FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-3668
--------
The Wright Managed Income Trust
-------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
------------------------------------------------------------------------
(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-------------------------------------------------------------------------
(Name and Address of Agent for Services)
(617) 482-8260
-------------------------------
(Registrant's Telephone Number)
December 31
-----------------------
Date of Fiscal Year End
June 30, 2005
-------------------------
Date of Reporting Period
- -------------------------------------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
SEMI-ANNUAL REPORT
JUNE 30 , 2005
THE WRIGHT MANAGED EQUITY TRUST
o Wright Selected Blue Chip Equities Fund
o Wright Major Blue Chip Equities Fund
o Wright International Blue Chip Equities Fund
THE WRIGHT MANAGED INCOME TRUST
o Wright U.S. Government Near Term Fund
o Wright Total Return Bond Fund
o Wright Current Income Fund
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
- -------------------------------------------------------------------------------
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS CONSISTS OF THREE EQUITY FUNDS
FROM THE WRIGHT MANAGED EQUITY TRUST AND THREE FIXED INCOME FUNDS FROM THE
WRIGHT MANAGED INCOME TRUST. EACH OF THE SIX FUNDS HAVE DISTINCT INVESTMENT
OBJECTIVES AND POLICIES. THEY CAN BE USED INDIVIDUALLY OR IN COMBINATION TO
ACHIEVE VIRTUALLY ANY OBJECTIVE. FURTHER, AS THEY ARE ALL "NO-LOAD" FUNDS (NO
COMMISSIONS OR SALES CHARGES), PORTFOLIO ALLOCATION STRATEGIES CAN BE ALTERED AS
DESIRED TO MEET CHANGING MARKET CONDITIONS OR CHANGING REQUIREMENTS WITHOUT
INCURRING ANY SALES CHARGES.
APPROVED WRIGHT INVESTMENT LIST
Securities selected for investment in these funds are chosen mainly from a list
of "investment grade" companies maintained by Wright Investors' Service
("Wright" or the "Adviser"). All 25,000 global companies (covering 50 countries)
in Wright's database are screened as new data becomes available to determine any
eligible additions or deletions to the list. The qualifications for inclusion as
"investment grade" are companies that meet Wright's Quality Rating criteria.
This rating includes fundamental criteria for investment acceptance, financial
strength, profitability & stability and growth. In addition, securities, which
are not included in Wright's "investment grade" list, may also be selected from
companies in the fund's specific benchmark (up to 20% of the market value of the
portfolio) in order to achieve broad diversification. Different quality criteria
may apply for the different funds. For example, the companies in the Major Blue
Chip Fund would require a higher Investment Acceptance rating than the companies
in the Selected Blue Chip Fund.
THREE EQUITY FUNDS
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) seeks to enhance total investment
return through price appreciation plus income. The fund's portfolio is
characterized as a blend of growth and value stocks. The market capitalization
of the companies is typically between $1-$10 billion at the time of the fund's
investment. The Adviser seeks to outperform the Standard & Poor's 400 Index (S&P
400) by selecting stocks using fundamental company analysis and company specific
criteria such as valuation and earnings trends. The portfolio is then
diversified across industries and sectors.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) seeks to enhance total investment
return through price appreciation plus income by providing management a broadly
diversified portfolio of equities of larger well-established companies with
market values of $10 billion or more. The Adviser seeks to outperform the
Standard & Poor's 500 Index (S&P 500) by selecting stocks, using fundamental
company analysis and company specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries and sectors.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) seeks total return
consisting of price appreciation plus income by investing in a broadly
diversified portfolio of equities of well-established, non-U.S. companies. The
portfolio may buy common stocks traded on the securities exchange of the country
in which the company is based or it may purchase American Depositary Receipts
(ADR's) traded in the United States. The portfolio is denominated in U.S.
dollars and investors should understand that fluctuations in foreign exchange
rates may impact the value of their investment. The Adviser seeks to outperform
the MSCI Developed World ex U.S. Index by selecting stocks using fundamental
company analysis and company-specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries and sectors.
THREE FIXED-INCOME FUNDS
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) is a diversified portfolio
concentrating on bonds and other obligations of the U.S. Government and U.S.
Government Agencies with an average weighted maturity of between one and three
years. This portfolio is designed to appeal to the investor seeking a high level
of income that is normally somewhat less variable and normally somewhat higher
than that available from short-term money market instruments and who is also
tolerant of modest fluctuation in capital (i.e. compared with somewhat greater
fluctuation likely with longer term fixed income securities). Dividends are
accrued daily and paid monthly. The fund's benchmark is the Lehman U.S.
Government 1-3 Year Bond Index.
WRIGHT TOTAL RETURN BOND FUND (WTRB) is a diversified portfolio of investment
grade government and corporate bonds and other debt securities of varying
maturities which, in the Adviser's opinion, will achieve the portfolio objective
of best total return (i.e. the total of ordinary income plus capital
appreciation). Accordingly, investment selections and maturities may differ
depending on the particular phase of the interest rate cycle. Dividends are
accrued daily and paid monthly. The fund's benchmark is the Lehman U.S.
Aggregate Bond Index.
WRIGHT CURRENT INCOME FUND (WCIF) may be invested in a variety of securities and
may use a number of strategies, including GNMAs, to produce a high level of
income with reasonable stability of principal. The fund reinvests all principal
payments. Dividends are accrued daily and paid monthly. The funds benchmark is
the Lehman GNMA Backed Bond Index.
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVES................................inside front & back cover
LETTER TO SHAREHOLDER........................................................2
MANAGEMENT DISCUSSION........................................................3
FUND EXPENSES............................................................... 8
BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT......55
IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS,
PORTFOLIO HOLDINGS AND PROXY VOTING......................................56
FINANCIAL STATEMENTS
THE WRIGHT MANAGED EQUITY TRUST
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Portfolio of Investments..................12
Statement of Assets & Liabilities.........15
Statement of Operations...................15
Statement of Changes in Net Assets........16
Financial Highlights......................17
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Portfolio of Investments..................18
Statement of Assets & Liabilities.........21
Statement of Operations...................21
Statement of Changes in Net Assets........22
Financial Highlights......................23
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Portfolio of Investments..................24
Statement of Assets & Liabilities.........26
Statement of Operations...................26
Statement of Changes in Net Assets........27
Financial Highlights......................28
NOTES TO FINANCIAL STATEMENTS...............29
THE WRIGHT MANAGED INCOME TRUST
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
Portfolio of Investments..................34
Statement of Assets & Liabilities.........35
Statement of Operations...................35
Statement of Changes in Net Assets........36
Financial Highlights......................37
WRIGHT TOTAL RETURN BOND FUND
Portfolio of Investments..................38
Statement of Assets & Liabilities.........42
Statement of Operations...................42
Statement of Changes in Net Assets........43
Financial Highlights......................44
WRIGHT CURRENT INCOME FUND
Portfolio of Investments..................45
Statement of Assets & Liabilities.........48
Statement of Operations...................48
Statement of Changes in Net Assets........49
Financial Highlights......................50
NOTES TO FINANCIAL STATEMENTS...............51
LETTER TO SHAREHOLDERS
- ------------------------------------------------------------------------------
July 2005
Dear Shareholders:
The U.S. stock market had a so-so second quarter, with most market
averages marginally higher at midyear than when they began the quarter (a
notable exception being the Dow Jones Industrials, which lost 2%). Once again,
mid- and small-cap stocks outperformed big-cap equities during the second
quarter. Energy stocks, clear winners in 2005's first quarter, were only
marginally better than average in the second. Encouragingly, market breadth
improved and was at post-1998 highs as the third quarter began. The U.S. bond
market, as measured by the Lehman Aggregate, had a 3% return in the second
quarter, beating the S&P 500's total return by more than 1.5% for a second
straight quarter and demonstrating the merits of bonds in balanced portfolios -
even in a low interest rate environment.
U.S. economic growth appears to have moderated in Q2 from the close to
4% growth rates of the prior three quarters, due to high oil prices, higher
interest rates from the Fed and the natural slowing that occurs in year four of
an economic expansion. As the second quarter ended, the Federal Reserve bumped
up its target fed funds rate to 3.25%, its ninth quarter-point increase in the
past 12 months. Crude oil prices ended the second quarter little changed from
where they began it ($56.50 a barrel vs $57), but the encouraging decline in
prices seen in April and May reversed itself in June. In the face of ongoing
supply-based pressures on oil prices and indications of more interest rate hikes
ahead, consumer confidence ended the first half at the highest levels of the
year. National purchasing manager surveys point to improving conditions in
manufacturing and service industries. On balance, the U.S. business expansion
appears to be on a 3.0%-3.5% growth track going into the second half.
Despite high oil prices, underlying inflation pressures are contained,
according to the Federal Reserve. In fact, the inflation rate implied by the
difference between nominal and inflation-indexed Treasury bond yields fell by
40-50 basis points, to around 2.3%, during Q2. Energy costs may impede world
economic growth and persuade other prices to rise in the second half of 2005,
but ultimately high oil prices will cool demand enough to bring oil prices below
this year's extraordinary levels. Geopolitical developments - renewed bouts of
chaos in Iraq and the rejection of a new EU constitution by voters in France and
the Netherlands - were not especially positive during the second quarter, nor
was the trend of business in Europe. Nonetheless, foreign stocks have generally
outdistanced U.S. shares so far in 2005, although the dollar's surprising
appreciation (7% against the euro) in the second quarter caused returns to lag
for dollar-based investors.
In spite of the "conundrum" of falling long-term interest rates in the
second quarter, the evidence indicates that the economy is still growing at
close to its long-term trend of 3.5% and core inflation is not far from the
Fed's 2% target. While we believe that the Fed will usher the fed funds rate
higher (perhaps to 4%) over the next 12 months, the rise in long-term bond
yields should be relatively modest. In such an environment, corporate profits
should continue to impress, with earnings gains on the order of 10% expected for
the S&P 500 in both 2005 and 2006. On the strength of rising profits and
dividends and healthier balance sheets, stocks are expected to improve on the 6%
return earned in the year ended June 30 over the coming 12 months. Bonds are
unlikely to match the nearly 7% return achieved over the past 12 months, but
they should keep ahead of inflation.
As always, I invite your questions and suggestions on how we can better
serve your investment needs.
Sincerely,
/s/Peter M. Donovan
-------------------
Peter M. Donovan
President
MANAGEMENT DISCUSSION
- -------------------------------------------------------------------------------
EQUITY FUNDS
U.S. STOCKS EDGED INTO POSITIVE TERRITORY IN THE SECOND QUARTER OF 2005 AFTER
RETREATING IN Q1. IN THE FIRST QUARTER, INVESTORS WORRIED ABOUT INCREASED
INFLATION; IN THE SECOND, THEY FRETTED ABOUT THE POSSIBILITY THAT THE EXPANSION
WAS ON SHAKY GROUND. IN BOTH QUARTERS, OIL PRICES WERE CENTRAL TO THESE
CONCERNS. OIL PRICES ROSE TO PEAK ABOVE $57 A BARREL IN EARLY APRIL, THEN
DECLINED 18% BEFORE SURGING AGAIN TO A NEW PEAK ABOVE $60 NEAR MIDYEAR. WITH OIL
PRICES SEEN AS A THREAT TO ECONOMIC GROWTH, TOWARDS MID-YEAR SOME INVESTORS AND
ECONOMISTS WORRIED THAT THE FED MIGHT BE GOING TOO FAR IN ITS REMOVAL OF
MONETARY ACCOMMODATION. NEVERTHELESS, ON THE LAST DAY OF THE QUARTER, THE FED
RAISED THE FED FUNDS RATE ANOTHER 25 BASIS POINTS TO 3.25%, EXPRESSED CONFIDENCE
IN THE EXPANSION AND SIGNALED THERE WAS MORE TIGHTENING TO COME.
HEALTHY PROFITS, REASONABLE VALUATIONS AND LOW INTEREST RATES WORKED IN THE
STOCK MARKET'S FAVOR IN THE SECOND QUARTER. STOCKS HIT THEIR LOWS FOR THE YEAR
IN APRIL AND CLAWED THEIR WAY BACK FROM THERE, WITH THE S&P 500 RECOVERING 5%
FROM THIS BOTTOM. THE S&P 500'S 1.4% RETURN FOR THE SECOND QUARTER WAS NOT
ENOUGH TO OFFSET THE FIRST QUARTER'S LOSS, LEAVING IT WITH A 0.8% LOSS FOR THE
FIRST HALF. THE DOW JONES INDUSTRIALS LOST 1.6% FOR THE SECOND QUARTER ON A
SELL-OFF LATE IN JUNE FOR WHICH THE SPIKE IN OIL PRICES GETS MOST OF THE BLAME.
NASDAQ FARED BETTER IN THE SECOND QUARTER, RETURNING 3.1%, THOUGH IT STILL HAD
THE LARGEST LOSS (ABOUT 5%) OF THE BIG-THREE MARKET AVERAGES FOR THE FIRST HALF.
THE S&P MIDCAP 400 AND SMALLCAP 600 BOTH OUTPERFORMED THE S&P 500 IN Q2 WITH
RETURNS OF ABOUT 4%; BOTH ARE IN THE BLACK FOR THE YEAR TO DATE. THE STRENGTH IN
THE DOLLAR THIS YEAR HAS TAKEN A BITE OUT OF RETURNS TO U.S. INVESTORS FROM
FOREIGN STOCKS. THE MSCI WORLD EX U.S. INDEX LOST 0.8% IN THE SECOND QUARTER AND
0.7% FOR THE FIRST HALF IN DOLLARS.
WE FORESEE AN ECONOMIC ENVIRONMENT OF MODERATE GROWTH AND INFLATION OVER THE
COMING YEAR. ALTHOUGH GROWTH IS LIKELY TO SLOW FROM THE PACE OF THE LAST 12
MONTHS AND INFLATION MAY BE A LITTLE HIGHER, THIS WOULD NEVERTHELESS BE AN
ENVIRONMENT THAT COULD SUPPORT PROFIT GROWTH IN THE 8%-10% RANGE OVER THE COMING
12 TO 24 MONTHS. ALTHOUGH BUSINESSES ARE FEELING SOME PRESSURE FROM HIGHER RAW
MATERIAL AND LABOR COSTS, SELLING PRICES ARE EDGING UP AND EFFORTS AT INCREASING
EFFICIENCY CONTINUE. EVEN WITHOUT IMPROVEMENT IN P/E MULTIPLES, STOCKS SHOULD
MOVE UP OVER THE COMING YEAR JUST ON THE BASIS OF HIGHER PROFITS. P/E MULTIPLES
HAVE COME DOWN BY MORE THAN ONE POINT SINCE THE BEGINNING OF THE YEAR; IT IS
POSSIBLE THAT SOME RETRACEMENT OF THIS DECLINE WILL BOOST RETURNS. ALTHOUGH WE
WOULDN'T BE SURPRISED IF THE CAUTIOUS MOOD THAT HAS REINED IN MULTIPLES
CONTINUES, WE WERE ENCOURAGED BY THE FACT THAT MARKET BREADTH HIT POST-1998
HIGHS AS THE THIRD QUARTER BEGAN. WE ALSO CONTINUE TO BELIEVE IN THE BENEFITS OF
DIVERSIFICATION, PARTICULARLY IN A RISKY INVESTMENT ENVIRONMENT. THE AGGREGATE
P/E OF THE S&P 400 MIDCAPS IS CURRENTLY HIGHER THAN THAT OF THE S&P 500, BUT IN
EXCHANGE THE MIDCAPS OFFER BETTER GROWTH PROSPECTS. INTERNATIONAL EQUITIES LOOK
RELATIVELY ATTRACTIVE ON A VALUATION BASIS.
2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
- -------------------------------------------------------------------------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP FUND
(WSBC) 5.5% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1% 32.7% 18.6% 30.3%
WRIGHT MAJOR BLUE CHIP FUND
(WMBC) -1.4% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4% 33.9% 17.6% 29.0%
WRIGHT INTERNATIONAL BLUE CHIP FUND
(WIBC) 3.5% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1% 1.5% 20.7% 13.6%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
The S&P MidCap 400 did better than the S&P 500 in each of the first two quarters
of 2005. The Wright Selected Blue Chip Fund (WSBC) took full advantage of its
positioning as a mid-cap blend fund, returning 4.6% in the second quarter of
2005. This showing topped both the S&P MidCap 400's 4.3% and the 2.8% return for
an average of 79 mid-cap blend funds in the Morningstar database. For the first
half of 2005, the WSBC also outperformed, returning 5.5% compared to 3.9% for
the S&P MidCaps and 1.6% for the Morningstar benchmark. WSBC returned nearly 16%
over the last 12 months, topping the MidCaps (14%) and the Morningstar average
(11%). In the first half of 2005, the larger stocks in the S&P MidCap 400
outperformed the smaller, and the WSBC Fund was correctly positioned for this.
Contributing to the good showing by the larger issues in the second quarter was
strength in home builders (e.g., D.R. Horton, since moved to the S&P 500, and
Toll Brothers both returned 29% for the quarter), which are among the larger
issues in the MidCaps. WSBC benefited from holding these issues and other larger
cap issues that outperformed in the quarter such Legg Mason (+33%), Pacificare
Health (+26%) and Equitable Resources (+19%). Also contributing to the strong
results in the first half were the first quarter's surge in energy stocks, in
which the Fund remains slightly overweighted, and a relatively strong showing by
the Fund's stock selections in the health care sector. As the third quarter of
2005 was getting underway, the WSBC remained overweight in the consumer
discretionary sector, which has been doing well; the Fund is underweight in
financials due to our forecast of rising interest rates and underweight in
technology due to lingering concerns about profit prospects. With the economic
expansion maturing, WSBC should benefit from being positioned in the more
substantial companies in the S&P MidCap 400. Additionally, the companies in the
WSBC have a lower median P/E than the S&P MidCap 400.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the large-cap
growth and value stocks in the S&P 500 Composite, selected with a bias toward
the higher-quality issues in the index. In the second quarter of 2005, U.S.
stocks posted modestly positive returns after losing ground in Q1. The WMBC
returned 0.8% in the April-to-June period, lagging the 1.4% returns for both the
S&P 500 and an average of 152 large-cap blend funds in the Morningstar data
base. For the first half of 2005, WMBC lost 1.4% compared to losses of 0.8% for
the S&P 500 and 0.7% for the Morningstar average. Though lagging modestly in
2005, the Fund's last 12 months' return of 8.4% exceeds both the S&P 500 (+6.3%)
and the Morningstar peer group (+5.7%). In the second quarter of 2005, the
WMBC's shortfall compared to the S&P 500 was due to a lagging performance in
April which was largely recouped by the end of the quarter. During the quarter,
the Fund benefited from the relatively strong showing of its selections in the
consumer discretionary sector, including home builders (e.g., Centex +23%, KB
Home +29%, Pulte Homes +14%) and some retailers (e.g., Best Buy +20%, Nordstrom
+23%). Among the stocks whose results detracted from the Fund's relative
performance were Molson Coors Brewing -19%, ExxonMobil -3% (one of the Fund's
largest holdings) and IBM -19%. For the first half of the year, the Fund also
benefited from an overweight position in the energy sector, which returned
nearly 18% in the first quarter. As the economic expansion continues to age,
profit growth is expected to slow. Sustainability of earning growth is becoming
more important in stock performance, and the quality tilt in the WMBC Fund
should work to its advantage in this regard. In addition, WMBC should also
benefit from the historically low valuations currently accorded to high-quality
stocks. The portfolio's median 12-month forward P/E multiple is more than a
point lower than the S&P 500's, while its historical growth and forecast
earnings growth are better, a combination that ought to drive above-market
performance.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
After outperforming the S&P 500 in the first quarter of 2005 as well as for all
of 2004, the MSCI World ex U.S. index (in dollars) lagged in the second quarter
of 2005 as the appreciation of the dollar canceled a positive local currency
return. Nevertheless, the Wright International Blue Chip Fund (WIBC)
outperformed the S&P 500 as well as its international benchmarks in the quarter,
returning 2.1% compared to losses of 0.8% for both the MSCI World ex U.S. index
and an average of 127 international equity funds in the Morningstar database.
For the first half of 2005, the WIBC Fund returned 3.5%, compared to losses of
0.7% for the MSCI benchmark and 1.2% for the Morningstar average. WIBC's
12-month return of 19% tops 15% for the MSCI benchmark and 13% for the
Morningstar average. In international markets, the strong showing in energy
stocks continued in the second quarter, and the WIBC continued to benefit from
its overweight position in energy. In addition, an overweighting in utility
stocks, another strong international sector, worked for the Fund in the quarter.
The Fund was overweight in the Euro Bloc, which had relatively strong markets,
while underweight in Japan, which was weak. On an absolute basis, a number of
the Fund's weakest holdings were Japanese issues, reflecting the weakness of the
Japanese market. Looking at first-half performance, several of the same factors
that benefited the second quarter- strength in energy, overweighting in Europe
and superior stock selection - contributed to the good showing; being
underweight in technology also helped the WIBC Fund. WIS continues to believe
that on a valuation basis, international stocks are attractive relative to U.S.
stocks. The WIBC is still overweight in energy and utility stocks but has
reduced its positions in these sectors by taking profits. The Fund has also
further reduced its positioning in technology. The proceeds have been invested
in industrials, including some in Japan as the economy shows signs of improving,
and telecom, which looks attractive on a valuation basis. These actions have
increased the Fund's holdings in Sweden and Hong Kong as well as Japan, but
reduced its weight in Europe, the U.K. and Canada.
FIXED-INCOME FUNDS
AFTER RETREATING IN THE FIRST QUARTER, BONDS WERE SOLIDLY IN THE BLACK IN THE
SECOND QUARTER OF 2005. EVEN THOUGH THE FED RAISED THE TARGET FED FUNDS RATE BY
50 BASIS POINTS IN THE SECOND QUARTER, JUST AS IT DID IN THE FIRST, LONG-TERM
BOND YIELDS RETRACED ALL OF THE FIRST QUARTER'S RISE AND THEN SOME. SEVERAL
FACTORS APPEARED TO BE AT WORK IN ENGINEERING THIS SOMEWHAT SURPRISING RALLY.
WORRY ABOUT A SLOWDOWN IN U.S. ECONOMIC GROWTH FIGURED IN THE DECLINING LONG
RATES, BUT THE PROSPECT OF 3%-3.5% GROWTH AND 2%-2.5% CORE INFLATION ALONE
DOESN'T SEEM ENOUGH TO JUSTIFY THE EXTENT OF THE BOND MARKET RALLY. INVESTMENT
STRATEGIES OF HEDGE FUNDS AND PENSION AND MORTGAGE MANAGERS PROBABLY ALSO PLAYED
A ROLE. THE GLOBAL INVESTMENT FLOWS EXPLANATION, I.E., A GLOBAL SAVINGS GLUT
FINDING ITS WAY TO THE U.S. BOND MARKET, SEEMED TO GAIN ADHERENTS; U.S. INTEREST
RATES, AS LOW AS THEY ARE, LOOK ATTRACTIVE COMPARED TO THE EVEN LOWER RATES IN
OTHER MARKETS.
THE LEHMAN U.S. AGGREGATE BOND MARKET INDEX RETURNED 3.0% IN THE SECOND QUARTER,
BRINGING ITS FIRST-HALF 2005 RETURN TO 2.5%. TREASURYS LED THE INVESTMENT GRADE
MARKET WITH A 3.6% RETURN IN THE QUARTER AND 3.2% YEAR TO DATE. IN Q2,
CORPORATES WERE ONLY A SHADE BEHIND WITH A 3.5% RETURN (2.4% YTD), AN IMPRESSIVE
SHOWING SINCE THE CORPORATE SECTOR HAD TO OVERCOME THE DOWNGRADES OF FORD AND GM
DEBT TO NONINVESTMENT GRADE. THE AGENCY, ASSET-BACKED AND MORTGAGE-BACKED
SECTORS WERE ALSO IN THE BLACK FOR BOTH THE QUARTER AND THE HALF. LONG-MATURITY
ISSUES OUTPERFORMED SHORTER IN THE QUARTER AND YTD AS THE YIELD CURVE CONTINUED
TO FLATTEN. IN THE SECOND QUARTER, THE YIELD ON THE 10-YEAR T-BOND DECLINED BY
57 BASIS POINTS, THE TWO-YEAR DECLINED BY 15 BPS, AND THE ONE-YEAR ROSE BY 10
BPS. AT ABOUT 30 BASIS POINTS, THE SPREAD BETWEEN TWO- AND 10-YEAR TREASURY
YIELDS WAS THE NARROWEST IN FOUR-AND-A-HALF YEARS.
OUR OUTLOOK IS FOR BOND RETURNS TO LAG EQUITY RETURNS OVER THE COMING YEAR. IF
THE GLOBAL INVESTMENT FLOWS ARGUMENT IS INDEED A REASON WHY BOND YIELDS ARE
CURRENTLY SO LOW, THEN YIELDS ARE LIKELY TO STAY LOWER THAN WE FORECAST AT THE
BEGINNING OF THE YEAR. WE EXPECT THAT RATES WILL MOVE SOMEWHAT HIGHER, HOWEVER.
OUR EXPECTATION IS THAT THE FED WILL TIGHTEN BY AT LEAST ANOTHER 50 BASIS POINTS
AND POSSIBLY 75 BY EARLY 2006, PUTTING THE FED FUNDS RATE AT 4.0%. THIS SHOULD
PUSH UP RATES AT THE SHORT END OF THE YIELD CURVE AND IN COMBINATION WITH
MODERATE GROWTH AND MODERATE INFLATION, PUSH LONG RATES HIGHER ALSO. THE RETURN
ON THE LEHMAN U.S. AGGREGATE INDEX IS TARGETED AT ABOUT 3% OVER THE COMING YEAR.
THE SECOND-QUARTER RALLY IN BONDS REMINDS US THAT EVEN WITH INTEREST RATES LOW,
THE RISKS OF THE INVESTMENT ENVIRONMENT ARGUE FOR DIVERSIFIED INVESTMENT
PORTFOLIOS THAT INCLUDE FIXED-INCOME SECURITIES.
2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
- ----------------------------------------------------------------------------------------------------------------------------
WRIGHT U.S.GOV'T.NEAR-TERM BOND FUND
(WNTB) 0.7% 0.4% 0.6% 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9% 11.9%
WRIGHT TOTAL RETURN BOND FUND
(WTRB) 2.0% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9% 22.0%
WRIGHT CURRENT INCOME FUND
(WCIF) 1.0% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4% 17.5%
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
The Wright U.S. Government Near-Term Fund (WNTB) is positioned to offer an
alternative to money market funds. The Fund may experience some mild price
fluctuation, but it typically has less sensitivity to changes in interest rates
than longer maturity funds. In the two-year maturity range, where the WNTB is
positioned, Treasury yields declined about 15 basis points during the second
quarter after rising in the first quarter. This contributed to the WNTB's 1.0%
return in the second quarter, modestly behind the 1.2% for both the Lehman 1-3
year government bond index and an average of 60 Morningstar government bond
funds with an average maturity between one and three years. An overall rise in
rates for the first half of the year helped limit WNTB's gain to 0.7%, about the
same as the Morningstar average but behind the 0.9% return for the Lehman
benchmark. Over the past year, the WNTB Fund returned 1.7% compared to 2.1% for
the Lehman benchmark and 2.2% for the Morningstar average. After the first
quarter's rise in interest rates, at the start of the second quarter the WNTB
was positioned with a duration of about 1.7 years, which just about matched the
Lehman benchmark. As yields moved lower in Q2, the Fund's duration was shortened
in anticipation of a reversal of the rally, a shift that proved to be early and
worked against the Fund's performance in the quarter. To pick up extra yield,
the Fund is overweight in mortgage-backed securities (30% of assets). The
position in whole-loan adjustable rate mortgages was sold in Q2. The Fund is
underweighting Treasuries (35% of assets) and is about neutral in Agency
securities (34%). The Fund is expected to continue to underweight Treasury
issues and as the third quarter began was positioned with a
shorter-than-benchmark maturity and duration, consistent with our forecast that
yields would be moving up from mid-year levels. The WNTB Fund had an indicated
annual yield of 3.0% at the end of Q2.
WRIGHT TOTAL RETURN BOND FUND
As the bond market rallied in the second quarter of 2005, the Wright Total
Return Bond Fund (WTRB), a diversified bond fund, returned 2.6% for the period.
This was behind the Lehman U.S. Aggregate Bond Index's 3.0% return but a little
better than the 2.5% return for an average of 174 total return bond funds in the
Morningstar database. WTRB's second-quarter gain more than recovered its loss in
the first quarter (when the bond market retreated). For the first half of 2005,
WTRB returned 2.0%, ahead of the Morningstar average's 1.9% but behind the
Lehman Aggregate's 2.5%. Over the last 12 months, the Fund (+5.9%) edged out the
Morningstar peer group average (+5.8%) but lagged the Lehman Average (+6.8%) by
just about the amount of fund expenses. The WTRB's indicated annual yield was
4.3% at the start of the third quarter. WTRB was moved from a short duration to
neutral in the first quarter as interest rates rose; in response to the interest
rate decline, in the second quarter the Fund's duration was shortened in
anticipation that the rate decline would reverse. The move proved to be early,
but the short position (about a quarter year compared to the Lehman Aggregate)
was maintained at the start of the third quarter in anticipation that rates
would move higher over the coming months. With corporate spreads staying tight,
the Fund reduced its position in corporates during the first and second
quarters, but is still moderately overweight (29% of Fund assets at quarter end)
to pick up extra yield. Although corporates lagged the Aggregate in the first
quarter, they outperformed in the second, partly offsetting the negative effect
of the Fund's short duration. In the second quarter, the Fund moved to an
overweight position in mortgage-backed securities (42% of assets), which have
lagged so far this year but which should provide incremental return as rates
rise going forward. The Fund ended the first half slightly underweight in agency
issues (about 10% of assets) but is expecting to increase that position to
neutral for the extra yield they provide. The position in Treasurys remains less
than the benchmark weight. The Fund also holds small positions in commercial
mortgage-backed securities (3%) and asset-backed issues (4%). Two whole-loan
adjustable rate mortgages were sold in the quarter.
WRIGHT CURRENT INCOME FUND
The Wright Current Income Fund (WCIF) is generally managed to be almost entirely
invested in GNMA issues - mortgage-based securities, known as Ginnie Maes, with
explicit backing from the Federal government. The WCIF Fund is actively managed
to maximize income and minimize principal fluctuation. (During the fourth
quarter of 2004, the Wright U.S. Government Intermediate Fund was merged into
the WCIF.) Mortgage-backed securities lagged the Lehman Aggregate in the second
quarter of 2005 after outperforming in the first quarter. For the second
quarter, WCIF returned 1.4%, behind the 2.0% for the Lehman GNMA bond index and
the 1.9% for an average of all 61 government mortgage funds in the Morningstar
database. For the first half of 2005, WCIF returned 1.0% compared to 2.1% for
the Lehman benchmark and 1.5% for the Morningstar average. The Fund's 12-month
return was 3.9% compared to 5.8% for the Lehman index and 4.5% for the
Morningstar benchmark. With interest rates expected to rise modestly in 2005,
reducing the risk of mortgage prepayments, the WCIF was positioned to be
slightly overweight in higher-coupon issues during the first and second quarters
of 2005. This allocation, which worked against the Fund in the second quarter,
is being maintained as the third quarter gets underway since WIS is still
expecting higher mortgage rates in the coming months. The overweighting of
higher coupon issues has the advantage of providing extra income. The Fund's
duration was targeted to be slightly shorter than the Lehman Ginnie Mae
benchmark's. At the start of the third quarter, the WCIF Fund had an indicated
annual yield of 4.4%, making it attractive for income-oriented investors.
U.S. SECURITIES MARKETS -------------------------------------------------------
The Dow Jones Industrial Average chart shows the point changes in the average
which consists of 30 major NYSE industrial companies and is a price-weighted
arithmetic average, with the divisor adjusted for stock splits. The yield
chart shows the basis point changes in the U.S. Treasury bond which is the
benchmark U.S. Treasury bond with a maturity of 10 years.
The following plotting points are used for comparison in the mountain charts.
Date Dow Jones U.S. 10 Year
Industrial Average Treasury Bond Yield
12/31/96 6448.27 6.43%
12/31/97 7908.25 5.75%
12/31/98 9181.43 4.65%
12/31/99 11,497.12 6.44%
12/31/00 10,786.85 5.11%
12/31/01 10,021.50 5.00%
12/31/02 8,341.63 3.82%
12/31/03 10,453.92 4.25%
12/31/04 10,783.01 4.22%
12/31/05 10,274.97 3.92%
FUND EXPENSES
- -------------------------------------------------------------------------------
EXAMPLE:
As a shareholder of a fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchases and redemption fees (if
applicable); and (2) ongoing costs including management fees; distribution or
service fees; and other fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in a fund and to compare
these costs with the ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (January 1, 2005-June 30, 2005).
ACTUAL EXPENSES:
The first line of the tables shown on the following page provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the fist line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES:
The second line of the tables provides information about hypothetical account
values and hypothetical expenses based on the actual Fund expense ratio and an
assumed rate of return of 5% per year (before expenses), which is not the actual
return of the Fund. The hypothetical account values and expenses may not be used
to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in your Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees (if payable). Therefore, the second line of
the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
FUND EXPENSES - continued
- -------------------------------------------------------------------------------
EQUITY FUNDS
Wright Selected Blue Chip Equities Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,054.50 $6.37
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.60 $6.26
*Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
Wright Major Blue Chip Equities Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $ 985.60 $6.15
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.60 $6.26
*Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
Wright International Blue Chip Equities Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,034.90 $8.48
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,016.50 $8.40
*Expenses are equal to the Fund's annualized expense ratio of 1.68% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
FIXED INCOME FUNDS
Wright U.S. Government Near Term Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,006.60 $4.73
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.10 $4.76
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
Wright Total Return Bond Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,020.40 $4.76
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.10 $4.76
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
Wright Current Income Fund
Beginning Ending Expenses Paid
Account Value Account Value During Period*
(1/1/05) (6/30/05) (1/1/05-6/30/05)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,010.20 $4.73
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.10 $4.76
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 181/365 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2004.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited)
EQUITY INTERESTS -- 98.1%
Shares Value
AUTOMOBILES & COMPONENTS -- 2.9%
BorgWarner, Inc..................... 14,840 $ 796,463
Copart, Inc.*....................... 24,860 591,668
Thor Industries, Inc................ 9,640 302,985
------------
$ 1,691,116
------------
BANKS -- 4.6%
Associated Banc-Corp................ 8,735 $ 294,020
Astoria Financial Corp.............. 10,807 307,675
City National Corp.................. 5,175 371,099
Colonial Bancgroup Inc.............. 15,555 343,143
Hibernia Corp. - Class A............ 6,775 224,794
Independence Community Bank......... 14,460 534,008
Investors Financial Services Corp... 4,270 161,491
Webster Financial Corp.............. 8,230 384,259
------------
$ 2,620,489
------------
CAPITAL GOODS -- 4.3%
AGCO Corp.* ........................ 13,765 $ 263,187
Alliant Techsystems, Inc.* ......... 9,545 673,877
Graco, Inc.......................... 7,037 239,751
Pentair, Inc........................ 5,320 227,749
Precision Castparts Corp............ 8,970 698,763
Thomas & Betts Corp.* .............. 12,335 348,340
------------
$ 2,451,667
------------
CHEMICALS -- 1.2%
Lubrizol Corp...................... 5,175 $ 217,402
Lyondell Chemical Co................ 17,060 450,725
------------
$ 668,127
------------
COMMERCIAL SERVICES & SUPPLIES -- 2.9%
Brink's Co., (The).................. 13,645 $ 491,220
Certegy, Inc........................ 3,555 135,872
ITT Educational Services, Inc.* .... 3,840 205,133
Manpower, Inc....................... 11,355 451,702
Republic Services, Inc. - Class A... 10,950 394,309
------------
$ 1,678,236
------------
COMMUNICATIONS EQUIPMENT -- 0.8%
Plantronics, Inc.................... 9,495 $ 345,238
Polycom, Inc.* ..................... 9,350 139,408
------------
$ 484,646
------------
COMPUTERS & PERIPHERALS -- 2.2%
CSG Systems International, Inc.* ... 7,540 $ 143,109
DST Systems, Inc.* ................. 6,225 291,330
Storage Technology Corp.* .......... 22,210 806,001
------------
$ 1,240,440
------------
CONSUMER DURABLES & APPAREL -- 7.6%
D.R. Horton, Inc.................... 24,266 $ 912,644
Harman International................ 4,175 339,678
Hovnanian Enterprises,Inc.-Class A*. 4,605 300,246
Lennar Corp. - Class A.............. 11,860 752,517
Mohawk Industries, Inc.* ........... 9,615 793,238
Timberland Co. - Class A* .......... 10,070 389,910
Toll Brothers, Inc.* ............... 6,895 700,187
Tupperware Corp..................... 7,135 166,745
------------
$ 4,355,165
------------
DIVERSIFIED FINANCIALS -- 6.6%
AmeriCredit Corp.* ................. 15,055 $ 383,903
Edwards, A.G., Inc.................. 6,585 297,313
I Shrs S&P Midcap 400 Index
Fd-Mid Cap......................... 11,560 792,438
Jefferies Group, Inc................ 8,615 326,422
Legg Mason, Inc..................... 13,130 1,366,964
Raymond James Financial, Inc........ 11,550 326,288
Ryland Group, Inc................... 3,410 258,717
------------
$ 3,752,045
------------
EDUCATION -- 0.4%
Career Education Corp.* ............ 6,420 $ 235,036
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 3.7%
Ametek, Inc......................... 7,780 $ 325,593
Arrow Electronics, Inc.* ........... 23,430 636,359
Avnet, Inc.* ....................... 10,975 247,267
Energizer Holdings, Inc.* .......... 5,915 367,736
Tech Data Corp.* ................... 14,365 525,903
------------
2,102,858
------------
ENERGY -- 8.5%
Forest Oil Corp.* .................. 3,985 $ 167,370
Murphy Oil Corp..................... 14,505 757,596
Newfield Exploration Company* ...... 24,910 993,660
Noble Energy, Inc................... 7,780 588,557
Plains Exploration & Production Co.* 29,370 1,043,516
Pogo Producing Co................... 13,575 704,814
Smith International, Inc............ 5,250 334,425
Western Gas Resources, Inc.......... 7,875 274,838
------------
$ 4,864,776
------------
FOOD, BEVERAGE & TOBACCO -- 2.8%
Constellation Brands, Inc.-Class A*. 24,210 $ 714,195
PepsiAmericas, Inc.................. 7,920 203,227
Smithfield Foods, Inc.* ............ 18,875 514,721
Universal Corp...................... 4,055 177,528
------------
$ 1,609,671
------------
HEALTH CARE EQUIPMENT & SERVICES-- 10.6%
Beckman Coulter, Inc................ 6,585 $ 418,608
Covance, Inc.* ..................... 6,320 283,578
Coventry Health Care, Inc.* ........ 18,370 1,299,678
Cytyc Corp.* ....................... 8,970 197,878
Health Net, Inc.* .................. 10,620 405,259
Inamed Corp.* ...................... 1,980 132,601
LifePoint Hospitals, Inc.* ......... 14,675 741,381
Lincare Holdings, Inc.* ............ 13,455 549,502
Pacificare Health Systems, Inc.* ... 11,215 801,312
Renal Care Group, Inc.* ............ 9,710 447,631
Triad Hospitals, Inc.* ............. 14,580 796,651
------------
$ 6,074,079
------------
HOTELS, RESTAURANTS & LEISURE -- 1.1%
Boyd Gaming Corp.................... 12,145 $ 620,974
------------
INSURANCE -- 5.6%
Everest Re Group, Ltd............... 4,440 $ 412,920
Fidelity National Financial, Inc.... 5,012 178,878
First American Corp................. 20,280 814,039
Old Republic International Corp..... 10,115 255,808
PMI Group Inc., (The)............... 7,180 279,876
Protective Life Corp................ 9,140 385,891
Radian Group, Inc................... 11,645 549,877
Stancorp Financial Group............ 4,035 309,000
------------
$ 3,186,289
------------
MATERIALS -- 2.5%
Cabot Corp.......................... 6,300 $ 207,900
Cytec Industries, Inc............... 9,590 381,682
FMC Corp.* ......................... 6,010 337,401
RPM International, Inc.............. 28,060 512,376
------------
$ 1,439,359
------------
MEDIA -- 1.1%
Catalina Marketing Corp............. 25,055 $ 636,648
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 0.6%
Barr Laboratories, Inc.* ........... 6,020 $ 293,415
Perrigo Company..................... 6,105 85,104
------------
$ 378,519
------------
REAL ESTATE -- 0.4%
New Plan Excel Realty Trust REIT.... 7,920 $ 215,186
------------
RETAILING -- 10.6%
Abercrombie & Fitch Co. - Class A... 9,685 $ 665,360
American Eagle Outfitters........... 21,640 663,266
Barnes & Noble, Inc.* .............. 10,190 395,372
BJ's Wholesale Club, Inc.* ......... 7,015 227,917
CDW Corp............................ 5,600 319,704
Chico's FAS, Inc.* ................. 9,710 332,859
Claire's Stores, Inc................ 18,110 435,546
Foot Locker, Inc.................... 18,155 494,179
Michaels Stores, Inc................ 4,985 206,229
Neiman Marcus Group, Inc. - Class A. 5,130 497,200
Pacific Sunwear of California, Inc.* 14,125 324,734
Petsmart, Inc....................... 8,445 256,306
United Rentals, Inc.* .............. 32,855 664,000
Urban Outfitters, Inc.* ............ 10,090 572,002
------------
$ 6,054,674
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 2.9%
Cree, Inc.* ........................ 31,290 $ 796,956
International Rectifier Corp.* ..... 7,730 368,876
Lam Research Corp.* ................ 9,400 272,036
Microchip Technology, Inc........... 6,705 198,602
------------
$ 1,636,470
------------
SOFTWARE & SERVICES -- 2.4%
Activision, Inc.* .................. 34,565 $ 571,014
Cognizant Technology Solutions Corp.* 6,345 299,040
Fair Isaac, Inc..................... 5,800 211,700
Gtech Holdings Corp................. 3,005 87,866
Jack Henry & Associates, Inc........ 10,410 190,607
------------
$ 1,360,227
------------
TELECOMMUNICATION SERVICES -- 0.5%
Cincinnati Bell, Inc.* ............. 32,510 $ 139,793
Telephone & Data Systems, Inc....... 3,625 147,936
------------
$ 287,729
------------
TRANSPORTATION -- 3.0%
CNF Transporation, Inc.............. 6,610 $ 296,789
Hunt, J.B. Transport Services, Inc.. 40,665 784,835
Overseas Shipholding Group.......... 4,605 274,688
Yellow Roadway Corp.* .............. 6,990 355,092
------------
$ 1,711,404
------------
UTILITIES -- 8.3%
Energy East Corp.................... 20,950 $ 607,131
Equitable Resources, Inc............ 16,250 1,105,000
MDU Resources Group, Inc............ 16,857 474,862
Oneok, Inc.......................... 17,490 571,049
Questar Corp........................ 12,930 852,087
Sierra Pacific Resources* .......... 46,165 574,754
Wisconsin Energy Corp............... 13,885 541,515
------------
$ 4,726,398
------------
TOTAL EQUITY INTERESTS-- 98.1%
(identified cost, $44,578,791) $56,082,228
OTHER ASSETS, LESS LIABILITIES -- 1.9% 1,090,995
------------
NET ASSETS -- 100% $57,173,223
============
* Non-income-producing security.
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $44,578,791) (Note 1A). $ 56,082,228
Cash.................................... 972,854
Receivable for fund shares sold......... 102,667
Receivable from investment adviser...... 7,714
Dividends receivable.................... 24,054
Other assets............................ 16,300
------------
Total assets............................ $ 57,205,817
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 15,333
Payable to affiliate for Trustees' fees. 881
Transfer agent fee payable.............. 2,022
Accrued expenses and other liabilities.. 14,358
------------
Total liabilities....................... $ 32,594
------------
NET ASSETS................................ $ 57,173,223
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 42,965,717
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)....................... 1,776,906
Unrealized appreciation on investments
(computed on the basis of identified cost) 11,503,437
Undistributed net investment income..... 927,163
-----------
Net assets applicable to outstanding
share................................. $ 57,173,223
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 4,237,396
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 13.49
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 259,556
Expenses -
Investment adviser fee (Note 2):........ $ 128,810
Administrator fee (Note 2):............. 25,762
Compensation of Trustees who are not employees
of the investment adviser or administrator 7,607
Custodian fee (Note 1D)................. 45,653
Distribution expenses (Note 3):......... 53,671
Transfer and dividend disbursing agent fees 11,784
Printing................................ 1,629
Interest expense........................ 1,773
Shareholder communications.............. 4,570
Audit services.......................... 12,836
Legal services.......................... 3,348
Registration costs...................... 8,556
Miscellaneous .......................... 3,373
------------
Total expenses.......................... $ 309,372
Deduct -
Reduction of custodian fee (Note 1D):... $ (5,981)
Preliminary allocation of expenses to
investment adviser (Note 2):........... (7,714)
Preliminary reduction of distribution expenses
by principal underwriter (Note 3):..... (26,837)
------------
Total deductions........................ $ (40,532)
------------
Net expenses............................ $ 268,840
------------
Net investment loss..................... $ (9,284)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 1,774,744
Change in unrealized appreciation of
investments............................ 674,470
------------
Net realized and unrealized gain
of investments......................... $ 2,449,214
------------
Net increase in net assets from operations $ 2,439,930
============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 Dec. 31,2004
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss........................................................ $ (9,284) $ (89,696)
Net realized gain on investments........................................... 1,774,744 4,095,367
Change in unrealized appreciation of investments........................... 674,470 1,915,763
-------------- --------------
Net increase in net assets resulting from operations..................... $ 2,439,930 $ 5,921,434
-------------- --------------
Distributions to shareholders (Note 1F) -
From net realized gain..................................................... $ (1,387,931) $ (1,597,259)
-------------- --------------
Total distributions...................................................... $ (1,387,931) $ (1,597,259)
-------------- --------------
Net increase in net assets from fund share transactions (Note 4)............. $ 12,623,366 $ 983,877
-------------- --------------
Net increase in net assets................................................... $ 13,675,365 $ 5,308,052
NET ASSETS:
At beginning of period....................................................... 43,497,858 38,189,806
-------------- --------------
At end of period............................................................. $ 57,173,223 $ 43,497,858
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD................................................................ $ 927,163 $ 936,447
============== ==============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003(6) 2002(6) 2001(6) 2000(6)
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430 $ 15.130
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1) ................ $ (0.003) $ (0.028) $ (0.023) $ (0.046) $ (0.045) $ (0.041)
Net realized and unrealized gain (loss) 0.714 1.884 2.756 (1.831) (1.322) 1.638
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 0.711 $ 1.856 $ 2.733 $ (1.877) $ (1.367) $ 1.597
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from capital gains....... $ (0.444) $ (0.500) $ (0.133) $ (0.433) $ (0.483) $ (3.297)
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.444) $ (0.500) $ (0.133) $ (0.433) $ (0.483) $ (3.297)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 13.493 $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 5.45% 15.73% 30.06% (16.98%) (10.15%) 10.75%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 57,173 $ 43,498 $ 38,190 $ 32,817 $ 45,883 $ 51,201
Ratio of net expenses to average net assets 1.28%(8) 1.26% 1.25% 1.26%(3) 1.26%(3) 1.26%(3)
Ratio of net expenses after custodian fee
reduction to average net assets(5)(7) 1.25%(8) 1.25% 1.25% 1.25%(3) 1.25%(3) 1.25%(3)
Ratio of net investment (loss) to average
net assets.......................... (0.04%)(8) (0.23%) (0.23%) (0.44%) (0.38%) (0.28%)
Portfolio turnover rate .............. 37% 69% 106% 119%(4) 67%(4) 55%(4)
- --------------------------------------------------------------------------------------------------------------------------------
(1)The operating expenses of the fund were reduced by an allocation of expenses
to the distributor and/or investment adviser. Had such action not been
undertaken, net investment loss per share and the ratios would have been as
follows:
2005 2004 2003 2002 2001 2000
--------------------------------------------------------------------------
Net investment loss per share.......... $ (0.013) $ (0.050) $ (0.057) $ (0.064) $ (0.057) $ (0.051)
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses........................... 1.44%(8) 1.44% 1.59% 1.43%(3) 1.37%(3) 1.33%(3)
========= ========= ========= ========= ========= =========
Expenses after custodian fee reduction(5) 1.41%(8) 1.43% 1.59% 1.42%(3) 1.36%(3) 1.32%(3)
========= ========= ========= ========= ========= =========
Net investment loss................ (0.20%)(8) (0.41%) (0.57%) (0.61%) (0.49%) (0.35%)
========= ========= ========= ========= ========= =========
- -------------------------------------------------------------------------------------------------------------------------------
(2)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated expenses (Note 1).
(4)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1).
(5)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1D). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
(6)Certain per share amounts are based on average shares outstanding.
(7)Under a written agreement in effect through the current fiscal year, Wright
waives a portion of its advisory fee and/or distribution fees and assumes
operating expenses to the extent necessary to limit expense ratios to 1.25%
after custodian fee reductions, if any.
(8)Annualized.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited)
EQUITY INTERESTS -- 99.8%
Shares Value
AEROSPACE & DEFENSE -- 0.3%
Lockheed Martin Corp................ 2,820 $ 182,933
------------
AUTOMOBILES & COMPONENTS -- 2.4%
Harley-Davidson, Inc................ 2,110 $ 104,656
Paccar, Inc......................... 21,385 1,454,180
------------
1,558,836
------------
BANKS -- 9.5%
Bank of America Corp................ 61,458 $ 2,803,099
Capital One Financial Corp.......... 12,760 1,020,928
MBNA Corp........................... 40,805 1,067,459
Wells Fargo & Co.................... 21,025 1,294,719
------------
$ 6,186,205
------------
CAPITAL GOODS -- 2.2%
Cummins, Inc........................ 9,115 $ 680,070
Tyco International, Ltd............. 8,875 259,150
United Technologies Corp............ 9,610 493,473
------------
$ 1,432,693
------------
COMMERCIAL SERVICES & SUPPLIES -- 0.3%
H&R Block, Inc...................... 3,590 $ 209,476
------------
COMMUNICATIONS EQUIPMENT -- 3.2%
Cisco Systems, Inc.* ............... 10,476 $ 200,196
Qualcomm, Inc....................... 31,599 1,043,083
Scientific-Atlanta, Inc............. 24,270 807,463
------------
$ 2,050,742
------------
COMPUTERS & PERIPHERALS -- 3.9%
Apple Computer, Inc.* .............. 9,980 $ 367,364
Computer Sciences Corp.* ........... 13,850 605,245
Dell, Inc.* ........................ 10,769 425,483
Hewlett-Packard Co.................. 36,470 857,410
Lexmark International, Inc.* ....... 4,490 291,087
------------
$ 2,546,589
------------
CONSUMER DURABLES & APPAREL -- 2.5%
Brunswick Corp...................... 1,700 $ 73,644
Centex Corp......................... 3,395 239,925
Fortune Brands, Inc................. 9,895 878,676
KB Home Corp........................ 1,090 83,091
Liz Claiborne, Inc.................. 1,705 67,791
Pulte Homes, Inc.................... 3,310 278,867
------------
$ 1,621,994
------------
DIVERSIFIED FINANCIALS -- 6.0%
Citigroup, Inc...................... 64,179 $ 2,966,995
Lehman Brothers Holdings, Inc....... 7,295 724,248
Providian Financial Corp.* ......... 11,155 196,663
------------
$ 3,887,906
------------
ELECTRIC UTILITIES -- 0.1%
Duke Energy Corp.................... 2,690 $ 79,974
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 0.2%
Nvidia Corp.* ...................... 2,525 $ 67,468
PerkinElmer, Inc.................... 2,960 55,944
------------
$ 123,412
------------
ENERGY -- 11.3%
Apache Corp......................... 5,548 $ 358,401
ChevronTexaco Corp.................. 21,375 1,195,290
ConocoPhillips Co................... 27,580 1,585,574
EOG Resources, Inc.................. 3,525 200,220
Exxon Mobil Corp.................... 51,355 2,951,372
Occidental Petroleum Corp........... 8,825 678,907
TXU Corp............................ 4,765 395,924
------------
$ 7,365,688
------------
FOOD, BEVERAGE & TOBACCO -- 4.4%
Altria Group, Inc................... 14,730 $ 952,442
Archer-Daniels-Midland Co........... 44,820 958,252
Molson Coors Brewing Co. - Class B.. 12,415 769,730
Supervalu, Inc...................... 5,975 194,845
------------
$ 2,875,269
------------
FOREST PRODUCTS & PAPER -- 0.4%
Georgia-Pacific Corp................ 7,860 $ 249,948
------------
HEALTH CARE EQUIPMENT & SERVICES-- 8.0%
Becton Dickinson & Co............... 1,875 $ 98,381
C.R. Bard, Inc...................... 5,354 356,095
Cigna Corp.......................... 4,175 446,850
Health Management Associates-Class A 37,365 978,216
Humana, Inc.* ...................... 8,965 356,269
Laboratory Corp.of America Holdings* 3,475 173,402
Manor Care, Inc..................... 2,400 95,352
Medco Health Solutions, Inc.* ...... 4,130 220,377
Quest Diagnostics, Inc.............. 8,200 436,814
St. Jude Medical, Inc.* ............ 2,400 104,664
UnitedHealth Group, Inc............. 34,316 1,789,236
Wellpoint, Inc.* ................... 2,110 146,940
------------
$ 5,202,596
------------
HEAVY MACHINERY -- 4.2%
Black & Decker Corp................. 11,030 $ 991,046
Caterpillar, Inc.................... 11,045 1,052,699
Ingersoll-Rand Co. - Class A........ 10,005 713,857
------------
$ 2,757,602
------------
HOTELS, RESTAURANTS & LEISURE -- 2.9%
Cendant Corp........................ 30,205 $ 675,686
Darden Restaurants, Inc............. 1,880 62,002
McDonald's Corp..................... 42,300 1,173,825
------------
$ 1,911,513
------------
INSURANCE -- 5.9%
Aetna, Inc.......................... 2,770 $ 229,411
AFLAC, Inc.......................... 6,165 266,821
Allstate Corp....................... 7,730 461,868
AMBAC Financial Group, Inc.......... 3,015 210,326
Chubb Corp.......................... 4,925 421,629
Loews Corp.......................... 2,810 217,775
MGIC Investment Corp................ 2,690 175,442
Progressive Corp.................... 18,505 1,828,479
------------
$ 3,811,751
------------
MATERIALS -- 2.8%
Ball Corp........................... 15,060 $ 541,558
Bemis Co., Inc...................... 2,265 60,113
Monsanto Co......................... 13,955 877,351
Nucor Corp.......................... 7,260 331,201
------------
$ 1,810,223
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 6.2%
Gilead Sciences, Inc.* ............. 4,195 $ 184,538
Johnson & Johnson, Inc.............. 23,886 1,552,590
Pfizer, Inc......................... 83,830 2,312,031
------------
$ 4,049,159
------------
RETAILING -- 7.4%
Best Buy Co., Inc................... 4,005 $ 274,543
CVS Corp............................ 4,800 139,536
Gap (The), Inc...................... 8,535 168,566
Home Depot, Inc..................... 53,225 2,070,453
J.C. Penney Co., Inc................ 4,250 223,465
Limited Brands, Inc................. 2,285 48,945
Nike, Inc. - Class B................ 1,040 90,064
Nordstrom, Inc...................... 6,360 432,289
Office Depot, Inc.* ................ 11,580 264,487
Safeway, Inc........................ 17,465 394,534
Sears Holdings Corp.* .............. 1,800 269,766
Staples, Inc........................ 20,550 438,126
------------
$ 4,814,774
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.0%
KLA-Tencor Corp..................... 1,375 $ 60,088
Texas Instruments, Inc.............. 21,265 596,909
------------
$ 656,997
------------
SOFTWARE & SERVICES -- 4.9%
Autodesk, Inc....................... 32,490 $ 1,116,681
Automatic Data Processing, Inc...... 4,865 204,184
International Business Machines Corp. 6,113 453,585
Microsoft Corp...................... 23,419 581,728
NCR Corp.* ......................... 9,360 328,723
Oracle Corp.* ...................... 16,598 219,094
Symantec Corp.* .................... 12,060 262,184
------------
$ 3,166,179
------------
TELECOMMUNICATION SERVICES -- 4.5%
Alltel Corp......................... 5,285 $ 329,150
AT&T Corp........................... 46,030 876,411
Bellsouth Corp...................... 12,935 343,683
Corning, Inc.* ..................... 8,660 143,929
Sprint Corp......................... 40,580 1,018,152
Verizon Communications, Inc......... 7,245 250,315
------------
$2,961,640
------------
TEXTILES, CLOTHING & FABRICS -- 0.1%
VF Corp............................. 1,135 $ 64,945
------------
TRANSPORTATION -- 0.9%
Burlington Northern Santa Fe Corp... 2,125 $ 100,045
FedEx Corp.......................... 2,539 205,684
Norfolk Southern Corp............... 9,160 283,594
------------
$ 589,323
------------
UTILITIES -- 4.3%
Exelon Corp......................... 47,586 $ 2,442,589
Sempra Energy....................... 9,095 375,714
------------
$ 2,818,303
------------
TOTAL EQUITY INTERESTS-- 99.8%
(identified cost, $52,689,563).... $64,986,670
OTHER ASSETS, LESS LIABILITIES -- 0.2% 151,687
------------
NET ASSETS -- 100% $65,138,357
============
* Non-income-producing security.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $52,689,563) (Note 1A). $ 64,986,670
Cash.................................... 103,212
Receivable for fund shares sold......... 10,431
Receivable from investment adviser...... 6,393
Dividends receivable.................... 55,094
Prepaid expenses........................ 17,323
------------
Total assets............................ $ 65,179,123
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 19,035
Payable to affiliate for Trustees' fees. 881
Transfer agent fee...................... 2,248
Accrued expenses and other liabilities.. 18,602
------------
Total liabilities....................... $ 40,766
------------
NET ASSETS................................ $ 65,138,357
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 86,470,468
Accumulated undistributed net realized loss on
investments (computed on the basis
of identified cost).................... (33,485,696)
Unrealized appreciation on investments
(computed on the basis of identified cost) 12,297,107
Distributions in excess of net
investment income...................... (143,522)
------------
Net assets applicable to outstanding
shares .............................. $ 65,138,357
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 5,626,560
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 11.58
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 559,030
------------
Expenses -
Investment adviser fee (Note 2):........ $ 192,345
Administrator fee (Note 2):............. 38,469
Compensation of Trustees not employees of the
investment adviser or administrator.... 7,607
Custodian fee (Note 1D):................ 37,341
Distribution expenses (Note 3):......... 80,144
Transfer and dividend disbursing agent fees 12,789
Printing................................ 2,353
Interest expense........................ 955
Shareholder communications.............. 6,080
Audit services.......................... 13,356
Legal services.......................... 3,982
Registration costs...................... 9,866
Miscellaneous .......................... 6,170
------------
Total expenses.......................... $ 411,457
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (4,353)
Preliminary allocation of expenses to the
investment adviser (Note 2):........... (6,393)
------------
Total deductions........................ $ (10,746)
------------
Net expenses............................ $ 400,711
------------
Net investment income................... $ 158,319
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 552,892
Change in unrealized depreciation of
investments............................ (1,649,412)
------------
Net realized and unrealized loss of
investments............................ $ (1,096,520)
------------
Net decrease in net assets from
operations............................ $ (938,201)
============
See notes to financial statements
Wright Major Blue Chip Equities Fund (WMBC)
- ------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December,31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 158,319 $ 325,576
Net realized gain on investments........................................... 552,892 3,568,382
Change in unrealized appreciation (depreciation) on investments............ (1,649,412) 3,534,335
-------------- --------------
Net increase (decrease) in net assets resulting from operations.......... $ (938,201) $ 7,428,293
-------------- --------------
Distributions to shareholders -
From net investment income................................................. $ (169,250) $ (289,970)
-------------- --------------
Total distributions...................................................... $ (169,250) $ (289,970)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 4).. $ 742,950 $(13,174,341)
-------------- --------------
Net decrease in net assets................................................... $ (364,501) $ (6,036,018)
NET ASSETS:
At beginning of period....................................................... 65,502,858 71,538,876
-------------- --------------
At end of period............................................................. $ 65,138,357 $ 65,502,858
-------------- --------------
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD............................................................. $ (143,522) $ (132,591)
============== ==============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003(4) 2002(4) 2001(4) 2000(4)
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690 $ 16.290
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) ....... $ 0.028 $ 0.053 $ 0.029 $ 0.024 $ (0.009) $ (0.001)
Net realized and unrealized gain (loss) (0.198) 1.247 1.958 (2.812) (2.301) (2.005)
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ (0.170) $ 1.300 $ 1.987 $ (2.788) $ (2.310) $ (2.006)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from investment income....... $ (0.030) $ (0.050) $ (0.027) $ (0.022) $ - $ (0.010)
Distributions from capital gains....... - - - - - (0.584)
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.030) $ (0.050) $ (0.027) $ (0.022) $ - $ (0.594)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 11.580 $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690
========= ========= ========= ========= ========= =========
TOTAL RETURN(3) ............................ (1.44%) 12.36% 23.20% (24.50%) (16.87%) (12.49%)
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 65,138 $ 65,503 $ 71,539 $ 66,609 $ 95,121 $ 135,262
Ratio of net expenses to average net assets 1.26%(7) 1.25% 1.25% 1.22% 1.13% 1.06%
Ratio of net expenses after custodian fee
reduction to average net assets(2)(6) 1.25%(7) 1.25% 1.25% 1.22% 1.13% 1.06%
Ratio of net investment income (loss) to
average net assets ................. 0.49%(7) 0.49% 0.31% 0.25% (0.08%) (0.00%)(5)
Portfolio turnover rate................ 35% 74% 143% 130% 78% 88%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2005 and for the years ended December 31,
2004 and 2003, the operating expenses of the Fund were reduced by an
allocation of expenses to the distributor and/or investment adviser. Had such
action not been undertaken, net investment income per share and the ratios
would have been as follows:
2005 2004 2003
-------------------------------
Net investment income per share........ $ 0.027 $ 0.050 $ 0.024
========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................. 1.28%(7) 1.28% 1.31%
========= ========= =========
Expenses after custodian fee reduction(2) 1.27%(7) 1.28% 1.31%
========= ========= =========
Net investment income................ 0.47%(7) 0.46% 0.26%
========= ========= =========
- ---------------------------------------------------------------------------------------------------------------------------------
(2)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1D). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(3)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(4 Certain per share amounts are based on average shares outstanding.
(5)Amount represents less than (0.00%) of average net assets.
(6)Under a written agreement in effect through the current fiscal year, Wright
waives a portion of its advisory fee and/or distribution fees and assumes
operating expenses to the extent necessary to limit expense ratios to 1.25%
after custodian fee reductions, if any.
(7)Annualized.
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (UNAUDITED)
EQUITY INTERESTS -- 101.1%
Shares Value
AUSTRALIA -- 4.0%
Aristocrat Leisure, Ltd............ 92,019 $ 813,641
Boral, Ltd.......................... 72,129 356,273
Computershare, Ltd. (Ordinary)...... 6,581 29,396
CSR, Ltd............................264,368 540,059
QBE Insurance Group, Ltd............ 71,037 867,992
------------
$ 2,607,361
------------
AUSTRIA -- 1.5%
OMV AG (Stammaktie)................. 2,210 $ 963,166
------------
BELGIUM -- 0.9%
Fortis.............................. 22,009 $ 611,507
------------
CANADA -- 7.1%
Canadian Natural Res, Ltd. (Common). 30,682 $ 1,112,248
Husky Energy, Inc................... 20,130 800,894
Manulife Financial Corp............. 17,733 847,124
Nexen Inc. (Common)................. 14,391 437,088
Nortel Networks Corp. (Common)* .... 27,699 72,142
Penn West Petroleum Ltd. (Common)... 11,153 263,891
Power Financial Corp. (Common)...... 43,621 1,163,892
------------
$ 4,697,279
------------
DENMARK -- 3.1%
Danisco A/S......................... 97 $ 6,304
Danske Bank A/S..................... 57,130 1,719,385
TDC A/S............................. 4,900 210,160
Topdanmark A/S* .................... 1,772 129,259
------------
$ 2,065,108
------------
FINLAND -- 1.4%
Cargotec Corp.* .................... 2,460 $ 68,707
Fortum Oyj.......................... 25,490 408,888
Kone Oyj* .......................... 2,940 176,186
Nokian Renkaat Oyj.................. 13,275 242,035
------------
$ 895,816
------------
FRANCE -- 5.9%
Pernod Ricard SA (Actions
Ordinaries)......................... 2,506 $ 400,473
Schneider Electric SA............... 20,784 1,568,860
Societe Generale.................... 7,281 741,761
Veolia Environment (Actions
Ordinaries)........................ 1,767 66,466
Vinci............................... 13,306 1,108,293
------------
3,885,853
------------
GERMANY -- 7.6%
Allianz AG (Namensaktie)............ 3,526 $ 405,403
Bayer AG (Stammaktie)............... 14,542 485,730
Celesio AG.......................... 4,194 329,985
Continental AG (Stammaktie)......... 8,526 615,088
E. On AG (Stammaktie)............... 22,692 2,024,142
MAN AG (Stammaktie)................. 397 16,500
RWE AG.............................. 17,325 1,119,619
------------
$ 4,996,467
------------
GREECE -- 0.2%
National Bank of Greece SA.......... 3,153 $ 107,186
------------
HONG KONG -- 2.6%
Cheung Kong Holdings, Ltd. (Ord).... 60,000 $ 584,694
CLP Holdings, Ltd. (Ordinary).......105,000 602,447
Wharf Holdings, Ltd................. 85,000 298,522
Yue Yuen Industrial Holdings, Ltd... 68,000 208,200
------------
$ 1,693,863
------------
IRELAND -- 1.3%
Bank of Ireland (Cap. Stock)........ 5,903 $ 95,906
CRH PLC (Ordinary).................. 11,873 315,510
DCC PLC............................. 12,987 259,425
Grafton Group PLC* ................. 14,025 162,662
------------
$ 833,503
------------
ITALY -- 3.9%
Banca Intesa Spa (Azioni Ordinarie). 10,872 $ 49,819
Enel Spa............................ 48,082 419,115
Eni Spa (Azioni Ordinarie).......... 80,314 2,072,017
------------
$ 2,540,951
------------
JAPAN -- 19.8%
Acom Co., Ltd. (Common)............. 5,070 $ 325,311
Aiful Corp. (Common)................ 15,075 1,125,081
Asahi Glass Co., Ltd................ 22,000 231,495
Canon, Inc.......................... 16,100 848,516
Central Glass Co., Ltd.............. 45,000 281,428
Daito Trust Construct Co., Ltd...... 9,500 355,789
Eisai Co., Ltd. (Common)............ 26,300 885,290
Fuji Soft ABC, Inc. (Common)........ 21,200 677,267
Honda Motor Co., Ltd. (Common)...... 17,060 842,146
Konami Corp......................... 5,200 109,810
Kyocera Corp........................ 6,700 512,734
Mitsui OSK Lines, Ltd...............146,000 902,536
Nissan Chemical Industries, Ltd..... 22,000 237,054
Nissan Motor Co., Ltd. (Common)..... 86,000 852,161
Sankyo Co., Ltd. ................... 7,000 325,963
Sega Sammy Holdings, Inc............ 14,900 914,358
Takeda Chemicals Ind., Ltd. (Common) 15,300 759,408
Toyota Motor Corp. (Common)......... 35,700 1,279,027
Uniden Corp......................... 22,000 348,633
Yamada Denki Co., Ltd. (Common)..... 14,500 834,853
Yamaha Motor Co., Ltd............... 21,000 385,660
------------
$13,034,520
------------
NETHERLANDS -- 5.5%
ABN Amro Holdings NV (Aandeel)...... 33,910 $ 835,431
ING Groep NV - ADR (Aandeel)........ 69,788 1,974,504
Koninklijke Philips Electronics NV.. 16,622 420,580
Royal Dutch Petroleum Co. (Aandeel). 3,953 258,428
TNT NV.............................. 4,451 112,891
------------
$ 3,601,834
------------
NORWAY -- 4.1%
Norsk Hydro ASA (Ordinaere Aksje)... 6,084 $ 558,353
Orkla ASA........................... 25,100 925,250
Statoil ASA......................... 54,597 1,114,855
Telenor ASA......................... 17,079 136,495
------------
$ 2,734,953
------------
SINGAPORE -- 0.4%
Jardine Cycle & Carriage, Ltd....... 19,000 $ 149,766
Keppel Corp., Ltd................... 14,000 103,716
------------
$ 253,482
------------
SPAIN -- 5.5%
Acciona SA (Accion)................. 6,787 $ 673,768
ACS, Actividades de Construccion
y Servicios SA................... 8,265 231,539
Banco Santander Central Hispano SA
(Accion Nom)..................... 28,555 331,527
Fomento de Construcciones y Contratas
SA (Accion)...................... 10,218 576,338
Grupo Ferrovial SA (Accion
Al Portador)....................... 8,744 564,230
Repsol YPF SA (Accion).............. 47,484 1,216,414
Sociedad General de Aguas de
Barcelona SA..................... 1,836 39,610
------------
$ 3,633,426
------------
SWEDEN -- 4.9%
Getinge AB (B Aktie)................ 2,823 $ 38,501
Nordea Bank AB......................174,209 1,583,931
Skandia Forsakrings AB.............. 36,826 202,311
Telefonaktiebolaget
LM Ericsson ADR*................... 19,200 613,440
TeliaSonera AB......................171,745 820,352
------------
$ 3,258,535
------------
SWITZERLAND -- 2.2%
Micronas Semiconductor
(Namenaktie)* ..................... 15,299 $ 579,191
Phonak Holding AG................... 8,620 323,645
Zurich Financial Services
(Inhaberaktie)* ................. 3,124 538,427
------------
$ 1,441,263
------------
UNITED KINGDOM -- 19.2%
Alliance Unichem PLC (Ordinary)..... 14,540 $ 221,399
Anglo American PLC (Ordinary)....... 35,000 821,211
Barclays PLC (Ordinary).............212,525 2,116,124
Barratt Developments PLC............ 49,537 636,199
Bellway PLC......................... 1,680 25,988
BP PLC.............................. 469 4,884
Cable & Wireless PLC (Ordinary).....374,396 999,918
Dixons Group PLC (Ordinary).........238,621 671,514
HBOS PLC............................103,723 1,599,827
Inchcape PLC........................ 12,979 478,545
Man Group PLC....................... 1,219 31,617
Persimmon PLC (Ordinary)............ 63,838 893,670
Shell Transport & Trading Co. PLC
(Ordinary) (Registered)..........163,855 1,594,067
Tesco PLC (Ordinary)................220,783 1,261,429
Wolseley PLC (Ordinary)............. 60,652 1,276,322
------------
$12,632,714
------------
TOTAL EQUITY INTERESTS-- 101.1%
(identified cost, $57,811,182)... $ 66,488,787
------------
OTHER ASSETS, LESS LIABILITIES -- (1.1%) (717,797)
------------
NET ASSETS -- 100% $65,770,990
============
* Non-income-producing security.
ADR American Depository Receipts
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $57,811,182) (Note 1A) $ 66,488,787
Cash.................................... 97
Foreign currency, at value (cost $39,115)
(Note 1)............................... 38,994
Receivable for fund shares sold......... 226,474
Dividends receivable.................... 65,996
Tax reclaim receivable.................. 69,449
Prepaid expenses........................ 21,928
Other assets............................ 5,203
------------
Total assets.......................... $ 66,916,928
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 4,133
Demand note payable..................... 1,114,000
Payable to affiliate for Trustees' fees. 881
Transfer agent fee payable.............. 1,460
Accrued expenses and other liabilities.. 25,464
------------
Total liabilities..................... $ 1,145,938
------------
NET ASSETS................................ $ 65,770,990
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 71,581,205
Accumulated net realized loss on investments
and foreign currency (computed on the
basis of identified cost).............. (16,449,420)
Unrealized appreciation of investments and
translation of assets and liabilities in foreign
currencies (computed on the basis of
identified cost)....................... 8,679,961
Undistributed net investment income..... 1,959,244
------------
Net assets applicable to outstanding
shares............................... $ 65,770,990
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 4,261,876
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 15.43
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 1,284,123
Less: Foreign Taxes..................... (157,657)
------------
Investment income....................... $ 1,126,466
------------
Expenses -
Investment adviser fee (Note 2):........ $ 252,827
Administrator fee (Note 2):............. 53,726
Compensation of Trustees not employees of
the investment adviser or administrator 7,607
Custodian fee (Note 1D):................ 79,131
Distribution expenses (Note 3):......... 79,008
Transfer and dividend disbursing agent fees 11,998
Printing................................ 2,081
Interest expense........................ 4,597
Shareholder communications.............. 5,430
Audit services.......................... 15,171
Legal services.......................... 3,620
Registration costs...................... 16,658
Miscellaneous .......................... 3,619
------------
Total expenses.......................... $ 535,473
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (3,093)
------------
Net expenses............................ $ 532,380
------------
Net investment income................... $ 594,086
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain -
Investment transactions (identified cost
basis)................................ $ 2,803,161
Foreign currency transactions.......... (23,178)
------------
Net realized gain....................... $ 2,779,983
Change in unrealized depreciation -
Investments (identified cost basis).... (1,125,567)
Foreign currency....................... (10,253)
------------
Net change in unrealized depreciation... $ (1,135,820)
------------
Net realized and unrealized gain of
investments ........................... $ 1,644,163
------------
Net increase in net assets from operations $ 2,238,249
============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 594,086 $ 534,963
Net realized gain on investments and foreign currency transactions......... 2,779,983 8,968,316
Change in unrealized depreciation on investments and translation of assets
and liabilities in foreign currencies ................................... (1,135,820) (73,598)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 2,238,249 $ 9,429,681
-------------- --------------
Distributions to shareholders
From net investment income................................................. $ (704,313) $ (376,098)
-------------- --------------
Total distributions...................................................... $ (704,313) $ (376,098)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 4) . $ 1,971,361 $ (1,373,901)
-------------- --------------
Net increase in net assets................................................... $ 3,505,297 $ 7,679,682
NET ASSETS:
At beginning of period....................................................... 62,265,693 54,586,011
-------------- --------------
At end of period............................................................. $ 65,770,990 $ 62,265,693
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD................................................................ $ 1,959,244 $ 2,069,471
============== ==============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- ------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005(4) 2004 2003(4) 2002(4) 2001(4) 2000(4)
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 15.070 $ 12.890 $ 9.840 $11.510 $15.180 $18.900
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) .......... $ 0.140 $ 0.128 $ 0.073 $ 0.070 $ (0.023) $ 0.135
Net realized and unrealized gain (loss) 0.387 2.140 3.044 (1.740) (3.647) (3.455)
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations...... $ 0.527 $ 2.268 $ 3.117 $ (1.670) $ (3.670) $ (3.320)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from investment income....... $ (0.167) $ (0.088) $ (0.067) $ - $ - $ -
Distributions from capital gains....... - - - - - (0.400)
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.167) $ (0.088) $ (0.067) $ - $ - $ (0.400)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 15.430 $ 15.070 $12.890 $ 9.840 $11.510 $15.180
========= ========= ========= ========= ========= =========
TOTAL RETURN(1) ............................ 3.49% 17.71% 31.96% (14.51%) (24.18%) (17.58%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 65,771 $ 62,266 $ 54,586 $ 50,835 $ 66,828 $110,868
Ratio of net expenses to average net assets 1.69%(6) 1.72% 1.80% 1.66%(2) 1.56%(2) 1.49%(2)
Ratio of net expenses after custodian fee
reduction to average net assets(5) 1.68%(6) 1.71% 1.80% 1.65%(2) - -
Ratio of net investment income (loss) to average
net assets 1.88%(6) 0.97% 0.81% 0.65% (0.18%) 0.76%
Portfolio turnover rate .............. 42% 121% 77% 62%(3) 39%(3) 53%(3)
- --------------------------------------------------------------------------------------------------------------------------------
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(2)Includes the fund's share of its corresponding Portfolio's allocated expenses (Note 1).
(3)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1).
(4)Certain per share amounts are based on average shares outstanding.
(5)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1D). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
(6)Annualized.
See notes to financial statements
WRIGHT MANAGED EQUITY TRUST
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Equity Trust (the Trust), issuer of Wright Selected Blue
Chip Equities Fund (WSBC) series, Wright Major Blue Chip Equities Fund (WMBC)
series, and Wright International Blue Chip Equities Fund (WIBC) series
(collectively, the Funds), is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end, management investment company. The
Funds seek to provide total return consisting of price appreciation and current
income. Prior to December 20, 2002, WSBC and WIBC invested all of their
investable assets in interests in a separate corresponding open-end management
investment company (a Portfolio), a New York Trust, having the same investment
objective as its corresponding fund. Subsequent to December 20, 2002, the Funds
invest directly in securities rather than through the Portfolios and maintain
the same investment objectives.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations - Securities listed on securities exchanges or in the
NASDAQ National Market are valued at closing sale prices, if those prices
are deemed to be representative of market values at the close of business.
Unlisted or listed securities for which closing sale prices are not
available are valued at the mean between the latest bid and asked prices.
Short-term obligations maturing in sixty days or less are valued at
amortized cost, which approximates fair value. Securities for which market
quotations are unavailable or deemed not to be representative of market
values at the close of business are appraised at their fair value as
determined in good faith by or at the direction of the Trustees.
B. Foreign Currency Translation - Investment security valuations, other
assets, and liabilities initially expressed in foreign currencies are
translated each business day into U.S. dollars based upon current exchange
rates. Purchases and sales of foreign investment securities and income and
expenses are translated into U.S. dollars based upon currency exchange
rates prevailing on the respective dates of such transactions.
C. Income - Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis.
However, if the ex-dividend date has passed, certain dividends from foreign
securities are recorded as the fund is informed of the ex-dividend date.
D. Expense Reduction - Investors Bank & Trust (IBT) serves as custodian to the
Funds. Pursuant to the custodian agreement, IBT receives a fee reduced by
credits which are determined based on the average daily cash balance the
Funds maintain with IBT. All credit balances used to reduce the Fund's
custodian fees are reported as a reduction of total expenses on the
Statement of Operations.
E. Federal Taxes - The Trust's policy is to comply with the provisions
of the Internal Revenue Code (the Code) available to regulated
investment companies and distribute to shareholders each year all of its
taxable income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is necessary.
At December 31, 2004, the Trust,for federal income tax purposes, had
capital loss carryovers of $33,673,411 (WMBC) and $19,221,164 (WIBC)
which will reduce the Funds' taxable income arising from future net
realized gain on investment transactions, if any, to the extent permitted
by the Code, and thus will reduce the amount of the distribution to
shareholders which would otherwise be necessary to relieve the
respective fund of any liability for federal income or excise tax.Pursuan
to the Code, such capital loss carryovers will expire as follows:
12/31 WSBC WMBC WIBC
- ------------------------------------------------------------------------------
2009 - $13,839,245 $ 3,647,716
2010 - 17,603,398 14,010,156
2011 - 2,230,768 1,563,292
- ------------------------------------------------------------------------------
At December 31, 2004, net capital losses of $15,195 for WIBC attributable to
security transactions incurred after October 31, 2004 are treated as arising on
the first day of the fund's current taxable year. Withholding taxes on foreign
dividends have been provided for in accordance with the Trust's understanding of
the applicable country's tax rules and rates.
F. Distributions - The Trust requires that differences in the recognition or
classification of income between the financial statements and tax earnings and
profits which result only in temporary overdistributions for financial statement
purposes, are classified as distributions in excess of net investment income or
accumulated net realized gains. Distributions in excess of tax basis earnings
and profits are reported in the financial statements as a return of capital.
Permanent differences between book and tax accounting for certain items may
result in reclassification of these items.
G. Other - Investment transactions are accounted for on a trade-date basis.
H. Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expense during the reporting period. Actual
results could differ from those estimates.
I. Interim Financial Information - The interim financial statements relating to
June 30, 2005 and for the six month period then ended have not been audited by
an Independent Registered Public Accounting Firm but in the opinion of the
Trust's management, reflect all adjustments, consisting only of normally
recurring adjustments, necessary for the fair presentation of the financial
statements.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as
investment adviser to the Funds pursuant to an Investment Advisory Contract.
Wright furnishes the Funds with investment management, investment advisory, and
other services. For its services, Wright is compensated based upon a percentage
of average daily net assets which rate is adjusted as average daily net assets
exceed certain levels. For the six months ended June 30, 2005, the effective
annual rate was 0.80% for WIBC and 0.60% for WSBC and WMBC. Wright has been
allocated expenses of $7,714, and $6,393 on behalf of WSBC and WMBC,
respectively. The Trust also has engaged Eaton Vance Management (Eaton Vance) to
act as administrator of the Trust. Under the Administration Agreement, Eaton
Vance is responsible for managing the business affairs of the Trust and is
compensated based upon a percentage of average daily net assets which rate is
reduced as average daily net assets exceed certain levels. For the six months
ended June 30, 2005, the effective rate was 0.12% for WSBC, 0.12% for WMBC, and
0.17% for WIBC. Certain of the Trustees and officers of the Trust are Trustees
or officers of the above organizations. Except as to Trustees of the Trust who
are not employees of Eaton Vance or Wright, Trustees and officers receive
remuneration for their services to the Trust out of the fees paid to Eaton Vance
and Wright.
(3) DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that each of the
funds will pay Wright Investors' Service Distributors, Inc. (Principal
Underwriter), a wholly-owned subsidiary of The Winthrop Corporation, an annual
rate of 0.25% of each fund's average daily net assets for activities primarily
intended to result in the sale of each fund's shares. Under a written agreement
in effect through the current fiscal year, Wright waives a portion of its
advisory fee and/or distribution fees and assumes operating expenses to the
extent necessary to limit expense ratios to 1.25% after custodian fee
reductions, if any, for both WSBC and WMBC. Pursuant to this agreement, the
principal underwriter made a reduction of its fees of $26,837 on behalf of WSBC.
The investment adviser also assumed $7,714 and $6,393 of expenses on behalf of
WSBC and WMBC, respectively. In addition, the Trustees have adopted a service
plan (the Service Plan) which allows the funds to reimburse the Principal
Underwriter for payments to intermediaries for providing account administration
and account maintenance services to their customers who are beneficial owners of
shares. The amount of service fee payable under the Service Plan with respect to
each class of shares may not exceed 0.25% annually of the average daily net
assets attributable to the respective classes. For the six months ended June 30,
2005, the funds did not accrue or pay any service fees.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
For the
Six Months Ended Year Ended
June 30, 2005 December 31, 2004
------------------------------------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP EQUITIES FUND--
Sold................................................... 1,349,870 $ 17,830,891 923,639 $ 11,222,820
Issued to shareholders in payment of
distributions declared................................ 93,100 1,210,303 106,988 1,396,188
Redemptions............................................ (494,500) (6,417,828) (957,939) (11,635,131)
----------- -------------- ----------- --------------
Net increase ........................................ 948,470 $ 12,623,366 72,688 $ 983,877
=========== ============== =========== ==============
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Sold................................................... 427,460 $ 4,908,270 898,054 $ 9,604,327
Issued to shareholders in payment of
distributions declared................................ 11,766 136,366 20,569 233,277
Redemptions............................................ (374,553) (4,301,686) (2,151,425) (23,011,945)
----------- -------------- ----------- --------------
Net increase (decrease).............................. 64,673 $ 742,950 (1,232,802) $ (13,174,341)
=========== ============== =========== ==============
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Sold................................................... 492,839 $ 7,429,397 792,931 $ 10,418,061
Issued to shareholders in payment of
distributions declared................................ 33,842 523,875 21,458 276,379
Redemptions............................................ (397,912) (5,981,911) (916,122) (12,068,341)
----------- -------------- ----------- --------------
Net increase (decrease).............................. 128,769 $ 1,971,361 (101,733) $ (1,373,901)
=========== ============== =========== ==============
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations were as follows:
Six Months Ended June 30, 2005
- -------------------------------------------------------------------------------
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Purchases..... $ 26,617,494 $ 23,087,805 $ 29,877,329
=========== =========== ===========
Sales......... $ 16,421,254 $ 22,736,562 $ 26,674,855
=========== =========== ===========
- -------------------------------------------------------------------------------
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) of the investment
securities owned at June 30, 2005, as computed on a federal income tax basis,
are as follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Aggregate cost $44,578,791 $52,689,563 $57,811,182
=========== =========== ===========
Gross unrealized
appreciation 11,899,495 12,936,511 8,962,641
Gross unrealized
depreciation (396,058) (639,404) (285,036)
----------- ----------- -----------
Net unrealized
appreciation $11,503,437 $12,297,107 $ 8,677,605
=========== =========== ===========
- -------------------------------------------------------------------------------
The appreciation on currency for WIBC is $2,356.
(7) LINE OF CREDIT
The funds participate with other funds managed by Wright in a committed
$10 million unsecured line of credit agreement with a bank. The funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. WSBC, WMBC, and WIBC did not have significant borrowings or
allocated fees during the six months ended June 30, 2005. WIBC had $1,114,000
outstanding at June 30, 2005.
(8) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less publicly
available information about foreign companies, particularly those not subject to
the disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on the removal of funds or
other assets of the Portfolio, political or financial instability or diplomatic
and other developments which could affect such investments.
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - June 30, 2005 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- --------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES
$ 69,077 FHLMC Gold Balloon #M90710 5.000% 03-01-07 $101.42 $ 70,059 4.9%
49,161 FHLMC Gold Balloon #M90724 5.500% 05-01-07 101.56 49,926 5.4%
210,994 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.52 212,096 4.5%
332,491 FHLMC Gold Balloon #M90802 4.000% 03-01-08 99.50 330,818 4.0%
1,165,485 FHLMC Gold Balloon #M90937 5.000% 08-01-09 101.45 1,182,442 4.9%
1,166,008 FHLMC Gold Balloon #M90941 4.500% 08-01-09 100.52 1,172,049 4.5%
398,164 FHLMC Gold Pool #M90796 4.000% 02-01-08 99.50 396,160 4.0%
397,964 FHLMC Pool #1B1291 4.397% 11-01-33 100.21 398,784 4.4%
849,783 FHLMC Pool #1G0233 5.018% 05-01-35 101.50 862,563 4.9%
85,036 FNMA Pool #254227 5.000% 02-01-09 101.08 85,953 4.9%
486,321 FNMA Pool #701043 4.056% 04-01-33 100.40 488,288 4.0%
836,590 FNMA Pool #809324 4.880% 02-01-35 101.05 845,415 4.8%
U.S. GOVERNMENT AGENCIES
$ 770,000 FFCB 2.500% 03-15-06 $ 99.17 $ 763,578 2.5%
3,135,000 FHLMC 3.250% 11-02-07 98.60 3,090,956 3.3%
795,000 FNMA 1.750% 06-16-06 98.14 780,196 1.8%
2,135,000 FNMA 3.000% 11-22-06 98.93 2,112,215 3.0%
U.S. TREASURIES
$ 5,435,000 U.S. Treasury Notes 4.625% 05-15-06 $100.97 $ 5,487,654 4.6%
1,535,000 U.S. Treasury Notes 3.000% 11-15-07 98.58 1,513,175 3.0%
-----------
Total Investments (identified cost, $20,006,429)-- 98.5% $19,842,327
Other Assets, Less Liabilities-- 1.5% 309,545
-----------
Net Assets-- 100.0% $20,151,872
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of $20,006,429)(Note 1A) $ 19,842,327
Cash.................................... 190,335
Receivable for investments sold......... 13,195
Receivable for fund shares sold......... 4,842
Receivable from investment adviser...... 8,653
Interest receivable..................... 96,315
Prepaid expenses........................ 19,839
------------
Total assets.......................... $ 20,175,506
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 1,862
Distributions payable................... 11,743
Payable to affiliate for Trustees' fees. 789
Transfer agent fee ..................... 1,713
Accrued expenses........................ 7,527
------------
Total liabilities..................... $ 23,634
------------
NET ASSETS................................ $ 20,151,872
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for Fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 21,841,116
Accumulated undistributed net realized loss on
investments (computed on the basis of
identified cost)....................... (1,428,194)
Unrealized depreciation on investments
(computed on the basis of identified cost) (164,102)
Distribution in excess of net investment
income................................. (96,948)
------------
Net assets applicable to outstanding
shares................................ $ 20,151,872
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING. 2,038,256
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST.................. $ 9.89
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 323,473
------------
Expenses -
- --
Investment adviser fee (Note 3)........ $ 46,145
Administrator fee (Note 3)............. 9,229
Compensation of Trustees not employees of
the investment adviser or administrator 7,842
Custodian fee (Note 1C)................ 23,681
Distribution expenses (Note 4)......... 25,636
Transfer and dividend disbursing agent fees 10,172
Printing............................... 1,810
Interest expense....................... 810
Shareholder communications............. 2,967
Audit services......................... 14,160
Legal services......................... 2,443
Registration costs..................... 7,731
Miscellaneous.......................... 3,810
------------
Total expenses........................ $ 156,436
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (1,694)
Preliminary allocation of expenses to the
investment adviser (Note 3)........... (8,653)
Preliminary reduction of investment adviser fee
(Note 3).............................. (23,073)
Preliminary reduction of distribution expenses
by principal underwriter (Note 4)..... (25,636)
------------
Total deductions...................... $ (59,056)
------------
Net expenses.......................... $ 97,380
------------
Net investment income............... $ 226,093
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (86,013)
Change in unrealized depreciation
of investments......................... (13,767)
------------
Net realized and unrealized loss of
investments........................... $ (99,780)
------------
Net increase in net assets from
operations........................... $ 126,313
============
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December 31, 2004
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 226,093 $ 327,655
Net realized loss on investments........................................... (86,013) (42,275)
Change in unrealized depreciation on investments........................... (13,767) (185,876)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 126,313 $ 99,504
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (323,041) $ (735,924)
-------------- --------------
Total distributions...................................................... $ (323,041) $ (735,924)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5)............. $ (1,224,071) $ (5,348,388)
-------------- --------------
Net decrease in net assets............................................... $ (1,420,799) $ (5,984,808)
NET ASSETS:
At beginning of period....................................................... 21,572,671 27,557,479
-------------- --------------
At end of period............................................................. $ 20,151,872 $ 21,572,671
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF PERIOD............................................... $ (96,948) $ --
============== ==============
See notes to financial statements
Wright U.S. Government Near Term Fund (WNTB)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080 $ 9.930
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ............... $ 0.107 $ 0.123 $ 0.165 $ 0.349 $ 0.480(7) $ 0.525
Net realized and unrealized gain (loss).. (0.042) (0.080) (0.102) 0.200 0.195(7) 0.143
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ 0.065 $ 0.043 $ 0.063 $ 0.549 $ 0.675 $ 0.668
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income... $ (0.155) $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518)
--------- --------- --------- --------- --------- ---------
Total distributions.................... $ (0.155) $ (0.313) $ (0.303) $ (0.349) $ (0.465) $ (0.518)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 9.890 $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 0.66% 0.43% 0.61% 5.42% 6.82% 6.94%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 20,152 $ 21,573 $ 27,557 $ 33,839 $ 36,025 $ 39,198
Ratio of net expenses to average net assets 0.97%(8) 0.96% 0.95% 0.97%(3) 0.97%(3) 0.98%(3)
Ratio of net expenses after custodian fee
reduction to average net assets(4)(6) 0.95%(8) 0.95% 0.95% 0.95%(3) 0.95%(3) 0.95%(3)
Interest expense ....................... 0.01%(8) _ 0.01% - - -
Ratio of net investment income to average
net assets............................ 2.21%(8) 1.38% 1.75% 3.10% 4.40% 5.27%
Portfolio turnover rate ................ 63% 138% 165% 64%(5) 92%(5) 65%(5)
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2005 and the years ended December 31,
2004, 2003, 2002, 2001, and 2000, the operating expenses of the fund were
reduced by an allocation of expenses to the investment adviser, a reduction
in distribution fees by the principal underwriter, a reduction in
administration fees, or a combination thereof. Had such action not been
undertaken, net investment income per share and the ratios would have been as
follows:
2005 2004 2003 2002 2001 2000
----------------------------------------------------------------------
Net investment income per share........ $ 0.081 $ 0.097 $ 0.134 $ 0.323 $ 0.452 $ 0.511
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.53%(8) 1.38% 1.28% 1.20%(3) 1.22%(3) 1.13%(3)
========= ========= ========= =========== ========= =========
Expense after custodian fee reduction(4) 1.51%(8) 1.37% 1.28% 1.18%(3) 1.20%(3) 1.10%(3)
========= ========= ========= =========== ========= =========
Interest expense..................... 0.01%(8) - 0.01% - - -
========= ========= ========= =========== ========= =========
Net investment income................ 1.65%(8) 0.96% 1.42% 2.87% 4.15% 5.13%
========= ========= ========= =========== ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each year reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated
expenses (Note 1).
(4)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1C). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(5)Represents portfolio turnover rate of the fund's corresponding portfolio
(Note 1).
(6)Under a written agreement, Wright waives all or a portion of its advisory
and/or distribution fees and assumes operating expenses to the extent
necessary to limit expense ratios to 0.95% after custodian fee credits are
applied.
(7)Reporting guidelines require the funds to disclose the effects of
implementing the change in accounting for amortization of premium and
discount on debt securities. If adjustments were not made, net investment
income per share would have been $0.491 and net realized and unrealized gain
(loss) per share would have been $0.184.
(8)Annualized.
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSET-BACKED SECURITIES
FINANCIAL SERVICES
$ 430,000 Citibank Credit Card Master Trust 6.900% 10-15-07 $100.98 $ 434,204 6.8%
380,000 Citibank Credit Card Master Trust 5.875% 03-10-11 106.19 403,513 5.5%
340,000 Citigroup Commercial Mortgage Trust,
Series 2004-C2 A5 4.733% 10-15-41 101.30 344,418 4.7%
565,000 JP Morgan Chase Commercial Mortgage
Securities, Series 2004-C3 A5 4.878% 01-15-42 102.31 578,050 4.8%
220,000 JP Morgan Chase Commercial Mortgage
Securities, Series 2004-CBX A6 4.899% 11-12-39 102.41 225,305 4.8%
610,000 MBNA Master Credit Card Trust,
Series 1999-BA 5.900% 08-15-11 106.43 649,246 5.5%
-----------
Total Asset Backed Securities (identified cost, $2,652,493)-- 6.4% $2,634,736
-----------
CORPORATE BONDS
AUTO
$ 190,000 DaimlerChrysler North America Holding
Co. 7.200% 09-01-09 $108.95 $ 207,005 6.6%
BANKS
$ 205,000 Bank One Corp., Note 2.625% 06-30-08 $ 95.72 $ 196,229 2.7%
390,000 Bayerische Landesbank, MTN 2.600% 10-16-06 98.34 383,526 2.6%
335,000 CIT Group, Inc. 7.750% 04-02-12 117.44 393,428 6.6%
320,000 National Rural Utilities 7.250% 03-01-12 116.09 371,501 6.2%
325,000 Royal Bank of Scotland 7.648% 08-31-49 127.58 414,624 6.0%
390,000 SLM Corp 2.300% 01-26-09 100.30 391,182 2.3%
360,000 U.S. Bancorp 5.100% 07-15-07 102.02 367,273 5.0%
BLDG - RESIDENTIAL/COMMER
$ 170,000 Centex Corp. 7.875% 02-01-11 $114.45 $ 194,573 6.9%
BUILDING MATERIALS
$ 95,000 Lowes Co., Inc. 8.250% 06-01-10 $117.69 $ 111,806 7.0%
CABLE TV
$ 170,000 Comcast Cable Comm HLDGS 8.375% 03-15-13 $122.11 $ 207,595 6.9%
DIVERSIFIED FINANCIALS
$ 375,000 Bear Stearns Co., Inc. 1.770% 09-27-07 $101.23 $ 379,622 1.7%
340,000 Boeing Capital Corp., Senior Note 7.375% 09-27-10 114.51 389,348 6.4%
230,000 Cendant Corp. 6.250% 01-15-08 104.37 240,057 6.0%
190,000 First Union Corp. 6.400% 04-01-08 105.64 200,708 6.1%
415,000 General Electric Cap Corp. 6.125% 02-22-11 108.78 451,424 5.6%
300,000 Goldman Sachs Group, Inc. 6.600% 01-15-12 111.29 333,870 5.9%
375,000 International Lease Finance Corp. 5.875% 05-01-13 106.33 398,725 5.5%
ELECTRIC - INTEGRATED
$ 80,000 American Electric Power Co., Inc. 6.125% 05-15-06 $101.78 $ 81,422 6.0%
205,000 Dominion Resources, Inc. 6.300% 03-15-33 109.12 223,704 5.8%
190,000 PPL Electric Utilities 5.875% 08-15-07 103.57 196,775 5.7%
FOOD - RETAIL
$ 180,000 Albertson's, Inc. 7.500% 02-15-11 $112.76 $ 202,975 6.7%
200,000 Safeway, Inc., Note 5.800% 08-15-12 105.27 210,530 5.5%
FOOD, BEVERAGE & TOBACCO
$ 380,000 Pepsico, Inc. 3.200% 05-15-07 $ 98.75 $ 375,232 3.2%
INSTRUMENTS - CONTROLS
$ 345,000 Honeywell International, Inc. 7.000% 03-15-07 $104.70 $ 361,212 6.7%
MEDICAL
$ 110,000 Amgen, Inc. 6.500% 12-01-07 $105.44 $ 115,986 6.2%
205,000 Wyeth 5.500% 03-15-13 105.41 216,091 5.2%
MEDICAL - HMO
$ 380,000 UnitedHealth Group, Inc. 4.875% 04-01-13 $102.68 $ 390,184 4.7%
MULTIMEDIA
$ 155,000 Time Warner Companies, Inc. 9.125% 01-15-13 $126.55 $ 196,146 7.2%
OIL & GAS
$ 460,000 BP Capital Markets PLC 2.750% 12-29-06 $ 98.44 $ 452,807 2.8%
320,000 Phillips Petroleum 6.650% 07-15-18 118.24 378,375 5.6%
190,000 Repsol International Finance 7.450% 07-15-05 100.18 190,335 7.4%
175,000 Sempra Energy 6.000% 02-01-13 106.76 186,829 5.6%
180,000 Transocean Sedco Forex 7.500% 04-15-31 131.15 236,062 5.7%
PIPELINES
$ 185,000 Duke Capital Corp., Senior Note 7.500% 10-01-09 $111.31 $ 205,922 6.7%
PROPERTY/CASUALTY INSURANCE
$ 205,000 Fund American Cos., Inc.,
Guaranteed Senior Note 5.875% 05-15-13 $104.32 $ 213,854 5.6%
RETAIL
$ 135,000 TJX Cos., Inc. 7.450% 12-15-09 $112.19 $ 151,450 6.6%
TELECOM
$ 180,000 AT&T Wireless 7.875% 03-01-11 $116.35 $ 209,432 6.8%
145,000 British Telecom PLC 8.875% 12-15-30 141.60 205,317 6.3%
170,000 Deutsche Telekom International Finance 8.500% 06-15-10 116.01 197,223 7.3%
170,000 France Telecom SA 9.250% 03-01-11 116.18 197,511 8.0%
190,000 Sprint Capital Corp. 6.125% 11-15-08 105.43 200,317 5.8%
325,000 Verizon Global Funding Corp. 7.750% 12-01-30 129.53 420,986 6.0%
-----------
Total Corporate Bonds (identified cost, $11,445,545)-- 28.4% $11,649,173
-----------
GOVERNMENT INTERESTS
MORTGAGE-BACKED SECURITIES
$ 159,049 FHLMC Gold Pool #A10798 5.500% 05-01-33 $101.52 $ 161,463 5.4%
548,866 FHLMC Gold Pool #A13645 6.000% 09-01-33 102.64 563,345 5.8%
349,310 FHLMC Gold Pool #A32600 5.500% 05-01-35 101.49 354,518 5.4%
125,723 FHLMC Gold Pool #C01646 6.000% 09-01-33 102.64 129,040 5.8%
83,792 FHLMC Gold Pool #C01702 6.500% 10-01-33 103.99 87,140 6.3%
39,783 FHLMC Gold Pool #E00903 7.000% 10-01-15 104.70 41,654 6.7%
401,200 FHLMC Pool #1B1291 4.397% 11-01-33 100.21 402,026 4.4%
1,009,743 FHLMC Pool #1G0233 5.018% 05-01-35 101.50 1,024,928 4.9%
48,507 FHLMC Pool #27663 7.000% 06-01-29 105.39 51,119 6.6%
558,623 FNMA Pool #254865 4.500% 08-01-18 99.65 556,659 4.5%
1,044,410 FNMA Pool #254904 5.500% 09-01-33 101.49 1,059,982 5.4%
1,354,569 FNMA Pool #254915 4.500% 09-01-23 99.03 1,341,420 4.5%
64,434 FNMA Pool #479477 6.000% 01-01-29 102.81 66,245 5.8%
58,709 FNMA Pool #489357 6.500% 03-01-29 103.88 60,989 6.3%
63,194 FNMA Pool #535332 8.500% 04-01-30 109.08 68,935 7.8%
274,896 FNMA Pool #545317 5.500% 11-01-16 102.76 282,486 5.4%
333,375 FNMA Pool #545407 5.500% 01-01-32 101.53 338,489 5.4%
90,614 FNMA Pool #545782 7.000% 07-01-32 105.52 95,612 6.6%
647,519 FNMA Pool #545993 6.000% 11-01-32 102.62 664,479 5.8%
485,294 FNMA Pool #555531 5.500% 06-01-33 101.49 492,529 5.4%
601,625 FNMA Pool #576524 5.500% 01-01-29 101.76 612,242 5.4%
89,688 FNMA Pool #597396 6.500% 09-01-31 103.76 93,061 6.3%
48,547 FNMA Pool #634823 6.500% 03-01-32 103.70 50,341 6.3%
475,240 FNMA Pool #663689 5.000% 01-01-18 101.23 481,085 4.9%
393,534 FNMA Pool #701043 4.056% 04-01-33 100.40 395,126 4.0%
234,015 FNMA Pool #725550 5.000% 05-01-19 101.23 236,893 4.9%
278,833 FNMA Pool #738630 5.500% 11-01-33 101.49 282,990 5.4%
350,285 FNMA Pool #739319 6.000% 10-01-33 102.59 359,363 5.8%
486,454 FNMA Pool #739372 4.121% 09-01-33 99.14 482,274 4.2%
299,035 FNMA Pool #807804 5.500% 03-01-35 101.46 303,400 5.4%
991,688 FNMA Pool #809324 4.880% 02-01-35 101.05 1,002,149 4.8%
798,166 FNMA Pool #815302 5.500% 05-01-35 101.46 809,816 5.4%
105,630 GNMA II Pool #2671 6.000% 11-20-28 103.19 108,997 5.8%
17,664 GNMA II Pool #2909 8.000% 04-20-30 107.62 19,009 7.4%
50,210 GNMA II Pool #2972 7.500% 09-20-30 106.72 53,582 7.0%
19,175 GNMA II Pool #2973 8.000% 09-20-30 107.62 20,636 7.4%
963,211 GNMA II Pool #3442 5.000% 09-20-33 100.61 969,090 5.0%
1,038,279 GNMA II Pool #3530 5.500% 03-20-34 102.03 1,059,405 5.4%
425,890 GNMA Pool #374892 7.000% 02-15-24 106.37 453,040 6.6%
86,967 GNMA Pool #376400 6.500% 02-15-24 104.90 91,225 6.2%
122,934 GNMA Pool #379982 7.000% 02-15-24 106.37 130,771 6.6%
140,497 GNMA Pool #410081 8.000% 08-15-25 108.24 152,073 7.4%
67,730 GNMA Pool #427199 7.000% 12-15-27 106.13 71,878 6.6%
71,133 GNMA Pool #436214 6.500% 02-15-13 104.69 74,468 6.2%
37,158 GNMA Pool #442996 6.000% 06-15-13 103.89 38,603 5.8%
174,711 GNMA Pool #448490 7.500% 03-15-27 107.37 187,587 7.0%
141,694 GNMA Pool #458762 6.500% 01-15-28 104.72 148,378 6.2%
140,705 GNMA Pool #460726 6.500% 12-15-27 104.75 147,395 6.2%
77,198 GNMA Pool #463839 6.000% 05-15-13 103.89 80,200 5.8%
89,588 GNMA Pool #478072 6.500% 05-15-28 104.72 93,814 6.2%
40,776 GNMA Pool #488924 6.500% 11-15-28 104.72 42,699 6.2%
33,920 GNMA Pool #510706 8.000% 11-15-29 108.15 36,685 7.4%
133,363 GNMA Pool #581536 5.500% 06-15-33 102.27 136,387 5.4%
U.S. GOVERNMENT AGENCIES
$ 415,000 FFCB 2.500% 03-15-06 $ 99.17 $ 411,539 2.5%
380,000 FHLMC 3.250% 11-02-07 98.60 374,661 3.3%
865,000 FNMA 3.000% 11-22-06 98.93 855,769 3.0%
900,000 FNMA 2.875% 05-19-08 97.32 875,866 3.0%
770,000 FNMA 3.875% 11-17-08 99.40 765,359 3.9%
275,000 FNMA 6.250% 05-15-29 124.17 341,468 5.0%
320,000 Tennessee Valley Authority 6.000% 03-15-13 112.43 359,763 5.3%
U.S. TREASURIES
$ 1,870,000 U.S. Treasury Bonds 7.250% 05-15-16 $128.08 $ 2,395,135 5.7%
1,175,000 U.S. Treasury Bonds 6.125% 11-15-27 126.32 1,484,265 4.8%
1,212,776 U.S. Treasury Inflation Index Note 2.000% 07-15-14 103.07 1,250,061 1.9%
-----------
Total Government Interests (identified cost, $25,912,734)-- 63.7% $26,181,606
-----------
Total Investments (identified cost, $40,010,772)-- 98.5% $40,465,515
Other Assets, Less Liabilities-- 1.5% 637,070
-----------
Net Assets-- 100.0% $41,102,585
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of $40,010,772)(Note 1A) $ 40,465,515
Cash.................................... 321,653
Receivable for investments sold......... 13,342
Receivable for fund shares sold......... 19,953
Interest receivable..................... 335,209
Prepaid expenses........................ 16,574
------------
Total assets.......................... $ 41,172,246
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 17,583
Distributions payable................... 30,799
Payable to affiliate for Trustees' fees. 786
Transfer agent fee ..................... 1,823
Accrued expenses and other liabilities.. 18,670
------------
Total liabilities..................... $ 69,661
------------
NET ASSETS................................ $ 41,102,585
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 42,714,283
Accumulated undistributed net realized loss on
investments (computed on the basis of
identified cost)....................... (1,947,711)
Unrealized appreciation on investments
(computed on the basis of identified cost) 454,743
Distributions in excess of net
investment income...................... (118,730)
------------
Net assets applicable to outstanding
shares................................ $41,102,585
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................. 3,220,374
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST..................... $ 12.76
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 909,466
------------
Expenses -
Investment adviser fee (Note 3)........ $ 88,372
Administrator fee (Note 3)............. 13,747
Compensation of Trustees not employees of
the investment adviser or administrator 7,841
Custodian fee (Note 1C)................ 31,310
Distribution expenses (Note 4)......... 49,096
Transfer and dividend disbursing agent fees 10,205
Printing............................... 1,719
Interest expense....................... 789
Shareholder communications............. 2,677
Audit services......................... 13,091
Legal services......................... 3,070
Registration costs..................... 10,549
Miscellaneous.......................... 3,560
------------
Total expenses........................ $ 236,026
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (4,748)
Preliminary reduction of distribution expenses
by principal underwriter (Note 4)..... $ (44,632)
------------
Total deductions....................... $ (49,380)
------------
Net expenses.......................... $ 186,646
------------
Net investment income............... $ 722,820
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (22,149)
Change in unrealized appreciation
of investments......................... 129,630
------------
Net realized and unrealized gain of
investments........................... $ 107,481
------------
Net increase in net assets from operations $ 830,301
============
See Notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December 31, 2004
- --------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 722,820 $ 1,429,546
Net realized gain (loss) on investments.................................... (22,149) 212,872
Change in unrealized appreciation (depreciation) of investments............ 129,630 (319,493)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 830,301 $ 1,322,925
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (831,878) $ (1,696,335)
-------------- --------------
Total distributions...................................................... $ (831,878) $ (1,696,335)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 5).. $ 2,890,991 $ (3,730,440)
-------------- --------------
Net increase (decrease) in net assets.................................... $ 2,889,414 $ (4,103,850)
NET ASSETS:
At beginning of period....................................................... 38,213,171 42,317,021
-------------- --------------
At end of period............................................................. $ 41,102,585 $ 38,213,171
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD...................................... $ (118,730) $ (9,672)
============== ==============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630 $ 12.100
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ................ $ 0.233 $ 0.453 $ 0.483 $ 0.639 $ 0.709 (4) $ 0.712
Net realized and unrealized gain (loss).. 0.024 (0.011) (0.066) 0.461 (0.090)(4) 0.530
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ 0.257 $ 0.442 $ 0.417 $ 1.100 $ 0.619 $ 1.242
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income..... $ (0.267) $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712)
--------- --------- --------- --------- --------- ---------
Total distributions.................... $ (0.267) $ (0.542) $ (0.557) $ (0.640) $ (0.699) $ (0.712)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 12.760 $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 2.04% 3.52% 3.25% 9.03% 4.96% 10.62%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 41,103 $ 38,213 $ 42,317 $ 39,404 $ 50,620 $ 65,775
Ratio of net expenses to average net assets 0.97%(6) 0.96% 0.95% 0.96% 0.96% 0.96%
Ratio of net expenses after custodian fee
reduction to average net assets(3) (5) 0.95%(6) 0.95% 0.95% 0.95% 0.95% 0.95%
Ratio of net investment income to average
net assets............................ 3.68%(6) 3.58% 3.67% 4.92% 5.44% 5.84%
Portfolio turnover rate.................. 36% 64% 131% 68% 38% 61%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2005 and for the years ended December 31,
2004, 2003, 2002, and 2001, the operating expenses of the fund were reduced
by an allocation of expenses to the investment adviser, and/or a reduction in
distribution expenses by the distributor. Had such action not been
undertaken, net investment income per share and the ratios would have been as
follows:
2005 2004 2003 2002 2001
---------------------------------------------------------
Net investment income per share.......... $ 0.217 $ 0.429 $ 0.455 $ 0.621 $ 0.701
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................... 1.20%(6) 1.18% 1.17% 1.09% 1.02%
========= ========= ========= ========= =========
Expenses after custodian fee reduction(3) 1.18%(6) 1.17% 1.17% 1.08% 1.01%
========= ========= ========= ========= =========
Net investment income.................. 3.45%(6) 3.36% 3.46% 4.78% 6.38%
========= ========= ========= ========= =========
- ---------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each year reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1C). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credits.
(4)Reporting guidelines require the funds to disclose the effects of
implementing the change in accounting for amortization of premium and
discount on debt securities. If adjustments were not made, net investment
income per share would have been $0.716 and net realized and unrealized gain
(loss) per share would have been $(0.097).
(5)Under a written agreement, Wright waives all or a portion of either its
advisory and/or distribution fees and assumes operating expenses to the
extent necessary to limit expense ratios to 0.95% after custodian fee credits
are applied.
(6)Annualized.
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ---------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 86.9%
$ 750,000 FHLB Disc. Corp. 3.100% 07-14-05 $ 99.89 $ 749,160 3.1%
9,832 FHLMC Gold Balloon #M90724 5.500% 05-01-07 101.56 9,985 5.4%
210,994 FHLMC Gold Balloon #M90767 4.500% 11-01-07 100.52 212,096 4.5%
110,830 FHLMC Gold Balloon #M90802 4.000% 03-01-08 99.50 110,273 4.0%
1,197,720 FHLMC Pool #11636 5.000% 01-01-19 101.23 1,212,502 4.9%
42,518 FNMA Pool #254227 5.000% 02-01-09 101.08 42,977 4.9%
40,835 FNMA Pool #254505 5.000% 11-01-09 101.08 41,276 4.9%
980,205 FNMA Pool #254686 5.500% 04-01-18 102.75 1,007,121 5.4%
730,420 FNMA Pool #254907 5.000% 10-01-18 101.23 739,403 4.9%
166,485 FNMA Pool #535131 6.000% 03-01-29 102.81 171,165 5.8%
1,959,500 FNMA Pool #634187 6.000% 02-01-22 103.07 2,019,705 5.8%
158,413 FNMA Pool #663689 5.000% 01-01-18 101.23 160,362 4.9%
716,414 FNMA Pool #673315 5.500% 11-01-32 101.52 727,301 5.4%
210,624 FNMA Pool #701043 4.056% 04-01-33 100.40 211,476 4.0%
545,211 FNMA Pool #729950 6.000% 12-01-33 102.59 559,342 5.8%
65,855 FNMA Pool #733750 6.310% 10-01-32 103.26 68,005 6.1%
1,002,851 FNMA Pool #801357 5.500% 08-01-34 101.52 1,018,090 5.4%
998,940 FNMA Pool #816108 5.500% 05-01-35 101.46 1,013,522 5.4%
493,942 FNMA Pool #816468 5.000% 03-01-20 101.21 499,943 4.9%
2,824,027 FNMA Pool #817170 6.000% 05-01-35 102.59 2,897,105 5.8%
718,514 FNMA Pool #821574 6.000% 06-01-35 102.59 737,107 5.8%
4,451 GNMA II Pool #1596 9.000% 04-20-21 109.74 4,885 8.2%
96,557 GNMA II Pool #2268 7.500% 08-20-26 106.95 103,266 7.0%
13,712 GNMA II Pool #2855 8.500% 12-20-29 108.74 14,911 7.8%
785,055 GNMA II Pool #3259 5.500% 07-20-32 102.08 801,398 5.4%
511,018 GNMA II Pool #3284 5.500% 09-20-32 102.08 521,657 5.4%
117,927 GNMA II Pool #601135 6.310% 09-20-32 103.63 122,208 6.1%
135,655 GNMA II Pool #601255 6.310% 01-20-33 103.64 140,595 6.1%
115,358 GNMA II Pool #608120 6.310% 01-20-33 103.64 119,559 6.1%
62,316 GNMA II Pool #723 7.500% 01-20-23 107.37 66,910 7.0%
140 GNMA Pool #009106 8.250% 05-15-06 102.24 143 8.1%
134 GNMA Pool #009889 7.250% 02-15-06 101.46 136 7.1%
323 GNMA Pool #012526 8.000% 11-15-06 101.82 329 7.9%
6,299 GNMA Pool #172558 9.500% 08-15-16 110.47 6,958 8.6%
2,731 GNMA Pool #176992 8.000% 11-15-16 107.71 2,941 7.4%
4,025 GNMA Pool #177784 8.000% 10-15-16 107.71 4,335 7.4%
13,263 GNMA Pool #192357 8.000% 04-15-17 108.38 14,374 7.4%
20,117 GNMA Pool #194057 8.500% 04-15-17 109.23 21,973 7.8%
11,400 GNMA Pool #194287 9.500% 03-15-17 110.80 12,631 8.6%
1,631 GNMA Pool #196063 8.500% 03-15-17 109.23 1,781 7.8%
617 GNMA Pool #208076 8.000% 04-15-17 108.38 668 7.4%
8,111 GNMA Pool #211231 8.500% 05-15-17 109.23 8,860 7.8%
5,819 GNMA Pool #212601 8.500% 06-15-17 109.23 6,356 7.8%
6,183 GNMA Pool #220917 8.500% 04-15-17 109.23 6,754 7.8%
5,408 GNMA Pool #223133 9.500% 07-15-17 110.80 5,993 8.6%
9,493 GNMA Pool #223348 10.000% 08-15-18 113.47 10,771 8.8%
1,529 GNMA Pool #223588 10.000% 12-15-18 113.47 1,735 8.8%
$ 13,831 GNMA Pool #228308 10.000% 01-15-19 $113.68 $ 15,722 8.8%
3,130 GNMA Pool #230223 9.500% 04-15-18 111.08 3,477 8.6%
1,217 GNMA Pool #247473 10.000% 09-15-18 105.72 1,287 9.5%
3,836 GNMA Pool #247872 10.000% 09-15-18 113.47 4,353 8.8%
4,850 GNMA Pool #251241 9.500% 06-15-18 111.08 5,387 8.6%
9,916 GNMA Pool #260999 9.500% 09-15-18 111.08 11,015 8.6%
9,341 GNMA Pool #263439 10.000% 02-15-19 113.68 10,619 8.8%
1,558 GNMA Pool #265267 9.500% 08-15-20 111.55 1,738 8.5%
2,046 GNMA Pool #266983 10.000% 02-15-19 113.68 2,326 8.8%
3,381 GNMA Pool #273690 9.500% 08-15-19 111.34 3,765 8.5%
9,018 GNMA Pool #286556 9.000% 03-15-20 109.98 9,918 8.2%
6,520 GNMA Pool #301366 8.500% 06-15-21 110.05 7,175 7.7%
835 GNMA Pool #302723 8.500% 05-15-21 110.05 918 7.7%
8,612 GNMA Pool #302933 8.500% 06-15-21 110.05 9,478 7.7%
6,150 GNMA Pool #306693 8.500% 09-15-21 110.05 6,768 7.7%
11,927 GNMA Pool #308792 9.000% 07-15-21 110.14 13,137 8.2%
3,737 GNMA Pool #314222 8.500% 04-15-22 110.18 4,118 7.7%
9,067 GNMA Pool #315187 8.000% 06-15-22 108.28 9,817 7.4%
15,308 GNMA Pool #315754 8.000% 01-15-22 108.28 16,576 7.4%
27,982 GNMA Pool #316240 8.000% 01-15-22 108.28 30,299 7.4%
31,236 GNMA Pool #319441 8.500% 04-15-22 110.18 34,416 7.7%
12,857 GNMA Pool #325165 8.000% 06-15-22 108.28 13,922 7.4%
16,363 GNMA Pool #335950 8.000% 10-15-22 108.28 17,718 7.4%
33,936 GNMA Pool #350659 7.500% 06-15-23 107.87 36,607 7.0%
155,256 GNMA Pool #352001 6.500% 12-15-23 104.94 162,920 6.2%
69,635 GNMA Pool #352110 7.000% 08-15-23 106.43 74,109 6.6%
2,733,786 GNMA Pool #3556 5.500% 05-20-34 102.03 2,789,410 5.4%
101,770 GNMA Pool #368238 7.000% 12-15-23 106.43 108,310 6.6%
52,551 GNMA Pool #372379 8.000% 10-15-26 108.24 56,878 7.4%
124,583 GNMA Pool #410215 7.500% 12-15-25 107.53 133,964 7.0%
29,532 GNMA Pool #414736 7.500% 11-15-25 107.53 31,756 7.0%
110,968 GNMA Pool #420707 7.000% 02-15-26 106.22 117,875 6.6%
50,122 GNMA Pool #421829 7.500% 04-15-26 107.45 53,855 7.0%
20,414 GNMA Pool #431036 8.000% 07-15-26 108.24 22,095 7.4%
97,776 GNMA Pool #431612 8.000% 11-15-26 108.24 105,827 7.4%
36,086 GNMA Pool #442190 8.000% 12-15-26 108.24 39,057 7.4%
59,279 GNMA Pool #449176 6.500% 07-15-28 104.72 62,076 6.2%
212,541 GNMA Pool #458762 6.500% 01-15-28 104.72 222,567 6.2%
71,229 GNMA Pool #462623 6.500% 03-15-28 104.72 74,589 6.2%
171,541 GNMA Pool #469615 6.500% 10-15-28 104.72 179,633 6.2%
2,089,009 GNMA Pool #471369 5.500% 05-15-33 102.27 2,136,363 5.4%
208,942 GNMA Pool #472028 6.500% 05-15-28 104.72 218,798 6.2%
383,661 GNMA Pool #486482 6.500% 09-15-28 104.72 401,759 6.2%
224,192 GNMA Pool #492705 6.500% 02-15-29 104.64 234,589 6.2%
85,424 GNMA Pool #538314 7.000% 02-15-32 105.95 90,505 6.6%
190,538 GNMA Pool #570141 6.500% 12-15-31 104.59 199,289 6.2%
420,234 GNMA Pool #587080 6.500% 05-15-32 104.58 439,486 6.2%
1,086,132 GNMA Pool #595606 6.000% 11-15-32 103.29 1,121,885 5.8% $
$ 898,016 GNMA Pool #603250 5.500% 04-15-34 $102.25 $ 918,255 5.4%
1,066,753 GNMA Pool #608639 5.500% 07-15-24 102.40 1,092,381 5.4%
721,741 GNMA Pool #616829 5.500% 01-15-25 103.33 745,750 5.3%
796,693 GNMA Pool #619718 6.000% 05-15-34 103.25 822,572 5.8%
988,419 GNMA Pool #631623 5.500% 08-15-34 102.25 1,010,695 5.4%
996,196 GNMA Pool #640225 5.500% 04-15-35 102.22 1,018,319 5.4%
2,096,381 GNMA Pool #640940 5.500% 05-15-35 102.25 2,143,591 5.4%
116,656 GNMA Pool #780429 7.500% 09-15-26 107.49 125,391 7.0%
232,578 GNMA Pool #780845 6.500% 08-15-28 104.72 243,563 6.2%
139,427 GNMA Pool #781029 6.500% 05-15-29 104.69 145,966 6.2%
2,123,767 GNMA Pool #781032 6.500% 04-15-29 104.69 2,223,372 6.2%
-----------
Total Investments (identified cost, $34,658,336)-- 101.3% $36,048,049
Other Assets, Less Liabilities-- (1.3%) (463,533)
-----------
Net Assets-- 100.0% $35,584,516
===========
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of ($34,658,336)(Note 1A) $ 36,048,049
Cash.................................... 170,433
Receivable for investments sold......... 8,472
Receivable for fund shares sold......... 24,878
Receivable from investment adviser...... 9,644
Interest receivable..................... 172,353
Prepaid expenses........................ 17,846
------------
Total assets.......................... $ 36,451,675
------------
LIABILITIES:
Payable for investments purchased....... $ 738,932
Payable for fund shares reacquired...... 64,502
Distributions payable................... 51,149
Payable to affiliate for Trustees' fees. 816
Transfer agent fee ..................... 1,652
Accrued expenses and other liabilities.. 10,108
------------
Total liabilities..................... $ 867,159
------------
NET ASSETS................................ $ 35,584,516
============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including the market
value of securities received in exchange for fund
shares and shares issued to shareholders in
payment of distributions declared), less cost
of shares reacquired................... $ 34,052,343
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)....................... 180,121
Unrealized appreciation on investments
(computed on the basis of identified cost) 1,389,713
Distributions in excess of net
investment income...................... (37,661)
------------
Net assets applicable to outstanding shares $ 35,584,516
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................... 3,644,547
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST................... $ 9.76
============
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2005 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 889,275
------------
Expenses -
Investment adviser fee (Note 3)........ $ 79,896
Administrator fee (Note 3)............. 15,979
Compensation of Trustees not employees of
the investment adviser or administrator 7,685
Custodian fee (Note 1C)................ 34,157
Distribution expenses (Note 4)......... 44,387
Transfer and dividend disbursing agent fees 9,621
Printing............................... 1,086
Interest expense....................... 2,841
Shareholder communications............. 1,763
Audit services......................... 13,062
Legal services......................... 2,534
Registration costs..................... 9,940
Miscellaneous.......................... 3,429
------------
Total expenses........................ $ 226,380
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (3,698)
Preliminary allocation of expenses to
investment adviser (Note 3)........... (9,616)
Preliminary reduction of distribution expenses
by principal underwriter (Note 4)..... (44,387)
------------
Total deductions...................... $ (57,701)
------------
Net expenses.......................... $ 168,679
------------
Net investment income............... $ 720,596
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 468,252
Change in unrealized depreciation
of investments......................... (780,297)
------------
Net realized and unrealized loss
of investments........................ $ (312,045)
------------
Net increase in net assets from operations $ 408,551
============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2005 December31, 2004
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 720,596 $ 1,366,512
Net realized gain on investments........................................... 468,252 1,091,575
Change in unrealized depreciation on investments........................... (780,297) (1,418,533)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 408,551 $ 1,039,554
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (764,575) $ (1,491,857)
From net realized gain..................................................... (69,145) (1,243,047)
-------------- --------------
Total distributions...................................................... $ (833,720) $ (2,734,904)
-------------- --------------
Net increase in net assets from fund share transactions (Note 5)............. $ 996,782 $ 376,737
-------------- --------------
Net increase (decrease) in net assets.................................... $ 571,613 $ (1,318,613)
NET ASSETS:
At beginning of period....................................................... 35,012,903 36,331,516
-------------- --------------
At end of period............................................................. $ 35,584,516 $ 35,012,903
============== ==============
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF PERIOD............................................... $ (37,661) $ 6,318
============== ==============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2005 2004 2003 2002 2001(4) 2000(4)
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460 $ 10.090
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ............... $ 0.198 $ 0.447 $ 0.417 $ 0.565 $ 0.616 $ 0.631
Net realized and unrealized gain (loss).. (0.098) (0.112) (0.235) 0.231 0.120 0.372
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ 0.100 $ 0.335 $ 0.182 $ 0.796 $ 0.736 $ 1.003
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income..... $ (0.210) $ (0.482) $ (0.502) $ (0.555) $ (0.616) $ (0.633)
Distributions from capital gains......... (0.020) (0.453) - - -- --
Tax return of capital.................... - - - (0.011) -- --
--------- --------- --------- --------- --------- ---------
Total distributions.................. $ (0.230) $ (0.935) $ (0.502) $ (0.566) $ (0.616) $ (0.633)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 9.760 $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 1.02% 3.29% 1.73% 7.70% 7.18% 10.31%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 35,585 $ 35,013 $ 36,332 $ 59,077 $ 54,966 $68,015
Ratio of net expenses to average net assets 0.97%(8) 0.97% 0.95% 0.97%(3) 0.95%(3) 0.95%(3)
Ratio of net expenses after custodian fee
reduction to average net assets(6) (7) 0.95%(8) 0.95% 0.95% 0.95%(3) -- --
Interest expense......................... 0.02% 0.02% 0.01% -- -- --
Ratio of net investment income
to average net assets................. 4.06%(8) 4.29% 4.43% 5.28% 5.83% 6.22%
Portfolio turnover rate ................. 72% 27% 20% 36%(5) 4%(5) 6%(5)
- -----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2005 and for the years ended December 31,
2004, 2003, 2002, 2001, and 2000, the operating expenses of the fund were
reduced by an allocation of expenses to the investment adviser or a reduction
in distribution expense by the distributor. Had such action not been
undertaken, net investment income per share and the ratios would have been as
follows:
2005 2004 2003 2002 2001 2000
----------------------------------------------------------------------
Net investment income per share........ $ 0.183 $ 0.410 $ 0.401 $ 0.555 $ 0.609 $ 0.629
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.27%(8) 1.28% 1.12% 1.06%(3) 1.02%(3) 0.97%(3)
========= ========= ========= ========= ========= =========
Expenses after custodian fee reduction(7 1.25%(8) 1.25% 1.12% 1.04%(3) -- --
========= ========= ========= ========= ========= =========
Interest expense..................... -- 0.02% 0.01% -- -- --
========= ========= ========= ========= ========= =========
Net investment income................ 3.76%(8) 3.99% 4.26% 5.19% 5.76% 6.20%
========= ========= ========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(3)Includes each fund's share of its corresponding portfolio's allocated expenses (Note 1).
(4)Certain of the per share data are based on average shares outstanding.
(5)Represents portfolio turnover rate at the fund's corresponding portfolio (Note 1).
(6)Under a written agreement in effect for the current fiscal year, Wright
waives all or a portion of either its advisory and/or distribution fees and
assumes operating expenses to the extent necessary to limit expense ratios to
0.95% after custodian fee credits are applied.
(7)Custodian fees were reduced by credits resulting from cash balances the fund
and/or the portfolio maintained with the custodian (Note 1C). The computation
of net expenses to average daily net assets reported above is computed
without consideration of such credits.
(8)Annualized.
See notes to financial statements
WRIGHT MANAGED INCOME TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1)SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Income Trust (the Trust), issuer of Wright U.S.
Government Near Term Fund (WNTB) series, Wright Total Return Bond Fund (WTRB)
series, and Wright Current Income Fund (WCIF) series (collectively, the Funds),
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end, management investment company. WNTB seeks a high level of
income, which is normally above that available from short-term money market
instruments or funds. WTRB seeks a superior rate of total return, consisting of
a high level of income plus price appreciation. WCIF seeks a high level of
current income consistent with moderate fluctuations of principal. Prior to
December 20, 2002, WNTB and WCIF invested all of their investable assets in
interests in a separate corresponding open-end management investment company (a
Portfolio), a New York Trust, having the same investment objective as its
corresponding fund. Subsequent to December 20, 2002, the Funds invest directly
in securities rather than through the Portfolio and maintain the same investment
objective.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations - Investments for which market quotations are readily
available are valued at current market value as furnished by a pricing
service. Investments for which valuations are not readily available will be
appraised at their fair value as determined in good faith by or at the
direction of the Trustees. Short-term obligations maturing in sixty days or
less are valued at amortized cost, which approximates market value.
B. Interest Income - Interest income consists of interest accrued and discount
earned (including both original issue and market discount) and amortization
of premium or discount on long-term debt securities. The income is accrued
ratably to the date of maturity on the investments of the funds.
C. Expense Reduction - Investors Bank & Trust Company (IBT) serves as
custodian to the Funds. Pursuant to the custodian agreement, IBT receives a
fee reduced by credits which are determined based on the average daily cash
balance the Funds maintain with IBT. All credit balances used to reduce the
Fund's custodian fees are reported as a reduction of total expenses on the
Statement of Operations.
D. Federal Taxes - The Trust's policy is to comply with the provisions of the
Internal Revenue Code (the Code) available to regulated investment
companies and to distribute to shareholders each year all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary. At December 31,
2004, the Trust, for federal income tax purposes, had capital loss
carryovers of $1,114,851 (WNTB), $1,755,347 (WTRB) and $274,864 (WCIF)
which will reduce taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distribution to shareholders which would otherwise
be necessary to relieve the respective fund of any liability for federal
income or excise tax. Pursuant to the Code, such capital loss carryovers
will expire as follows:
12/31 WNTB WTRB WCIF
- -------------------------------------------------------------------------------
2006 $37,825 - -
2007 297,581 - -
2008 273,806 $1,246,741 -
2010 - 508,606 -
2012 505,639 - $274,864
At December 31, 2004, net capital losses of $32,603 for WNTB and $6,402 for
WCIF, attributable to security transactions incurred after October 31,
2004, are treated as arising on the first day of the fund's current taxable
year.
E. Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
F. Other - Investment transactions are accounted for on the date the
investments are purchased or sold.
G. Interim Financial Statements - The interim financial statements relating to
June 30, 2005 and for the period then ended have not been audited by an
Independent Registered Public Accounting Firm, but in the opinion of the
Trust's management reflect all recurring adjustments, necessary for the
fair presentation of the financial statements.
(2)DISTRIBUTIONS
Each fund's policy is to determine net income once daily, as of the close
of the New York Stock Exchange and the net income so determined is substantially
declared as a dividend to shareholders of record at the time of such
determination. Distributions of realized capital gains are made at least
annually. Shareholders may reinvest capital gain distributions in additional
shares of the same fund at the net asset value as of the ex-dividend date.
Dividends may be reinvested in additional shares of the same fund at the net
asset value as of the payable date.
The Trust requires that differences in the recognition or classification of
income between the financial statements and tax earnings and profits which
result in temporary overdistributions for financial statement purposes be
classified as distributions in excess of net investment income or accumulated
net realized gains.
Distributions in excess of tax basis earnings and profits are reported in
the financial statements as a return of capital. Permanent differences between
book and tax accounting for certain items may result in reclassification of
these items.
(3)INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as
investment adviser to the funds pursuant to the respective Investment Advisory
Contracts. Wright furnishes each fund with investment management, investment
advisory, and other services. For its services, Wright is compensated based upon
a percentage of average daily net assets which rate is adjusted as average daily
net assets exceed certain levels. For the six months ended June 30, 2005, the
effective annual rate for WNTB, WCIF, and WTRB was 0.45 %. Under a written
agreement, Wright waives a portion of its advisory fee and/or distribution fees
and assumes operating expenses to the extent necessary to limit expense ratios
to 0.95% after custodian fee reductions, if any. Accordingly, Wright made a
reduction of its investment adviser fee by $23,073 on behalf of WNTB. In
addition, Wright has been allocated expenses of $8,653 and $9,616 on behalf of
WNTB and WCIF, respectively.
The Trust also has engaged Eaton Vance Management (Eaton Vance) to act as
administrator of the Trust. Under the Administration Agreement, Eaton Vance is
responsible for managing the business affairs of the Trust and is compensated
based upon a percentage of average daily net assets which rate is reduced as
average daily net assets exceed certain levels. For the six months ended June
30, 2005, the effective annual rate was 0.09% for WNTB, 0.07% for WTRB, and
0.09% for WCIF. Certain of the Trustees and officers of the Trust are
directors/trustees and/or officers of the above organizations. Except as to
Trustees of the Trust who are not employees of Eaton Vance or Wright, Trustees
and officers received remuneration for their services to the Trust out of fees
paid to Eaton Vance and Wright.
(4)DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that each of the
funds will pay Wright Investors' Service Distributors, Inc. (Principal
Underwriter), a wholly-owned subsidiary of Winthrop, at an annual rate of 0.25%
of the average daily net assets of each fund for activities primarily intended
to result in the sale of each fund's shares. Pursuant to a written agreement
(Note 3), the Principal Underwriter made a reduction of its fee by $25,636,
$44,632, and $44,387 for the benefit of WNTB, WTRB and WCIF, respectively.
In addition, the Trustees have adopted a service plan (the Service Plan)
which allows the funds to reimburse the Principal Underwriter for payments to
intermediaries for providing account administration and personal and account
maintenance services to their customers who are beneficial owners of each fund's
shares. The amount of service fee payable under the Service Plan may not exceed
0.25% annually of each fund's average daily net assets. For the six months ended
June 30, 2005, the funds did not accrue or pay any service fees.
(5)SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
For the
Six Months Ended Year Ended
June 30, 2005 December 31, 2004
- ---------------------------------------------------------------------------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------------------
Wright U.S. Government Near Term Fund--
Sold................................................. 194,447 $ 1,928,671 499,602 $ 5,040,521
Issued to shareholders in payment of distributions
declared............................................ 24,977 247,338 52,428 529,329
Redemptions.......................................... (343,026) (3,400,080) (1,079,475) (10,918,238)
----------- -------------- ----------- --------------
Net decrease..................................... (123,602) $ (1,224,071) (527,445) $ (5,348,388)
=========== ============== =========== ==============
Wright Total Return Bond Fund--
Sold................................................. 388,464 $ 4,938,995 673,399 $ 8,596,949
Issued to shareholders in payment of distributions
declared............................................ 52,518 667,398 108,451 1,384,717
Redemptions.......................................... (213,426) (2,715,402) (1,077,968) (13,712,106)
----------- -------------- ----------- --------------
Net increase/(decrease).......................... 227,556 $ 2,890,991 (296,118) $ (3,730,440)
=========== ============== =========== ==============
Wright Current Income Fund--
Sold................................................. 776,843 $ 7,599,326 1,231,990 $ 12,684,308
Issued to shareholders in payment of distributions
declared............................................ 53,576 524,449 159,979 1,619,251
Redemptions.......................................... (726,996) (7,126,993) (2,153,390) (22,192,828)
Issued to Wright U.S. Govt. Intermediate Fund
shareholders - _ 837,488 8,266,006
----------- -------------- ----------- --------------
Net increase..................................... 103,423 $ 996,782 76,067 $ 376,737
=========== ============== =========== ==============
(6) INVESTMENT TRANSACTIONS
The Trust invests primarily in debt securities. The ability of the issuers
of the debt securities held by the Trust to meet their obligations may be
affected by economic developments in a specific industry or municipality.
Purchases and sales and maturities of investments, other than short-term
obligations, were as follows:
Six Months Ended June 30, 2005
-------------------------------------
WNTB WTRB WCIF
- ------------------------------------------------------------------------------
Purchases--
Non-U.S. Obligations $12,834,771 $ 589,682 -
=========== ========== ==========
U.S. Gov't Obligations - $16,287,993 $26,225,042
=========== =========== ==========
Sales--
Non-U.S. Obligations $ 1,823,890 $ 3,236,883 -
========== =========== ==========
U.S.Gov't Obligations $12,299,855 $10,844,642 $25,122,561
========== =========== ==========
- -------------------------------------------------------------------------------
(7)FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) of the investment
securities owned at June 30, 2005, as computed on a federal income tax basis,
are as follows:
WNTB WTRB WCIF
- -------------------------------------------------------------------------------
Aggregate cost $20,016,696 $40,220,707 $34,658,337
=========== =========== ===========
Gross unrealized
appreciation 6,956 590,853 1,468,508
Gross unrealized
depreciation (181,325) (346,045) (78,796)
----------- ----------- -----------
Net unrealized
appreciation/
(depreciation) $ (174,369) $ 244,808 $ 1,389,712
=========== =========== ===========
- -------------------------------------------------------------------------------
(8) LINE OF CREDIT
The funds participate with other funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. The funds did not have significant borrowings or allocated
fees during the six months ended June 30, 2005.
(9) TRANSFER OF NET ASSETS
Prior to the opening of business on December 29, 2004, the Wright Current
Income Fund (WCIF) acquired the net assets of Wright U.S. Government
Intermediate Fund (WUSGI) pursuant to an Agreement and Plan of Reorganization
dated December 20, 2004. In accordance with the agreement, WCIF issued 837,488
shares having a value of $8,266,006. As a result, WCIF issued 1.303 shares for
each share of WUSGI. The transaction was structured for tax purposes to qualify
as a tax free reorganization under the Internal Revenue Code. WUSGI's net assets
at the date of the transaction was $8,266,006, including $(41,372) of unrealized
depreciation. Directly after the merger, the combined net assets of WCIF were
$34,959,687 with a net asset value of $9.87.
BOARD OF TRUSTEES
ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
IN EVALUATING THE INVESTMENT ADVISORY CONTRACTS, THE INDEPENDENT TRUSTEES
MET SEPARATELY FROM THE INTERESTED TRUSTEES AND REVIEWED AND CONSIDERED
MATERIALS FURNISHED BY WRIGHT, INCLUDING INFORMATION REGARDING WRIGHT, ITS
AFFILIATES AND PERSONNEL, OPERATIONS AND FINANCIAL CONDITION. THE INDEPENDENT
TRUSTEES DISCUSSED WITH REPRESENTATIVES OF WRIGHT THE PORTFOLIO MANAGEMENT AND
OPERATIONS OF THE FUNDS AND THE CAPABILITIES OF WRIGHT TO PROVIDE ADVISORY AND
OTHER SERVICES TO EACH FUND. THE INDEPENDENT TRUSTEES CONSIDERED, AMONG OTHER
THINGS, THE FOLLOWING:
EQUITY FUNDS AND INCOME FUNDS
- -------------------------------------------------------------------------------
o Whether the advisory arrangements are fair and reasonable relative to
possible alternative arrangements. The Trustees concluded that the
advisory fees paid by the funds are reasonable.
o Whether advisory services are being provided as agreed to. The Trustees
concluded that the services being provided by the adviser are as agreed
to in the advisory contract.
o Whether compensation paid by a Fund to the adviser is fair and
reasonable in relation to the services provided and the charges by
other advisers for similar services. The Trustees concluded that the
compensation paid by the funds to the adviser is in the average range
of compensation charged by other advisers for similar services and is
reasonable.
o Fees and expense ratios compared to similar funds. The Trustees
concluded that the expense ratios of the funds are lower than the
average for similar funds.
o Performance and relationship of fees and performance. The Trustees
concluded that in most cases the performance results of the funds were
at least in the mid-range of similar funds while their expense ratios
were generally lower.
o Analysis of each Fund's profitability to the adviser. The Trustees
concluded that the profitability to the adviser of each fund was
reasonable and not excessive.
o The adviser's financial condition and the overall organization of
the adviser.
o Sales and redemption data. The Trustees reviewed the information which
had been provided to them relating to sales and redemptions and
Wright's marketing strategies to try to increase assets under
management.
o The economic outlook and the general investment outlook in the relevant
investment markets. The Trustees have received a presentation on the
overall economic outlook and investment outlook of both equity and
income markets at each Board meeting.
o The resources devoted to compliance efforts undertaken by the adviser
and the record of compliance with investment policies and restrictions
and with policies on personal securities transactions. The Trustees
have approved and met separately with the fund's Chief Compliance
Officer.
ADDITIONAL CONSIDERATIONS FOR EQUITY FUNDS
- ------------------------------------------------------------------------------
o The allocation of brokerage and any benefits received by the adviser as
a result of brokerage allocation. The Trustees reviewed the Trading
Analysis included in the material provided in advance of the meeting.
The Independent Trustees' Committee did not consider any single factor as
controlling in their consideration of the renewal of the Investment Advisory
Contracts, nor are the considerations described above all encompassing. Based on
their consideration of all factors which they considered material, and with the
assistance of independent counsel, the Independent Trustees' Committee concluded
that the renewal of the Investment Advisory Contract with its current fee
structure is in the interests of the shareholders.
IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF
SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING
WRIGHT MANAGED INVESTMENT FUNDS
WRIGHT INVESTORS SERVICE, INC.
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
EATON VANCE MANAGEMENT
PRIVACY POLICY
-------------------
Wright is committed to ensuring your financial privacy. Each of the above
financial institutions has the following policy in effect with respect to
nonpublic personal information about its customers:
o The only such information we collect is information received from
customers, through application forms or otherwise, and information
which we necessarily receive in connection with your Wright fund
transactions.
o We will not disclose this information to anyone except as required or
permitted by law. Such disclosure includes that made to other companies
such as transfer agents and their employees and to our employees, in
each case as necessary to service your account.
o We have adopted policies and procedures (including physical, electronic
and procedural safeguards) that are designed to protect the
confidentiality of this information.
For more information about Wright's privacy policies please feel free to
call 1-800-888-9471.
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDERS DOCUMENTS
------------------------------------------------------------------
The Securities and Exchange Commission permits funds to deliver only one
copy of shareholder documents, including prospectuses, proxy statements and
shareholder reports, to fund investors with multiple accounts at the same
residential or post office box address. This practice is often called
"householding" and it helps eliminate duplicate mailings to shareholders.
Wright, or your financial adviser, may household the mailing of your
documents indefinitely unless you instruct Wright, or your financial adviser,
otherwise.
If you would prefer that your Wright documents not be householded, please
contact Wright at 1-800-888-9471, or your financial adviser.
Your instructions that householding not apply to delivery of your Wright
documents will be effective within 30 days of receipt by Wright or your
financial adviser.
PORTFOLIO HOLDINGS
--------------------
Each Wright Fund will file a schedule of its portfolio holdings on Form N-Q
with the SEC for the first and third quarters of each fiscal year. The Form N-Q
will be available on the Wright website www.wisi.com, by calling Wright at
1-800-888-9471 or in the EDGAR database on the SEC's website at www.sec.gov.
Form N-Q may also be reviewed and copied at the SEC's public reference room in
Washingto, D.C. (call 1-800-732-0330 or informaiton on the operation of the
public reference room).
PROXY VOTING POLICIES AND PROCEDURES
-------------------------------------------
From time to time funds are required to vote proxies related to the
securities held by the funds. The Wright Managed Funds vote proxies according to
a set of policies and procedures approved by the Funds' Board. You may obtain a
description of these policies and procedures and information on how the Funds
voted proxies relating to Portfolio securities during the most recent 12-month
period ended June 30 without charge, upon request, by calling 1-800-888-9471.
This description is also available on the Securities and Exchange Commissions
website at http://www.sec.gov.
SEMI-ANNUAL REPORT
OFFICERS AND TRUSTEES OF THE FUNDS
Peter M. Donovan, President and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President
James J. Clarke, Trustee
Dorcas R. Hardy, Trustee
Richard E. Taber, Trustee
Janet Sanders, Secretary
James L. O'Connor, Treasurer
William J. Austin, Jr., Assistant Treasurer
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
Wright Investors' Service
440 Wheelers Farms Road
Milford, Connecticut 06461
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, Connecticut 06461
(800) 888-9471
e-mail: funds@wrightinvestors.com
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AND DIVIDEND DISBURSING AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, ME 04101
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of a mutual fund unless
accompanied or preceded by a Fund's current prospectus.
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer and Principal Financial Officer. The registrant undertakes to
provide a copy of such code of ethics to any person upon request, without
charge, by calling 1-800-888-9471.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Not required in filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required in filing.
ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in Filing
ITEM 6. SCHEDULE OF INVESTMENTS
Please see schedule of investments contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in Filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in Filing
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in Filing
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Effective March 17,2005, the Governance Committee of the Board of Trustees
revised the procedures by which a Fund's shareholders may recommend nominees to
the registrant's board of Trustees to add the following (highlighted):
The Governance Committee shall, when identifying candidates for the position of
Independent Trustee, consider any such candidate recommended by a shareholder of
a Fund if such recommendation contains (i) sufficient background information
concerning the candidate, INCLUDING EVIDENCE THE CANDIDATE IS WILLING TO SERVE
AS AN INDEPENDENT TRUSTEE IF SELECTED FOR THE POSITION; AND (II) is received in
a sufficiently timely manner (and in any event no later than the date specified
for receipt of shareholder proposals in any applicable proxy statement with
respect to a Fund). Shareholders shall be directed to address any such
recommendations IN WRITING to the attention of the Governance Committee, c/o the
Secretary of the Fund. THE SECRETARY SHALL RETAIN COPIES OF ANY SHAREHOLDER
RECOMMENDATIONS WHICH MEET THE FOREGOING REQUIREMENTS FOR A PERIOD OF NOT MORE
THAN 12 MONTHS FOLLOWING RECEIPT. THE SECRETARY SHALL HAVE NO OBLIGATION TO
ACKNOWLEDGE RECEIPT OF ANY SHAREHOLDER RECOMMENDATIONS.
ITEM 11. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS
(a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a) (2) Treasurer's and President's Section 302 certification.
(b) Combined 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Wright Managed Income Trust (On behalf of Wright U.S. Government Near Term
- -------------------------------------------------------------------------------
Fund, Wright Total Return Bond Fund and Wright Current Income Fund)
- -----------------------------------------------------------------------
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Date:August 24, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ James L. O'Connor
----------------------
James L. O'Connor
Treasurer
Date: August 24, 2005
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Date:August 24, 2005