FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-3489
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The Wright Managed Equity Trust
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(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Services)
(617) 482-8260
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(Registrant's Telephone Number)
December 31
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Date of Fiscal Year End
December 31, 2004
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Date of Reporting Period
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ITEM 1. REPORTS TO STOCKHOLDERS
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
ANNUAL REPORT
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DECEMBER 31 , 2004
THE WRIGHT MANAGED EQUITY TRUST
o Wright Selected Blue Chip Equities Fund
o Wright Major Blue Chip Equities Fund
o Wright International Blue Chip Equities Fund
THE WRIGHT MANAGED INCOME TRUST
o Wright U.S. Government Near Term Fund
o Wright Total Return Bond Fund
o Wright Current Income Fund
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
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THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS CONSISTS OF THREE EQUITY FUNDS
FROM THE WRIGHT MANAGED EQUITY TRUST AND THREE FIXED INCOME FUNDS FROM THE
WRIGHT MANAGED INCOME TRUST. EACH OF THE SIX FUNDS HAVE DISTINCT INVESTMENT
OBJECTIVES AND POLICIES. THEY CAN BE USED INDIVIDUALLY OR IN COMBINATION TO
ACHIEVE VIRTUALLY ANY OBJECTIVE. FURTHER, AS THEY ARE ALL "NO-LOAD" FUNDS (NO
COMMISSIONS OR SALES CHARGES), PORTFOLIO ALLOCATION STRATEGIES CAN BE ALTERED AS
DESIRED TO MEET CHANGING MARKET CONDITIONS OR CHANGING REQUIREMENTS WITHOUT
INCURRING ANY SALES CHARGES.
APPROVED WRIGHT INVESTMENT LIST
Securities selected for investment in these funds are chosen mainly from a list
of "investment grade" companies maintained by Wright Investors' Service
("Wright" or the "Adviser"). All 25,000 global companies (covering 50 countries)
in Wright's database are screened as new data becomes available to determine any
eligible additions or deletions to the list. The qualifications for inclusion as
"investment grade" are companies that meet Wright's Quality Rating criteria.
This rating includes fundamental criteria for investment acceptance, financial
strength, profitability & stability and growth. In addition, securities, which
are not included in Wright's "investment grade" list, may also be selected from
companies in the fund's specific benchmark (up to 20% of the market value of the
portfolio) in order to achieve broad diversification. Different quality criteria
may apply for the different funds. For example, the companies in the Major Blue
Chip Fund would require a higher Investment Acceptance rating than the companies
in the Selected Blue Chip Fund.
THREE EQUITY FUNDS
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) seeks to enhance total investment
return of price appreciation plus income. The fund's portfolio is characterized
as a blend of growth and value stocks. The market capitalization of the
companies is typically between $1-$10 billion at the time of the fund's
investment. The Adviser seeks to outperform the Standard & Poor's 400 Index (S&P
400) by selecting stocks using fundamental company analysis and company specific
criteria such as valuation and earnings trends. The portfolio is then
diversified across industries and sectors.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) seeks to enhance total investment
return of price appreciation plus income by providing management a broadly
diversified portfolio of equities of larger well-established companies with
market values of $10 billion or more. The Adviser seeks to outperform the
Standard & Poor's 500 Index (S&P 500) by selecting stocks, using fundamental
company analysis and company specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries and sectors.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) seeks total return
consisting of price appreciation plus income by investing in a broadly
diversified portfolio of equities of well-established, non-U.S. companies. The
portfolio may buy common stocks traded on the securities exchange of the country
in which the company is based or it may purchase American Depositary Receipts
(ADR's) traded in the United States. The portfolio is denominated in U.S.
dollars and investors should understand that fluctuations in foreign exchange
rates may impact the value of their investment. The Adviser seeks to outperform
the MSCI Developed World ex U.S. Index by selecting stocks using fundamental
company analysis and company-specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries and sectors.
THREE FIXED-INCOME FUNDS
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) is a diversified portfolio
concentrating on bonds and other obligations of the U.S. Government and U.S.
Government Agencies with an average weighted maturity of between one and three
years. This portfolio is designed to appeal to the investor seeking a high level
of income that is normally somewhat less variable and normally somewhat higher
than that available from short-term money market instruments and who is also
tolerant of modest fluctuation in capital (i.e. compared with somewhat greater
fluctuation likely with longer term fixed income securities). Dividends are
accrued daily and paid monthly. The fund's benchmark is the Lehman U.S.
Government 1-3 Year Bond Index.
WRIGHT TOTAL RETURN BOND FUND (WTRB) is a diversified portfolio of investment
grade government and corporate bonds and other debt securities of varying
maturities which, in the Adviser's opinion, will achieve the portfolio objective
of best total return (i.e. the best total of ordinary income plus capital
appreciation). Accordingly, investment selections and maturities may differ
depending on the particular phase of the interest rate cycle. Dividends are
accrued daily and paid monthly. The fund's benchmark is the Lehman U.S.
Aggregate Bond Index.
WRIGHT CURRENT INCOME FUND (WCIF) may be invested in a variety of securities and
may use a number of strategies, including GNMAs, to produce a high level of
income with reasonable stability of principal. The fund reinvests all principal
payments. Dividends are accrued daily and paid monthly. The funds benchmark is
the Lehman GNMA Backed Bond Index.
WRIGHT MANAGED INVESTMENT FUNDS
WRIGHT INVESTORS SERVICE, INC.
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
EATON VANCE MANAGEMENT
PRIVACY POLICY
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Wright is committed to ensuring your financial privacy. Each of the above
financial institutions has the following policy in effect with respect to
nonpublic personal information about its customers:
o The only such information we collect is information received from customers,
through application forms or otherwise, and information which we necessarily
receive in connection with your Wright fund transactions.
o We will not disclose this information to anyone except as required or
permitted by law. Such disclosure includes that made to other companies such
as transfer agents and their employees and to our employees, in each case as
necessary to service your account.
o We have adopted policies and procedures (including physical, electronic and
procedural safeguards) that are designed to protect the confidentiality of
this information.
For more information about Wright's privacy policies please feel free to call
1-800-888-9471.
TABLE OF CONTENTS
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Investment Objectives..............................inside front & back cover
Letter to Shareholders.....................................................2
Management Discussio.......................................................3
Performance Summaries......................................................8
Fund Expenses.............................................................13
Management and Organization...............................................62
FINANCIAL STATEMENTS
THE WRIGHT MANAGED EQUITY TRUST
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Portfolio of Investments..................16
Statement of Assets & Liabilities.........19
Statement of Operations...................19
Statement of Changes in Net Assets........20
Financial Highlights......................21
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Portfolio of Investments..................22
Statement of Assets & Liabilities.........25
Statement of Operations...................25
Statement of Changes in Net Assets........26
Financial Highlights......................27
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Portfolio of Investments..................28
Statement of Assets & Liabilities.........30
Statement of Operations...................30
Statement of Changes in Net Assets........31
Financial Highlights......................32
NOTES TO FINANCIAL STATEMENTS...............33
INDEPENDENT AUDITORS' REPORT................37
THE WRIGHT MANAGED INCOME TRUST
Wright U.S. Government Near Term Fund
Portfolio of Investments..................40
Statement of Assets & Liabilities.........41
Statement of Operations...................41
Statement of Changes in Net Assets........42
Financial Highlights......................43
WRIGHT TOTAL RETURN BOND FUND
Portfolio of Investments..................44
Statement of Assets & Liabilities.........48
Statement of Operations...................48
Statement of Changes in Net Assets........49
Financial Highlights......................50
WRIGHT CURRENT INCOME FUND
Portfolio of Investments..................51
Statement of Assets & Liabilities.........54
Statement of Operations...................54
Statement of Changes in Net Assets........55
Financial Highlights......................56
NOTES TO FINANCIAL STATEMENTS...............57
INDEPENDENT AUDITORS' REPORT................61
LETTER TO SHAREHOLDERS
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January 2005
Dear Shareholders:
Putting aside the concerns that kept stock prices fairly flat over
2004's first 10 months - a slowing economy, the weak dollar, higher energy and
commodities prices, a bitter election campaign, and Iraq - investors ended 2004
on a strong note, propelling the major stock market indexes to three-year highs
near year end. It helped that oil prices retreated some 20% off their highs by
December 31 and that, after the second quarter's "slow patch," the U.S. economy
regained its form in the second half. The Federal Reserve's five increases in
short-term interest rates in 2004 raised the federal funds rate from a 45-year
low of 1% in late June to 2.25% by the end of the year, with two 25 basis-point
increases coming in the fourth quarter.
But the big story for the stock market in 2004 was the healthy increase
seen in corporate profits. Earnings for the S&P 500 companies are estimated to
have increased about 20% in 2004, including an impressive 15% increase projected
in the fourth quarter. Unlike the typical year, during which earnings estimates
prove to be optimistic, in 2004 earnings generally came in above estimates
throughout the year, lending support to our forecast of earnings gains near 10%
in 2005. On record profits, S&P 500 companies raised dividends 12% this past
year, the largest increase since 1989. Increased cash flows were also used to
rebuild corporate balance sheet strength; the latest Federal Reserve figures
show corporate debt at a five-year low relative to GDP.
For a third straight year, the dollar lost value against the major
currencies of the world during 2004. Although 2004's decline was smaller than
the prior two years' and the greenback began 2005 with its best rally in 2 1/2
years, more declines are likely in 2005, probably of a moderate magnitude. In
any case, we do not believe that dollar weakness will pose an overwhelming risk
to the U.S. capital markets in 2005, although stubborn U.S. trade and budget
deficits could push the cost of capital marginally higher this year. In the end,
though, this risk must be balanced against the U.S.'s many strengths - military
might, free markets, liquidity, strong productivity, low inflation and political
stability - and is ultimately subordinate to domestic economic fundamentals -
which we believe are mostly positive.
WIS analysts currently forecast GDP growth in a range of 3%-3.5% for
2005, with a modestly better jobs market and no serious inflation problem
developing. Businesses have gained some pricing power, and combined with some
upward pressure on prices due to the weak dollar, this could produce a slightly
higher rate of core inflation - but only around 2.0%, compared with 1.5% in
2004. Overall inflation should ease on the basis of lower energy prices. In this
benign inflation environment, the Fed should be able to proceed on its course of
"measured" interest rate hikes. While this climate is not particularly negative
for bonds, current low yields and tight spreads probably offer less room for
appreciation than in 2004. For the Lehman aggregate, a return in the 3% range,
ahead of expected inflation but behind 2004's 4.3% return, is indicated.
With respect to stocks, we look for another year of healthy gains in
corporate profits - on the order of 8%-10% for the S&P 500 - powering equity
returns that should be comfortably ahead of inflation and fixed-income returns
and might even match last year's 10%+ return if conditions break right. There is
a good chance, in Wright's view, that foreign markets will provide better dollar
returns than U.S. stocks for a fourth straight year. On balance, the investment
outlook is sufficiently strong to keep investors favorably disposed toward
stocks. As always, I invite your questions and suggestions on how we can better
serve your investment needs.
Sincerely,
/s/Peter M. Donovan
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Peter M. Donovan
President
MANAGEMENT DISCUSSION
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EQUITY FUNDS
Stuck in a trading range for much of 2004, the U.S. stock market finished the
year with a strong fourth quarter. The late rally, which accounted for almost
all of the market's return for 2004, took stocks to the highest levels in more
than three years. The S&P 500 provided a total return of just over 9% for the
quarter and close to 11% for the year. Nasdaq was stronger in the quarter with a
15% return, but lagged the S&P 500 a bit for the year with a 9% return. The Dow
Jones Industrials returned almost 8% in Q4 and about 4% for the year. As a
class, small stocks were the star performers in 2004. The S&P MidCap 400 and
SmallCap 600 both reached all-time highs close to year end; double-digit gains
in both indices in Q4 resulted in full-year returns of 16% for the MidCaps and
23% for the SmallCaps. Returns to U.S. investors from international markets were
given a boost by the dollar's depreciation last year. The MSCI World ex U.S.
index returned 15% in Q4 and 20% for the year in dollars.
Healthy corporate profits were the prime driver in 2004's stock market advance.
Earnings for S&P 500 companies are estimated to have increased 20% last year.
This strong showing was enough to offset a modest correction in P/E multiples.
For the first three quarters of the year, investors stayed cautious because of a
wavering economy, uncertainties surrounding the 2004 presidential election and
rising oil prices. One of the sparks for the fourth-quarter stock market rally
may have been the reelection of President Bush, an outcome many investors saw as
raising the chances of stock-friendly policies. A retreat in oil prices and the
general tone of economic data - one suggesting that the expansion would continue
to move ahead in 2005 - also provided support for equity prices late in the
year.
We look for stock returns to be nicely ahead of inflation and bond returns in
2005. Even though S&P 500 profit growth may slow by half from the 20% pace
achieved in 2004, earnings should increase enough to support stock prices.
Adding in a modest dividend yield (currently about 1.8%) and assuming P/E
multiples remain fairly level, stock returns this year could approach 2004's.
(We don't expect P/E multiples to go much higher in the near term, as investors
burned by the 1990s' bubble remain wary of bidding up valuations.) Even a more
conservative forecast assuming a modest correction in multiples as interest
rates edge higher could get stock returns to the 6%-8% range for the coming
year, still ahead of inflation and expected bond returns. There is a good
chance, in our view, that foreign markets will again provide a better return
than the S&P 500 this year.
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Total Return Year Year Year Year Year Year Year Year Year Year
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Wright Selected Blue Chip Fund
(WSBC) 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1% 32.7% 18.6% 30.3%
Wright Major Blue Chip Fund
(WMBC) 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4% 33.9% 17.6% 29.0%
Wright International Blue Chip Fund
(WIBC) 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1% 1.5% 20.7% 13.6%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
The S&P MidCap 400 did better than the S&P 500 in the fourth quarter of 2004
after two quarters of lagging performance; the MidCaps also had a superior
return for the full year. The Wright Selected Blue Chip Fund (WSBC), which is
managed as a mid-cap blend fund, returned 12.8% in the October-December period,
edging out the 12.2% return for the S&P MidCap 400 and the 11.8% average return
of 28 mid-cap blend funds in the Morningstar database. For all of 2004, the WSBC
returned 15.7%, modestly behind the 16.5% for the S&P MidCap 400 and 16.0% for
the Morningstar benchmark.
In the fourth quarter of 2004, the WSBC Fund's return was better than the S&P
MidCap 400's in eight out of ten market sectors, accounting for the Fund's
superior performance. Notably, strong gains by a number of specialty retailers
(e.g., Abercrombie & Fitch, American Eagle Outfitters) and home builders (e.g.,
Toll Brothers) contributed to good results in the consumer discretionary sector,
and Copart and Pentair were issues that helped boost results in the industrial
sector. Good selection in the consumer discretionary and industrial sectors was
key to the strong results for the year also, offsetting laggard performance in
financials and health care. The Fund's performance for the fourth quarter and
the year was also affected by an increase in turnover in the Fund reflecting the
greatest turnover in the S&P MidCap 400 benchmark (37 stocks, 13% of the MID's
market cap) since 2001. On a gross basis, i.e., ex fund expenses, WSBC had a
higher return than the S&P MidCaps last year.
Over the last five years, the S&P MidCap 400 has far outperformed the S&P 500
with a +9.5% annual rate of return compared to the large-cap index's -2.3%
annual rate. Mid-cap valuations are now slightly higher than large-cap, which we
believe makes careful stock selection in this sector all the more important. At
the start of 2005, the holdings in the WSBC had a better record of growth and
profitability than the S&P MidCaps and comparable growth prospects. However, the
WSBC's forward P/E multiple was nearly two points lower on both a weighted
portfolio and median basis.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the large-cap
growth and value stocks in the S&P 500 Composite, selected with a bias toward
the higher quality issues in the index. In the fourth quarter of 2004, as U.S.
stocks rallied, the WMBC returned 10.9%, a better showing that the 9.2% return
for the S&P 500 and 8.8% for an average of 155 large-cap blend funds in the
Morningstar data base. The WMBC also outperformed the benchmarks for the year,
returning 12.4% compared with 10.9% for the S&P 500 and 9.4% for the Morningstar
average.
The WMBC Fund's strong fourth-quarter showing relative to its S&P 500 benchmark
was entirely due to strong stock selection. This was especially true in the
consumer staples and health care sectors, two of the S&P 500's weakest groups in
the period, where the Fund's return was significantly higher than the
benchmark's. Among specific issues making positive contributions were
UnitedHealth Group (+19%), WellPoint Health Networks (+19%, acquired) and Humana
(+50%) in health care and Altria (+31%) and Archer Daniels Midland (+32%) in
consumer staples. On the other hand, a slightly overweight position in energy
stocks, the weakest S&P 500 sector for the quarter, detracted from WMBC
performance. Good stock selection in the majority of sectors also drove the
superior performance for the full year, with consumer staples and health care
again leading the way; a lagging performance in its telecom selections (e.g.,
CenturyTel, sold before the end of the year, Nextel and BellSouth) shaved a bit
from WMBC's premium return for all of 2004.
As the economic expansion ages, earnings growth is expected to slow and
short-term interest rates are likely to rise in 2005. In our view, this means
that fundamentals such as quality of earnings and sustainable growth will become
even more important in determining stock price performance. WIS's selection
process, which is always tilted toward higher quality issues, has yielded a
portfolio of stocks whose median historic profitability and growth at December
31, 2004 were considerably better than the S&P 500's and whose expected growth
was as good. The WMBC portfolio represents a superior value, with a median
forward P/E of 15 compared to 17 for the benchmark.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Reinforcing the case for diversity in investment holdings, the MSCI World ex
U.S. index (in dollars) outperformed the S&P 500 in the fourth quarter and for
all of 2004, due in part to a boost from the depreciation of the dollar. The
Wright International Blue Chip Fund (WIBC) returned 14.8% in the fourth quarter
of 2004, midway between the MSCI World ex U.S. index (15.2%) and an average of
106 international large-cap blend equity funds in the Morningstar database
(14.4%). For all of 2004, the WIBC Fund returned 17.7%, matching the return of
the Morningstar average but behind the 20.4% for the MSCI index.
In the fourth quarter of 2004, WIBC's performance was aided by good stock
selection in health care and energy, among the industry sectors where WIBC
outperformed the benchmark. Being overweight in the strong U.K. and euro region
markets also helped. Some drag on performance came from Japan, specifically
WIBC's holdings of Toyota and Honda, which were weak performers. Earlier in the
year, the Fund's relative performance was aided by its positioning in the
Japanese market, but was hurt by an underweighting in small and mid-cap stocks,
which fared well. Also in the first half of 2004, an overweight position in
Europe, which had a weak first quarter, and a poor showing by European financial
stocks detracted from Fund performance.
WIS continues to see international markets as relatively attractive compared to
the U.S. on a valuation basis. WIBC's allocation to euro markets was recently
increased in anticipation of improved performance there, even if the dollar is
stable. The position in Japan has been increased as well, while profits have
been taken in Switzerland, the U.K. and Australia, and in China/Hong Kong, where
the government is making efforts to slow an overheating economy. An expected
continuation of the relatively low interest rate environment has prompted an
increased weight in financial issues, while industrials have been reduced
because of possible negative fallout (i.e., soft exports) from the weak dollar.
FIXED-INCOME FUNDS
Bonds achieved positive returns in the fourth quarter of 2004, although they
lagged behind stocks by a good margin. The Lehman U.S. Aggregate bond index
returned just under 1.0% for the quarter. For the year, the index returned 4.3%.
In the latest three months, the yield curve continued to flatten, with the yield
on the ten-year Treasury rising just 10 basis points while the two-year yield
rose 40 bps. For the entire year, the yield on the ten-year Treasury was
virtually unchanged, but rates on shorter maturities rose in response to Fed
tightening. The net result for 2004: the spread between the two- and ten-year
T-bonds narrowed by about 115 basis points. For both the quarter and the year,
longer maturities outperformed short and intermediate issues, and lower-quality
issues did better than high-quality. In the fourth quarter, corporate and
mortgage-backed issues both returned about 1.3%; Treasury and agency securities
lagged with returns of 0.4% and 0.6%, respectively. For all of 2004, corporates
and mortgage-backed also led the Lehman Aggregate.
The rise in bond yields expected for last year was dampened by a "soft patch" in
the economic expansion. Although the economy began to pull out of this slowdown
about mid-year, a stop-and-go recovery in jobs has kept worries about a booming
economy and runaway inflation to a minimum. The Federal Reserve raised interest
rates twice during the fourth quarter, bringing the fed funds target to 2.25%.
But even with five rate hikes since tightening began in June, monetary policy is
still easy. The Fed justifies this "measured" tightening by the fact that
inflation and inflation expectations are well contained. The core PCE deflator
increased at a modest 1.5% for the 12 months through November. In the fourth
quarter, the weak dollar had investors worried that U.S. interest rates would
have to rise to attract foreign capital to fund U.S. budget and trade deficits,
but these concerns were not serious enough to overwhelm factors favorable for
bonds.
Inflation does not look to be a major problem for 2005. Some improvement in
business's pricing power and upward pressure on prices from the weak dollar
could produce a slightly higher rate of core inflation - around 2% compared to
1.5% in 2004. Under this scenario, the Fed should be able to proceed slowly in
moving toward a neutral monetary policy (although more aggressive tightening is
possible if inflation threatens to pick up). The economic environment we foresee
for 2005 is not particularly negative for bonds, but current low yields and
tight spreads probably offer less room for appreciation than in 2004. We also
expect more flattening of the yield curve. For the Lehman Aggregate, a return in
the 2.5% to 3% range, ahead of inflation but behind 2004's 4.3%, is forecast.
2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Total Return Year Year Year Year Year Year Year Year Year Year
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Wright U.S. Gov't. Near-Term Bond Fund
(WNTB) 0.4% 0.6% 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9% 11.9%
Wright Total Return Bond Fund
(WTRB) 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9% 22.0%
Wright Current Income Fund
(WCIF) 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4% 17.5%
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
The Wright U.S. Government Near-Term Fund (WNTB) is positioned to offer an
alternative to money market funds. The Fund will have some price fluctuation,
but it typically has less sensitivity to changes in interest rates than longer
maturity funds. With interest rates rising by about 40 to 50 basis points in the
one-to-two year maturity range, where the WNTB Fund is positioned, WNTB returned
just 0.1% for Q4. This was about the same as the Lehman 1-3 year government bond
index and a little behind the 0.2% return for an average of 64 Morningstar
government bond funds with an average maturity between one and three years. For
the full year, WNTB returned 0.4% compared to 1.1% for the Lehman Government
index and 1.0% for the Morningstar benchmark.
In anticipation of rising interest rates, WNTB was positioned at a slightly
shorter duration (1.5 years) than the Lehman benchmark (1.8 years) over the
course of the fourth quarter. (A short duration in the first quarter of 2004,
when interest rates declined, detracted from the Fund's performance for the
year.) To pick up extra yield, the Fund held about 24% of its assets in
mortgage-backed securities. In the third quarter, WNTB added whole loan
adjustable rate mortgages (non-Agency mortgage-backed securities of short
duration, rated AAA) to its holdings and during the fourth quarter this position
was increased to about 9%. The Fund also held Treasury (35% of assets) and
Agency (32%) securities. As 2005 began, the Fund had a slightly short (about a
quarter year) duration, a strategy that is subject to change as the interest
rate environment unfolds. The Fund is expected to continue to overweight
non-Treasury sectors. The WNTB Fund had an indicated annual yield of 3.3% at
year end.
WRIGHT TOTAL RETURN BOND FUND
As yields moved higher in the fourth quarter of 2004, the Wright Total Return
Bond Fund (WTRB), a diversified bond fund, returned 0.8% for the period. This
was a little behind the 1.0% return for the Lehman U.S. Aggregate Bond Composite
but matched the 0.8% return indicated for an average of 186 total return bond
funds in the Morningstar database. For all of 2004, the WTRB Fund returned 3.5%,
in line with the 3.7% for the Morningstar benchmark, but behind the 4.3% return
for the Lehman Aggregate. (For both the quarter and the year, the Fund's
shortfall in performance compared to the Lehman Aggregate can be attributed to
Fund expenses.)
With interest rates rising in the fourth quarter, the WTRB Fund maintained the
slightly short duration position (4.1 years) relative to the Lehman Aggregate
that was established in the third quarter. (The Fund's full-year performance was
shaved a bit by a first-quarter shortfall resulting from a premature short
positioning for higher rates.). An overweight position in corporates (32% of
Fund holdings at year end), which outperformed the Aggregate, had a positive
effect. The Fund was about neutral in mortgage-backed securities (37%) and
agencies (10%) and underweight in Treasuries (7%). The Fund increased its
position (7%) in whole-loan adjustable-rate mortgages (non-Agency
mortgage-backed securities of short duration, rated AAA), which offer an
attractive yield. Also, a small (about 2%) position in commercial
mortgage-backed securities was added. The Fund is likely to stay overweight in
non-Treasury issues to capture extra yield; although further tightening of
spreads is possible, from current levels it will be limited. The Fund's short
duration at year end is subject to adjustment as the interest environment
changes over the course of the year.
WRIGHT CURRENT INCOME FUND
The Wright Current Income Fund (WCIF) is generally managed to be almost entirely
invested in GNMA issues - mortgage-based securities, known as Ginnie Mae's, with
explicit backing from the Federal government. The WCIF Fund is actively managed
to maximize income and minimize principal fluctuation. During the fourth quarter
of 2004, the Wright U.S. Government Intermediate Fund was merged into the WCIF.
As a result, at year end, the WCIF had about a 10% position in Agency issues and
about 2% in Treasuries. These positions are expected to be gradually eliminated.
Mortgage-backed issues outperformed the Lehman Aggregate slightly for both the
fourth quarter and all of 2004. For the latest three months, WCIF returned 0.9%
compared to 1.2% for the Lehman Ginnie Mae index and 0.8% for the average of all
60 Morningstar government mortgage funds. For all of 2004, WCIF returned 3.3%,
compared to 4.4% for the Lehman benchmark and 3.4% for the Morningstar average.
At the end of the year, the WCIF's duration and average life were shorter than
the Lehman benchmark. With interest rates expected to rise modestly in 2005,
reducing the risk of mortgage prepayments, it is expected that the Fund's
holdings will be tilted toward higher-coupon issues to pick up extra income. At
the end of 2004, the WCIF Fund had an indicated annual yield of 4.3%, making it
attractive for income-oriented investors.
U.S. SECURITIES MARKETS -------------------------------------------------------
The Dow Jones Industrial Average chart shows the point changes in the average
which consists of 30 major NYSE industrial companies and is a price-weighted
arithmetic average, with the divisor adjusted for stock splits. The yield
chart shows the basis point changes in the U.S. Treasury bond which is the
benchmark U.S. Treasury bond with a maturity of 10 years.
The following plotting points are used for comparison in the mountain charts.
Date Dow Jones U.S. 10 Year
Industrial Average Treasury Bond Yield
12/31/95 5117.12 5.58%
12/31/96 6448.27 6.43%
12/31/97 7908.25 5.75%
12/31/98 9181.43 4.65%
12/31/99 11,497.12 6.44%
12/31/00 10,786.85 5.11%
12/31/01 10,021.50 5.00%
12/31/02 8,341.63 3.82%
12/31/03 10,453.92 4.25%
12/31/04 10,783.01 4.22%
PERFORMANCE SUMMARIES
- ------------------------------
IMPORTANT
The Total Investment Return is the percent return of an initial $10,000
investment made at the beginning of the period to the ending redeemable value
assuming all dividends and distributions are reinvested. After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates, and do not reflect the impact of state and local taxes. Actual after-tax
returns depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
PERFORMANCE SUMMARIES - continued
- -------------------------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
--------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- ---------------------------------------------------------------------------------------------------------------------------
WSBC
- Return before taxes 15.73% 4.45% 10.44%
- Return after taxes on distributions 14.87% 2.88% 7.87%
- Return after taxes on distributions and sales of fund shares 11.90% 2.88% 7.87%
S&P MidCap 400 16.48% 9.54% 16.10%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED
BLUE CHIP EQUITIES FUND on 12/31/94 would have grown to $27,006 by
December 31, 2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Selected S&P MidCap
Blue Chip Fund 400
12/31/94 $10,000 $10,000
12/31/95 $13,034 $13,095
12/31/96 $15,454 $15,609
12/31/97 $20,508 $20,644
12/31/98 $20,536 $24,590
12/31/99 $21,718 $28,210
12/31/2000 $24,052 $33,149
12/31/2001 $21,611 $32,948
12/31/2002 $17,942 $28,166
12/31/2003 $23,336 $38,199
12/31/2004 $27,006 $44,493
- -------------------------------------------------------------------------------
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- -------------------------------------------------------------------------------------------------------------------------
WMBC
- Return before taxes 12.36% -5.35% 8.70%
- Return after taxes on distributions 12.17% -5.61% 6.40%
- Return after taxes on distributions and sales of fund shares 9.74% -5.66% 6.40%
S&P 500 10.88% -2.30% 12.07%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT MAJOR BLUE CHIP EQUITIES FUND on 12/31/94 would have
grown to $23,032 by December 31, 2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Major Blue
Chip Fund S&P 500
12/31/94 $10,000 $10,000
12/31/95 $12,898 $13,758
12/31/96 $15,173 $16,912
12/31/97 $20,311 $22,560
12/31/98 $24,460 $29,007
12/31/99 $30,317 $36,112
12/31/2000 $26,511 $31,915
12/31/2001 $22,038 $28,122
12/31/2002 $16,638 $21,907
12/31/2003 $20,498 $28,191
12/31/2004 $23,032 $31,258
- --------------------------------------------------------------------------------
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND-- Standard Shares
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
----------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- --------------------------------------------------------------------------------------------------------------------------
WIBC
- Return before taxes 17.71% -3.66% 5.12%
- Return after taxes on distributions 17.40% -3.87% 4.25%
- Return after taxes on distributions and sales of fund shares 13.92% -3.87% 4.07%
MSCI World ex US Index 20.38% -0.77% 5.94%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT INT'L BLUE CHIP EQUITIES FUND on 12/31/94 would have
grown to $16,470 by December 31, 2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Int'l Blue Chip MSCI World Ex U.S.
Equities Fund Index
12/31/94 $10,000 $10,000
12/31/95 $11,361 $11,141
12/31/96 $13,716 $11,906
12/31/97 $13,927 $12,176
12/31/98 $14,782 $14,461
12/31/99 $19,846 $18,500
12/31/2000 $16,357 $16,026
12/31/2001 $12,402 $12,597
12/31/2002 $10,603 $10,607
12/31/2003 $13,992 $14,788
12/31/2004 $16,470 $17,803
- --------------------------------------------------------------------------------
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
-----------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- --------------------------------------------------------------------------------------------------------------------------
WNTB
- Return before taxes 0.43% 4.00% 4.94%
- Return after taxes on distributions -0.78% 2.46% 2.99%
- Return after taxes on distributions and sales of fund shares -0.78% 2.46% 2.99%
Lehman Govt. 1-3 Year 1.07% 5.11% 5.79%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT U.S.GOVERNMENT NEAR TERM FUND on 12/31/94 would have grown to $16,196
by December 31,2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright U.S. Government Lehman Gov't
Near Term Bond Fund 1-3 Years
12/31/94 $10,000 $10,000
12/31/95 $11,193 $11,084
12/31/96 $11,634 $11,647
12/31/97 $12,324 $12,422
12/31/98 $13,061 $13,287
12/31/99 $13,310 $13,682
12/31/2000 $14,233 $14,800
12/31/2001 $15,204 $16,063
12/31/2002 $16,029 $17,029
12/31/2003 $16,126 $17,372
12/31/2004 $16,196 $17,557
- --------------------------------------------------------------------------------
WRIGHT TOTAL RETURN BOND FUND
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
----------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- ----------------------------------------------------------------------------------------------------------------------------
WTRB
- Return before taxes 3.52% 6.23% 6.71%
- Return after taxes on distributions 1.82% 4.19% 4.50%
- Return after taxes on distributions and sales of fund shares 1.82% 4.19% 4.50%
Lehman Aggregate Bond Index 4.34% 7.71% 7.72%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT TOTAL RETURN BOND FUND on 12/31/94 would have grown to $19,150 by
December 31, 2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Total Retun Lehman Aggregate Bond
Bond Fund Index
12/31/94 $10,000 $10,000
12/31/95 $12,197 $11,848
12/31/96 $12,307 $12,278
12/31/97 $13,444 $13,463
12/31/98 $14,730 $14,632
12/31/99 $14,154 $14,512
12/31/2000 $15,657 $16,199
12/31/2001 $16,433 $17,567
12/31/2002 $17,917 $19,369
12/31/2003 $18,500 $20,164
12/31/2004 $19,150 $21,038
- --------------------------------------------------------------------------------
WRIGHT CURRENT INCOME FUND-- Standard Shares
Growth of $10,000 Invested 1/1/95 Through 12/31/04
Average Annual Total Return
----------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- ---------------------------------------------------------------------------------------------------------------------------
WCIF
- Return before taxes 3.29% 6.00% 6.66%
- Return after taxes on distributions 0.54% 3.62% 4.16%
- Return after taxes on distributions and sales of fund shares 0.54% 3.60% 4.10%
Lehman GNMA Index 4.35% 7.00% 7.54%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT
INCOME FUND on 12/31/94 would have grown to $19,063 by December 31, 2004.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Current Lehman GNMA
Income Fund Index
12/31/94 $10,000 $10,000
12/31/95 $11,746 $11,705
12/31/96 $12,257 $12,353
12/31/97 $13,306 $13,530
12/31/98 $14,172 $14,467
12/31/99 $14,246 $14,746
12/31/2000 $15,714 $16,384
12/31/2001 $16,843 $17,731
12/31/2002 $18,141 $19,272
12/31/2003 $18,455 $19,822
12/31/2004 $19,063 $20,684
- --------------------------------------------------------------------------------
FUND EXPENSES
- -------------------------------------------------------------------------------
EXAMPLE:
As a shareholder of a fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchases and redemption fees (if
applicable); and (2) ongoing costs including management fees; distribution or
service fees; and other fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in a fund and to compare
these costs with the ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004-December 31, 2004).
ACTUAL EXPENSES:
The first line of the tables shown on the following page provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the fist line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES:
The second line of the tables provides information about hypothetical account
values and hypothetical expenses based on the actual Fund expense ratio and an
assumed rate of return of 5% per year (before expenses), which is not the actual
return of the Fund. The hypothetical account values and expenses may not be used
to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in your Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees (if payable). Therefore, the second line of
the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
FUND EXPENSES - continued
- -------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,105.10 $6.61
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.90 $6.34
*Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
Wright Major Blue Chip Equities Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,101.80 $6.55
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.90 $6.29
*Expenses are equal to the Fund's annualized expense ratio of 1.24% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
Wright International Blue Chip Equities Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,153.10 $9.20
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,016.60 $8.62
*Expenses are equal to the Fund's annualized expense ratio of 1.70% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
Wright U.S. Government Near Term Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,010.40 $4.80
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.40 $4.82
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
Wright Total Return Bond Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,038.00 $4.87
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.40 $4.82
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
Wright Current Income Fund
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/04-
(7/1/04) (12/31/04) 12/31/04)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,028.40 $4.89
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.30 $4.88
*Expenses are equal to the Fund's annualized expense ratio of 0.96% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2004.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - December 31, 2004
Shares Value
EQUITY INTERESTS -- 99.9%
ADVERTISING -- 0.7%
Catalina Marketing Corp............. 9,490 $ 281,189
------------
AEROSPACE & DEFENSE -- 0.4%
Alliant Techsystems, Inc.* ......... 2,425 $ 158,546
------------
AUTOMOBILES & COMPONENTS -- 3.9%
BorgWarner, Inc..................... 12,520 $ 678,208
Copart, Inc.* ...................... 18,125 477,050
Lear Corp........................... 9,140 557,631
------------
$ 1,712,889
------------
BANKS -- 7.9%
Associated Banc-Corp................ 7,330 $ 243,429
Astoria Financial Corp.............. 6,025 240,819
Banknorth Group, Inc................ 13,890 508,374
City National Corp.................. 4,355 307,681
Compass Bancshares, Inc............. 5,070 246,757
Greater Bay Bancorp................. 9,465 263,884
Hibernia Corp. - Class A............ 11,320 334,053
Independence Community Bank......... 11,960 509,257
Investors Financial Services Corp... 3,580 178,928
New York Community Bancorp.......... 12,666 260,540
Webster Financial Corp.............. 6,900 349,416
------------
$ 3,443,138
------------
BUILDING MATERIALS -- 0.9%
Cytyc Corp.* ....................... 14,025 $ 386,669
------------
CAPITAL GOODS -- 3.1%
Ametek, Inc......................... 6,515 $ 232,390
Jacobs Engineering Group, Inc.* .... 7,530 359,859
Pentair, Inc........................ 11,515 501,593
SPX Corp............................ 4,460 178,668
Vishay Intertechnology, Inc.* ...... 6,330 95,077
------------
$ 1,367,587
------------
CHEMICALS -- 2.6%
Cabot Corp.......................... 5,250 $ 203,070
Church & Dwight Co., Inc............ 4,437 149,172
Cytec Industries, Inc............... 8,045 413,674
FMC Corp.* ......................... 3,215 155,284
Minerals Technologies, Inc.......... 3,440 229,448
------------
$ 1,150,648
------------
COMMERCIAL SERVICES & SUPPLIES -- 2.6%
ITT Educational Services, Inc.* .... 5,965 $ 283,636
Korn/Ferry International* .......... 6,105 126,679
Manpower, Inc....................... 5,920 285,936
United Rentals, Inc.* .............. 22,670 428,463
------------
$ 1,124,714
------------
COMMUNICATIONS EQUIPMENT -- 0.5%
Utstarcom, Inc.* ................... 8,875 $ 196,581
------------
COMPUTERS & PERIPHERALS -- 3.6%
CDW Corp............................ 4,725 $ 313,504
Imation Corp........................ 4,215 134,163
Sandisk Corp.* ..................... 9,500 237,215
Storage Technology Corp.* .......... 13,005 411,088
Tech Data Corp.* ................... 10,280 466,712
------------
$ 1,562,682
------------
CONSUMER DURABLES & APPAREL -- 1.7%
Mohawk Industries, Inc.*............ 7,910 $ 721,787
------------
DIVERSIFIED FINANCIALS -- 4.8%
AG Edwards, Inc..................... 5,495 $ 237,439
Jefferies Group, Inc................ 7,225 291,023
Legg Mason, Inc..................... 10,840 794,138
New Plan Excel Realty Trust REIT.... 13,270 359,352
Raymond James Financial, Inc........ 12,580 389,728
------------
$ 2,071,680
------------
ELECTRIC UTILITIES -- 1.7%
Alliant Energy Corp................. 14,980 $ 428,428
Black Hills Corp.................... 9,875 302,965
------------
$ 731,393
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 0.5%
Thomas & Betts Corp.* .............. 7,430 $ 228,472
------------
ELECTRONICS -- 2.5%
Arrow Electronics, Inc.* ........... 19,345 $ 470,084
Avnet, Inc.* ....................... 9,120 166,349
Cree, Inc.* ........................ 10,940 438,475
------------
$ 1,074,908
------------
ENERGY -- 6.6%
Equitable Resources, Inc............ 8,455 $ 512,880
MDU Resources Group, Inc............ 14,197 378,776
Murphy Oil Corp..................... 7,310 588,090
Oneok, Inc.......................... 10,950 311,199
Pogo Producing Co................... 16,105 780,931
Smith International, Inc.* ......... 4,415 240,220
Western Gas Resources, Inc.......... 2,275 66,544
------------
$ 2,878,640
------------
FOOD, BEVERAGE & TOBACCO -- 3.5%
Constellation Brands, Inc.- Class A* 10,035 $ 466,728
Smithfield Foods, Inc.* ............ 15,630 462,492
Tyson Foods, Inc. - Class A......... 23,975 441,140
Universal Corp...................... 3,400 162,656
------------
$ 1,533,016
------------
HEALTH CARE EQUIPMENT & SERVICES-- 6.3%
Covance, Inc.* ..................... 5,235 $ 202,856
Coventry Health Care, Inc.* ........ 13,995 742,855
Inamed Corp.* ...................... 7,890 499,043
LifePoint Hospitals, Inc.* ......... 10,340 360,039
Lincare Holdings, Inc.* ............ 11,255 480,026
Renal Care Group, Inc.* ............ 8,285 298,177
Triad Hospitals, Inc.* ............. 4,235 157,584
------------
$ 2,740,580
------------
HEAVY CONSTRUCTION -- 0.4%
Hovnanian Enterprises,Inc.- Class A*3,870 $ 191,642
------------
HOME CONSTRUCTION, FURNISHINGS & APPLIANCES-- 5.1%
D.R. Horton, Inc.................... 15,040 $ 606,262
Graco, Inc.......................... 8,377 312,881
Harman International................ 4,985 633,095
Lennar Corp......................... 7,490 424,533
Toll Brothers, Inc.* ............... 3,785 259,689
------------
$ 2,236,460
------------
HOTELS, RESTAURANTS & LEISURE -- 2.0%
Applebee's International, Inc....... 7,695 $ 203,533
Gtech Holdings Corp................. 15,095 391,715
Mandalay Resort Group............... 4,010 282,424
------------
$ 877,672
------------
INSURANCE -- 5.8%
Everest Re Group, Ltd............... 3,725 $ 333,611
Fidelity National Financial, Inc.... 8,572 391,483
Old Republic International Corp..... 8,450 213,785
Pacificare Health Systems* ......... 9,280 524,506
Protective Life Corp................ 7,675 327,646
Radian Group, Inc................... 9,645 513,500
Stancorp Financial Group............ 2,360 194,700
------------
$ 2,499,231
------------
MATERIALS -- 2.8%
Airgas, Inc......................... 6,760 $ 179,208
Precision Castparts Corp............ 8,860 581,925
RPM International, Inc.............. 23,130 454,736
------------
$ 1,215,869
------------
MEDIA -- 0.4%
Macrovision Corp.* ................. 5,845 $ 150,333
------------
METALS -- 0.5%
Worthington Industries, Inc......... 11,275 $ 220,765
------------
OIL & GAS -- 2.6%
Newfield Exploration Company* ...... 10,265 $ 606,148
Plains Exploration & Production Co.* 19,870 516,620
------------
$ 1,122,768
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 3.1%
Barr Laboratories, Inc.* ........... 7,580 $ 345,193
Beckman Coulter, Inc................ 5,495 368,110
Omnicare, Inc....................... 9,810 339,622
Perrigo Company..................... 17,790 307,233
------------
$ 1,360,158
------------
RETAILING -- 8.2%
Abercrombie & Fitch Co. - Class A... 7,965 $ 373,957
American Eagle Outfitters........... 8,775 413,303
Ann Taylor Stores Corp.* ........... 5,225 112,494
Barnes & Noble, Inc.* .............. 8,650 279,136
Blyth, Inc.......................... 5,995 177,212
Chico's FAS, Inc.* ................. 7,455 339,426
Claire's Stores, Inc................ 15,270 324,488
Foot Locker, Inc.................... 11,530 310,503
Neiman-Marcus Group, Inc. - Class A. 5,375 384,528
Pacific Sunwear of California* ..... 11,435 254,543
Petsmart, Inc....................... 7,045 250,309
Urban Outfitters, Inc.* ............ 8,220 364,968
------------
$ 3,584,867
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.8%
International Rectifier Corp.* ..... 6,305 $ 281,014
Lam Research Corp.* ................ 6,960 201,214
Microchip Technology, Inc........... 5,535 147,563
Semtech Corp.* ..................... 6,920 151,340
------------
$ 781,131
------------
SOFTWARE & SERVICES -- 4.1%
Activision, Inc.* .................. 7,550 $ 152,359
Certegy, Inc........................ 2,970 105,524
Cognizant Technology Solutions Corp.* 5,200 220,116
Fair Isaac, Inc..................... 10,440 382,939
Jack Henry & Associates, Inc........ 10,850 216,024
Sybase, Inc.* ...................... 18,165 362,392
Transaction Syst. Architects, Inc.
-Class A*......................... 16,620 329,907
------------
$ 1,769,261
------------
TELECOMMUNICATION SERVICES -- 2.0%
Cincinnati Bell, Inc.* ............. 27,120 $ 112,548
Plantronics, Inc.................... 7,960 330,101
Polycom, Inc.* ..................... 7,740 180,497
Telephone & Data Systems, Inc....... 3,035 233,543
------------
$ 856,689
------------
TRANSPORTATION -- 4.0%
CNF, Inc............................ 5,515 $ 276,302
J.B. Hunt Transport Services, Inc... 14,530 651,671
Overseas Shipholding Group.......... 3,850 212,520
Republic Services, Inc.............. 9,160 307,226
Thor Industries, Inc................ 8,225 304,736
------------
$ 1,752,455
------------
UTILITIES -- 3.3%
Energy East Corp.................... 5,455 $ 145,539
Great Plains Energy, Inc............ 4,560 138,077
Questar Corp........................ 10,670 543,743
SCANA Corp.......................... 6,045 238,173
Wisconsin Energy Corp............... 11,475 386,822
------------
$ 1,452,354
------------
TOTAL EQUITY INTERESTS-- 99.9%
(identified cost, $32,607,807) $43,436,774
OTHER ASSETS, LESS LIABILITIES -- 0.1% 61,084
------------
NET ASSETS -- 100% $43,497,858
============
* Non-income-producing security.
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $32,607,807) (Note 1A). $43,436,774
Cash.................................... 31,589
Receivable for fund shares sold......... 3,479
Receivable from investment adviser...... 20,497
Dividends receivable.................... 20,978
Prepaid expenses........................ 5,577
------------
Total assets............................ $ 43,518,894
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 943
Payable to affiliate for Trustees' fees. 774
Transfer agent fee payable.............. 2,002
Accrued expenses and other liabilities.. 17,317
------------
Total liabilities....................... $ 21,036
------------
NET ASSETS................................ $ 43,497,858
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 30,342,351
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)....................... 1,390,093
Unrealized appreciation on investments
(computed on the basis of identified cost) 10,828,967
Undistributed net investment income..... 936,447
------------
Net assets applicable to outstanding
shares................................ $ 43,497,858
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 3,288,926
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 13.23
============
See notes to financial statements
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 398,763
Expenses -
Investment adviser fee (Note 2):........ $ 234,381
Administrator fee (Note 2):............. 46,876
Compensation of Trustees who are not employees
of the investment adviser or administrator 15,966
Custodian fee (Note 1D)................. 77,947
Distribution expenses (Note 3):......... 97,659
Audit services.......................... 25,359
Transfer and dividend disbursing agent fees 23,524
Registration costs...................... 15,196
Shareholder communications.............. 9,218
Legal services.......................... 6,764
Printing................................ 3,360
Interest expense........................ 735
Miscellaneous .......................... 4,488
------------
Total expenses.......................... $ 561,473
Deduct -
Reduction of custodian fee (Note 1D):... $ (2,357)
Allocation of expenses to investment adviser
(Note 2):.............................. (20,497)
Reduction of distribution expenses
by principal underwriter (Note 3):..... (50,160)
------------
Total deductions........................ $ (73,014)
------------
Net expenses............................ $ 488,459
------------
Net investment loss..................... $ (89,696)
------------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment transactions
(identified cost basis)................ $ 4,095,367
Change in unrealized appreciation of
investments............................ 1,915,763
------------
Net realized and unrealized gain
of investments......................... $ 6,011,130
------------
Net increase in net assets from operations $ 5,921,434
============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Year Ended
December 31,
-----------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss........................................................ $ (89,696) $ (77,006)
Net realized gain (loss) on investments.................................... 4,095,367 (660,788)
Change in unrealized appreciation of investments........................... 1,915,763 9,657,697
-------------- --------------
Net increase in net assets resulting from operations..................... $ 5,921,434 $ 8,919,903
-------------- --------------
Distributions to shareholders (Note 1F) -
From net realized gain..................................................... $ (1,597,259) $ (470,550)
-------------- --------------
Total distributions...................................................... $ (1,597,259) $ (470,550)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 4).. $ 983,877 $ (3,076,788)
-------------- --------------
Net increase in net assets................................................... $ 5,308,052 $ 5,372,565
NET ASSETS:
At beginning of year......................................................... 38,189,806 32,817,241
-------------- --------------
At end of year............................................................... $ 43,497,858 $ 38,189,806
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR.................................................................. $ 936,447 $ 930,450
============== ==============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003(6) 2002(6) 2001(6) 2000(6)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 11.870 $ 9.270 $ 11.580 $ 13.430 $ 15.130
--------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1) ................ $ (0.028) $ (0.023) $ (0.046) $ (0.045) $ (0.041)
Net realized and unrealized gain (loss) 1.884 2.756 (1.831) (1.322) 1.638
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 1.856 $ 2.733 $ (1.877) $ (1.367) $ 1.597
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from capital gains....... (0.500) (0.133) (0.433) (0.483) (3.297)
--------- --------- --------- --------- ---------
Total distributions................ $ (0.500) $ (0.133) $ (0.433) $ (0.483) $ (3.297)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430
========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 15.73% 30.06% (16.98%) (10.15%) 10.75%
Ratios/Supplemental Data(1)(7):
Net assets, end of year (000 omitted).. $ 43,498 $ 38,190 $ 32,817 $ 45,883 $ 51,201
Ratio of net expenses to average net assets 1.26% 1.25% 1.26%(3) 1.26%(3) 1.26%(3)
Ratio of net expenses after custodian fee
reduction to average net assets..... 1.25% 1.25% 1.25%(3)(5) 1.25%(3)(5) 1.25%(3)(5)
Ratio of net investment income (loss) to average
net assets.......................... (0.23%) (0.23%) (0.44%) (0.38%) (0.28%)
Portfolio turnover rate .............. 69% 106% 119%(4) 67%(4) 55%(4)
- -----------------------------------------------------------------------------------------------------------------------------------
(1)The operating expenses of the fund were reduced by an allocation of expenses
to the distributor and/or investment adviser. Had such action not been
undertaken, net investment loss per share and the ratios would have been as
follows:
2004 2003 2002 2001 2000
--------------------------------------------------------------------
Net investment loss per share.......... $ (0.050) $ (0.057) $ (0.064) $ (0.057) $ (0.051)
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses........................... 1.44% 1.59% 1.43%(3) 1.37%(3) 1.33%(3)
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.43% 1.59% 1.42%(3)(5) 1.36%(3)(5) 1.32%(3)(5)
========= ========= ========= ========= =========
Net investment loss................ (0.41%) (0.57%) (0.61%) (0.49%) (0.35%)
========= ========= ========= ========= =========
- ---------------------------------------------------------------------------------------------------------------------------------
(2)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated expenses.
(4)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1).
(5)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1D). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
(6)Certain per share amounts are based on average shares outstanding.
(7)Under a written agreement in effect through the current fiscal year, Wright
waives a portion of its advisory fee and/or distribution fees and assumes
operating expenses to the extent necessary to limit expense ratios to 1.25%
after custodian fee reductions, if any.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - December 31, 2004
Shares Value
Equity Interests -- 100.3%
AUTOMOBILES & COMPONENTS -- 5.6%
Ford Motor Company.................. 49,345 $ 722,411
Johnson Controls, Inc............... 17,910 1,136,210
Paccar, Inc......................... 22,420 1,804,362
------------
$ 3,662,983
------------
BANKS -- 11.3%
Bank of America Corp................ 47,393 $ 2,226,997
Capital One Financial Corp.......... 8,880 747,785
Fannie Mae.......................... 16,730 1,191,343
Freddie Mac......................... 8,620 635,294
MBNA Corp........................... 45,335 1,277,994
Wells Fargo & Co.................... 21,045 1,307,947
------------
$ 7,387,360
------------
CAPITAL GOODS -- 4.1%
Tyco International, Ltd............. 52,015 $ 1,859,016
United Technologies Corp............ 8,055 832,484
------------
$ 2,691,500
------------
COMMERCIAL SERVICES & SUPPLIES -- 1.1%
First Data Corp..................... 16,380 $ 696,805
------------
COMMUNICATIONS EQUIPMENT -- 3.9%
Cisco Systems, Inc.* ............... 12,186 $ 235,190
Qualcomm, Inc....................... 35,189 1,492,014
Scientific-Atlanta, Inc............. 25,385 837,959
------------
$ 2,565,163
------------
COMPUTERS & PERIPHERALS -- 2.7%
Computer Sciences Corp.* ........... 9,085 $ 512,121
Dell, Inc.* ........................ 10,719 451,699
Hewlett-Packard Co.................. 17,210 360,894
Lexmark International, Inc.* ....... 5,340 453,900
------------
$ 1,778,614
------------
CONSUMER DURABLES & APPAREL -- 1.3%
Eastman Kodak Co.................... 21,720 $ 700,470
Liz Claiborne, Inc.................. 3,250 137,182
------------
$ 837,652
------------
DIVERSIFIED FINANCIALS -- 7.9%
Bear Stearns Cos. (The), Inc........ 1,575 $ 161,138
Citigroup, Inc...................... 55,699 2,683,578
JPMorgan Chase & Co................. 15,030 586,320
Lehman Brothers Holdings, Inc....... 3,925 343,359
Merrill Lynch & Co., Inc............ 2,575 153,908
Morgan Stanley...................... 20,535 1,140,103
Providian Financial Corp.* ......... 5,990 98,655
------------
$ 5,167,061
------------
ELECTRIC UTILITIES -- 0.1%
Duke Energy Corp.................... 2,680 $ 67,884
------------
ENERGY -- 9.1%
Apache Corp......................... 7,363 $ 372,347
ChevronTexaco Corp.................. 24,420 1,282,294
ConocoPhillips Co................... 13,060 1,134,000
Exxon Mobil Corp.................... 52,090 2,670,133
Occidental Petroleum Corp........... 8,800 513,568
------------
$ 5,972,342
------------
ENTERTAINMENT & LEISURE -- 0.1%
Brunswick Corp...................... 1,710 $ 84,645
------------
FOOD & DRUG RETAILING -- 0.4%
Kroger Co. (The)* .................. 15,995 $ 280,552
------------
FOOD, BEVERAGE & TOBACCO -- 4.3%
Altria Group, Inc................... 16,080 $ 982,488
Archer-Daniels-Midland Co........... 39,985 892,065
Coors Adolph Co. - Class B.......... 3,390 256,521
Sara Lee Corp....................... 4,675 112,854
Supervalu, Inc...................... 16,950 585,114
------------
$ 2,829,042
------------
FOREST PRODUCTS & PAPER-- 0.7%......
Georgia-Pacific Corp................ 11,475 $ 430,083
------------
HEALTH CARE EQUIPMENT & SERVICES-- 4.9%
C.R. Bard, Inc...................... 7,859 $ 502,819
Health Management Associates-Class A 20,255 460,194
Humana, Inc.* ...................... 8,940 265,429
Quest Diagnostics, Inc.............. 4,655 444,785
UnitedHealth Group, Inc............. 17,628 1,551,793
------------
$ 3,225,020
------------
HEAVY MACHINERY -- 4.4%
Black & Decker Corp................. 9,115 $ 805,128
Caterpillar, Inc.................... 11,260 1,097,963
Centex Corp......................... 3,385 201,678
Ingersoll-Rand Co. - Class A........ 9,970 800,591
------------
$ 2,905,360
------------
HOTELS, RESTAURANTS & LEISURE -- 4.1%
Cendant Corp........................ 53,750 $ 1,256,675
McDonald's Corp..................... 44,900 1,439,494
------------
$ 2,696,169
------------
HOUSEHOLD & PERSONAL PRODUCTS -- 0.4%
Alberto-Culver Co................... 2,725 $ 132,353
Clorox Co........................... 1,635 96,351
------------
$ 228,704
------------
INSURANCE -- 5.7%
Aetna, Inc.......................... 1,380 $ 172,155
Allstate Corp....................... 9,950 514,614
AMBAC Financial Group, Inc.......... 6,590 541,237
Chubb Corp.......................... 2,690 206,861
MBIA, Inc........................... 4,630 292,986
MGIC Investment Corp................ 5,360 369,358
Progressive Corp.................... 15,675 1,329,867
Torchmark Corp...................... 4,950 282,843
------------
$ 3,709,921
------------
MATERIALS -- 1.1%
Ball Corp........................... 16,465 $ 724,131
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 7.1%
Becton Dickinson & Co............... 13,270 $ 753,736
Cardinal Health, Inc................ 5,515 320,697
Guidant Corp........................ 4,330 312,193
Johnson & Johnson, Inc.............. 24,656 1,563,684
Pfizer, Inc......................... 62,115 1,670,272
------------
$ 4,620,582
------------
RETAILING -- 5.5%
CVS Corp............................ 11,635 $ 524,389
Gap (The), Inc...................... 26,400 557,568
Home Depot, Inc..................... 31,530 1,347,592
Lowe's Cos., Inc.................... 8,430 485,484
Nike, Inc. - Class B................ 1,040 94,318
Nordstrom, Inc...................... 3,120 145,798
Staples, Inc........................ 13,650 460,141
------------
$ 3,615,290
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.3%
Intel Corp.......................... 37,128 $ 868,424
------------
SOFTWARE & SERVICES -- 6.1%
Adobe Systems, Inc.................. 3,505 $ 219,904
Affiliated Computer Services, Inc.* 13,495 812,264
Autodesk, Inc....................... 14,810 562,040
Computer Associates International,
Inc............................... 5,440 168,966
International Business Machines Corp. 9,573 943,706
Microsoft Corp...................... 25,909 692,029
NCR Corp.* ......................... 2,190 151,614
Oracle Corp.* ...................... 17,113 234,790
Symantec Corp.* .................... 7,850 202,216
------------
$ 3,987,529
------------
TELECOMMUNICATION SERVICES -- 4.0%
Alltel Corp......................... 4,185 $ 245,911
AT&T Corp........................... 7,030 133,992
Bellsouth Corp...................... 43,195 1,200,389
Nextel Communications, Inc.-Class A* 14,117 423,510
SBC Communications, Inc............. 8,045 207,320
Verizon Communications, Inc......... 10,885 440,951
------------
$ 2,652,073
------------
TRANSPORTATION -- 1.1%
FedEx Corp.......................... 3,039 $ 299,311
Norfolk Southern Corp............... 12,150 439,709
------------
$ 739,020
------------
UTILITIES -- 2.0%
Exelon Corp......................... 22,136 $ 975,534
Sempra Energy....................... 9,065 332,504
------------
$ 1,308,038
------------
TOTAL EQUITY INTERESTS-- 100.3%
(identified cost, $51,785,428).... $ 65,731,947
OTHER ASSETS, LESS LIABILITIES -- (0.3%) (229,089)
------------
NET ASSETS -- 100% $65,502,858
============
* Non-income-producing security.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $51,785,428) (Note 1A). $ 65,731,947
Cash.................................... 639
Receivable for fund shares sold......... 9,921
Receivable from investment adviser...... 10,054
Dividends receivable.................... 98,162
Prepaid expenses........................ 6,602
------------
Total assets............................ $ 65,857,325
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 3,592
Demand note payable..................... 327,000
Payable to affiliate for Trustees' fees. 774
Transfer agent fee...................... 2,088
Accrued expenses and other liabilities.. 21,013
------------
Total liabilities....................... $ 354,467
------------
NET ASSETS................................ $ 65,502,858
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 85,727,518
Accumulated undistributed net realized loss on
investments (computed on the basis
of identified cost).................... (34,038,588)
Unrealized appreciation on investments
(computed on the basis of identified cost) 13,946,519
Distributions in excess of net
investment income...................... (132,591)
------------
Net assets applicable to outstanding
shares................................ $ 65,502,858
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 5,561,887
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 11.78
============
See notes to financial statemnts
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 1,150,482
------------
Expenses -
Investment adviser fee (Note 2):........ $ 396,054
Administrator fee (Note 2):............. 79,211
Compensation of Trustees not employees of the
investment adviser or administrator.... 15,966
Custodian fee (Note 1D):................ 87,652
Distribution expenses (Note 3):......... 165,023
Audit services.......................... 26,430
Transfer and dividend disbursing agent fees 25,052
Registration costs...................... 17,427
Shareholder communications.............. 13,730
Legal services.......................... 7,970
Printing................................ 4,612
Interest expense........................ 3,128
Miscellaneous .......................... 6,388
------------
Total expenses.......................... $ 848,643
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (2,456)
Allocation of expenses to the
investment adviser (Note 2):........... (10,054)
Reduction of distribution expenses
by principal underwriter (Note 3):..... (11,227)
------------
Total deductions........................ $ (23,737)
------------
Net expenses............................ $ 824,906
------------
Net investment income................... $ 325,576
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 3,568,382
Change in unrealized appreciation of
investments............................ 3,534,335
------------
Net realized and unrealized gain of
investments............................ $ 7,102,717
------------
Net increase in net assets from operations $ 7,428,293
============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
Year Ended
December 31,
---------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 325,576 $ 214,803
Net realized gain (loss) on investments.................................... 3,568,382 (498,392)
Change in unrealized appreciation on investments........................... 3,534,335 14,590,659
-------------- --------------
Net increase in net assets resulting from operations..................... $ 7,428,293 $ 14,307,070
-------------- --------------
Distributions to shareholders -
From net investment income................................................. $ (289,970) $ (187,155)
-------------- --------------
Total distributions...................................................... $ (289,970) $ (187,155)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 4)............. $(13,174,341) $ (9,190,510)
-------------- --------------
Net Increase (decrease) in net assets........................................ $ (6,036,018) $ 4,929,405
NET ASSETS:
At beginning of year......................................................... 71,538,876 66,609,471
-------------- --------------
At end of year............................................................... $ 65,502,858 $ 71,538,876
-------------- --------------
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR............................................................... $ (132,591) $ (168,054)
============== ==============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
Year Ended December 31,
-----------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003(6) 2002(6) 2001(6) 2000(6)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 10.530 $ 8.570 $ 11.380 $ 13.690 $ 16.290
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss)(1) ....... $ 0.053 $ 0.029 $ 0.024 $ (0.009) $ (0.001)
Net realized and unrealized gain (loss) 1.247 1.958 (2.812) (2.301) (2.005)
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 1.300 $ 1.987 $ (2.788) $ (2.310) $ (2.006)
--------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income....... $ (0.050) $ (0.027) $ (0.022) $ - $ (0.010)
Distributions from capital gains....... - - - - (0.584)
--------- --------- --------- --------- ---------
Total distributions................ $ (0.050) $ (0.027) $ (0.022) $ - $ (0.594)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690
========= ========= ========= ========= =========
Total Return(3) ............................ 12.36% 23.20% (24.50%) (16.87%) (12.49%)
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).. $ 65,503 $ 71,539 $ 66,609 $ 95,121 $135,262
Ratio of net expenses to average net assets 1.25% 1.25% 1.22% 1.13% 1.06%
Ratio of net expenses after custodian fee
reduction to average net assets(2)(6) 1.25% 1.25% 1.22% 1.13% 1.06%
Ratio of net investment income (loss) to
average net assets ................. 0.49% 0.31% 0.25% (0.08%) (0.00%)(5)
Portfolio turnover rate................ 74% 143% 130% 78% 88%
- ---------------------------------------------------------------------------------------------------------------------------------
(1)For the year ended December 31, 2004 and for the year ended December 31,
2003, the operating expenses of the Fund were reduced by an allocation of
expenses to the distributor and/or investment adviser. Had such action not
been undertaken, net investment income per share and the ratios would have
been as follows:
2004 2003
-----------------------------
Net investment income per share........ $ 0.050 $ 0.024
========= =========
Ratios (As a percentage of average net assets):
Expenses............................. 1.28% 1.31%
========= =========
Expenses after custodian fee reduction(2) 1.28% 1.31%
========= =========
Net investment income................ 0.46% 0.26%
========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
(2)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1D). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(3)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(4)Certain per share amounts are based on average shares outstanding.
(5)Amount represents less than (0.00%) of average net assets.
(6)Under a written agreement in effect through the current fiscal year, Wright
waives a portion of its advisory fee and/or distribution fees and assumes
operating expenses to the extent necessary to limit expense ratios to 1.25%
after custodian fee reductions, if any.
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - December 31, 2004
Shares Value
Equity Interests -- 98.9%
AUSTRALIA -- 2.5%
BlueScope Steel, Ltd................ 12,090 $ 78,188
Boral, Ltd.......................... 68,087 366,675
CSR, Ltd............................267,491 557,765
QBE Insurance Group, Ltd............ 33,440 402,379
Santos, Ltd......................... 26,256 174,536
------------
$ 1,579,543
------------
AUSTRIA -- 2.0%
OMV AG.............................. 4,252 $ 1,281,264
------------
BELGIUM -- 1.0%
Delhaize Group...................... 5,121 $ 389,452
KBC Bancassurance Holdings.......... 2,897 222,483
------------
$ 611,935
------------
CANADA -- 7.4%
Bank of Nova Scotia................. 40,799 $ 1,385,903
Canadian Natural Resources, Ltd..... 20,934 895,437
Husky Energy, Inc................... 8,492 242,750
Nexen, Inc.......................... 6,793 276,108
Nortel Networks Corp................ 85,434 296,629
Penn West Petroleum, Ltd............ 3,529 233,421
Petro-Canada........................ 6,578 335,831
Power Financial Corp................ 31,340 836,762
Talisman Energy, Inc................ 3,020 81,540
------------
$ 4,584,381
------------
DENMARK -- 1.8%
Danske Bank A/S..................... 19,345 $ 592,982
GN Store Nord....................... 17,811 192,022
TDC A/S............................. 5,156 218,345
Topdanmark A/S...................... 1,673 131,760
------------
$ 1,135,109
------------
FINLAND -- 0.9%
Fortum Oyj.......................... 9,965 $ 184,482
Nokian Renkaat Oyj.................. 2,412 366,538
------------
$ 551,020
------------
FRANCE -- 7.8%
BNP Paribas SA...................... 21,926 $ 1,588,495
Compagnie De Saint-Gobain........... 4,360 262,655
Pernod-Ricard....................... 3,589 549,790
Peugeot SA.......................... 2,058 130,636
Renault SA.......................... 3,042 254,499
Schneider Electric SA............... 13,305 925,943
Societe Generale.................... 6,873 695,521
Veolia Environnement................ 11,349 410,798
Vinci SA............................ 179 24,039
------------
$ 4,842,376
------------
GERMANY -- 5.9%
Allianz AG.......................... 5,678 $ 753,259
Continental AG...................... 8,048 511,191
Deutsche Bank AG.................... 1,287 114,268
Deutsche Post AG - Registered....... 18,085 415,436
E. On AG............................ 10,958 998,836
Fresenius Medical Care AG........... 545 43,862
MAN AG.............................. 3,880 149,462
RWE AG.............................. 7,948 439,695
Thyssen Krupp....................... 10,745 236,603
------------
$ 3,662,612
------------
GREECE -- 1.4%
National Bank of Greece SA.......... 25,755 $ 849,982
------------
HONG KONG -- 2.6%
Cheung Kong Holdings, Ltd........... 17,000 $ 169,504
CLP Holdings, Ltd................... 99,000 569,339
Hong Kong Electric Holdings......... 80,500 367,665
Techtronic Industries Co., Ltd......168,000 366,359
Yue Yuen Industrial Holdings, Ltd... 49,500 136,285
------------
$ 1,609,152
------------
IRELAND -- 1.7%
Bank of Ireland..................... 8,929 $ 148,675
CRH PLC............................. 22,074 591,080
DCC PLC............................. 10,416 233,606
Grafton Group PLC................... 5,739 62,016
------------
$ 1,035,377
------------
ITALY -- 4.2%
Banca Intesa Spa.................... 44,658 $ 214,883
Enel Spa............................ 33,857 332,726
Eni Spa............................. 76,831 1,923,647
Mediaset Spa........................ 13,038 165,345
------------
$ 2,636,601
------------
JAPAN -- 21.3%
Acom Co., Ltd....................... 7,200 $ 538,928
Aiful Corp.......................... 9,400 1,033,844
Canon, Inc.......................... 24,900 1,343,779
Central Glass Co., Ltd.............. 28,000 198,380
Daito Trust Construct Co., Ltd...... 17,400 826,954
Eisai Co., Ltd...................... 22,900 753,128
Fuji Soft ABC, Inc.................. 13,200 436,694
Honda Motor Co., Ltd................ 17,460 904,778
Itochu Techno-Science Corp.......... 5,600 224,066
Konami Corp......................... 4,000 92,710
Mitsui OSK Lines, Ltd............... 86,000 516,151
Mitsui Sumitomo Insurance Co., Ltd.. 41,000 356,104
Nissan Motor Co., Ltd............... 68,100 740,347
ORIX Corp........................... 3,700 502,625
Promise Co., Ltd.................... 9,000 642,920
Sankyo Co., Ltd., Gunma............. 5,400 272,977
Sumitomo Trust & Banking............ 66,000 477,271
Suzuken Co., Ltd.................... 1,700 45,623
Takeda Chemicals Industries, Ltd.... 14,400 725,129
TDK Corp............................ 7,500 555,528
TIS, Inc............................ 2,000 87,635
Toyota Motor Corp................... 33,700 1,371,416
Yamada Denki Co., Ltd............... 8,200 351,303
Yamaha Motor Co., Ltd............... 19,800 297,184
------------
$13,295,474
------------
NETHERLANDS -- 5.4%
ABN Amro Holdings NV................ 8,711 $ 230,770
Akzo Nobel NV....................... 20,268 864,496
ING Groep NV - ADR.................. 44,825 1,356,266
Koninklijke Philips Electronics NV.. 15,691 416,109
OCE NV.............................. 12,581 192,554
Royal KPN NV........................ 33,695 320,142
------------
$ 3,380,337
------------
NORWAY -- 3.7%
Norsk Hydro ASA..................... 10,271 $ 808,907
Orkla ASA........................... 10,968 360,370
Statoil ASA......................... 51,537 808,370
Tandberg ASA........................ 16,900 209,972
Telenor ASA......................... 12,826 116,472
------------
$ 2,304,091
------------
SINGAPORE -- 1.5%
Keppel Corp., Ltd...................112,000 $ 590,051
Singapore Telecommunications, Ltd...238,000 346,998
------------
$ 937,049
------------
SPAIN -- 4.7%
Acciona SA.......................... 5,413 $ 478,981
Banco Santander Central Hispano SA.. 77,902 966,760
Corporacion Mapfre SA............... 19,876 292,858
Endesa SA........................... 11,983 281,618
Fomento de Construcciones y Contratas SA9,645 464,486
Gas Natural SDG SA.................. 3,156 97,636
Repsol YPF SA....................... 12,795 333,223
------------
$ 2,915,562
------------
SWEDEN -- 5.4%
Getinge AB.......................... 36,293 $ 451,929
Nordea Bank AB......................164,444 1,657,951
Skandia Forsakrings AB.............. 28,307 140,994
Swedish Match AB.................... 13,939 161,511
TeliaSonera AB......................162,122 970,966
------------
$ 3,383,351
------------
SWITZERLAND -- 2.1%
Micronas Semiconductor-Registered*.. 7,433 $ 364,427
UBS AG.............................. 5,170 433,523
Zurich Financial Services* ......... 2,956 492,883
------------
$ 1,290,833
------------
UNITED KINGDOM -- 15.6%
Alliance Unichem PLC................ 9,570 $ 138,628
Aviva PLC........................... 11,249 135,629
Barclays PLC........................146,437 1,647,506
Barratt Developments PLC............ 62,342 711,559
BT Group PLC........................ 60,541 235,952
Cable & Wireless PLC................170,203 389,677
Davis Service Group PLC............. 49,577 390,250
Dixons Group PLC.................... 63,648 185,741
Lloyds TSB Group PLC................ 19,455 176,673
Man Group PLC....................... 5,173 146,194
Next PLC............................ 31,714 1,004,647
Persimmon PLC....................... 60,260 799,440
Scottish & Southern Energy PLC...... 3,011 50,438
Tesco PLC...........................286,836 1,771,866
The Berkeley Group Holdings PLC..... 32,712 508,083
Trinity Mirror PLC.................. 16,105 196,651
United Utilities PLC................ 8,649 104,613
Wolseley PLC........................ 58,564 1,094,574
------------
$ 9,688,121
------------
TOTAL EQUITY INTERESTS-- 98.9%
(identified cost, $51,770,998)... $ 61,574,170
------------
OTHER ASSETS, LESS LIABILITIES -- 1.1% 691,523
------------
NET ASSETS -- 100% $ 62,265,693
============
* Non-income-producing security.
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $51,770,998) (Note 1A) $ 61,574,170
Cash.................................... 584,849
Foreign currency, at value (cost $319)
(Note 1)............................... 321
Receivable for fund shares sold......... 14,281
Dividends receivable.................... 53,510
Tax reclaim receivable.................. 52,729
Prepaid expenses........................ 11,911
Other assets............................ 9,545
------------
Total assets.......................... $ 62,301,316
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 9,469
Payable to affiliate for Trustees' fees. 774
Transfer agent fee payable.............. 1,435
Accrued expenses and other liabilities.. 23,945
------------
Total liabilities..................... $ 35,623
------------
NET ASSETS................................ $ 62,265,693
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 69,609,844
Accumulated net realized loss on investments
and foreign currency (computed on the
basis of identified cost).............. (19,229,403)
Unrealized appreciation of investments and
translation of assets and liabilities in foreign
currencies (computed on the basis of
identified cost)....................... 9,815,781
Undistributed net investment income..... 2,069,471
------------
Net assets applicable to outstanding
share................................. $ 62,265,693
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 4,133,107
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 15.07
============
See notes to financial statements
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 1,625,735
Less: Foreign Taxes..................... (143,371)
------------
Investment income....................... $ 1,482,364
------------
Expenses -
Investment adviser fee (Note 2):........ $ 442,884
Administrator fee (Note 2):............. 94,113
Compensation of Trustees not employees of
the investment adviser or administrator 15,966
Custodian fee (Note 1D):................ 145,313
Distribution expenses (Note 3):......... 138,401
Audit services.......................... 30,006
Registration costs...................... 29,136
Transfer and dividend disbursing agent fees 21,299
Shareholder communications.............. 11,038
Legal services.......................... 7,461
Printing................................ 4,190
Interest expense........................ 3,799
Miscellaneous .......................... 7,508
------------
Total expenses.......................... $ 951,114
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (3,713)
------------
Net expenses............................ $ 947,401
------------
Net investment income................... $ 534,963
------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain -
Investment transactions (identified
cost basis)........................... $ 9,004,754
Foreign currency transactions.......... (36,438)
------------
Net realized gain....................... $ 8,968,316
Change in unrealized depreciation -
Investments (identified cost basis).... (68,856)
Foreign currency....................... (4,742)
------------
Net change in unrealized depreciation... $ (73,598)
------------
Net realized and unrealized gain of
investments........................... $ 8,894,718
------------
Net increase in net assets from operations $ 9,429,681
============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Year Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS Dec. 31, 2004 Dec. 31, 2003
- ---------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 534,963 $ 468,757
Net realized gain (loss) on investments and foreign currency transactions.. 8,968,316 (959,406)
Change in unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies.............. (73,598) 15,005,840
-------------- --------------
Net increase in net assets resulting from operations..................... $ 9,429,681 $ 14,515,191
-------------- --------------
Distributions to shareholders - From net investment income
Standard shares............................................................ $ (376,098) $ (338,309)
Institutional shares (Note 8).............................................. - (69,545)
-------------- --------------
Total distributions...................................................... $ (376,098) $ (407,854)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 4) -
Standard shares............................................................ $ (1,373,901) $ (9,715,249)
Institutional shares (Note 8) ............................................. - (11,047,783)
-------------- --------------
Net decrease in net assets from fund share transactions...................... $ (1,373,901) $(20,763,032)
-------------- --------------
Net increase (decrease) in net assets........................................ $ 7,679,682 $ (6,655,695)
NET ASSETS:
At beginning of year......................................................... 54,586,011 61,241,706
-------------- --------------
At end of year............................................................... $ 62,265,693 $ 54,586,011
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF YEAR.................................................................. $ 2,069,471 $ 1,947,044
============== ==============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Year Ended December 31,
-----------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003(4) 2002(4) 2001(4) 2000(4)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 12.890 $ 9.840 $11.510 $15.180 $18.900
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss) .......... $ 0.128 $ 0.073 $ 0.070 $ (0.023) $ 0.135
Net realized and unrealized gain (loss) 2.140 3.044 (1.740) (3.647) (3.455)
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations...... $ 2.268 $ 3.117 $ (1.670) $ (3.670) $ (3.320)
--------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income....... $ (0.088) $ (0.067) $ - $ - $ -
Distributions from capital gains....... - - - - (0.400)
--------- --------- --------- --------- ---------
Total distributions................ $ (0.088) $ (0.067) $ - $ - $ (0.400)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 15.070 $12.890 $ 9.840 $11.510 $15.180
========= ========= ========= ========= =========
Total return(1) ............................ 17.71% 31.96% (14.51%) (24.18%) (17.58%)
Ratios/Supplemental Data
Net assets, end of year (000 omitted).. $62,266 $ 54,586 $ 50,835 $ 66,828 $110,868
Ratio of net expenses to average net assets 1.72% 1.80% 1.66%(2) 1.56%(2) 1.49%(2)
Ratio of net expenses after custodian fee
reduction to average net assets(5) 1.71% 1.80% 1.65% - -
Ratio of net investment income (loss) to average
net assets 0.97% 0.81% 0.65% (0.18%) 0.76%
Portfolio turnover rate .............. 121% 77% 62%(3) 39%(3) 53%(3)
- --------------------------------------------------------------------------------------------------------------------------------
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(2)Includes each fund's share of its corresponding Portfolio's allocated expenses.(Note 1)
(3)Represents portfolio turnover rate of the fund's corresponding portfolio.(Note 1)
(4)Certain per share amounts are based on average shares outstanding.
(5)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1D). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
See notes to financial statements
WRIGHT MANAGED EQUITY TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Equity Trust (the Trust), issuer of Wright Selected Blue
Chip Equities Fund (WSBC) series, Wright Major Blue Chip Equities Fund (WMBC)
series, and Wright International Blue Chip Equities Fund (WIBC) series
(collectively, the Funds), is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end, management investment company. The
Funds seek to provide total return consisting of price appreciation and current
income. Prior to December 20, 2002, WSBC and WIBC invested all of their
investable assets in interests in a separate corresponding open-end management
investment company (a Portfolio), a New York Trust, having the same investment
objective as its corresponding fund. Subsequent to December 20, 2002, the Funds
invest directly in securities rather than through the Portfolios and maintain
the same investment objectives.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations - Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sale prices, if those prices
are deemed to be representative of market values at the close of business.
Unlisted or listed securities for which closing sale prices are not
available are valued at the mean between the latest bid and asked prices.
Short-term obligations maturing in sixty days or less are valued at
amortized cost, which approximates fair value. Securities for which market
quotations are unavailable or deemed not to be representative of market
values at the close of business are appraised at their fair value as
determined in good faith by or at the direction of the Trustees.
B. Foreign Currency Translation - Investment security valuations, other
assets, and liabilities initially expressed in foreign currencies are
translated each business day into U.S. dollars based upon current exchange
rates. Purchases and sales of foreign investment securities and income and
expenses are translated into U.S. dollars based upon currency exchange
rates prevailing on the respective dates of such transactions.
C. Income - Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis.
However, if the ex-dividend date has passed, certain dividends from foreign
securities are recorded as the fund is informed of the ex-dividend date.
D. Expense Reduction - Investors Bank & Trust (IBT) serves as custodian to the
Funds. Pursuant to the custodian agreement, IBT receives a fee reduced by
credits, which are determined based on the average daily cash balance the
Funds maintain with IBT. All credit balances used to reduce the Fund's
custodian fees are reported as a reduction of total expenses on the
Statement of Operations.
E. Federal Taxes - The Trust's policy is to comply with the provisions of
the Internal Revenue Code (the Code) available to regulated investment
companies and distribute to shareholders each year all of its taxable
income, including any net realized gain on investments. Accordingly,
no provision for federal income or excise tax is necessary. At Decembe
31, 2004, the Trust, for federal income tax purposes, had capital loss
carryovers of $33,673,411 (WMBC) and $19,221,164 (WIBC) which will
reduce the Funds' taxable income arising from future net realized
gain on investment transactions, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distribution to
shareholders which would otherwise be necessary to relieve the respective
fund of any liability for federal income or excise tax. Pursuant to the
Code, such capital loss carryovers will expire as follows:
12/31 WSBC WMBC WIBC
-----------------------------------
2009 - $13,839,245 $ 3,647,716
2010 - 17,603,398 14,010,156
201 - 2,230,768 1,563,292
At December 31, 2004, net capital losses of $15,195 for WIBC attributable
to foreign currency transactions incurred after October 31, 2004 are
treated as arising on the first day of the fund's current taxable year.
Withholding taxes on foreign dividends have been provided for in accordance
with the Trust's understanding of the applicable country's tax rules and
rates.
F. Distributions - The Trust requires that differences in the recognition or
classification of income between the financial statements and tax earnings
and profits which result only in temporary overdistributions for financial
statement purposes, are classified as distributions in excess of net
investment income or accumulated net realized gains. Distributions in
excess of tax basis earnings and profits are reported in the financial
statements as a return of capital. Permanent differences between book and
tax accounting for certain items may result in reclassification of these
items.
The tax character of distributions paid for the years ended December 31, 2004
and December 31, 2003 was as follows:
Year Ended 12/31/04 WSBC WMBC WIBC
- ------------------------------------------------------------------------------
Distributions declared from:
Ordinary income - $289,970 $376,098
Long-term capital gain $1,597,259 - -
- ------------------------------------------------------------------------------
Year Ended 12/31/03 WSBC WMBC WIBC
- ------------------------------------------------------------------------------
Distributions declared from:
Ordinary income - $187,155 $408,176
Long-term capital gain $ 470,550 - -
- ------------------------------------------------------------------------------
During the year ended December 31, 2004, the following amounts were reclassified
due to differences between book and tax accounting created primarily by the
deferral of certain losses for tax purposes and character reclassifications
between net investment income and net realized capital gains.
Accumulated Undistrib- Undistributed
Paid-In uted Net Realized Gain Net Investment
Capital on Investments Income
- -------------------------------------------------------------------------------
WSBC $(67,118) $(28,575) $95,693
WMBC - 143 (143)
WIBC - 36,438 (36,438)
- -------------------------------------------------------------------------------
Net investment income, net realized gains (losses) and net assets were not
affected by these reclassifications.
As of December 31, 2004, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Undistributed income - $ 73,373 $ 697,366
Undistributed gain $ 1,387,304 - -
Capital loss carryforwards - $(33,673,411) $(19,221,164)
Unrealized appreciation $ 10,843,824 $ 13,587,865 $ 9,611,249
Other temporary differences $ 924,379 $ (212,487) $ 1,568,398
- -------------------------------------------------------------------------------
G. Other - Investment transactions are accounted for on a trade-date basis.
H. Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as
investment adviser to the Funds pursuant to an Investment Advisory Contract.
Wright furnishes the Funds with investment management, investment advisory, and
other services. For its services, Wright is compensated based upon a percentage
of average daily net assets which rate is adjusted as average daily net assets
exceed certain levels. For the year ended December 31, 2004, the effective
annual rate was 0.80% for WIBC and 0.60% for WSBC and WMBC. Wright has been
allocated expenses of $20,497 and $10,054 on behalf of WSBC and WMBC,
respectively. The Trust also has engaged Eaton Vance Management (Eaton Vance) to
act as administrator of the Trust. Under the Administration Agreement, Eaton
Vance is responsible for managing the business affairs of the Trust and is
compensated based upon a percentage of average daily net assets which rate is
reduced as average daily net assets exceed certain levels. For the year ended
December 31, 2004, the effective rate was 0.12% for WSBC, 0.12% for WMBC, and
0.17% for WIBC. Certain of the Trustees and officers of the Trust are Trustees
or officers of the above organizations. Except as to Trustees of the Trust who
are not employees of Eaton Vance or Wright, Trustees and officers receive
remuneration for their services to the Trust out of the fees paid to Eaton Vance
and Wright.
(3) DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that each of the
funds will pay Wright Investors' Service Distributors, Inc. (Principal
Underwriter), a wholly-owned subsidiary of The Winthrop Corporation, an annual
rate of 0.25% of each fund's average daily net assets for activities primarily
intended to result in the sale of each fund's shares. Under a written agreement
in effect through the current fiscal year, Wright waives a portion of its
advisory fee and/or distribution fees and assumes operating expenses to the
extent necessary to limit expense ratios to 1.25% after custodian fee
reductions, if any, for both WSBC and WMBC. Pursuant to this agreement, the
principal underwriter made a reduction of its fees of $50,160 and $11,227 on
behalf of WSBC and WMBC, respectively. The investment adviser also assumed
$20,497 and $10,054 of expenses on behalf of WSBC and WMBC, respectively. In
addition, the Trustees have adopted a service plan (the Service Plan) which
allows the funds to reimburse the Principal Underwriter for payments to
intermediaries for providing account administration and account maintenance
services to their customers who are beneficial owners of shares. The amount of
service fee payable under the Service Plan with respect to each class of shares
may not exceed 0.25% annually of the average daily net assets attributable to
the respective classes. For the year ended December 31, 2004, the Funds did not
accrue or pay any service fees.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
Year Ended Year Ended
December 31, 2004 December 31, 2003
----------------------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fund--
Sold................................................... 923,639 $ 11,222,820 1,288,153 $ 12,745,026
Issued to shareholders in payment of distributions
declared............................................. 106,988 1,396,188 47,582 403,022
Redemptions............................................ (957,939) (11,635,131) (1,659,851) (16,224,836)
----------- -------------- ----------- --------------
Net increase (decrease).............................. 72,688 $ 983,877 (324,116) $ (3,076,788)
=========== ============== =========== ==============
Wright Major Blue Chip Equities Fund
Sold................................................... 898,054 $ 9,604,327 1,487,609 $ 13,724,956
Issued to shareholders in payment of distributions
declared............................................. 20,569 233,277 14,951 150,707
Redemptions............................................ (2,151,425) (23,011,945) (2,481,862) (23,066,173)
----------- -------------- ----------- --------------
Net decrease......................................... (1,232,802) $ (13,174,341) (979,302) $ (9,190,510)
=========== ============== =========== ==============
Wright International Blue Chip Equities Fund-- Standard Shares:
Sold................................................... 792,931 $ 10,418,061 1,000,262 $ 10,448,947
Issued to shareholders in payment of distributions
declared............................................. 21,458 276,379 25,450 231,084
Redemptions............................................ (916,122) (12,068,341) (1,956,708) (20,395,280)
----------- -------------- ----------- --------------
Net decrease......................................... (101,733) $ (1,373,901) (930,996) $ (9,715,249)
=========== ============== =========== ==============
Wright International Blue Chip Equities Fund-- Institutional Shares:
Issued to shareholders in payment of distributions
declared............................................. - $ - 16,247 $ 9,545
Redemptions............................................ - - (2,259,640) (11,117,328)
----------- -------------- ----------- --------------
Net decrease........................................... - $ - (2,243,393) $ (11,047,783)
=========== ============== =========== ==============
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations were as follows:
Year Ended December 31, 2004
--------------------------------------
WSBC WMBC WIBC
- -----------------------------------------------------------------------------
Purchases..... $ 26,840,098 $ 48,694,283 $ 66,492,718
=========== =========== ===========
Sales......... $ 27,116,247 $ 61,783,544 $ 68,829,228
=========== =========== ===========
- -----------------------------------------------------------------------------
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) of the investment
securities owned at December 31, 2004, as computed on a federal income tax
basis, are as follows:
WSBC WMBC WIBC
- -----------------------------------------------------------------------------
Aggregate cost $ 32,592,950 $ 52,144,082 $ 51,975,530
=========== =========== ===========
Gross unrealized
appreciation 11,264,933 14,065,733 9,865,289
Gross unrealized
depreciation (421,109) (477,868) (266,649)
------------- ------------- -------------
Net unrealized
appreciation $10,843,824 $ 13,587,865 $ 9,598,640
=========== =========== ===========
- -------------------------------------------------------------------------------
The appreciation on foreign currency for WIBC is $12,609.
(7) LINE OF CREDIT
The funds participate with other funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. WSBC, WMBC, and WIBC did not have significant borrowings or
allocated fees during the year ended December 31, 2004. WMBC had $327,000
outstanding at December 31, 2004.
(8) CLASS ELIMINATION
The Institutional Share class of the Wright International Blue Chip
Equities Fund was fully liquidated on May 20, 2003.
(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. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on the removal of funds or
other assets of the Portfolio, political or financial instability or diplomatic
and other developments which could affect such investments.
WRIGHT MANAGED EQUITY TRUST
- -------------------------------------------------------------------------------
Independent Auditors' Report
To the Trustees and Shareholders of
The Wright Managed Equity Trust:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of The Wright Managed Equity Trust
(the "Trust"), comprising the Wright Selected Blue Chip Equities Fund,
Wright Major Blue Chip Equities Fund, and Wright International Blue Chip
Equities Fund (the "Funds"), as of December 31, 2004, and the related
statements of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. Our procedures included confirmation of the
securities owned as of December 31, 2004, by correspondence with the
custodian and brokers, where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of each of the Funds constituting The Wright Managed Equity Trust as of
December 31, 2004, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 11, 2005
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - December 31, 2004
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
MORTAGE-BACKED SECURITIES
$ 303,792 Countrywide Alternative Loan Trust,
Series 2004-15 2A1 5.317% 09-25-34 $101.63 $ 308,740 5.2%
84,367 FHLMC Gold Balloon #M90710 5.000% 03-01-07 102.19 86,212 4.9%
60,799 FHLMC Gold Balloon #M90724 5.500% 05-01-07 102.52 62,329 5.4%
263,948 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.80 266,068 4.5%
398,884 FHLMC Gold Balloon #M90802 4.000% 03-01-08 100.45 400,671 4.0%
1,344,447 FHLMC Gold Balloon #M90937 5.000% 08-01-09 102.24 1,374,514 4.9%
1,302,991 FHLMC Gold Balloon #M90941 4.500% 08-01-09 101.27 1,319,507 4.4%
467,529 FHLMC Gold Pool #M90796 4.000% 02-01-08 100.45 469,624 4.0%
490,471 FHLMC Pool #1B1291 4.397% 11-01-33 100.13 491,099 4.4%
292,555 First Horizon Alternative Mortgage
Securities, Series 2004-AA3 A1 5.375% 09-25-34 101.39 296,627 5.3%
309,677 First Horizon Mortgage Pass-Through Trust,
Series 2004-AR4 3A1 4.700% 08-25-34 100.24 310,424 4.7%
103,593 FNMA Pool #254227 5.000% 02-01-09 101.79 105,446 4.9%
604,843 FNMA Pool #701043 4.056% 04-01-33 100.27 606,473 4.0%
318,133 Structured Adjustable Rate Mortgage Loan
Trust, Series 2004-12 6A 4.192% 09-25-34 98.88 314,583 4.2%
295,556 Washington Mutual, Series 2004-AR3 4.240% 06-25-34 99.65 294,520 4.3%
313,176 Wells Fargo Mortgage Backed Securities
Trust, Series 2004-Z 2A2 4.365% 12-25-34 99.94 312,980 4.4%
U.S. GOVERNMENT AGENCIES
$ 770,000 FFCB 2.500% 03-15-06 99.37 $ 765,153 2.5%
3,135,000 FHLMC 3.250% 11-02-07 99.57 3,121,516 3.3%
795,000 FNMA 1.750% 06-16-06 98.10 779,851 1.8%
2,135,000 FNMA 3.000% 11-22-06 99.60 2,126,343 3.0%
U.S. TREASURIES
$ 3,090,000 U.S. Treasury Notes 6.750% 05-15-05 101.58 $ 3,138,766 6.6%
4,015,000 U.S. Treasury Notes 4.625% 05-15-06 102.34 4,108,790 4.5%
265,000 U.S. Treasury Notes 3.000% 11-15-07 99.41 263,447 3.0%
-----------
Total Investments (identified cost, $21,474,018)-- 98.8% $21,323,683
Other Assets, Less Liabilities-- 1.2% 248,988
-----------
Net Assets-- 100.0% $21,572,671
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of $21,474,018)(Note 1A) $ 21,323,683
Cash.................................... 144,572
Receivable for investments sold......... 15,990
Receivable for fund shares sold......... 3,616
Receivable from investment adviser...... 1,318
Interest receivable..................... 110,396
Prepaid expenses........................ 4,473
------------
Total assets.......................... $ 21,604,048
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 1,305
Distributions payable................... 14,877
Payable to affiliate for Trustees' fees. 447
Transfer agent fee ..................... 1,743
Accrued expenses........................ 13,005
------------
Total liabilities..................... $ 31,377
------------
NET ASSETS................................ $ 21,572,671
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for Fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 23,065,187
Accumulated undistributed net realized loss
on investments (computed on the basis o
identified cost)...................... (1,342,181)
Unrealized depreciation on investments
(computed on the basis of identified cost) (150,335)
------------
Net assets applicable to outstanding
shares................................ $ 21,572,671
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING. 2,161,858
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST.................. $ 9.98
============
See notes to financial statements
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 552,847
------------
Expenses -
Investment adviser fee (Note 3)........ $ 106,742
Administrator fee (Note 3)............. 21,348
Compensation of Trustees not employees of
the investment adviser or administrator 11,247
Custodian fee (Note 1C)................ 48,912
Distribution expenses (Note 4)......... 59,301
Audit services......................... 25,956
Transfer and dividend disbursing agent fees 20,512
Registration costs..................... 13,827
Shareholder communications............. 6,336
Legal services......................... 4,912
Printing............................... 3,526
Interest expense....................... 667
Miscellaneous.......................... 3,561
------------
Total expenses........................ $ 326,847
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (2,490)
Allocation of expenses to the investment adviser
(Note 3).............................. (1,318)
Reduction of investment adviser fee
(Note 3).............................. (38,546)
Reduction of distribution expenses
by principal underwriter (Note 4)..... (59,301)
------------
Total deductions...................... $ (101,655)
------------
Net expenses.......................... $ 225,192
------------
Net investment income............... $ 327,655
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (42,275)
Change in unrealized depreciation
of investments......................... (185,876)
------------
Net realized and unrealized loss of
investments........................... $ (228,151)
------------
Net increase in net assets from operations $ 99,504
============
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
Year Ended
December 31,
---------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 327,655 $ 545,906
Net realized gain (loss) on investments.................................... (42,275) 699,197
Change in unrealized depreciation on investments........................... (185,876) (1,048,933)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 99,504 $ 196,170
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (735,924) $ (914,896)
-------------- --------------
Total distributions...................................................... $ (735,924) $ (914,896)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (5,348,388) $ (5,563,259)
-------------- --------------
Net decrease in net assets............................................... $ (5,984,808) $ (6,281,985)
NET ASSETS:
At beginning of year......................................................... 27,557,479 33,839,464
-------------- --------------
At end of year............................................................... $ 21,572,671 $ 27,557,479
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF YEAR................................................. $ -- $ (17,880)
============== ==============
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- ------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 10.250 $ 10.490 $ 10.290 $ 10.080 $ 9.930
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ............... $ 0.123 $ 0.165 $ 0.349 $ 0.480(7) $ 0.525
Net realized and unrealized gain (loss).. (0.080) (0.102) 0.200 0.195(7) 0.143
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.043 $ 0.063 $ 0.549 $ 0.675 $ 0.668
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income... $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518)
--------- --------- --------- --------- ---------
Total distributions.................... $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080
========= ========= ========= ========= =========
Total return(2) ............................ 0.43% 0.61% 5.42% 6.82% 6.94%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 21,573 $ 27,557 $ 33,839 $ 36,025 $ 39,198
Ratio of net expenses to average net assets 0.96% 0.95% 0.97%(3) 0.97%(3) 0.98%(3)
Ratio of net expenses after custodian fee
reduction to average net assets ...... 0.95%(6) 0.95%(6) 0.95%(3)(4)(6 0.95%(3)(4)(6) 0.95%(3)(4)(6)
Interest expense ....................... _ 0.01% - - -
Ratio of net investment income to average
net assets............................ 1.38% 1.75% 3.10% 4.40% 5.27%
Portfolio turnover rate ................ 138% 165% 64%(5) 92%(5) 65%(5)
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For certain periods presented, the operating expenses of the fund were
reduced by an allocation of expenses to the investment adviser, a reduction
in distribution fees by the principal underwriter, a reduction in
administration fees, or a combination thereof. Had such action not been
undertaken, net investment income per share and the ratios would have been as
follows:
2004 2003 2002 2001 2000
--------------------------------------------------------------------
Net investment income per share........ $ 0.097 $ 0.134 $ 0.323 $ 0.452 $ 0.511
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.38% 1.28% 1.20%(3) 1.22%(3) 1.13%(3)
========= ========= ========= ========= =========
Expense after custodian fee reduction 1.37% 1.28% 1.18%(3)(4) 1.20%(3)(4) 1.10%(3)(4)
========= ========= ========= ========= =========
Interest expense..................... - 0.01% - - -
========= ========= ========= ========= =========
Net investment income................ 0.96% 1.42% 2.87% 4.15% 5.13%
========= ========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each year reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated expenses.(Note 1)
(4)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1C). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(5)Represents portfolio turnover rate of the fund's corresponding portfolio.(Note 1)
(6)Under a written agreement, Wright waives all or a portion of either its
advisory and/or distribution fees and assumes operating expenses to the
extent necessary to limit expense ratios to 0.95% after custodian fee credits
are applied.
(7)Reporting guidelines require the funds to disclose the effects of
implementing the change in accounting for amortization of premium and
discount on debt securities. If adjustments were not made, net investment
income per share would have been $0.491 and net realized and unrealized gain
(loss) per share would have been $0.184.
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - December 31, 2004
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSET-BACKED SECURITIES
FINANCIAL SERVICES
- --------------------
$ 430,000 Citibank Credit Card Master Trust 6.900% 10-15-07 $103.05 $ 443,119 6.7%
380,000 Citibank Credit Card Master Trust 5.875% 03-10-11 107.63 408,992 5.5%
340,000 Citigroup Commercial Mortgage Trust,
Series 2004-C2 A5 4.733% 10-15-41 98.74 335,723 4.8%
356,006 Countrywide Alternative Loan Trust,
Series 2004-15 2A1 5.317% 09-25-34 101.63 361,804 5.2%
347,409 First Horizon Alternative Mortgage Securities,
Series 2004-AA3 A1 5.375% 09-25-34 101.39 352,244 5.3%
374,386 First Horizon Mortgage Pass-Through Trust,
Series 2004-AR4 3A1 4.700% 08-25-34 100.24 375,289 4.7%
565,000 JP Morgan Chase Commercial Mortgage
Securities, Series 2004-C3 A5 4.878% 01-15-42 99.76 563,644 4.9%
220,000 JP Morgan Chase Commercial Mortgage
Securities, Series 2004-CBX A6 4.899% 11-12-39 100.42 220,920 4.9%
610,000 MBNA Master Credit Card Trust,
Series 1999-BA 5.900% 08-15-11 107.88 658,063 5.5%
140,000 MBNA Master Credit Card Trust,
Series 2000-AA 7.350% 07-16-07 100.63 140,881 7.3%
376,865 Structured Adjustable Rate Mortgage
Loan Trust, Series 2004-12 6A 4.192% 09-25-34 98.88 372,660 4.2%
364,090 Washington Mutual, Series 2004-AR3 4.240% 06-25-34 99.65 362,815 4.3%
367,003 Wells Fargo Mortgage Backed Securities Trust,
Series 2004-Z 2A2 4.365% 12-25-34 99.94 366,774 4.4%
-----------
Total Asset Backed Securities (identified cost, $4,992,855)-- 13.0% $4,962,928
-----------
CORPORATE BONDS
AUTO
- ----
$ 190,000 DaimlerChrysler North America
Holding Co. 7.200% 09-01-09 $111.41 $ 211,684 6.5%
195,000 General Motors Corp. 8.800% 03-01-21 108.45 211,479 8.1%
BANKS
- ------
$ 205,000 Bank One Corp., Note 2.625% 06-30-08 $ 96.09 $ 196,982 2.7%
390,000 Bayerische Landesbank, MTN 2.600% 10-16-06 98.65 384,752 2.6%
335,000 CIT Group, Inc. 7.750% 04-02-12 118.54 397,105 6.5%
320,000 National Rural Utilities 7.250% 03-01-12 115.59 369,872 6.3%
325,000 Royal Bank of Scotland 7.648% 08-31-49 122.13 396,916 6.3%
390,000 SLM Corp 2.300% 01-26-09 100.12 390,452 2.3%
360,000 U.S. Bancorp 5.100% 07-15-07 103.49 372,561 4.9%
BLDG - RESIDENTIAL/COMMER
- -------------------------
$ 170,000 Centex Corp. 7.875% 02-01-11 $116.95 $ 198,822 6.7%
BUILDING MATERIALS
- --------------------
$ 95,000 Lowes Co., Inc. 8.250% 06-01-10 $120.05 $ 114,052 6.9%
CABLE TV
- ----------
$ 170,000 Comcast Cable Comm HLDGS 8.375% 03-15-13 $123.50 $ 209,950 6.8%
DIVERSIFIED FINANCIALS
- ----------------------
$ 375,000 Bear Stearns Co., Inc. 1.770% 09-27-07 $101.34 $ 380,015 1.7%
340,000 Boeing Capital Corp., Senior Note 7.375% 09-27-10 115.43 392,459 6.4%
230,000 Cendant Corp. 6.250% 01-15-08 106.80 245,629 5.9%
190,000 First Union Corp. 6.400% 04-01-08 108.52 206,194 5.9%
200,000 Ford Motor Credit Co. 7.375% 10-28-09 107.98 215,952 6.8%
415,000 General Electric Cap Corp. 6.125% 02-22-11 109.68 455,171 5.6%
300,000 Goldman Sachs Group, Inc. 6.600% 01-15-12 111.76 335,288 5.9%
ELECTRIC - INTEGRATED
- ----------------------
$ 190,000 American Electric Power Co., Inc. 6.125% 05-15-06 $103.67 $ 196,977 5.9%
205,000 Dominion Resources, Inc. 6.300% 03-15-33 104.34 213,893 6.0%
190,000 PPL Electric Utilities 5.875% 08-15-07 105.18 199,844 5.6%
210,000 Scana Corp. 1.620% 11-15-06 100.28 210,578 1.6%
FOOD - RETAIL
- --------------
$ 180,000 Albertson's, Inc. 7.500% 02-15-11 $115.96 $ 208,732 6.5%
200,000 Safeway, Inc., Note 5.800% 08-15-12 105.73 211,455 5.5%
FOOD, BEVERAGE & TOBACCO
- -------------------------
$ 380,000 Pepsico, Inc. 3.200% 05-15-07 $ 99.57 $ 378,378 3.2%
INSTRUMENTS - CONTROLS
- -------------------------
$ 345,000 Honeywell International, Inc. 7.000% 03-15-07 $107.27 $ 370,078 6.5%
MEDICAL
- --------
$ 110,000 Amgen, Inc. 6.500% 12-01-07 $108.18 $ 118,992 6.0%
205,000 Wyeth 5.500% 03-15-13 104.10 213,412 5.3%
MEDICAL - HMO
- --------------
$ 380,000 UnitedHealth Group, Inc. 4.875% 04-01-13 $101.01 $ 383,825 4.8%
MULTIMEDIA
- -----------
$ 185,000 AOL Time Warner, Inc. 6.750% 04-15-11 $112.63 $ 208,368 6.0%
OIL & GAS
- ----------
$ 460,000 BP Capital Markets Plc 2.750% 12-29-06 $ 99.02 $ 455,510 2.8%
320,000 Phillips Petroleum 6.650% 07-15-18 114.85 367,524 5.8%
190,000 Repsol International Finance 7.450% 07-15-05 102.34 194,445 7.3%
175,000 Sempra Energy 6.000% 02-01-13 106.90 187,074 5.6%
180,000 Transocean Sedco Forex 7.500% 04-15-31 123.48 222,264 6.1%
PIPELINES
- ----------
$ 185,000 Duke Capital Corp., Senior Note 7.500% 10-01-09 $113.30 $ 209,598 6.6%
PROPERTY/CASUALTY INSURANCE
- ---------------------------
$ 205,000 Fund American Cos., Inc.,
Guaranteed Senior Note 5.875% 05-15-13 $101.94 $ 208,982 5.8%
RETAIL
- -------
$ 135,000 TJX Cos., Inc. 7.450% 12-15-09 $114.49 $ 154,562 6.5%
TELECOM
- --------
$ 165,000 Ameritech Capital Corp. 7.500% 04-01-05 $101.09 $ 166,796 7.4%
180,000 AT&T Wireless 7.875% 03-01-11 118.01 212,416 6.7%
145,000 British Telecom Plc 8.875% 12-15-30 134.30 194,741 6.6%
170,000 Deutsche Telekom International Finance 8.500% 06-15-10 119.27 202,760 7.1%
170,000 France Telecom SA 9.250% 03-01-11 119.44 203,043 7.7%
190,000 Sprint Capital Corp. 6.125% 11-15-08 107.34 203,936 5.7%
325,000 Verizon Global Funding Corp. 7.750% 12-01-30 124.72 405,349 6.2%
-----------
Total Corporate Bonds (identified cost, $12,004,368)-- 31.9% $12,188,867
GOVERNMENT INTERESTS
MORTGAGE-BACKED SECURITIES
- ---------------------------
$ 179,828 FHLMC Gold Pool #A10798 5.500% 05-01-33 $101.71 $ 182,909 5.4%
662,810 FHLMC Gold Pool #A13645 6.000% 09-01-33 103.38 685,199 5.8%
147,967 FHLMC Gold Pool #C01646 6.000% 09-01-33 103.38 152,965 5.8%
104,343 FHLMC Gold Pool #C01702 6.500% 10-01-33 105.36 109,935 6.2%
54,217 FHLMC Gold Pool #E00903 7.000% 10-01-15 106.04 57,490 6.6%
494,458 FHLMC Pool #1B1291 4.397% 11-01-33 100.13 495,092 4.4%
95,162 FHLMC Pool #27663 7.000% 06-01-29 106.11 100,973 6.6%
606,178 FNMA Pool #254865 4.500% 08-01-18 99.94 605,803 4.5%
1,193,504 FNMA Pool #254904 5.500% 09-01-33 101.64 1,213,070 5.4%
78,528 FNMA Pool #479477 6.000% 01-01-29 103.79 81,504 5.8%
63,822 FNMA Pool #489357 6.500% 03-01-29 105.08 67,060 6.2%
80,221 FNMA Pool #535332 8.500% 04-01-30 109.14 87,550 7.8%
315,435 FNMA Pool #545317 5.500% 11-01-16 103.55 326,620 5.3%
376,360 FNMA Pool #545407 5.500% 01-01-32 101.76 382,990 5.4%
104,906 FNMA Pool #545782 7.000% 07-01-32 106.04 111,241 6.6%
774,923 FNMA Pool #545993 6.000% 11-01-32 103.57 802,603 5.8%
544,872 FNMA Pool #555531 5.500% 06-01-33 101.64 553,804 5.4%
608,730 FNMA Pool #576524 5.500% 01-01-29 101.91 620,368 5.4%
112,079 FNMA Pool #597396 6.500% 09-01-31 105.01 117,692 6.2%
59,930 FNMA Pool #634823 6.500% 03-01-32 104.99 62,922 6.2%
510,620 FNMA Pool #663689 5.000% 01-01-18 101.73 519,441 4.9%
489,443 FNMA Pool #701043 4.056% 04-01-33 100.27 490,762 4.0%
258,040 FNMA Pool #725550 5.000% 05-01-19 101.73 262,497 4.9%
320,579 FNMA Pool #738630 5.500% 11-01-33 101.64 325,835 5.4%
443,404 FNMA Pool #739319 6.000% 10-01-33 103.48 458,835 5.8%
610,259 FNMA Pool #739372 4.121% 09-01-33 99.34 606,210 4.1%
125,948 GNMA II Pool #2671 6.000% 11-20-28 103.92 130,881 5.8%
22,724 GNMA II Pool #2909 8.000% 04-20-30 108.16 24,579 7.4%
64,603 GNMA II Pool #2972 7.500% 09-20-30 107.01 69,129 7.0%
24,742 GNMA II Pool #2973 8.000% 09-20-30 108.16 26,761 7.4%
1,053,108 GNMA II Pool #3442 5.000% 09-20-33 100.12 1,054,349 5.0%
1,184,779 GNMA II Pool #3530 5.500% 03-20-34 102.12 1,209,929 5.4%
528,057 GNMA Pool #374892 7.000% 02-15-24 106.81 563,997 6.6%
96,698 GNMA Pool #376400 6.500% 02-15-24 105.84 102,341 6.1%
156,076 GNMA Pool #379982 7.000% 02-15-24 106.81 166,698 6.6%
175,436 GNMA Pool #410081 8.000% 08-15-25 109.00 191,223 7.3%
68,303 GNMA Pool #427199 7.000% 12-15-27 106.53 72,762 6.6%
89,385 GNMA Pool #436214 6.500% 02-15-13 106.68 95,358 6.1%
39,794 GNMA Pool #442996 6.000% 06-15-13 105.53 41,995 5.7%
$ 176,438 GNMA Pool #448490 7.500% 03-15-27 $107.67 $ 189,966 7.0%
199,719 GNMA Pool #458762 6.500% 01-15-28 105.50 210,700 6.2%
152,428 GNMA Pool #460726 6.500% 12-15-27 105.57 160,919 6.2%
134,767 GNMA Pool #463839 6.000% 05-15-13 105.53 142,220 5.7%
155,247 GNMA Pool #478072 6.500% 05-15-28 105.50 163,783 6.2%
60,727 GNMA Pool #488924 6.500% 11-15-28 105.50 64,066 6.2%
40,477 GNMA Pool #510706 8.000% 11-15-29 108.62 43,968 7.4%
151,910 GNMA Pool #581536 5.500% 06-15-33 102.26 155,346 5.4%
U.S. GOVERNMENT AGENCIES
- ---------------------------
$ 415,000 FFCB 2.500% 03-15-06 $ 99.37 $ 412,388 2.5%
380,000 FHLMC 3.250% 11-02-07 99.57 378,366 3.3%
865,000 FNMA 3.000% 11-22-06 99.60 861,492 3.0%
900,000 FNMA 2.875% 05-19-08 97.73 879,553 2.9%
770,000 FNMA 3.875% 11-17-08 99.67 767,464 3.9%
275,000 FNMA 6.250% 05-15-29 114.18 313,986 5.5%
320,000 Tennessee Valley Authority 6.000% 03-15-13 110.89 354,836 5.4%
U.S. TREASURIES
- ------------------
$ 1,360,000 U.S. Treasury Bonds 6.125% 11-15-27 116.82 $ 1,588,810 5.2%
565,000 U.S. Treasury Notes 6.750% 05-15-05 101.58 573,917 6.6%
-----------
Total Government Interests (identified cost, $20,322,611)-- 53.6% $20,493,152
-----------
Total Investments (identified cost, $37,319,834)-- 98.5% $37,644,947
Other Assets, Less Liabilities-- 1.5% 568,224
-----------
Net Assets-- 100.0% $38,213,171
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost, $37,319,834) (Note 1A) $ 37,644,947
Cash.................................... 251,329
Receivable for investments sold......... 16,120
Receivable for fund shares sold......... 8,502
Receivable from investment adviser...... 20,755
Interest receivable..................... 310,561
Prepaid expenses........................ 5,795
------------
Total assets.......................... $ 38,258,009
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 1,142
Distributions payable................... 24,444
Payable to affiliate for Trustees' fees. 445
Transfer agent fee ..................... 1,699
Accrued expenses and other liabilities.. 17,108
------------
Total liabilities..................... $ 44,838
------------
NET ASSETS................................ $ 38,213,171
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 39,823,292
Accumulated net realized loss on investments
(computed on the basis of identified cost) (1,925,562)
Unrealized appreciation on investments
(computed on the basis of identified cost) 325,113
Distributions in excess of net investment
income................................ (9,672)
------------
Net assets applicable to outstanding
shares................................ $ 38,213,171
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................. 2,992,818
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST..................... $ 12.77
============
See notes to financial statements
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 1,809,253
------------
Expenses -
Investment adviser fee (Note 3)........ $ 179,909
Administrator fee (Note 3)............. 27,986
Compensation of Trustees not employees of
the investment adviser or administrator 10,997
Custodian fee (Note 1C)................ 70,057
Distribution expenses (Note 4)......... 99,950
Audit services......................... 25,956
Transfer and dividend disbursing agent fees 20,064
Registration costs..................... 19,175
Shareholder communications............. 6,084
Legal services......................... 5,183
Printing............................... 3,460
Interest expense....................... 797
Miscellaneous.......................... 1,835
------------
Total expenses........................ $ 471,453
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (3,893)
Allocation of expenses to the
investment adviser (Note 3)........... (20,755)
Reduction of distribution expenses
by principal underwriter (Note 4)..... $ (67,098)
------------
Total deductions....................... $ (91,746)
------------
Net expenses.......................... $ 379,707
------------
Net investment income............... $ 1,429,546
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 212,872
Change in unrealized depreciation
of investments......................... (319,493)
------------
Net realized and unrealized loss of
investments........................... $ (106,621)
------------
Net increase in net assets from
perations............................ $ 1,322,925
============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Year Ended
December 31,
---------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 1,429,546 $ 1,491,343
Net realized gain on investments........................................... 212,872 1,652,885
Change in unrealized depreciation of investments........................... (319,493) (1,854,914)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 1,322,925 $ 1,289,314
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (1,696,335) $ (1,734,662)
-------------- --------------
Total distributions...................................................... $ (1,696,335) $ (1,734,662)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (3,730,440) $ 3,358,788
-------------- --------------
Net increase (decrease) in net assets.................................... $ (4,103,850) $ 2,913,440
NET ASSETS:
At beginning of year......................................................... 42,317,021 39,403,581
-------------- --------------
At end of year............................................................... $ 38,213,171 $ 42,317,021
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF YEAR........................................ $ (9,672) $ (9,673)
============== ==============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 12.870 $ 13.010 $ 12.550 $ 12.630 $ 12.100
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ................ $ 0.453 $ 0.483 $ 0.639 $ 0.709 (4) $ 0.712
Net realized and unrealized gain (loss).. (0.011) (0.066) 0.461 (0.090)(4) 0.530
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.442 $ 0.417 $ 1.100 $ 0.619 $ 1.242
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income..... $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712)
--------- --------- --------- --------- ---------
Total distributions.................... $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630
========= ========= ========= ========= =========
Total return(2) ............................ 3.52% 3.25% 9.03% 4.96% 10.62%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 38,213 $ 42,317 $ 39,404 $ 50,620 $ 65,775
Ratio of net expenses to average net assets 0.96% 0.95% 0.96% 0.96% 0.96%
Ratio of net expenses after custodian fee
reduction to average net assets........ 0.95%(5) 0.95%(5) 0.95%(3)(5) 0.95%(3)(5) 0.95%(3)(5)
Ratio of net investment income to average
net assets............................ 3.58% 3.67% 4.92% 5.44% 5.84%
Portfolio turnover rate.................. 64% 131% 68% 38% 61%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the years ended December 31, 2004, 2003, 2002, and 2001, the operating
expenses of the fund were reduced by an allocation of expenses to the
investment adviser, and/or a reduction in distribution expenses by the
distributor. Had such action not been undertaken, net investment income per
share and the ratios would have been as follows:
2004 2003 2002 2001
-------------------------------------------------------
Net investment income per share.......... $ 0.429 $ 0.455 $ 0.621 $ 0.701
========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................... 1.18% 1.17% 1.09% 1.02%
========= ========= ========= =========
Expenses after custodian fee reduction. 1.17% 1.17% 1.08%(3) 1.01%(3)
========= ========= ========= =========
Net investment income.................. 3.36% 3.46% 4.78% 6.38%
========= ========= ========= =========
- -----------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each year reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1C). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(4)Reporting guidelines require the funds to disclose the effects of
implementing the change in accounting for amortization of premium and
discount on debt securities. If adjustments were not made, net investment
income per share would have been $0.716 and net realized and unrealized gain
(loss) per share would have been $(0.097).
(5)Under a written agreement, Wright waives all or a portion of either its
advisory and/or distribution fees and assumes operating expenses to the
extent necessary to limit expense ratios to 0.95% after custodian fee credits
are applied.
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Portfolio of Investments - December 31, 2004
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
MORTGAGE-BACKED SECURITIES - 86.9%
$ 12,160 FHLMC Gold Balloon #M90724 5.500% 05-01-07 $102.52 $ 12,466 5.4%
263,948 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.80 266,068 4.5%
132,961 FHLMC Gold Balloon #M90802 4.000% 03-01-08 100.45 133,557 4.0%
600,266 FHLMC Gold Pool #C01672 6.000% 10-01-33 103.38 620,543 5.8%
1,362,466 FHLMC Pool #11636 5.000% 01-01-19 101.67 1,385,157 4.9%
259,192 FHLMC Pool #1B1291 4.397% 11-01-33 100.13 259,524 4.4%
51,797 FNMA Pool #254227 5.000% 02-01-09 101.79 52,723 4.9%
48,367 FNMA Pool #254505 5.000% 11-01-09 101.79 49,232 4.9%
462,651 FNMA Pool #254546 5.500% 12-01-17 103.49 478,803 5.3%
196,144 FNMA Pool #535131 6.000% 03-01-29 103.79 203,577 5.8%
170,207 FNMA Pool #663689 5.000% 01-01-18 101.73 173,147 4.9%
857,659 FNMA Pool #673315 5.500% 11-01-32 101.71 872,281 5.4%
861,094 FNMA Pool #696828 5.000% 04-01-18 101.73 875,969 4.9%
261,955 FNMA Pool #701043 4.056% 04-01-33 100.27 262,661 4.0%
694,043 FNMA Pool #729950 6.000% 12-01-33 103.48 718,196 5.8%
2,300,000 FNMA Pool #803855 5.500% 12-01-34 101.61 2,337,074 5.4%
5,182 GNMA II Pool #1596 9.000% 04-20-21 112.15 5,811 8.0%
120,869 GNMA II Pool #2268 7.500% 08-20-26 107.29 129,685 7.0%
16,834 GNMA II Pool #2855 8.500% 12-20-29 108.91 18,333 7.8%
255,792 GNMA II Pool #3228 6.500% 04-20-32 105.17 269,023 6.2%
883,923 GNMA II Pool #3259 5.500% 07-20-32 102.24 903,755 5.4%
1,335,497 GNMA II Pool #3284 5.500% 09-20-32 102.24 1,365,461 5.4%
105,250 GNMA II Pool #723 7.500% 01-20-23 107.72 113,380 7.0%
204 GNMA Pool #007003 8.000% 07-15-05 101.35 206 7.9%
281 GNMA Pool #009106 8.250% 05-15-06 103.66 291 8.0%
356 GNMA Pool #009889 7.250% 02-15-06 102.54 365 7.1%
465 GNMA Pool #012526 8.000% 11-15-06 103.08 479 7.8%
1,262 GNMA Pool #153564 10.000% 04-15-16 111.53 1,407 9.0%
6,676 GNMA Pool #172558 9.500% 08-15-16 112.58 7,516 8.4%
2,872 GNMA Pool #176992 8.000% 11-15-16 108.99 3,130 7.3%
4,151 GNMA Pool #177784 8.000% 10-15-16 108.99 4,524 7.3%
13,587 GNMA Pool #192357 8.000% 04-15-17 109.51 14,880 7.3%
20,592 GNMA Pool #194057 8.500% 04-15-17 110.36 22,725 7.7%
11,650 GNMA Pool #194287 9.500% 03-15-17 112.76 13,137 8.4%
1,672 GNMA Pool #196063 8.500% 03-15-17 110.36 1,845 7.7%
831 GNMA Pool #208076 8.000% 04-15-17 109.51 910 7.3%
8,300 GNMA Pool #211231 8.500% 05-15-17 110.36 9,159 7.7%
7,362 GNMA Pool #212601 8.500% 06-15-17 110.36 8,125 7.7%
7,111 GNMA Pool #220917 8.500% 04-15-17 110.36 7,848 7.7%
11,676 GNMA Pool #223133 9.500% 07-15-17 112.76 13,167 8.4%
9,794 GNMA Pool #223348 10.000% 08-15-18 111.84 10,954 8.9%
1,566 GNMA Pool #223588 10.000% 12-15-18 111.84 1,752 8.9%
14,185 GNMA Pool #228308 10.000% 01-15-19 111.95 15,881 8.9%
3,195 GNMA Pool #230223 9.500% 04-15-18 112.90 3,607 8.4%
1,387 GNMA Pool #247473 10.000% 09-15-18 107.53 1,492 9.3%
3,906 GNMA Pool #247872 10.000% 09-15-18 111.84 4,369 8.9%
5,061 GNMA Pool #251241 9.500% 06-15-18 112.90 5,714 8.4%
8,311 GNMA Pool #258911 9.500% 09-15-18 112.90 9,383 8.4%
10,098 GNMA Pool #260999 9.500% 09-15-18 112.90 11,400 8.4%
9,496 GNMA Pool #263439 10.000% 02-15-19 111.95 10,631 8.9%
1,693 GNMA Pool #265267 9.500% 08-15-20 112.97 1,913 8.4%
4,300 GNMA Pool #266983 10.000% 02-15-19 111.95 4,814 8.9%
$ 3,472 GNMA Pool #273690 9.500% 08-15-19 $112.92 $ 3,920 8.4%
7,081 GNMA Pool #274489 9.500% 12-15-19 112.92 7,996 8.4%
9,266 GNMA Pool #286556 9.000% 03-15-20 112.45 10,419 8.0%
7,031 GNMA Pool #301366 8.500% 06-15-21 110.13 7,743 7.7%
1,884 GNMA Pool #302723 8.500% 05-15-21 110.13 2,074 7.7%
8,753 GNMA Pool #302933 8.500% 06-15-21 110.13 9,639 7.7%
6,235 GNMA Pool #306693 8.500% 09-15-21 110.13 6,867 7.7%
12,082 GNMA Pool #308792 9.000% 07-15-21 112.55 13,598 8.0%
3,793 GNMA Pool #314222 8.500% 04-15-22 110.02 4,173 7.7%
14,578 GNMA Pool #315187 8.000% 06-15-22 109.46 15,956 7.3%
15,835 GNMA Pool #315754 8.000% 01-15-22 109.46 17,332 7.3%
28,868 GNMA Pool #316240 8.000% 01-15-22 109.46 31,598 7.3%
31,628 GNMA Pool #319441 8.500% 04-15-22 110.02 34,797 7.7%
16,398 GNMA Pool #321976 8.500% 01-15-22 110.02 18,040 7.7%
17,781 GNMA Pool #325165 8.000% 06-15-22 109.46 19,462 7.3%
21,448 GNMA Pool #325651 8.000% 06-15-22 109.46 23,476 7.3%
26,631 GNMA Pool #335950 8.000% 10-15-22 109.46 29,149 7.3%
40,352 GNMA Pool #348213 6.500% 08-15-23 105.95 42,750 6.1%
34,354 GNMA Pool #350659 7.500% 06-15-23 108.16 37,158 6.9%
183,593 GNMA Pool #352001 6.500% 12-15-23 105.94 194,506 6.1%
81,794 GNMA Pool #352110 7.000% 08-15-23 106.87 87,413 6.6%
3,017,709 GNMA Pool #3556 5.500% 05-20-34 102.12 3,081,766 5.4%
103,170 GNMA Pool #368238 7.000% 12-15-23 106.87 110,258 6.6%
53,008 GNMA Pool #372379 8.000% 10-15-26 108.84 57,693 7.4%
148,222 GNMA Pool #410215 7.500% 12-15-25 107.81 159,795 7.0%
36,146 GNMA Pool #414736 7.500% 11-15-25 107.81 38,968 7.0%
141,432 GNMA Pool #420707 7.000% 02-15-26 106.66 150,847 6.6%
57,132 GNMA Pool #421829 7.500% 04-15-26 107.73 61,549 7.0%
26,720 GNMA Pool #431036 8.000% 07-15-26 108.84 29,082 7.4%
114,757 GNMA Pool #431612 8.000% 11-15-26 108.84 124,900 7.4%
42,081 GNMA Pool #442190 8.000% 12-15-26 108.84 45,801 7.4%
70,307 GNMA Pool #449176 6.500% 07-15-28 105.50 74,173 6.2%
299,578 GNMA Pool #458762 6.500% 01-15-28 105.50 316,051 6.2%
97,748 GNMA Pool #462623 6.500% 03-15-28 105.50 103,123 6.2%
226,005 GNMA Pool #469615 6.500% 10-15-28 105.50 238,432 6.2%
2,462,484 GNMA Pool #471369 5.500% 05-15-33 102.26 2,518,182 5.4%
250,632 GNMA Pool #472028 6.500% 05-15-28 105.50 264,413 6.2%
459,966 GNMA Pool #486482 6.500% 09-15-28 105.50 485,258 6.2%
376,149 GNMA Pool #523002 6.500% 02-15-32 105.39 396,430 6.2%
111,171 GNMA Pool #538314 7.000% 02-15-32 106.31 118,188 6.6%
235,090 GNMA Pool #570141 6.500% 12-15-31 105.39 247,762 6.2%
1,124,541 GNMA Pool #585467 6.000% 08-15-32 103.80 1,167,218 5.8%
505,749 GNMA Pool #587080 6.500% 05-15-32 105.39 533,017 6.2%
1,569,823 GNMA Pool #589580 5.500% 11-15-32 102.34 1,606,520 5.4%
479,095 GNMA Pool #594897 6.000% 09-15-32 103.80 497,277 5.8%
1,124,878 GNMA Pool #595207 5.500% 12-15-32 102.34 1,151,173 5.4%
1,035,747 GNMA Pool #595455 5.500% 11-15-32 102.34 1,059,959 5.4%
1,262,235 GNMA Pool #595606 6.000% 11-15-32 103.80 1,310,138 5.8%
966,050 GNMA Pool #603250 5.500% 04-15-34 102.22 987,465 5.4%
992,751 GNMA Pool #619718 6.000% 05-15-34 103.75 1,029,929 5.8%
143,070 GNMA Pool #780429 7.500% 09-15-26 107.77 154,184 7.0%
-----------
Total Mortgaged-Backed Securities (identified cost, $28,241,123)-- 86.9% $ 30,435,667
U.S. GOVERNMENT AGENCIES
- --------------------------
$ 480,000 FFCB 2.500% 03-15-06 $ 99.37 $ 476,978 2.5%
855,000 FNMA 3.000% 11-22-06 99.60 851,533 3.0%
1,175,000 FNMA 2.875% 05-19-08 97.73 1,148,305 2.9%
925,000 FNMA 3.875% 11-17-08 99.67 921,954 3.9%
140,000 Tennessee Valley Authority 6.000% 03-15-13 110.89 155,241 5.4%
-----------
Total U.S. Government Agencies (identified cost, $3,582,732)-- 10.2% $ 3,554,011
U.S. TREASURIES
- ---------------------
$ 570,000 U.S. Treasury Notes 3.875% 02-15-13 $ 98.70 $ 562,564 3.9%
-----------
Total U.S. Treasuries (identified cost, $588,377)-- 1.6% $ 562,564
-----------
Total Investments (identified cost, $32,382,232)-- 98.7% $34,552,242
Other Assets, Less Liabilities-- 1.3% 460,661
-----------
Net Assets-- 100.0% $35,012,903
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of ($32,382,232) (Note 1A) $ 34,552,242
Cash.................................... 286,868
Receivable for investments sold......... 8,450
Receivable for fund shares sold......... 6,230
Receivable from investment adviser...... 58,694
Interest receivable..................... 167,804
Prepaid expenses........................ 8,389
------------
Total assets.......................... $ 35,088,677
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 3,069
Distributions payable................... 47,036
Payable to affiliate for Trustees' fees. 631
Transfer agent fee payable.............. 2,640
Accrued expenses and other liabilities.. 22,398
------------
Total liabilities..................... $ 75,774
------------
NET ASSETS................................ $ 35,012,903
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 33,055,561
Accumulated undistributed net realized loss on
investments (computed on the basis of
identified cost)....................... (218,986)
Unrealized appreciation on investments
(computed on the basis of identified cost) 2,170,010
Undistributed net investment income..... 6,318
------------
Net assets applicable to outstanding
shares................................ $ 35,012,903
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................... 3,541,124
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST................... $ 9.89
============
See notes to financial statements
STATEMENT OF OPERATIONS
Year Ended December 31, 2004
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 1,668,719
------------
Expenses -
Investment adviser fee (Note 3)........ $ 143,265
Administrator fee (Note 3)............. 28,653
Compensation of Trustees not employees of
the investment adviser or administrator 10,967
Custodian fee (Note 1C)................ 63,175
Distribution expenses (Note 4)......... 79,592
Audit services......................... 25,956
Registration costs..................... 16,932
Transfer and dividend disbursing agent fees 15,005
Interest expense....................... 7,245
Legal services......................... 5,246
Shareholder communications............. 4,865
Printing............................... 2,061
Miscellaneous.......................... 3,226
------------
Total expenses........................ $ 406,188
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (6,975)
Allocation of expenses to
investment adviser (Note 3)........... (31,554)
Reduction of distribution expenses
by principal underwriter (Note 4)..... (65,452)
------------
Total deductions...................... $ (103,981)
------------
Net expenses.......................... $ 302,207
------------
Net investment income............... $ 1,366,512
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 1,091,575
Change in unrealized depreciation
of investments......................... (1,418,533)
------------
Net realized and unrealized loss
of investments........................ (326,958)
------------
Net increase in net assets from
operations........................... $ 1,039,554
============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Year Ended
December 31,
-------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2004 2003
- -------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 1,366,512 $ 2,448,956
Net realized gain on investments........................................... 1,091,575 1,664,914
Change in unrealized depreciation on investments........................... (1,418,533) (3,218,260)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 1,039,554 $ 895,610
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income -
Standard shares.......................................................... $ (1,491,857) $ (2,349,214)
Institutional shares (Note 9)............................................ - (333,233)
From net realized gain..................................................... (1,243,047) --
-------------- --------------
Total distributions...................................................... $ (2,734,904) $ (2,682,447)
-------------- --------------
Net increase (decrease) in net assets from Fund share transactions (Note 5) -
Standard shares............................................................ $ (7,889,269) $(21,111,610)
Standard shares - issued in reorganization of Wright
U.S. Govt. Intermediate Fund............................................. 8,266,006 -
Institutional shares (Note 9).............................................. - (15,550,021)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions....... $ 376,737 $(36,661,631)
-------------- --------------
Net decrease in net assets............................................... $ (1,318,613) $(38,448,468)
NET ASSETS:
At beginning of year......................................................... 36,331,516 74,779,984
-------------- --------------
At end of year............................................................... $ 35,012,903 $ 36,331,516
============== ==============
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF YEAR................................................. $ 6,318 $ (84,560)
============== ==============
See notes to financial srarements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2004 2003 2002 2001(4) 2000(4)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 10.490 $ 10.810 $ 10.580 $ 10.460 $ 10.090
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ............... $ 0.447 $ 0.417 $ 0.565 $ 0.616 $ 0.631
Net realized and unrealized gain (loss).. (0.112) (0.235) 0.231 0.120 0.372
--------- --------- --------- --------- ---------
Total income from
investment operations............. $ 0.335 $ 0.182 $ 0.796 $ 0.736 $ 1.003
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income..... $ (0.482) $ (0.502) $ (0.555) $ (0.616) $ (0.633)
Distributions from capital gains......... (0.453) - - -- --
Tax return of capital.................... - - (0.011) -- --
--------- --------- --------- --------- ---------
Total distributions.................. $ (0.935) $ (0.502) $ (0.566) $ (0.616) $ (0.633)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460
========= ========= ========= ========= =========
Total return(2) ............................ 3.29% 1.73% 7.70% 7.18% 10.31%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 35,013 $ 36,332 $ 59,077 $ 54,966 $68,015
Ratio of net expenses to average net assets 0.97% 0.95% 0.97%(3) 0.95%(3)(6) 0.95%(3)(6)
Ratio of net expenses after custodian fee
reduction to average net assets(6) .... 0.95% 0.95% 0.95%(3)(7) -- --
Interest expense......................... 0.02% 0.01% -- -- --
Ratio of net investment income
to average net assets................. 4.29% 4.43% 5.28% 5.83% 6.22%
Portfolio turnover rate ................. 27% 20% 36%(5) 4%(5) 6%(5)
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the years ended December 31, 2004, 2003, 2002, 2001, and 2000, the
operating expenses of the fund were reduced by an allocation of expenses to
the investment adviser or a reduction in distribution expense by the
distributor. Had such action not been undertaken, net investment income per
share and the ratios would have been as follows:
2004 2003 2002 2001 2000
------------------------------------------------------------------
Net investment income per share........ $ 0.410 $ 0.401 $ 0.555 $ 0.609 $ 0.629
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.28% 1.12% 1.06%(3) 1.02%(3) 0.97%(3)
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.25% 1.12% 1.04%(3)(7) -- --
========= ========= ========= ========= =========
Interest expense..................... 0.02% 0.01% -- -- --
========= ========= ========= ========= =========
Net investment income................ 3.99% 4.26% 5.19% 5.76% 6.20%
========= ========= ========= ========= =========
- -------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated expenses.(Note 1)
(4)Certain of the per share data are based on average shares outstanding.
(5)Represents portfolio turnover rate at the fund's corresponding portfolio.(Note 1)
(6)Under a written agreement in effect for the current fiscal year, Wright
waives all or a portion of either its advisory and/or distribution fees and
assumes operating expenses to the extent necessary to limit expense ratios to
0.95% after custodian fee credits are applied.
(7)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1C). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
See notes to financial statements
WRIGHT MANAGED INCOME TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1)SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Income Trust (the Trust), issuer of Wright U.S.
Government Near Term Fund (WNTB) series, Wright Total Return Bond Fund (WTRB)
series, and Wright Current Income Fund (WCIF) series (collectively, the Funds),
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end, management investment company. WNTB seeks a high level of
income, which is normally above that available from short-term money market
instruments or funds. WTRB seeks a superior rate of total return, consisting of
a high level of income plus price appreciation. WCIF seeks a high level of
current income consistent with moderate fluctuations of principal. Prior to
December 20, 2002, WNTB and WCIF invested all of their investable assets in
interests in a separate corresponding open-end management investment company (a
Portfolio), a New York Trust, having the same investment objective as its
corresponding fund. Subsequent to December 20, 2002, the Funds invest directly
in securities rather than through the Portfolio and maintain the same investment
objective.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations - Investments for which market quotations are readily
available are valued at current market value as furnished by a pricing
service. Investments for which valuations are not readily available will be
appraised at their fair value as determined in good faith by or at the
direction of the Trustees. Short-term obligations maturing in sixty days or
less are valued at amortized cost, which approximates market value.
B. Interest Income - Interest income consists of interest accrued and discount
earned (including both original issue and market discount) and amortization
of premium or discount on long-term debt securities. The income is accrued
ratably to the date of maturity on the investments of the funds.
C. Expense Reduction - Investors Bank & Trust Company (IBT) serves as
custodian to the Funds. Pursuant to the custodian agreement, IBT receives a
fee reduced by credits which are determined based on the average daily cash
balance the Funds maintain with IBT. All credit balances used to reduce the
Fund's custodian fees are reported as a reduction of total expenses on the
Statement of Operations.
D. Federal Taxes - The Trust's policy is to comply with the provisions of the
Internal Revenue Code (the Code) available to regulated investment
companies and to distribute to shareholders each year all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At December 31,
2004, the Trust, for federal income tax purposes, had capital loss
carryovers of $1,114,851 (WNTB), $1,755,347 (WTRB) and $274,864 (WCIF)
which will reduce taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distribution to shareholders which would otherwise
be necessary to relieve the respective fund of any liability for federal
income or excise tax. Pursuant to the Code, such capital loss carryovers
will expire as follows:
12/31 WNTB WTRB WCIF
- -------------------------------------------------------------------------------
2006 $37,825 -- --
2007 297,581 -- --
2008 273,806 $1,246,741 --
2010 -- 508,606 --
2012 505,639 -- $274,864
At December 31, 2004, net capital losses of $32,603 for WNTB and $6,402 for
WCIF, attributable to security transactions incurred after October 31,
2004, are treated as arising on the first day of the fund's current taxable
year.
E. Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
F. Other - Investment transactions are accounted for on the date the
investments are purchased or sold.
(2)DISTRIBUTIONS
Each fund's policy is to determine net income once daily, as of the close
of the New York Stock Exchange and the net income so determined is substantially
declared as a dividend to shareholders of record at the time of such
determination. Distributions of realized capital gains are made at least
annually. Shareholders may reinvest capital gain distributions in additional
shares of the same fund at the net asset value as of the ex-dividend date.
Dividends may be reinvested in additional shares of the same fund at the net
asset value as of the payable date.
The Trust requires that differences in the recognition or classification of
income between the financial statements and tax earnings and profits which
result in temporary overdistributions for financial statement purposes be
classified as distributions in excess of net investment income or accumulated
net realized gains.
Distributions in excess of tax basis earnings and profits are reported in
the financial statements as a return of capital. Permanent differences between
book and tax accounting for certain items may result in reclassification of
these items.
During the year ended December 31, 2004, the following amounts were
reclassified due to differences between book and tax accounting created
primarily by the deferral of certain losses for tax purposes and character
reclassifications between net investment income and net realized capital gain.
Accumulated Undistributed
Undistributed Net Net
Paid-In Realized Gain Investment
Capital on Investments Income
- -------------------------------------------------------------------------------
WTRB $ (1) $(266,789) $266,790
WCIF 147,612 (363,835) 216,223
WNTB (17,882) (408,269) 426,151
- -------------------------------------------------------------------------------
The tax character of distributions paid for the year ended December 31,
2004 and December 31, 2003 was as follows:
Year Ended 12/31/04 WTRB WCIF WNTB
- -------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $1,696,335 $1,491,857 $735,924
Capital gains - $1,243,047 -
- -------------------------------------------------------------------------------
Year Ended 12/31/03 WTRB WCIF WNTB
- -------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $1,734,662 $2,636,854 $914,506
Capital gains - 45,893 380
- -------------------------------------------------------------------------------
As of December 31, 2004, the components of distributable earnings
(accumulated losses) on a tax basis were as follows:
WTRB WCIF WNTB
- -------------------------------------------------------------------------------
Undistributed income $14,772 $6,318 -
Undistributed capital gains - 68,900 -
Capital loss carryforward (1,755,347) (274,864) $(1,114,851)
Unrealized gains/(loss) 154,898 2,163,390 (345,062)
Other temporary differences (24,444) (6,402) (32,603)
- -------------------------------------------------------------------------------
(3)INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as
investment adviser to the funds pursuant to the respective Investment Advisory
Contracts. Wright furnishes each fund with investment management, investment
advisory, and other services. For its services, Wright is compensated based upon
a percentage of average daily net assets which rate is adjusted as average daily
net assets exceed certain levels. For the year ended December 31, 2004, the
effective annual rate for WNTB, WCIF, and WTRB was 0.45 %. Under a written
agreement, Wright waives a portion of its advisory fee and/or distribution fees
and assumes operating expenses to the extent necessary to limit expense ratios
to 0.95% after custodian fee reductions, if any. Accordingly, Wright made a
reduction of its investment adviser fee by $38,546 on behalf of WNTB. In
addition, Wright has been allocated expenses of $1,318, $20,755, and $31,554 on
behalf of WNTB, WTRB and WCIF, respectively.
The Trust also has engaged Eaton Vance Management (Eaton Vance) to act as
administrator of the Trust. Under the Administration Agreement, Eaton Vance is
responsible for managing the business affairs of the Trust and is compensated
based upon a percentage of average daily net assets which rate is reduced as
average daily net assets exceed certain levels. For the year ended December 31,
2004, the effective annual rate was 0.09% for WNTB, 0.07% for WTRB, and 0.09%
for WCIF. Certain of the Trustees and officers of the Trust are
directors/trustees and/or officers of the above organizations. Except as to
Trustees of the Trust who are not employees of Eaton Vance or Wright, Trustees
and officers received remuneration for their services to the Trust out of fees
paid to Eaton Vance and Wright.
(4)DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that each of the
funds will pay Wright Investors' Service Distributors, Inc. (Principal
Underwriter), a wholly-owned subsidiary of Winthrop, at an annual rate of 0.25%
of the average daily net assets of each fund for activities primarily intended
to result in the sale of each fund's shares. Pursuant to a written agreement
(Note 3), the Principal Underwriter made a reduction of its fee by $59,301,
$67,098, and $65,452 for the benefit of WNTB, WTRB and WCIF, respectively.
In addition, the Trustees have adopted a service plan (the Service Plan) which
allows the funds to reimburse the Principal Underwriter for payments to
intermediaries for providing account administration and personal and account
maintenance services to their customers who are beneficial owners of each fund's
shares. The amount of service fee payable under the Service Plan may not exceed
0.25% annually of each fund's average daily net assets. For the year ended
December 31, 2004, the funds did not accrue or pay any service fees.
(5)SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
Year Ended Year Ended
December 31, 2004 December 31, 2003
----------------------------------------------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------------------
Wright U.S. Government Near Term Fund--
Sold................................................. 499,602 $ 5,040,521 1,235,965 $ 12,845,606
Issued to shareholders in payment of
distributions declared............................. 52,428 529,329 61,296 635,839
Redemptions.......................................... (1,079,475) (10,918,238) (1,835,158) (19,044,704)
----------- -------------- ----------- --------------
Net decrease..................................... (527,445) $ (5,348,388) (537,897) $ (5,563,259)
=========== ============== =========== ==============
Wright Total Return Bond Fund--
Sold................................................. 673,399 $ 8,596,949 1,205,393 $ 15,614,387
Issued to shareholders in payment of
distributions declared............................. 108,451 1,384,717 106,037 1,375,694
Redemptions.......................................... (1,077,968) (13,712,106) (1,051,037) (13,631,293)
----------- -------------- ----------- --------------
Net increase/(decrease).......................... (296,118) $ (3,730,440) 260,393 $ 3,358,788
=========== ============== =========== ==============
Wright Current Income Fund -- Standard Shares
Sold................................................. 1,231,990 $ 12,684,308 1,044,836 $ 11,086,467
Issued to shareholders in payment of
distributions declared............................. 159,979 1,619,251 103,674 1,101,063
Redemptions.......................................... (2,153,390) (22,192,828) (3,146,463) (33,299,140)
Issued to Wright U.S. Govt. Intermediate
Fund shareholders.................................. 837,488 8,266,006 - -
----------- -------------- ----------- --------------
Net increase/(decrease).......................... 76,067 $ 376,737 (1,997,953) $ (21,111,610)
=========== ============== =========== ==============
Wright Current Income Fund -- Institutional Shares
Sold................................................. - $ - 394,118 $ 4,020,000
Issued to shareholders in payment of
distributions declared.............................. - - 27,597 282,568
Redemptions.......................................... - - (1,948,242) (19,852,589)
----------- -------------- ----------- --------------
Net decrease..................................... - $ - (1,526,527) $ (15,550,021)
=========== ============== =========== ==============
(6) INVESTMENT TRANSACTIONS
The Trust invests primarily in debt securities. The ability of the issuers
of the debt securities held by the Trust to meet their obligations may be
affected by economic developments in a specific industry or municipality.
Purchases and sales and maturities of investments, other than short-term
obligations, were as follows:
Year Ended December 31, 2004
--------------------------------------
WNTB WTRB WCIF
- -------------------------------------------------------------------------------
Purchases--
Non-U.S.
Obligations $1,892,754 $7,298,251 $ -
========== ========== ==========
U.S. Gov't
Obligations $30,550,706 $17,768,510 $8,490,164
========== ========== ==========
Sales --
Non-U.S. Gov't
Obligation $48,863 $7,116,041 $ -
========== ========== ==========
U.S. Gov't
Obligations $37,844,653 $21,776,973 $17,651,798
========== ========== ==========
- -------------------------------------------------------------------------------
(7)FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) of the investment
securities owned at December 31, 2004, as computed on a federal income tax
basis, are as follows:
WNTB WTRB WCIF
- -------------------------------------------------------------------------------
Aggregate
cost $21,668,745 $37,490,049 $32,388,852
=========== =========== ===========
Gross unrealized
appreciation 6,005 133,983 2,239,123
Gross unrealized
depreciation (351,067) (288,881) (75,733)
----------- ----------- -----------
Net unrealized
appreciation/
(depreciation) (345,062) (154,898) 2,163,390
=========== =========== ===========
- -------------------------------------------------------------------------------
(8) LINE OF CREDIT
The funds participate with other funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. The funds did not have significant borrowings or allocated
fees during the year ended December 31, 2004.
(9) CLASS ELIMINATION
The Institutional Share class of the Wright Current Income Fund (WCIF) was
fully liquidated on May 20, 2003.
(10) TRANSFER OF NET ASSETS
Prior to the opening of business on December 29, 2004, the Wright Current
Income Fund (WCIF) acquired the net assets of Wright U.S. Government
Intermediate Fund (WUSGI) pursuant to an Agreement and Plan of Reorganization
dated December 20, 2004. In accordance with the agreement, WCIF issued 837,488
shares having a value of $8,266,006. As a result, WCIF issued 1.303 shares for
each share of WUSGI. The transaction was structured for tax purposes to qualify
as a tax free reorganization under the Internal Revenue Code. WUSGI's net assets
at the date of the transaction was $8,266,006, including $(41,372) of unrealized
depreciation. Directly after the merger, the combined net assets of WCIF were
$34,959,687 with a net asset value of $9.87.
WRIGHT MANAGED INCOME TRUST
- -------------------------------------------------------------------------------
Independent Auditors' Report
To the Trustees and Shareholders of
The Wright Managed Income Trust:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of The Wright Managed Income
Trust (the "Trust"), comprising the Wright U.S. Government Near Term
Fund, Wright Total Return Bond Fund, and Wright Current Income Fund
(the "Funds"), as of December 31, 2004, and the related statements of
operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with standards of the Public
Company Accounting Oversight board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of the securities
owned as of December 31, 2004, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed
other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of each of the Funds constituting The Wright Managed
Income Trust as of December 31, 2004, the results of their operations
for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 11, 2005
MANAGEMENT AND ORGANIZATION (unaudited)
- ------------------------------------------------------------------------------
FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall
management and supervision of the affairs of the Trust. The Trustees and
principal officers of the Trusts are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. The business address of each Trustee and principal officer
is 255 State Street, Boston, Massachusetts 02109.
Definitions:
- -----------
"WISDI" means Wright Investors' Service Distributors, Inc., the principal
underwriter of the fund.
"Winthrop" means The Winthrop Corporation, a holding company which owns all of
the shares of Wright and WISDI.
Number of Other Trustee/
Term* Portfolios in Director/
Name, Position(s) of Office Fund Complex Partnership/
Address with the and Length Principal Occupation Overseen Employment
and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held
- -----------------------------------------------------------------------------------------------------------------------------------
Interested Trustees
H. Day Brigham, Jr.** Vice President, Vice President, Director of Wright and Winthrop since 6 Director of
Age 78 Secretary Secretary and February 1997; Retired Vice President, Wright and
and Trustee Chairman of the Management Committee Winthrop
Trustee since and Chief Legal Officer of Eaton Vance
Inception Corp.; Vice President and Secretary of
6 funds managed by Wright
- -----------------------------------------------------------------------------------------------------------------------------------
Peter M. Donovan*** President President Chairman and Chief Executive Officer and 6 Director of
Age 61 and and Trustee Director of Wright and Winthrop; Chairman Wright and
Trustee since of the Investment Committee; Vice President, Winthrop
Inception Treasurer and a Director of WISDI; President
of 6 funds managed by Wright
- ----------------------------------------------------------------------------------------------------------------------------------
A.M. Moody, III**** Vice President Vice President President, AM Moody Consulting LLC 6 None
Age 68 and of the Trusts since July 1, 2003; Vice President of 6 funds
Trustee since December, managed by Wright;Retired Senior Vice
1990;Trustee of President of Wright and Winthrop;
the Trusts since Retired President of WISDI.
January, 1990
- -------------------------------------------------------------------------------
* Trustees serve an indefinite term. Officers are elected annually.
** Mr. Brigham is an interested person of the Trusts because of his positions
as Vice President and Secretary of the Trusts and a Director of Wright and
Winthrop.
*** Mr. Donovan is an interested person of the Trusts because of his positions
as President of the Trusts, Chairman, Chief Executive Officer and Director
of Wright and Winthrop and Vice President, Treasurer and a Director of
WISDI.
**** Mr. Moody is an interested person of the Trusts because of his positions
as Vice President of the Trusts and his affiliation as a consultant to
Wright.
- -------------------------------------------------------------------------------
Independent Trustees
James J. Clarke Trustee Trustee Principal, Clarke Consulting 6 None
Age 63 since (financial management and
December, 2002 strategic planning)
- ------------------------------------------------------------------------------------------------------------------------------
Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 6 None
Age 58 since (a public policy and government relations
December,1998 firm)Spotsylvania,VA;
Director, The Options Clearing Corporation
and First Coast Service Options,
Jacksonville, FL 1996-1998 - Chairman
and CEO of Work Recovery, Inc.(an advanced
rehabilitation technology firm)Tucson, AZ
- -------------------------------------------------------------------------------------------------------------------------------
Richard E. Taber Trustee Trustee since Chairman and Chief Executive 6 None
Age 56 March, 1997 Officer of First County Bank,
Stamford, CT
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
Judith R. Corchard Vice President Vice President Executive Vice President, Investment
Age 66 and Chief of the Trusts Management; Senior Investment Officer
Compliance since June, 1998; and Director of Wright and Winthrop;
Officer Vice President of 6 funds managed
by Wright
- ----------------------------------------------------------------------------------------------------------------------------------
James L. O'Connor Treasurer Treasurer of Vice President Eaton Vance Management;
Age 59 the Trusts Administrator for the funds;Officer of
since April 1989; 6 funds managed by Wright and 117 funds
managed by Eaton Vance and its affiliates.
- ----------------------------------------------------------------------------------------------------------------------------------
Additional information about the Funds' Trustees is available in the Statement
of Additional Information, which is available without charge, upon request, by
calling 1-800-888-9471.
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.
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' Boards. You may obtain a
description of these policies and procedures without charge, upon request, by
calling 1-800-888-9471. This description will also be available on the
Securities and Exchange Commissions website at http://www.sec.gov. after May 1,
2005.
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road, Milford, CT 06460
ANNUAL REPORT
OFFICERS AND TRUSTEES OF THE FUNDS
Peter M. Donovan, President and Trustee
H. Day Brigham, Jr., Vice President , Secretary and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President
James J. Clarke, Trustee
Dorcas R. Hardy, Trustee
Leland Miles, Trustee
Richard E. Taber, Trustee
James L. O'Connor, Treasurer
William J. Austin, Jr., Assistant Treasurer
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
Wright Investors' Service
440 Wheelers Farms Road
Milford, Connecticut 06460
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, Connecticut 06460
(800) 888-9471
e-mail: funds@wrightinvestors.com
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AND DIVIDEND DISBURSING AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, ME 04101
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of a mutual fund unless
accompanied or preceded by a Fund's current prospectus.
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer and Principal Financial Officer. The registrant undertakes to
provide a copy of such code of ethics to any person upon request, without
charge, by calling 1-800-888-9471.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated James J. Clarke, an independent
trustee, as its audit committee financial expert. Mr. Clarke is the Principal of
Clarke Consulting, a financial management and strategic planning firm.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
------------
The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the audit of the
registrant's annual financial statements or services that are normally provided
by the accountant in connection with statutory and filings or engagements for
those fiscal years were as follows: 2004: $74,100 and 2003: $70,500.
(b) Audit-Related Fees
--------------------
None.
(c) Tax Fees
--------
The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning were 2004: $11,000 and 2003: $11,000. The nature of
the services comprising these fees was tax compliance, tax advice and tax
planning including fees for tax return preparation.
(d) All Other Fees
---------------
None.
(e) (1) The registrant's audit committee has adopted an Audit Committee
Charter which contains policies and procedures relating to the pre-approval of
services provided by the registrant's principal accountant (the "Pre-Approval
Policies"). The Pre-Approval Policies establish a framework intended to assist
the audit committee in the proper discharge of its pre-approval
responsibilities. As a general matter, the Pre-Approval Policies (i) specify
certain types of audit, audit-related, tax, and other services determined to be
pre-approved by the audit committee; and (ii) delineate specific procedures
governing the mechanics of the pre-approval process, including the approval and
monitoring of audit and non-audit service fees with the exception of any de
minimus engagement meeting applicable requirements. Unless a service is
specifically pre-approved under the Pre-Approval Policies, it must be separately
pre-approved by the registrant's audit committee. The Pre-Approval Policies and
the types of audit and non-audit services pre-approved therein must be reviewed
and ratified by the registrant's audit committee at least annually. The
registrant's audit committee maintains full responsibility for the appointment,
compensation, and oversight of the work of the registrant's principal
accountant.
(2) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in Filing
ITEM 6. SCHEDULE OF INVESTMENTS
Please see schedule of investments contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in Filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in Filing
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in Filing
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A(17 CFR240.14a-101), or
this Item.
ITEM 11. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS
(a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a) (2) Treasurer's and President's Section 302 certification.
(b) Combined 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
THE WRIGHT MANAGED 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: February 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ James L. O'Connor
---------------------
James L. O'Connor
Treasurer
Date: March 1, 2005
By: /s/Peter M. Donovan
-------------------
Peter M. Donovan
President
Date:February 28, 2005