FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-3489
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The Wright Managed Equity Trust
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(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Services)
(617) 482-8260
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(Registrant's Telephone Number)
December 31
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Date of Fiscal Year End
June 30, 2006
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Date of Reporting Period
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Item 1. REPORTS TO STOCKHOLDERS
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
SEMI-ANNUAL REPORT
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JUNE 30 , 2006
THE WRIGHT MANAGED EQUITY TRUST
o Wright Selected Blue Chip Equities Fund
o Wright Major Blue Chip Equities Fund
o Wright International Blue Chip Equities Fund
THE WRIGHT MANAGED INCOME TRUST
o Wright U.S. Government Near Term Fund
o Wright Total Return Bond Fund
o Wright Current Income Fund
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
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THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS CONSIST 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 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 and
countries.
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 Shareholders.......................................................2
Management Discussion........................................................3
Fund Expenses................................................................8
Board of Trustees Annual Approval of the Investment Advisory Agreement......54
Important Notices Regarding Privacy, Delivery of Shareholder Documents,
Portfolio Holdings and Proxy Voting......................................55
FINANCIAL STATEMENTS
THE WRIGHT MANAGED EQUITY TRUST
Wright Selected Blue Chip Equities Fund
Portfolio of Investments..................10
Statement of Assets & Liabilities.........13
Statement of Operations...................13
Statement of Changes in Net Assets........14
Financial Highlights......................15
Wright Major Blue Chip Equities Fund
Portfolio of Investments..................16
Statement of Assets & Liabilities.........19
Statement of Operations...................19
Statement of Changes in Net Assets........20
Financial Highlights......................21
Wright International Blue Chip Equities Fund
Portfolio of Investments..................22
Statement of Assets & Liabilities.........24
Statement of Operations...................24
Statement of Changes in Net Assets........25
Financial Highlights......................26
Notes to Financial Statements ..............27
THE WRIGHT MANAGED INCOME TRUST
Wright U.S. Government Near Term Fund
Portfolio of Investments..................32
Statement of Assets & Liabilities.........33
Statement of Operations...................33
Statement of Changes in Net Assets........34
Financial Highlights......................35
Wright Total Return Bond Fund
Portfolio of Investments..................36
Statement of Assets & Liabilities.........40
Statement of Operations...................40
Statement of Changes in Net Assets........41
Financial Highlights......................42
Wright Current Income Fund
Portfolio of Investments..................43
Statement of Assets & Liabilities.........46
Statement of Operations...................46
Statement of Changes in Net Assets........47
Financial Highlights......................48
Notes to Financial Statements ..............49
LETTER TO SHAREHOLDERS
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July 2006
Dear Shareholders:
Despite rising interest rates and increased market volatility, U.S.
stocks and bonds both suffered limited damage in the second quarter, losing 1.4%
(S&P 500 stock composite) and 0.1% (Lehman Aggregate bond index), respectively.
Consumer prices ran up at roughly a 5% annual rate for the latest three months,
as prices for energy goods and services increased at around a 25% annual rate.
Even at the core level, i.e., excluding energy and food prices, the inflation
rate is now closer to 3% than to the Federal Reserve's presumed ceiling of 2%.
This uptick in core inflation, which had previously been fairly well contained
despite soaring commodity prices, was an important reason for the second
quarter's heightened market volatility - that and rising expectations on how
much higher the Fed is going to take interest rates.
Getting reacquainted with risk in 2006's second quarter, investors shied
away from riskier securities and sectors that had previously been market
leaders. Major foreign stock markets generally continued to outperform domestic
averages, but emerging markets sold off violently in May-June. Small- and
mid-cap U.S. stocks trailed big-cap stocks for only the second quarter in the
last eight. The dollar retreated against other currencies in the second quarter,
although the greenback enjoyed a brief flight-to-safety rally late in the
quarter while stocks and commodities were foundering. For the entire first half,
small-cap, mid-cap, developed foreign markets (with the notable exception of
Japan) and most emerging markets still had an edge over the S&P 500 Composite's
2.7% return.
Global credit markets were little changed in local currency terms in the
second quarter; in dollar terms, most major bond markets outside the U.S. had
positive (and stock-beating) returns. Bond yields climbed roughly 30 basis
points in the U.S. and Europe for the quarter, and about half that much in
Japan. Unlike the case in the first quarter, when real yields and inflation
expectations each increased by about the same order of magnitude, real rates
accounted for the bulk of the second-quarter rise in nominal yields. For this
reason, the Federal Reserve (Fed) was able to say after its June 29 Federal Open
Market Committee meeting that inflation expectations "remain contained." To a
large extent, this is the Fed's bet on the U.S. economy: the slowing apparent in
housing and business activity generally will reduce pressure on prices, allowing
the Fed to cease its program of interest rate hikes in time to arrest a more
serious economic slowdown. As seen in the Wall Street Journal's midyear survey,
economists' forecasts are generally in agreement with futures and the forward
curve that the bulk of the Fed's tightening and the bond market's weakness is
behind us.
After a 5.6% first-quarter GDP rebound, the U.S. economy reverted to
trend (3.5%) or sub-trend growth in the second quarter, in our view. In fact,
with housing slowing and higher interest rates taking a toll on auto sales and
consumer spending, GDP growth may sag below the 3% annual rate for the next
several quarters. The Federal Reserve's most recent statements on the economy
have been taken by investors to mean that the Fed is getting ready to stop
raising interest rates. Even if June's was not the very last rate hike, the end
of the current cycle of Fed tightening cannot be too far off. The late-June
stock market action - including two days with better-than-2% advances in the S&P
500 - suggests a healthier investor psyche than was witnessed earlier in the
month and in May.
The prospect of stable and possibly lower interest rates and corporate
earnings growth on the order of 10% leads us to believe the bull market in
stocks has not yet run its course. In the near term, our enthusiasm for global
stocks is tempered by the return of crude oil prices to their April peak of $75
per barrel. Longer term, with inflation and interest rates expected to recede,
more normal returns from stocks and bonds appear likely. We would like to
express our appreciation for your confidence in us and invite your suggestions
on how we can better serve your investment and wealth management needs.
Sincerely,
s/s Peter M. Donovan
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Peter M. Donovan
President
MANAGEMENT DISCUSSION
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EQUITY FUNDS
U.S. STOCKS BEGAN AND ENDED THE SECOND QUARTER OF 2006 ON A POSITIVE NOTE, BUT
CORRECTED IN BETWEEN. DURING A FIVE-WEEK PERIOD FROM EARLY-MAY TO MID-JUNE, THE
DOW AND THE S&P 500 BOTH LOST ABOUT 8%, WHILE THE NASDAQ AND S&P MIDCAP 400
INDEXES LOST ABOUT 13%. THE STOCK MARKET'S GYRATIONS IN THE QUARTER REFLECTED
CHANGING VIEWS ON THE ECONOMY. EARLY IN THE QUARTER, SIGNS OF STRONG GROWTH AND
HEALTHY FIRST-QUARTER PROFIT REPORTS WERE GOOD FOR STOCKS (THOUGH THEY HAD THE
BOND MARKET WORRIED ABOUT INFLATION). STOCKS PEAKED AND INVESTORS BEGAN TO
RETREAT FROM RISK ABOUT THE TIME OF THE MAY FEDERAL OPEN MARKET COMMITTEE
MEETING, WHEN THE FED BEGAN TO TALK TOUGH ON INFLATION. EQUITY INVESTORS STARTED
TO WORRY THAT THE FED WOULD GO TOO FAR IN ITS TIGHTENING PROGRAM AND DRIVE THE
ECONOMY INTO RECESSION. THE RECOVERY IN STOCKS NEAR MID-YEAR WAS GIVEN A BOOST
ON JUNE 29 WHEN, IN ANNOUNCING ANOTHER 25 BASIS-POINT HIKE IN THE FED FUNDS
TARGET RATE, THE FED GAVE SOME INDICATION THAT AN END TO FED TIGHTENING MIGHT
NOT BE TOO FAR IN THE FUTURE AFTER ALL.
BY THE END OF THE SECOND QUARTER, STOCKS HAD RECOVERED MUCH OF WHAT THEY LOST IN
THE EARLIER RETREAT. THE DOW CLOSED UP FOR THE QUARTER WITH A TOTAL RETURN OF
0.9%. THE S&P 500 DIDN'T MAKE IT INTO THE BLACK, BUT ITS LOSS OF 1.4% FOR THE
QUARTER REPRESENTS A GOOD RECOVERY FROM ITS LOW AND KEPT ITS RETURN IN POSITIVE
TERRITORY (+2.7%) FOR THE FIRST HALF OF THE YEAR. INVESTORS' RISK AVERSION TOOK
A GREATER TOLL ON NASDAQ (-7.0%) AND THE S&P MIDCAP (-3.1%) AND SMALLCAP (-4.6%)
INDEXES IN THE QUARTER. NASDAQ'S LOSS IN Q2 WAS ENOUGH TO PUT IT IN THE RED FOR
THE SIX MONTHS (-1.1%), WHILE THE MIDCAP 400 (+4.2%) AND SMALLCAP 600 (+7.7%)
RETURNED MORE THAN THE S&P 500 FOR THE FIRST HALF. FOREIGN STOCKS WERE GENERALLY
REWARDING FOR U.S. INVESTORS IN Q2, AS THEY WERE IN THE FIRST QUARTER. IN LOCAL
TERMS, THE MSCI WORLD EX U.S. INDEX LOST 4.3% IN Q2, BUT THE DEPRECIATION OF THE
DOLLAR CONVERTED THAT TO A 0.7% POSITIVE RETURN IN DOLLAR TERMS. (AGAINST A
WEIGHTED AVERAGE OF CURRENCIES IN THE MSCI DEVELOPED MARKETS EX U.S. INDEX, THE
DOLLAR LOST ABOUT 5% IN Q2, ALTHOUGH IT BOUNCED OFF ITS LOWS IN JUNE.) IN THE
FIRST HALF OF 2006, THE MSCI WORLD EX U.S. INDEX RETURNED 10% IN DOLLARS, WITH
AN ESPECIALLY STRONG SHOWING BY THE EUROPEAN REGION.
GOING FORWARD, THERE IS STILL ENOUGH UNCERTAINTY ABOUT THE DIRECTION OF THE
ECONOMY TO KEEP THE STOCK MARKET VOLATILE. IN THE END, HOWEVER, WE EXPECT THE
FED TO ACHIEVE ITS TARGETED SOFT LANDING. AFTER AN ABOVE-TREND 5.6% INCREASE IN
Q1, GDP GROWTH IS EXPECTED TO BE IN THE 2.5%-3% RANGE FOR THE REST OF THIS YEAR.
INFLATION MAY EDGE UP IN THE NEAR TERM, BUT WE EXPECT EASING INFLATION PRESSURES
TO BE EVIDENT BY THE END OF THE YEAR. THERE IS A GOOD CHANCE THE FED WILL RAISE
RATES ANOTHER 25 BASIS POINTS, PROBABLY AT ITS AUGUST MEETING. AFTER THAT,
HOWEVER, INCOMING DATA SHOULD DEPICT CONDITIONS THAT WILL MAKE A PAUSE IN FED
TIGHTENING APPEAR PRUDENT WITHOUT DAMAGING THE FED'S INFLATION FIGHTING
CREDENTIALS. WE EXPECT THAT THE FED WILL STOP TIGHTENING SOON ENOUGH TO AVOID
PUSHING THE ECONOMY INTO RECESSION (AS A 6.5% FED FUNDS RATE DID IN 2001).
EASING FEARS OF SIGNIFICANTLY HIGHER INTEREST RATES WILL BE GOOD FOR THE STOCK
MARKET. SLOWER ECONOMIC GROWTH WILL RESULT IN MORE SUBDUED PROFIT GROWTH - ABOUT
8% OVER THE COMING YEAR BY OUR FORECAST. BUT ONCE INVESTORS ADJUST TO THESE
LOWER GROWTH RATES, THE STOCK MARKET'S LOW VALUATION SHOULD HELP THE MARKET
RESUME ITS UPTREND. (THE S&P 500'S FORWARD P/E MULTIPLE AT MID YEAR WAS JUST
ABOUT WHERE IT WAS AT THE 2002 MARKET BOTTOM.) EVEN WITHOUT THE MODEST RECOVERY
IN MULTIPLES THAT WE FORECAST, STOCKS SHOULD OUTPERFORM BONDS OVER THE COMING 12
MONTHS. WE ARE POSITIVE ON THE PROSPECTS FOR MID-CAP AND INTERNATIONAL STOCKS AS
WELL AS LARGE-CAP U.S. EQUITIES.
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
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Wright Selected Blue Chip Fund
(WSBC) 1.9% 11.1% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1% 32.7% 18.6%
Wright Major Blue Chip Fund
(WMBC) 1.7% 6.2% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4% 33.9% 17.6%
Wright International Blue Chip Fund
(WIBC) 11.7% 21.1% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1% 1.5% 20.7%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
After outperforming the S&P 500 in Q1 and all of last year, the S&P MidCap 400
lagged bigger stocks in the second quarter. The Wright Selected Blue Chip Fund
(WSBC), which is a mid-cap blend fund, lost 2.2% in the second quarter, a
smaller loss than the S&P MidCap 400's 3.1% and the 2.8% loss for an average of
79 mid-cap blend funds in the Morningstar database. Reflecting a lagging
first-quarter performance, WSBC returned 1.9% for the first six months of 2006,
behind the S&P MidCap's 4.2% return and 4.3% for the Morningstar average. Over
the last four quarters, the WSBC returned 7.4% compared to 13.0% for the S&P
MidCaps and 12.0% for the Morningstar average. In the second quarter, WSBC
benefited from investors' preference for the larger, higher-quality issues in
the MidCap 400. This is a reversal from the first quarter, when the smaller and
low-quality issues in the S&P MidCap 400 led the index, which worked against the
WSBC's bias toward higher quality and larger stocks. In the second quarter, the
Fund especially benefited from superior stock selection in the industrial,
technology and utility sectors, as well as its overweighting in energy, which
was the best-performing mid-cap sector. Newfield Exploration (+16.8%), J.B. Hunt
Transport (+16.0%) and Questar (15.3%) contributed to the Fund's strong relative
performance in Q2. Although weakness in some retail stocks hurt the Fund's
absolute performance in the quarter, it outperformed the S&P MidCap 400 in the
consumer discretionary sector, which was its weakest in the quarter. With risk
aversion increasingly apparent in the investment environment, WSBC is well
positioned in the mid-cap area with a bias toward the more substantial companies
in the S&P MidCap 400. Also, though mid-cap valuations are higher than
large-cap, the WSBC Fund has a lower median forward P/E than the S&P MidCap 400.
Wright continues to advise diversity in investment portfolios and sees mid-cap
stocks as likely to make a positive contribution to total portfolio returns
going forward.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the large-cap
growth and value stocks in the S&P 500 Composite, selected with a bias toward
the higher-quality issues in the index. In the first quarter of 2006, large-cap
U.S. stocks posted attractive investment returns. After keeping pace with the
S&P 500 in the first quarter of 2006, the WMBC Fund lost 2.5% in the second
quarter, lagging the S&P 500's 1.4% loss and the 2.1% loss for an average of 152
large-cap blend funds in the Morningstar database. Year to date, WMBC returned
1.7% compared to 2.7% for the S&P 500 and 2.4% for the Morningstar average. Over
the last 12 months, WMBC (+9.5%) is ahead of both the S&P 500 (+8.6%) and the
Morningstar group (+9.0%). In the first quarter of 2006, the smaller issues in
the S&P 500 did better than the larger and lower quality generally did better
than higher. These patterns worked against the WMBC Fund, which has a larger
median market cap than the S&P 500 and is tilted toward the higher-quality
issues in the index. Nevertheless, the Fund was able to keep pace with the index
due to superior stock selection. In the second quarter, as investors turned away
from risk, larger, higher-quality issues did better, which worked to the fund's
benefit. The fund was also helped in Q2 by being underweight in technology
stocks, the weakest S&P 500 sector in the quarter. It also had a good relative
showing from selections in the consumer staples and industrial sectors. These
pluses were offset, however, by being overweight in health care, one of the
weaker sectors and by poor stock selection in that group and in the consumer
discretionary sector. Among the specific holdings that hurt second-quarter
performance were Home Depot (-15.0%), Express Scripts (-18.4%) and Unitedhealth
(-19.8%). Among the positive contributors: Archer Daniels Midland (+23.0%),
which produces ethanol, Paccar (+17.4%) and Cummins Engine (+16.6%). The
prospect of lower economic growth and more uncertainty in the economic and
geopolitical environment suggest that the risk aversion that became evident in
the financial markets during the second quarter will persist for a while. Such
an environment ought to favor higher-quality and large-cap stocks, which
moreover are currently attractively valued compared with smaller issues as well
as with their recent history. With its bias toward the larger, higher-quality
stocks in the S&P 500, the WMBC is well positioned for a risk-averse
environment. WMBC's holdings also are valued at a lower median forward P/E than
the S&P 500.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
International stocks outperformed U.S. stocks for the first and second quarters
of 2006, helped some, especially in the second quarter, by depreciation of the
dollar. The Wright International Blue Chip Fund (WIBC) outperformed its
benchmark for both quarters. For the second quarter, WIBC returned 1.4% compared
to 0.7% for the MSCI World ex U.S. index and a loss of 0.7% for an average of
127 international equity funds in the Morningstar database. For the first half
of 2006, WIBC returned 11.7% compared to 10.1% for the MSCI benchmark and 8.9%
for the Morningstar average. For the last 12 months, WIBC's return of 30.8% also
topped the MSCI benchmark (26.9%) and the Morningstar average (26.3%). Markets
in Europe were particularly strong in the first and second quarters of 2006, and
the WIBC Fund's relative performance was helped by its overweighting in that
region. Japan, on the other hand, was one of the world's weaker markets in the
first half of 2006. Being overweight in Japan detracted from Fund performance in
the first quarter, but in the second, the Fund benefited as its Japanese
holdings outperformed that country's overall market. Although technology stocks
generally underperformed in the quarter, the Fund's technology holdings
contributed positively to performance. The Fund also benefited in both the first
and second quarters from its position in material stocks, which were strong in
both periods. On the negative side, in the second quarter the Fund's consumer
discretionary and industrial holdings lagged their respective sectors. Economic
and earnings growth prospects outside of the U.S., especially in Europe and
Japan, look promising for the coming 12 months. In addition to improving
fundamentals, returns to U.S. investors from international holdings are likely
to continue to be boosted by depreciation of the dollar as they were in the
first half of the year. WIBC has reduced its position somewhat in the Eurozone
markets and Japan, but remains overweight in Eurozone to take advantage of its
improving fundamentals. The Fund has increased its exposure in the U.K., but has
gone from overweight to underweight in Australia and Hong Kong. By sector, the
Fund has taken some profits in the material sector, which has been strong in
2006, and also reduced its exposure to industrials while increasing its
weighting in technology, telecom, health care and financials. In consideration
of the favorable growth prospects of emerging economies, WIBC has taken
positions in companies that export to these areas. Wright continues to emphasize
diversity in investment programs and expects a position in international stocks
will augment returns in diversified investment portfolios.
FIXED-INCOME FUNDS
BOND YIELDS ROSE IN THE FIRST AND SECOND QUARTERS OF 2006. IN THE MIDDLE OF THE
SECOND QUARTER, AS STOCKS RETREATED AND INVESTORS SHIED AWAY FROM RISK, BONDS
RALLIED DUE TO THEIR SAFE HAVEN APPEAL. SOME TOUGH TALK FROM THE FED ON
INFLATION ALSO GAVE BONDS A BOOST, BUT ONCE THE STOCK MARKET TURNED MORE
POSITIVE, BONDS GAVE BACK THEIR GAINS. THE TREASURY YIELD CURVE STARTED THE YEAR
2006 JUST ABOUT FLAT BETWEEN 2- AND 10-YEAR MATURITIES AND ENDED THE FIRST HALF
THE SAME WAY. THE CURVE BETWEEN THOSE MATURITIES SHIFTED HIGHER BY ABOUT 75
BASIS POINTS OVER THE FIRST HALF, WHICH PUT THE YIELD ON THE 10-YEAR T-BOND AT
5.14% AT MID-YEAR. INFLATION TICKED HIGHER IN THE QUARTER. IN WHAT MAY BE AN
INDICATION OF GROWING CONFIDENCE IN THE BERNANKE FED, HOWEVER, MORE OF THE RISE
IN BOND YIELDS IN Q2 WAS DUE TO HIGHER REAL YIELDS (AS MEASURED BY TIPS
[TREASURY INFLATION PROTECTED SECURITIES]) THAN TO HIGHER LONG-TERM INFLATION
EXPECTATIONS, UNLIKE IN Q1.
BONDS OUTPERFORMED STOCKS IN THE SECOND QUARTER OF 2006, THOUGH THEY ARE STILL
LAGGING YEAR TO DATE. FOR THE LEHMAN U.S. AGGREGATE BOND INDEX, COUPON INCOME
JUST ABOUT OFFSET PRICE DECLINE IN THE SECOND QUARTER, RESULTING IN A LOSS OF
0.1% FOR THE PERIOD. THIS BROUGHT THE LEHMAN AGGREGATE'S LOSS FOR THE FIRST HALF
OF THE YEAR TO 0.7%. IN THE SECOND QUARTER, THE SAME SORT OF RISK AVERSION THAT
AFFECTED THE STOCK MARKET ALSO RESULTED IN CORPORATE SPREADS WIDENING; CORPORATE
BONDS LOST 0.4% IN THE QUARTER, WITH LOSSES INCREASING AS QUALITY DECLINED.
AGENCIES AND ASSET-BACKED SECURITIES DID BETTER THAN THE OVERALL LEHMAN INDEX;
MORTGAGES WERE ALSO SLIGHTLY AHEAD, WHILE TREASURIES PERFORMED IN LINE WITH THE
AGGREGATE. FOR THE SIX MONTHS, ASSET-BACKED ISSUES WERE THE BEST PLACE TO BE AND
CORPORATES WERE THE WORST.
IN THE NEAR TERM, HIGHER INFLATION READINGS COULD CAUSE BOND YIELDS TO MOVE
HIGHER. IN ADDITION, IT APPEARS LIKELY THAT THE FED WILL RAISE RATES AT LEAST
ONE MORE TIME, PROBABLY IN AUGUST, WHICH COULD NUDGE RATES HIGHER AT THE SHORT
END OF THE YIELD CURVE. WE BELIEVE, HOWEVER, THAT BEFORE LONG INVESTORS WILL BE
ANTICIPATING THE MORE MODEST INFLATION WE EXPECT BY EARLY 2007; THERE COULD EVEN
BE SOME ANTICIPATION OF EASING BY THE FED AS ECONOMIC GROWTH SLOWS GOING
FORWARD. WE EXPECT ANY RISE IN YIELDS WILL BE SHORT LIVED, ESPECIALLY FOR LONGER
MATURITIES, AND A YEAR FROM NOW YIELDS SHOULD BE CLOSE TO WHERE THEY WERE AT
MID-YEAR 2006. OUR FORECAST ALSO CALLS FOR A BIT MORE WIDENING OF CORPORATE
SPREADS, ALTHOUGH THIS SHOULD BE LIMITED AS THE WORSE FEARS FOR THE ECONOMY
BEGIN TO FADE. THE END RESULT SHOULD BE A RETURN OF 5%-6% FOR THE LEHMAN
AGGREGATE OVER THE NEXT 12 MONTHS, LESS THAN THE RETURN WE EXPECT FROM EQUITIES
BUT WELL AHEAD OF FORECAST INFLATION. WE RECOMMEND DIVERSIFIED INVESTMENT
PORTFOLIOS INCLUDING STOCKS AND BONDS AS THE PRUDENT COURSE FOR LONG-TERM
INVESTORS IN A RISKY INVESTMENT ENVIRONMENT.
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
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Wright U.S. Gov't. Near-Term Bond Fund
(WNTB) 0.8% 1.0% 0.4% 0.6% 5.4% 6.8% 6.9% 1.9% 6.0% 5.9% 3.9%
Wright Total Return Bond Fund
(WTRB) -1.3% 1.5% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6% 9.3% 0.9%
Wright Current Income Fund
(WCIF) -0.6% 1.8% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5% 8.6% 4.4%
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 one-to-two-year average maturity range, where
the WNTB is positioned, Treasury yields rose 40-45 basis points during the first
quarter and another 35-40 in Q2. This rise has limited the WNTB's returns so far
this year. For the second quarter of 2006, the Fund returned 0.4%, lagging the
0.7% return of the Lehman 1-3 year government bond index but better than the
0.3% for an average of 54 Morningstar government bond funds with an average
maturity between one and three years. For the first half of the year, the Fund
returned 0.8%, better than the Morningstar average's 0.4% but behind the Lehman
benchmark's 1.1%. Over the last 12 months, the Fund (+1.2%) also lagged the
Lehman benchmark (+1.9%) but was ahead of the Morningstar average (+0.7%). WNTB
has recently lagged the average money market fund, which returned 1.0% in the
second quarter, 2.0% for six months and 3.4% for 12 months. The WNTB Fund had a
yield of 3.8% at the end of the second quarter as calculated by SEC guidelines.
Dividends paid by this fund may be more or less than implied by this yield. To
pick up extra yield, the Fund is overweighting mortgage-backed securities (32%
of assets) and agencies (47%) and underweighting Treasurys, which have a lower
yield than the other security classes. In the quarter and six months, the WNTB's
relative performance was helped by its slightly short duration (about 1.6 years
at mid-year) compared with the Lehman benchmark. This positioning reflected our
expectation, which has proved to be correct, that further rate hikes from the
Fed would keep the short end of the yield curve moving higher.
WRIGHT TOTAL RETURN BOND FUND
Yields rose in the first half of 2006, resulting in a negative return for the
bond market. The Wright Total Return Bond Fund (WTRB), a diversified bond fund,
lost 0.4% in the second quarter of 2006. This was slightly behind the Lehman
U.S. Aggregate Bond Composite's 0.1% loss and the 0.2% loss for an average of
174 total return bond funds in the Morningstar database. For the first half of
2006, WTRB had a loss of 1.3%, which compared with losses of 0.7% for both the
Morningstar average and the Lehman Aggregate. Over the last 12 months, WTRB lost
1.8% compared to losses of 0.8% for the Lehman Aggregate and 1.0% for the
Morningstar average. At midyear, WTRB had a yield of 4.4% calculated according
to SEC guidelines. Dividends paid by this fund may be more or less than implied
by this yield. Early in the second quarter, WTRB's duration was extended to be
slightly longer than the Lehman benchmark. This move was made in anticipation of
a rally after yields moved higher in March. Near the end of April, the Fund's
duration was moved back to a neutral position, reflecting the increased
uncertainty in the economic environment and expected volatility in interest
rates. With these conditions persisting, the duration was still at neutral as
the third quarter got under way. For the second quarter as a whole, the duration
positioning detracted slightly from the Fund's performance. Asset class
weightings overall contributed positively to performance, particularly the
positioning in mortgage securities (including hybrid ARMs) and corporate
sectors. This was offset, however, by lagging performance of some individual
issues held in the portfolio. With credit spreads expected (correctly) to widen,
in the first quarter the Fund's position in corporate bonds was reduced from
overweight to about neutral with the benchmark, where it remained during the
second quarter (at about 23% of assets). Because of their attractive valuations
and income contribution, the Fund was overweight in mortgages (including hybrid
ARMs) at midyear (49%) and has positions in asset-backed (2%) securities and
commercial mortgages (8%). The Fund remained underweight in Treasuries (11%) and
agencies (6%) and also held a small amount of cash.
WRIGHT CURRENT INCOME FUND
The Wright Current Income Fund (WCIF) is generally managed to be primarily
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. After outperforming in
the first quarter, GNMA's lagged Treasuries and the Lehman Aggregate in the
second quarter of 2006. For the second quarter, the WCIF lost 0.3%, slightly
less than the Lehman GNMA bond index's loss of 0.4% but a little more than the
loss of 0.2% for the average of all 61 government mortgage funds in the
Morningstar database. For the six months, WCIF's loss of 0.6% compared with
losses of 0.5% for the Lehman benchmark and 0.4% for the Morningstar average.
For the last 12 months, WCIF returned 0.1%, ahead of the Morningstar average's
slight loss but behind the Lehman benchmark's 0.5% return. At the start of the
second quarter, the WCIF Fund had a yield of 4.7% as calculated by SEC
guidelines. Dividends paid by this fund may be more or less than implied by this
yield. In the first and second quarters, WCIF continued to be overweight in
higher-coupon premium issues. This position, which reflected our expectation
that the rise in mortgage rates during 2005 had reduced the risk of mortgage
prepayments, allowed the Fund to pick up extra income. With interest rates on
the rise, the Fund's duration was shortened in the first quarter to be slightly
shorter than the Ginnie Mae benchmark's. It remained shorter than the
benchmark's at midyear.
THE VIEWS EXPRESSED THROUGHOUT THIS REPORT ARE THOSE OF THE PORTFOLIO
MANAGERS AND ARE CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT
AS STATED ON THE COVER. THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
UPON MARKET OR OTHER CONDITIONS, AND THE INVESTMENT ADVISOR DISCLAIMS ANY
RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS
INVESTMENT ADVICE AND, BECAUSE INVESTMENT DECISIONS FOR A FUND ARE BASED ON
MANY FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY OF THE WRIGHT MANAGED INVESTMENT FUNDS.
U.S. SECURITIES MARKETS -------------------------------------------------------
The Dow Jones Industrial Average chart shows the point changes in the average
which consists of 30 major NYSE industrial companies and is a price-weighted
arithmetic average, with the divisor adjusted for stock splits. The yield
chart shows the basis point changes in the U.S. Treasury bond which is the
benchmark U.S. Treasury bond with a maturity of 10 years.
The following plotting points are used for comparison in the mountain charts.
Date Dow Jones U.S. 10 Year
Industrial Average Treasury Bond Yield
12/31/96 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 10,717.50 4.39%
06/30/06 11,150.22 5.14%
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, 2006-June 30, 2006).
ACTUAL EXPENSES:
The first line of the tables shown on the following page provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES:
The second line of the tables provides information about hypothetical account
values and hypothetical expenses based on the actual Fund expense ratio and an
assumed rate of return of 5% per year (before expenses), which is not the actual
return of the Fund. The hypothetical account values and expenses may not be used
to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in your Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees (if payable). Therefore, the second line of
the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,019.20 $6.26
- -------------------------------------------------------------------------------
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, 2005.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,016.50 $6.25
- -------------------------------------------------------------------------------
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, 2005.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,117.20 $7.30
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,017.90 $6.95
*Expenses are equal to the Fund's annualized expense ratio of 1.39% 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, 2005.
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,008.40 $4.66
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.60 $4.69
*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, 2005.
WRIGHT TOTAL RETURN BOND FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $ 987.30 $4.68
- -------------------------------------------------------------------------------
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, 2005.
WRIGHT CURRENT INCOME FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/06-
(1/1/06) (6/30/06) 6/30/06)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $ 994.10 $4.55
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.20 $4.61
*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, 2005.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2006 (unaudited)
Shares Value
EQUITY INTERESTS --100.3%
AUTOMOBILES & COMPONENTS -- 2.6%
ArvinMeritor, Inc................... 13,825 $ 237,652
BorgWarner, Inc..................... 10,255 667,600
Thor Industries, Inc................ 6,195 300,148
------------
$ 1,205,400
------------
BANKS -- 4.4%
Associated Banc-Corp................ 6,715 $ 211,724
Astoria Financial Corp.............. 16,952 516,188
City National Corp.................. 4,020 261,662
Colonial Bancgroup, Inc............. 12,095 310,600
Cullen/Frost Bankers, Inc........... 1,605 91,966
Webster Financial Corp.............. 6,435 305,276
Wilmington Trust Corp............... 7,425 313,186
------------
$ 2,010,602
------------
CAPITAL GOODS -- 6.5%
Alliant Techsystems, Inc.* ......... 6,035 $ 460,772
Graco, Inc.......................... 3,172 145,849
Precision Castparts Corp............ 13,940 833,054
SPX Corp............................ 10,465 585,517
Teleflex, Inc....................... 5,155 278,473
Thomas & Betts Corp.* .............. 12,620 647,406
------------
$ 2,951,071
------------
CHEMICALS -- 1.4%
Lyondell Chemical Co................ 16,555 $ 375,136
Scotts Miracle-Gro Co., Class A..... 6,300 266,616
------------
$ 641,752
------------
COMMERCIAL SERVICES & SUPPLIES -- 6.9%
Career Education Corp.* ............ 5,630 $ 168,281
Ceridian Corp.* .................... 5,840 142,730
ITT Educational Services, Inc.* .... 2,970 195,456
Jacobs Engineering Group, Inc.* .... 10,390 827,460
Manpower, Inc....................... 9,945 642,447
MPS Group, Inc.* ................... 18,120 272,887
Pharmaceutical Product
Development, Inc................... 12,665 444,795
Plexus Corp.* ...................... 3,375 115,459
Republic Services, Inc. - Class A... 8,505 343,092
------------
$ 3,152,607
------------
COMMUNICATIONS EQUIPMENT -- 0.9%
Harris Corp......................... 7,950 $ 330,004
Powerwave Technologies, Inc.* ...... 6,450 58,824
------------
$ 388,828
------------
COMPUTERS & PERIPHERALS -- 2.4%
CSG Systems International, Inc.* ... 7,305 $ 180,726
Imation Corp........................ 8,325 341,741
Palm, Inc.* ........................ 7,895 127,109
Western Digital Corp.* ............. 22,765 450,975
------------
$ 1,100,551
------------
CONSUMER DURABLES & APPAREL -- 1.4%
Mohawk Industries, Inc.* ........... 6,395 $ 449,888
Toll Brothers, Inc.* ............... 6,985 178,606
------------
$ 628,494
------------
DIVERSIFIED FINANCIALS -- 4.3%
AmeriCredit Corp.* ................. 17,070 $ 476,594
Edwards, A.G., Inc.................. 7,115 393,602
Jefferies Group, Inc................ 17,410 515,858
Raymond James Financial, Inc........ 18,547 561,418
------------
$ 1,947,472
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 5.9%
Ametek, Inc......................... 9,745 $ 461,718
Arrow Electronics, Inc.* ........... 15,340 493,948
Avnet, Inc.* ....................... 11,025 220,720
CommScope, Inc.* ................... 2,100 65,982
Energizer Holdings, Inc.* .......... 4,565 267,372
Lincoln Electric Holdings, Inc...... 5,250 328,912
MEMC Electronic Materials, Inc.* ... 22,595 847,312
-----------
$ 2,685,964
------------
ENERGY -- 8.8%
ENSCO International, Inc............ 5,660 $ 260,473
Newfield Exploration Company* ...... 17,940 877,984
Noble Energy, Inc................... 12,080 566,069
Patterson-UTI Energy, Inc........... 13,775 389,970
Peabody Energy Corp................. 17,790 991,792
Pogo Producing Co................... 10,555 486,586
Western Gas Resources, Inc.......... 7,065 422,840
------------
$ 3,995,714
------------
FOOD, BEVERAGE & TOBACCO -- 2.1%
Hormel Foods Corp................... 6,330 $ 235,096
PepsiAmericas, Inc.................. 10,255 226,738
Smithfield Foods, Inc.* ............ 16,500 475,695
------------
$ 937,529
------------
HEALTH CARE EQUIPMENT & SERVICES-- 4.7%
Community Health Systems, Inc.* .... 3,620 $ 133,035
Covance, Inc.* ..................... 4,850 296,917
DENTSPLY International, Inc......... 3,130 189,678
Health Net, Inc.* .................. 13,355 603,245
LifePoint Hospitals, Inc.* ......... 8,705 279,692
Lincare Holdings, Inc.* ............ 7,370 278,881
Triad Hospitals, Inc.* ............. 9,435 373,437
------------
$ 2,154,885
------------
HEAVY MACHINERY -- 0.7%
Joy Global, Inc..................... 6,040 $ 314,624
------------
HOME CONSTRUCTION, FURNISHINGS
& APPLIANCES -- 0.4%
Beazer Homes USA, Inc............... 3,695 $ 169,490
------------
HOTELS, RESTAURANTS & LEISURE -- 0.5%
Ruby Tuesday, Inc................... 8,705 $ 212,489
------------
INSURANCE -- 8.2%
AmerUs Group Co..................... 2,435 $ 142,569
First American Corp................. 15,755 665,964
HCC Insurance Holdings, Inc......... 9,610 282,918
Ohio Casualty Corp.................. 7,415 220,448
Old Republic International Corp..... 9,698 207,246
PMI Group Inc., (The)............... 5,520 246,082
Protective Life Corp................ 7,990 372,494
Radian Group, Inc................... 9,040 558,491
Stancorp Financial Group............ 6,255 318,442
W.R. Berkley Corp................... 21,482 733,181
------------
$ 3,747,835
------------
MATERIALS -- 4.4%
Airgas, Inc......................... 3,740 $ 139,315
Crane Co............................ 6,600 274,560
FMC Corp............................ 7,365 474,232
Grant Prideco, Inc.* ............... 8,690 388,878
Martin Marietta Materials, Inc...... 2,175 198,251
RPM International, Inc.............. 6,235 112,230
Steel Dynamics, Inc................. 1,530 100,582
Timken Co., (The)................... 9,865 330,576
------------
$ 2,018,624
------------
MEDICAL SUPPLIES -- 1.8%
Intuitive Surgical, Inc.*........... 5,215 $ 615,214
ResMed, Inc.* ...................... 4,000 187,800
------------
$ 803,014
------------
OIL & GAS -- 3.2%
AGL Resources, Inc.................. 9,605 $ 366,143
Helmerich & Payne, Inc.............. 3,790 228,385
Pioneer Natural Resources Co........ 6,730 312,339
Smith International, Inc............ 3,785 168,319
Southwestern Energy Co.* ........... 9,360 291,658
Tidewater, Inc...................... 2,295 112,914
------------
$ 1,479,758
------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 1.3%
Omnicare, Inc....................... 12,405 $ 588,245
------------
REAL ESTATE -- 2.1%
New Plan Excel Realty Trust REIT.... 39,570 $ 976,983
------------
RETAILING -- 8.1%
Abercrombie & Fitch Co. - Class A... 8,805 $ 488,061
American Eagle Outfitters........... 16,800 571,872
AnnTaylor Stores Corp.* ............ 5,325 230,999
Barnes & Noble, Inc................. 4,610 168,265
Callaway Golf Co.................... 6,945 90,216
CDW Corp............................ 4,315 235,815
Chico's FAS, Inc.* ................. 7,335 197,898
Claire's Stores, Inc................ 16,595 423,338
GameStop Corp. - Class A* .......... 8,015 336,630
Michaels Stores, Inc................ 5,330 219,809
MSC Industrial Direct Co.
Inc. - Class A..................... 6,340 301,594
O'Reilly Automotive, Inc.* ......... 8,615 268,702
Payless ShoeSource, Inc.* .......... 5,395 146,582
------------
$ 3,679,781
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.5%
Intersil Corp. - Class A............ 8,090 $ 188,093
Lam Research Corp.* ................ 6,665 310,722
Microchip Technology, Inc........... 5,140 172,447
------------
$ 671,262
------------
SOFTWARE & SERVICES -- 3.3%
Cognizant Technology Solutions Corp.* 6,745 $ 454,411
Fair Isaac, Inc..................... 7,960 289,028
McAfee, Inc.* ...................... 13,150 319,151
Sybase, Inc.* ...................... 16,280 315,832
Transaction Systems Architects, Inc.* 3,425 142,788
------------
$ 1,521,210
------------
TELECOMMUNICATION SERVICES -- 0.8%
ADTRAN, Inc......................... 10,910 $ 244,711
Cincinnati Bell, Inc.* ............. 25,125 103,013
------------
$ 347,724
------------
TEXTILES, CLOTHING & FABRICS -- 1.0%
Polo Ralph Lauren Corp.............. 8,140 $ 446,886
------------
TRANSPORTATION -- 3.9%
Con-way, Inc........................ 5,155 $ 298,629
Hunt, J.B. Transport Services, Inc.. 31,605 787,281
Swift Transportation Co., Inc.* .... 7,135 226,608
Trinity Industries, Inc............. 5,185 209,474
YRC Worldwide, Inc.* ............... 6,515 274,347
------------
$ 1,796,339
------------
UTILITIES -- 6.8%
Black Hills Corp.................... 12,670 $ 434,961
Energy East Corp.................... 9,665 231,283
Equitable Resources, Inc............ 3,820 127,970
MDU Resources Group, Inc............ 19,332 707,745
Questar Corp........................ 12,450 1,002,101
Sierra Pacific Resources* .......... 20,025 280,350
Wisconsin Energy Corp............... 7,390 297,817
------------
$ 3,082,227
------------
TOTAL EQUITY INTERESTS-- 100.3%
(identified cost, $37,518,692) $ 45,657,360
OTHER ASSETS, LESS LIABILITIES -- (0.3%) (153,053)
------------
NET ASSETS -- 100% $45,504,307
============
* Non-income-producing security.
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $37,518,692) (Note 1A). $ 45,657,360
Cash.................................... 855
Receivable for fund shares sold......... 56,960
Dividends receivable.................... 43,077
Other assets............................ 15,085
------------
Total assets............................ $ 45,773,337
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 10,639
Demand note payable..................... 224,000
Payable to affiliate for Trustees' fees. 45
Transfer agent fee payable.............. 5,465
Accrued expenses and other liabilities.. 28,881
------------
Total liabilities....................... $ 269,030
------------
NET ASSETS................................ $ 45,504,307
============
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................... $ 34,396,484
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)....................... 2,123,486
Unrealized appreciation on investments
(computed on the basis of identified cost) 8,138,668
Undistributed net investment income..... 845,669
------------
Net assets applicable to
outstanding shares.................... $ 45,504,307
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 3,612,180
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 12.60
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 222,024
Expenses -
Investment adviser fee (Note 2):........ $ 144,291
Administrator fee (Note 2):............. 28,858
Compensation of Trustees who are not employees
of the investment adviser or administrator 6,543
Custodian fee (Note 1D)................. 29,919
Distribution expenses (Note 3):......... 60,121
Transfer and dividend disbursing agent fees 16,639
Printing................................ 2,896
Interest expense........................ 1,963
Shareholder communications.............. 6,990
Audit services.......................... 12,942
Legal services.......................... 3,349
Registration costs...................... 12,575
Miscellaneous .......................... 3,172
------------
Total expenses.......................... $ 330,258
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (2,809)
Reduction of distribution expenses
by principal underwriter (Note 3):..... (26,665)
------------
Total deductions........................ $ (29,474)
------------
Net expenses............................ $ 300,784
------------
Net investment loss..................... $ (78,760)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 2,197,553
Change in unrealized depreciation of
investments............................ (1,273,860)
------------
Net realized and unrealized gain
of investments......................... $ 923,693
------------
Net increase in net assets from operations $ 844,933
============
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, 2006 December 31, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss........................................................ $ (78,760) $ (87,194)
Net realized gain on investments........................................... 2,197,553 6,417,438
Change in unrealized depreciation of investments........................... (1,273,860) (1,416,439)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 844,933 $ 4,913,805
-------------- --------------
Distributions to shareholders (Note 1F) -
From net realized gain..................................................... $ (2,514,840) $ (5,390,227)
-------------- --------------
Total distributions...................................................... $ (2,514,840) $ (5,390,227)
-------------- --------------
Net increase (decrease) in net assets from fund share transactions (Note 4).. $ (477,410) $ 4,630,188
-------------- --------------
Net increase (decrease) in net assets........................................ $ (2,147,317) $ 4,153,766
NET ASSETS:
At beginning of period....................................................... 47,651,624 43,497,858
-------------- --------------
At end of period............................................................. $ 45,504,307 $ 47,651,624
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD................................................................ $ 845,669 $ 924,429
============== ==============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
FINANCIAL HIGHLIGHTS June 30, 2006 2005 2004 2003(6) 2002(6) 2001(6)
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 13.030 $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONs:
Net investment loss(1) ................ $ (0.021) $ (0.053) $ (0.028) $ (0.023) $ (0.046) $ (0.045)
Net realized and unrealized gain (loss) 0.278 1.476 1.884 2.756 (1.831) (1.322)
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 0.257 $ 1.423 $ 1.856 $ 2.733 $ (1.877) $ (1.367)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from capital gains....... $ (0.687) $ (1.619) $ (0.500) $ (0.133) $ (0.433) $ (0.483)
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.687) $ (1.619) $ (0.500) $ (0.133) $ (0.433) $ (0.483)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 12.600 $ 13.030 $ 13.226 $ 11.870 $ 9.270 $ 11.580
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 1.92% 11.09% 15.73% 30.06% (16.98%) (10.15%)
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 45,504 $ 47,652 $ 43,498 $ 38,190 $ 32,817 $ 45,883
Ratio of net expenses to average net assets 1.26%(8) 1.27% 1.26% 1.25% 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% 1.25%(3) 1.25%(3)
Ratio of net investment (loss) to average
net assets.......................... (0.33%)(8) (0.18%) (0.23%) (0.23%) (0.44%) (0.38%)
Portfolio turnover rate .............. 32% 110% 69% 106% 119%(4) 67%(4)
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2006 and for the years ended December 31,
2005, 2004, 2003, 2002, and 2001, 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:
2006 2005 2004 2003 2002 2001
----------------------------------------------------------------------
Net investment loss per share.......... $ (0.028) $ (0.111) $ (0.050) $ (0.057) $ (0.064) $ (0.057)
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses........................... 1.37%(8) 1.45% 1.44% 1.59% 1.43%(3) 1.37%(3)
========= ========= ========= ========= ========= =========
Expenses after custodian fee reduction(5) 1.36%(8) 1.43% 1.43% 1.59% 1.42%(3) 1.36%(3)
========= ========= ========= ========= ========= =========
Net investment loss................ (0.44%)(8) (0.38%) (0.41%) (0.57%) (0.61%) (0.49%)
========= ========= ========= ========= ========= =========
- ---------------------------------------------------------------------------------------------------------------------------------
(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, 2006 (unaudited)
Shares Value
EQUITY INTERESTS -- 99.2%
AUTOMOBILES & COMPONENTS -- 2.7%
Johnson Controls, Inc............... 5,285 $ 434,533
Paccar, Inc......................... 15,315 1,261,650
------------
$ 1,696,183
------------
BANKS -- 9.3%
Bank of America Corp................ 63,260 $ 3,042,806
Capital One Financial Corp.......... 11,790 1,007,455
Golden West Financial Corp.......... 3,645 270,459
SunTrust Banks, Inc................. 2,735 208,571
Wells Fargo & Co.................... 18,495 1,240,645
------------
$ 5,769,936
------------
CAPITAL GOODS -- 1.1%
Cummins, Inc........................ 3,865 $ 472,496
Illinois Tool Works, Inc............ 4,240 201,400
------------
$ 673,896
------------
CHEMICALS -- 0.2%
Air Products & Chemicals, Inc....... 1,860 $ 118,891
------------
COMMERCIAL SERVICES & SUPPLIES -- 3.2%
First Data Corp..................... 4,390 $ 197,726
Fisher Scientific International,Inc.* 1,310 95,695
Fluor Corp.......................... 1,095 101,758
Robert Half International, Inc...... 3,310 139,020
Tyco International, Ltd............. 14,475 398,062
United Technologies Corp............ 8,405 533,045
Waste Management, Inc............... 14,795 530,845
------------
$ 1,996,151
------------
COMMUNICATIONS EQUIPMENT -- 1.8%
Cisco Systems, Inc.* ............... 19,405 $ 378,980
Motorola, Inc....................... 25,125 506,269
QUALCOMM, Inc....................... 3,535 141,647
Tellabs, Inc.* ..................... 7,420 98,760
------------
$ 1,125,656
------------
COMPUTERS & PERIPHERALS -- 4.9%
Apple Computer, Inc.* .............. 4,545 $ 259,610
Computer Sciences Corp.* ........... 5,915 286,523
Dell, Inc.* ........................ 10,680 260,699
Hewlett-Packard Co.................. 67,005 2,122,718
Network Appliance, Inc.* ........... 4,055 143,141
------------
$ 3,072,691
------------
COSMETICS & PERSONAL CARE -- 0.4%
Colgate-Palmolive Co................ 4,090 $ 244,991
------------
DIVERSIFIED FINANCIALS -- 10.8%
American Express Co................. 6,740 $ 358,703
Bear Stearns Cos., Inc. (The)....... 1,815 254,245
Citigroup, Inc...................... 53,109 2,561,978
Franklin Resources, Inc............. 3,330 289,077
Goldman Sachs Group, Inc., (The).... 9,565 1,438,863
JPMorgan Chase & Co................. 8,965 376,530
Lehman Brothers Holdings, Inc....... 15,505 1,010,151
Merrill Lynch & Co., Inc............ 6,190 430,576
------------
$ 6,720,123
------------
ELECTRONIC EQUIP. & INSTRUMENTS-- 1.1%
Agilent Technologies, Inc.* ........ 11,910 $ 375,880
Nvidia Corp.* ...................... 14,750 314,027
------------
$ 689,907
------------
ENERGY -- 11.6%
Apache Corp......................... 2,918 $ 199,153
ChevronTexaco Corp.................. 21,945 1,361,907
ConocoPhillips Co................... 16,830 1,102,870
EOG Resources, Inc.................. 3,835 265,919
Exxon Mobil Corp.................... 41,875 2,569,031
Hess Corp........................... 2,750 145,337
Kerr-McGee Corp..................... 1,290 89,461
Occidental Petroleum Corp........... 5,670 581,458
Valero Energy Corp.................. 8,030 534,156
Weatherford International, Ltd.* ... 6,990 346,844
------------
$ 7,196,136
------------
ENTERTAINMENT & LEISURE -- 1.1%
CBS Corp. - Class B................. 10,475 $ 283,349
Time Warner, Inc.................... 23,030 398,419
------------
$ 681,768
------------
FOOD & DRUG RETAILING -- 0.3%
Starbucks Corp.* ................... 4,755 $ 179,549
------------
FOOD, BEVERAGE & TOBACCO -- 5.3%
Altria Group, Inc................... 16,025 $ 1,176,716
Archer-Daniels-Midland Co........... 36,700 1,514,976
Brown-Forman Corp. - Class B........ 530 37,996
Kellogg Co.......................... 3,945 191,056
PepsiCo, Inc........................ 6,590 395,664
------------
$ 3,316,408
------------
HEALTH CARE EQUIPMENT & SERVICES-- 6.4%
AmerisourceBergen Corp.............. 5,950 $ 249,424
Express Scripts, Inc.* ............. 6,880 493,571
Humana, Inc.* ...................... 8,450 453,765
Laboratory Corp. of America Holdings* 4,465 277,857
Manor Care, Inc..................... 6,715 315,068
McKesson Corp....................... 5,985 282,971
Quest Diagnostics, Inc.............. 2,865 171,671
UnitedHealth Group, Inc............. 16,246 727,496
Wellpoint, Inc.* ................... 13,950 1,015,141
------------
$ 3,986,964
------------
HEAVY MACHINERY -- 3.9%
Black & Decker Corp................. 3,725 $ 314,614
Caterpillar, Inc.................... 22,020 1,640,050
Ingersoll-Rand Co. - Class A........ 11,505 492,184
------------
$ 2,446,848
------------
HOME CONSTRUCTION, FURNISHINGS
& APPLIANCES -- 0.4%
Whirlpool Corp...................... 3,110 $ 257,042
------------
HOTELS, RESTAURANTS & LEISURE -- 0.2%
Darden Restaurants, Inc............. 2,960 $ 116,624
------------
INSURANCE -- 5.4%
AFLAC, Inc.......................... 7,985 $ 370,105
AMBAC Financial Group, Inc.......... 6,950 563,645
Chubb Corp.......................... 4,690 234,031
Cincinnati Financial Corp........... 4,320 203,083
Hartford Financial Services
Group, Inc......................... 2,140 181,044
MetLife, Inc........................ 7,590 388,684
Progressive Corp.................... 47,110 1,211,198
Torchmark Corp...................... 3,975 241,362
------------
$ 3,393,152
------------
MATERIALS -- 1.1%
Ball Corp........................... 2,595 $ 96,119
Nucor Corp.......................... 8,710 472,518
Sigma-Aldrich Corp.................. 1,625 118,040
------------
$ 686,677
------------
MEDICAL SUPPLIES -- 0.7%
Danaher Corp........................ 5,200 $ 334,464
Patterson Cos, Inc.* ............... 2,120 74,052
------------
$ 408,516
------------
METALS -- 0.4%
Allegheny Technologies, Inc......... 1,955 $ 135,364
Phelps Dodge Corp................... 1,245 102,289
------------
$ 237,653
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 8.0%
Abbott Laboratories................. 5,605 $ 244,434
Amgen, Inc.* ....................... 9,105 593,919
Applera Corp.-Applied Biosystems
Group.............................. 14,905 482,177
Barr Laboratories, Inc.* ........... 6,360 303,308
Bristol-Myers Squibb Co............. 13,470 348,334
Eli Lilly & Co...................... 5,220 288,509
Gilead Sciences, Inc.* ............. 8,325 492,507
Johnson & Johnson, Inc.............. 10,035 601,297
King Pharmaceuticals, Inc.* ........ 14,740 250,580
Merck & Co., Inc.................... 8,815 321,130
Pfizer, Inc......................... 44,230 1,038,078
------------
$ 4,964,273
------------
REAL ESTATE -- 0.5%
Archstone-Smith Trust REIT.......... 2,495 $ 126,921
Equity Office Properties Trust REIT. 5,165 188,574
------------
$ 315,495
------------
RETAILING -- 5.8%
Best Buy Co., Inc................... 5,300 $ 290,652
Costco Wholesale Corp............... 3,025 172,818
CVS Corp............................ 8,400 257,880
Federated Department Stores, Inc.... 2,190 80,154
Home Depot, Inc..................... 31,200 1,116,648
J.C. Penney Co., Inc................ 5,625 379,744
Limited Brands, Inc................. 3,880 99,289
Lowe's Cos., Inc.................... 4,810 291,823
Nordstrom, Inc...................... 8,550 312,075
Office Depot, Inc.* ................ 12,320 468,160
Staples, Inc........................ 6,195 150,662
------------
$ 3,619,905
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 2.3%
Intel Corp.......................... 33,155 $ 628,287
LSI Logic Corp* .................... 20,310 181,775
Texas Instruments, Inc.............. 19,895 602,620
------------
$ 1,412,682
------------
SOFTWARE & SERVICES -- 1.0%
International Game Technology....... 8,605 $ 326,474
Oracle Corp.* ...................... 20,385 295,379
------------
$ 621,853
------------
TELECOMMUNICATION SERVICES -- 3.6%
Alltel Corp......................... 5,020 $ 320,427
AT&T, Inc........................... 52,000 1,450,280
Corning, Inc.* ..................... 20,585 497,951
------------
$ 2,268,658
------------
TRANSPORTATION -- 3.3%
Burlington Northern Santa Fe Corp... 6,120 $ 485,010
CSX Corp............................ 2,880 202,867
FedEx Corp.......................... 5,045 589,559
Norfolk Southern Corp............... 8,990 478,448
United Parcel Service, Inc. - Class B 4,035 332,202
------------
$ 2,088,086
------------
UTILITIES -- 2.4%
Duke Energy Corp.................... 5,345 $ 156,983
Exelon Corp......................... 18,781 1,067,324
FirstEnergy Corp.................... 2,230 120,888
Sempra Energy....................... 3,515 159,862
------------
$ 1,505,057
------------
TOTAL EQUITY INTERESTS-- 99.2%
(identified cost, $54,187,022).... $61,811,771
OTHER ASSETS, LESS LIABILITIES -- 0.8% 480,810
------------
NET ASSETS -- 100% $62,292,581
============
* Non-income-producing security.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $54,187,022) (Note 1A). $ 61,811,771
Cash.................................... 108,742
Receivable for investments sold......... 5,289,689
Receivable for fund shares sold......... 86,160
Receivable from investment adviser...... 8,852
Dividends receivable.................... 54,992
Prepaid expenses........................ 15,394
------------
Total assets............................ $ 67,375,600
------------
LIABILITIES:
Payable for investments purchased....... $ 3,015,315
Payable for fund shares reacquired...... 2,036,858
Transfer agent fee...................... 5,643
Accrued expenses and other liabilities.. 25,203
------------
Total liabilities....................... $ 5,083,019
------------
NET ASSETS................................ $ 62,292,581
============
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................... $ 77,913,729
Accumulated undistributed net realized loss on
investments (computed on the basis
of identified cost).................... (23,059,647)
Unrealized appreciation on investments
(computed on the basis of identified cost) 7,624,749
Distributions in excess of net
investment income...................... (186,250)
------------
Net assets applicable to outstanding shares $ 62,292,581
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 4,938,263
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 12.61
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 502,586
------------
Expenses -
Investment adviser fee (Note 2):........ $ 202,296
Administrator fee (Note 2):............. 40,459
Compensation of Trustees not employees of the
investment adviser or administrator.... 6,543
Custodian fee (Note 1D):................ 43,827
Distribution expenses (Note 3):......... 84,290
Transfer and dividend disbursing agent fees 13,723
Printing................................ 1,181
Interest expense........................ 2,490
Shareholder communications.............. 3,253
Audit services.......................... 13,471
Legal services.......................... 3,626
Registration costs...................... 16,158
Miscellaneous .......................... 4,009
------------
Total expenses.......................... $ 435,326
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (5,273)
Allocation of expenses to the
investment adviser (Note 2):........... (8,852)
------------
Total deductions........................ $ (14,125)
------------
Net expenses............................ $ 421,201
------------
Net investment income................... $ 81,385
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 7,367,653
Change in unrealized appreciation of
investments............................ (6,381,449)
------------
Net realized and unrealized gain of
investments............................ $ 986,204
------------
Net increase in net assets from operations $ 1,067,589
============
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, 2006 December 31, 2005
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 81,385 $ 431,620
Net realized gain on investments........................................... 7,367,653 3,605,530
Change in unrealized appreciation (depreciation) on investments............ (6,381,449) 59,679
-------------- --------------
Net increase in net assets resulting from operations..................... $ 1,067,589 $ 4,096,829
-------------- --------------
Distributions to shareholders -
From net investment income................................................. $ (79,695) $ (485,388)
-------------- --------------
Total distributions...................................................... $ (79,695) $ (485,388)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 4)............. $ (5,436,897) $ (2,372,715)
-------------- --------------
Net increase (decrease) in net assets........................................ $ (4,449,003) $ 1,238,726
NET ASSETS:
At beginning of period....................................................... 66,741,584 65,502,858
-------------- --------------
At end of period............................................................. $ 62,292,581 $ 66,741,584
-------------- --------------
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD............................................................. $ (186,250) $ (187,940)
============== ==============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
FINANCIAL HIGHLIGHTS June 30, 2006(4) 2005 2004 2003(4) 2002(4) 2001(4)
- ------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 12.420 $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)(1) ....... $ 0.015 $ 0.077 $ 0.053 $ 0.029 $ 0.024 $ (0.009)
Net realized and unrealized gain (loss) 0.190 0.651 1.247 1.958 (2.812) (2.301)
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 0.205 $ 0.728 $ 1.300 $ 1.987 $ (2.788) $ (2.310)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from investment income....... $ (0.015) $ (0.088) $ (0.050) $ (0.027) $ (0.022) $ -
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.015) $ (0.088) $ (0.050) $ (0.027) $ (0.022) $ -
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 12.610 $ 12.420 $ 11.780 $ 10.530 $ 8.570 $ 11.380
========= ========= ========= ========= ========= =========
TOTAL RETURN(3) ............................ 1.65% 6.20% 12.36% 23.20% (24.50%) (16.87%)
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 62,293 $ 66,742 $ 65,503 $ 71,539 $ 66,609 $ 95,121
Ratio of net expenses to average net assets 1.27%(6) 1.26% 1.25% 1.25% 1.22% 1.13%
Ratio of net expenses after custodian fee
reduction to average net assets(2)(5) 1.25%(6) 1.25% 1.25% 1.25% 1.22% 1.13%
Ratio of net investment income (loss) to
average net assets ................. 0.24%(6) 0.66% 0.49% 0.31% 0.25% (0.08%)
Portfolio turnover rate................ 69% 82% 74% 143% 130% 78%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2006 and for the years ended December 31,
2005, 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:
2006 2005 2004 2003
----------------------------------------------
Net investment income per share........ $ 0.011 $ 0.077 $ 0.050 $ 0.024
========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................. 1.29%(6) 1.26% 1.28% 1.31%
========= ========= ========= =========
Expenses after custodian fee reduction(2) 1.28%(6) 1.25% 1.28% 1.31%
========= ========= ========= =========
Net investment income................ 0.22%(6) 0.66% 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)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.
(6)Annualized
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2006 (unaudited)
Shares Value
EQUITY INTERESTS -- 97.6%
AUSTRALIA -- 4.6%
BHP Billiton, Ltd...................102,415 $ 2,206,587
Commonwealth Bank of Australia...... 21,064 694,994
QBE Insurance Group, Ltd............161,794 2,464,199
Rio Tinto Ltd....................... 20,731 1,198,283
Westfield Group.....................153,383 1,974,856
------------
$ 8,538,919
------------
AUSTRIA -- 1.3%
Boehler-Uddeholm AG................. 7,089 $ 387,501
OMV AG (Stammaktie)................. 33,198 1,975,983
------------
$ 2,363,484
------------
BELGIUM -- 1.7%
Fortis.............................. 73,982 $ 2,518,174
InBev NV............................ 13,200 647,278
------------
$ 3,165,452
------------
CANADA -- 7.5%
Biovail Corp........................139,868 $ 3,277,547
Encana Corp......................... 61,918 3,272,673
Gildan Activewear, Inc.* ........... 6,080 288,610
Husky Energy, Inc................... 34,855 2,195,793
IPSCO, Inc.......................... 5,362 515,275
National Bank of Canada............. 13,841 709,412
Nexen Inc. (Common)................. 11,524 651,794
Penn West Energy Trust.............. 15,778 637,022
Royal Bank of Canada................ 16,660 678,924
Talisman Energy, Inc................ 43,514 762,209
Teck Cominco Ltd. - Class B......... 16,212 976,423
------------
$13,965,682
------------
CAYMAN ISLANDS -- 0.4%
Kingboard Chemicals Holdings Ltd....243,000 $ 685,168
------------
DENMARK -- 2.7%
Danske Bank Ag (Stammaktie).........125,695 $ 4,783,251
Topdanmark A/S* .................... 1,697 236,496
------------
$ 5,019,747
------------
FINLAND -- 1.3%
Rautaruukki Oyj..................... 15,450 $ 466,616
Yit Oyj* ........................... 80,796 1,980,449
------------
$ 2,447,065
------------
FRANCE -- 4.9%
Axa (Actions Ordinaires)............ 29,511 $ 968,261
BNP Paribas......................... 23,246 2,224,804
Gecina SA........................... 3,964 519,021
Sanofi-Aventis...................... 4,058 395,903
Schneider Electric SA............... 7,979 831,491
Societe Generale de France
(Actions Ord.)..................... 17,585 2,585,782
Vallourec SA........................ 878 1,055,295
Vinci............................... 5,496 566,062
------------
$ 9,146,619
------------
GERMANY -- 9.1%
Allianz Ag Holding (Namensaktie).... 7,361 $ 1,162,588
BASF AG (Stammaktie)................ 22,152 1,778,222
Continental AG (Stammaktie)......... 18,760 1,917,079
DaimlerChrysler AG (Namenaktie)..... 18,346 906,187
Deutsche Bank AG (Stammaktie)....... 27,275 3,069,016
Deutsche Boerse AG.................. 17,030 2,319,081
E. On AG (Stammaktie)............... 43,823 5,044,206
Suedzucker AG....................... 31,587 700,340
------------
$16,896,719
------------
GREECE -- 0.0%
Intralot SA Integrated Lottery...... 4 $ 107
------------
IRELAND -- 0.6%
Bank of Ireland (Cap. Stock)........ 38,197 $ 681,326
Fyffes PLC..........................288,844 509,676
------------
$ 1,191,002
------------
ITALY -- 3.0%
Eni Spa (Azioni Ordinarie)..........186,918 $ 5,504,232
------------
JAPAN -- 22.2%
Aisin Seiki Co Ltd.................. 21,400 $ 636,487
Asics Corp..........................146,000 1,489,183
Canon, Inc. (Common)................ 78,450 3,849,928
Denso Corp.......................... 12,800 418,773
Fanuc Ltd........................... 8,200 737,401
Honda Motor Co., Ltd. (Common)...... 58,000 1,841,753
Ibiden Co., Ltd. (Common)........... 56,800 2,732,800
Kddi Corp........................... 297 1,826,453
Komatsu Ltd.........................139,000 2,766,260
Leopalace21 Corp.................... 22,700 784,368
Makita Corp......................... 49,800 1,577,011
Marubeni Corp....................... 60,000 320,168
Mitsubishi Corp..................... 64,500 1,289,266
Mitsubishi Rayon Co. Ltd............ 96,000 782,679
Mitsui OSK Lines, Ltd...............189,000 1,286,288
Ngk Spark Plug Co. Ltd.............. 28,000 563,356
Nippon Shokubai Co., Ltd............ 57,000 697,572
Nippon System Development Co., Ltd.. 8,800 305,612
Nippon Seiki........................ 13,000 257,578
Nissan Chemical Industries, Ltd..... 29,000 361,755
ORIX Corp.(Common).................. 9,300 2,273,849
Sankyo Co., Ltd. ................... 14,600 928,505
Shinko Electric Industries Co., Ltd. 32,500 943,883
Sumitomo Corp.......................104,000 1,372,838
Sumitomo Heavy Industries, Ltd......159,000 1,471,565
Sumitomo Metal Industries Ltd.......129,000 532,633
Takeda Chemicals Industries,
Ltd. (Com.)........................ 23,600 1,469,903
Toyota Motor Corp. (Common)......... 72,100 3,777,973
Tsumura & CO........................ 14,000 399,248
Yamada Denki Co., Ltd. (Common)..... 20,000 2,041,727
Yamaha Motor Co., Ltd............... 57,200 1,496,112
------------
$41,232,927
------------
NETHERLANDS -- 4.4%
Aegon NV............................ 62,563 $ 1,069,549
ING Groep NV (Aandeel)..............141,704 5,567,963
Koninklijke Philips Electronics NV.. 41,465 1,295,260
Royal Dutch Shell Plc - A Shs....... 8,866 298,150
------------
$ 8,230,922
------------
NORWAY -- 2.7%
Norsk Hydro Asa (Ordinaere Aksje)* . 40,491 $ 1,073,669
Orkla ASA........................... 12,181 564,751
Statoil ASA.........................119,878 3,400,261
------------
$ 5,038,681
------------
PORTUGAL -- 0.6%
Energias de Portugal SA.............290,097 $ 1,138,763
------------
SINGAPORE -- 1.0%
Capitaland Ltd......................237,000 $ 674,424
Keppel Land Ltd. (Ordinary).........135,000 344,895
Singapore Petroleum Co. Ltd.........236,000 753,660
------------
$ 1,772,979
------------
SPAIN -- 4.0%
ACS, Actividades de Construccion
y Servicios SA..................... 17,527 $ 730,819
Ebro Puleva SA...................... 23,202 476,159
Endesa SA........................... 9,177 319,052
Inmobiliaria Colonial SA............ 8,635 685,655
Metrovacesa SA...................... 10,355 934,774
Repsol YPF SA (Accion).............. 78,618 2,250,753
Sacyr Vallehermoso SA............... 21,756 726,892
Union Fenosa, S.A................... 35,599 1,377,395
------------
$ 7,501,499
------------
SWEDEN -- 3.9%
Atlas Copco AB - Class A............ 21,591 $ 599,463
Kungsleden AB* .....................123,021 1,443,097
SKF AB..............................160,711 2,532,217
Tele2 AB - Class B.................. 74,628 753,693
TeliaSonera AB......................352,578 2,001,880
------------
$ 7,330,350
------------
SWITZERLAND -- 2.5%
UBS AG* ............................ 16,152 $ 1,766,831
Zurich Financial Services
(Inhaberaktie)..................... 13,488 2,950,844
------------
$ 4,717,675
------------
UNITED KINGDOM -- 19.2%
Anglo American PLC (Ordinary).......129,882 $ 5,328,152
AstraZeneca PLC..................... 22,298 1,346,115
Barratt Developments PLC............154,743 2,713,223
Bellway PLC (Ordinary).............. 76,098 1,632,666
BG Group PLC........................ 77,733 1,038,746
BHP Billiton PLC.................... 38,031 737,869
Boots Group PLC.....................141,777 2,017,811
BP PLC (Ordinary)...................150,889 1,759,579
British American Tobacco PLC........146,825 3,698,650
George Wimpey PLC................... 41,309 347,443
Hammerson PLC....................... 17,917 392,358
Hanson PLC.......................... 23,003 279,309
Land Securities Group PLC........... 74,854 2,483,725
Man Group PLC....................... 81,250 3,829,031
Persimmon PLC (Ordinary)............140,908 3,216,006
Royal & Sun Alliance Insurance
Group PLC..........................612,685 1,524,143
Royal Dutch Shell PLC............... 37,397 1,307,960
Scottish Power PLC.................. 86,942 937,485
Taylor Woodrow PLC..................174,465 1,077,757
------------
$35,668,028
------------
TOTAL EQUITY INTERESTS-- 97.6%
(identified cost, $160,785,499).. $181,556,020
------------
OTHER ASSETS, LESS LIABILITIES -- 2.4% 4,392,409
------------
NET ASSETS -- 100% $185,948,429
============
* Non-income-producing security.
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $160,785,499) (Note 1A) $ 181,556,020
Cash.................................... 3,527,943
Foreign currency, at value (cost $135,293)
(Note 1)............................... 136,325
Receivable for fund shares sold......... 474,513
Dividends receivable.................... 153,051
Prepaid expenses........................ 19,390
Other assets............................ 7,154
Tax reclaim receivable.................. 120,463
------------
Total assets.......................... $185,994,859
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 8,396
Payable for open forward foreign
current contracts...................... 912
Transfer agent fee payable.............. 6,030
Accrued expenses and other liabilities.. 31,092
------------
Total liabilities..................... $ 46,430
------------
NET ASSETS................................ $185,948,429
============
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................... $165,971,978
Accumulated undistributed net realized loss on
investments and foreign currency (computed on
the basis of identified cost).......... (3,705,127)
Unrealized appreciation of investments and
translation of assets and liabilities in foreign
currencies (computed on the basis of
identified cost)....................... 20,781,800
Undistributed net investment income..... 2,899,778
------------
Net assets applicable to
outstanding shares................... $185,948,429
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 9,287,928
============
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $ 20.02
============
See notes to financial statements
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C):
Dividend income......................... $ 3,081,180
Less: Foreign Taxes..................... (341,884)
------------
Investment income....................... $ 2,739,296
------------
Expenses -
Investment adviser fee (Note 2):........ $ 547,527
Administrator fee (Note 2):............. 97,836
Compensation of Trustees not employees of
the investment adviser or administrator 6,498
Custodian fee (Note 1D):................ 134,353
Distribution expenses (Note 3):......... 172,311
Transfer and dividend disbursing agent fees 19,613
Printing................................ 4,172
Interest expense........................ 957
Shareholder communications.............. 7,240
Audit services.......................... 15,329
Legal services.......................... 3,620
Registration costs...................... 23,781
Miscellaneous .......................... 3,619
------------
Total expenses.......................... $ 1,036,856
------------
Deduct -
Reduction of custodian fee (Note 1D):... $ (76,413)
------------
Net expenses............................ $ 960,443
------------
Net investment income................... $ 1,778,853
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain -
Investment transactions
(identified cost basis).............. $ 7,878,569
Foreign currency transactions.......... (33,858)
------------
Net realized gain....................... $ 7,844,711
Change in unrealized appreciation -
Investments (identified cost basis).... 4,231,917
Foreign currency....................... 7,706
------------
Net change in unrealized appreciation... $ 4,239,623
------------
Net realized and unrealized gain
of investments........................ $ 12,084,334
------------
Net increase in net assets from operations $ 13,863,187
============
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, 2006 December 31, 2005
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income ..................................................... $ 1,778,853 $ 596,164
Net realized gain on investments and foreign currency transactions......... 7,844,711 7,843,984
Change in unrealized appreciaiton on investments and translation of assets
and liabilities in foreign currencies ................................... 4,239,623 6,726,396
-------------- --------------
Net increase in net assets resulting from operations..................... $ 13,863,187 $ 15,166,544
-------------- --------------
Distributions to shareholders
From net investment income................................................. $ (1,004,815) $ (704,313)
-------------- --------------
Total distributions...................................................... $ (1,004,815) $ (704,313)
-------------- --------------
Net increase in net assets from fund share transactions (Note 4) ............ $ 63,192,679 $ 33,169,454
-------------- --------------
Net increase in net assets................................................... $ 76,051,051 $ 47,631,685
NET ASSETS:
At beginning of period....................................................... 109,897,378 62,265,693
-------------- --------------
At end of period............................................................. $185,948,429 $109,897,378
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD................................................................ $ 2,899,778 $ 2,125,740
============== ==============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
FINANCIAL HIGHLIGHTS June 30, 2006 2005(1) 2004 2003(1) 2002(1) 2001(1)
- -------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 18.060 $ 15.070 $12.890 $ 9.840 $ 11.510 $ 15.180
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) .......... $ 0.249 $ 0.129 $ 0.128 $ 0.073 $ 0.070 $ (0.023)
Net realized and unrealized gain (loss) 1.862 3.028 2.140 3.044 (1.740) (3.647)
--------- --------- --------- --------- --------- ---------
Total income (loss)
from investment operations...... $ 2.111 $ 3.157 $ 2.268 $ 3.117 $ (1.670) $ (3.670)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from investment income....... $ (0.151) $ (0.167) (0.088) $(0.067) $ - $ -
--------- --------- --------- --------- --------- ---------
Total distributions................ $ (0.151) $ (0.167) $(0.088) $(0.067) $ - $ -
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 20.020 $ 18.060 $15.070 $12.890 $ 9.840 $11.510
========= ========= ========= ========= ========= =========
Total return(2) ............................ 11.72% 21.13% 17.71% 31.96% (14.51%) (24.18%)
Ratios/Supplemental Data
Net assets, end of period (000 omitted) $185,948 $109,897 $ 62,266 $ 54,586 $ 50,835 $ 66,828
Ratio of net expenses to average net assets 1.50%(6) 1.66% 1.72% 1.80% 1.66%(3) 1.56%(3)
Ratio of net expenses after custodian fee
reduction to average net assets(4) .. 1.39%(6) 1.62% 1.71% 1.80% 1.65% -
Ratio of net investment income (loss) to average
net assets.......................... 2.57%(6) 0.81% 0.97% 0.81% 0.65% (0.18%)
Portfolio turnover rate .............. 68% 99% 121% 77% 62%(5) 39%(5)
- ---------------------------------------------------------------------------------------------------------------------------------
(1)Certain per share amounts are based on average shares outstanding.
(2)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be invested at
the net asset value on the reinvestment date.
(3)Includes the 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
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.
(5)Represents portfolio turnover rate of the fund's corresponding portfolio (Note 1).
(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, if any, 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,
2005, the Trust, for federal income tax purposes, had capital loss
carryovers of $30,269,711 (WMBC)and $11,465,196 (WIBC) which will reduce
the Funds' taxable income arising from future net realized gain on
investment transactions, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distribution to shareholders
which would otherwise be necessary to relieve the respective fund of any
liability for federal income or excise tax. Pursuant to the Code, such
capital loss carryovers will expire as follows:
12/31 WSBC WMBC WIBC
- -------------------------------------------------------------------------------
2009 $ - $10,435,545 $ -
2010 - 17,603,398 9,901,904
2011 - 2,230,768 1,563,292
- -------------------------------------------------------------------------------
At December 31, 2005, net currency losses of $(28,467) for WIBC
attributable to security transactions incurred after October 31, 2005 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, 2006 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, 2006, the effective
annual rate was 0.79% for WIBC and 0.60% for WSBC and WMBC. Wright has been
allocated expenses of $8,852 on behalf of WMBC. 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, 2006, the effective rate was 0.12% for
WSBC and WMBC, and 0.14% 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 $26,665 on behalf of WSBC. 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, 2006, 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, 2006 December 31, 2005
---------------------------- ---------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fund
Sold................................................... 428,826 $ 5,558,984 1,994,101 $ 26,725,001
Issued to shareholders in payment of
distributions declared................................ 175,477 2,232,069 362,284 4,698,930
Redemptions............................................ (649,164) (8,268,463) (1,988,270) (26,793,743)
------------ --------------- ------------ ---------------
Net increase (decrease).............................. (44,861) $ (477,410) 368,115 $ 4,630,188
============ =============== ============ ===============
Wright Major Blue Chip Equities Fund
Sold................................................... 409,093 $ 4,793,843 746,933 $ 8,790,299
Issued to shareholders in payment of
distributions declared .............................. 4,956 64,573 32,288 390,542
Redemptions............................................ (847,638) (10,295,313) (969,256) (11,553,556)
------------ --------------- ------------ ---------------
Net decrease......................................... (433,589) $ (5,436,897) (190,035) $ (2,372,715)
============ =============== ============ ===============
Wright International Blue Chip Equities Fund
Sold................................................... 4,054,657 $ 79,508,019 2,853,233 $ 47,557,242
Issued to shareholders in payment of
distributions declared............................... 42,438 815,684 33,842 523,875
Redemptions............................................ (892,907) (17,131,024) (936,442) (14,911,663)
------------ --------------- ------------ ---------------
Net increase......................................... 3,204,188 $ 63,192,679 1,950,633 $ 33,169,454
============ =============== ============ ===============
- -------------------------------------------------------------------------------
(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, 2006
-------------------------------------------
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Purchases............... $ 15,318,236 $ 46,288,983 $ 158,744,512
============ ============ ============
Sales................... $ 18,112,088 $ 52,908,209 $ 91,993,491
============ ============ ============
- -------------------------------------------------------------------------------
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) of the investment securities
owned at June 30, 2006, as computed on a federal income tax basis, are as
follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Aggregate cost $ 37,518,692 $54,187,022 $160,785,499
========== =========== =============
Gross unrealized
appreciation 9,263,447 8,637,034 22,319,618
Gross unrealized
depreciation (1,124,779) (1,012,285) (1,549,097)
----------- ----------- -----------
Net unrealized
appreciation $ 8,138,668 $ 7,624,749 $ 20,770,521
=========== ============ ============
- -------------------------------------------------------------------------------
The appreciation on currency for WIBC is $11,279.
(7) LINE OF CREDIT
The funds participate with other funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. At June 30, 2006, WSBC had a balance outstanding pursuant
to this line of credit of $224,000. WMBC and WIBC did not have significant
borrowings or allocated fees during the six months ended June 30, 2006.
(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.
(9) FINANCIAL INSTRUMENTS
The Funds may trade in financial instruments with off-balance sheet risk in the
normal course of its investing activities and to assist in managing exposure to
various market risks. These financial instruments include written options,
financial futures contracts, forward foreign currency contracts, credit default
swaps, and interest rate swaps and may involve, to a varying degree, elements of
risk in excess of the amounts recognized for financial statement purposes. The
notional or contractual amounts of these instruments represent the investment
the Portfolio has in particular classes of financial instruments and does not
necessarily represent the amounts potentially subject to risk. The measurement
of the risks associated with these instruments is meaningful only when all
related and offsetting transactions are considered. A summary of obligations
under these financial instruments for WIBC at June 30, 2006, is as follows:
Forward Foreign Currency Exchange Contracts
- ------------------------------------------------
Purchases
- ------------------------------------------------
Settlement Net Unrealized
Dates Deliver In Exchange For Depreciation
- ------------------------------------------------------------------------------
7/3/06 Euro United States Dollar
10,938 13,706 (281)
7/3/06 British Pound United States Dollar
6,463 11,707 (246)
7/3/06 Japanese Yen United States Dollar
2,237,580 19,189 (385)
- -------------------------------------------------------------------------------
$ (912)
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2006 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ----------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 31.8%
- ------------------------------------
$ 44,273 FHLMC Gold Balloon #M90710 5.000% 03-01-07 $ 99.15 $ 43,897 5.0%
32,893 FHLMC Gold Balloon #M90724 5.500% 05-01-07 99.97 32,883 5.5%
145,279 FHLMC Gold Balloon #M90767 4.500% 11-01-07 98.65 143,318 4.6%
237,095 FHLMC Gold Balloon #M90802 4.000% 03-01-08 96.56 228,927 4.1%
879,878 FHLMC Gold Balloon #M90937 5.000% 08-01-09 98.17 863,747 5.1%
862,122 FHLMC Gold Balloon #M90941 4.500% 08-01-09 97.13 837,358 4.6%
300,274 FHLMC Gold Pool #M90796 4.000% 02-01-08 97.33 292,243 4.1%
262,835 FHLMC Pool #1B1291 4.401% 11-01-33 98.00 257,585 4.5%
669,513 FHLMC Pool #1G0233 5.018% 05-01-35 97.93 655,661 5.1%
59,730 FNMA Pool #254227 5.000% 02-01-09 97.92 58,491 5.1%
369,113 FNMA Pool #701043 4.052% 04-01-33 98.28 362,763 4.1%
507,131 FNMA Pool #745467 5.858% 04-01-36 99.94 506,814 5.9%
636,504 FNMA Pool #809324 4.880% 02-01-35 98.38 626,221 5.0%
U.S. GOVERNMENT AGENCIES - 46.4%
- --------------------------------
$ 500,000 FHLB 4.875% 08-22-07 $ 99.32 $ 496,590 4.9%
3,140,000 FHLB 4.000% 03-10-08 97.67 3,066,737 4.1%
1,345,000 FHLMC 3.030% 06-11-08 95.58 1,285,593 3.2%
2,335,000 FNMA 3.000% 11-22-06 99.08 2,313,597 3.0%
U.S. TREASURIES - 17.2%
- -----------------------
$ 635,000 U.S. Treasury Notes 3.000% 11-15-07 $ 97.12 616,719 3.1%
2,125,000 U.S. Treasury Notes 3.375% 11-15-08 96.10 2,042,159 3.5%
-----------
TOTAL INVESTMENTS (identified cost, $14,972,279)-- 95.4% $14,731,303
OTHER ASSETS, LESS LIABILITIES-- 4.6% 709,541
-----------
NET ASSETS-- 100.0% $15,440,844
===========
FHLB Federal Home Loan 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, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $14,972,279) (Note 1A) $ 14,731,303
Cash.................................... 336,826
Receivable for investments sold......... 2,843,646
Receivable for fund shares sold......... 8,289
Receivable from investment adviser...... 13,669
Interest receivable..................... 92,260
Prepaid expenses........................ 14,815
------------
Total assets.......................... $ 18,040,808
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 2,570,558
Distributions payable................... 11,418
Payable to affiliate for Trustees' fees. 36
Transfer agent fee ..................... 3,680
Accrued expenses........................ 14,272
------------
Total liabilities..................... $ 2,599,964
------------
NET ASSETS................................ $ 15,440,844
============
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................... $ 17,472,526
Accumulated undistributed net realized loss
on investments (computed on the basis of
identified cost)....................... (1,748,669)
Unrealized depreciation on investments
(computed on the basis of identified cost) (240,976)
Undistributed net investment income..... (42,037)
------------
Net assets applicable to
outstanding shares.................... $ 15,440,844
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING. 1,590,714
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST.................. $ 9.71
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 314,531
------------
Expenses ---
Investment adviser fee (Note 3)........ $ 39,062
Administrator fee (Note 3)............. 7,812
Compensation of Trustees not employees of
the investment adviser or administrator 6,525
Custodian fee (Note 1C)................ 24,412
Distribution expenses (Note 4)......... 21,701
Transfer and dividend disbursing agent fees 11,187
Printing............................... 1,424
Interest expense....................... 1,073
Shareholder communications............. 2,406
Audit services......................... 13,192
Legal services......................... 2,444
Registration costs..................... 11,723
Miscellaneous.......................... 2,310
------------
Total expenses........................ $ 145,271
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (3,315)
Allocation of expenses to the
investment adviser (Note 3)........... (13,669)
Reduction of investment adviser fee (Note 3) (24,153)
Reduction of distribution expenses
by principal underwriter (Note 4)..... (21,576)
------------
Total deductions...................... $ (62,713)
------------
Net expenses.......................... $ 82,558
------------
Net investment income............... $ 231,973
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (143,523)
Change in unrealized appreciation
of investments......................... 58,326
------------
Net realized and unrealized loss of
investments........................... $ (85,197)
------------
Net increase in net assets from
operations........................... $ 146,776
============
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, 2006 December 31, 2005
- -------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 231,973 $ 468,802
Net realized loss on investments........................................... (143,523) (126,026)
Change in unrealized appreciation (depreciation) on investments............ 58,326 (148,967)
-------------- --------------
Net increase in net assets resulting from operations..................... $ 146,776 $ 193,809
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (274,108) $ (605,643)
-------------- --------------
Total distributions...................................................... $ (274,108) $ (605,643)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5)............. $ (2,998,901) $ (2,593,760)
-------------- --------------
Net decrease in net assets............................................... $ (3,126,233) $ (3,005,594)
NET ASSETS:
At beginning of period....................................................... 18,567,077 21,572,671
-------------- --------------
At end of period............................................................. $ 15,440,844 $ 18,567,077
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF PERIOD............................................... $ (42,037) $ 98
============== ==============
See notes to financial statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB)
- ------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
-----------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2006 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 9.780 $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ............... $ 0.121 $ 0.227 $ 0.123 $ 0.165 $ 0.349 $ 0.480(7)
Net realized and unrealized gain (loss).. (0.044) (0.128) (0.080) (0.102) 0.200 0.195(7)
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ 0.077 $ 0.099 $ 0.043 $ 0.063 $ 0.549 $ 0.675
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income... $ (0.147) $ (0.299) $ (0.313) $ (0.303) $ (0.349) $ (0.465)
--------- --------- --------- --------- --------- ---------
Total distributions.................... $ (0.147) $ (0.299) $ (0.313) $ (0.303) $ (0.349) $ (0.465)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 9.710 $ 9.780 $ 9.980 $ 10.250 $ 10.490 $ 10.290
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) ............................ 0.84% 1.01% 0.43% 0.61% 5.42% 6.82%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 15,441 $ 18,567 $ 21,573 $ 27,557 $ 33,839 $ 36,025
Ratio of net expenses to average net assets 0.99%(8) 0.97% 0.96% 0.95% 0.97%(3) 0.97%(3)
Ratio of net expenses after custodian fee
reduction to average net assets(4)(6) 0.95%(8) 0.95% 0.95% 0.95% 0.95%(3) 0.95%(3)
Interest expense ....................... 0.01%(8) 0.01% _ 0.01% - -
Ratio of net investment income to average
net assets............................ 2.67%(8) 2.35% 1.38% 1.75% 3.10% 4.40%
Portfolio turnover rate ................ 44% 109% 138% 165% 64%(5) 92%(5)
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2006 and for the years ended December 31,
2005, 2004, 2003, 2002, and 2001, 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:
2006 2005 2004 2003 2002 2001
----------------------------------------------------------------------
Net investment income per share........ $ 0.009 $ 0.170 $ 0.097 $ 0.134 $ 0.323 $ 0.452
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.68%(8) 1.56% 1.38% 1.28% 1.20%(3) 1.22%(3)
========= ========= ========= ========= ========= =========
Expense after custodian fee reduction(4) 1.64%(8) 1.54% 1.37% 1.28% 1.18%(3) 1.20%(3)
========= ========= ========= ========= ========= =========
Interest expense..................... 0.01%(8) 0.01% - 0.01% - -
========= ========= ========= ========= ========= =========
Net investment income................ 1.99%(8) 1.76% 0.96% 1.42% 2.87% 4.15%
========= ========= ========= ========= ========= =========
- -------------------------------------------------------------------------------------------------------------------------------
(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, 2006 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES -10.8%
- -------------------------------
FINANCIAL SERVICES
- -------------------
$ 340,000 Citigroup Commercial Mortgage Trust,
Series 2004-C2 A5 4.733% 10-15-41 $ 92.75 $ 315,347 5.1%
335,000 Credit-Based Asset Servicing
and Securities, Series 2005-CB7 AF2 5.147% 11-25-35 98.84 331,103 5.2%
440,000 CS First Boston Mortgage
Securities Corp., Series 2003-C3 A5 3.936% 05-15-38 89.59 394,206 4.4%
366,581 First Horizon Alternative
Mortgage Securities,
Series 2005-AA10 1A2 5.776% 12-25-35 97.94 359,020 5.9%
565,000 JP Morgan Chase Commercial
Mortgage Securities,
Series 2004-C3 A5 4.878% 01-15-42 93.17 526,432 5.2%
220,000 JP Morgan Chase Commercial
Mortgage Securities,
Series 2004-CBX A6 4.899% 11-12-37 93.64 206,005 5.2%
425,000 Merrill Lynch Mortgage Trust,
Series 2005-LC1 A4 5.291% 01-12-44 95.77 407,043 5.5%
420,000 Merrill Lynch/Countrywide
Commercial Mortgage,
Series 2006-2 A4 5.910% 06-12-46 100.29 421,231 5.9%
405,000 Salomon Brothers Mortage Securities VII,
Series 2002-KEY2 A2 4.467% 03-18-36 96.38 390,324 4.6%
405,000 Structured Asset Securities Corp.,
Series 2004-23XS 1A4 4.930% 01-25-35 96.01 388,840 5.1%
-----------
Total Asset Backed Securities (identified cost, $3,866,900)-- 10.8% $3,739,551
-----------
CORPORATE BONDS - 22.5%
- -----------------------
AUTO - 0.5%
- ------------
$ 160,000 DaimlerChrysler North America
Holding Co. 7.200% 09-01-09 $103.22 $ 165,151 7.0%
BANKS - 5.5%
- -------------
$ 285,000 CIT Group, Inc. 7.750% 04-02-12 $108.53 $ 309,308 7.1%
305,000 General Electric Capital Corp. 5.875% 02-15-12 100.65 306,981 5.8%
415,000 HSBC Finance Corp. 4.125% 11-16-09 95.25 395,287 4.3%
285,000 National Rural Utilities 7.250% 03-01-12 106.68 304,024 6.8%
295,000 Royal Bank of Scotland Group PLC 7.648% 08-31-49 107.94 318,410 7.1%
310,000 SLM Corp. 4.823% 01-26-09 100.36 311,116 4.8%
BLDG - RESIDENTIAL/COMMER - 0.4%
- ---------------------------------
$ 145,000 Centex Corp. 7.875% 02-01-11 $105.86 $ 153,495 7.4%
BUILDING MATERIALS - 0.3%
- --------------------------
$ 80,000 Lowes Co., Inc. 8.250% 06-01-10 $109.17 $ 87,334 7.6%
CABLE TV - 0.5%
- ----------------
$ 145,000 Comcast Cable Comm HLDGS 8.375% 03-15-13 $111.21 $ 161,252 7.5%
COMMUNICATIONS EQUIPMENT - 0.9%
- --------------------------------
$ 330,000 Cisco Systems, Inc. 5.500% 02-22-16 $ 96.20 $ 317,456 5.7%
DIVERSIFIED FINANCIALS - 3.3%
- ------------------------------
$ 280,000 Boeing Capital Corp., Senior Note 7.375% 09-27-10 $106.34 $ 297,765 6.9%
230,000 Cendant Corp. 6.250% 01-15-08 100.93 232,150 6.2%
315,000 International Lease Finance Corp. 5.875% 05-01-13 99.39 313,067 5.9%
330,000 JP Morgan Chase & Co. 5.150% 10-01-15 93.51 308,576 5.5%
ELECTRIC - INTEGRATED - 0.9%
- ------------------------------
$ 170,000 Dominion Resources, Inc. 6.300% 03-15-33 $ 94.17 $ 160,093 6.7%
160,000 PPL Electric Utilities 5.875% 08-15-07 100.12 160,187 5.9%
ELECTRIC UTILITIES - 0.5%
- --------------------------
$ 175,000 American Electric Power 5.250% 06-01-15 $ 93.48 $ 163,586 5.6%
FINANCIAL SERVICES - 0.9%
- -------------------------
$ 325,000 Goldman Sachs Group, Inc. 5.350% 01-15-16 $ 94.61 $ 307,491 5.7%
FOOD - RETAIL - 0.5%
- --------------------
170,000 Safeway, Inc., Note 5.800% 08-15-12 $ 97.78 $ 166,233 5.9%
INSTRUMENTS - CONTROLS - 0.7%
- -----------------------------
$ 255,000 Honeywell International, Inc. 7.000% 03-15-07 $100.75 $ 256,922 6.9%
MEDICAL - 0.7%
- ---------------
$ 85,000 Amgen, Inc. 6.500% 12-01-07 $101.10 $ 85,935 6.4%
170,000 Wyeth 5.500% 03-15-13 97.49 165,727 5.6%
OIL & GAS - 1.8%
- -----------------
$ 290,000 Phillips Petroleum 6.650% 07-15-18 $106.08 $ 307,638 6.3%
155,000 Sempra Energy 6.000% 02-01-13 99.65 154,461 6.0%
150,000 Transocean Sedco Forex 7.500% 04-15-31 111.62 167,426 6.7%
PIPELINES - 0.5%
- ------------------
$ 155,000 Duke Capital Corp., Senior Note 7.500% 10-01-09 $105.10 $ 162,901 7.1%
PROPERTY/CASUALTY INSURANCE - 0.5%
- -------------------------------------
$ 175,000 Fund American Cos., Inc.,
Guaranteed Senior Note 5.875% 05-15-13 $ 96.08 $ 168,144 6.1%
RETAIL - 0.4%
- ---------------
$ 120,000 TJX Cos., Inc. 7.450% 12-15-09 $105.06 $ 126,072 7.1%
RETAILING - 0.5%
- -----------------
$ 195,000 Autozone, Inc. 4.375% 06-01-13 $ 87.85 $ 171,307 5.0%
TELECOM - 3.2%
- ---------------
$ 150,000 AT&T Wireless 7.875% 03-01-11 $107.82 $ 161,726 7.3%
125,000 British Telecom PLC 8.875% 12-15-30 123.25 154,056 7.2%
150,000 Deutsche Telekom International Finance 8.000% 06-15-10 107.45 161,172 7.4%
140,000 France Telecom SA 7.750% 03-01-11 107.53 150,536 7.2%
165,000 Sprint Capital Corp. 6.125% 11-15-08 100.84 166,383 6.1%
305,000 Verizon Global Funding Corp. 7.750% 12-01-30 108.16 329,893 7.2%
-----------
Total Corporate Bonds (identified cost, $8,143,609)-- 22.5% $7,829,261
-----------
GOVERNMENT INTERESTS - 65.2%
- ------------------------------
MORTGAGE-BACKED SECURITIES - 47.8%
- ------------------------------------
$ 137,634 FHLMC Gold Pool #A10798 5.500% 05-01-33 $ 96.50 $ 132,823 5.7%
288,734 FHLMC Gold Pool #A32600 5.500% 05-01-35 96.14 277,598 5.7%
92,843 FHLMC Gold Pool #C01646 6.000% 09-01-33 98.79 91,720 6.1%
59,246 FHLMC Gold Pool #C01702 6.500% 10-01-33 101.27 60,000 6.4%
204,806 FHLMC Gold Pool #C47318 7.000% 09-01-29 103.67 212,318 6.8%
682,850 FHLMC Gold Pool #C55780 6.000% 01-01-29 98.99 675,924 6.1%
190,250 FHLMC Gold Pool #C90493 6.500% 11-01-21 101.30 192,719 6.4%
161,348 FHLMC Gold Pool #D66753 6.000% 10-01-23 99.18 160,032 6.0%
26,866 FHLMC Gold Pool #E00903 7.000% 10-01-15 102.59 27,562 6.8%
343,642 FHLMC Gold Pool #E01425 4.500% 08-01-18 94.63 325,191 4.8%
527,638 FHLMC Gold Pool #G01035 6.000% 05-01-29 98.97 522,208 6.1%
198,359 FHLMC Gold Pool #G01842 4.500% 06-01-35 90.75 180,017 5.0%
186,253 FHLMC Gold Pool #G08088 6.500% 10-01-35 100.64 187,442 6.5%
204,761 FHLMC Gold Pool #GO1349 5.000% 12-01-31 93.64 191,728 5.3%
200,541 FHLMC Gold Pool #N30514 5.500% 11-01-28 97.42 195,373 5.6%
264,972 FHLMC Pool #1B1291 4.401% 11-01-33 98.00 259,679 4.5%
795,539 FHLMC Pool #1G0233 5.018% 05-01-35 97.93 779,080 5.1%
47,741 FHLMC Pool #27663 7.000% 06-01-29 102.46 48,915 6.8%
249,561 FNMA Pool #253057 8.000% 12-01-29 105.82 264,089 7.6%
81,726 FNMA Pool #254845 4.000% 07-01-13 94.92 77,574 4.2%
80,606 FNMA Pool #254863 4.000% 08-01-13 94.93 76,517 4.2%
472,764 FNMA Pool #254865 4.500% 09-01-18 94.77 448,040 4.7%
553,225 FNMA Pool #254904 5.500% 10-01-33 96.50 533,869 5.7%
384,548 FNMA Pool #255747 4.500% 04-01-25 92.30 354,936 4.9%
856,903 FNMA Pool #255894 5.000% 10-01-25 94.74 811,853 5.3%
43,254 FNMA Pool #479477 6.000% 01-01-29 98.94 42,797 6.1%
51,856 FNMA Pool #489357 6.500% 03-01-29 101.05 52,400 6.4%
43,645 FNMA Pool #535332 8.500% 04-01-30 107.52 46,927 7.9%
218,193 FNMA Pool #545317 5.500% 11-01-16 98.36 214,613 5.6%
268,643 FNMA Pool #545407 5.500% 01-01-32 96.52 259,302 5.7%
67,857 FNMA Pool #545782 7.000% 07-01-32 102.97 69,871 6.8%
533,246 FNMA Pool #576524 5.500% 01-01-29 96.43 514,186 5.7%
68,455 FNMA Pool #597396 6.500% 09-01-31 100.94 69,101 6.4%
38,774 FNMA Pool #634823 6.500% 03-01-32 100.91 39,128 6.4%
363,533 FNMA Pool #663689 5.000% 01-01-18 96.56 351,016 5.2%
298,689 FNMA Pool #701043 4.052% 04-01-33 98.28 293,550 4.1%
190,648 FNMA Pool #725550 5.000% 05-01-19 96.56 184,084 5.2%
78,186 FNMA Pool #725866 4.500% 09-01-34 90.92 71,083 4.9%
365,492 FNMA Pool #730505 4.500% 08-01-33 91.15 333,150 4.9%
223,132 FNMA Pool #738630 5.500% 11-01-33 96.50 215,325 5.7%
382,999 FNMA Pool #739372 4.121% 09-01-33 96.61 370,017 4.3%
1,270,243 FNMA Pool #745467 5.858% 04-01-36 99.94 1,269,449 5.9%
238,122 FNMA Pool #747529 4.500% 10-01-33 91.15 217,051 4.9%
169,198 FNMA Pool #750859 6.500% 10-01-32 101.05 170,973 6.4%
308,492 FNMA Pool #753189 4.000% 12-01-33 88.17 272,011 4.5%
346,596 FNMA Pool #755749 5.500% 01-01-29 96.58 334,738 5.7%
838,075 FNMA Pool #781893 4.500% 11-01-31 91.11 763,610 4.9%
294,834 FNMA Pool #807804 5.500% 03-01-35 96.15 283,479 5.7%
754,507 FNMA Pool #809324 4.880% 02-01-35 98.38 742,318 5.0%
90,632 FNMA Pool #809888 4.500% 03-01-35 90.69 82,194 5.0%
464,045 FNMA Pool #849893 4.000% 11-01-23 90.44 419,684 4.4%
76,080 GNMA II Pool #2671 6.000% 11-20-28 99.28 75,533 6.0%
11,718 GNMA II Pool #2909 8.000% 04-20-30 105.70 12,386 7.6%
32,233 GNMA II Pool #2972 7.500% 09-20-30 103.89 33,486 7.2%
12,188 GNMA II Pool #2973 8.000% 09-20-30 105.70 12,883 7.6%
375,511 GNMA Pool #374892 7.000% 02-15-24 103.22 387,585 6.8%
70,315 GNMA Pool #376400 6.500% 02-15-24 101.48 71,359 6.4%
92,215 GNMA Pool #379982 7.000% 02-15-24 103.22 95,180 6.8%
306,331 GNMA Pool #393347 7.500% 02-15-27 104.80 321,036 7.2%
113,781 GNMA Pool #410081 8.000% 08-15-25 106.17 120,803 7.5%
38,027 GNMA Pool #427199 7.000% 12-15-27 103.33 39,293 6.8%
41,401 GNMA Pool #436214 6.500% 02-15-13 101.75 42,126 6.4%
31,748 GNMA Pool #442996 6.000% 06-15-13 100.59 31,935 6.0%
152,779 GNMA Pool #448490 7.500% 03-15-27 104.80 160,113 7.2%
80,089 GNMA Pool #458762 6.500% 01-15-28 101.58 81,352 6.4%
102,287 GNMA Pool #460726 6.500% 12-15-27 101.56 103,881 6.4%
40,407 GNMA Pool #463839 6.000% 05-15-13 100.59 40,646 6.0%
67,002 GNMA Pool #478072 6.500% 05-15-28 101.58 68,059 6.4%
27,855 GNMA Pool #488924 6.500% 11-15-28 101.58 28,295 6.4%
23,406 GNMA Pool #510706 8.000% 11-15-29 106.31 24,884 7.5%
105,835 GNMA Pool #581536 5.500% 06-15-33 97.08 102,746 5.7%
U.S. GOVERNMENT AGENCIES - 6.1%
- -------------------------------
$ 200,000 FNMA 3.875% 11-17-08 $ 96.45 $ 192,898 4.0%
965,000 FNMA 5.000% 04-15-15 96.85 934,601 5.2%
625,000 FNMA 6.250% 05-15-29 108.49 678,035 5.8%
320,000 Tennessee Valley Authority 6.000% 03-15-13 102.73 328,736 5.8%
U.S. TREASURIES - 11.3%
- -----------------------
$ 1,970,000 U.S. Treasury Bonds 4.375% 05-15-07 $ 99.27 $ 1,955,534 4.4%
235,000 U.S. Treasury Bonds 7.250% 05-15-16 115.82 272,178 6.3%
1,540,000 U.S. Treasury Bonds 6.125% 11-15-27 110.52 1,702,062 5.5%
-----------
Total Government Interests (identified cost, $23,308,279)-- 65.2% $22,686,889
-----------
TOTAL INVESTMENTS (identified cost, $35,318,788)-- 98.5% $34,255,701
OTHER ASSETS, LESS LIABILITIES-- 1.5% 517,891
-----------
NET ASSETS-- 100.0% $34,773,592
===========
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, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of $35,318,788) (Note 1A) $ 34,255,701
Cash.................................... 4,231,168
Receivable for investments sold......... 902,646
Receivable for fund shares sold......... 77,618
Interest receivable..................... 273,187
Prepaid expenses........................ 15,681
------------
Total assets.......................... $ 39,756,001
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 4,929,262
Distributions payable................... 24,293
Payable to affiliate for distribution fees 7,559
Transfer agent fee ..................... 3,358
Accrued expenses and other liabilities.. 17,937
------------
Total liabilities..................... $ 4,982,409
------------
NET ASSETS................................ $ 34,773,592
============
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................... $ 38,899,379
Accumulated undistributed net realized loss on
investments (computed on the basis of
identified cost)....................... (2,918,652)
Unrealized depreciation on investments
(computed on the basis of identified cost) (1,063,087)
Distributions in excess of net
investment incom....................... (144,048)
------------
Net assets applicable to outstanding
shares................................ $ 34,773,592
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................. 2,896,770
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST..................... $ 12.00
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 956,289
------------
Expenses -
Investment adviser fee (Note 3)........ $ 90,622
Administrator fee (Note 3)............. 14,097
Compensation of Trustees not employees of
the investment adviser or administrator 6,528
Custodian fee (Note 1C)................ 34,593
Distribution expenses (Note 4)......... 50,346
Transfer and dividend disbursing agent fees 10,030
Printing............................... 1,780
Interest expense....................... 910
Shareholder communications............. 2,092
Audit services......................... 13,182
Legal services......................... 2,570
Registration costs..................... 13,331
Miscellaneous.......................... 2,109
------------
Total expenses........................ $ 242,190
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (8,017)
Reduction of distribution expenses
by principal underwriter (Note 4)..... $ (42,787)
------------
Total deductions....................... $ (50,804)
------------
Net expenses.......................... $ 191,386
------------
Net investment income............... $ 764,903
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (490,065)
Change in unrealized depreciation
of investments......................... (803,434)
------------
Net realized and unrealized loss of
investments........................... $(1,293,499)
------------
Net decrease in net assets from
operations........................... $ (528,596)
============
See notes to financial statemnts
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2006 December 31, 2005
- ---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 764,903 $ 1,475,641
Net realized loss on investments........................................... (490,065) (272,363)
Change in unrealized depreciation of investments........................... (803,434) (584,766)
--------------- ---------------
Net increase (decrease) in net assets resulting from operations.......... $ (528,596) $ 618,512
--------------- ---------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (899,352) $ (1,706,230)
--------------- ---------------
Total distributions...................................................... $ (899,352) $ (1,706,230)
--------------- ---------------
Net increase (decrease) in net assets from fund share transactions (Note 5).. $ (5,086,572) $ 4,162,659
--------------- ---------------
Net increase (decrease) in net assets.................................... $ (6,514,520) $ 3,074,941
NET ASSETS:
At beginning of period....................................................... 41,288,122 38,213,171
--------------- ---------------
At end of period............................................................. $ 34,773,592 $ 41,288,112
=============== ===============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD...................................... $ (144,048) $ (9,599)
=============== ===============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2006 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 12.430 $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ................ $ 0.218 $ 0.465 $ 0.453 $ 0.483 $ 0.639 $ 0.709 (2)
Net realized and unrealized gain (loss).. (0.383) (0.271) (0.011) (0.066) 0.461 (0.090)(2)
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ (0.165) $ 0.194 $ 0.442 $ 0.417 $ 1.100 $ 0.619
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income..... $ (0.265) $ (0.534) $ (0.542) $ (0.557) $ (0.640) $ (0.699)
--------- --------- --------- --------- --------- ---------
Total distributions.................... $ (0.265) $ (0.534) $ (0.542) $ (0.557) $ (0.640) $ (0.699)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 12.000 $ 12.430 $ 12.770 $ 12.870 $ 13.010 $ 12.550
========= ========= ========== ========= ========= =========
TOTAL RETURN(3) ............................ -1.27% 1.54% 3.52% 3.25% 9.03% 4.96%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 34,774 $ 41,288 $ 38,213 $ 42,317 $ 39,404 $ 50,620
Ratio of net expenses to average net assets 0.99%(6) 0.98% 0.96% 0.95% 0.96% 0.96%
Ratio of net expenses after custodian fee
reduction to average net assets(4)(5) . 0.95%(6) 0.95% 0.95% 0.95% 0.95% 0.95%
Ratio of net investment income to average
net assets............................ 3.80%(6) 3.66% 3.58% 3.67% 4.92% 5.44%
Portfolio turnover rate.................. 37% 86% 64% 131% 68% 38%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2006 and for the years ended December 31,
2005, 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:
2006 2005 2004 2003 2002 2001
----------------------------------------------------------------------
Net investment income per share.......... $ 0.217 $ 0.439 $ 0.429 $ 0.455 $ 0.621 $ 0.701
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................... 1.20%(6) 1.18% 1.18% 1.17% 1.09% 1.02%
========= ========= ========= ========= ========= =========
Expenses after custodian fee reduction(4) 1.16%(6) 1.15% 1.17% 1.17% 1.08% 1.01%
========= ========= ========= ========= ========= =========
Net investment income.................. 3.59%(6) 3.46% 3.36% 3.46% 4.78% 6.38%
========= ========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
(2)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).
(3)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.
(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)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, 2006 (unaudited)
Face Coupon Maturity Market Current
Amount Description Rate Date Price Value Yield
- ----------------------------------------------------------------------------------------------------------------------------------
ASSET - BACKED SECURITIES - 7.4%
- --------------------------------
$ 854,084 Chase Mortgage Finance Corporation,
Series 2003-S3, Class A16 5.000% 11-25-33 $ 95.02 $ 811,511 5.3%
1,598,384 Countrywide Home Loans,
Series 2006-J1, Class 3A1 6.000% 02-25-36 97.96 1,565,729 6.1%
MORTGAGE-BACKED SECURITIES - 89.8%
- ----------------------------------
$ 6,579 FHLMC Gold Balloon #M90724 5.500% 05-01-07 $ 99.97 $ 6,577 5.5%
145,279 FHLMC Gold Balloon #M90767 4.500% 11-01-07 98.65 143,318 4.6%
79,032 FHLMC Gold Balloon #M90802 4.000% 03-01-08 96.56 76,309 4.1%
177,832 FHLMC Gold Pool #C00778 7.000% 06-01-29 102.46 182,205 6.8%
252,995 FHLMC Gold Pool #C47318 7.000% 09-01-29 103.67 262,275 6.8%
174,804 FHLMC Gold Pool #E00678 6.500% 06-01-14 101.18 176,869 6.4%
181,109 FHLMC Gold Pool #E00721 6.500% 07-01-14 101.18 183,248 6.4%
148,908 FHLMC Gold Pool #G00812 6.500% 04-01-26 101.07 150,500 6.4%
322,296 FHLMC Pool #11636 5.000% 01-01-19 96.51 311,038 5.2%
135,979 FHLMC Pool #765183 5.818% 08-01-24 100.41 136,540 5.8%
62,422 FHLMC Pool #C00548 7.000% 08-01-27 102.58 64,031 6.8%
247,590 FHLMC Pool #D82572 7.000% 09-01-27 102.58 253,969 6.8%
531,077 FHLMC, Series 15, Class L 7.000% 07-25-23 102.43 543,968 6.8%
29,865 FNMA Pool #254227 5.000% 02-01-09 97.92 29,245 5.1%
28,650 FNMA Pool #254505 5.000% 11-01-09 97.92 28,055 5.1%
128,028 FNMA Pool #535131 6.000% 03-01-29 98.94 126,676 6.1%
174,528 FNMA Pool #545133 6.500% 12-01-28 100.99 176,248 6.4%
121,178 FNMA Pool #663689 5.000% 01-01-18 96.56 117,005 5.2%
576,682 FNMA Pool #673315 5.500% 11-01-32 96.52 556,587 5.7%
159,862 FNMA Pool #701043 4.033% 04-01-33 98.28 157,112 4.1%
366,316 FNMA Pool #729950 6.000% 12-01-33 98.76 361,783 6.1%
64,996 FNMA Pool #733750 6.310% 10-01-32 100.13 65,080 6.3%
592,929 FNMA Pool #801357 5.500% 08-01-34 96.52 572,267 5.7%
654,852 FNMA Pool #816108 5.500% 05-01-35 96.15 629,630 5.7%
422,169 FNMA Pool #816468 5.000% 03-01-20 96.37 406,849 5.2%
602,069 FNMA Pool #821574 6.000% 06-01-35 98.53 593,241 6.1%
1,188,414 FNMA Pool# 255669 4.500% 02-01-35 90.69 1,077,768 5.0%
622,544 FNMA, Series G93-5, Class Z 6.500% 02-25-23 100.58 626,169 6.5%
4,281 GNMA II Pool #1596 9.000% 04-20-21 107.54 4,604 8.4%
65,457 GNMA II Pool #2268 7.500% 08-20-26 104.07 68,121 7.2%
7,027 GNMA II Pool #2855 8.500% 12-20-29 107.07 7,524 7.9%
593,406 GNMA II Pool #3259 5.500% 07-20-32 96.70 573,841 5.7%
391,134 GNMA II Pool #3284 5.500% 09-20-32 96.70 378,238 5.7%
123,247 GNMA II Pool #3484 3.500% 09-20-33 82.51 101,689 4.2%
116,380 GNMA II Pool #601135 6.310% 09-20-32 100.20 116,607 6.3%
133,894 GNMA II Pool #601255 6.310% 01-20-33 100.16 134,102 6.3%
113,703 GNMA II Pool #608120 6.310% 01-20-33 100.16 113,880 6.3%
42,758 GNMA II Pool #723 7.500% 01-20-23 103.90 44,426 7.2%
3,037,444 GNMA II Pool# 3734 4.500% 07-20-35 90.84 2,759,104 5.0%
612,617 GNMA II Pool# 648541 6.000% 10-20-35 98.85 605,572 6.1%
49 GNMA Pool #012526 8.000% 11-15-06 100.33 49 8.0%
192,595 GNMA Pool #081161 5.500% 11-20-34 98.85 190,372 5.6%
5,913 GNMA Pool #172558 9.500% 08-15-16 108.46 6,413 8.8%
2,376 GNMA Pool #176992 8.000% 11-15-16 105.01 2,495 7.6%
2,671 GNMA Pool #177784 8.000% 10-15-16 105.01 2,805 7.6%
12,572 GNMA Pool #192357 8.000% 04-15-17 105.22 13,229 7.6%
19,087 GNMA Pool #194057 8.500% 04-15-17 107.06 20,434 7.9%
5,243 GNMA Pool #194287 9.500% 03-15-17 108.81 5,705 8.7%
1,532 GNMA Pool #196063 8.500% 03-15-17 107.06 1,640 7.9%
7,709 GNMA Pool #211231 8.500% 05-15-17 107.06 8,253 7.9%
4,579 GNMA Pool #212601 8.500% 06-15-17 107.06 4,902 7.9%
4,337 GNMA Pool #220917 8.500% 04-15-17 107.06 4,644 7.9%
8,737 GNMA Pool #223348 10.000% 08-15-18 109.51 9,568 9.1%
13,115 GNMA Pool #228308 10.000% 01-15-19 109.50 14,362 9.1%
3,000 GNMA Pool #230223 9.500% 04-15-18 109.11 3,273 8.7%
868 GNMA Pool #247473 10.000% 09-15-18 104.20 904 9.6%
3,684 GNMA Pool #247872 10.000% 09-15-18 109.51 4,034 9.1%
4,391 GNMA Pool #251241 9.500% 06-15-18 109.11 4,791 8.7%
5,732 GNMA Pool #260999 9.500% 09-15-18 109.11 6,254 8.7%
5,926 GNMA Pool #263439 10.000% 02-15-19 109.50 6,490 9.1%
1,511 GNMA Pool #265267 9.500% 08-15-20 109.60 1,656 8.7%
1,944 GNMA Pool #266983 10.000% 02-15-19 109.50 2,128 9.1%
3,180 GNMA Pool #273690 9.500% 08-15-19 109.37 3,478 8.7%
1,559 GNMA Pool #286556 9.000% 03-15-20 107.79 1,680 8.3%
4,933 GNMA Pool #301366 8.500% 06-15-21 107.72 5,314 7.9%
5,945 GNMA Pool #302933 8.500% 06-15-21 107.72 6,404 7.9%
11,591 GNMA Pool #308792 9.000% 07-15-21 107.94 12,511 8.3%
3,617 GNMA Pool #314222 8.500% 04-15-22 107.87 3,902 7.9%
3,804 GNMA Pool #315187 8.000% 06-15-22 105.92 4,029 7.6%
14,193 GNMA Pool #315754 8.000% 01-15-22 105.92 15,033 7.6%
29,056 GNMA Pool #319441 8.500% 04-15-22 107.87 31,342 7.9%
9,734 GNMA Pool #325165 8.000% 06-15-22 105.92 10,310 7.6%
15,626 GNMA Pool #335950 8.000% 10-15-22 105.92 16,551 7.6%
245,510 GNMA Pool #346987 7.000% 12-15-23 103.17 253,288 6.8%
116,225 GNMA Pool #352001 6.500% 12-15-23 101.45 117,908 6.4%
53,384 GNMA Pool #352110 7.000% 08-15-23 103.17 55,075 6.8%
2,156,514 GNMA Pool #3556 5.500% 05-20-34 96.64 2,084,011 5.7%
98,978 GNMA Pool #368238 7.000% 12-15-23 103.17 102,114 6.8%
51,535 GNMA Pool #372379 8.000% 10-15-26 106.24 54,750 7.5%
62,513 GNMA Pool #396537 7.490% 03-15-25 104.68 65,436 7.2%
71,036 GNMA Pool #399964 7.490% 04-15-26 104.73 74,392 7.2%
95,410 GNMA Pool #410215 7.500% 12-15-25 104.71 99,901 7.2%
18,626 GNMA Pool #414736 7.500% 11-15-25 104.71 19,503 7.2%
62,040 GNMA Pool #420707 7.000% 02-15-26 103.30 64,085 6.8%
36,274 GNMA Pool #421829 7.500% 04-15-26 104.76 38,000 7.2%
19,481 GNMA Pool #431036 8.000% 07-15-26 106.24 20,697 7.5%
73,265 GNMA Pool #431612 8.000% 11-15-26 106.24 77,834 7.5%
64,582 GNMA Pool #438004 7.490% 11-15-26 104.73 67,634 7.2%
20,182 GNMA Pool #442190 8.000% 12-15-26 106.24 21,441 7.5%
23,469 GNMA Pool #449176 6.500% 07-15-28 101.58 23,839 6.4%
58,061 GNMA Pool #462623 6.500% 03-15-28 101.58 58,977 6.4%
415,312 GNMA Pool #471369 5.500% 05-15-33 97.08 403,189 5.7%
113,739 GNMA Pool #475149 6.500% 05-15-13 101.75 115,730 6.4%
145,982 GNMA Pool #489377 6.375% 03-15-29 101.02 147,471 6.3%
51,063 GNMA Pool #538314 7.000% 02-15-32 103.19 52,691 6.8%
395,903 GNMA Pool #595606 6.000% 11-15-32 99.38 393,437 6.0%
63,863 GNMA Pool #602377 4.500% 06-15-18 95.36 60,900 4.7%
708,386 GNMA Pool #603250 5.500% 04-15-34 97.04 687,445 5.7%
55,492 GNMA Pool #603377 4.500% 01-15-18 95.36 52,917 4.7%
970,381 GNMA Pool #608639 5.500% 07-15-24 97.43 945,426 5.6%
217,999 GNMA Pool #609452 4.000% 08-15-33 88.44 192,797 4.5%
581,911 GNMA Pool #616829 5.500% 01-15-25 98.44 572,806 5.6%
805,242 GNMA Pool #631623 5.500% 08-15-34 97.04 781,439 5.7%
839,844 GNMA Pool #640225 5.500% 04-15-35 97.00 814,688 5.7%
1,842,983 GNMA Pool #640940 5.500% 05-15-35 97.00 1,787,780 5.7%
85,304 GNMA Pool #780429 7.500% 09-15-26 104.73 89,342 7.2%
46,555 GNMA Pool# 399726 7.490% 05-15-25 104.68 48,732 7.2%
181,115 GNMA Pool# 399788 7.490% 09-15-25 104.68 189,584 7.2%
90,698 GNMA Pool# 399958 7.490% 02-15-27 104.77 95,023 7.1%
139,223 GNMA Pool# 524811 6.375% 09-15-29 101.02 140,643 6.3%
490,383 GNMA Pool# 624600 6.150% 01-15-34 99.81 489,428 6.2%
1,420,999 GNMA Pool# 651026 5.500% 12-15-25 97.38 1,383,713 5.6%
1,833,146 GNMA Series 1999-4, Class ZB 6.000% 02-20-29 99.60 1,825,850 6.0%
750,000 GNMA Series 2002-47, Class PG 6.500% 07-16-32 101.77 763,250 6.4%
359,887 GNMA Series 2002-7, Class PG 6.500% 01-20-32 101.16 364,047 6.4%
U.S. GOVERNMENT AGENCIES - 1.5%
- -------------------------------
$ 500,000 FFCB 5.050% 07-05-06 $ 99.94 $ 499,719 5.1%
-----------
TOTAL INVESTMENTS (identified cost, $32,158,900)-- 98.7% $31,921,397
OTHER ASSETS, LESS LIABILITIES-- 1.3% 418,143
-----------
NET ASSETS-- 100.0% $32,339,540
===========
FFCB - Federal Farm Credit Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
See notes to financial statements
WRIGHT CURRENT INCOME FUND
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost of (32,158,900)(Note 1A) $ 31,921,397
Cash.................................... 749,445
Receivable for investments sold......... 1,088
Receivable for fund shares sold......... 29,449
Receivable from investment adviser...... 5,818
Interest receivable..................... 153,123
Prepaid expenses........................ 19,974
------------
Total assets.......................... $ 32,880,294
------------
LIABILITIES:
Payable for fund shares reacquired...... $ 474,310
Distributions payable................... 45,041
Payable to affiliate for Trustees' fees. 36
Transfer agent fee ..................... 3,167
Accrued expenses and other liabilities.. 18,200
------------
Total liabilities..................... $ 540,754
------------
NET ASSETS................................ $ 32,339,540
============
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................... $ 32,360,194
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)....................... 246,627
Unrealized depreciation on investments
(computed on the basis of identified cost) (237,503)
Accumulated undistributed net investment
income................................. (29,778)
------------
Net assets applicable to outstanding shares $ 32,339,540
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................... 3,472,391
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST................... $ 9.31
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2006 (unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B):
Interest income........................ $ 866,861
------------
Expenses -
Investment adviser fee (Note 3)........ $ 73,906
Administrator fee (Note 3)............. 14,781
Compensation of Trustees not employees of
the investment adviser or administrator 6,498
Custodian fee (Note 1C)................ 28,864
Distribution expenses (Note 4)......... 41,059
Transfer and dividend disbursing agent fees 9,262
Printing............................... 1,353
Interest expense....................... 3,692
Shareholder communications............. 1,960
Audit services......................... 15,582
Legal services......................... 2,534
Registration costs..................... 13,906
Miscellaneous.......................... 2,838
------------
Total expenses........................ $ 216,235
------------
Deduct -
Reduction of custodian fee (Note 1C):.. $ (1,840)
Allocation of expenses to
investment adviser (Note 3)........... (5,818)
Reduction of management fee (Note 3)... (12,138)
Reduction of distribution expenses
by principal underwriter (Note 4)..... (41,059)
------------
Total deductions...................... $ (60,855)
------------
Net expenses.......................... $ 155,380
------------
Net investment income............... $ 711,481
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis)................ $ 287,389
Change in unrealized depreciation
of investments......................... (1,175,347)
------------
Net realized and unrealized loss
of investments........................ $ (887,958)
------------
Net decrease in net assets from operations $ (176,477)
============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2006 December 31, 2005
- -------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income...................................................... $ 711,481 $ 1,454,647
Net realized gain on investments........................................... 287,389 404,721
Change in unrealized depreciation on investments........................... (1,175,347) (1,232,166)
-------------- --------------
Net increase (decrease) in net assets resulting from operations.......... $ (176,477) $ 627,202
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income................................................. $ (791,501) $ (1,558,214)
From net realized gain..................................................... (59,861) (69,145)
-------------- --------------
Total distributions...................................................... $ (851,362) $ (1,627,359)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5)............. $ (493,533) $ (151,834)
-------------- --------------
Net decrease in net assets............................................... $ (1,521,372) $ (1,151,991)
NET ASSETS:
At beginning of period....................................................... 33,860,912 35,012,903
-------------- --------------
At end of period............................................................. $ 32,339,540 $ 33,860,912
============== ==============
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF PERIOD............................................... $ (29,778) $ 50,242
============== ==============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS June 30, 2006 2005 2004 2003 2002 2001(2)
- -----------------------------------------------------------------------------------------------------------------------------
(unaudited)
Net asset value, beginning of period........ $ 9.610 $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) ............... $ 0.197 $ 0.400 $ 0.447 $ 0.417 $ 0.565 $ 0.616
Net realized and unrealized gain (loss).. (0.260) (0.230) (0.112) (0.235) 0.231 0.120
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ (0.063) $ 0.170 $ 0.335 $ 0.182 $ 0.796 $ 0.736
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income..... $ (0.220) $ (0.430) $ (0.482) $ (0.502) $ (0.555) $ (0.616)
Distributions from capital gains......... (0.017) (0.020) (0.453) - - --
Tax return of capital.................... - - - - (0.011) --
--------- --------- --------- --------- --------- ---------
Total distributions.................. $ (0.237) $ (0.450) $ (0.935) $ (0.502) $ (0.566) $ (0.616)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.............. $ 9.310 $ 9.610 $ 9.890 $ 10.490 $ 10.810 $ 10.580
========= ========= ========= ========= ========= =========
TOTAL RETURN(3) ............................ -0.59% 1.76% 3.29% 1.73% 7.70% 7.18%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted).. $ 32,340 $ 33,861 $ 35,013 $ 36,332 $ 59,077 $54,966
Ratio of net expenses to average net assets 0.96%(8) 0.97% 0.97% 0.95% 0.97%(5) 0.95%(5)
Ratio of net expenses after custodian fee
reduction to average net assets(6) (7) 0.95%(8) 0.95% 0.95% 0.95% 0.95%(5) --
Interest expense......................... 0.02% 0.01% 0.02% 0.01% -- --
Ratio of net investment income
to average net assets................. 4.33%(8) 4.12% 4.29% 4.43% 5.28% 5.83%
Portfolio turnover rate ................. 43% 103% 27% 20% 36%(4) 4%(4)
- ---------------------------------------------------------------------------------------------------------------------------------
(1)For the six months ended June 30, 2006 and for the years ended December 31,
2005, 2004, 2003, 2002, and 2001, 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:
2006 2005 2004 2003 2002 2001
----------------------------------------------------------------------
Net investment income per share........ $ 0.186 $ 0.369 $ 0.410 $ 0.401 $ 0.555 $ 0.609
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.32%(8) 1.30% 1.28% 1.12% 1.06%(5) 1.02%(5)
========= ========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.31%(7)(8) 1.28%(7) 1.25%(7) 1.12% 1.04%(5)(7) --
========= ========= ========= ========= ========= =========
Interest expense..................... 0.02% 0.01% 0.02% 0.01% -- --
========= ========= ========= ========= ========= =========
Net investment income................ 3.97%(8) 3.80% 3.99% 4.26% 5.19% 5.76%
=========== ========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(2)Certain of the per share data are based on average shares outstanding.
(3)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.
(4)Represents portfolio turnover rate at the fund's corresponding portfolio (Note 1).
(5)Includes each fund's share of its corresponding portfolio's allocated expenses (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, if any, 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, 2005, the Trust, for federal income tax
purposes, had capital loss carryovers of $1,584,491 (WNTB) and
$2,024,032 (WTRB) 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 1,244,473 -
2010 - 508,606 -
2012 505,639 - -
2013 469,640 270,953 -
At December 31, 2005, net capital losses of $9,094 for WNTB, $136,116
for WTRB and $38,352 for WCIF, attributable to security transactions
incurred after October 31, 2005, were 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, 2006 and for the six months 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, consisting only of normal 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 over distributions for financial statement purposes be
classified as distributions in excess of net investment income or accumulated
net realized gains.
Distributions in excess of tax basis earnings and profits, if any, are reported
in the financial statements as a return of capital. Permanent differences
between book and tax accounting for certain items may result in reclassification
of these items.
(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, 2006, the
effective annual rate for WNTB, WCIF, and WTRB was 0.45%. Under a written
agreement, Wright Investors' Service and/or Wright Investors' Service
Distributors, Inc., waive a portion of their advisory fee and/or distribution
fees and assume operating expenses to the extent necessary to limit each Fund's
expense ratios to 0.95% after custodian fee reductions, if any. Accordingly,
Wright made a reduction of its investment adviser fee by $24,153 and $12,138 on
behalf of WNTB and WCIF, respectively (Note 4). In addition, Wright has been
allocated expenses of $13,669 and $5,818 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 of each Fund which rate is
reduced as average daily net assets exceed certain levels. For the six months
ended June 30, 2006, 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 The Winthrop Corporation, 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 $21,576,
$42,787, and $41,059 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, 2006, 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, 2006 December 31, 2005
-----------------------------------------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Wright U.S. Government Near Term Fund--
Sold................................................. 307,362 $ 2,991,869 308,569 $ 3,047,973
Issued to shareholders in payment of distributions
declared............................................ 22,265 216,916 47,224 465,559
Redemptions.......................................... (637,721) (6,207,686) (618,843) (6,107,292)
----------- -------------- ----------- --------------
Net decrease..................................... (308,094) $ (2,998,901) (263,050) $ (2,593,760)
=========== ============== =========== ==============
Wright Total Return Bond Fund--
Sold................................................. 325,906 $ 4,002,428 652,090 $ 8,236,968
Issued to shareholders in payment of distributions
declared............................................ 57,864 704,533 106,865 1,346,413
Redemptions.......................................... (808,644) (9,793,533) (430,129) (5,420,722)
----------- -------------- ----------- --------------
Net increase (decrease).......................... (424,874) $ (5,086,572) 328,826 $ 4,162,659
=========== ============== =========== ==============
Wright Current Income Fund--
Sold................................................. 446,103 $ 4,220,906 1,064,067 $ 10,372,941
Issued to shareholders in payment of distributions
declared............................................ 56,783 536,167 102,779 998,494
Redemptions.......................................... (555,355) (5,250,606) (1,183,110) (11,523,269)
----------- -------------- ----------- --------------
Net decrease..................................... (52,469) $ (493,533) (16,264) $ (151,834)
=========== ============== =========== ==============
(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, 2006
-------------------------------------------------
WNTB WTRB WCIF
- -------------------------------------------------------------------------------
Purchases--
Non-U.S. Obligations $ - $ 2,812,884 $ 2,399,115
========== ========== ==========
U.S.Gov't Obligation $ 7,421,202 $11,523,648 $11,559,863
========== ========== ==========
Sales--
Non-U.S. Obligations $ - $ 5,334,497 $ 24,464
========== ========== ==========
U.S.Gov't Obligations $10,922,293 $13,837,486 $14,959,433
========== ========== ==========
- -------------------------------------------------------------------------------
(7)FEDERAL INCOME TAX BASIS OF INVESTMENT
SECURITIES
The cost and unrealized appreciation (depreciation) of the investment
securities owned at June 30, 2006, as computed on a federal income tax basis,
are as follows:
WNTB WTRB WCIF
- -------------------------------------------------------------------------------
Aggregate cost $14,996,344 $35,525,724 $31,668,834
=========== =========== ===========
Gross unrealized
appreciation 224 57,846 691,961
Gross unrealized
depreciation (265,265) (1,327,869) (939,117)
----------- ----------- -----------
Net unrealized
depreciation $ (265,041) $(1,270,023) $ (247,156)
=========== =========== ===========
- -------------------------------------------------------------------------------
(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, 2006.
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
Barbara E. Campbell, Treasurer
William J. Austin, Jr., Assistant Treasurer
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
Wright Investors' Service
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
Citigroup Fund 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
The registrant's Board has designated James J. Clarke, an independent
trustee, as its audit committee financial expert. Mr. Clarke is the Principal of
Clarke Consulting, a financial management and strategic planning firm.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
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.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors/trustees.
Item 11. CONTROLS AND PROCEDURES
a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Item 12. EXHIBITS
(a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a) (2) Treasurer's and President's Section 302 certification.
(b) Combined 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Wright Managed Equity Trust(On behalf of Wright Selected Blue Chip Equities
- -------------------------------------------------------------------------------
Fund, Wright Major Blue Chip Equities Fund and Wright International Blue Chip
- -------------------------------------------------------------------------------
Equities Fund)
- ---------------
By: /s/ Peter M. Donovan
--------------------
Peter M. Donovan
President
Date: August 15, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Barbara E. Campbell
-------------------------
Barbara E. Campbell
Treasurer
Date: August 18, 2006
By: /s/ Peter M. Donovan
----------------------
Peter M. Donovan
President
Date: August 15, 2006