | 3,883 | | | 226,399 |
| Total SA | | 13,797 | | | 624,707 |
| Vallourec SA | | 3,136 | | | 548,344 |
| Vinci SA | | 3,500 | | | 147,221 |
| | | | |
|
|
| | | | | $ | 3,447,692 |
| | | | |
|
|
| | |
| GERMANY — 5.9% | | | | | |
| Adidas AG | | 4,413 | | $ | 216,084 |
| Allianz SE | | 2,161 | | | 216,658 |
| BASF SE | | 12,763 | | | 706,630 |
| Bayer AG | | 6,333 | | | 356,835 |
| Deutsche Bank AG | | 3,492 | | | 199,752 |
| Henkel AG & Co. KGaA (Preferred Stock) | | 7,503 | | | 368,123 |
| | | | | |
| | | Shares | | Value |
| | | | | | |
| GERMANY — continued | | | | | |
| Muenchener Rueckversicherungs AG | | 3,061 | | $ | 387,315 |
| SAP AG | | 4,818 | | | 216,292 |
| Siemens AG | | 2,536 | | | 230,429 |
| | | | |
|
|
| | | | | $ | 2,898,118 |
| | | | |
|
|
| | |
| HONG KONG — 2.9% | | | | | |
| ASM Pacific Technology, Ltd. | | 19,300 | | $ | 151,433 |
| Cheung Kong Holdings, Ltd. | | 24,000 | | | 278,613 |
| CLP Holdings, Ltd. (Ordinary) | | 71,567 | | | 518,798 |
| Esprit Holding, Ltd. | | 29,100 | | | 158,632 |
| Hong Kong Exchanges & Clearing, Ltd. | | 19,500 | | | 307,006 |
| | | | |
|
|
| | | | | $ | 1,414,482 |
| | | | |
|
|
| | |
| INDIA — 0.4% | | | | | |
| ICICI Bank, Ltd., ADR | | 5,979 | | $ | 216,081 |
| | | | |
|
|
| | |
| ISRAEL — 0.9% | | | | | |
| Teva Pharmaceutical Industries, Ltd., ADR | | 8,511 | | $ | 442,487 |
| | | | |
|
|
| | |
| ITALY — 3.5% | | | | | |
| Enel SpA | | 171,241 | | $ | 732,038 |
| ENI SpA (Azioni Ordinarie) | | 54,413 | | | 1,012,421 |
| | | | |
|
|
| | | | | $ | 1,744,459 |
| | | | |
|
|
| | |
| JAPAN — 19.9% | | | | | |
| Asahi Glass Co., Ltd. | | 21,000 | | $ | 200,056 |
| Asics Corp. | | 17,000 | | | 157,532 |
| Astellas Pharma, Inc. | | 19,000 | | | 641,993 |
| Daito Trust Construction Co., Ltd. | | 4,500 | | | 255,792 |
| Fanuc, Ltd. | | 2,000 | | | 229,178 |
| Honda Motor Co., Ltd. | | 5,500 | | | 161,414 |
| ITOCHU Corp. | | 117,700 | | | 937,716 |
| Itochu Techno-Solutions Corp. | | 8,500 | | | 312,182 |
| JGC Corp | | 18,000 | | | 277,455 |
| Makita Corp. | | 33,300 | | | 901,271 |
| Marubeni Corp. | | 94,000 | | | 489,705 |
| Miraca Holdings, Inc. | | 5,500 | | | 165,889 |
| Mitsubishi Corp. | | 39,400 | | | 829,942 |
| Mitsui & Co., Ltd. | | 62,800 | | | 748,008 |
| NHK Spring Co., Ltd. | | 16,000 | | | 147,904 |
| Nidec Corp. | | 3,200 | | | 271,217 |
| Nippon Electric Glass Co., Ltd. | | 30,000 | | | 348,514 |
| Nippon Telegraph & Telephone Corp. | | 8,300 | | | 341,417 |
| Obic Co., Ltd. | | 1,190 | | | 231,168 |
| Omron Corp. | | 12,600 | | | 278,228 |
| Sankyo Co., Ltd. | | 9,200 | | | 418,465 |
| Shimamura Co., Ltd. | | 7,300 | | | 663,261 |
| Shionogi & Co., Ltd. | | 8,600 | | | 179,114 |
| Tokyo Electron, Ltd. | | 5,400 | | | 296,271 |
| USS Co., Ltd. | | 2,440 | | | 175,645 |
| Yamada Denki Co., Ltd. | | 2,340 | | | 154,167 |
| | | | |
|
|
| | | | | $ | 9,813,504 |
| | | | |
|
|
| | |
| NETHERLANDS — 1.6% | | | | | |
| Koninklijke Vopak NV | | 6,137 | | $ | 226,945 |
| Mediq NV | | 8,764 | | | 161,294 |
See notes to financial statements
21
Wright International Blue Chip Equities Fund (WIBC)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | |
| | | Shares | | Value |
| | | | | | |
| NETHERLANDS — continued | | | | | |
| Royal Dutch Shell PLC — Class B | | 16,823 | | $ | 410,504 |
| | | | |
|
|
| | | | | $ | 798,743 |
| | | | |
|
|
| | |
| NEW ZEALAND — 0.4% | | | | | |
| Fletcher Building, Ltd. | | 33,183 | | $ | 179,124 |
| | | | |
|
|
| | |
| NORWAY — 0.8% | | | | | |
| Telenor ASA | | 32,407 | | $ | 411,868 |
| | | | |
|
|
| | |
| RUSSIA — 0.4% | | | | | |
| Lukoil OAO, ADR | | 3,874 | | $ | 199,511 |
| | | | |
|
|
| | |
| SINGAPORE — 3.0% | | | | | |
| Jardine Cycle & Carriage, Ltd. | | 45,000 | | $ | 966,979 |
| Oversea-Chinese Banking Corp., Ltd. | | 80,000 | | | 508,273 |
| | | | |
|
|
| | | | | $ | 1,475,252 |
| | | | |
|
|
| | |
| SOUTH AFRICA — 0.5% | | | | | |
| Sasol, Ltd., ADR | | 6,522 | | $ | 230,031 |
| | | | |
|
|
| | |
| SOUTH KOREA — 0.5% | | | | | |
| POSCO, ADR | | 2,703 | | $ | 254,947 |
| | | | |
|
|
| | |
| SPAIN — 5.9% | | | | | |
| Acciona SA | | 3,366 | | $ | 258,884 |
| Banco Bilbao Vizcaya Argentaria SA | | 19,305 | | | 203,645 |
| Banco Bilbao Vizcaya Argentaria SA, ADR | | 17,986 | | | 185,076 |
| Banco Santander SA | | 44,857 | | | 480,222 |
| Banco Santander SA, ADR | | 45,336 | | | 476,028 |
| Mapfre SA | | 75,893 | | | 208,791 |
| Telefonica SA | | 59,015 | | | 1,102,746 |
| | | | |
|
|
| | | | | $ | 2,915,392 |
| | | | |
|
|
| | |
| SWEDEN — 2.5% | | | | | |
| SKF AB — Class B | | 19,196 | | $ | 348,301 |
| Svenska Handelsbanken AB — Class A | | 22,811 | | | 563,387 |
| TeliaSonera AB | | 53,235 | | | 344,434 |
| | | | |
|
|
| | | | | $ | 1,256,122 |
| | | | |
|
|
| | |
| SWITZERLAND — 6.9% | | | | | |
| ABB, Ltd.* | | 10,929 | | $ | 192,260 |
| Credit Suisse Group AG | | 6,977 | | | 264,755 |
| Holcim, Ltd. | | 2,499 | | | 168,825 |
| Nestle SA | | 27,149 | | | 1,314,209 |
| Novartis AG | | 10,638 | | | 518,903 |
| Roche Holding AG | | 1,584 | | | 219,015 |
| Swatch Group AG (The) — Class B | | 1,501 | | | 426,630 |
| Zurich Financial Services AG (Inhaberktie) | | 1,374 | | | 305,163 |
| | | | |
|
|
| | | | | $ | 3,409,760 |
| | | | |
|
|
| | |
| UNITED ARAB EMIRATES — 0.4% | | | | | |
| Dragon Oil PLC* | | 32,873 | | $ | 200,660 |
| | | | |
|
|
| | | | | | |
| | | Shares | | Value | |
| | | | | | | |
| UNITED KINGDOM — 15.8% | | | | | | |
| AstraZeneca PLC | | 23,305 | | $ | 1,104,922 | |
| Aviva PLC | | 129,462 | | | 608,374 | |
| BAE Systems PLC | | 58,939 | | | 276,440 | |
| Barclays PLC (Ordinary) | | 124,540 | | | 504,100 | |
| BG Group PLC | | 7,723 | | | 116,237 | |
| BHP Billiton PLC | | 24,543 | | | 644,231 | |
| BP PLC | | 61,502 | | | 293,430 | |
| British American Tobacco PLC | | 9,306 | | | 297,458 | |
| Carnival PLC | | 9,170 | | | 299,491 | |
| Centrica PLC | | 68,034 | | | 301,998 | |
| Ensco PLC, ADR | | 5,775 | | | 226,842 | |
| HSBC Holdings PLC | | 38,040 | | | 350,120 | |
| Investec PLC | | 68,309 | | | 463,566 | |
| Man Group PLC | | 72,865 | | | 243,427 | |
| Rio Tinto PLC | | 10,200 | | | 452,999 | |
| Sage Group PLC (The) | | 58,478 | | | 202,624 | |
| Schroders PLC | | 15,355 | | | 278,658 | |
| Smith & Nephew PLC | | 16,495 | | | 156,830 | |
| Vodafone Group PLC | | 234,352 | | | 487,879 | |
| WPP PLC | | 28,376 | | | 269,791 | |
| Xstrata PLC | | 18,298 | | | 242,767 | |
| | | | |
|
|
|
| | | | | $ | 7,822,184 | |
| | | | |
|
|
|
| TOTAL EQUITY INTERESTS — 97.2% | | | | | | |
| (identified cost, $48,648,289) | | | | $ | 47,990,844 | |
| | | | |
|
|
|
| |
| INVESTMENT COMPANIES — 3.5% | | | | |
| iShares MSCI Brazil Index Fund | | 11,805 | | $ | 731,438 | |
| iShares MSCI Emerging Markets Index Fund | | 26,440 | | $ | 986,741 | |
| | | | |
|
|
|
| |
| TOTAL INVESTMENT COMPANIES — 3.5% | | | | |
| (identified cost, $1,810,472) | | | | $ | 1,718,179 | |
| | | | |
|
|
|
| | |
| TOTAL INVESTMENTS — 100.7% | | | | | | |
| (identified cost, $50,458,761) | | | | $ | 49,709,023 | |
| |
| OTHER ASSETS, LESS LIABILITIES — (0.7%) | | | (364,017 | ) |
| | | | |
|
|
|
| | |
| NET ASSETS — 100.0% | | | | $ | 49,345,006 | |
| | | | |
|
|
|
ADR — American Depository Receipt
PLC — Public Limited Company
| * | Non-income producing security. |
| | |
| Portfolio Composition By Sector |
| % of portfolio at 06/30/10 |
| Financials | | 23.4% |
| Industrials | | 16.9% |
| Consumer Discretionary | | 9.3% |
| Energy | | 8.8% |
| Other | | 41.6% |
See notes to financial statements
22
Wright International Blue Chip Equities Fund (WIBC)
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| ASSETS: | | | | |
Investments, at value
(identified cost $50,458,761) (Note 1A) | | $ | 49,709,023 | |
Foreign currency, at value
(cost $110,714) (Note 1A) | | | 111,042 | |
Receivable for fund shares sold | | | 66,854 | |
Dividends receivable | | | 80,100 | |
Tax reclaims receivable | | | 142,783 | |
Prepaid expenses and other assets | | | 37,822 | |
| | |
|
|
|
Total assets | | $ | 50,147,624 | |
| | |
|
|
|
| |
| LIABILITIES: | | | | |
Demand note payable (Note 8) | | $ | 669,959 | |
Payable for fund shares reacquired | | | 48,311 | |
Payable to custodian | | | 72,420 | |
Accrued expenses and other liabilities | | | 11,928 | |
| | |
|
|
|
Total liabilities | | $ | 802,618 | |
| | |
|
|
|
| NET ASSETS | | $ | 49,345,006 | |
| | |
|
|
|
| |
| NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 105,685,036 | |
Accumulated net realized loss on investments and foreign currency | | | (56,195,572 | ) |
Undistributed net investment income | | | 602,360 | |
Unrealized depreciation on investments and foreign currency | | | (746,818 | ) |
| | |
|
|
|
Net assets applicable to outstanding shares | | $ | 49,345,006 | |
| | |
|
|
|
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING | | | 4,104,686 | |
| | |
|
|
|
| |
| NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST | | $ | 12.02 | |
| | |
|
|
|
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| INVESTMENT INCOME (Note 1C) | | | | |
Dividend income (net of foreign taxes, $152,367) | | $ | 1,110,786 | |
Income from securities lending (net) | | | 333 | |
| | |
|
|
|
Total investment income | | $ | 1,111,119 | |
| | |
|
|
|
| |
| Expenses – | | | | |
Investment adviser fee (Note 3) | | $ | 247,865 | |
Administrator fee (Note 3) | | | 52,671 | |
Compensation of Trustees who are not employees of the investment adviser or administrator | | | 7,188 | |
Custodian fee (Note 1F) | | | 17,075 | |
Accountant fees | | | 30,788 | |
Distribution expenses (Note 4) | | | 77,458 | |
Transfer and dividend disbursing agent fees | | | 26,881 | |
Printing | | | 214 | |
Shareholder communications | | | 3,670 | |
Audit services | | | 18,605 | |
Legal services | | | 10,214 | |
Registration costs | | | 5,306 | |
Miscellaneous | | | 11,193 | |
| | |
|
|
|
Total expenses | | $ | 509,128 | |
| | |
|
|
|
| |
| Deduct – | | | | |
Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) | | $ | (458 | ) |
| | |
|
|
|
Total deductions | | $ | (458 | ) |
| | |
|
|
|
Net expenses | | $ | 508,670 | |
| | |
|
|
|
Net investment income | | $ | 602,449 | |
| | |
|
|
|
|
| REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY: | |
| |
| Net realized loss – | | | | |
Investment transactions | | $ | (381,469 | ) |
Foreign currency transactions | | | (99,682 | ) |
| | |
|
|
|
Net realized loss | | $ | (481,151 | ) |
| | |
|
|
|
| |
| Change in unrealized appreciation (depreciation) – | | | | |
Investments | | $ | (10,071,872 | ) |
Foreign currency | | | (6,279 | ) |
| | |
|
|
|
Net change in unrealized appreciation (depreciation) on investments | | $ | (10,078,151 | ) |
| | |
|
|
|
Net realized and unrealized loss on investments and foreign currency | | $ | (10,559,302 | ) |
| | |
|
|
|
Net decrease in net assets from operations | | $ | (9,956,853 | ) |
| | |
|
|
|
See notes to financial statements
23
Wright International Blue Chip Equities Fund (WIBC)
| | | | | | | | |
| STATEMENTS OF CHANGES IN NET ASSETS | | Six Months Ended
June 30, 2010
(Unaudited) | | | Year Ended
December 31, 2009 | |
| | |
| INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | |
From operations – | | | | | | | | |
Net investment income | | $ | 602,449 | | | $ | 1,117,967 | |
Net realized loss on investments and foreign currency transactions | | | (481,151 | ) | | | (19,779,893 | ) |
Net change in unrealized appreciation (depreciation) on investments and foreign currency | | | (10,078,151 | ) | | | 36,832,030 | |
| | |
|
|
| |
|
|
|
Net increase (decrease) in net assets from operations | | $ | (9,956,853 | ) | | $ | 18,170,104 | |
| | |
|
|
| |
|
|
|
Distributions to shareholders (Note 2) | | | | | | | | |
From net investment income | | $ | (1,069,411 | ) | | $ | — | |
| | |
|
|
| |
|
|
|
Total distributions | | $ | (1,069,411 | ) | | $ | — | |
| | |
|
|
| |
|
|
|
| Net decrease in net assets from fund share transactions (Note 6) | | $ | (8,467,660 | ) | | $ | (16,476,708 | ) |
| | |
|
|
| |
|
|
|
| Net increase (decrease) in net assets | | $ | (19,493,924 | ) | | $ | 1,693,396 | |
| | |
| NET ASSETS: | | | | | | | | |
At beginning of period | | | 68,838,930 | | | | 67,145,534 | |
| | |
|
|
| |
|
|
|
At end of period | | $ | 49,345,006 | | | $ | 68,838,930 | |
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| | |
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET
ASSETS AT END OF PERIOD | | $ | 602,360 | | | $ | 1,069,322 | |
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See notes to financial statements
24
Wright International Blue Chip Equities Fund (WIBC)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months
Ended
June 30, 2010
(Unaudited) | | | Year Ended December 31,
| |
| FINANCIAL HIGHLIGHTS | | | 2009 | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| | | | | | |
| Net asset value, beginning of period | | $ | 14.461 | | | $ | 10.810 | | $ | 22.470 | | | $ | 22.830 | | | $ | 18.060 | | | $ | 15.070 | |
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| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(1) (2) | | $ | 0.132 | | | $ | 0.208 | | $ | 0.483 | | | $ | 0.434 | | | $ | 0.255 | | | $ | 0.129 | |
Net realized and unrealized gain (loss) | | | (2.341 | ) | | | 3.443 | | | (11.002 | ) | | | 0.755 | | | | 4.859 | | | | 3.028 | |
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Total income (loss) from investment operations | | $ | (2.209 | ) | | $ | 3.651 | | $ | (10.519 | ) | | $ | 1.189 | | | $ | 5.114 | | | $ | 3.157 | |
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| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | $ | (0.230 | ) | | $ | — | | $ | (0.575 | ) | | $ | (0.491 | ) | | $ | (0.320 | ) | | $ | (0.167 | ) |
From net realized gains | | | — | | | | — | | | (0.558 | ) | | | (1.058 | ) | | | (0.024 | ) | | | — | |
Tax return of capital | | | — | | | | — | | | (0.008 | ) | | | — | | | | — | | | | — | |
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Total distributions | | $ | (0.230 | ) | | $ | — | | $ | (1.141 | ) | | $ | (1.549 | ) | | $ | (0.344 | ) | | $ | (0.167 | ) |
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| Net asset value, end of period | | $ | 12.022 | | | $ | 14.461 | | $ | 10.810 | | | $ | 22.470 | | | $ | 22.830 | | | $ | 18.060 | |
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| | | | | | |
| Total Return(3) | | | (15.50% | )(4) | | | 33.77% | | | (47.74% | ) | | | 5.50% | | | | 28.49% | | | | 21.13% | |
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| | | | | | |
| Ratios/Supplemental Data(1): | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 49,345 | | | $ | 68,839 | | $ | 67,146 | | | $ | 183,608 | | | $ | 218,201 | | | $ | 109,897 | |
Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses | | | 1.64% | (5) | | | 1.63% | | | 1.54% | | | | 1.49% | | | | 1.46% | | | | 1.66% | |
Net expenses after custodian fee reduction | | | N/A | (5) | | | 1.63% | | | 1.53% | | | | 1.47% | | | | 1.37% | | | | 1.62% | |
Net investment income | | | 1.94% | (5) | | | 1.75% | | | 2.71% | | | | 1.82% | | | | 1.26% | | | | 0.81% | |
| Portfolio turnover rate | | | 57% | (4) | | | 64% | | | 82% | | | | 138% | | | | 116% | | | | 99% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) For the six months ended June 30, 2010, the operating expenses of the Fund were reduced by a waiver of fees and/or 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: | |
| | | 2010 | | | | | | | | | | | | | | | |
| Net investment income per share(2) | | $ | 0.132 | | | | | | | | | | | | | | | | | | | | |
| | |
|
|
| | | | | | | | | | | | | | | | | | | |
| | | | | | |
| Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.64% | (5) | | | | | | | | | | | | | | | | | | | |
| | |
|
|
| | | | | | | | | | | | | | | | | | | |
Net investment income | | | 1.94% | (5) | | | | | | | | | | | | | | | | | | | |
| | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | Computed using average shares outstanding. |
| (3) | Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. |
See notes to financial statements
25
Wright Managed Equity Trust
Notes to Financial Statements
1. Significant Accounting Policies
Wright Select Blue Chip Equities Fund (“WSBC”), Wright Major Blue Chip Equities Fund (“WMBC”), and Wright International Blue Chip Equities Fund (“WIBC”) (each a “Fund” and collectively, the “Funds”) (the Funds constituting Wright Managed Equity Trust (the “Trust”)), 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 a third party 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 generally 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 third party pricing service. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads. 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. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Funds in a manner that most fairly reflects the security’s value, or the amount that the Funds might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies, quotations or relevant information obtained from broker-dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
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 Funds are 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.
26
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. Foreign taxes are provided for based on WIBC’s understanding of the tax rules and rates that exist in the foreign markets in which it invests. At December 31, 2009, WSBC, WMBC and WIBC, for federal income tax purposes, had capital loss carryforwards of $2,193,372, $20,781,823 and $53,550,800, respectively, which will reduce each 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 the distributions to shareholders, which would otherwise be necessary to relieve the Funds of any liability for federal income or excise tax. Pursuant to the Code, such capital loss carryovers will expire as follows:
| | | | | | | | | |
| December 31, | | WSBC | | WMBC | | WIBC |
| 2010 | | $ | — | | $ | 12,738,080 | | $ | — |
| 2011 | | | — | | | 2,230,768 | | | — |
| 2016 | | | 640,031 | | | 875,589 | | | 18,850,926 |
| 2017 | | | 1,553,341 | | | 4,937,386 | | | 34,699,874 |
Additionally, at December 31, 2009, WSBC had net capital losses of $7,815, attributable to security transactions incurred after October 31, 2009. These net capital losses were treated as arising on the first day of the Fund’s taxable year ending December 31, 2010.
As of June 30, 2010, 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, 2009 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. 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 and foreign currency transactions. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.
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 each Fund’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.
I. Interim Financial Statements — The interim financial statements relating to June 30, 2010, and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of Funds’ management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
27
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) of the Funds. 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.
As of December 31, 2009, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
| | | | | | | | | | | | |
| | | WSBC | | | WMBC | | | WIBC | |
| Undistributed ordinary income | | $ | 16,687 | | | $ | 2,051 | | | $ | 1,069,322 | |
| Capital loss carryforward and post October losses | | | (2,201,187 | ) | | | (20,781,823 | ) | | | (53,550,800 | ) |
| Net unrealized appreciation | | | 2,100,798 | | | | 216,003 | | | | 7,167,711 | |
The difference between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to wash sales and distributions from real estate investment trusts.
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 six months ended June 30, 2010, 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 | | $ | 54,656 | | 0.60 | % |
| WMBC | | | 76,511 | | 0.60 | % |
| WIBC | | | 247,865 | | 0.80 | % |
The administrator fee is earned by Wright 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. Atlantic Fund Administration, LLC (“Atlantic”) serves as sub-administrator of the Funds to perform certain services of the administrator as may be agreed upon between the administrator and sub-administrator. The sub-administration fee is paid by Wright.
For the six months ended June 30, 2010, the administrator fee for WSBC, WMBC and WIBC amounted to $10,931, $15,302 and $52,671, respectively. Wright also waived and/or reimbursed expenses for WSBC, WMBC and WIBC (see Note 4).
Certain 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 Atlantic or Wright, Trustees and officers receive remuneration for their services to the Trust out of the fees paid to Atlantic and Wright.
28
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 six months ended June 30, 2010, for WSBC, WMBC and WIBC were $22,773, $31,879 and $77,458, 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 six months ended June 30, 2010, 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 exceed 1.40% of the average daily net assets of each of WSBC and WMBC and 1.85% of the average daily net assets of WIBC through April 30, 2011 (excluding interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, and other extraordinary expenses not incurred in the ordinary course of the Fund’s business). 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 $36,067, $22,430 and $458 for WSBC, WMBC and WIBC, respectively.
5. Investment Transactions
Purchases and sales of investments, other than short-term obligations, were as follows:
| | | | | | | | | |
| | | Six Months Ended June 30, 2010
|
| | | WSBC | | WMBC | | WIBC |
| Purchases | | $ | 5,448,107 | | $ | 9,089,607 | | $ | 35,133,048 |
| | |
|
| |
|
| |
|
|
| Sales | | $ | 5,214,048 | | $ | 12,735,611 | | $ | 43,564,793 |
| | |
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|
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|
|
| | | | | | | | | | |
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:
| | | | | | | | | | | | | | |
| | | Six Months Ended
June 30, 2010
(Unaudited)
| | | Year Ended
December 31, 2009
| |
| | | Shares | | | Amount | | | Shares | | | Amount | |
| WRIGHT SELECTED BLUE CHIP EQUITIES FUND | | | | | | | | | | | | |
| Sold | | 332,617 | | | $ | 2,950,358 | | | 215,260 | | | $ | 1,502,588 | |
| Issued to shareholders in payment of distributions declared | | 1,610 | | | | 14,107 | | | — | | | | — | |
| Redemptions | | (268,067 | ) | | | (2,388,486 | ) | | (425,279 | ) | | | (2,840,480 | ) |
| | |
|
| |
|
|
| |
|
| |
|
|
|
| Net increase (decrease) | | 66,160 | | | $ | 575,979 | | | (210,019 | ) | | $ | (1,337,892 | ) |
| | |
|
| |
|
|
| |
|
| |
|
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|
| | | |
| WRIGHT MAJOR BLUE CHIP EQUITIES FUND | | | | | | | | | | | | |
| Sold | | 122,911 | | | $ | 1,366,826 | | | 893,986 | | | $ | 7,946,834 | |
| Issued to shareholders in payment of distributions declared | | 154 | | | | 1,691 | | | 25,410 | | | | 270,513 | |
| Redemptions | | (511,828 | ) | | | (5,620,217 | ) | | (1,883,001 | ) | | | (18,975,348 | ) |
| | |
|
| |
|
|
| |
|
| |
|
|
|
| Net decrease | | (388,763 | ) | | $ | (4,251,700 | ) | | (963,605 | ) | | $ | (10,758,001 | ) |
| | |
|
| |
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| |
|
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|
|
|
29
| | | | | | | | | | | | | | |
| | | Six Months Ended
June 30, 2010
(Unaudited)
| | | Year Ended
December 31, 2009
| |
| | | Shares | | | Amount | | | Shares | | | Amount | |
| WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND | | | | | | | | | | | | |
| Sold | | 306,084 | | | $ | 4,285,299 | | | 982,921 | | | $ | 11,778,461 | |
| Issued to shareholders in payment of distributions declared | | 55,579 | | | | 770,886 | | | — | | | | — | |
| Redemptions | | (1,017,149 | ) | | | (13,525,341 | ) | | (2,433,845 | ) | | | (28,255,506 | ) |
| Redemption fees | | — | | | | 1,496 | | | — | | | | 337 | |
| | |
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| |
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| |
|
| |
|
|
|
| Net decrease | | (655,486 | ) | | $ | (8,467,660 | ) | | (1,450,924 | ) | | $ | (16,476,708 | ) |
| | |
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| | | | | | | | | | | | | | | |
7. Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2010, as determined on a federal income tax basis, were as follows:
| | | | | | | | | | | | |
| | | Six Months Ended June 30, 2010
| |
| | | WSBC | | | WMBC | | | WIBC | |
| Aggregate cost | | $ | 15,503,039 | | | $ | 23,820,175 | | | $ | 50,458,761 | |
| | |
|
|
| |
|
|
| |
|
|
|
| Gross unrealized appreciation | | $ | 2,313,018 | | | $ | 1,016,299 | | | $ | 4,555,332 | |
| Gross unrealized depreciation | | | (804,103 | ) | | | (3,232,520 | ) | | | (5,305,070 | ) |
| | |
|
|
| |
|
|
| |
|
|
|
| Net unrealized appreciation (depreciation) | | $ | 1,508,915 | | | $ | (2,216,221 | ) | | $ | (749,738 | ) |
| | |
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| | | | | | | | | | | | | |
8. Line of Credit
The Funds participate with other funds managed by Wright in a committed $10 million unsecured line of credit agreement with Union Bank of California, N.A. (“Union 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 LIBOR rate. Because the line of credit is not available exclusively to each Fund, they may be unable to borrow some or all of the Funds’ requested amounts at any particular time. At June 30, 2010, WMBC and WIBC had a balance outstanding pursuant to this line of credit of $361,739 and $669,959, respectively, at an interest rate of 1.35%.
The average borrowings and average interest rate (annualized) for the six months ended June 30, 2010, were as follows:
| | | | | | |
| | | WMBC | | WIBC |
| Average borrowings | | $ | 170,455 | | $ | 173,924 |
| Average interest rate | | | 1.3% | | | 1.3% |
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
30
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
WIBC has established a securities lending arrangement with Union Bank as securities lending agent in which WIBC 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 may be invested in government securities. WIBC earns interest on the amount invested in the portfolio, but it must pay to or receive from a broker a rebate fee, depending on the securities loaned, computed as a varying percentage of the collateral received. The broker fee and interest income earned is offset by the broker rebate fees received of $37,747 for the six months ended June 30, 2010. In the event of counterparty default, WIBC is subject to potential loss if it is delayed or prevented from exercising its right to dispose of the collateral. WIBC bears risk in the event that invested collateral is not sufficient to meet obligations due on loans. WIBC has the right under the securities lending agreement to recover the securities from the borrower on demand. As of June 30, 2010, WIBC had no securities on loan.
11. Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, 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.
| | • | | Level 1 — quoted prices in active markets for identical investments |
| | • | | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| | • | | 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 June 30, 2010, the inputs used in valuing each Fund’s investments, which are carried at value, were as follows:
WSBC
| | | | | | | | | | | | |
| Asset Description | | Quoted Prices in
Active Markets
for Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Equity Interests | | $ | 16,515,746 | | $ | — | | $ | — | | $ | 16,515,746 |
| | |
|
| |
|
| |
|
| |
|
|
| Short-term Investments | | | 496,208 | | | | | | | | | 496,208 |
| | |
|
| |
|
| |
|
| |
|
|
| Total Investments | | $ | 17,011,954 | | $ | — | | $ | — | | $ | 17,011,954 |
WMBC
| | | | | | | | | | | | |
| Asset Description | | Quoted Prices in
Active Markets
for Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Equity Interests | | $ | 20,564,651 | | $ | — | | $ | — | | $ | 20,564,651 |
| | |
|
| |
|
| |
|
| |
|
|
| Investment Companies | | | 1,039,303 | | | | | | | | | 1,039,303 |
| | |
|
| |
|
| |
|
| |
|
|
| Total Investments | | $ | 21,603,954 | | $ | — | | $ | — | | $ | 21,603,954 |
31
WIBC
| | | | | | | | | | | | |
| Asset Description | | Quoted Prices in
Active Markets
for Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Equity Interests | | $ | 47,990,844 | | $ | — | | $ | — | | $ | 47,990,844 |
| | |
|
| |
|
| |
|
| |
|
|
| Investment Companies | | | 1,718,179 | | | | | | | | | 1,718,179 |
| | |
|
| |
|
| |
|
| |
|
|
| Total Investments | | $ | 49,709,023 | | $ | — | | $ | — | | $ | 49,709,023 |
The level classification by major category of investments is the same as the category presentation in each Fund’s Portfolio of Investments.
During the six months ended June 30, 2010, the Funds held no investments or other financial instruments, whose fair value was determined using Level 3 inputs.
12. Review for Subsequent Events
In connection with the preparation of the financial statements of the Funds as of and for the six months ended June 30, 2010, events and transactions subsequent to June 30, 2010, have been evaluated by the Funds’ management for possible adjustment and/or disclosure. Management has not identified any subsequent events requiring financial statement disclosure as of the date these financial statements were issued.
32
Wright Total Return Bond Fund (WTRB)
Portfolio of Investments — As of June 30, 2010 (Unaudited)
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | FIXED INCOME INVESTMENTS — 98.2% | | | |
| |
| | ASSET-BACKED SECURITIES — 2.7% | | | |
| $ | 145,564 | | AEP Texas Central Transition Funding LLC, Series 2006-A, Class A2 | | 4.980 | % | | 07/01/13 | | $ | 153,615 |
| | 270,000 | | Citibank Credit Card Issuance Trust, Series 2009-A1, Class A1 | | 2.100 | %(1) | | 03/17/14 | | | 276,879 |
| | 145,000 | | Harley-Davidson Motorcycle Trust, Series 2009-1, Class A4 | | 4.550 | % | | 01/15/17 | | | 153,744 |
| | 180,000 | | PSE&G Transition Funding LLC, Series 2001-1, Class A7 | | 6.750 | % | | 06/15/16 | | | 210,877 |
| | | | | | | | | | |
|
|
| | Total Asset-Backed Securities (identified cost, $750,864) | | | | | | | $ | 795,115 |
| | | | | | | | | | |
|
|
| |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 7.1% | | | |
| $ | 220,000 | | Citigroup Commercial Mortgage Trust, Series 2004-C2, Class A5 | | 4.733 | % | | 10/15/41 | | $ | 228,350 |
| | 285,000 | | Credit Suisse First Boston Mortgage Securities Corp., Series 2003-C3, Class A5 | | 3.936 | % | | 05/15/38 | | | 294,168 |
| | 330,000 | | JP Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A5 | | 4.878 | % | | 01/15/42 | | | 343,874 |
| | 265,000 | | LB-UBS Commercial Mortgage Trust, Series 2006-C6, Class A4 | | 5.372 | % | | 09/15/39 | | | 274,509 |
| | 270,000 | | Merrill Lynch Mortgage Trust, Series 2005-LC1, Class A4 | | 5.291 | %(1) | | 01/12/44 | | | 288,407 |
| | 420,000 | | Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-2, Class A4 | | 6.104 | %(1) | | 06/12/46 | | | 447,548 |
| | 99,110 | | Salomon Brothers Mortgage Securities VII, Inc., Series 2002-KEY2, Class A2 | | 4.467 | % | | 03/18/36 | | | 102,184 |
| | 85,651 | | Wells Fargo Mortgage Backed Securities Trust, Series 2004-K, Class 1A2 | | 4.470 | %(1) | | 07/25/34 | | | 85,739 |
| | | | | | | | | | |
|
|
| | Total Commercial Mortgage-Backed Securities (identified cost, $1,933,609) | | | | | | | $ | 2,064,779 |
| | | | | | | | | | |
|
|
| |
| | NON-AGENCY MORTGAGE-BACKED SECURITIES — 0.0% | | | |
| $ | 201,363 | | First Horizon Alternative Mortgage Securities, Series 2005-AA10, Class 1A2 | | 5.655 | %(1) | | 12/25/35 | | $ | 2,224 |
| | | | | | | | | | |
|
|
| | Total Non-Agency Mortgage-Backed Securities (identified cost, $201,362) | | | | | | | $ | 2,224 |
| | | | | | | | | | |
|
|
| |
| | CORPORATE BONDS — 39.0% | | | |
| | | |
| | AUTOMOTIVE — 0.7% | | | | | | | | |
| $ | 55,000 | | AutoZone, Inc. | | 5.750 | % | | 01/15/15 | | $ | 61,072 |
| | 110,000 | | PACCAR, Inc. | | 6.875 | % | | 02/15/14 | | | 127,539 |
| | | |
| | BANKS & MISCELLANEOUS FINANCIAL — 7.4% | | | | | | | | |
| $ | 60,000 | | American Express Credit Corp. | | 7.300 | % | | 08/20/13 | | $ | 67,980 |
| | 260,000 | | Citigroup, Inc. | | 6.500 | % | | 08/19/13 | | | 277,142 |
| | 130,000 | | Credit Suisse USA, Inc. | | 0.544 | %(1) | | 04/12/13 | | | 130,088 |
| | 210,000 | | Deutsche Bank AG/London | | 5.375 | % | | 10/12/12 | | | 225,158 |
| | 100,000 | | Goldman Sachs Group, Inc. (The) | | 1.135 | %(1) | | 09/29/14 | | | 94,321 |
| | 115,000 | | Goldman Sachs Group, Inc. (The) | | 6.150 | % | | 04/01/18 | | | 120,650 |
| | 235,000 | | HSBC Finance Corp. | | 6.375 | % | | 10/15/11 | | | 245,666 |
| | 70,000 | | Jefferies Group, Inc. | | 8.500 | % | | 07/15/19 | | | 78,755 |
| | 110,000 | | JPMorgan Chase & Co. | | 6.300 | % | | 04/23/19 | | | 124,458 |
| | 125,000 | | Merrill Lynch & Co., Inc. | | 6.050 | % | | 05/16/16 | | | 129,326 |
| | 100,000 | | Morgan Stanley | | 5.300 | % | | 03/01/13 | | | 104,055 |
| | 120,000 | | Nomura Holdings, Inc. | | 5.000 | % | | 03/04/15 | | | 126,933 |
| | 55,000 | | SunTrust Banks, Inc. | | 6.000 | % | | 09/11/17 | | | 56,027 |
| | 130,000 | | TD Ameritrade Holding Corp. | | 4.150 | % | | 12/01/14 | | | 135,046 |
| | 100,000 | | Wachovia Corp. | | 0.688 | %(1) | | 03/01/12 | | | 98,898 |
| | 110,000 | | Wells Fargo & Co. | | 4.375 | % | | 01/31/13 | | | 116,360 |
| | | |
| | CABLE TV — 1.1% | | | | | | | | |
| $ | 90,000 | | Comcast Cable Communications Holdings, Inc. | | 9.455 | % | | 11/15/22 | | $ | 124,403 |
| | 135,000 | | DirecTV Holdings LLC/DirecTV Financing Co., Inc. | | 7.625 | % | | 05/15/16 | | | 146,818 |
| | 50,000 | | Time Warner Cable, Inc. | | 8.250 | % | | 04/01/19 | | | 61,590 |
| | | |
| | CHEMICALS — 0.4% | | | | | | | | |
| $ | 100,000 | | Lubrizol Corp. | | 8.875 | % | | 02/01/19 | | $ | 125,344 |
| | | |
| | COMMUNICATIONS EQUIPMENT — 0.5% | | | | | | | | |
| $ | 140,000 | | Harris Corp. | | 5.000 | % | | 10/01/15 | | $ | 149,606 |
See notes to financial statements
33
Wright Total Return Bond Fund (WTRB)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | COMPUTERS & PERIPHERALS — 0.6% | | | | | | | | |
| $ | 30,000 | | Dell, Inc. | | 5.625 | % | | 04/15/14 | | $ | 33,667 |
| | 105,000 | | International Business Machines Corp. | | 7.625 | % | | 10/15/18 | | | 135,222 |
| | | |
| | DIVERSIFIED FINANCIALS — 3.2% | | | | | | | | |
| $ | 7,000 | | Ameriprise Financial, Inc. | | 5.350 | % | | 11/15/10 | | $ | 7,082 |
| | 55,000 | | Ameriprise Financial, Inc. | | 5.650 | % | | 11/15/15 | | | 61,021 |
| | 65,000 | | BlackRock, Inc. | | 3.500 | % | | 12/10/14 | | | 67,481 |
| | 55,000 | | Capital One Financial Corp. | | 7.375 | % | | 05/23/14 | | | 62,944 |
| | 110,000 | | Daimler Finance North America LLC | | 6.500 | % | | 11/15/13 | | | 123,210 |
| | 225,000 | | General Electric Capital Corp. | | 6.750 | % | | 03/15/32 | | | 242,863 |
| | 110,000 | | John Deere Capital Corp. | | 5.250 | % | | 10/01/12 | | | 119,259 |
| | 210,000 | | National Rural Utilities Cooperative Finance Corp. | | 7.250 | % | | 03/01/12 | | | 230,375 |
| | | |
| | DIVERSIFIED MANUFACTURING — 0.7% | | | | | | | | |
| $ | 110,000 | | Honeywell International, Inc. | | 3.875 | % | | 02/15/14 | | $ | 118,422 |
| | 55,000 | | Tyco International Finance SA | | 8.500 | % | | 01/15/19 | | | 71,213 |
| | | |
| | ELECTRIC UTILITIES — 3.2% | | | | | | | | |
| $ | 115,000 | | American Electric Power Co., Inc. | | 5.250 | % | | 06/01/15 | | $ | 125,779 |
| | 110,000 | | Consolidated Edison Co. of New York, Inc. | | 7.125 | % | | 12/01/18 | | | 136,739 |
| | 90,000 | | Dominion Resources, Inc. | | 6.300 | % | | 03/15/33 | | | 99,397 |
| | 115,000 | | Duke Energy Indiana, Inc. | | 5.000 | % | | 09/15/13 | | | 123,898 |
| | 80,000 | | Exelon Generation Co. LLC | | 5.200 | % | | 10/01/19 | | | 85,259 |
| | 115,000 | | FPL Group Capital, Inc. | | 7.300 | %(1) | | 09/01/67 | | | 113,430 |
| | 55,000 | | Hawaiian Electric Industries, Inc. | | 6.141 | % | | 08/15/11 | | | 57,111 |
| | 50,000 | | Pacific Gas & Electric Co. | | 8.250 | % | | 10/15/18 | | | 64,075 |
| | 60,000 | | Public Service Electric & Gas Co. | | 5.300 | % | | 05/01/18 | | | 65,916 |
| | 55,000 | | TransAlta Corp. | | 4.750 | % | | 01/15/15 | | | 57,971 |
| | | |
| | FOOD–RETAIL — 0.9% | | | | | | | | |
| $ | 115,000 | | Kraft Foods, Inc. | | 6.000 | % | | 02/11/13 | | $ | 126,859 |
| | 120,000 | | Safeway, Inc. | | 5.000 | % | | 08/15/19 | | | 129,033 |
| | | |
| | FOOD, BEVERAGE & TOBACCO — 2.6% | | | | | | | | |
| $ | 55,000 | | Altria Group, Inc. | | 9.700 | % | | 11/10/18 | | $ | 69,756 |
| | 60,000 | | Anheuser-Busch Cos., Inc. | | 5.050 | % | | 10/15/16 | | | 64,589 |
| | 115,000 | | Coca-Cola Co. (The) | | 3.625 | % | | 03/15/14 | | | 122,975 |
| | 55,000 | | ConAgra Foods, Inc. | | 5.875 | % | | 04/15/14 | | | 62,240 |
| | 55,000 | | Diageo Capital PLC | | 4.828 | % | | 07/15/20 | | | 58,457 |
| | 60,000 | | General Mills, Inc. | | 5.650 | % | | 02/15/19 | | | 68,295 |
| | 40,000 | | PepsiAmericas, Inc. | | 4.375 | % | | 02/15/14 | | | 43,670 |
| | 100,000 | | PepsiCo, Inc. | | 7.900 | % | | 11/01/18 | | | 129,503 |
| | 105,000 | | Philip Morris International, Inc. | | 6.875 | % | | 03/17/14 | | | 121,582 |
| | | |
| | HOTELS, RESTAURANTS & LEISURE — 0.2% | | | | | | | | |
| $ | 60,000 | | Brinker International, Inc. | | 5.750 | % | | 06/01/14 | | $ | 63,046 |
| | | |
| | HOUSEHOLD & PERSONAL PRODUCTS — 0.9% | | | | | | | | |
| $ | 115,000 | | Avon Products, Inc. | | 5.625 | % | | 03/01/14 | | $ | 128,645 |
| | 60,000 | | Estee Lauder Cos., Inc. (The) | | 6.000 | % | | 05/15/37 | | | 67,513 |
| | 60,000 | | NBTY, Inc. | | 7.125 | % | | 10/01/15 | | | 60,000 |
| | | |
| | INSURANCE — 3.8% | | | | | | | | |
| $ | 100,000 | | ACE INA Holdings, Inc. | | 5.875 | % | | 06/15/14 | | $ | 110,722 |
| | 125,000 | | MetLife, Inc. | | 5.000 | % | | 06/15/15 | | | 133,756 |
| | 130,000 | | OneBeacon US Holdings, Inc. | | 5.875 | % | | 05/15/13 | | | 136,289 |
| | 255,000 | | PartnerRe Finance B LLC | | 5.500 | % | | 06/01/20 | | | 246,897 |
| | 55,000 | | Principal Financial Group, Inc. | | 8.875 | % | | 05/15/19 | | | 67,547 |
| | 130,000 | | Principal Life Income Funding Trusts | | 0.554 | %(1) | | 11/08/13 | | | 128,098 |
| | 50,000 | | Prudential Financial, Inc. | | 7.375 | % | | 06/15/19 | | | 57,995 |
| | 200,000 | | Travelers Cos., Inc. (The) | | 5.500 | % | | 12/01/15 | | | 224,966 |
See notes to financial statements
34
Wright Total Return Bond Fund (WTRB)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | LEISURE — 0.2% | | | | | | | | |
| $ | 55,000 | | NetFlix, Inc. | | 8.500 | % | | 11/15/17 | | $ | 57,475 |
| | | |
| | MATERIALS — 0.2% | | | | | | | | |
| $ | 55,000 | | Steel Dynamics, Inc. | | 7.375 | % | | 11/01/12 | | $ | 57,200 |
| | | |
| | MEDIA — 1.3% | | | | | | | | |
| $ | 95,000 | | McGraw-Hill Cos., Inc. (The) | | 5.900 | % | | 11/15/17 | | $ | 105,490 |
| | 115,000 | | Time Warner Cos., Inc. | | 6.950 | % | | 01/15/28 | | | 130,261 |
| | 120,000 | | Viacom, Inc. | | 4.375 | % | | 09/15/14 | | | 127,666 |
| | | |
| | MEDICAL — 2.3% | | | | | | | | |
| $ | 245,000 | | Bristol-Myers Squibb Co. | | 5.875 | % | | 11/15/36 | | $ | 274,064 |
| | 40,000 | | McKesson Corp. | | 6.500 | % | | 02/15/14 | | | 45,741 |
| | 100,000 | | Medtronic, Inc. | | 4.500 | % | | 03/15/14 | | | 109,752 |
| | 55,000 | | UnitedHealth Group, Inc. | | 6.000 | % | | 02/15/18 | | | 61,421 |
| | 115,000 | | Wyeth | | 5.500 | % | | 02/01/14 | | | 129,290 |
| | 55,000 | | Zimmer Holdings, Inc. | | 4.625 | % | | 11/30/19 | | | 57,868 |
| | | |
| | MINING — 0.5% | | | | | | | | |
| $ | 80,000 | | Barrick Gold Financeco LLC | | 6.125 | % | | 09/15/13 | | $ | 89,250 |
| | 50,000 | | Rio Tinto Finance USA, Ltd. | | 8.950 | % | | 05/01/14 | | | 60,697 |
| | | |
| | OIL & GAS — 3.3% | | | | | | | | |
| $ | 205,000 | | Baker Hughes, Inc. | | 6.875 | % | | 01/15/29 | | $ | 241,858 |
| | 35,000 | | Marathon Oil Corp. | | 6.500 | % | | 02/15/14 | | | 39,441 |
| | 50,000 | | Newfield Exploration Co. | | 6.625 | % | | 04/15/16 | | | 50,500 |
| | 60,000 | | Oneok, Inc. | | 5.200 | % | | 06/15/15 | | | 62,869 |
| | 50,000 | | ONEOK Partners LP | | 6.850 | % | | 10/15/37 | | | 52,952 |
| | 100,000 | | Sempra Energy | | 6.000 | % | | 02/01/13 | | | 108,752 |
| | 50,000 | | Smith International, Inc. | | 9.750 | % | | 03/15/19 | | | 68,163 |
| | 60,000 | | Spectra Energy Capital LLC | | 5.650 | % | | 03/01/20 | | | 63,163 |
| | 170,000 | | TransCanada PipeLines, Ltd. | | 6.500 | % | | 08/15/18 | | | 199,458 |
| | 55,000 | | Valero Energy Corp. | | 9.375 | % | | 03/15/19 | | | 66,724 |
| | | |
| | RETAIL — 0.9% | | | | | | | | |
| $ | 115,000 | | Hasbro, Inc. | | 6.125 | % | | 05/15/14 | | $ | 122,523 |
| | 120,000 | | Home Depot, Inc. | | 5.200 | % | | 03/01/11 | | | 123,041 |
| | 22,000 | | Ltd. Brands, Inc. | | 5.250 | % | | 11/01/14 | | | 21,945 |
| | | |
| | SEMICONDUCTOR EQUIPMENT & PRODUCTS — 0.7% | | | | | | | | |
| $ | 165,000 | | Applied Materials, Inc. | | 7.125 | % | | 10/15/17 | | $ | 192,856 |
| | | |
| | TECHNOLOGY — 0.4% | | | | | | | | |
| $ | 120,000 | | Intuit, Inc. | | 5.400 | % | | 03/15/12 | | $ | 127,446 |
| | | |
| | TELECOMMUNICATIONS — 2.5% | | | | | | | | |
| $ | 110,000 | | AT&T, Inc. | | 5.800 | % | | 02/15/19 | | $ | 124,056 |
| | 70,000 | | British Telecommunications PLC | | 9.875 | % | | 12/15/30 | | | 85,638 |
| | 105,000 | | Cellco Partnership/Verizon Wireless Capital LLC | | 5.550 | % | | 02/01/14 | | | 117,817 |
| | 120,000 | | France Telecom SA | | 7.750 | % | | 03/01/11 | | | 125,240 |
| | 60,000 | | L-3 Communications Corp. | | 5.875 | % | | 01/15/15 | | | 59,550 |
| | 175,000 | | Verizon Global Funding Corp. | | 7.750 | % | | 12/01/30 | | | 218,691 |
| | | |
| | TRANSPORTATION — 0.5% | | | | | | | | |
| $ | 120,000 | | Burlington Northern Santa Fe LLC | | 6.200 | % | | 08/15/36 | | $ | 135,445 |
| | | | | | | | | | |
|
|
| | Total Corporate Bonds (identified cost, $10,477,002) | | | | | | | $ | 11,266,305 |
| | | | | | | | | | |
|
|
| | | |
| | CONVERTIBLE BONDS — 0.9% | | | | | | | | |
| $ | 130,000 | | NASDAQ OMX Group, Inc. (The) | | 2.500 | % | | 08/15/13 | | $ | 123,988 |
| | 125,000 | | National City Corp. | | 4.000 | % | | 02/01/11 | | | 126,562 |
| | | | | | | | | | |
|
|
| | Total Convertible Bonds (identified cost, $245,698) | | | | | | | $ | 250,550 |
| | | | | | | | | | |
|
|
See notes to financial statements
35
Wright Total Return Bond Fund (WTRB)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT INTERESTS — 48.5% | | | | | | | | |
| | | |
| | AGENCY MORTGAGE-BACKED SECURITIES — 21.8% | | | | | | | | |
| $ | 200,346 | | FHLMC Gold Pool #A32600 | | 5.500 | % | | 05/01/35 | | $ | 215,761 |
| | 44,697 | | FHLMC Gold Pool #C01646 | | 6.000 | % | | 09/01/33 | | | 49,162 |
| | 22,194 | | FHLMC Gold Pool #C27663 | | 7.000 | % | | 06/01/29 | | | 25,237 |
| | 128,574 | | FHLMC Gold Pool #C47318 | | 7.000 | % | | 09/01/29 | | | 148,344 |
| | 228,612 | | FHLMC Gold Pool #C66878 | | 6.500 | % | | 05/01/32 | | | 254,345 |
| | 166,610 | | FHLMC Gold Pool #C91046 | | 6.500 | % | | 05/01/27 | | | 183,258 |
| | 44,744 | | FHLMC Gold Pool #D66753 | | 6.000 | % | | 10/01/23 | | | 47,496 |
| | 9,711 | | FHLMC Gold Pool #E00903 | | 7.000 | % | | 10/01/15 | | | 10,529 |
| | 237,145 | | FHLMC Gold Pool #G01035 | | 6.000 | % | | 05/01/29 | | | 261,800 |
| | 138,058 | | FHLMC Gold Pool #G02478 | | 5.500 | % | | 12/01/36 | | | 148,464 |
| | 172,505 | | FHLMC Gold Pool #H19018 | | 6.500 | % | | 08/01/37 | | | 188,338 |
| | 101,434 | | FHLMC Gold Pool #N30514 | | 5.500 | % | | 11/01/28 | | | 108,350 |
| | 300,466 | | FHLMC Gold Pool #P00024 | | 7.000 | % | | 09/01/32 | | | 333,231 |
| | 21,349 | | FHLMC Gold Pool #P50031(2) | | 7.000 | % | | 08/01/18 | | | 23,564 |
| | 47,803 | | FHLMC Gold Pool #P50064(2) | | 7.000 | % | | 09/01/30 | | | 52,763 |
| | 88,684 | | FHLMC Pool #1B1291 | | 3.130 | %(1) | | 11/01/33 | | | 91,983 |
| | 308,415 | | FHLMC Pool #1G0233 | | 3.045 | %(1) | | 05/01/35 | | | 320,719 |
| | 65,591 | | FHLMC Pool #781071 | | 5.218 | %(1) | | 11/01/33 | | | 69,383 |
| | 59,590 | | FHLMC Pool #781804 | | 5.027 | %(1) | | 07/01/34 | | | 63,719 |
| | 27,756 | | FHLMC Pool #781884 | | 5.106 | %(1) | | 08/01/34 | | | 29,682 |
| | 73,897 | | FHLMC Pool #782862 | | 5.006 | %(1) | | 11/01/34 | | | 78,756 |
| | 257,469 | | FHLMC Series 1983, Class Z | | 6.500 | % | | 12/15/23 | | | 282,485 |
| | 195,769 | | FHLMC Series 2044, Class PE | | 6.500 | % | | 04/15/28 | | | 203,647 |
| | 121,833 | | FNMA Pool #253057 | | 8.000 | % | | 12/01/29 | | | 141,199 |
| | 20,341 | | FNMA Pool #254845 | | 4.000 | % | | 07/01/13 | | | 20,870 |
| | 20,520 | | FNMA Pool #254863 | | 4.000 | % | | 08/01/13 | | | 20,987 |
| | 23,270 | | FNMA Pool #479477 | | 6.000 | % | | 01/01/29 | | | 25,781 |
| | 20,379 | | FNMA Pool #489357 | | 6.500 | % | | 03/01/29 | | | 22,755 |
| | 19,101 | | FNMA Pool #535332 | | 8.500 | % | | 04/01/30 | | | 22,267 |
| | 36,971 | | FNMA Pool #545782 | | 7.000 | % | | 07/01/32 | | | 42,320 |
| | 28,027 | | FNMA Pool #597396 | | 6.500 | % | | 09/01/31 | | | 31,296 |
| | 53,376 | | FNMA Pool #725866 | | 4.500 | % | | 09/01/34 | | | 55,897 |
| | 122,179 | | FNMA Pool #738630 | | 5.500 | % | | 11/01/33 | | | 131,789 |
| | 218,201 | | FNMA Pool #745467 | | 5.656 | %(1) | | 04/01/36 | | | 233,276 |
| | 434,287 | | FNMA Pool #745755 | | 5.000 | % | | 12/01/35 | | | 461,584 |
| | 172,614 | | FNMA Pool #747529 | | 4.500 | % | | 10/01/33 | | | 181,088 |
| | 571,977 | | FNMA Pool #781893 | | 4.500 | % | | 11/01/31 | | | 599,700 |
| | 55,848 | | FNMA Pool #809888 | | 4.500 | % | | 03/01/35 | | | 58,416 |
| | 70,924 | | FNMA Pool #906455 | | 5.920 | %(1) | | 01/01/37 | | | 76,567 |
| | 86,059 | | GNMA I Pool #374892 | | 7.000 | % | | 02/15/24 | | | 97,301 |
| | 32,975 | | GNMA I Pool #376400 | | 6.500 | % | | 02/15/24 | | | 36,712 |
| | 45,087 | | GNMA I Pool #379982 | | 7.000 | % | | 02/15/24 | | | 50,976 |
| | 165,658 | | GNMA I Pool #393347 | | 7.500 | % | | 02/15/27 | | | 188,480 |
| | 59,459 | | GNMA I Pool #410081 | | 8.000 | % | | 08/15/25 | | | 68,732 |
| | 34,461 | | GNMA I Pool #427199 | | 7.000 | % | | 12/15/27 | | | 39,148 |
| | 8,041 | | GNMA I Pool #436214 | | 6.500 | % | | 02/15/13 | | | 8,759 |
| | 63,038 | | GNMA I Pool #448490 | | 7.500 | % | | 03/15/27 | | | 71,722 |
| | 48,598 | | GNMA I Pool #458762 | | 6.500 | % | | 01/15/28 | | | 54,621 |
| | 53,760 | | GNMA I Pool #460726 | | 6.500 | % | | 12/15/27 | | | 60,070 |
| | 15,492 | | GNMA I Pool #488924 | | 6.500 | % | | 11/15/28 | | | 17,412 |
| | 12,858 | | GNMA I Pool #510706 | | 8.000 | % | | 11/15/29 | | | 14,929 |
| | 50,818 | | GNMA I Pool #581536 | | 5.500 | % | | 06/15/33 | | | 55,325 |
| | 116,063 | | GNMA II Pool #002630 | | 6.500 | % | | 08/20/28 | | | 131,015 |
| | 5,438 | | GNMA II Pool #002909 | | 8.000 | % | | 04/20/30 | | | 6,316 |
| | 13,916 | | GNMA II Pool #002972 | | 7.500 | % | | 09/20/30 | | | 15,807 |
See notes to financial statements
36
Wright Total Return Bond Fund (WTRB)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value | |
| | | | | | | | | | | | | |
| | AGENCY MORTGAGE-BACKED SECURITIES — continued | | | | | | | | | |
| $ | 4,993 | | GNMA II Pool #002973 | | 8.000 | % | | 09/20/30 | | $ | 5,779 | |
| | 51,675 | | GNMA II Pool #003095 | | 6.500 | % | | 06/20/31 | | | 57,892 | |
| | | |
| | U.S. GOVERNMENT AGENCIES — 1.5% | | | | | | | | | |
| $ | 225,000 | | Citigroup, Inc. (FDIC Guaranteed) | | 2.875 | % | | 12/09/11 | | $ | 232,076 | |
| | 145,000 | | JPMorgan Chase & Co. (FDIC Guaranteed) | | 3.125 | % | | 12/01/11 | | | 150,056 | |
| | 55,000 | | PNC Funding Corp. (FDIC Guaranteed) | | 2.300 | % | | 06/22/12 | | | 56,657 | |
| | | |
| | U.S. TREASURIES — 25.2% | | | | | | | | | |
| $ | 1,030,000 | | U.S. Treasury Notes | | 0.875 | % | | 04/30/11 | | $ | 1,034,748 | |
| | 450,000 | | U.S. Treasury Notes | | 0.750 | % | | 11/30/11 | | | 451,758 | |
| | 1,555,000 | | U.S. Treasury Notes | | 3.875 | % | | 02/15/13 | | | 1,680,008 | |
| | 865,000 | | U.S. Treasury Notes | | 3.375 | % | | 07/31/13 | | | 927,577 | |
| | 670,000 | | U.S. Treasury Notes | | 4.500 | % | | 11/15/15 | | | 760,764 | |
| | 505,000 | | U.S. Treasury Notes | | 3.250 | % | | 06/30/16 | | | 535,655 | |
| | 1,165,000 | | U.S. Treasury Notes | | 3.875 | % | | 05/15/18 | | | 1,273,491 | |
| | 80,000 | | U.S. Treasury Interest Strip | | 0.000 | % | | 11/15/19 | | | 59,626 | |
| | 615,000 | | U.S. Treasury Interest Strip | | 0.000 | % | | 11/15/30 | | | 267,387 | |
| | 950,000 | | U.S. Treasury Principal Strip | | 0.000 | % | | 08/15/39 | | | 288,412 | |
| | | | | | | | | | |
|
|
|
| | Total U.S. Government Interests (identified cost, $13,400,744) | | | | | | | $ | 14,016,019 | |
| | | | | | | | | | |
|
|
|
| | | |
| | TOTAL FIXED INCOME INVESTMENTS (identified cost, $27,009,279) — 98.2% | | | | | | | $ | 28,394,992 | |
| | | | | | | | | | |
|
|
|
| | | |
| | SHORT-TERM INVESTMENTS — 2.3% | | | | | | | | | |
| $ | 658,239 | | Fidelity Government Money Market Fund, 0.05% | | | | | | | $ | 658,239 | |
| | | | | | | | | | |
|
|
|
| | | |
| | TOTAL SHORT-TERM INVESTMENTS (identified cost, $658,239) — 2.3% | | | | | | | $ | 658,239 | |
| | | | | | | | | | |
|
|
|
| | | |
| | TOTAL INVESTMENTS (identified cost, $27,667,518) — 100.5% | | | | | | | $ | 29,053,231 | |
| | | |
| | OTHER ASSETS, LESS LIABILITIES — (0.5%) | | | | | | | | (137,780 | ) |
| | | | | | | | | | |
|
|
|
| | | |
| | NET ASSETS — 100.0% | | | | | | | $ | 28,915,451 | |
| | | | | | | | | | |
|
|
|
FDIC — Federal Deposit Insurance Corporation
FHLMC — Federal Home Loan Mortgage Corporation
FNMA — Federal National Mortgage Association
GNMA — Government National Mortgage Association
LLC — Limited Liability Company
LP — Limited Partnership
PLC — Public Limited Company
| (1) | Adjustable rate security. Rate shown is the rate at period end. |
| (2) | Security fair valued in accordance with procedures adopted by the Board of Trustees. At year end, the value of these securities amounted to $76,327 or 0.3% of net assets. |
| | |
| Portfolio Composition by Security Type |
| % of total investments at 06/30/10 |
| Asset-Backed Securities | | 2.7% |
| Commercial Mortgage-Backed Securities | | 7.1% |
| Non-Agency Mortgage-Backed Securities | | 0.0% |
| Corporate Bonds | | 38.8% |
| Convertible Bonds | | 0.9% |
| U.S. Government Interests | | 48.2% |
| Short-Term Investments | | 2.3% |
See notes to financial statements
37
Wright Total Return Bond Fund (WTRB)
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| ASSETS: | | | | |
Investments, at value
(identified cost $27,667,518) (Note 1A) | | $ | 29,053,231 | |
Receivable for fund shares sold | | | 2,111 | |
Investment securities sold | | | 1,244,779 | |
Dividends and interest receivable | | | 264,682 | |
Tax reclaims receivable | | | 97 | |
Prepaid expenses and other assets | | | 28,401 | |
| | |
|
|
|
Total assets | | $ | 30,593,301 | |
| | |
|
|
|
| |
| LIABILITIES: | | | | |
Payable for fund shares reacquired | | $ | 549 | |
Investment securities purchased | | | 1,635,015 | |
Distributions payable | | | 26,328 | |
Accrued expenses and other liabilities | | | 15,958 | |
| | |
|
|
|
Total liabilities | | $ | 1,677,850 | |
| | |
|
|
|
| NET ASSETS | | $ | 28,915,451 | |
| | |
|
|
|
| |
| NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 29,905,213 | |
Accumulated net realized loss on investments | | | (2,307,039 | ) |
Distributions in excess of net investment income | | | (68,436 | ) |
Unrealized appreciation on investments | | | 1,385,713 | |
| | |
|
|
|
Net assets applicable to outstanding shares | | $ | 28,915,451 | |
| | |
|
|
|
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING | | | 2,230,523 | |
| | |
|
|
|
| |
| NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST | | $ | 12.96 | |
| | |
|
|
|
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| INVESTMENT INCOME (Note 1C) | | | | |
Dividend income | | $ | 82 | |
Interest income (net of foreign taxes, $194) | | | 582,470 | |
| | |
|
|
|
Total investment income | | $ | 582,552 | |
| | |
|
|
|
| |
| Expenses – | | | | |
Investment adviser fee (Note 3) | | $ | 58,375 | |
Administrator fee (Note 3) | | | 9,081 | |
Compensation of Trustees who are not employees of the investment adviser or administrator | | | 10,926 | |
Accountant fees | | | 19,087 | |
Distribution expenses (Note 4) | | | 32,431 | |
Transfer and dividend disbursing agent fees | | | 14,133 | |
Printing | | | 124 | |
Shareholder communications | | | 1,890 | |
Audit services | | | 16,864 | |
Legal services | | | 4,908 | |
Registration costs | | | 5,277 | |
Miscellaneous | | | 9,586 | |
| | |
|
|
|
Total expenses | | $ | 182,682 | |
| | |
|
|
|
| |
| Deduct – | | | | |
Waiver and/or reimbursement by the principal underwriter and/or investment adviser (Note 3 and 4) | | $ | (91,860 | ) |
| | |
|
|
|
Total deductions | | $ | (91,860 | ) |
| | |
|
|
|
Net expenses | | $ | 90,822 | |
| | |
|
|
|
Net investment income | | $ | 491,730 | |
| | |
|
|
|
|
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |
Net realized gain on investment transactions | | $ | 156,808 | |
Net change in unrealized appreciation (depreciation) on investments | | | 608,324 | |
| | |
|
|
|
Net realized and unrealized gain on investments | | $ | 765,132 | |
| | |
|
|
|
Net increase in net assets from operations | | $ | 1,256,862 | |
| | |
|
|
|
See notes to financial statements
38
Wright Total Return Bond Fund (WTRB)
| | | | | | | | |
| STATEMENTS OF CHANGES IN NET ASSETS | | Six Months Ended
June 30, 2010
(Unaudited) | | | Year Ended
December 31, 2009 | |
| | |
| INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | |
From operations – | | | | | | | | |
Net investment income | | $ | 491,730 | | | $ | 1,053,830 | |
Net realized gain (loss) on investment transactions | | | 156,808 | | | | (237,554 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 608,324 | | | | 1,465,401 | |
| | |
|
|
| |
|
|
|
Net increase in net assets from operations | | $ | 1,256,862 | | | $ | 2,281,677 | |
| | |
|
|
| |
|
|
|
Distributions to shareholders (Note 2) | | | | | | | | |
From net investment income | | $ | (541,211 | ) | | $ | (1,139,933 | ) |
| | |
|
|
| |
|
|
|
Total distributions | | $ | (541,211 | ) | | $ | (1,139,933 | ) |
| | |
|
|
| |
|
|
|
| Net increase in net assets from fund share transactions (Note 6) | | $ | 3,643,589 | | | $ | 152,064 | |
| | |
|
|
| |
|
|
|
| Net increase in net assets | | $ | 4,359,240 | | | $ | 1,293,808 | |
| | |
| NET ASSETS: | | | | | | | | |
At beginning of period | | | 24,556,211 | | | | 23,262,403 | |
| | |
|
|
| |
|
|
|
At end of period | | $ | 28,915,451 | | | $ | 24,556,211 | |
| | |
|
|
| |
|
|
|
| | |
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET
ASSETS AT END OF PERIOD | | $ | (68,436 | ) | | $ | (18,955 | ) |
| | |
|
|
| |
|
|
|
See notes to financial statements
39
Wright Total Return Bond Fund (WTRB)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months
Ended
June 30,
2010
(Unaudited)
| | | Year Ended December 31,
| |
| FINANCIAL HIGHLIGHTS | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| | | | | | |
| Net asset value, beginning of period | | $ | 12.616 | | | $ | 11.990 | | | $ | 12.390 | | | $ | 12.290 | | | $ | 12.430 | | | $ | 12.770 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(1)(2) | | $ | 0.235 | | | $ | 0.558 | | | $ | 0.573 | | | $ | 0.558 | | | $ | 0.483 | | | $ | 0.465 | |
Net realized and unrealized gain (loss) | | | 0.331 | | | | 0.672 | | | | (0.373 | ) | | | 0.115 | | | | (0.082 | ) | | | (0.271 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total income from investment operations | | $ | 0.566 | | | $ | 1.230 | | | $ | 0.200 | | | $ | 0.673 | | | $ | 0.401 | | | $ | 0.194 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | $ | (0.218 | ) | | $ | (0.604 | ) | | $ | (0.600 | ) | | $ | (0.573 | ) | | $ | (0.541 | ) | | $ | (0.534 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total distributions | | $ | (0.218 | ) | | $ | (0.604 | ) | | $ | (0.600 | ) | | $ | (0.573 | ) | | $ | (0.541 | ) | | $ | (0.534 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| Net asset value, end of period | | $ | 12.964 | | | $ | 12.616 | | | $ | 11.990 | | | $ | 12.390 | | | $ | 12.290 | | | $ | 12.430 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Total Return(3) | | | 4.80% | (4) | | | 10.53% | | | | 1.69% | | | | 5.64% | | | | 3.34% | | | | 1.54% | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Ratios/Supplemental Data(1): | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 28,915 | | | $ | 24,556 | | | $ | 23,262 | | | $ | 24,989 | | | $ | 30,866 | | | $ | 41,288 | |
Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses | | | 0.70% | (5) | | | 0.70% | | | | 0.71% | | | | 0.87% | | | | 0.99% | | | | 0.98% | |
Net expenses after custodian fee reduction | | | N/A | (5) | | | 0.70% | | | | 0.70% | | | | 0.85% | | | | 0.95% | | | | 0.95% | |
Net investment income | | | 3.79% | (5) | | | 4.53% | | | | 4.73% | | | | 4.56% | | | | 3.96% | | | | 3.66% | |
| Portfolio turnover rate | | | 50% | (4) | | | 61% | | | | 125% | | | | 119% | | | | 90% | | | | 86% | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) For the six months ended June 30, 2010, and for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, 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: | |
| | | 2010 | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| Net investment income per share(2) | | $ | 0.191 | | | $ | 0.453 | | | $ | 0.475 | | | $ | 0.490 | | | $ | 0.453 | | | $ | 0.439 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.41% | (5) | | | 1.55% | | | | 1.52% | | | | 1.41% | | | | 1.23% | | | | 1.18% | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Expenses after custodian fee reduction | | | N/A | (5) | | | 1.55% | | | | 1.51% | | | | 1.38% | | | | 1.19% | | | | 1.15% | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net investment income | | | 3.08% | (5) | | | 3.68% | | | | 3.93% | | | | 4.03% | | | | 3.72% | | | | 3.46% | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) | Computed using average shares outstanding. |
| (3) | Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. |
See notes to financial statements
40
Wright Current Income Fund (WCIF)
Portfolio of Investments — As of June 30, 2010 (Unaudited)
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | FIXED INCOME INVESTMENTS — 93.5% | | | | | | | | |
| | | |
| | NON-AGENCY MORTGAGE-BACKED SECURITIES — 2.8% | | | | | | | | |
| $ | 137,671 | | Bear Stearns Adj. Rate Mortgage Trust, Series 2003-4, Class 3A1 | | 5.001 | %(1) | | 07/25/33 | | $ | 141,774 |
| | 515,266 | | Chase Mortgage Finance Corp., Series 2003-S13, Class A16 | | 5.000 | % | | 11/25/33 | | | 527,524 |
| | 366,712 | | Countrywide Home Loan Mortgage Pass Through Trust,
Series 2006-J1, Class 3A1 | | 6.000 | % | | 02/25/36 | | | 290,650 |
| | | | | | | | | | |
|
|
| | Total Non-Agency Mortgage-Backed Securities (identified cost, $979,864) | | | | | | | $ | 959,948 |
| | | | | | | | | | |
|
|
| | | |
| | AGENCY MORTGAGE-BACKED SECURITIES — 90.7% | | | | | | | | |
| $ | 326,207 | | FHLMC Gold Pool #A14706 | | 4.000 | % | | 10/01/33 | | $ | 331,321 |
| | 29,364 | | FHLMC Gold Pool #C00548 | | 7.000 | % | | 08/01/27 | | | 33,343 |
| | 86,135 | | FHLMC Gold Pool #C00778 | | 7.000 | % | | 06/01/29 | | | 97,945 |
| | 222,472 | | FHLMC Gold Pool #C90580 | | 6.000 | % | | 09/01/22 | | | 245,562 |
| | 53,143 | | FHLMC Gold Pool #D81642 | | 7.500 | % | | 08/01/27 | | | 60,732 |
| | 105,643 | | FHLMC Gold Pool #D82572 | | 7.000 | % | | 09/01/27 | | | 119,959 |
| | 49,415 | | FHLMC Gold Pool #E00678 | | 6.500 | % | | 06/01/14 | | | 52,502 |
| | 52,158 | | FHLMC Gold Pool #E00721 | | 6.500 | % | | 07/01/14 | | | 55,461 |
| | 55,930 | | FHLMC Gold Pool #E81704 | | 8.500 | % | | 05/01/15 | | | 63,556 |
| | 81,639 | | FHLMC Gold Pool #E90181 | | 6.500 | % | | 06/01/17 | | | 89,047 |
| | 362,401 | | FHLMC Gold Pool #G02478 | | 5.500 | % | | 12/01/36 | | | 389,717 |
| | 300,466 | | FHLMC Gold Pool #P00024 | | 7.000 | % | | 09/01/32 | | | 333,231 |
| | 72,955 | | FHLMC Pool #845830 | | 2.823 | %(1) | | 07/01/24 | | | 76,206 |
| | 161,975 | | FHLMC Series 4, Class D | | 8.000 | % | | 12/25/22 | | | 182,072 |
| | 244,757 | | FHLMC Series 15, Class L | | 7.000 | % | | 07/25/23 | | | 253,559 |
| | 89,269 | | FHLMC Series 23, Class KZ | | 6.500 | % | | 11/25/23 | | | 93,718 |
| | 147,268 | | FHLMC Series 2176, Class OJ | | 7.000 | % | | 08/15/29 | | | 163,865 |
| | 87,709 | | FHLMC Series 2201, Class C | | 8.000 | % | | 11/15/29 | | | 98,643 |
| | 185,021 | | FHLMC Series 2259, Class ZM | | 7.000 | % | | 10/15/30 | | | 205,875 |
| | 1,000,000 | | FHLMC Series 2586, Class WG | | 4.000 | % | | 03/15/33 | | | 1,021,905 |
| | 616,338 | | FNMA Pool #252034 | | 7.000 | % | | 09/01/28 | | | 701,136 |
| | 65,094 | | FNMA Pool #254305 | | 6.500 | % | | 05/01/22 | | | 72,487 |
| | 106,981 | | FNMA Pool #255068 | | 6.000 | % | | 01/01/24 | | | 118,218 |
| | 809,762 | | FNMA Pool #255935 | | 5.000 | % | | 11/01/25 | | | 863,193 |
| | 58,360 | | FNMA Pool #535131 | | 6.000 | % | | 03/01/29 | | | 64,656 |
| | 247,081 | | FNMA Pool #673315 | | 5.500 | % | | 11/01/32 | | | 266,670 |
| | 1,147,445 | | FNMA Pool #725027 | | 5.000 | % | | 11/01/33 | | | 1,220,463 |
| | 60,913 | | FNMA Pool #733750 | | 6.310 | % | | 10/01/32 | | | 67,705 |
| | 368,352 | | FNMA Pool #735861 | | 6.500 | % | | 09/01/33 | | | 411,311 |
| | 189,428 | | FNMA Pool #745630 | | 5.500 | % | | 01/01/29 | | | 205,511 |
| | 208,268 | | FNMA Pool #801357 | | 5.500 | % | | 08/01/34 | | | 224,780 |
| | 244,263 | | FNMA Pool #813839 | | 6.000 | % | | 11/01/34 | | | 269,697 |
| | 173,099 | | FNMA Pool #871394 | | 7.000 | % | | 04/01/21 | | | 187,857 |
| | 268,138 | | FNMA Pool #888129 | | 5.500 | % | | 02/01/37 | | | 288,307 |
| | 553,492 | | FNMA Pool #888339 | | 4.500 | % | | 04/01/37 | | | 578,936 |
| | 245,800 | | FNMA Series 2003-W3, Class 2A5 | | 5.356 | % | | 06/25/42 | | | 265,486 |
| | 481,559 | | FNMA Series 2003-110, Class CK | | 3.000 | % | | 11/25/33 | | | 474,027 |
| | 637,760 | | FNMA Series 2010-12, Class EY | | 4.000 | % | | 02/25/25 | | | 652,706 |
| | 314,849 | | FNMA Series G93-5, Class Z | | 6.500 | % | | 02/25/23 | | | 351,500 |
| | 856 | | GNMA I Pool #176992 | | 8.000 | % | | 11/15/16 | | | 888 |
| | 1,048 | | GNMA I Pool #177784 | | 8.000 | % | | 10/15/16 | | | 1,161 |
| | 9,080 | | GNMA I Pool #192357 | | 8.000 | % | | 04/15/17 | | | 10,159 |
| | 1,978 | | GNMA I Pool #194287 | | 9.500 | % | | 03/15/17 | | | 2,250 |
| | 949 | | GNMA I Pool #196063 | | 8.500 | % | | 03/15/17 | | | 1,065 |
| | 5,669 | | GNMA I Pool #211231 | | 8.500 | % | | 05/15/17 | | | 6,360 |
| | 1,072 | | GNMA I Pool #212601 | | 8.500 | % | | 06/15/17 | | | 1,203 |
| | 1,480 | | GNMA I Pool #220917 | | 8.500 | % | | 04/15/17 | | | 1,660 |
| | 4,472 | | GNMA I Pool #223348 | | 10.000 | % | | 08/15/18 | | | 5,177 |
| | 5,045 | | GNMA I Pool #228308 | | 10.000 | % | | 01/15/19 | | | 5,820 |
See notes to financial statements
41
Wright Current Income Fund (WCIF)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | AGENCY MORTGAGE-BACKED SECURITIES — continued | | | | | | | | |
| $ | 2,332 | | GNMA I Pool #230223 | | 9.500 | % | | 04/15/18 | | $ | 2,683 |
| | 3,340 | | GNMA I Pool #260999 | | 9.500 | % | | 09/15/18 | | | 3,844 |
| | 4,795 | | GNMA I Pool #263439 | | 10.000 | % | | 02/15/19 | | | 5,584 |
| | 1,268 | | GNMA I Pool #265267 | | 9.500 | % | | 08/15/20 | | | 1,471 |
| | 1,500 | | GNMA I Pool #266983 | | 10.000 | % | | 02/15/19 | | | 1,747 |
| | 713 | | GNMA I Pool #286556 | | 9.000 | % | | 03/15/20 | | | 819 |
| | 1,422 | | GNMA I Pool #301366 | | 8.500 | % | | 06/15/21 | | | 1,619 |
| | 4,166 | | GNMA I Pool #302933 | | 8.500 | % | | 06/15/21 | | | 4,823 |
| | 9,900 | | GNMA I Pool #308792 | | 9.000 | % | | 07/15/21 | | | 11,422 |
| | 1,721 | | GNMA I Pool #314222 | | 8.500 | % | | 04/15/22 | | | 1,990 |
| | 3,072 | | GNMA I Pool #315187 | | 8.000 | % | | 06/15/22 | | | 3,545 |
| | 8,639 | | GNMA I Pool #315754 | | 8.000 | % | | 01/15/22 | | | 9,444 |
| | 23,135 | | GNMA I Pool #319441 | | 8.500 | % | | 04/15/22 | | | 25,284 |
| | 7,173 | | GNMA I Pool #325165 | | 8.000 | % | | 06/15/22 | | | 8,277 |
| | 7,802 | | GNMA I Pool #335950 | | 8.000 | % | | 10/15/22 | | | 8,678 |
| | 113,850 | | GNMA I Pool #346987 | | 7.000 | % | | 12/15/23 | | | 128,558 |
| | 53,481 | | GNMA I Pool #352001 | | 6.500 | % | | 12/15/23 | | | 59,146 |
| | 20,440 | | GNMA I Pool #352110 | | 7.000 | % | | 08/15/23 | | | 23,080 |
| | 46,065 | | GNMA I Pool #368238 | | 7.000 | % | | 12/15/23 | | | 52,017 |
| | 43,144 | | GNMA I Pool #372379 | | 8.000 | % | | 10/15/26 | | | 49,940 |
| | 55,455 | | GNMA I Pool #396537 | | 7.490 | % | | 03/15/25 | | | 63,030 |
| | 41,514 | | GNMA I Pool #399726 | | 7.490 | % | | 05/15/25 | | | 47,185 |
| | 99,722 | | GNMA I Pool #399788 | | 7.490 | % | | 09/15/25 | | | 113,344 |
| | 28,135 | | GNMA I Pool #399958 | | 7.490 | % | | 02/15/27 | | | 32,002 |
| | 26,916 | | GNMA I Pool #399964 | | 7.490 | % | | 04/15/26 | | | 30,583 |
| | 50,877 | | GNMA I Pool #410215 | | 7.500 | % | | 12/15/25 | | | 57,842 |
| | 5,826 | | GNMA I Pool #414736 | | 7.500 | % | | 11/15/25 | | | 6,623 |
| | 23,847 | | GNMA I Pool #420707 | | 7.000 | % | | 02/15/26 | | | 27,068 |
| | 16,607 | | GNMA I Pool #421829 | | 7.500 | % | | 04/15/26 | | | 18,875 |
| | 9,945 | | GNMA I Pool #431036 | | 8.000 | % | | 07/15/26 | | | 11,512 |
| | 14,097 | | GNMA I Pool #431612 | | 8.000 | % | | 11/15/26 | | | 16,317 |
| | 7,010 | | GNMA I Pool #442190 | | 8.000 | % | | 12/15/26 | | | 8,114 |
| | 52,165 | | GNMA I Pool #448970 | | 8.000 | % | | 08/15/27 | | | 60,452 |
| | 13,299 | | GNMA I Pool #449176 | | 6.500 | % | | 07/15/28 | | | 14,947 |
| | 21,753 | | GNMA I Pool #462623 | | 6.500 | % | | 03/15/28 | | | 24,449 |
| | 165,943 | | GNMA I Pool #471369 | | 5.500 | % | | 05/15/33 | | | 180,660 |
| | 9,925 | | GNMA I Pool #475149 | | 6.500 | % | | 05/15/13 | | | 10,811 |
| | 326,846 | | GNMA I Pool #487108 | | 6.000 | % | | 04/15/29 | | | 361,758 |
| | 133,526 | | GNMA I Pool #489377 | | 6.375 | % | | 03/15/29 | | | 149,233 |
| | 534,192 | | GNMA I Pool #503405 | | 6.500 | % | | 04/15/29 | | | 599,063 |
| | 138,516 | | GNMA I Pool #509930 | | 5.500 | % | | 06/15/29 | | | 151,048 |
| | 337,746 | | GNMA I Pool #509965 | | 5.500 | % | | 06/15/29 | | | 368,303 |
| | 36,427 | | GNMA I Pool #524811 | | 6.375 | % | | 09/15/29 | | | 40,713 |
| | 16,952 | | GNMA I Pool #538314 | | 7.000 | % | | 02/15/32 | | | 19,282 |
| | 160,731 | | GNMA I Pool #595606 | | 6.000 | % | | 11/15/32 | | | 177,900 |
| | 24,530 | | GNMA I Pool #602377 | | 4.500 | % | | 06/15/18 | | | 26,304 |
| | 22,765 | | GNMA I Pool #603377 | | 4.500 | % | | 01/15/18 | | | 24,411 |
| | 126,299 | | GNMA I Pool #616829 | | 5.500 | % | | 01/15/25 | | | 139,632 |
| | 123,167 | | GNMA I Pool #623190 | | 6.000 | % | | 12/15/23 | | | 135,683 |
| | 458,953 | | GNMA I Pool #624600 | | 6.150 | % | | 01/15/34 | | | 506,432 |
| | 77,968 | | GNMA I Pool #640940 | | 5.500 | % | | 05/15/35 | | | 84,688 |
| | 609,813 | | GNMA I Pool #651773 | | 6.000 | % | | 04/15/36 | | | 667,135 |
| | 50,840 | | GNMA I Pool #658267 | | 6.500 | % | | 02/15/22 | | | 55,385 |
| | 354,515 | | GNMA I Pool #675363 | | 6.000 | % | | 01/15/35 | | | 388,836 |
| | 1,189,634 | | GNMA I Pool #711286 | | 6.500 | % | | 10/15/32 | | | 1,325,921 |
| | 39,644 | | GNMA I Pool #780429 | | 7.500 | % | | 09/15/26 | | | 45,064 |
| | 237,999 | | GNMA I Pool #780492 | | 7.000 | % | | 09/15/24 | | | 268,836 |
| | 136,386 | | GNMA I Pool #780977 | | 7.500 | % | | 12/15/28 | | | 155,067 |
See notes to financial statements
42
Wright Current Income Fund (WCIF)
Portfolio of Investments — As of June 30, 2010 (Unaudited) — continued
| | | | | | | | | | | |
Face
Amount | | Description | | Coupon
Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | AGENCY MORTGAGE-BACKED SECURITIES — continued | | | | | | | | |
| $ | 346,837 | | GNMA I Pool #781120 | | 7.000 | % | | 12/15/29 | | $ | 394,440 |
| | 23,804 | | GNMA II Pool #000723 | | 7.500 | % | | 01/20/23 | | | 26,937 |
| | 1,936 | | GNMA II Pool #001596 | | 9.000 | % | | 04/20/21 | | | 2,226 |
| | 29,404 | | GNMA II Pool #002268 | | 7.500 | % | | 08/20/26 | | | 33,282 |
| | 124,522 | | GNMA II Pool #002442 | | 6.500 | % | | 06/20/27 | | | 140,571 |
| | 3,789 | | GNMA II Pool #002855 | | 8.500 | % | | 12/20/29 | | | 4,414 |
| | 163,144 | | GNMA II Pool #003284 | | 5.500 | % | | 09/20/32 | | | 177,847 |
| | 97,231 | | GNMA II Pool #003401 | | 4.500 | % | | 06/20/33 | | | 102,371 |
| | 140,909 | | GNMA II Pool #003554 | | 4.500 | % | | 05/20/34 | | | 148,103 |
| | 660,615 | | GNMA II Pool #003556 | | 5.500 | % | | 05/20/34 | | | 718,813 |
| | 396,575 | | GNMA II Pool #003689 | | 4.500 | % | | 03/20/35 | | | 416,603 |
| | 63,398 | | GNMA II Pool #004149 | | 7.500 | % | | 05/20/38 | | | 69,616 |
| | 709,639 | | GNMA II Pool #004308 | | 5.000 | % | | 12/20/38 | | | 752,793 |
| | 433,900 | | GNMA II Pool #004412 | | 5.000 | % | | 04/20/39 | | | 459,609 |
| | 162,452 | | GNMA II Pool #575787 | | 5.760 | % | | 03/20/33 | | | 178,948 |
| | 105,840 | | GNMA II Pool #608120 | | 6.310 | % | | 01/20/33 | | | 116,992 |
| | 304,124 | | GNMA II Pool #610116 | | 5.760 | % | | 04/20/33 | | | 335,006 |
| | 70,426 | | GNMA II Pool #610143 | | 5.760 | % | | 06/20/33 | | | 77,577 |
| | 238,323 | | GNMA II Pool #612121 | | 5.760 | % | | 07/20/33 | | | 262,523 |
| | 327,560 | | GNMA II Pool #648541 | | 6.000 | % | | 10/20/35 | | | 359,216 |
| | 999,143 | | GNMA Series 1998-21, Class ZB | | 6.500 | % | | 09/20/28 | | | 1,052,145 |
| | 872,558 | | GNMA Series 1999-4, Class ZB | | 6.000 | % | | 02/20/29 | | | 952,479 |
| | 219,276 | | GNMA Series 1999-25, Class TB | | 7.500 | % | | 07/16/29 | | | 253,174 |
| | 337,371 | | GNMA Series 2000-14, Class PD | | 7.000 | % | | 02/16/30 | | | 359,852 |
| | 262,604 | | GNMA Series 2001-4, Class PM | | 6.500 | % | | 03/20/31 | | | 290,054 |
| | 149,072 | | GNMA Series 2002-7, Class PG | | 6.500 | % | | 01/20/32 | | | 163,257 |
| | 331,988 | | GNMA Series 2002-22, Class GF | | 6.500 | % | | 03/20/32 | | | 353,608 |
| | 228,926 | | GNMA Series 2002-40, Class UK | | 6.500 | % | | 06/20/32 | | | 241,687 |
| | 178,643 | | GNMA Series 2002-45, Class QE | | 6.500 | % | | 06/20/32 | | | 191,010 |
| | 1,055,000 | | GNMA Series 2008-27, Class JA | | 5.750 | % | | 08/20/37 | | | 1,186,321 |
| | 1,500,000 | | GNMA Series 2010-21, Class NB | | 4.500 | % | | 01/20/37 | | | 1,617,963 |
| | 1,494,206 | | GNMA Series 2010-23, Class DP | | 4.500 | % | | 10/20/37 | | | 1,613,961 |
| | 381,942 | | Vendee Mortgage Trust, Series 1996-1, Class 1Z | | 6.750 | % | | 02/15/26 | | | 420,713 |
| | 304,927 | | Vendee Mortgage Trust, Series 1998-1, Class 2E | | 7.000 | % | | 03/15/28 | | | 338,110 |
| | | | | | | | | | |
|
|
| | Total Agency Mortgage-Backed Securities (identified cost, $29,934,773) | | | | | | | $ | 31,919,308 |
| | | | | | | | | | |
|
|
| | | |
| | TOTAL FIXED INCOME INVESTMENTS (identified cost, $30,914,637) — 93.5% | | | | | | | $ | 32,879,256 |
| | | | | | | | | | |
|
|
| | | |
| | SHORT-TERM INVESTMENTS — 1.8% | | | | | | | | |
| $ | 639,422 | | Fidelity Government Money Market Fund, 0.05% | | | | | | | $ | 639,422 |
| | | | | | | | | | |
|
|
| | | |
| | TOTAL SHORT-TERM INVESTMENTS (identified cost, $639,422) — 1.8% | | | | | | | $ | 639,422 |
| | | | | | | | | | |
|
|
| | | |
| | TOTAL INVESTMENTS (identified cost, $31,554,059) — 95.3% | | | | | | | $ | 33,518,678 |
| | | |
| | OTHER ASSETS, LESS LIABILITIES — 4.7% | | | | | | | | 1,667,497 |
| | | | | | | | | | |
|
|
| | | |
| | NET ASSETS — 100.0% | | | | | | | $ | 35,186,175 |
| | | | | | | | | | |
|
|
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. |
| | |
| Portfolio Composition by Security Type | | |
| % of total investments at 06/30/10 | | |
| Agency Mortgage-Backed Securities | | 95.2% |
| Non-Agency Mortgage-Backed Securities | | 2.9% |
| Short-Term Investments | | 1.9% |
See notes to financial statements
43
Wright Current Income Fund (WCIF)
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| ASSETS: | | | | |
Investments, at value
(identified cost $31,554,059) (Note 1A) | | $ | 33,518,678 | |
Receivable for fund shares sold | | | 1,551,074 | |
Investment securities sold | | | 334 | |
Dividends and interest receivable | | | 145,034 | |
Prepaid expenses and other assets | | | 32,802 | |
| | |
|
|
|
Total assets | | $ | 35,247,922 | |
| | |
|
|
|
| |
| LIABILITIES: | | | | |
Payable for fund shares reacquired | | $ | 5,837 | |
Distributions payable | | | 43,391 | |
Accrued expenses and other liabilities | | | 12,519 | |
| | |
|
|
|
Total liabilities | | $ | 61,747 | |
| | |
|
|
|
| NET ASSETS | | $ | 35,186,175 | |
| | |
|
|
|
| |
| NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 33,939,697 | |
Accumulated net realized loss on investments | | | (706,954 | ) |
Distributions in excess of net investment income | | | (11,187 | ) |
Unrealized appreciation on investments | | | 1,964,619 | |
| | |
|
|
|
Net assets applicable to outstanding shares | | $ | 35,186,175 | |
| | |
|
|
|
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING | | | 3,512,436 | |
| | |
|
|
|
| |
| NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST | | $ | 10.02 | |
| | |
|
|
|
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
| | | | |
| | | | | |
| INVESTMENT INCOME (Note 1C) | | | | |
Dividend income | | $ | 230 | |
Interest income | | | 849,420 | |
| | |
|
|
|
Total investment income | | $ | 849,650 | |
| | |
|
|
|
| |
| Expenses – | | | | |
Investment adviser fee (Note 3) | | $ | 72,441 | |
Administrator fee (Note 3) | | | 14,488 | |
Compensation of Trustees who are not employees of the investment adviser or administrator | | | 10,674 | |
Accountant fees | | | 18,913 | |
Distribution expenses (Note 4) | | | 40,245 | |
Transfer and dividend disbursing agent fees | | | 14,996 | |
Printing | | | 161 | |
Shareholder communications | | | 2,094 | |
Audit services | | | 19,349 | |
Legal services | | | 5,677 | |
Registration costs | | | 4,889 | |
Miscellaneous | | | 7,743 | |
| | |
|
|
|
Total expenses | | $ | 211,670 | |
| | |
|
|
|
| |
| Deduct – | | | | |
Waiver and/or reimbursement by the principal underwriter and/or investment adviser
(Note 3 and 4) | | $ | (66,730 | ) |
| | |
|
|
|
Total deductions | | $ | (66,730 | ) |
| | |
|
|
|
Net expenses | | $ | 144,940 | |
| | |
|
|
|
Net investment income | | $ | 704,710 | |
| | |
|
|
|
|
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | |
Net realized loss on investment transactions | | $ | (1,475 | ) |
Net change in unrealized appreciation (depreciation) on investments | | | 757,961 | |
| | |
|
|
|
Net realized and unrealized gain on investments | | $ | 756,486 | |
| | |
|
|
|
Net increase in net assets from operations | | $ | 1,461,196 | |
| | |
|
|
|
See notes to financial statements
44
Wright Current Income Fund (WCIF)
| | | | | | | | |
| STATEMENTS OF CHANGES IN NET ASSETS | | Six Months Ended
June 30, 2010
(Unaudited) | | | Year Ended,
December 31, 2009 | |
| | |
| INCREASE (DECREASE) IN NET ASSETS: | | | | | | | | |
From operations – | | | | | | | | |
Net investment income | | $ | 704,710 | | | $ | 1,843,529 | |
Net realized gain (loss) on investment transactions | | | (1,475 | ) | | | 721,461 | |
Net change in unrealized appreciation (depreciation) on investments | | | 757,961 | | | | (208,499 | ) |
| | |
|
|
| |
|
|
|
Net increase in net assets from operations | | $ | 1,461,196 | | | $ | 2,356,491 | |
| | |
|
|
| |
|
|
|
Distributions to shareholders (Note 2) | | | | | | | | |
From net investment income | | $ | (843,650 | ) | | $ | (1,798,418 | ) |
| | |
|
|
| |
|
|
|
Total distributions | | $ | (843,650 | ) | | $ | (1,798,418 | ) |
| | |
|
|
| |
|
|
|
| Net increase (decrease) in net assets from fund share transactions (Note 6) | | $ | 1,539,424 | | | $ | (6,335,077 | ) |
| | |
|
|
| |
|
|
|
| Net increase (decrease) in net assets | | $ | 2,156,970 | | | $ | (5,777,004 | ) |
| | |
| NET ASSETS: | | | | | | | | |
At beginning of period | | | 33,029,205 | | | | 38,806,209 | |
| | |
|
|
| |
|
|
|
At end of period | | $ | 35,186,175 | | | $ | 33,029,205 | |
| | |
|
|
| |
|
|
|
| | |
| UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED IN NET ASSETS AT END OF PERIOD | | $ | (11,187 | ) | | $ | 127,753 | |
| | |
|
|
| |
|
|
|
See notes to financial statements
45
Wright Current Income Fund (WCIF)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months
Ended
June 30,
2010
(Unaudited) | | | Year Ended December 31,
| |
| FINANCIAL HIGHLIGHTS | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| | | | | | |
| Net asset value, beginning of period | | $ | 9.831 | | | $ | 9.700 | | | $ | 9.590 | | | $ | 9.510 | | | $ | 9.610 | | | $ | 9.890 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(1)(2) | | $ | 0.215 | | | $ | 0.472 | | | $ | 0.447 | | | $ | 0.455 | | | $ | 0.427 | | | $ | 0.400 | |
Net realized and unrealized gain (loss) | | | 0.190 | | | | 0.119 | | | | 0.122 | | | | 0.078 | | | | (0.063 | ) | | | (0.230 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total income from investment operations | | $ | 0.405 | | | $ | 0.591 | | | $ | 0.569 | | | $ | 0.533 | | | $ | 0.364 | | | $ | 0.170 | |
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| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | $ | (0.219 | ) | | $ | (0.460 | ) | | $ | (0.459 | ) | | $ | (0.444 | ) | | $ | (0.447 | ) | | $ | (0.430 | ) |
From net realized gains | | | — | | | | — | | | | — | | | | (0.009 | ) | | | (0.017 | ) | | | (0.020 | ) |
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Total distributions | | $ | (0.219 | ) | | $ | (0.460 | ) | | $ | (0.459 | ) | | $ | (0.453 | ) | | $ | (0.464 | ) | | $ | (0.450 | ) |
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| Net asset value, end of period | | $ | 10.017 | | | $ | 9.831 | | | $ | 9.700 | | | $ | 9.590 | | | $ | 9.510 | | | $ | 9.610 | |
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| Total Return(3) | | | 4.57% | (4) | | | 6.20% | | | | 6.10% | | | | 5.77% | | | | 3.92% | | | | 1.76% | |
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| Ratios/Supplemental Data(1): | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000 omitted) | | $ | 35,186 | | | $ | 33,029 | | | $ | 38,806 | | | $ | 39,699 | | | $ | 40,474 | | | $ | 33,861 | |
Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses | | | 0.90% | (5) | | | 0.92% | | | | 0.96% | | | | 0.96% | | | | 0.96% | | | | 0.97% | |
Net expenses after custodian fee reduction | | | N/A | (5) | | | 0.92% | | | | 0.95% | | | | 0.95% | | | | 0.95% | | | | 0.95% | |
Net investment income | | | 4.38% | (5) | | | 4.81% | | | | 4.66% | | | | 4.80% | | | | 4.47% | | | | 4.12% | |
| Portfolio turnover rate | | | 22% | (4) | | | 57% | | | | 57% | | | | 47% | | | | 75% | | | | 103% | |
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(1) For the six months ended June 30, 21010, and for the years ended December 31, 2009, 2008, 2007, 2006 and 2005, 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: | |
| | | 2010 | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
| Net investment income per share(2) | | $ | 0.194 | | | $ | 0.433 | | | $ | 0.420 | | | $ | 0.429 | | | $ | 0.391 | | | $ | 0.369 | |
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| Ratios (As a percentage of average daily net assets): | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.31% | (5) | | | 1.32% | | | | 1.24% | | | | 1.23% | | | | 1.31% | | | | 1.30% | |
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Expenses after custodian fee reduction | | | N/A | (5) | | | 1.32% | | | | 1.23% | | | | 1.22% | | | | 1.30% | | | | 1.28% | |
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Net investment income | | | 3.96% | (5) | | | 4.41% | | | | 4.38% | | | | 4.52% | | | | 4.13% | | | | 3.80% | |
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| (2) | Computed using average shares outstanding. |
| (3) | Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. |
See notes to financial statements
46
Wright Managed Income Trust
Notes to Financial Statements
1. Significant Accounting Policies
Wright Total Return Bond Fund (“WTRB”) and Wright Current Income Fund (“WCIF”) (each a “Fund” and collectively, the “Funds”) (the Funds constituting Wright Managed Income Trust (the “Trust”)), 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 provided by third party pricing services, when 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 generally 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 as described above. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Funds in a manner that most fairly reflects the security’s value, or the amount that the Funds might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies, quotations or relevant information obtained from broker-dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
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 Funds are 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 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, 2009, WTRB and WCIF, for federal income tax purposes, had capital loss carryovers of $2,366,461 and $774,661, respectively, which will reduce each Fund’s taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code,
47
and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the respective Funds 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 | | | — | | | — |
| 2012 | | | — | | | 418,203 |
| 2013 | | | 270,953 | | | 196,117 |
| 2014 | | | 1,088,772 | | | — |
| 2015 | | | 199,047 | | | 160,341 |
| 2017 | | | 299,083 | | | — |
A capital loss carryover of $774,661, 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 June 30, 2010, 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, 2009, 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. 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.
G. 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.
H. Interim Financial Statements — The interim financial statements relating to June 30, 2010, and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of Funds’ management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
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.
48
As of December 31, 2009, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
| | | | | | | | |
| | | WTRB | | | WCIF | |
| Undistributed ordinary income | | $ | 954 | | | $ | 127,753 | |
| Capital loss carryforward and post October losses | | | (2,366,461 | ) | | | (774,661 | ) |
| Unrealized appreciation | | | 680,003 | | | | 1,275,840 | |
| Other temporary differences | | | (19,909 | ) | | | — | |
The difference 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 six months ended June 30, 2010, 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 | | $ | 58,375 | | 0.45 | % |
| WCIF | | | 72,441 | | 0.45 | % |
The administrator fee is earned by Wright for administering the business affairs of each Fund. The fee 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. Atlantic Fund Administration, LLC (“Atlantic”) serves as sub-administrator of the Funds to perform certain services of the administrator as may be agreed upon between the administrator and sub-administrator. The sub-administration fee is paid by Wright.
For the six months ended June 30, 2010, the administrator fee for WTRB and WCIF amounted to $9,081 and $14,488, respectively. Wright also waived and/or reimbursed expenses for WTRB and WCIF (see Note 4).
Certain 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 Atlantic or Wright, Trustees and officers receive remuneration for their services to the Trust out of the fees paid to Atlantic and Wright.
4. Distribution Plans 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 six months ended June 30, 2010, for WTRB and WCIF amounted to $32,431 and $40,245, 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 six months ended June 30, 2010, 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 exceed 0.95% and 1.00% of the average daily net assets of WTRB and WCIF, respectively, through April 30, 2011 (excluding interest, taxes, brokerage
49
commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, and other extraordinary expenses not incurred in the ordinary course of the Fund’s business). 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 of WTRB to 0.70% and of WCIF to 0.90% 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 $91,860 and $66,730 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:
| | | | | | |
| | | Six Months Ended June 30, 2010
|
| | | WTRB | | WCIF |
| Purchases – | | | | | | |
| Non-U.S. Government & Agency Obligations | | $ | 3,209,394 | | $ | — |
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| U.S. Government & Agency Obligations | | $ | 12,129,641 | | $ | 6,933,145 |
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| Sales – | | | | | | |
| Non-U.S. Government & Agency Obligations | | $ | 1,888,347 | | $ | 192,572 |
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| U.S. Government & Agency Obligations | | $ | 10,801,272 | | $ | 7,761,791 |
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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:
| | | | | | | | | | | | | | |
| | | Six Months Ended
June 30, 2010
| | | Year Ended
December 31, 2009
| |
| | | Shares | | | Amount | | | Shares | | | Amount | |
| WRIGHT TOTAL RETURN BOND FUND | | | | | | | | | | | | | | |
| Sold | | 524,179 | | | $ | 6,711,931 | | | 412,466 | | | $ | 5,130,935 | |
| Issued to shareholders in payment of distributions declared | | 31,806 | | | | 407,300 | | | 75,223 | | | | 927,254 | |
| Redemptions | | (271,932 | ) | | | (3,475,642 | ) | | (481,454 | ) | | | (5,906,125 | ) |
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| Net increase | | 284,053 | | | $ | 3,643,589 | | | 6,235 | | | $ | 152,064 | |
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| WRIGHT CURRENT INCOME FUND | | | | | | | | | | | | | | |
| Sold | | 743,468 | | | $ | 7,376,294 | | | 959,509 | | | $ | 9,406,951 | |
| Issued to shareholders in payment of distributions declared | | 54,811 | | | | 542,370 | | | 117,297 | | | | 1,151,298 | |
| Redemptions | | (645,704 | ) | | | (6,379,240 | ) | | (1,716,872 | ) | | | (16,893,326 | ) |
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| Net increase (decrease) | | 152,575 | | | $ | 1,539,424 | | | (640,066 | ) | | $ | (6,335,077 | ) |
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7. Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of the investment securities owned at June 30, 2010, as computed on a federal income tax basis, were as follows:
| | | | | | | | |
| | | WTRB | | | WCIF | |
| Aggregate cost | | $ | 27,763,033 | | | $ | 31,577,352 | |
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| Gross unrealized appreciation | | $ | 1,533,084 | | | $ | 2,047,941 | |
| Gross unrealized depreciation | | | (242,886 | ) | | | (106,615 | ) |
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| Net unrealized appreciation | | $ | 1,290,198 | | | $ | 1,941,326 | |
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8. Line of Credit
The Funds participate with other funds managed by Wright in a committed $10 million unsecured line of credit agreement with Union Bank of California, N.A. (“Union 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 LIBOR rate. Because the line of credit is not available exclusively to each Fund, they may be unable to borrow some or all of the Funds’ requested amounts at any particular time. At June 30, 2010, the Funds had no outstanding balances pursuant to this line of credit.
The average borrowings and average interest rate (annualized) for the six months ended June 30, 2010, were as follows:
| | | |
| | | WTRB |
| Average borrowings | | $ | 1,375 |
| Average interest rate | | | 1.3% |
9. Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, 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.
| | • | | Level 1 — quoted prices in active markets for identical investments |
| | • | | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| | • | | 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 June 30, 2010, the inputs used in valuing each Fund’s investments, which are carried at value, were as follows:
WTRB
| | | | | | | | | | | | |
| Asset Description | | Quoted Prices in
Active Markets
for Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Asset-Backed Securities | | $ | — | | $ | 795,115 | | $ | — | | $ | 795,115 |
| Commercial Mortgage-Backed Securities | | | — | | | 2,064,779 | | | — | | | 2,064,779 |
| Non-Agency Mortgage-Backed Securities | | | — | | | 2,224 | | | — | | | 2,224 |
| Corporate Bonds | | | — | | | 11,266,305 | | | — | | | 11,266,305 |
| Convertible Bonds | | | — | | | 250,550 | | | — | | | 250,550 |
| U.S. Government Interests | | | — | | | 13,939,692 | | | 76,327 | | | 14,016,019 |
| Short-Term Investments | | | 658,239 | | | — | | | — | | | 658,239 |
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| Total Investments | | $ | 658,239 | | $ | 28,318,665 | | $ | 76,327 | | $ | 29,053,231 |
51
The following is a reconciliation of Level 3 assets (at either the beginning or ending of the period) for which significant unobservable inputs were used to determine fair value.
| | | |
| | | U.S. Government
Interests |
| Balance as of 12/31/09 | | $ | — |
| Accrued Accretion/(Amortization) | | | — |
| Realized Gain/(Loss) | | | — |
| Change in Unrealized Appreciation/(Depreciation) | | | — |
| Purchases | | | — |
| Sales | | | — |
| Transfers In/(Out) | | | 76,327 |
| | |
|
|
| Balance as of 03/31/10 | | $ | 76,327 |
| | |
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WCIF
| | | | | | | | | | | | |
| Asset Description | | Quoted Prices in
Active Markets
for Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Total |
| Non-Agency Mortgage-Backed Securities | | $ | — | | $ | 959,948 | | $ | — | | $ | 959,948 |
| Agency Mortgage-Backed Securities | | | — | | | 31,919,308 | | | — | | | 31,919,308 |
| Short-Term Investments | | | 639,422 | | | — | | | — | | | 639,422 |
| | |
|
| |
|
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|
|
| Total Investments | | $ | 639,422 | | $ | 32,879,256 | | $ | — | | $ | 33,518,678 |
The level classification by major category of investments is the same as the category presentation in each Fund’s Portfolio of Investments.
| 10. | Review for Subsequent Events |
In connection with the preparation of the financial statements of the Funds as of and for the six months ended June 30, 2010, events and transactions subsequent to June 30, 2010, have been evaluated by the Funds’ management for possible adjustment and/or disclosure. Management has not identified any subsequent events requiring financial statement disclosure as of the date these financial statements were issued.
52
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
| | • | | 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. |
| | • | | 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. |
| | • | | 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. |
| | • | | 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. |
| | • | | 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. |
| | • | | 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. |
| | • | | The adviser’s financial condition and the overall organization of the adviser. |
| | • | | 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. |
| | • | | 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. |
| | • | | 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
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.
53
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.
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:
| | • | | 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. |
| | • | | 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. |
| | • | | 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 1-800-888-9471.
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.
54
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 Index.
Wright Investors’ Service Distributors, Inc.
440 Wheelers Farms Road, Milford, CT 06461
Semi-Annual Report
Officers and Trustees of the Funds
Peter M. Donovan, President and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President
James J. Clarke, Trustee
Dorcas R. Hardy, Trustee
Richard E. Taber, Trustee
Christopher A. Madden, Secretary
Gale L. Bertrand, Treasurer
Investment Adviser and Administrator
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
Union Bank, NA
350 California Street
San Francisco, California 94104
Transfer and Dividend Disbursing Agent
Atlantic Fund Administration, LLC
P.O. Box 588
Portland, Maine 04112
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.
comb-sar-100630
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 designate 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. |
Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
(a) Included as part of report to stockholders under Item 1.
(b) Not applicable.
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| 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 shareholder 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 to 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.
| | |
| (a)(1) | | Registrant’s Code of Ethics – Not applicable (please see Item 2) |
| |
| (a)(2) | | Treasurer’s and President’s Section 302 certification |
| |
| (a)(3) | | Not applicable. |
| |
| (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.
Registrant The Wright Managed Equity Trust (On behalf of Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund and Wright International Blue Chip Equities Fund)
| | |
| By | | /s/ Peter M. Donovan |
| | Peter M. Donovan |
| | President |
| |
| Date | | 8/23/10 |
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/ Peter M. Donovan |
| | Peter M. Donovan |
| | President |
| |
| Date | | 8/23/10 |
| |
| By | | /s/ Gale L. Bertrand |
| | Gale L. Bertrand |
| | Treasurer |
| |
| Date | | 8/23/10 |
