As filed with the Securities and Exchange Commission on October 13, 2006
File No. 333-_____________
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ______
Post-Effective Amendment No. _______
(Check appropriate box or boxes)
THE WRIGHT MANAGED INCOME TRUST
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(Exact Name of Registrant as Specified in Charter)
(617) 482-8260
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(Area Code and Telephone Number)
255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
Alan R. Dynner
255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
Copies to: Leonard A. Pierce, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is due because of reliance on Section 24(f) of the Investment Company Act of
1940, as amended, which permits registration of an indefinite number of
securities.
Title of Securities Being Registered: Shares of beneficial interest of the
Registrant.
It is proposed that this filing will become effective on November 13, 2006
pursuant to Rule 488 under the Securities Act of 1933.
THE WRIGHT MANAGED INCOME TRUST
Wright U.S. Government Near Term Fund
Wright Current Income Fund
November 13, 2006
IMPORTANT INFORMATION
Dear Shareholder:
I am writing to inform you about a reorganization that will affect your
investment in Wright U.S. Government Near Term Fund ("U.S. Government Near Term
Fund" or "your fund"). Your fund's investment adviser, Wright Investors'
Service, Inc. ("Wright"), manages two fixed income mutual funds that focus on
your fund and Wright Current Income Fund ("Current Income Fund"), each a series
of The Wright Managed Income Trust (the "Trust"). The enclosed prospectus
contains information about the reorganization of your fund into Current Income
Fund. As a result of the reorganization, you will receive shares of Current
Income Fund equal in value to the value of your shares in U.S. Government Near
Term Fund, and you will become a shareholder of Current Income Fund, which has
investment goals and focus similar to your fund, but which is larger in size.
Our hope is that this will enable the combined fund to invest more efficiently
and to have the potential to realize expense savings in the future.
WHY IS THE REORGANIZATION TAKING PLACE?
In approving the reorganization, the trustees of the Trust have
determined that the reorganization is in the best interests of the shareholders
of your fund. The trustees believe that reorganizing your fund into Current
Income Fund offers you potential benefits, including the opportunity to be part
of a fund with a similar objective and a larger asset size that may be better
positioned in the market to increase asset size and achieve increased economies
of scale. The larger portfolio of the combined fund may enable it to achieve
better net prices on securities trades. In addition, each fund incurs
substantial operating costs for insurance, accounting, legal, and custodial
services. Because Wright currently limits each fund's expenses as explained
below, the combination of the funds is not expected to reduce expenses
immediately but may increase the potential for cost savings in the future as the
fixed expenses are spread over a larger pool of assets, reducing expenses on a
per share basis. Without giving effect to the expense limitations, the combined
fund would have a lower expense ratio than your fund.
NO IMPACT ON FUND FEES AND EXPENSES.
No increase in management fees will result from the reorganization.
Under a written agreement in effect through April 30, 2007, Wright limits your
fund's operating expense to 0.95%, after custodian fee reductions, if any. After
the reorganization, Wright will extend this contractual expense limitation to
the combined fund through April 30, 2008, so your expenses will not increase
above this limit through at least April 30, 2008, but Wright may eliminate it in
the future after April 30, 2008. The pro forma gross expenses (i.e., before
giving effect to the expense limitation) of the combined fund will be lower than
U.S. Government Near Term Fund's current gross expenses. Because of the expense
limitation, the pro forma net expenses (i.e., after giving effect to the expense
limitation) are the same for both funds. That may benefit you if Wright
terminates the expense limitation agreement in the future after April 30, 2008.
NO SHAREHOLDER ACTION REQUIRED.
In accordance with the Trust's organizational documents and applicable
law, no action is required by shareholders in order to effect the
reorganization. Prior to the reorganization, you may purchase and redeem shares
of U.S. Government Near Term Fund as usual in accordance with the procedures
described in the enclosed prospectus for the fund. On or about December 8, 2006,
U.S. Government Near Term Fund will transfer all of its assets and liabilities
to Current Income Fund, and your shares in U.S. Government Near Term Fund will
automatically be exchanged for shares of Current Income Fund. This will not be a
taxable transaction for federal income tax purposes and you will not recognize
gain or loss upon the exchange of your shares as part of this transaction. The
basis of your shares in Current Income Fund will be the same as the basis of
your U.S. Government Near Term Fund shares exchanged for Current Income Fund
shares. You will receive confirmation of the transaction.
If you have any questions or need additional information, please
contact Wright Investors' Service Distributors, Inc. at (800) 888-9471.
Sincerely,
/s/ Peter M. Donovan
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Peter Donovan
President and Trustee
INFORMATION STATEMENT
Of Wright U.S. Government Near Term Fund
PROSPECTUS
for Wright Current Income Fund
November 13, 2006
255 State Street
Boston, MA 02109
(800) 888-9471
This combined information statement and prospectus (the "Information
Statement/Prospectus") is being furnished to you because you are a shareholder
of Wright U.S. Government Near Term Fund ("U.S. Government Near Term Fund" or
"your fund"), a series of The Wright Managed Income Trust (the "Trust"). In
connection with an Agreement and Plan of Reorganization (the "Agreement"), your
fund will be reorganized into another series of the Trust, Wright Current Income
Fund ("Current Income Fund" or the "Acquiring Fund and, together with U.S.
Government Near Term Fund, the "funds"). In exchange for your shares of your
fund, you will receive shares of Current Income Fund equal in value to the value
of your shares in your fund.
The Board of Trustees (the "Board") of the Trust determined that the
reorganization is in the best interests of the funds and their respective
shareholders, and that the interests of each fund's shareholders will not be
diluted as a result of the reorganization. For federal income tax purposes, the
reorganization will not result in income, gain or loss being recognized by your
fund, Current Income Fund or the shareholders of your fund.
This Information Statement/Prospectus sets forth concisely the
information about Current Income Fund you should know before the reorganization
and should be retained for future reference. It is both your fund's information
statement and a prospectus for Current Income Fund. This Information
Statement/Prospectus is being mailed on or about November 13, 2006 to U.S.
Government Near Term Fund's shareholders of record as of the close of business
on November 10, 2006 (the "Shareholders").
Additional information (a) with respect to Current Income Fund is set
forth in the Statement of Additional Information relating to and dated the date
of this Information Statement/Prospectus, which is incorporated herein by
reference and (b) with respect to the funds is contained in the prospectus dated
May 1, 2006 included herein, as well as in the statement of additional
information relating to and dated the date of such prospectus, which is
incorporated therein by reference. A copy of the funds' Annual Report for the
fiscal year ended December 31, 2005 was previously mailed to the shareholders of
the funds on or about March 9, 2006. A copy of the funds' Semi-Annual Report for
the period ended June 30, 2006 was previously mailed to the funds' shareholders
on or about September 1, 2006 and is incorporated by reference herein.
Additional copies of these documents may be obtained without charge by writing
the Trust at 440 Wheelers Farms Road, Milford, Connecticut 06461 or calling
(800) 888-9471. These documents have also been filed with the Securities and
Exchange Commission ("SEC") and are available on the SEC's website at
www.sec.gov.
No vote of the Shareholders will be taken with respect to the matters
described in this Information Statement/Prospectus. THE TRUST IS NOT ASKING YOU
FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY TO THE TRUST.
AS WITH ALL MUTUAL FUNDS, THE SEC HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED WHETHER THE INFORMATION IN THIS INFORMATION
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS
COMMITTING A CRIME.
TABLE OF CONTENTS
SUMMARY......................................................1
THE REORGANIZATION...........................................9
CAPITALIZATION..............................................11
BOARD'S EVALUATION AND RECOMMENDATION.......................12
OWNERSHIP OF SHARES OF THE FUNDS............................12
EXPERTS.....................................................13
AVAILABLE INFORMATION.......................................13
Exhibit A - FORM OF AGREEMENT AND PLAN OF REORGANIZATION....14
SUMMARY
THE REORGANIZATION AND THE AGREEMENT AND PLAN OF REORGANIZATION
The Board has approved the Agreement, which provides for the
reorganization of your fund into the Acquiring Fund. The Board has concluded
that the reorganization is in the best interests of your fund and that interests
of the shareholders of your fund will not be diluted as a result of the
reorganization. Similarly, the Board has concluded that the reorganization is in
the best interests of the Acquiring Fund and that interests of the shareholders
of the Acquiring Fund will not be diluted as a result of the reorganization.
Under the Agreement, your fund will transfer all of its assets to the
Acquiring Fund in exchange for shares of the Acquiring Fund and the Acquiring
Fund will assume all of the liabilities of your fund. You will receive shares of
the Acquiring Fund equal in value to the value of your shares of your fund on
the closing date of the reorganization. Following the closing of the
Reorganization, your fund will then be dissolved. Wright Investors' Service,
Inc. ("Wright") has agreed to pay for all of the expenses of the reorganization.
The implementation of the reorganization is subject to a number of
conditions set forth in the Agreement. Among the significant conditions is the
receipt by your fund of an opinion of counsel to the effect that the
reorganization will not result in income, gain or loss being recognized by your
fund, the Acquiring Fund or the shareholders of your fund for federal income tax
purposes as described further below. This description of the reorganization is
qualified by reference to the full text of the form of the Agreement, which is
attached as Exhibit A.
COMPARISON OF YOUR FUND TO THE ACQUIRING FUND
The following is a summary of more complete information appearing later
in this Information Statement/Prospectus or incorporated herein by reference.
You should read carefully the entire Information Statement/Prospectus, including
the form of Agreement and Plan of Reorganization (the "Agreement") attached as
Exhibit A. In the table below if a row extends across the entire table, the
policy disclosed applies to both funds. Please see "Comparison of Principal
Risks of Investing in the Funds" after the table below for a comparison of the
risks of investing in the funds.
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U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND
(Your fund) (Acquiring Fund)
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Business Each fund is a diversified series of the Trust, an
open-end investment management company organized as a
Massachusetts business trust.
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Net assets, as of
September 30, 2006 $12,766,195 $31,788,049
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INVESTMENT INFORMATION
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U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND
(Your fund) (Acquiring Fund)
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Investment adviser ` Wright Investors' Service, Inc. ("Wright"), the funds' investment adviser, selects the funds'
and portfolio managers investments and oversees the funds' operations.
An investment committee of senior officers controls
the investment selections, policies and procedures of
the funds. These officers are experienced analysts
with different areas of expertise, and have over 204
years of combined service with Wright. The investment
committee consists of the following members:
Committee Member Title Joined Wright in
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Peter M. Donovan, CFA Chairman and Chief Executive Officer 1966
Chairman of the Investment Committee
Judith R. Corchard Executive Vice President 1960
-Investment Management
Senior Investment Officer
Michael F. Flament, CFA Senior Vice President 1972
- Investmentand Economic Analysis
James P. Fields, CFA Senior Vice President 1982
- Fixed Income Investments
Amit S. Khandwala Senior Vice President 1986
- International Investments
Charles T. Simko, Jr., CFA Senior Vice President 1985
- Investment Research
Anthony van Daalen, CFA Senior Vice President 2002
- Fixed Income Investments
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Investment objective Your fund seeks a high level of income, The acquiring fund seeks a high level of current
which is normally above that available from income consistent with moderate fluctuations of
short-term money market instruments or funds. principal.
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Each fund's investment objective is non-fundamental and may be changed by the Board without
shareholder approval.
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U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND
(Your fund) (Fund into which your fund is being reorganized)
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Primary investments Your fund invests at least 80% of its total assets Your acquiring fund invests at least 80% of its
in U.S. government obligations and maintains total assets primarily in debt obligations issued or
an average weighted maturity of between one guaranteed by the U.S. government or any of
and three years. its agencies or instrumentalities, mortgage-
related securities of governmental or corporate
issuers and corporate debt securities.
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U.S. government securities in which the funds may invest include:
o direct obligations of the U.S. government, such as bills, notes and bonds issued by the U.S. Treasury;
o obligations of U.S. government agencies and instrumentalities secured by the full faith and credit of
the U.S. Treasury, such as securities, including pass-through securities, of the GNMA
(Government National Mortgage Association)("Ginnie Maes") or the Export-Import Bank;
o obligations secured by the right to borrow from the U.S. Treasury; and
o obligations backed only by the credit of a
government agency such as the Federal Home Loan
Bank, Fannie Mae (Federal National Mortgage
Association) and Freddie Mac (Federal Home Loan
Mortgage Corporation).
Each fund may invest in mortgage-related securities, including collateralized mortgage obligations,
issued by the U.S. government or one of its agencies or instrumentalities.
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INVESTMENT INFORMATION
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The Acquiring Fund may invest in privately
issued mortgage-related securities, including
collateralized mortgage obligations,supported by
mortgage collateral that is insured, guaranteed or
otherwise backed by the U.S. government. The
corporate debt securities in which the Acquiring
fund may invest include commercial paper and
other short-term instruments rated A-1 by
Standard & Poor's Ratings Group or P-1 by
Moody's Investors Service, Inc. and comparable
unrated securities.
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Investment strategies Wright allocates your fund's assets based on Wright may allocate the Acquiring Fund's assets
its view of the economic outlook and expected among different market sectors (such as agency
trend in short-term interest rates. For securities, U.S. government and U.S. Treasury
example, your fund may invest more heavily securities, and corporate debt securities) with different
in shorter term securities when it expects an maturities based on its view of the relative value of
increase in interest rates. Your fund's average each sector or maturity. The Acquiring Fund's average
maturity as of June 30, 2006 was 1.5 years effective life as of June 30, 2006 was 6.7 years and its
and its duration was 1.3 years. duration was 4.4 years.
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In buying and selling securities for each fund, Wright analyzes a security's structural
features, current price compared with its estimated long-term price, and the credit quality of
the issuer.
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Benchmark Lehman U.S. Government 1-3 Year Bond Index Lehman GNMA Backed Bond Index
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Other investments Each fund may purchase when-issued securities and make contracts to purchase or sell
securities for a fixed price at a future date beyond customary settlement time. Alternatively
a fund may enter into offsetting contracts for the forward sale of other securities that it owns.
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Temporary defensive During periods of unusual market conditions, when Wright believes that investing for temporary defensive
strategies purposes is appropriate, all or a portion of each fund's assets may be held in cash or invested
in short-term obligations without limit. Although a fund would do this to reduce losses, defensive
investments may conflict with and hurt the fund's efforts to achieve its investment objective.
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Diversification Each fund is diversified, which means that, with respect to 75% of total assets, the fund cannot invest (i)
more than 5% of total assets in securities of a single issuer or (ii) in securities representing more
than 10% of the outstanding voting securities of an issuer, except obligations issued or guaranteed by
the U.S.government, its agencies or instrumentalities.
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U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND
(Your fund) (Acquiring Fund)
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Short-term trading The funds do not intend to engage in trading for short-term profits. However, portfolio turnover
rates will vary.
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Certain Derivatives The funds do not invest in the residual collateralized mortgage obligations of CMO's,
stripped mortgage-related securities, leveraged floating rate instruments or indexed securities.
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SHARES
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U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND
(Your fund) (Acquiring Fund)
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Sales charges and The shares of both funds have the same characteristics and Rule 12b-1 fees structure.
Rule 12b-1 fees o Shares are offered with no sales charges.
o Shares are subject to distribution and service fees of up to 0.25% of average daily net assets.
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Buying shares The procedures for buying shares of the Acquiring Fund are identical to those of your fund. You may buy
shares directly from the funds, from any investment firm that has a sales agreement with Wright Investors'
Service Distributors, Inc. ("WISDI"), the funds' distributor, or through a retirement plan. You can buy
shares at the public offering price, which is their net asset value. You may use securities you own to
purchase shares of a fund by delivering to the funds' custodian securities that meet the fund's investment
objective and policies, have easily determined market prices and are otherwise acceptable. The securities
delivered must have a minimum aggregate value of $5,000. Securities are valued at the date they are
received by the funds. Please refer to your Shareholder Manual for detailed instructions on how to
buy fund shares.
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Minimum initial The minimum initial investment for buying shares of the Acquiring Fund is identical to
investment the minimum initial investment for your fund. Your initial investment generally must be at least $1,000.
There is no minimum for subsequent investments.
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Exchanging shares The procedures for exchanging shares of the Acquiring Fund into any other Wright fund are identical to
those of your fund. Shares of the funds may be exchanged for shares of any other Wright fund as described
in the funds' combined prospectus, dated May 1, 2006. Please read that prospectus carefully before
requesting an exchange. The exchange of shares results in the sale of one fund's shares and the purchase
of another, normally resulting in a gain or loss, and is therefore a taxable event for you. You are
limited to four "round-trip" exchanges each year. A round-trip exchange is an exchange of one fund into
another Wright fund and then back into the original fund. You will receive notice 60 days before the funds
materially amend or terminate the exchange privilege. For more information on exchanges, please refer to
your Shareholder Manual.
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Selling shares The procedures for selling shares of Acquiring Fund are identical to those of your fund. You may
redeem or sell shares of the funds on any business day. No redemption request will be paid until your
shares have been paid for in full. If the shares to be redeemed were purchased by check, the redemption
payment will be delayed until the check has been collected, which may take up to 15 days from the date
of purchase. Telephone, mail and internet redemption procedures are described in your Shareholder Manual.
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Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets
minus its operating expenses and any other liabilities. The funds calculate a net asset value
for its shares every day the New York Stock Exchange is open when regular trading closes (generally 4:00
p.m. Eastern time). The price for the purchase,redemption or exchange of fund shares is the next net
asset value calculated after your order is received.
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Federal For federal income tax purposes, the reorganization will not result in income,gain or loss being recognized
Income Tax by your fund, the Acquiring Fund or the shareholders of your fund. For further information see "Federal
Consequences Income Tax Consequences" below.
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INVESTMENT OBJECTIVE AND INVESTMENT STRATEGIES
The investment objective and investment strategies of your fund and the
Acquiring Fund are as described in the comparison chart above. For information
about each fund's investment objective and investment strategies, please refer
to the comparison chart above.
COMPARISON OF PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Because the funds have a similar investment objective and similar but
not the same investment policies and strategies, the funds are generally subject
to the same types of principal risks. However, as a result of differences in
their investment objectives, policies and strategies, the risks associated with
the Acquiring Fund may be greater for the reasons described below.
These principal risks associated with an investment in the funds are:
o INTEREST RATE RISK: Bond prices fall when interest rates rise and
vice versa. The longer the duration of a bond, the greater the
potential change in price.
o CREDIT OR DEFAULT RISK: An issuer's credit rating may be
downgraded or the issuer may be unable to pay principal and
interest obligations.
o PREPAYMENT RISK: When interest rates decline, the issuer of a
security may exercise an option to prepay the principal. This
forces the fund to reinvest in lower yielding securities.
o EXTENSION RISK: When interest rates rise, the life a
mortgage-related security is extended beyond the expected
prepayment time, reducing the value of the security.
Since the investment objective, policies and strategies of your fund
are similar but not identical to those of Acquiring Fund, the funds are subject
to different levels of these principal risks. The combined fund will have the
same investment committee, objective, policies and strategies as the Acquiring
Fund. Since both Acquiring Fund and your fund invest substantially in securities
issued or backed by the U.S. government, the fund's exposure to credit risk is
minimal. Historically, the Acquiring Fund invests predominantly in
mortgage-related securities where timely payment of principal and interest is
guaranteed by the U.S. government (such as Ginnie Mae securities), while your
fund invests a greater portion of its assets in U.S. Treasury bills, notes and
bonds and securities issued by U.S. government agencies, with a smaller portion
of its investments in such mortgage-related securities. As a result of the
Acquiring Fund's greater investment in mortgage-related securities, the credit
risk of the Acquiring Fund is not as low as the credit risk of your fund. In
addition, since mortgage-related securities such as Ginnie Maes are subject to
prepayment and extension risks during times of falling or rising interest rates,
the Acquiring Fund's significantly greater investment in mortgage-related
securities subjects it to additional prepayment risk and extension risk.
Finally, the duration of the Acquiring Fund is longer than the duration of your
fund; this means that the Acquiring Fund has greater interest rate risk and
potential change in price than your fund.
The funds' yields may decline during times of falling interest rates.
The funds cannot eliminate risk or assure achievement of their investment
objectives and you may lose money.
OTHER CONSEQUENCES OF THE REORGANIZATION
THE FUNDS' FEES AND EXPENSES
Shareholders of both funds pay various fees and expenses, either
directly or indirectly. Your fund and the Acquiring Fund each pay a monthly
management fee equal to Wright at the same rate of 0.45% of average daily net
assets. Both funds also pay a 12b-1 fee at the same rate of 0.25% of average
daily net assets. As discussed below, the estimated pro forma expenses of the
combined fund after the contractual expense limitation will be 0.95%, which is
your fund's current contractual expense limitation. The estimated pro forma
gross expenses (i.e., without giving effect to the expense limitations) of the
combined fund are lower than your fund's current gross expenses.
The table below shows the fees and expenses that you would pay if you
were to buy and hold shares of each fund. The table does not reflect any charges
that may be imposed by institutions directly on their customer accounts in
connection with investments in either fund. The expenses appearing in the table
below for each fund are based on the fund's expenses for the twelve-month period
ended June 30, 2006. Future expenses may be greater (after expiration of the
contractual expense limitation described above) or less. The table also shows
the estimated ("pro forma") expenses of the combined fund assuming the
reorganization occurred on June 30, 2006. Pro forma expense levels shown should
not be considered an actual representation of future expenses or performance.
Such pro forma expense levels project anticipated expenses but actual expenses
may be greater or less than those shown.
CURRENT INCOME FUND
(Acquiring Fund)
(PRO FORMA for the
SHAREHOLDER TRANSACTION FEES U.S. GOVERNMENT combined fund for the
(PAID DIRECTLY FROM YOUR NEAR TERM FUND CURRENT INCOME FUND 12-month period
INVESTMENT) (Your fund) (Acquiring Fund) ended June 30, 2006)
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Maximum sales charge (load) None None None
Maximum deferred sales charge (load) None None None
Redemption fee None None None
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ANNUAL FUND OPERATING EXPENSES
(DEDUCTED FROM FUND ASSETS) AS A %
OF AVERAGE DAILY NET ASSETS
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Management Fee 0.45% 0.45% 0.45%
Distribution and Service (12b-1) Fees 0.25% 0.25% 0.25%
Other Expenses 0.93% 0.61% 0.55%
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Total Annual Fund Operating Expenses 1.63% 1.31% 1.25%
Less: Fee Waiver and Expense Limitation (0.68)% (0.36)% (0.30)%
Net Operating Expenses 0.95%(1) 0.95%(1) 0.95%(1)
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(1) The expenses in the table above reflect the expense limitation under which
Wright has contractually agreed to waive a portion of its advisory fee and/or
distribution fees and assume operating expenses to the extent required to limit
expenses to 0.95% of average daily net assets, after custodian fee reductions,
if any. The contractual expense limitation agreement for your fund and the
Acquiring Fund is currently through April 30, 2007. Wright has agreed to extend
the contractual expense limitation agreement for the combined fund through April
30, 2008. There can be no assurance that Wright will extend the expense
limitation beyond April 30, 2008.
EXAMPLE
The hypothetical example below helps you compare the cost of investing
in each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) your investment has a 5% return each year, (c) each fund's
operating expenses remain the same, and (d) you redeem your shares after the end
of each period. Pro forma expenses are included assuming a reorganization with
your fund and the Acquiring Fund. The example also reflects the expense
limitation agreement described above only through April 30, 2008. The examples
are for comparison purposes only and are not a representation of either fund's
actual expenses or returns, either past or future.
CURRENT INCOME FUND
U.S. GOVERNMENT (Acquiring Fund)
NUMBER OF YEARS NEAR TERM FUND CURRENT INCOME FUND (PRO FORMA for the
YOU OWN YOUR SHARES (Your fund) (Acquiring Fund) combined fund
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1 Year $97 $97 $97
3 Years $303 $303 $303
5 Years $525 $525 $525
10 Years $1,166 $1,166 $1,166
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COMPARISON OF FUND PERFORMANCE
Set forth below is performance information for each fund, which
indicates some of the risks of investing in each fund. The bar charts show how
each fund's total return has varied from year to year for each full calendar
year. The third table shows average annual total return (before and after taxes)
for each fund over time as compared with a broad-based securities market index.
Past performance before and after taxes does not indicate future results. You
should note that the investment committee of the combined fund after the
reorganization will be the same as your fund's and the Acquiring Fund's
investment committee. However, the investment objective and policies of your
fund are similar, but not identical, to the investment objective, policies and
strategies of the Acquiring Fund, which causes the funds to have different
risk/return profiles. Both your fund and the Acquiring Fund benefited from an
expense limitation agreement during various periods. In the absence of such
expense limitation agreement, the funds' performance would have been lower.
ANNUAL RETURN OF CURRENT INCOME FUND (ACQUIRING FUND)*
(Years ended December 31)
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12.00%
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10.00% 10.31%
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8.00% 8.56% 7.18% 7.70%
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6.00% 6.51%
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4.00% 4.35%
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2.00% 3.29%
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0.00% 0.52% 1.73% 1.76%
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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
*The Acquiring Fund's year-to-date return as of September 30, 2006 was 2.63%.
During the period shown in the bar chart, the Acquiring Fund's highest quarterly
return was 3.80% for the quarter ended September 30, 2001, and the lowest
quarterly return was -1.21% for the quarter ended June 30, 1999.
ANNUAL RETURN OF U.S. GOVERNMENT NEAR TERM FUND (YOUR FUND)**
(Years ended December 31)
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7.00%
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6.00% 6.94% 6.82%
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5.00% 5.93% 5.90% 5.42%
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4.00%
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3.00% 3.94%
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2.00%
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1.00% 1.91% 1.01%
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0.00% 0.61% 0.43%
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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
**Your fund's year-to-date return as of September 30, 2006 was 2.53%. During the
period shown in the bar chart, your fund's highest quarterly return was 2.87%
for the quarter ended June 30, 1998, and the lowest quarterly return was -1.22%
for the quarter ended June 30, 2004.
Note: The scale of the bar charts for the Acquiring Fund and for your fund is
different; so any comparison should be based on the annual total return numbers
reflected in the bar charts.
AVERAGE ANNUAL TOTAL RETURNS
(For the periods ended December 31, 2005)
1 Year 5 Years 10 Years
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CURRENT INCOME FUND (ACQUIRING FUND)
Return Before Taxes 1.76% 4.30% 5.14%
Return After Taxes on Distributions (1) -0.02% 2.11% 2.76%
Return After Taxes on Distributions and Sale of Fund Shares (1) -0.02% 2.11% 2.76%
LEHMAN GNMA BACKED BOND INDEX (2) 3.21% 5.43% 6.19%
(reflects no deduction for fees, expenses or taxes)
U.S. GOVERNMENT NEAR TERM FUND (your fund)
Return Before Taxes 1.01% 2.82% 3.87%
Return After Taxes on Distribution (1) -0.18% 1.47% 2.06%
Return After Taxes on Distributions and Sale of Fund Shares (1) -0.18% 1.47% 2.06%
LEHMAN U.S. GOVERNMENT 1-3 YEAR BOND INDEX
(reflects no deduction for fees, expenses or taxes) (2) 1.73% 3.83% 4.89%
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(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation and
may differ from those shown. The after-tax returns shown are not relevant to
shareholders who hold their shares through tax-deferred arrangements, such as
401(k) plans or individual retirement accounts.
(2) The Lehman GNMA Backed Bond Index, an unmanaged index that generally
indicates the performance of government and corporate mortgage-backed bond
markets, and the Lehman U.S. Government 1-3 year Bond Index, an unmanaged index
that generally indicates the performance of the U.S. government short duration
bond market, are for reference only and do not mirror the funds' investments.
THE REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
The Board has approved the Agreement regarding the reorganization of
your fund into the Acquiring Fund, a copy of which is attached to this
Information Statement/Prospectus as Exhibit A and incorporated herein by the
reference. The description of the Agreement contained herein is qualified in its
entirety by the attached copy.
THE REORGANIZATION
The Agreement provides for the reorganization on the following terms:
o The reorganization is scheduled to occur on the close of business
on December 8, 2006, but may occur on such later date as the Board
determines. Your fund will transfer all of its assets to the
Acquiring Fund, and the Acquiring Fund will assume all of your
fund's liabilities. This will result in the addition of your
fund's assets to the Acquiring Fund's portfolio. The net asset
value of both funds will be computed as of the close of regular
trading on the New York Stock Exchange on the reorganization date.
o The Acquiring Fund will issue shares to your fund with a value
equal to the net assets attributable to your fund's shares. As
part of the liquidation of your fund, these shares will
immediately be distributed to shareholders of record of your fund
so that you will receive shares in the Acquiring Fund with a value
equal to the value of your shares of your fund on the
reorganization date. As a result, shareholders of your fund will
become shareholders of the Acquiring Fund.
o After the shares are issued, the existence of your fund will be
terminated.
REASONS FOR THE REORGANIZATION
At a meeting held on October 6, 2006, the Board approved the Agreement
on behalf of your fund. The Board also determined that the reorganization is in
the best interests of your fund and that the interests of shareholders of your
fund will not be diluted as a result of the reorganization. The Board believes
that the reorganization will be advantageous to the shareholders of your fund
for several reasons. The Board considered the following matters, among others,
in approving the proposal:
FIRST, after the reorganization, the combined fund will have an asset
size larger than that of your fund, which may allow the combined fund to achieve
economies of scale in investments or expenses and be better positioned in the
market to increase asset size.
SECOND, the combined fund will have a similar, although different,
investment objective and similar, although different, investment policies and
strategies as your fund. The combined fund will have the same investment
committee and a similar portfolio composition to that of your fund.
THIRD, no increase in management fee, as a percentage of average daily
net assets, will occur as a result of the reorganization.
FOURTH, the pro forma gross expenses (i.e., without giving effect to
the expense limitation) of the combined fund will be lower than your fund's
current gross expenses. Because of the expense limitation, the pro forma net
expenses (i.e., giving effect to the expense limitation) are the same for both
funds.
FIFTH, for federal income tax purposes, the reorganization will not
result in income, gain, or loss being recognized by your fund, the Acquiring
Fund or the shareholders of your fund (as further discussed below).
SIXTH, the shareholder services and privileges available to the
Acquiring Fund are the same as those available to your fund, and the service
providers to the Acquiring Fund are the same as the service providers to your
fund.
The Board considered that Wright will pay all of the expenses of the
funds associated with the preparation, printing and mailing of any shareholder
communications, including this Information Statement/Prospectus, and any filings
with the SEC and other governmental agencies in connection with the
reorganization. In addition, the Board considered that Wright advised the board
that it does not anticipate that the reorganization will result in any decline
in the level of investment advisory services from that historically provided to
the funds.
The Board also considered that the funds' investment adviser and
principal distributor will benefit from the reorganization. Wright may be able
to increase the combined fund's assets at a faster rate than would otherwise be
possible if your fund continued to operate separately from the Acquiring Fund
and compete with the Acquiring Fund for investors. Also, as a percentage of
average daily net assets, the combined fund's gross expenses are expected to be
lower than either fund's gross expenses. Such a growth in asset size benefits
Wright by increasing its management fees and accelerating the point at which
management of the combined fund is profitable to Wright and lowers its cost to
cap the funds' expenses. In particular, because the total expenses of the funds
are currently above the expense limitation, and on a pro forma basis after the
reorganization will be above the expense limitation, any expense savings as a
result of the reorganization will accrue to Wright until such future time, if
any, as the combined funds expenses are below any expense limitation.
The Board further considered that the reorganization presents an
attractive opportunity for the shareholders of each fund to become investors in
a combined fund that has a larger asset size than either fund alone, without any
obligation on the fund to pay commissions or other transaction costs that a fund
normally incurs when purchasing securities. This opportunity provides an
economic benefit to both funds and their shareholders.
In addition, the Board considered possible alternatives to the
reorganization, including maintaining the status quo and the possibility of
liquidating your fund or merging your fund into a fund different than the
Acquiring Fund. The Board, however, determined that the opportunity presented by
the reorganization and the factors in favor of the reorganization made the
reorganization more compelling than these alternatives. For the reasons stated
above and other factors considered by the Board, the Board determined that the
reorganization is in the best interests of your fund and its shareholders.
TAX STATUS OF THE REORGANIZATION
The reorganization is intended to result in no income, gain or loss for
federal income tax purposes to the Acquiring Fund, your fund or the shareholders
of your fund. Consummation of the reorganization is subject to the condition
that your fund and the Acquiring Fund receive an opinion from Wilmer Cutler
Pickering Hale and Dorr LLP, counsel to the Trust, substantially to the effect
that the reorganization will be a "reorganization" within the meaning of section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
As a result, with respect to the reorganization, for federal income tax
purposes:
o the shareholders of your fund will recognize no gain or loss upon
their receipt of shares of the Acquiring Fund;
o the aggregate tax basis of the Acquiring Fund's shares received by
each shareholder of your fund will equal the aggregate tax basis
of your fund's shares surrendered by that shareholder in the
reorganization;
o the holding periods of the Acquiring Fund's shares received by
each shareholder of your fund will include the holding periods of
your fund's shares surrendered by that shareholder in the
reorganization, provided that your fund's shares are held by that
shareholder as capital assets on the date of the exchange;
o your fund will not recognize any gain or loss (a) upon the
transfer of its assets to the Acquiring Fund in exchange for your
fund's shares and the assumption of liabilities of your fund, or
(b) upon the distribution of those shares to the shareholders of
your fund;
o the Acquiring Fund will not recognize any gain or loss upon the
receipt of the assets of your fund in exchange for shares of the
Acquiring Fund and the assumption of the liabilities of your fund;
o the tax basis in the hands of the Acquiring Fund of each asset of
your fund transferred to the Acquiring Fund in the reorganization
will be the same as the basis of that asset in the hands of your
fund immediately before the transfer; and
o the holding period in the hands of the Acquiring Fund of each
asset of your fund transferred to the Acquiring Fund in the
reorganization will include the period during which that asset was
held by your fund.
In rendering such opinion, counsel shall rely upon, among other things,
reasonable assumptions as well as representations of the Acquiring Fund and your
fund.
No ruling has been or will be received from the Internal Revenue
Service ("IRS") in connection with the reorganization. An opinion of counsel is
not binding on the IRS or a court, and no assurance can be given that the IRS
would not assert, or a court would not sustain, a contrary position.
The foregoing discussion does not address certain classes of taxpayers
who are subject to special circumstances, such as shareholders who are not
citizens or residents of the United States, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities or foreign
currencies, or persons who hold their shares as part of a straddle or conversion
transaction.
You should consult your own adviser for the particular tax consequences
to you of the reorganization, including the applicability of any state, local or
foreign tax laws.
ADDITIONAL TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION
CONDITIONS TO CLOSING THE REORGANIZATION. The obligation of your fund
to consummate the reorganization is subject to the satisfaction of customary
conditions, including the performance by the Acquiring Fund of all its
obligations under the Agreement, and the receipt of all consents, orders and
permits necessary to consummate the reorganization (see Agreement, paragraph 7).
The obligation of the Acquiring Fund to consummate the reorganization
is subject to the satisfaction of customary conditions, including your fund's
performance of all of its obligations under the Agreement, the receipt of
certain documents and financial statements from your fund and the receipt of all
consents, orders and permits necessary to consummate the reorganization (see
Agreement, paragraph 8).
The funds' obligations are also subject to the receipt of a favorable
opinion of Wilmer Cutler Pickering Hale and Dorr LLP as to the federal income
tax consequences of the reorganization (see Agreement, paragraph 9).
TERMINATION OF AGREEMENT. The Board may terminate the Agreement at any
time before the reorganization date if the Board believes that proceeding with
the reorganization would no longer be advisable.
EXPENSES OF THE REORGANIZATION. Wright will pay the expenses of both
funds in connection with the reorganization, including the costs of printing,
mailing, legal fees and accounting fees.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of
September 30, 2006, and the pro forma combined capitalization of both funds as
if the reorganization had occurred on that date. When the reorganization is
consummated, the actual exchange ratios on the reorganization date may vary from
the exchange ratios indicated. This is due to changes in the market value of the
portfolio securities of both funds between September 30, 2006 and the
reorganization date, changes in the amount of undistributed net investment
income and net realized capital gains of both funds during that period resulting
from income and distributions, and changes in the accrued liabilities of both
funds during the same period.
September 30, 2006
CURRENT INCOME FUND
(Acquiring Fund)
U.S. GOVERNMENT NEAR TERM FUND CURRENT INCOME FUND (PRO FORMA for the
(Your fund) (Acquiring Fund) combined fund
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Net Assets $12,766,195 $31,788,049 $44,554,244
Net Asset Value Per Share $9.78 $9.50 $9.50
Shares Outstanding 1,304,970 3,347,038 4,690,848
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It is impossible to predict how many shares of the Acquiring Fund will
actually be received and distributed by your fund on the closing date of the
reorganization. The table should not be relied upon to determine the amount of
the Acquiring Fund's shares that will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the Board, including a majority of the
trustees who are not "interested persons" of the Trust within the meaning of the
Investment Company Act of 1940, as amended ("the independent trustees"),
approved the reorganization. In particular, the Board determined that the
reorganization is in the best interests of your fund and that the interests of
your fund's shareholders will not be diluted as a result of the reorganization.
Similarly, the Board, including the independent trustees, approved the
reorganization on behalf of the Acquiring Fund. The Board also determined that
the reorganization is in the best interests of the Acquiring Fund and that the
interests of the Acquiring Fund's shareholders will not be diluted as a result
of the reorganization.
OWNERSHIP OF SHARES OF THE FUNDS
As of September 30, 2006, the following persons owned of record or, to the
knowledge of each fund, beneficially 5% or more of the outstanding shares of
Current Income Fund or U.S. Government Near Term Fund as indicated in the table
below:
As of September 30, 2006
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Percentage of
Actual Percentage Current Income Fund
Actual Percentage of U.S. Government Owned Assuming
Shareholder Name of Current Income of Net Term Fund Completion of the
and Address Fund Owned Owned Reorganization
- -----------------------------------------------------------------------------------------------------------------------------------
Charles Schwab & Co Inc., 6.66% 4.75%
Mutual Funds Dept.
San Francisco, CA 94104
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Jupiter & Co 7.53% 5.37%
c/o Investors Bank & Trust
Boston, MA 02117
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Lynn M. Phelps MD 5.72% 4.08%
Pueblo West, CO 81007
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Farmers Merchants 5.81% 4.14%
Meridian, ID 83642
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First County Bank 10.10% 2.90%
Stamford, CT 06901
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Hudson Savings Bank 5.29% 8.43% 6.19%
Hudson, MA 01749
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Counsel Trust/Plumbers Local 9.40% 2.70%
Pittsburgh, PA 15222
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Ruane & Co - TR Paul 9.50% 2.73%
Ithaca, NY 14851
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As of September 30, 2006, the trustees and officers of each fund owned in the
aggregate less than 1% of the outstanding shares of their respective funds.
EXPERTS
The financial statements and the financial highlights of the funds for
the fiscal year ended December 31, 2005 are incorporated by reference into this
Information Statement/Prospectus from the combined prospectus of the funds,
dated May 1, 2006. The financial statements and financial highlights for each
fund as of and for the year ended December 31, 2005 have been independently
audited by Deloitte & Touche LLP, independent registered public accounting firm,
as stated in their reports appearing in the statement of additional information.
These financial statements and financial highlights have been included in
reliance on their reports given on their authority as experts in accounting and
auditing. The unaudited financial statements and financial highlights of your
fund, appearing in your fund's 2006 semi-annual report, are also incorporated by
reference into the Statement of Additional Information relating to this
Information Statement/Prospectus.
AVAILABLE INFORMATION
Each fund is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended and the Investment Company Act of
1940, as amended, and files reports, prospectuses and other information with the
SEC. These reports, prospectuses and other information filed by the funds can be
inspected and copied (for a duplication fee at prescribed rates) at the public
reference facilities of the SEC at 100 F Street, N.E., Washington, D.C. 20549.
Copies of these materials can also be obtained by mail from the Public Reference
Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed
rates. In addition, copies of these documents may be viewed on-screen or
downloaded from the SEC's Internet site at http://www.sec.gov.
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this [ ] day of [_______], 2006, between Wright Current Income Fund (the
"Acquiring Fund") and Wright U.S. Government Near Term Fund (the "Acquired
Fund"), each a series of The Wright Managed Income Trust (the "Trust"), a
business trust organized under the laws of the Commonwealth of Massachusetts
with its principal place of business at 255 State Street, Boston, MA 02109.
Wright Investors' Service, Inc. (the "Adviser") is a party to this Agreement
solely for the purposes of its obligations set forth in paragraph 10.2 and
paragraph 12.2.
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
regulations promulgated thereunder. The reorganization (the "Reorganization")
will consist of (a) the transfer of all of the assets of the Acquired Fund to
the Acquiring Fund solely in exchange for (i) the issuance of shares of
beneficial interest of the Acquiring Fund with an aggregate net asset value that
corresponds to the aggregate net asset value of the outstanding shares of the
Acquired Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring
Fund Share") to the Acquired Fund, and (ii) the assumption by the Acquiring Fund
of all of the liabilities of the Acquired Fund (the "Assumed Liabilities"), on
the closing date set forth below (the "Closing Date"), and (b) the distribution
by the Acquired Fund, on the Closing Date, or as soon thereafter as practicable,
of the Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation and termination of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, Acquiring Fund and the Acquired Fund are each series of the
same registered investment company classified as a management company of the
open-end type, and the Acquired Fund owns securities that generally are assets
of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the Acquiring Fund has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquiring Fund shareholders and
that the interests of the existing shareholders of the Acquiring Fund will not
be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees of the Acquired Fund has determined that
the exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares
and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquired Fund shareholders and
that the interests of the existing shareholders of the Acquired Fund will not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 TRANSFER OF ASSETS BY ACQUIRED FUND; ISSUANCE OF SHARES AND ASSUMPTION OF
LIABILITIES BY ACQUIRING FUND. Subject to the terms and conditions set forth in
this Agreement and on the basis of the representations and warranties contained
in this Agreement, the Acquired Fund agrees to transfer its assets as set forth
in paragraph 1.2 to the Acquiring Fund free and clear of all liens and
encumbrances (other than those arising under the Securities Act of 1933, as
amended (the "Securities Act"), liens for taxes not yet due and payable or being
contested in good faith and contractual restrictions on the transfer of the
acquired assets), and the Acquiring Fund agrees in exchange therefor: (a) to
issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, with an aggregate net asset value ("NAV")
equal to the aggregate NAV of the Acquired Fund Shares, as determined in the
manner set forth in paragraph 2; and (b) to assume the Assumed Liabilities, as
set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing").
1.2 ASSETS TO BE ACQUIRED; INVESTMENTS BY ACQUIRED FUND PENDING CLOSING. (a) The
assets of the Acquired Fund to be acquired by the Acquiring Fund shall consist
of all of the Acquired Fund's property, including, without limitation, all
portfolio securities and instruments, dividends and interest and other
receivables, cash, cash equivalents, deferred or prepaid expenses, goodwill,
contractual rights (whether absolute or contingent, known or unknown) of the
Acquired Fund, all other tangible and intangible property owned by the Acquired
Fund and originals or copies of all books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's securities and other assets as of the date of this
Agreement. The Acquiring Fund will, within a reasonable time before the Closing
Date, furnish the Acquired Fund with a list of the securities, if any, on the
Acquired Fund's list referred to above that do not conform to the Acquiring
Fund's investment objectives, policies, and restrictions. The Acquired Fund, if
required by the Acquiring Fund, will dispose of securities on the Acquiring
Fund's list before the Closing Date. In addition, if it is determined that the
portfolios of the Acquired Fund and the Acquiring Fund, when aggregated, would
contain investments exceeding certain percentage limitations imposed upon the
Acquiring Fund with respect to such investments, the Acquired Fund, if required
by the Acquiring Fund, will dispose of a sufficient amount of such investments
as may be necessary to avoid violating such limitations as of the Closing Date.
The Acquired Fund reserves the right to sell any of these securities and other
assets (except to the extent sales may be limited by representations of the
Acquired Fund made in connection with the issuance of the tax opinion provided
for in paragraph 9.4 hereof) but will not, without the prior approval of the
Acquiring Fund, acquire any additional securities other than securities of the
type in which the Acquiring Fund is permitted to invest and shall not acquire,
without the consent of the Acquiring Fund, any securities that are valued at
"fair value" under the valuation procedures of either the Acquired Fund or the
Acquiring Fund.
1.3 ASSUMED LIABILITIES; CLOSING STATEMENT. The Acquired Fund will endeavor to
discharge all the Acquired Fund's known liabilities and obligations that are or
will become due prior to the Closing Date. Notwithstanding the foregoing, any
liabilities not so discharged shall be assumed by the Acquiring Fund, which
assumed liabilities shall include all of the Acquired Fund's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether known or unknown, whether or not arising in
the ordinary course of business, whether or not determinable at the Closing
Date, and whether or not specifically referred to in this Agreement. The
Acquired Fund shall prepare an unaudited statement of assets and liabilities
(the "Closing Statement"), as of the Valuation Date (as defined in paragraph
2.1), in accordance with U.S. generally accepted accounting principles ("GAAP")
consistently applied from the prior audited period, including a calculation of
the net assets of the Acquired Fund as of the close of business on the Closing
Date.
1.4 LIQUIDATION OF ACQUIRED FUND; Distribution of Acquiring Fund Shares. On the
Closing Date or as soon thereafter as is practicable, the Acquired Fund shall
liquidate and distribute pro rata to the Acquired Fund's shareholders of record
determined as of the close of business on the Closing Date (the "Acquired Fund
Shareholders") the Acquiring Fund Shares it receives pursuant to paragraph 1.1.
Such liquidation and distribution will be accomplished by the Acquired Fund
instructing the Acquiring Fund to transfer the Acquiring Fund Shares then
credited to the account of the Acquired Fund on the books of the Acquiring Fund
to open accounts on the share records of the Acquiring Fund in the names of the
Acquired Fund Shareholders (as provided to the Acquiring Fund by the Acquired
Fund) and representing the respective pro rata number of the Acquiring Fund
Shares due such shareholders. Each Acquired Fund Shareholder shall receive the
number of Acquiring Fund Shares that have an aggregate NAV equal to the
aggregate NAV of the Acquired Fund Shares held of record by such Acquired Fund
Shareholder on the Closing Date. The Acquired Fund shall promptly provide the
Acquiring Fund with evidence of such liquidation and distribution. All issued
and outstanding shares of the Acquired Fund will simultaneously be cancelled on
the books of the Acquired Fund, although any share certificates representing
interests in the Acquired Fund will represent a number of Acquiring Fund Shares
after the Closing Date as determined in accordance with paragraph 1.1. The
Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with the Reorganization.
1.5 TRANSFER TAXES. Any transfer taxes payable upon issuance of the Acquiring
Fund Shares in a name other than the registered holder of the Acquired Fund
shares on the books of the Acquired Fund as of the time of issuance shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.6 ACQUIRED FUND REPORTING RESPONSIBILITY. Any reporting responsibility of the
Acquired Fund with respect to the Acquired Fund is and shall remain the
responsibility of the Acquired Fund up to and including the Closing Date and
such later date on which the Acquired Fund is terminated.
1.7 TERMINATION OF ACQUIRED FUND. The Acquired Fund shall, following the Closing
Date and the making of all distributions pursuant to paragraph 1.4, be
terminated as a series of the Trust under the laws of the Commonwealth of
Massachusetts and in accordance with the Declaration of Trust and By-Laws of the
Acquired Fund.
2. VALUATION
2.1 VALUE OF ASSETS OF THE ACQUIRED FUND. The value of the assets of the
Acquired Fund to be acquired by the Acquiring Fund hereunder shall be the value
of such assets computed as of the close of regular trading on the New York Stock
Exchange on the Closing Date (such time and date being hereinafter called the
"Valuation Date"), using the valuation procedures set forth in the Information
Statement/Prospectus and statement of additional information of the Acquired
Fund as in effect on the date hereof.
2.2 NAV OF ACQUIRING FUND SHARES. The NAV of the Acquiring Fund Shares shall be
computed as of the Valuation Date, using the valuation procedures set forth in
the Information Statement/Prospectus and statement of additional information of
the Acquiring Fund as in effect on the date hereof.
2.3 COMPUTATION BY WRIGHT. All computations of value shall be made by the
Adviser, or its agent, in accordance with its regular practice as pricing agent
for the Acquired Fund and the Acquiring Fund and with the Information
Statement/Prospectus and statement of additional information for each such Fund.
3. CLOSING AND CLOSING DATE
3.1 CLOSING DATE AND PLACE. The Closing Date shall be December 8, 2006, or such
later date as the parties may agree to in writing. All acts taking place at the
Closing shall be deemed to take place simultaneously as of the close of business
on the Closing Date unless otherwise provided. The Closing shall be held as of
5:00 p.m. (Eastern time) at the offices of the Funds at 255 State Street,
Boston, Massachusetts, or at such other time and/or place as the parties may
agree.
3.2 DELIVERY OF ASSETS BY ACQUIRED FUND. Any portfolio securities that are held
other than in book entry form in the name of Investors Bank & Trust Company
("IBT") as custodian and record holder for the Acquired Fund ("Acquired Fund
Custodian") shall be presented by the Acquired Fund to IBT as custodian for the
Acquiring Fund ("Acquiring Fund Custodian") for examination no later than three
business days preceding the Valuation Date. The Acquiring Fund may, in its
discretion, reject any securities if it reasonably believes that its acquisition
of such securities would violate its investment policies and restrictions. The
portfolio securities and due bills of the Acquired Fund shall be delivered by
the Acquired Fund to the Acquiring Fund Custodian for the account of the
Acquiring Fund at the Closing duly endorsed in proper form for transfer in such
condition as to constitute good delivery thereof in accordance with the custom
of brokers. Delivery of portfolio securities held of record by the Acquired Fund
Custodian in book entry form on behalf of the Acquired Fund to the Acquiring
Fund shall be effected by the Acquiring Fund Custodian recording the beneficial
ownership thereof by the Acquiring Fund on the records of the Acquiring Fund
Custodian in accordance with the customary practices of IBT, as custodian, and
each securities depository, as defined in Rule 17f-4 under the Investment
Company Act of 1940, as amended. Any cash shall be delivered by wire in federal
funds to an account of the Acquiring Fund specified by the Acquiring Fund.
3.3 ACQUIRED FUND CUSTODIAN CERTIFICATE WITH RESPECT TO DELIVERY OF ASSETS. IBT,
custodian for the Acquired Fund, shall deliver at or as soon as possible after
the Closing a certificate of an authorized officer stating that: (a) the
Acquired Fund's assets have been delivered in proper form to the Acquiring Fund
on the Closing Date and (b) all necessary transfer taxes including all
applicable federal and state stock transfer stamps, if any, have been paid, or
provision for payment shall have been made, in conjunction with the delivery of
portfolio securities.
3.4 TRADING RESTRICTION ON SCHEDULED VALUATION DATE. In the event that on the
Valuation Date (a) the primary trading market for portfolio securities of the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on such market shall be disrupted so
that, in the judgment of the Board of Trustees of the Trust, it is advisable
that the Closing Date be postponed, the Closing Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
and reporting shall have been restored.
3.5 ACQUIRED FUND SHAREHOLDER LIST. The Acquired Fund shall deliver to the
Acquiring Fund at the Closing (or, if not reasonably available at the Closing,
as soon as practicable thereafter) a list of the names, addresses, taxpayer
identification numbers and backup withholding and nonresident alien withholding
status of the Acquired Fund Shareholders and the number and percentage ownership
of outstanding shares owned by each such shareholder immediately prior to the
Closing, certified by the President, Executive Vice President or Treasurer of
the Acquired Fund as being an accurate record of the information (i) provided by
Acquired Fund Shareholders or (ii) derived from the Acquired Fund's records by
such officers or one of the Acquired Fund's service providers.
3.6 ACQUIRING FUND SHARES CREDITED TO ACQUIRED FUND. The Acquiring Fund shall
issue and deliver a confirmation evidencing the Acquiring Fund Shares to be
credited to the Acquired Fund's account on the Closing Date to the Secretary of
the Acquired Fund, or provide evidence satisfactory to the Acquired Fund that
such Acquiring Fund Shares have been credited to the Acquired Fund's account on
the books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. LIQUIDATION AND TERMINATION OF ACQUIRED FUND
4.1 LIQUIDATING DISTRIBUTION. As soon as practicable after the Closing, the
Acquired Fund shall liquidate and distribute pro rata to the Acquired Fund
Shareholders the Acquiring Fund Shares received pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares credited to the account of the Acquired Fund to open
accounts on the share records in the names of Acquired Fund Shareholders, as
delivered to the Acquiring Fund on the Closing Date in accordance with paragraph
3.5, and representing the respective pro rata entitlement of each Acquired Fund
shareholder at the time of the Closing. As provided in paragraph 1.4, each
Acquired Fund Shareholder shall receive the number of Acquiring Fund Shares that
have an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares
held of record by such Acquired Fund Shareholder on the Closing Date.
4.2 CLOSE OF ACQUIRED FUND SHARE TRANSFER BOOKS. In connection with such
liquidating distributions, (a) the Acquiring Fund shall not deliver certificates
representing its shares, (b) the share transfer books of the Acquired Fund shall
be permanently closed as of the Closing Date, and (c) arrangements satisfactory
to the Acquiring Fund, acting reasonably, shall be made to restrict the further
transfer of the Acquired Fund's shares.
4.3 TERMINATION OF ACQUIRED FUND AS SERIES OF TRUST. As soon as practicable
after the liquidation of the Acquired Fund, the Acquired Fund shall terminate
its existence as a series of a business trust under the laws of the Commonwealth
of Massachusetts and in accordance with the Declaration of Trust and By-Laws of
the Trust.
5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES BY ACQUIRED FUND. The Acquired Fund
represents and warrants to the Acquiring Fund, which representations and
warranties will be true and correct on the date hereof and on the Closing Date
as though made on and as of the Closing Date, as follows:
(a) The Acquired Fund is a series of the Trust, which is a business
trust validly existing and in good standing under the laws of the Commonwealth
of Massachusetts and has the power to own all of its properties and assets and
to perform its obligations under this Agreement. The Acquired Fund is not
required to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would subject it to any material liability
or disability. The Acquired Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquired Fund is a series registered investment company
classified as a management company of the open-end type, and the Trust's
registration with the Securities and Exchange Commission (the "Commission")
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), is in full force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement in respect of the Acquired Fund will not result,
in a violation of its Declaration of Trust or By-Laws or in material violation
of any material agreement, indenture, instrument, contract, lease or other
undertaking with respect to the Acquired Fund to which the Acquired Fund is a
party or by which the Acquired Fund or its assets are bound. The execution,
delivery and performance of this Agreement will not result in the acceleration
of any obligation, or the imposition of any penalty under any agreement,
indenture, instrument, contract, lease, judgment or decree to which the Trust,
on behalf of the Acquired Fund, is a party or by which it is bound;
(d) Except as specifically disclosed on Schedule 5.1(d) or included in
the calculation of NAV on the Valuation Date, all material contracts or other
commitments (other than this Agreement) with respect to the Acquired Fund will
be terminated without liability to either the Acquired Fund or to the Acquiring
Fund on or prior to the Closing Date;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Fund's properties or
assets, except as previously disclosed in writing to, and acknowledged in
writing by, the Acquiring Fund. The Acquired Fund knows of no facts which might
form the basis for institution of such proceedings, and the Acquiring Fund is
not a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects the
Acquired Fund's business or the Acquired Fund's ability to consummate the
transactions herein contemplated or would be binding on the Acquiring Fund as
the successor to the Acquired Fund;
(f) The financial statements of the Acquired Fund as of December 31,
2005 and for the fiscal year then ended have been audited by Deloitte & Touche
LLP, a registered independent public accounting firm, and such financial
statements have been prepared in accordance with GAAP consistently applied and
fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended, and all known liabilities, whether actual or contingent, of the
Acquired fund as of the date thereof required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP are disclosed therein. The
financial statements of the Acquired Fund as of June 30, 2006 and for the
six-month period then ended have been prepared in accordance with GAAP
consistently applied and fairly reflect, in all material respects, the financial
condition of the Acquired Fund as of such date and the results of its operations
for the period then ended; and all known liabilities, whether actual or
contingent, of the Acquired fund as of the date thereof required to be reflected
on a balance sheet (including the notes thereto) in accordance with GAAP are
disclosed therein;
(g) Since June 30, 2006, except as disclosed on a schedule to this
Agreement or specifically disclosed in the Acquired Fund's prospectus or
statement of additional information as in effect on the date of this Agreement,
there has not been any material adverse change in the Acquired Fund's financial
condition, assets, liabilities, business or prospects, or any incurrence by the
Acquired Fund of indebtedness, except for normal contractual obligations
incurred in the ordinary course of business or in connection with the settlement
of purchases and sales of portfolio securities. Solely for the purposes of this
subparagraph (g), a decline in NAV per share of the Acquired Fund arising out of
its normal investment operations or a decline in net assets of the Acquired Fund
as a result of redemptions shall not constitute a material adverse change;
(h) For each taxable year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and favorable tax
treatment as a regulated investment company and will qualify as such as of the
Closing Date with respect to its taxable year ending on the Closing Date. The
Acquired Fund has not taken any action, or failed to take any action, which has
caused or will cause the Acquired Fund to fail to qualify for such favorable tax
treatment as a regulated investment company under the Code. The Acquired Fund
has not been notified that any tax return or other filing of the Acquired Fund
has been reviewed or audited by any federal, state, local or foreign taxing
authority, except as set forth on Schedule 5.1.
(A) Within the times and in the manner prescribed by law, the
Acquired Fund shall have properly filed all federal, state and
local tax returns required by law to be filed, including all
information returns and payee statements, and all tax returns
for foreign countries, provinces and other governing bodies
that have jurisdiction to levy taxes upon it;
(B) The Acquired Fund shall have timely paid, in the manner
prescribed by law, all taxes, interest, penalties, assessments
and deficiencies which have become due or which have been
claimed to be due or provision shall have been made for the
payment thereof;
(C) All tax returns filed or to be filed by the Acquired Fund
shall constitute complete and accurate reports of the
respective tax liabilities of the Acquired Fund or, in the
case of information returns and payee statements, the amounts
required to be reported accurately set forth all material
items required to be included or reflected in such returns.
The Acquired Fund has not been informed by any jurisdiction
that the jurisdiction believes that the Acquired Fund was
required to file any tax return that was not filed and the
Acquired Fund does not know of any basis upon which a
jurisdiction could assert such a position;
(D) The Acquired Fund has not and will not have waived or
extended any applicable statute of limitations relating to the
assessment or collection of federal, state, local or foreign
taxes; and
(E) The Acquired Fund has not been notified that any
examinations of the federal, state, local or foreign tax
returns of the Acquired Fund are currently in progress or
threatened and no deficiencies have been asserted or assessed
against the Acquired Fund as a result of any audit by the
Internal Revenue Service or any state, local or foreign taxing
authority, and no such deficiency has been proposed or
threatened;
(i) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. To the Acquired Fund's knowledge, all of the issued and
outstanding shares of the Acquired Fund will, at the time of Closing, be held of
record by the persons and in the amounts set forth in the records of the
transfer agent as provided in paragraph 3.5. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquired Fund, nor is there outstanding any security
convertible into any shares of the Acquired Fund;
(j) At the Closing Date, the Acquired Fund will have good and
marketable title to the assets to be transferred to the Acquiring Fund pursuant
to paragraph 1.1 and full right, power and authority to sell, assign, transfer
and deliver such assets hereunder, and, upon delivery and payment for such
assets, the Acquiring Fund will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, except such
restrictions as might arise under the Securities Act, other than as disclosed in
writing to, and acknowledged in writing by, the Acquiring Fund;
(k) The Trust on behalf of the Acquired Fund has the power and
authority to enter into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by the Acquired Fund has
been duly authorized by all necessary action on the part of the Trust's Board of
Trustees, and assuming due authorization, execution and delivery by the Trust on
behalf of the Acquiring Fund, this Agreement constitutes a valid and binding
obligation of the Acquired Fund, enforceable in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights and to general equity
principles;
(l) Any information furnished by the Acquired Fund for use in
registration statements and any information necessary to compute the total
return of the Acquired Fund shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities and
other laws and regulations applicable thereto or the requirements of any form
for which its use is intended;
(m) Except as set forth on Schedule 5.1 and as will be obtained on or
prior to the Closing Date, no consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated by this Agreement;
(n) To the Acquired Fund's knowledge, all of the issued and outstanding
shares of beneficial interest of the Acquired Fund have been offered for sale
and sold in conformity with all applicable federal and state securities laws;
(o) The Acquired Fund currently complies in all material respects with
and since its organization has complied in all material respects with all
applicable laws, rules and regulations, including without limitation, the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Securities Exchange Act of 1934 (the "Exchange
Act"), state "Blue Sky" laws and all other applicable federal and state laws or
regulations. The Acquired Fund currently complies in all material respects with,
and since its organization has complied in all material respects with, all
investment objectives, policies, guidelines and restrictions and any compliance
procedures established by the Trust with respect to the Acquired Fund, and,
immediately prior to the Closing, will have calculated its NAV in accordance
with the Acquired Fund's registration statement. All advertising and sales
material used by the Acquired Fund complies in all material respects with and
has complied in all material respects with the applicable requirements of the
Securities Act, the rules and regulations of the Commission, and, to the extent
applicable, the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD") and any applicable state regulatory authority. All
registration statements, prospectuses, reports, or other filings required to be
made or filed with the Commission, the NASD or any state securities authorities
by the Acquired Fund have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by law.
Such registration statements, prospectuses, reports, and other filings under the
Securities Act, the Exchange Act and the Investment Company Act (i) are or were
in compliance in all material respects with the requirements of all applicable
statutes and the rules and regulations thereunder and (ii) do not or did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not false or misleading;
(p) The Acquired Fund has previously provided to the Acquiring Fund
(and will at the Closing provide an update through the Closing Date of such
information) with data which supports a calculation of the Acquired Fund's total
return and yield for all periods since the organization of the Acquired Fund.
Such data has been prepared in accordance in all material respects with the
requirements of the Investment Company Act and the regulations thereunder and
the rules of the NASD; and
(q) The prospectus of the Acquired Fund dated May 1, 2006, and any
amendments or supplements thereto, previously furnished to the Acquiring Fund,
did not as of their dates or the dates of their distribution to the public
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
(r) The Acquired Fund Tax Representation Certificate to be delivered by
the Acquired Fund to the Acquiring Fund and Wilmer Cutler Pickering Hale and
Dorr LLP at the Closing pursuant to paragraph 8.4 (the "Acquired Fund Tax
Representation Certificate") will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading.
5.2 REPRESENTATIONS AND WARRANTIES BY ACQUIRING FUND. The Acquiring Fund
represents and warrants to the Acquired Fund, which representations and
warranties will be true and correct on the date hereof and on the Closing Date
as though made on and as of the Closing Date, as follows:
(a) The Acquiring Fund is a series of the Trust, a business trust which
is validly existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the power to own all of its properties and assets and to
perform its obligations under this Agreement. The Acquiring Fund is not required
to qualify to do business in any jurisdiction in which it is not so qualified or
where failure to qualify would subject it to any material liability or
disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquiring Fund is a series registered investment company
classified as a management company of the open-end type, and the Trust's
registration with the Commission as an investment company under the Investment
Company Act is in full force and effect;
(c) The Acquiring Fund's registration statement on Form N-1A that will
be in effect on the Closing Date and the prospectus and statement of additional
information of the Acquiring Fund included therein will conform in all material
respects with the applicable requirements of the Securities Act and the
Investment Company Act and the rules and regulations of the Commission
thereunder and will not as of its date and as of the Closing Date contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading;
(d) The Acquiring Fund is not, and its execution, delivery and
performance of this Agreement will not result, in violation of its Declaration
of Trust or By-Laws or in material violation of any material agreement,
indenture, instrument, contract, lease or other undertaking with respect to the
Acquiring Fund to which it is a party or by which it is bound. The execution,
delivery and performance of this Agreement will not result in the acceleration
of any obligation, or the imposition of any penalty under any agreement,
indenture, instrument, contract, lease, judgment or decree to which the Acquired
Trust, on behalf of the Acquiring Fund, is a party or by which it is bound;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its knowledge
threatened against the Acquiring Fund or any of the Acquiring Fund's properties
or assets, except as previously disclosed in writing to, and acknowledged in
writing by, the Acquired Fund. The Acquiring Fund knows of no facts which might
form the basis for the institution of such proceedings, and the Acquiring Fund
is not a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely affects the
Acquiring Fund's business or its ability to consummate the transactions
contemplated herein;
(f) The financial statements of the Acquiring Fund as of December 31,
2005 and for the fiscal year then ended have been audited by Deloitte & Touche
LLP, a registered independent public accounting firm, and such financial
statements have been prepared in accordance with GAAP consistently applied and
fairly reflect, in all material respects, the financial condition of the
Acquiring Fund as of such date or the results of its operations for the period
then ended; and all known liabilities, whether actual or contingent, of the
Acquiring Fund as of the date thereof required to be reflected on a balance
sheet (including the notes thereto) in accordance with GAAP are disclosed
therein.
(g) Since June 30, 2006, except as disclosed on a schedule to this
Agreement or specifically disclosed in the Acquiring Fund's prospectus or
statement of additional information as in effect on the date of this Agreement,
there has not been any material adverse change in the Acquiring Fund's financial
condition, assets, liabilities, business or prospects, or any incurrence by the
Acquiring Fund of indebtedness, except for normal contractual obligations
incurred in the ordinary course of business or in connection with the settlement
of purchases and sales of portfolio securities. Solely for the purposes of this
subparagraph (g), a decline in NAV per share of the Acquiring Fund arising out
of its normal investment operations or a decline in net assets of the Acquiring
Fund as a result of redemptions shall not constitute a material adverse change;
(h) The Trust on behalf of the Acquiring Fund has the power and
authority to enter into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by the Acquiring Fund has
been duly authorized by all necessary action, if any, on the part of the Trust's
Board of Trustees, and, assuming due authorization, execution and delivery by
the Trust on behalf of the Acquired Fund, this Agreement constitutes a valid and
binding obligation of the Acquiring Fund, enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(i) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to
the terms of this Agreement, are duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring Fund Shares and will be
fully paid and non-assessable and will conform in all material respects to the
description thereof contained in the Acquiring Fund's registration statement on
Form N-14; the Acquiring Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquiring Fund Shares, nor is
there outstanding any security convertible into any of the Acquiring Fund
Shares;
(j) The information to be furnished by the Acquiring Fund for use in
the prospectus and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all material
respects and shall comply in all material respects with federal securities and
other laws and regulations applicable thereto or the requirements of any form
for which its use is intended;
(k) For each taxable year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and favorable tax
treatment as a regulated investment company and has elected to be treated as
such and will qualify as such as of the Closing Date. The Acquiring Fund has not
taken any action, which has caused or will cause the Acquiring Fund to fail to
qualify as a regulated investment company under the Code. The Acquiring Fund has
not been notified that any tax return or other filing of the Acquiring Fund has
been reviewed or audited by any federal, state, local or foreign taxing
authority. Except as set forth on Schedule 5.1
(A) Within the times and in the manner prescribed by law, the
Acquiring Fund shall have properly filed all federal, state
and local tax returns required to be filed, including all
information returns and payee statements, and all tax returns
for foreign countries, provinces and other governing bodies
that have jurisdiction to levy taxes upon it;
(B) The Acquiring Fund shall have timely paid, in the manner
prescribed by law, all taxes, interest, penalties, assessments
and deficiencies which have become due or which have been
claimed to be due or provision shall have been made for the
payment thereof;
(C) All tax returns filed or to be filed by the Acquiring Fund
shall constitute complete and accurate reports of the
respective tax liabilities of the Acquiring Fund or, in the
case of information returns and payee statements, the amounts
required to be reported accurately set forth all material
items required to be included or reflected in such returns.
The Acquiring Fund has not been informed by any jurisdiction
that the jurisdiction believes that the Acquired Fund was
required to file any tax return that was not filed and the
Acquiring Fund does not know of any basis upon which a
jurisdiction could assert such a position;
(D) The Acquiring Fund has not and will not have waived or
extended any applicable statute of limitations relating to the
assessment or collection of federal, state, local or foreign
taxes; and
(E) The Acquiring Fund has not been notified that any
examinations of the federal, state, local or foreign tax
returns of the Acquiring Fund are currently in progress or
threatened and no deficiencies have been asserted or assessed
against the Acquiring Fund as a result of any audit by the
Internal Revenue Service or any state, local or foreign taxing
authority, and no such deficiency has been proposed or
threatened;
(l) The Acquiring Fund currently complies in all material respects with
and since its organization has complied in all material respects with all
applicable laws, rules and regulations, including, without limitation, the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquiring Fund currently
complies in all material respects with and since its organization has complied
in all material respects with all investment objectives, policies, guidelines
and restrictions and any compliance procedures established by the Trust with
respect to the Acquiring Fund, and, immediately prior to the closing, will have
calculated its NAV in accordance with the Acquiring Fund's registration
statement;
(m) The Acquiring Fund Shares to be issued pursuant to this Agreement
shall on the Closing Date be duly registered under the Securities Act by a
registration statement on Form N-14 of the Acquiring Fund then in effect and
qualified for sale under the applicable state securities laws;
(n) Except as set forth on Schedule 5.2 and as will be obtained on or
prior to the Closing Date, no consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by this Agreement;
(o) To the Acquiring Fund's knowledge all of the issued and outstanding
shares of beneficial interest of the Acquiring Fund have been offered for sale
and sold in conformity with all applicable federal and state securities; and
(p) The Acquiring Fund Tax Representation Certificate to be delivered
by the Acquiring Fund to the Acquired Fund and Wilmer Cutler Pickering Hale and
Dorr LLP at Closing pursuant to paragraph 7.3 (the "Acquiring Fund Tax
Representation Certificate") will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein not misleading.
6. COVENANTS OF EACH OF THE PARTIES
6.1 ORDINARY COURSE PENDING CLOSING. The Acquired Fund and the Acquiring Fund
will operate its respective business in the ordinary course between the date
hereof and the Closing Date, except, in the case of the Acquired Fund, as
contemplated by paragraph 1.2(b). It is understood that such ordinary course of
business will include the declaration and payment of customary dividends and
distributions and any other dividends and distributions necessary or advisable
(except to the extent distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in paragraph 9.5 hereof), in each case payable either in cash or in
additional shares.
6.2 FORM N-14. Each of the Acquired Fund and the Acquiring Fund will use
reasonable efforts to promptly prepare and file with the Commission a
registration statement on Form N-14 relating to the transactions contemplated by
this Agreement.
6.3 DISTRIBUTION OF ACQUIRING FUND SHARES IN LIQUIDATION ONLY. The Acquired Fund
covenants that the Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof other than in
accordance with the terms of this Agreement.
6.4 INFORMATION REGARDING ACQUIRED FUND SHAREHOLDERS. The Acquired Fund will
assist the Acquiring Fund in obtaining such information as the Acquiring Fund
reasonably requests concerning the beneficial ownership of the Acquired Fund's
shares.
6.5 FURTHER ASSURANCES. Subject to the provisions of this Agreement, each of the
Acquired Fund and the Acquiring Fund will take, or cause to be taken, all
actions, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement.
6.6 CLOSING STATEMENT. The Acquired Fund shall furnish to the Acquiring Fund on
the Closing Date the Closing Statement, which statement shall be prepared in
accordance with GAAP consistently applied and shall be certified by the Acquired
Fund's Treasurer or Assistant Treasurer. As promptly as practicable, but in any
case within [90] days after the Closing Date, the Acquired Fund shall furnish to
the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits of the Acquired Fund for federal
income tax purposes, and of any capital loss carryovers and other items that
will be carried over to the Acquiring Fund as a result of Section 381 of the
Code, and which statement will be certified by the Treasurer or Assistant
Treasurer of the Acquired Fund.
6.7 ACQUIRED FUND INFORMATION FOR FORM N-14. The Acquired Fund shall provide the
Acquiring Fund with information reasonably necessary for the preparation of a
prospectus to be included in the Acquiring Fund's registration statement on Form
N-14, in compliance with the Securities Act, the Exchange Act and the Investment
Company Act in connection with the transactions contemplated herein.
6.8 ACQUIRED FUND E&O INSURANCE. The Acquired Fund shall maintain errors
and omissions insurance covering management of the Acquired Fund prior to and
including the Closing Date.
6.9 TAX COMPLIANCE. Neither the Acquired Fund nor the Acquiring Fund shall take
any action that is inconsistent with the representations set forth in, with
respect to the Acquired Fund, the Acquired Fund Tax Representation Certificate,
and with respect to the Acquiring Fund, the Acquiring Fund Tax Representation
Certificate, to the extent such action would prevent the reorganization from
qualifying as a "reorganization" under Section 368(a) of the Code.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
7.1 ACQUIRING FUND REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Agreement by the Acquiring Fund shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date;
7.2 ACQUIRING FUND OFFICER'S CERTIFICATE. The Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in its name by its
President, Executive Vice President, Treasurer or Assistant Treasurer, in form
and substance reasonably satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties made in this
Agreement by the Acquiring Fund are true and correct in all material respects at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement; and
7.3 ACQUIRING FUND TAX REPRESENTATION CERTIFICATE. The Acquiring Fund shall have
delivered to the Acquired Fund and Wilmer Cutler Pickering Hale and Dorr LLP an
Acquiring Fund Tax Representation Certificate, satisfactory to the Acquired Fund
and Wilmer Cutler Pickering Hale and Dorr LLP, concerning certain tax-related
matters with respect to the Acquiring Fund.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquiring Fund in writing:
8.1 ACQUIRED FUND REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Agreement by the Acquired Fund shall be true and correct
in all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the Closing
Date with the same force and effect as if made on and as of the Closing Date;
8.2 ACQUIRED FUND ASSET AND LIABILITIES STATEMENT. The Acquired Fund shall have
delivered to the Acquiring Fund a statement of the Acquired Fund's assets and
liabilities showing the federal tax bases and holding periods as of the Closing
Date, certified by the Acquired Fund's Treasurer or Assistant Treasurer;
8.3 ACQUIRED FUND OFFICER'S CERTIFICATE. The Acquired Fund shall have delivered
to the Acquiring Fund on the Closing Date a certificate executed in its name by
its President, Executive Vice President, Treasurer or Assistant Treasurer, in
form and substance reasonably satisfactory to the Acquiring Fund and dated as of
the Closing Date, to the effect that the representations and warranties made in
this Agreement by the Acquired Fund are true and correct in all material
respects at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement; and
8.4 ACQUIRED FUND, TAX REPRESENTATION CERTIFICATE. The Acquired Fund shall have
delivered to the Acquiring Fund and Wilmer Cutler Pickering Hale and Dorr LLP an
Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring Fund
and Wilmer Cutler Pickering Hale and Dorr LLP, concerning certain tax-related
matters with respect to the Acquired Fund.
9. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
9.1 NO PROCEEDINGS. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated herein;
9.2 CONSENTS. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may for itself waive any of such
conditions;
9.3 REGISTRATION STATEMENT EFFECTIVE. The Acquiring Fund's Registration
Statement on Form N-14 shall have become effective under the Securities Act and
no stop orders suspending the effectiveness thereof shall have been issued and,
to the best knowledge of the parties hereto, no investigation or proceeding for
that purpose shall have been instituted or be pending, threatened or
contemplated under the Securities Act;
9.4 TAX OPINION. The parties shall have received the opinion of Wilmer Cutler
Pickering Hale and Dorr LLP, dated the Closing Date, satisfactory to the
Acquired Fund and the Acquiring Fund and subject to customary assumptions and
qualifications, substantially to the effect that for federal income tax purposes
the acquisition by the Acquiring Fund of the assets of the Acquired Fund in
exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the
assumption of the Assumed Liabilities by the Acquiring Fund, followed by the
distribution by the Acquired Fund, in liquidation of the Acquired Fund, of
Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for their
Acquired Fund Shares and the termination of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a) of the Code; and
9.5 DISTRIBUTION BY ACQUIRED FUND OF INCOME AND CAPITAL GAINS. The Acquired Fund
shall have distributed to its shareholders, in a distribution or distributions
qualifying for the deduction for dividends paid under Section 561 of the Code,
all of its investment company taxable income (as defined in Section 852(b)(2) of
the Code determined without regard to Section 852(b)(2)(D) of the Code) for its
taxable year ending on the Closing Date, all of the excess of (i) its interest
income excludable from gross income under Section 103(a) of the Code over (ii)
its deductions disallowed under Sections 265 and 171(a)(2) of the Code for its
taxable year ending on the Closing Date, and all of its net capital gain (as
such term is used in Sections 852(b)(3)(A) and (C) of the Code), after reduction
by any available capital loss carry forward, for its taxable year ending on the
Closing Date.
10. BROKERAGE FEES AND EXPENSES
10.1 NO BROKER FEES. Each party hereto represents and warrants to the other
party hereto that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
10.2 EXPENSES. The Adviser will pay all expenses incurred in connection with the
Reorganization (including, but not limited to, the preparation of the
prospectus). Notwithstanding the foregoing, expenses will in any event be paid
by the party directly incurring such expenses if and to the extent that the
payment by another person of such expenses would result in the disqualification
of such party as a "regulated investment company" within the meaning of Section
851 of the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 ENTIRE AGREEMENT. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein or referred to in
paragraphs 6.9 and 7.7 hereof and that this Agreement constitutes the entire
agreement between the parties.
11.2 SURVIVAL. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
12. TERMINATION
12.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date by: (a) the mutual agreement of the Acquired Fund and the Acquiring
Fund; (b) by resolution of the board of trustees of the Trust if circumstances
should develop that in the good faith opinion of such board, make proceeding
with the Agreement not in the best interest of either fund or its shareholders;
(c) any party in the event that the other party hereto shall breach any material
representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date and has not cured such breach within 10 days after of
notice thereof; or (d) a condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
12.2 EXPENSES UPON TERMINATION. In the event of any such termination, there
shall be no liability for damages on the part of any party hereto or the Trust's
Trustees or officers to the other party, and the Adviser will pay all expenses
in connection with preparation of this Agreement and the contemplated
Reorganization, subject only to the last sentence of paragraph 10.2.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may be
mutually agreed upon in writing by the authorized officers of the Acquired Fund
and the Acquiring Fund.
14. NOTICES
Any notice, report, statement or demand required or permitted by any provision
of this Agreement shall be in writing and shall be given by telecopy or prepaid
certified mail addressed to the Acquired Fund and the Acquiring Fund at 440
Wheelers Farms Road, Milford, Connecticut 06460.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 HEADINGS. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original.
15.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
15.4 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit
of the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by either party without the written consent of the other party hereto.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm, corporation or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
15.5 BINDING ON TRUST ONLY. It is expressly agreed that the obligations of the
Acquiring Fund and the Acquired Fund shall not be binding upon any of their
Trustees, shareholders, nominees, officers, agents or employees personally, but
bind only the property of the Acquiring Fund or the Acquired Fund, as the case
may be, as provided in the Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the board of trustees of the Trust on
behalf of each of the Acquiring Fund and the Acquired Fund, and this Agreement
has been executed on behalf of the Acquired Fund and the Acquiring Fund by
authorized officers acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the property of the Acquiring Fund and the
Acquired Fund, as the case may be, as provided in the Declaration of Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and attested by its
Secretary or Assistant Secretary.
Attested:
THE WRIGHT MANAGED INCOME TRUST,
on behalf of its series
WRIGHT CURRENT INCOME FUND
By: _________________________________ By: _____________________________
Name: Name:
Title: Title:
Attested:
THE WRIGHT MANAGED INCOME TRUST,
on behalf of its series
WRIGHT U.S.GOVERNMENT NEAR TERM FUND
By: _________________________________ By: ______________________________
Name: Name:
Title: Title:
Wright Investors' Service, Inc.is
a party to this Agreement solely for
the purposes of paragraph 10.2
and paragraph 12.2
WRIGHT INVESTORS' SERVICE, INC.
By: ______________________________
Name:
Title:
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
PROSPECTUS
MAY 1, 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 Current Income Fund
o Wright Total Return Bond Fund
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER THE INFORMATION
IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS
COMMITTING A CRIME.
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUNDS............1
Wright Selected Blue Chip Equities Fund............................2
Wright Major Blue Chip Equities Fund...............................4
Wright International Blue Chip Equities Fund.......................6
Wright U.S. Government Near Term Fund..............................8
Wright Current Income Fund........................................10
Wright Total Return Bond Fund.....................................12
NFORMATION ABOUT YOUR ACCOUNT..............................................14
How the Funds Value Their Shares..................................14
Purchasing Shares.................................................14
Selling Shares....................................................15
Exchanging Shares.................................................16
Privacy Concerns..................................................16
Market Timing and Excessive Trading Policy........................16
DIVIDENDS AND TAXES........................................................18
MANAGING THE FUNDS.........................................................19
FINANCIAL HIGHLIGHTS.......................................................21
Wright Selected Blue Chip Equities Fund...........................21
Wright Major Blue Chip Equities Fund..............................22
Wright International Blue Chip Equities Fund......................23
Wright U.S. Government Near Term Fund.............................24
Wright Current Income Fund........................................25
Wright Total Return Bond Fund.....................................26
HOW TO USE THIS PROSPECTUS
Reading this prospectus will help you decide if investing in the Wright
funds is right for you. Please keep this prospectus for future reference.
Included in this prospectus are descriptions telling you about each fund's:
OBJECTIVE...
what the fund seeks to achieve.
PRINCIPAL INVESTMENT STRATEGIEs...
how the fund intends to achieve its investment objective and the
strategies used by Wright Investors' Service, the fund's investment
adviser.
PRINCIPAL RISKS...
the risks associated with the fund's primary investments.
WHO MAY WANT TO INVEST...
decide if the fund is a suitable investment for you.
PAST PERFORMANCE...
the total return on your investment, including income from dividends
and interest, and the increase or decrease in price over various time
periods.
FEES AND EXPENSES...
what overall costs you bear by investing in the fund.
OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUNDS
- ------------------------------------------------------------------------------
This prospectus offers a variety of equity and fixed income mutual funds
designed to meet various individual investment objectives. You can use them
singularly or in any combination to meet your objectives.
- -----SIDE BAR TEXT-----
Fundamental Analysis and
"Bottom-up" vs "Top-Down"
Investing
FUNDAMENTAL ANALYSIS is the analysis of company financial statements to
forecast future price movements using past records of assets, earnings, sales,
products, management and markets. It differs from technical analysis which
relies on price and volume movements of stocks and does not concern itself with
company financial statistics.
BOTTOM-UP INVESTING is the analysis of company information before
considering the impact of industry and economic trends. It differs from the
"top-down" approach which looks first at the economy, then the industry and last
the company.
- -----END SIDE BAR TEXT-----
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 30,000 global companies (covering 58 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.
- ----SIDE BAR TEXT----
Blue Chip
Financial dictionaries define Blue Chip as a common stock of a company that has
a long record of profit growth and dividend payment and a reputation for quality
management, products and services. Wright further defines this to include
securities issued by companies that meet its qualitative standards.
- ----END SIDE BAR TEXT----
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
- --------------------------------------------------------------------------------
CUSIP: 8235F107 Ticker Symbol: WSBEX
OBJECTIVE...
The fund seeks to provide long-term total return consisting of price
appreciation and current income.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its assets in a diversified portfolio of equity
securities of well-established companies. The portfolio investments are selected
primarily from companies on the Adviser's "investment grade" list of Approved
companies. The funds 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. The
Adviser believes that the resulting diversified portfolio has better overall
fundamental characteristics than the benchmark, i.e. earnings growth, financial
strength and profitability.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o MARKET RISK: when the prices of stocks fall, the value of the fund's
investments may fal
o MANAGEMENT RISK: Wright's strategy may not produce
the expected results, causing losses.
In addition to normal market and management risks, fund performance will be
adversely affected if mid-cap stocks fall out of favor with the market and
returns trail the overall stock market, or selected companies remain undervalued
or experience an adverse event, such as an unfavorable earnings report.
The fund cannot eliminate risk or assure achievement of its objective and you
may lose money.
WHO MAY WANT TO INVEST...
You may be interested in the fund if you are seeking an actively managed common
stock investment for total investment return and intend to make a long-term
investment commitment.
PAST PERFORMANCE...
The information on the next page shows the performance of the fund for the
ten-year period through December 31, 2005. These returns include reinvestment of
all dividends and capital gain distributions, and reflect fund expenses. As with
all mutual funds, past performance (before and after taxes) does not guarantee
future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart on the following page illustrates the risk of investing in
the fund by showing the volatility of the fund's performance for each
calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
40%
- -------------------------------------------------------------------------------------------------------------------
30% 32.70% 30.06%
- -------------------------------------------------------------------------------------------------------------------
20%
- -------------------------------------------------------------------------------------------------------------------
10% 18.57% 10.75% 15.73% 11.09%
- -------------------------------------------------------------------------------------------------------------------
0% 0.14% 5.75%
- -------------------------------------------------------------------------------------------------------------------
(10)%
- -------------------------------------------------------------------------------------------------------------------
(20)% -10.15% -16.98%
- -------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best Quarter:18.72%(4th quarter 1998) Worst Quarter:-19.20%(3rd quarter 1998)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before- and after-tax performance. The fund's average annual
return is compared with that of the S&P Mid-Cap 400, an unmanaged index of
stocks in a broad range of industries with market capitalizations of a few
billion or less. The performance of the S&P Mid-Cap 400, unlike that of the
fund, reflects no deductions for fees, expenses or taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------------------------------------------------
WSBC
- Return before taxes 11.09% 4.52% 8.69%
- Return after taxes on distributions 8.52% 3.33% 6.14%
- Return after taxes on distributions
and sales of fund shares 6.81% 2.87% 6.14%
S&P Mid-Cap 400 12.46% 8.60% 14.36%
- ----SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After-tax
returns are calculated using the highest individual federal income tax rates and
do not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor's tax situation and may differ from those shown. The
after-tax returns shown are not relevant to investors who hold their shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
- ----END SIDE BAR TEXT----
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
Annual Fund Operating Expenses Standard Shares
- -------------------------------------------------------------------------------------------------
(deducted directly from fund Management fee 0.60%
assets) Distribution and service (12b-1) fees 0.25%
As a shareholder in the fund Other expenses 0.58%
you do not pay any sales charges, --------------------------------------------------------------
redemption or exchange fees. Total Operating Expenses 1.43%
--------------------------------------------------------------
Expense Reimbursement (1) (0.18%)
-------------------------------------------------------------
NET OPERATING EXPENSES 1.25%
- --------------------------------------------------------------------------------------------------
(1) Under a written agreement in effect through the current fiscal year,Wright
waives a portion of its advisory fee and/or distribution fee and assumes
operating expenses to the extent necessary to limit expense ratios to 1.25%
after custodian fee reductions, if any.
Example
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
$127 $397 $686 $1,511
- -----SIDE BAR TEXT-------
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include the
fund's share of the portfolio's expenses,12b-1 fees, an administration fee and
registration fees.
- -----END SIDE BAR TEXT-----
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
- -------------------------------------------------------------------------------
CUSIP: 98235F305 Ticker Symbol: WQCEX
OBJECTIVE...
The fund seeks total return, consisting of price appreciation plus income.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its assets in a diversified portfolio of equity
securities of well-established large capitalization companies. The Adviser
currently defines large companies as those with market values of $10 billion or
more at the time of the fund's investment. The portfolio investments are chosen
primarily from companies on the Advisers "investment grade" list of Approved
companies. 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. The Adviser believes that the
resulting diversified portfolio has better overall fundamental characteristics
than the benchmark, i.e. earnings growth, financial strength and profitability.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o MARKET RISK: when the prices of stocks fall, the value of the fund's
investments may fall
o MANAGEMENT RISK: Wright's strategy may not produce the expected results,
causing losses.
In addition to normal market and management risk, fund performance will be
adversely affected if large capitalization stocks fall out of favor with the
market and their returns trail the overall stock market.
The fund cannot eliminate risk or assure achievement of its objective and
you may lose money.
WHO MAY WANT TO INVEST...
This fund may be suitable for investors seeking a common stock investment for
total investment return or a core equity portfolio for those investing in
several asset classes.
PAST PERFORMANCE...
The information on the next page shows the performance of the fund for the
ten-year period through December 31, 2005. These returns include reinvestment of
all dividends and capital gain distributions, and reflect fund expenses. As with
all mutual funds, past performance (before and after taxes) does not guarantee
future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart on the following page illustrates the risk of investing in
the fund by showing the volatility of the fund's performance for each calendar
year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
40%
- -------------------------------------------------------------------------------------------------------------------
30% 33.86%
- -------------------------------------------------------------------------------------------------------------------
20% 20.43% 23.95% 23.20%
- -------------------------------------------------------------------------------------------------------------------
10% 17.63% 12.36%
- -------------------------------------------------------------------------------------------------------------------
0% 6.20%
- -------------------------------------------------------------------------------------------------------------------
(10)%
- -------------------------------------------------------------------------------------------------------------------
(20)% -12.49% -16.87% -24.50%
- -------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best quarter:23.71%(4th quarter 1998) Worst quarter:-16.01%(3rd quarter 2002)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before- and after-tax performance. The fund's average annual
return is compared with that of the S&P 500, an unmanaged index of 500 widely
held common stocks that generally indicates the performance of the market. The
performance of the S&P 500, unlike that of the fund, reflects no deductions for
fees, expenses or taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------
WMBC
- Return before taxes 6.20% -1.60% 6.61%
- Return after taxes on distributions 5.90% -1.73% 4.82%
- Return after taxes on distributions
and sales of fund shares 4.72% -1.73% 4.82%
S&P 500 4.91% 0.54% 9.07%
- ---SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After-tax
returns are calculated using the highest individual federal income tax rates and
do not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor's tax situation and may differ from those shown. The
after-tax returns shown are not relevant to investors who hold their shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
- ----END SIDE BAR TEXT----
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------------------------------
(deductly directly from fund assets)
As a shareholder in Management fee 0.60%
the fund, you do not Distribution and
pay any sales charges, service (12b-1) fees 0.25%
redemption or exchange Other Expenses 0.40%
fees. -------------------------------------------------
TOTAL OPERATING EXPENSES 1.25%
-------------------------------------------------
(1) 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.
Example
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
$127 $397 $686 $1,511
- -----SIDE BAR TEXT-----
UNDERSTANDING EXPENSES
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees,12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
- -------------------------------------------------------------------------------
CUSIP: 98235F404 Ticker Symbol: WIBCX
OBJECTIVE...
The fund seeks total return consisting of price appreciation plus income.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its assets in a diversified portfolio of equity
securities of well-established non-U.S. companies. The portfolio investments are
chosen primarily from companies on the Adviser's "investment grade" list of
Approved companies. Companies may be traded on the securities market of their
own country, on other foreign exchanges or in the U.S. through American
Depository Receipts (ADR's). ADR's represent interest in the underlying
security. 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. The Adviser believes that the
resulting diversified portfolio has better overall fundamental characteristics
than the benchmark, i.e. earnings growth, financial strength and profitability.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o MARKET RISK: when the prices of stocks fall, the value of the fund's
investments may fall
o MANAGEMENT RISK: Wright's strategy may not produce
the expected results, causing losses.
In addition to market and management risks, the fund is subject to additional
risks in connection with investing in foreign securities. These include:
currency risk (changes in foreign currency rates reducing the value of the
fund's assets), seizure, expropriation or nationalization of a company's assets,
less publicly available information, and the impact of political, social or
diplomatic events. If an ADR is not sponsored by the issuer of the underlying
security, there may be reduced access to information about the issuer.
The fund cannot eliminate risk or assure achievement of its objective and you
may lose money.
WHO MAY WANT TO INVEST...
The fund may be suitable for investors seeking a diversified portfolio of
quality non-U.S. equities offering ownership in some of the leading companies
throughout the world and who are not adverse to the risks associated with
international investing. Also, because foreign stock prices may not move in
concert with U.S. market prices, the fund may be a useful way for an investor to
diversify equity investments.
PAST PERFORMANCE...
The information in the table on the next page shows the performance of the fund
for the periods indicated through December 31, 2005. These returns include
reinvestment of all dividends and capital gain distributions, and reflect fund
expenses. As with all mutual funds, past performance (before and after taxes)
does not guarantee future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart illustrates the risk of investing in the fund by showing the
volatility of the fund's performance for each calendar year for the past ten
years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
30% 34.26% 31.96%
- ----------------------------------------------------------------------------------------------------------
20% 20.73% 17.71% 21.13%
- ----------------------------------------------------------------------------------------------------------
10%
- ----------------------------------------------------------------------------------------------------------
0% 1.54% 6.14%
- ----------------------------------------------------------------------------------------------------------
(10)% -17.58% -14.51%
- ----------------------------------------------------------------------------------------------------------
(20)% -24.18%
- ----------------------------------------------------------------------------------------------------------
(30)%
- ----------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best quarter:30.24%(4th quarter 1999) Worst quarter:-18.45%(3rd quarter 2002)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before- and after-tax performance. The fund's average annual
return is compared with that of the MSCI Developed World ex U.S. Index. While
the fund does not seek to match the returns of this index, this unmanaged index
generally indicates foreign stock market performance. The performance of the
MSCI Developed World ex U.S. Index, unlike that of the fund, reflects no
deductions for fees, expenses, or taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Yr 5 Yrs 10 Yrs
- -------------------------------------------------------------------------------
WIBC
- - Return before taxes 21.13% 4.05% 5.79%
- - Return after taxes on distributions 20.63% 3.85% 4.91%
- - Return after taxes on distributions
and sales of fund shares 16.50% 3.13% 4.54%
MSCI Developed World ex U.S. Index 14.47% 4.92% 6.22%
- ----SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After -tax
returns are shown only for Standard Shares and would be different for
Institutional Shares.After-tax returns are calculated using the highest
individual federal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown. The after-tax returns shown are not relevant to
investors who hold their shares through tax-deferred arrangements such as 401(k)
plans or individual retirement accounts.
- ----END SIDE BAR TEXT----
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
SHAREHOLDER FEES*
- -------------------------------------------------------------------------------
(paid directly from Maximum redemption fee
your investment) (% of redemption proceeds) 2.00%
- ------------------------------------------------------------------------------
* A redemtion fee applies if you redeem your shares within three months of
purchase.
- -------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------------------------------
(deductly directly from fund assets)
As a shareholder in Management fee 0.80%
the fund, you do not Distribution and
pay any sales charges service (12b-1) fees 0.25%
or exchange fees. Other Expenses 0.57%
-----------------------------------------------------
TOTAL OPERATING EXPENSES 1.62%
- -------------------------------------------------------------------------------
EXAMPLE
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------
$165 $511 $881 $1,922
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include the
fund's share of the portfolio's expenses,12b-1 fees, an administration fee and
registration fees.
- -----END SIDE BAR TEXT-----
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
- --------------------------------------------------------------------------------
CUSIP: 982349201 Ticker Symbol: WNTBX
OBJECTIVE...
The fund seeks a high level of income, which is normally above that available
from short-term money market instruments or funds.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its total assets in U.S. government obligations
and maintains an average weighted maturity of between one and three years. U.S.
government obligations include:
o direct obligations of the U.S. government, such as U.S. Treasury bills,
notes and bonds
o obligations of U.S. government agencies secured by the full faith and
credit of the U.S. Treasury, such as securities, including
pass-through securities, of the Government National Mortgage Association
or securities of the Export-Import Bank
o obligations secured by the right to borrow from the U.S. Treasury
o obligations backed only by the credit of a government agency such as the
Federal Home Loan Bank, Fannie Mae (Federal National Mortgage Association)
and Freddie Mac (Federal Home Loan Mortgage Corporation).
Wright allocates assets among different market sectors and maturities based on
its view of the economic outlook and expected trend in short-term interest
rates. For example, the fund may invest more heavily in shorter term securities
when it expects an increase in interest rates. In buying and selling securities
for the fund, Wright analyzes a security's structural features, current price
compared with its estimated value and the credit quality of its issuer. The
fund's average maturity as of December 31, 2005, was 1.8 years and its duration
was 1.6 years. The fund's benchmark is the Lehman U.S. Government 1-3 Year Bond
Index.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
The general risks of bond funds are credit and interest rate risks. Because the
fund invests in U.S. government obligations, credit risk is less than other
types of bonds. However, this does not protect the fund against interest rate
risk or guarantee the value of the fund's shares. The fund's yield may decline
during times of falling interest rates. Also, mortgage-related securities (such
as Ginnie Maes) are subject to prepayment and extension risks during times of
falling or rising interest rates. These risks are defined to mean:
o CREDIT OR DEFAULT RISK: An issuer's credit rating may be downgraded or the
issuer may be unable to pay principal and interest obligations.
o INTEREST RATE RISK: Bond prices fall when interest rates rise and vice
versa. The longer the duration of a bond, the greater the potential change
in price.
o PREPAYMENT RISK: When interest rates decline, the issuer of a security may
exercise an option to prepay the principal. This forces the portfolio to
reinvest in lower yielding securities.
o EXTENSION RISK: When interest rates rise, the life of a mortgage-related
security is extended beyond the expected prepayment time, reducing the
value of the security.
The fund cannot eliminate risk or assure achievement of its objective and you
may lose money.
- ----SIDE BAR TEXT-----
UNDERSTANDING DURATION
Duration measures how quickly the principal and interest of a bond is expected
to be paid. It is also used to predict how much a bond's value will rise and
fall in response to small changes in interest rates. Generally, the shorter a
fund's duration is, the less its securities will decline in value when there is
an increase in interest rates.
- -----END SIDE BAR TEXT-----
WHO MAY WANT TO INVEST...
You may be interested in the fund if you seek a higher level of income than is
available from money market instruments and can accept greater fluctuation in
principal. Also, the fund may be suitable if you seek a total return alternative
to a money market investment.
PAST PERFORMANCE...
The information in the table on the next page shows the fund's performance for
the ten-year period through December 31, 2005. These returns include
reinvestment of all dividends and capital gain distributions, and reflect fund
expenses. As with all mutual funds, past performance (before and after taxes)
does not guarantee future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart illustrates the risk of investing in the fund by showing the
volatility of the fund's performance for each calendar year for the past ten
years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
20%
- ------------------------------------------------------------------------------------------------------------------
10%
- ------------------------------------------------------------------------------------------------------------------
0% 3.94% 5.93% 5.98% 1.91% 6.94% 6.82% 5.42% 0.61% 0.43% 1.01%
- ------------------------------------------------------------------------------------------------------------------
(10)%
- ------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best quarter:2.87%(3rd quarter 1998) Worst quarter:-1.22%(2nd quarter 2004)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before and after tax performance. The fund's average annual
return is compared with that of the Lehman U.S. Government 1-3 Year Bond Index.
While the fund does not seek to match the returns of this Index, this unmanaged
index generally indicates the performance of the U.S. government bond market.
The Lehman U.S. Government 1-3 Year Bond Index, unlike the fund, reflects no
deductions for fees, expenses, or taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Yr 5 Yrs 10 Yrs
- --------------------------------------------------------------------------------
WNTB
- Return before taxes 1.01% 2.82% 3.87%
- Return after taxes on distributions -0.18% 1.47% 2.06%
- Return after taxes on distributions
and sales of fund shares -0.18% 1.47% 2.06%
Lehman U.S. Government 1-3 Year Bond Index 1.73% 3.83% 4.89%
- ----SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After-tax
returns are calculated using the highest individual federal income tax rates and
do not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor's tax situation and may differ from those shown. The
after-tax returns shown are not relevant to investors who hold their shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
- ----END SIDE BAR TEXT
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------------------------
(deductly directly from fund assets)
As a shareholder in Management fee 0.45%
the fund, you do not Distribution and
pay any sales charges, service (12b-1) fees 0.25%
redemption or exchange Other Expenses 0.84%
fees. ---------------------------------------------
Total Operating Expenses 1.54%
Expense Reimbursement(1) (0.59%)
---------------------------------------------
NET OPERATING EXPENSES 0.95%
(1)Under a written agreement, Wright waives a portion of its advisory fee
and/or distribution fees and assumes operating expenses to the extent
necessary to limit expense ratios to 0.95% after custodian fee reductions,if
any.
Example
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------
$97 $303 $525 $1,166
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include the
fund's share of the portfolio's expenses,12b-1 fees, an administration fee and
registration fees.
- -----END SIDE BAR TEXT-----
WRIGHT CURRENT INCOME FUND
- --------------------------------------------------------------------------------
CUSIP: 982349607 Ticker Symbol: WCIFX
OBJECTIVE...
The fund seeks a high level of current income consistent with moderate
fluctuations of principal.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its total assets primarily in debt obligations
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, mortgage-related securities of governmental or corporate
issuers and corporate debt securities. The U.S. Government securities in which
the fund may invest include direct obligations of the U.S. Government, such as
bills, notes, and bonds issued by the U.S. Treasury; obligations of U.S.
Government agencies and instrumentalities secured by the full faith and credit
of the U.S. Treasury, such as securities of GNMA or the Export-Import Bank;
obligations secured by the right to borrow from the U.S. Treasury; and
obligations backed only by the credit of the government agency itself, such as
securities of Federal Home Loan Bank, FNMA and FHLMC.
Corporate debt securities include commercial paper and other short-term
instruments rated A-1 by Standard & Poor's Ratings Group or P-1 by Moody's
Investors Service, Inc. and comparable unrated securities. The fund reinvests
all principal payments. The fund seeks to outperform the Lehman GNMA Backed Bond
Index.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
The general risks of bond funds are credit and interest rate risks. Credit risk
is minimal to the extent the fund concentrates in mortgage-related securities
whose timely payment of interest and principal is guaranteed by the U.S.
government. However, this does not protect the fund against interest rate risk
or guarantee the value of the fund's shares. Securities based on underlying
loans are generally subject to prepayment and extension risks. These risks are
defined to mean:
o INTEREST RATE RISK: Bond prices fall when interest rates rise and vice
versa. The longer the duration of a bond, the greater the potential change
in price.
o CREDIT OR DEFAULT RISK: An issuer's credit rating may be downgraded or the
issuer may be unable to pay principal and interest obligations.
o PREPAYMENT RISK: When interest rates decline, the issuer of a security may
exercise an option to prepay the principal. This forces the fund to
reinvest in lower yielding securities.
o EXTENSION RISK: When interest rates rise, the life of a mortgage-related
security is extended beyond the expected prepayment time, reducing the
value of the security.
Also, the fund's yield may decline during times of falling interest rates. The
fund cannot eliminate risk or assure achievement of its objective and you may
lose money.
WHO MAY WANT TO INVEST...
You may want to invest in the fund if you are seeking a high level of income
over a long period of time. The fund is designed for investors who want to
receive the kind of income that mortgage-related securities provide, but do not
want to bother with the receipt or reinvestment of principal payments.
PAST PERFORMANCE...
The information in the table on the next page shows the fund's performance for
the ten-year period through December 31, 2005. These returns include
reinvestment of all dividends and capital gain distributions, and reflect fund
expenses. As with all mutual funds, past performance (before and after taxes)
does not guarantee future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart illustrates the risk of investing in the fund by showing the
volatility of the fund's performance for each calendar year for the past ten
years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
30%
- ---------------------------------------------------------------------------------------------------------------
20%
- ---------------------------------------------------------------------------------------------------------------
10% 10.31%
- ---------------------------------------------------------------------------------------------------------------
0% 4.35% 8.56% 6.51% 0.52% 7.18% 7.70% 1.73% 3.29% 1.76%
- ---------------------------------------------------------------------------------------------------------------
(10)%
- ---------------------------------------------------------------------------------------------------------------
(20)%
- ---------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best quarter:3.80%(3rd quarter 2001) Worst quarter:-1.21%(2nd quarter 1999)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before- and after-tax performance. The fund's average annual
return is compared with that of the Lehman GNMA Backed Bond Index. While the
fund does not seek to match the returns of the Lehman GNMA Backed Bond Index,
Wright believes that this unmanaged index generally indicates the performance of
government and corporate mortgage-backed bond markets. The Lehman GNMA Backed
Bond Index, unlike the fund, reflects no deductions for fees, expenses, or
taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------
WCIF
- Return before taxes 1.76% 4.30% 5.14%
- Return after taxes on distributions -0.02% 2.11% 2.76%
- Return after taxes on distributions
and sales of fund shares -0.02% 2.11% 2.76%
Lehman GNMA Backed Bond Index 3.21% 5.43% 6.19%
- -------------------------------------------------------------------------------
- ----SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After-tax
returns are shown only for Standard shares and would be different for
Institutional shares. After-tax returns are calculated using the highest
individual federal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on an investor's tax situation and
may differ from those shown. The after-tax returns shown are not relevant to
investors who hold their shares through tax-deferred arrangements such as 401(k)
plans or individual retirement accounts.
- ----END SIDE BAR TEXT
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
ANNUAL FUND OPERATING EXPENSES
- ------------------------------------------------------------------------------
(deductly directly from fund assets)
As a shareholder in Management fee 0.45%
the fund, you do not Distribution and
pay any sales charges, service (12b-1) fees 0.25%
redemption or exchange Other Expenses 0.60%
fees. --------------------------------------------------
Total Operating Expenses 1.30%
Expense Reimbursement(1) (0.35%)
--------------------------------------------------
NET OPERATING EXPENSES 0.95%
(1)Under a written agreement in effect for the current fiscal year, Wright
assumes operating expenses to the extent necessary to limit expense ratios to
0.95% after custodian fee reductions,if any.
EXAMPLE
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------
$97 $303 $525 $1,166
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include the
fund's share of the portfolio's expenses,12b-1 fees, an administration fee and
registration fees.
- -----END SIDE BAR TEXT-----
WRIGHT TOTAL RETURN BOND FUND
- --------------------------------------------------------------------------------
CUSIP: 982349300 Ticker Symbol: WTRBX
OBJECTIVE...
The fund seeks a superior rate of total return, consisting of a high level of
income plus price appreciation.
PRINCIPAL INVESTMENT STRATEGIES...
The fund invests at least 80% of its total assets in U.S. government and
investment grade (rated "BBB" or higher or of comparable quality if unrated)
corporate debt securities. These securities meet the Wright Quality Rating
Standards. Investment selections differ depending on the trend in interest
rates. The fund looks for securities that in Wright's judgment will produce the
best total return.
Wright allocates assets among different market sectors (such as U.S. Treasury
securities, U.S. government agency securities and corporate bonds) with
different maturities based on its view of the relative value of each sector or
maturity.
There are no limits on the minimum or maximum weighted average
maturity of the fund's portfolio or an individual security. As of December 31,
2005, the fund's average maturity was 7.0 years and its duration was 4.7 years.
The fund seeks to outperform the Lehman U.S. Aggregate Bond Index.
Generally, the fund will sell an individual security if its rating is downgraded
below "BBB" by the major rating services such as Moody's or Standard and Poor's.
The fund's objective may be changed by the trustees without shareholder
approval.
PRINCIPAL RISKS...
The general risks of bond funds are credit and interest rate risks. The fund's
risk profile will vary, depending on the mix of its assets. The fund reduces
credit risk by investing in U.S. government obligations and investment grade or
higher corporate bonds. However, this does not protect the fund against interest
rate risk. Interest rate risk is greater for long-term debt securities than for
short-term debt securities. These risks are defined to mean:
o INTEREST RATE RISK: Bond prices fall when interest rates rise and vice
versa. The longer the duration of a bond, the greater the potential change
in price.
o CREDIT OR DEFAULT RISK: An issuer's credit rating may be downgraded or the
issuer may be unable to pay principal and interest obligations.
o PREPAYMENT RISK: When interest rates decline, the issuer of a security may
exercise an option to prepay the principal. This forces the fund to
reinvest in lower yielding securities. Corporate bonds may have a "call"
feature which gives the issuer the right to redeem outstanding bonds
before their scheduled maturity.
o EXTENSION RISK: When interest rates rise, the life of a mortgage-related
security is extended beyond the expected prepayment time, reducing the
value of the security.
Also, the fund's yield may decline during times of falling interest rates. The
fund cannot eliminate risk or assure achievement of its objective and you may
lose money.
- -----SIDE BAR TEXT-----
UNDERSTANDING DURATION
Duration measures how quickly the principal and interest of a bond is expected
to be paid. It is also used to predict how much a bond's value will rise and
fall in response to small changes in interest rates. Generally, the shorter a
fund's duration is, the less its securities will decline in value when there is
an increase in interest rates.
- -----END SIDE BAR TEXT-----
WHO MAY WANT TO INVEST...
You may be interested in the fund if you seek a level of income consistent with
total return by investing in intermediate and longer term debt and can accept
price fluctuations.
PAST PERFORMANCE...
The information on the following page shows the fund's performance for the
ten-year period through December 31, 2005. These returns include reinvestment of
all dividends and capital gain distributions, and reflect fund expenses. As with
all mutual funds, past performance (before and after taxes) does not guarantee
future results.
Performance is for the stated time periods only. Due to market volatility, the
fund's current performance may be lower or higher than the quoted returns.
The bar chart illustrates the risk of investing in the fund by showing the
volatility of the fund's performance for each calendar year for the past ten
years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
30%
- ----------------------------------------------------------------------------------------------------------
20%
- ----------------------------------------------------------------------------------------------------------
10% 10.62%
- ----------------------------------------------------------------------------------------------------------
0% 0.90% 9.25% 9.56% 4.96% 9.03% 3.25% 3.52% 1.54%
- ----------------------------------------------------------------------------------------------------------
(10)% -3.91%
- ----------------------------------------------------------------------------------------------------------
20)%
- ----------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Best quarter:5.73%(3rd quarter 1998) Worst quarter:-4.20%(1st quarter 1996)
The fund's annual return shown above does not reflect the impact of taxes. The
table below shows before- and after-tax performance. The fund's average annual
return is compared with that of the Lehman U.S. Aggregate Bond Index, an
unmanaged index that is a broad representation of the investment-grade fixed
income market in the U.S. The Lehman U.S. Aggregate Bond Index, unlike the fund,
reflects no deductions for fees, expenses, or taxes.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------
WTRB
- Return before taxes 1.54% 4.43% 4.77%
- Return after taxes on distributions -0.12% 2.55% 2.67%
- Return after taxes on distributions
and sales of fund shares -0.12% 2.55% 2.67%
Lehman Aggregate Bond Index 2.43% 5.87% 6.16%
- ----SIDE BAR TEXT----
AFTER-TAX RETURN
After-tax performance is computed two ways: "Return after taxes on
distributions" assumes the payment of federal taxes on fund distributions before
their reinvestment and "Return after taxes on distributions and sales of fund
shares" reflects the additional taxable impact of the realized gain or loss if
any, from the sale of fund shares at the end of the holding period. After-tax
returns are calculated using the highest individual federal income tax rates and
do not reflect the impact of state and local taxes. Actual after-tax returns
depend on an investor's tax situation and may differ from those shown. The
after-tax returns shown are not relevant to investors who hold their shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts.
- ----END SIDE BAR TEXT-----
FEES AND EXPENSES...
The table describes the fees and expenses you may pay if you buy and hold shares
of the fund.
ANNUAL FUND OPERATING EXPENSES Standard Shares
- -----------------------------------------------------------------------------
(deductly directly from fund assets)
As a shareholder in Management fee 0.45%
the fund, you do not Distribution and
pay any sales charges, service (12b-1) fees 0.25%
redemption or exchange Other Expenses 0.48%
fees. -------------------------------------------------
Total Operating Expenses 1.18%
Expense Reimbursement(1) (0.23%)
-------------------------------------------------
NET OPERATING EXPENSES 0.95%
(1)Under a written agreement, Wright waives a portion of its advisory fee
and/or distribution fees and assumes operating expenses to the extent
necessary to limit expense ratios to 0.95% after custodian fee reductions, if
any.
EXAMPLE
The following example allows you to compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for comparison
only. Based on these assumptions your costs at the end of each period would be:
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------
$97 $303 $525 $1,166
- -----SIDE BAR TEXT-----
UNDERSTANDING EXPENSES
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees,12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
INFORMATION ABOUT YOUR ACCOUNT
- -------------------------------------------------------------------------------
HOW THE FUNDS VALUE THEIR SHARES
The price at which you buy, sell or exchange fund shares is the net asset value
per share or NAV.
The NAV for each fund is calculated at the close of regular trading
(normally 4:00 p.m. New York time) on the New York Stock Exchange (Exchange)
each day the Exchange is open. It is not calculated on days the Exchange is
closed. The price for a purchase, redemption or exchange of fund shares is the
next NAV calculated after your order is received.
The funds generally value their portfolio securities at the last current sales
price on the market where the security is normally traded or the official
closing price in the case of Nasdaq securities. When closing market prices or
market quotations are not available or are considered by Wright to be unreliable
for a security, the fund values the security at its fair value. All methods of
determining the value of a security used by the fund on a basis other than
market value are forms of fair value. All fair valuations of securities are made
pursuant to procedures adopted by the board of trustees and administered by a
fair value pricing committee that oversees the fair valuation of investments.
The use of fair value pricing by a fund may cause the net asset value of its
shares to differ from the net asset value that would be calculated only using
market prices. For market prices and quotations, as well as for some fair value
methods, the funds rely upon securities prices provided by pricing services.
The funds use the fair value of a security, including a non-U.S. security,
when Wright determines that the closing market price on the primary exchange
where the security is traded no longer accurately reflects the value of the
security at the time the fund calculates its net asset value. This may occur for
a variety of reasons that affect either the relevant securities markets
generally or the specific issuer. For example, with respect to non-U.S.
securities held by the Wright International Blue Chip Equities Fund,
developments relating to specific events, the securities markets or the specific
issuer may occur between the time the primary market closes and the time the
fund determines its net asset value. In those circumstances when the fund
believes the price of the security may be affected, the fund uses the fair value
of the security. International securities markets may be open on days when the
U.S. markets are closed. For this reason, the values of any international
securities owned by Wright International Blue Chip Equities Fund could change on
a day you cannot buy or sell shares of the fund.
The value of all assets and liabilities expressed in foreign currencies is
converted into U.S. dollars at the most recent market rates quoted by one or
more major banks shortly before the close of the Exchange.
When purchasing or redeeming fund shares, your order must be communicated
to the principal underwriter by a specific time each day in order for the
purchase price or the redemption price to be based on that day's net asset value
per share. An investment dealer has a responsibility to transmit orders
promptly. Each fund may accept purchase and redemption orders as of the time of
their receipt by certain investment dealers (or their designated
intermediaries).
- -----SIDE BAR TEXT-----
Determining NAV
Share price is determined by adding the value of a fund's cash and other
assets, deducting liabilities, and then dividing that amount by the total number
of shares outstanding.
- -----END SIDE BAR TEXT-----
PURCHASING SHARES
PURCHASING SHARES FOR CASH
Shares of each fund may be purchased without a sales charge at NAV. The
minimum initial investment is $1,000. There are no minimums for subsequent
investments.
WAIVER OF THE MINIMUM INITIAL INVESTMENT: The minimums may be waived for
investments by bank trust departments, 401(k) tax-sheltered retirement plans and
automatic investment program accounts. The minimum initial investment will be
reduced to $500 for shares purchased through certain investment advisers,
financial planners, brokers or other intermediaries that charge a fee for their
services.
- -----SIDE BAR TEXT-----
Paying for Shares
You may pay for shares by wire, check or Federal Reserve draft payable
in U.S. dollars and drawn on U.S banks. Third party checks will not be accepted.
A charge is imposed on any returned checks.
- -----END SIDE BAR TEXT-----
Authorized dealers, including investment dealers, banks or other institutions,
may impose investment minimums higher than those imposed by the funds. They may
also charge for their services. There are no transaction charges if you purchase
your shares directly from the funds.
Procedures for Opening New Accounts: To help the government fight the funding of
terrorism and money laundering activities, federal law requires the fund to
obtain, verify and record information that identifies each person who opens a
fund account. When you open an account, you will be asked for your name,
address, date of birth and other identifying information. You also may be asked
to produce a copy of your driver's license and other identifying documents. If a
person fails to provide the information requested, any application by that
person to open a new account will be rejected. Moreover, if unable to verify the
identity of a person based on information provided by that person, additional
steps may be taken including, but not limited to, requesting additional
information from the person, closing the person's account or reporting the
matter to the appropriate federal authorities. If your account is closed for
this reason, your shares may be automatically redeemed. If the fund's net asset
value has decreased since your purchase, you will lose money as a result of this
redemption.
The funds have the right to reject any purchase order, or limit or suspend the
offering of their shares.
BUYING FUND SHARES
o If you are buying shares directly from the funds, please refer to your
Shareholder Manual for additional instructions on how to buy fund shares.
o If you buy shares through bank trust departments or other fiduciary
institutions, please consult your trust or investment officer.
o If you buy shares through a broker, please consult your broker for
purchase instructions.
o If you buy shares through an account with a registered investment adviser
or financial planner, please consult your investment adviser or planner.
o If you buy shares of the funds through a retirement plan, please consult
your plan documents or speak with your plan administrator.
PURCHASING SHARES THROUGH EXCHANGE OF SECURITIES
You may buy shares by delivering to the funds' custodian securities that meet
that fund's investment objective and policies, have easily determined market
prices and are otherwise acceptable. Exchanged securities must have a minimum
aggregate value of $5,000. Securities are valued as of the date they are
received by the funds. If you want to exchange securities for fund shares you
should furnish a list with a full description of these securities. See the
Shareholder Manual for detailed instructions.
DISTRIBUTION AND SERVICE PLANS
The funds have adopted a 12b-1 plan permitting them to pay a fee to finance
the distribution of their shares. Wright Investors' Service Distributors, Inc.
(WISDI), the principal underwriter and distributor of the funds' shares,
receives a distribution fee of 0.25% of the average daily net assets of each
fund's average daily net assets. Because this fee is paid on an ongoing basis,
it may cost you more than other types of sales charges over time.
- -----SIDE BAR TEXT-----
Service Plans
Each fund has adopted a service plan. This plan allows each fund to
reimburse WISDI for payments to intermediaries for providing account
administration and personal and account maintenance services to shareholders of
the funds. The combined annual service and 12b-1 plan fee may not exceed 0.25%
of the average daily net assets of each class of shares.
- -----END SIDE BAR TEXT-----
SELLING SHARES
You may redeem or sell shares of the funds on any business day. NO REDEMPTION
REQUEST WILL BE PAID UNTIL YOUR SHARES HAVE BEEN PAID FOR IN FULL. IF THE SHARES
TO BE REDEEMED WERE PURCHASED BY CHECK, THE REDEMPTION PAYMENT WILL BE DELAYED
UNTIL THE CHECK HAS BEEN COLLECTED, WHICH MAY TAKE UP TO 15 DAYS FROM THE DATE
OF PURCHASE. Telephone, mail and internet redemption procedures are described in
the Shareholder Manual.
- -----SIDE BAR TEXT-----
Redemption Proviso
In times of drastic economic or market conditions, you may have difficulty
selling shares by telephone or the internet. These redemption options may be
modified or terminated without notice to shareholders.
- -----END SIDE BAR TEXT-----
Redemption requests received by the funds or their authorized agents in
"proper form" before 4:00 p.m. New York time will be processed at that day's
NAV. "Proper form" means that the fund has received your request, all shares are
paid for, and all documentation along with any required signature guarantee, are
included. The funds normally pay redemption proceeds by check on the next
business day to the address of record. Payment will be by wire if you specified
this option on your account application.
If you redeem shares of Wright International Blue Chip Equities Fund within
three months after purchase, you will pay a redemption fee of 2.00%. These
redemption fees may be waived on shares purchased for Wright's investment
advisory clients and 401(k) or similar plans.
For more information about selling your shares, please refer to your Shareholder
Manual or consult your trust officer, adviser or plan administrator.
REDEMPTIONS IN-KIND
Although the funds expect to pay redemptions in cash, they reserve the
right to redeem shares in-kind by giving shareholders readily marketable
portfolio securities instead of cash. This is done to protect the interests of
remaining shareholders. If this occurs, you will incur transaction costs and may
incur additional tax liability if you sell the securities.
INVOLUNTARY REDEMPTION
If your account falls below $500, a fund may involuntarily redeem your shares.
You will receive notice 60 days before this happens. Your account will not be
redeemed if the balance is below the minimum due to investment losses.
EXCHANGING SHARES
Shares of the funds may be exchanged for shares of any other fund described in
this prospectus. The exchange of shares results in the sale of one fund's shares
and the purchase of another, normally resulting in a gain or loss, and is
therefore a taxable event for you.
You are limited to four "round-trip" exchanges each year. A round-trip
exchange is an exchange of one fund into another Wright fund, and then back
into the original fund. You will receive notice 60 days before the fund
materially amends or terminates the exchange privilege.
For more information on exchanging shares please see the Shareholder Manual or
consult your adviser.
PRIVACY CONCERNS
We respect and protect your privacy. We collect nonpublic personal
information about you from the information we receive from you on the
application or other forms and information about your transactions with us, our
affiliates, or others. We do not disclose any nonpublic personal information
about our customers or former customers to anyone except as permitted by law.
However, we may disclose your name and address to affiliated companies who
perform marketing services on our behalf. We restrict access to nonpublic
personal information about you to those employees who need to know that
information to provide products or services to you. We maintain physical,
electronic, and procedural safeguards that comply with federal standards to
guard your nonpublic personal information.
MARKET TIMING AND EXCESSIVE TRADING POLICY
The funds are not intended for excessive trading or market timing. Market timers
seek to profit by rapidly switching money into a fund when they expect the share
price of the fund to rise and taking money out of the fund when they expect the
price to fall. By realizing profits from short-term trading, shareholders who
engage in rapid purchases and sales or exchanges of a fund's shares may dilute
the value of shares held by long-term shareholders. Volatility resulting from
excessive purchases and sales or exchanges of fund shares, especially involving
large dollar amounts, may disrupt efficient portfolio management. In particular,
excessive purchases and sales or exchanges of a fund's shares may cause a fund
to have difficulty implementing its investment strategies, may force the fund to
sell portfolio securities at inopportune times to raise cash or may cause
increased expenses (such as brokerage costs, increased administrative costs, or
realization of taxable gains without attaining any investment advantage). In
addition, if a fund invests a portion of its assets in foreign securities, it
may be susceptible to a time-zone arbitrage strategy in which shareholders
attempt to take advantage of fund share prices that may not reflect developments
in a foreign securities market that occur after the close of such market but
prior to the pricing of fund shares.
To discourage such activity, the funds and their agents reserve the right to
refuse any purchase or exchange request, including those from any person or
group who, in the funds' view is likely to engage in excessive trading. Although
there is no generally applied standard in the marketplace as to what level of
trading activity is excessive, trading in a fund's shares may be considered
excessive for a variety of reasons, such as if a shareholder:
o sells shares within a short period of time after the shares were
purchased;
o makes two or more purchases and redemptions within a short period of time;
o enters into a series of transactions that is indicative of a timing
pattern or strategy; or
o is reasonably believed to have engaged in such practices in connection
with other mutual funds.
In addition, the funds have adopted and implemented various policies and
procedures aimed to discourage short-term trading and excessive exchange
activity in the funds. The policies and procedures include:
TRADE ACTIVITY MONITORING. The principal underwriter and the transfer agent
have implemented programs, which have been approved by the funds' Trustees,
designed to identify market timers based on their trading activity and to block
their accounts from further purchases.
EXCHANGE LIMITATIONS. As discussed above under "Exchanging Shares", the funds
have implemented policies that limit the number of exchanges of fund shares to
four "round trip" exchanges each year. This is intended to limit the ability of
shareholders to engage in excessive exchange activity in the funds.
FAIR VALUE PRICING. As discussed above under "How the Funds Value their Shares,"
the funds use fair value pricing to, among other things, reflect changes in
value of a security if Wright determines that the closing market price on the
primary exchange where the security is traded no longer accurately reflects the
value of the security at the time the fund calculates its net asset value. Fair
value pricing results in an estimated price and may reduce the possibility that
short-term traders could take advantage of potentially "stale" prices of
portfolio holdings. However, it cannot eliminate the possibility of short-term
trading and excessive exchange activities.
SHORT-TERM REDEMPTION FEE. The Wright International Blue Chip Equities Fund
charges shareholders a 2% redemption fee if they redeem their shares of the fund
within three months of purchase. This is intended to limit the ability of
shareholders to attempt to engage in excessive trading activity in The Wright
International Blue Chip Equities Fund.
In determining whether to accept or reject a purchase or exchange request, the
funds consider the historical trading activity of the account making the trade,
as well as the potential impact of any specific transaction on the funds and
their shareholders.
The fund and its principal underwriter cannot ensure that they will be able
to identify all cases of market timing and excessive trading, although they
believe they have adequate procedures in place to attempt to do so. For example,
the ability of a fund to monitor trades or exchanges by, and or to assess a
redemption fee on, the underlying shareholders of omnibus accounts maintained by
brokers, retirement plan accounts and accounts attributable to other financial
intermediaries is severely limited in those instances in which the broker,
retirement plan administrator or other financial intermediary maintains the
underlying shareholder account and may be further limited by systems limitations
applicable to these types of accounts. Inability to curtail market timing could
result in additional transactional expenses and/or the fund maintaining a higher
level of cash to fund share activity. The fund or its principal underwriter may
also reject or cancel any purchase order (including an exchange) from an
investor or group of investors for any other reason. The funds also reserve the
right to suspend redemptions or postpone payment dates as permitted by law. No
Wright managed fund has any arrangement to accommodate market timing.
DIVIDENDS AND TAXES
- -------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Unless you tell us that you want to receive your distributions in cash, they are
reinvested automatically in fund shares. The funds generally make two different
kinds of distributions:
o CAPITAL GAINS FROM THE SALE OF PORTFOLIO SECURITIES HELD BY A FUND. Each
fund will distribute any net realized capital gains annually, normally in
December. Capital gains are the main source of distributions paid by the
equity funds.
o NET INVESTMENT INCOME FROM INTEREST OR DIVIDENDS RECEIVED ON SECURITIES
HELD BY A FUND. Net investment income is the primary source of dividends
paid by the bond and money market funds.
The funds will distribute their investment income as follows:
Distributions of
Fund Net Investment Income
- -------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fun Quarterly
Wright Major Blue Chip Equities Fund Quarterly
- -------------------------------------------------------------------------------
Wright International Blue Chip Equities Fund Annually
- -------------------------------------------------------------------------------
Wright U.S. Government Near Term Fund Declared Daily - Paid Monthly
Wright Current Income Fund Declared Daily - Paid Monthly
Wright Total Return Bond Fund Declared Daily - Paid Monthly
- -----SIDE BAR TEXT-----
TAX CONSIDERATIONS
Unless your investment is in a tax-deferred account you may want to avoid:
o Investing in a fund near the end of its fiscal year. If the fund makes a
capital gains distribution you will receive some of your investment back as a
taxable distribution.
o Selling shares at a loss for tax purposes and then making an identical
investment within 30 days before or after the sale. This results in a "wash
sale" and you will not be allowed to claim a tax loss.
- -----END SIDE BAR TEXT-----
TAX CONSEQUENCES
Selling or exchanging mutual fund shares generally is a taxable event and may
result in a capital gain or loss. Distributions, whether received in cash or
additional fund shares, are subject to federal income tax.
DISTRIBUTION TAX STATUS
- ------------------------------------------------------------------------------
Income dividends Ordinary income or
"qualified dividend income"(1)
Short-term capital gains Ordinary income
Long-term capital gains Long-term capital gains
(1) Income dividends designated by a fund as "qualified dividend income" are
taxable to an individual shareholder at a maximum 15% U.S. federal income tax
rate, provided that certain conditions, including holding period requirements,
are met by the fund and the shareholder.
Distributions of income (other than qualified dividend income, which is
described below) and net realized short-term capital gains are taxable as
ordinary income. Distributions of qualified dividend income and long-term
capital gains are taxable as long-term gains. Taxes on distributions of capital
gains are determined by how long the Fund owned the investments that generated
them, rather than how long a shareholder has owned his or her shares.
For taxable years beginning on or before December 31, 2008, distributions of
investment income designated by the Fund as "qualified dividend income" is taxed
in the hands of individual shareholders at rates equivalent to long-term capital
gain tax rates, which currently reach a maximum of 15%. Qualified dividend
income generally includes dividends from domestic corporations and dividends
from foreign corporations that meet certain specified criteria.
Wright International Blue Chip Equities Fund may be subject to foreign
withholding taxes or other foreign taxes on some of its foreign investments.
This will reduce the yield or total return on those investments.
You must provide your social security number or other taxpayer identification
number to a Fund along with certifications required by the Internal Revenue
Service when you open an account. If such information is not provided by a
shareholder and/or if it is otherwise legally required, a Fund will withhold 28%
"backup withholding" tax from such shareholder's dividends and distributions,
sale proceeds and any other payments to such shareholder.
Your investment in the funds could have additional tax consequences. Please
consult your tax advisor on state, local, foreign or other applicable tax laws.
You may also consult the funds' Statement of Additional Information for a more
detailed discussion of U.S. Federal income tax considerations that may affect
the funds and their shareholders.
MANAGING THE FUNDS
Wright Investors' Service, Inc. is a leading independent international
investment management and advisory firm with more than 40 years experience.
Wright manages approximately $2.2 billion of assets in portfolios of all sizes
and styles as well as a family of mutual funds. Wright developed Worldscope(R),
one of the world's largest and most complete databases of financial information,
which currently includes more than 30,000 companies in more than 58 nations.
Wright manages the investments of the funds . Wright is located at 440
Wheelers Farms Road, Milford, CT 06461. Wright receives a monthly advisory fee
for its services. The table below lists the effective annual advisory fee rates
paid for the fiscal year ended December 31, 2005:
Fee Paid
Fund (as a % of average daily net assets)
- -------------------------------------------------------------------------------
Wright Selected Blue Chip Equities Fund 0.60%
Wright Major Blue Chip Equities Fund 0.60%
Wright International Blue Chip Equities Fund 0.80%
Wright U.S. Government Near Term Fund 0.45%
Wright Current Income Fund 0.45%
Wright Total Return Bond Fund 0.45%
- -------------------------------------------------------------------------------
The Funds' most recent shareholder report provides information regarding the
basis for the Trustee's approval of the Funds'investment advisory agreements.
The most recent shareholder report is the annual report for the period ended
December 31, 2005.
INVESTMENT COMMITTEE
An investment committee of senior officers controls the investment selections,
policies and procedures of the funds and the portfolios. These officers are
experienced analysts with different areas of expertise, and have over 186 years
of combined service with Wright. The investment committee consists of the
following members:
Committee Member Title Joined Wright in
- ----------------------------------------------------------------------------------------------------
Peter M. Donovan, CFA Chairman and Chief Executive Officer 1966
Chairman of the Investment Committee
Judith R. Corchard Executive Vice President - Investment Management 1960
Senior Investment Officer
Michael F. Flament, CFA Senior Vice President - Investment
and Economic Analysis 1972
James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982
Amit S. Khandwala Executive Vice President - Head of International
and Domestic Equities 1986
Stanley Kirtman Executive Vice President - Domestic Equities 2002
Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985
Anthony van Daalen, CFA Executive Vice President -Head of Fixed Income
Investments 2002
Day to day responsibility for the management of each fund's portfolio is as
follows. Each of these investment professionals are members of the Investment
Committee (see above). In addition to managing the funds, they are also
responsible for managing other accounts of the Adviser.
James P. Fields
for the Wright Curent Income Fund
Amit S. Khandwala
for the Wright International Blue Chip Equities Fund
Stanley Kirtman
for the Wright Major Blue Chip Equities Fund
Charles T. Simko, Jr.
for the Wright Selected Blue Chip Equities Fund
Anthony van Daalen
for the Wright Total Return Bond Fund and the Wright U.S. Government
Near Term Fund
The Statement of Additional Information provides additional information about
each portfolio manager's compensation, ownership of shares of each Fund and
other accounts managed by each portfolio manager.
The investment adviser, principal underwriter, and each fund have adopted codes
of ethics governing personal securities transactions. Under the codes, Wright
employees may purchase and sell securities subject to certain pre-clearance and
reporting requirements and other procedures.
- -----SIDE BAR TEXT-----
ADMINISTRATOR
Eaton Vance Management ("Eaton Vance")serves as the funds' administrator
and is responsible for managing their daily business affairs. Eaton Vance's
services include recordkeeping, preparing and filing documents required to
comply with federal and state securities laws, supervising the activities of the
funds' custodian , providing assistance in connection with the trustees' and
shareholders' meetings and other necessary administrative services.
- -----END SIDE BAR TEXT-----
PORTFOLIO TURNOVER
The funds may sell a portfolio security regardless of how long the security has
been held. The funds do not intend to engage in trading for short-term profits.
However, portfolio turnover rates will vary. In the past turnover rates have
exceeded and in the future may exceed 100%. A turnover rate of 100% means the
securities owned by a fund were replaced once during the year. Higher turnover
rates may result in higher brokerage costs to the funds and in higher net
taxable gains for you as an investor, and will reduce the funds' returns.
DISCLOSURE OF PORTFOLIO HOLDINGS
The funds have established policies and procedures with respect to the
disclosure of portfolio holdings and other information concerning fund
characteristics. A description of these policies and procedures is provided in
the Statement of Additional Information. Such policies and procedures regarding
disclosure of portfolio holdings are designed to prevent the misuse of material,
non-public information about the funds.
FINANCIAL HIGHLIGHTS
These financial highlights will help you understand each fund's financial
performance for the periods indicated. Certain information reflects financial
results for a single fund share. Total return shows how much your investment in
the fund increased or decreased during each period, assuming you reinvested all
dividends and distributions. Deloitte & Touche LLP, an independent certified
public accounting firm, audited this information. Their reports are included in
the funds' annual report, which is available upon request.
Year Ended December 31,
------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) 2005 2004 2003(6) 2002(6) 2001(6)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 13.226 $ 11.870 $ 9.270 $ 11.580 $ 13.430
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment loss(1) ................ $ (0.053) $ (0.028) $ (0.023) $ (0.046) $ (0.045)
Net realized and unrealized gain (loss) 1.476 1.884 2.756 (1.831) (1.322)
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 1.423 $ 1.856 $ 2.733 $ (1.877) $ (1.367)
--------- --------- --------- --------- ---------
Less distributions:
Distributions from capital gains....... $ (1.619) $ (0.500) $ (0.133) $ (0.433) $ (0.483)
--------- --------- --------- --------- ---------
Total distributions................ $ (1.619) $ (0.500) $ (0.133) $ (0.433) $ (0.483)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 13.030 $ 13.226 $ 11.870 $ 9.270 $ 11.580
========= ========= ========= ========= =========
Total return(2) ............................ 11.09% 15.73% 30.06% (16.98%) (10.15%)
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).. $ 47,652 $ 43,498 $ 38,190 $ 32,817 $ 45,883
Ratio of net expenses to average net assets 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% 1.25% 1.25% 1.25%(3) 1.25%(3)
Ratio of net investment (loss) to average
net assets.......................... (0.18%) (0.23%) (0.23%) (0.44%) (0.38%)
Portfolio turnover rate .............. 110% 69% 106% 119%(4) 67%(4)
- --------------------------------------------------------------------------------------------------------------------------------
(1)The operating expenses of the fund were reduced by an allocation of expenses
to the distributor and/or investment adviser. Had such action not been
undertaken, net investment loss per share and the ratios would have been as
follows:
2005 2004 2003 2002 2001
--------------------------------------------------------------------
Net investment loss per share.......... $ (0.111) $ (0.050) $ (0.057) $ (0.064) $ (0.057)
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses........................... 1.45% 1.44% 1.59% 1.43%(3) 1.37%(3)
========= ========= ========= ========= =========
Expenses after custodian fee reduction(5) 1.43% 1.43% 1.59% 1.42%(3) 1.36%(3)
========= ========= ========= ========= =========
Net investment loss................ (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.
Year Ended December 31,
----------------------------------------------------------------
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) 2005 2004 2003(4) 2002(4) 2001(4)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 11.780 $ 10.530 $ 8.570 $ 11.380 $ 13.690
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss)(1) ....... $ 0.077 $ 0.053 $ 0.029 $ 0.024 $ (0.009)
Net realized and unrealized gain (loss) 0.651 1.247 1.958 (2.812) (2.301)
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations......... $ 0.728 $ 1.300 $ 1.987 $ (2.788) $ (2.310)
--------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income....... $ (0.088) $ (0.050) $ (0.027) $ (0.022) $ -
--------- --------- --------- --------- ---------
Total distributions................ $ (0.088) $ (0.050) $ (0.027) $ (0.022) $ -
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 12.420 $ 11.780 $ 10.530 $ 8.570 $ 11.380
========= ========= ========= ========= =========
Total Return(3) ............................ 6.20% 12.36% 23.20% (24.50%) (16.87%)
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).. $ 66,742 $ 65,503 $ 71,539 $ 66,609 $ 95,121
Ratio of net expenses to average net assets 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% 1.25% 1.25% 1.22% 1.13%
Ratio of net investment income (loss) to
average net assets ................. 0.66% 0.49% 0.31% 0.25% (0.08%)
Portfolio turnover rate................ 82% 74% 143% 130% 78%
- ------------------------------------------------------------------------------------------------------------------------------
(1)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:
2005 2004 2003
------------------------------------------
Net investment income per share........ $ 0.077 $ 0.050 $ 0.024
========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................. 1.26% 1.28% 1.31%
========= ========= =========
Expenses after custodian fee reduction(2) 1.25% 1.28% 1.31%
========= ========= =========
Net investment income................ 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.
Year Ended December 31,
--------------------------------------------------------------
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) 2005(1) 2004 2003(1) 2002(1) 2001(1)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $15.070 $12.890 $ 9.840 $11.510 $15.180
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss) .......... $ 0.129 $ 0.128 $ 0.073 $ 0.070 $ (0.023)
Net realized and unrealized gain (loss) 3.028 2.140 3.044 (1.740) (3.647)
--------- --------- --------- --------- ---------
Total income (loss)
from investment operations...... $ 3.157 $ 2.268 $ 3.117 $ (1.670) $ (3.670)
--------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income....... $ (0.167) $ (0.088) $ (0.067) $ - $ -
--------- --------- --------- --------- ---------
Total distributions................ $ (0.167) $(0.088) $ (0.067) $ - $ -
--------- --------- --------- --------- ---------
Net asset value, end of year................ $18.060 $15.070 $12.890 $ 9.840 $11.510
========= ========= ========= ========= =========
Total return(2) ............................ 21.13% 17.71% 31.96% (14.51%) (24.18%)
Ratios/Supplemental Data
Net assets, end of year (000 omitted).. $109,897 $ 62,266 $ 54,586 $ 50,835 $ 66,828
Ratio of net expenses to average net assets 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) .. 1.62% 1.71% 1.80% 1.65% -
Ratio of net investment income (loss) to average
net assets.......................... 0.81% 0.97% 0.81% 0.65% (0.18%)
Portfolio turnover rate .............. 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).
Year Ended December 31,
------------------------------------------------------------
WRIGHT U.S. GOVERNMENT NEAR TERM FUND (WNTB) 2005 2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 9.980 $ 10.250 $ 10.490 $ 10.290 $ 10.080
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ............... $ 0.227 $ 0.123 $ 0.165 $ 0.349 $ 0.480(7)
Net realized and unrealized gain (loss).. (0.128) (0.080) (0.102) 0.200 0.195(7)
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.099 $ 0.043 $ 0.063 $ 0.549 $ 0.675
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income... $ (0.299) $ (0.313) $ (0.303) $ (0.349) $ (0.465)
--------- --------- --------- --------- ---------
Total distributions.................... $ (0.299) $ (0.313) $ (0.303) $ (0.349) $ (0.465)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 9.780 $ 9.980 $ 10.250 $ 10.490 $ 10.290
========= ========= ========= ========= =========
Total return(2) ............................ 1.01% 0.43% 0.61% 5.42% 6.82%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 18,567 $ 21,573 $ 27,557 $ 33,839 $ 36,025
Ratio of net expenses to average net assets 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% 0.95% 0.95% 0.95%(3) 0.95%(3)
Interest expense ....................... 0.01% _ 0.01% - -
Ratio of net investment income to average
net assets............................ 2.35% 1.38% 1.75% 3.10% 4.40%
Portfolio turnover rate ................ 109% 138% 165% 64%(5) 92%(5)
- ---------------------------------------------------------------------------------------------------------------------------------
(1)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:
2005 2004 2003 2002 2001
--------------------------------------------------------------------
Net investment income per share........ $ 0.170 $ 0.097 $ 0.134 $ 0.323 $ 0.452
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.56% 1.38% 1.28% 1.20%(3) 1.22%(3)
========= ========= ========= ========= =========
Expense after custodian fee reduction(4) 1.54% 1.37% 1.28% 1.18%(3) 1.20%(3)
========= ========= ========= ========= =========
Interest expense..................... 0.01% - 0.01% - -
========= ========= ========= ========= =========
Net investment income................ 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.
Year Ended December 31,
----------------------------------------------------------------
WRIGHT CURRENT INCOME FUND (WCIF) 2005 2004 2003 2002 2001(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 9.890 $ 10.490 $ 10.810 $ 10.580 $ 10.460
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ............... $ 0.400 $ 0.447 $ 0.417 $ 0.565 $ 0.616
Net realized and unrealized gain (loss).. (0.230) (0.112) (0.235) 0.231 0.120
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.170 $ 0.335 $ 0.182 $ 0.796 $ 0.736
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income..... $ (0.430) $ (0.482) $ (0.502) $ (0.555) $ (0.616)
Distributions from capital gains......... (0.020) (0.453) - - --
Tax return of capital.................... - - - (0.011) --
--------- --------- --------- --------- ---------
Total distributions.................. $ (0.450) $ (0.935) $ (0.502) $ (0.566) $ (0.616)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 9.610 $ 9.890 $ 10.490 $ 10.810 $ 10.580
========= ========= ========= ========= =========
Total return(3) ............................ 1.76% 3.29% 1.73% 7.70% 7.18%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 33,861 $ 35,013 $ 36,332 $ 59,077 $54,966
Ratio of net expenses to average net assets 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% 0.95% 0.95% 0.95%(5) --
Interest expense......................... 0.01% 0.02% 0.01% -- --
Ratio of net investment income
to average net assets................. 4.12% 4.29% 4.43% 5.28% 5.83%
Portfolio turnover rate ................. 103% 27% 20% 36%(4) 4%(4)
- ---------------------------------------------------------------------------------------------------------------------------------
(1)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:
2005 2004 2003 2002 2001
--------------------------------------------------------------------
Net investment income per share........ $ 0.369 $ 0.410 $ 0.401 $ 0.555 $ 0.609
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses ............................ 1.30% 1.28% 1.12% 1.06%(5) 1.02%(5)
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.28%(7) 1.25%(7) 1.12% 1.04%(5)(7) --
========= ========= ========= ========= =========
Interest expense..................... 0.01% 0.02% 0.01% -- --
========= ========= ========= ========= =========
Net investment income................ 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.
Year Ended December 31,
------------------------------------------------------------------
WRIGHT TOTAL RETURN BOND FUND (WTRB) 2005 2004 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 12.770 $ 12.870 $ 13.010 $ 12.550 $ 12.630
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income(1) ................ $ 0.465 $ 0.453 $ 0.483 $ 0.639 $ 0.709 (2)
Net realized and unrealized gain (loss).. (0.271) (0.011) (0.066) 0.461 (0.090)(2)
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.194 $ 0.442 $ 0.417 $ 1.100 $ 0.619
--------- --------- --------- --------- ---------
Less distributions:
Distributions from investment income..... $ (0.534) $ (0.542) $ (0.557) $ (0.640) $ (0.699)
--------- --------- --------- --------- ---------
Total distributions.................... $ (0.534) $ (0.542) $ (0.557) $ (0.640) $ (0.699)
--------- --------- --------- --------- ---------
Net asset value, end of year................ $ 12.430 $ 12.770 $ 12.870 $ 13.010 $ 12.550
========= ========= ========= ========= =========
Total return(3) ............................ 1.54% 3.52% 3.25% 9.03% 4.96%
Ratios/Supplemental Data(1):
Net assets, end of year (000 omitted).... $ 41,288 $ 38,213 $ 42,317 $ 39,404 $ 50,620
Ratio of net expenses to average net assets 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% 0.95% 0.95% 0.95% 0.95%
Ratio of net investment income to average
net assets............................ 3.66% 3.58% 3.67% 4.92% 5.44%
Portfolio turnover rate.................. 86% 64% 131% 68% 38%
- --------------------------------------------------------------------------------------------------------------------------------
(1)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:
2005 2004 2003 2002 2001
--------------------------------------------------------------------
Net investment income per share.......... $ 0.439 $ 0.429 $ 0.455 $ 0.621 $ 0.701
========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses............................... 1.18% 1.18% 1.17% 1.09% 1.02%
========= ========= ========= ========= =========
Expenses after custodian fee reduction(4) 1.15% 1.17% 1.17% 1.08% 1.01%
========= ========= ========= ========= =========
Net investment income.................. 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.
FOR MORE INFORMATION
Additional information about the funds' investments is available in the funds'
semi-annual and annual reports to shareholders. The funds' annual report
contains a discussion of the market conditions and investment strategies that
affected the funds' performance over the past year.
You may want to read the statement of additional information (SAI) for more
information on the funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is legally
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the SAI,
request other information or get answers to your questions about the funds by
writing, calling, or e-mailing:
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, CT 06461
(800) 888-9471
E-mail: funds@wrightinvestors.com
Copies of documents and application forms can be viewed and downloaded from
Wright's web site: www.wrightinvestors.com.
Text-only versions of fund documents can be viewed on-line or downloaded
from the SEC's web site at http://www.sec.gov. You can also obtain copies by
visiting the SEC's Public Reference Room in Washington DC. For information on
the operation of the Public Reference Room, call (202) 942-8090. Copies of
documents may also be obtained by sending your request and the appropriate
duplicating fee to the SEC's Public Reference Section, Washington, DC 20549-0102
or by electronic mail at publicinfo@sec.gov. Investment Company Act file
numbers:
The Wright Managed Equity Trust..........................811-03489
The Wright Managed Income Trust..........................811-03668
WRIGHT CURRENT INCOME FUND
(a series of The Wright Managed Income Trust)
STATEMENT OF ADDITIONAL INFORMATION
November 13, 2006
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the related Prospectus (also dated November 13, 2006), which
covers shares of Wright Current Income Fund, to be issued in exchange for shares
of Wright U.S. Government Near Term Fund. Please retain this Statement of
Additional Information for further reference.
The Prospectus is available to you free of charge (please call 1-800-888-9471).
INTRODUCTION......................................................2
EXHIBITS......................................................... 2
ADDITIONAL INFORMATION ABOUT WRIGHT CURRENT INCOME FUND...........2
FUND HISTORY.............................................2
DESCRIPTION OF THE FUND AND ITS INVESTMENT AND RISKS.....2
MANAGEMENT OF THE FUND...................................2
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES......3
INVESTMENT ADVISORY AND OTHER SERVICES...................3
PORTFOLIO MANAGERS.......................................3
BROKERAGE ALLOCATION AND OTHER PRACTICES.................3
CAPITAL STOCK AND OTHER SECURITIES.......................3
PURCHASE, REDEMPTION AND PRICING OF SHARES...............3
TAXATION OF THE FUND.....................................3
UNDERWRITERS.............................................3
CALCULATION OF PERFORMANCE DATA..........................3
FINANCIAL STATEMENTS.....................................3
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in the Prospectus, dated November 13, 2006 (the
"Prospectus"), relating to the proposed reorganization of Wright U.S. Government
Near Term Fund into Wright Current Income Fund, each a series of The Wright
Managed Income Trust.
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference, unless
otherwise indicated. Shareholders will receive a copy of each document that is
incorporated by reference upon any request to receive a copy of this Statement
of Additional Information.
1. Statement of additional information of The Wright Managed Income Trust,
dated May 1, 2006 (the "SAI") (File No. 2-81915), as filed with the
Securities and Exchange Commission on April 27, 2006 (Accession No.
0000715165-06-000014), is incorporated herein by reference.
2 Annual Report of The Wright Managed Income Trust for the fiscal year
ended December 31, 2005 (File No.811-3668), as filed with the
Securities and Exchange Commission on February 27, 2006 (Accession No.
0000715165-06-000010), is incorporated herein by reference.
3. Semiannual Report of The Wright Managed Income Trust for the period
ended June 30, 2006 (the "Semiannual Report") (File No.
811-3668), as filed with the Securities and Exchange Commission on
August 18, 2006 (Accession No. 000075-165-06-000026), is
incorporated herein by reference.
ADDITIONAL INFORMATION ABOUT
WRIGHT CURRENT INCOME FUND
FUND HISTORY
For additional information about Wright Current Income Fund generally,
see "Additional Information About the Trust" in the SAI.
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
For additional information about Wright Current Income Fund's
investment objective, policies, risks and restrictions, see "The Funds and their
Investment Policies - The Wright Managed Income Trust - Wright Current Income
Fund" and "Additional Investment Policies and Other Information" in the SAI.
MANAGEMENT OF THE FUND
For additional information about Wright Current Income Fund's Board of
Trustees and officers, see "Management and Organization" in the SAI.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
For additional information, see "Ownership of Shares of the Funds" in
the Prospectus and "Control Persons and Principal Holders of Shares" "Custodian
and Transfer Agent," and "Independent Registered Public Accounting Firm" in the
SAI.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information, see "Investment Advisory and Administrative
Services," "Custodian and Transfer Agent," and "Independent Registered Public
Accounting Firm" in the SAI.
PORTFOLIO MANAGERS
For additional information about Wright Current Income Fund's portfolio
managers, see "Investment Advisory and Administrative Services" in the SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about the Wright Current Income Fund's
brokerage allocation practices, see "Brokerage Allocation" in the SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other
characteristics of shares of beneficial interest of Wright Current Income Fund,
see "Pricing of Shares" in the SAI.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about purchase, redemption and pricing of
shares of Wright Current Income Fund, see "Pricing of Shares" in the SAI.
TAXATION OF THE FUND
For additional information about tax matters related to an investment
in Wright Current Income Fund, see "Taxes" in the SAI.
UNDERWRITERS
For additional information about the Wright Current Income Fund's
principal underwriter and distribution plans, see "Principal Underwriter" and
"Service Plans" in the SAI.
CALCULATION OF PERFORMANCE DATA
See "Summary - Comparison of Fund Performance" in the Prospectus.
FINANCIAL STATEMENTS
For additional information, see "Financial Statements" in the SAI, the
Annual Report and the Semiannual Report.
WRIGHT CURRENT INCOME FUND AND WRIGHT U.S. GOVERNMENT NEAR TERM FUND
PRO FORMA FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
June 30, 2006
(unaudited)
Wright Wright Pro Wright Wright Pro
U.S. Govt. Current Forma U.S. Govt. Current Forma
Near Term Income Combined Near Term Income Combined
Face Face Face Coupon Rate & Market Market Market Market
Amount Amount Amount Security Descriptions Maturity Date Price Value Value Value Yield
- ---------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES
854,084 854,084 CMFC 2003-S13 A16 5.000% Due 11-25-33 95.02 811,511 811,511 5.30
1,598,384 1,598,384 Countrywide Home Loans 6.000% Due 02-25-36 97.96 1,565,729 1,565,729 6.10
MORTGAGE-BACKED SECURITIES
148,908 148,908 FGCI Gold Pool #G00812 6.500% Due 04-01-26 101.07 150,500 150,500 6.40
322,296 322,296 FGCI Pool #b11636 5.000% Due 01-01-19 96.51 311,038 311,038 5.20
174,804 174,804 FGCI Pool #e00678 6.500% Due 06-01-14 101.18 176,869 176,869 6.40
181,109 181,109 FGCI Pool #e00721 6.500% Due 07-01-14 101.18 183,248 183,248 6.40
32,893 6,579 39,472 FGFB Pool #M90724 5.500% Due 05-01-07 99.97 32,883 6,577 39,460 5.50
145,279 145,279 290,558 FGFB Pool #M90767 4.500% Due 11-01-07 98.65 143,318 143,318 286,636 4.60
300,274 300,274 FGFB Pool #M90796 4.000% Due 02-01-08 97.33 292,243 292,243 4.10
237,095 79,032 316,126 FGFB Pool #M90802 4.000% Due 03-01-08 96.56 228,927 76,309 305,236 4.10
879,878 879,878 FGFB Pool #M90937 5.000% Due 08-01-09 98.17 863,747 863,747 5.10
862,122 862,122 FGFB Pool #M90941 4.500% Due 08-01-09 97.13 837,358 837,358 4.60
62,422 62,422 FGLMC Pool #c00548 7.000% Due 08-01-27 102.58 64,031 64,031 6.80
177,832 177,832 FGLMC Pool #c00778 7.000% Due 06-01-29 102.46 182,205 182,205 6.80
252,995 252,995 FGLMC Pool #c47318 7.000% Due 09-01-29 103.67 262,275 262,275 6.80
247,590 247,590 FGLMC Pool #d82572 7.000% Due 09-01-27 102.58 253,969 253,969 6.80
262,835 262,835 FHARM Pool #1B1291 Flt 4.400% Due 11-01-33 98.00 257,585 257,585 4.50
669,513 669,513 FHARM Pool #1G0233 Flt 5.018% Due 05-01-35 97.93 655,661 655,661 5.10
135,979 135,979 FHARM Pool #765183 Flt 5.808% Due 08-01-24 100.41 136,540 136,540 5.80
44,273 44,273 FHLMC Gold Balloon #M90710 5.000% Due 03-01-07 99.15 43,897 43,897 5.00
531,077 531,077 FHLMC-FHG 15 L GNMA 7.000% Due 07-25-23 102.43 543,968 543,968 6.80
121,178 121,178 FNCI Pool #663689 5.000% Due 01-01-18 96.56 117,005 117,005 5.20
422,169 422,169 FNCI Pool #816468 5.000% Due 03-01-20 96.37 406,849 406,849 5.20
1,188,414 1,188,414 FNCL Pool #255669 4.500% Due 02-01-35 90.69 1,077,768 1,077,768 5.00
174,528 174,528 FNCL Pool #545133 6.500% Due 12-01-28 100.99 176,248 176,248 6.40
576,682 576,682 FNCL Pool #673315 5.500% Due 11-01-32 96.52 556,587 556,587 5.70
366,316 366,316 FNCL Pool #729950 6.000% Due 12-01-33 98.76 361,783 361,783 6.10
64,996 64,996 FNCL Pool #733750 6.310% Due 10-01-32 100.13 65,080 65,080 6.30
507,131 507,131 FNCL Pool #745467 Flt 5.858% Due 04-01-36 99.94 506,814 506,814 5.80
592,929 592,929 FNCL Pool #801357 5.500% Due 08-01-34 96.52 572,267 572,267 5.70
654,852 654,852 FNCL Pool #816108 5.500% Due 05-01-35 96.15 629,630 629,630 5.70
602,069 602,069 FNCL Pool #821574 6.000% Due 06-01-35 98.53 593,241 593,241 6.10
59,730 29,865 89,596 FNCX Pool #254227 5.000% Due 02-01-09 97.92 58,491 29,245 87,736 5.10
28,650 28,650 FNCX Pool #254505 5.000% Due 11-01-09 97.92 28,055 28,055 5.10
128,028 128,028 FNMA Pool #535131 6.000% Due 03-01-29 98.94 126,676 126,676 6.10
369,113 159,862 528,975 FNMA Pool #701043 Flt 4.033% Due 04-01-33 98.28 362,763 157,112 519,875 4.10
636,504 636,504 FNMA Pool #809324 Flt 4.880% Due 02-01-35 98.38 626,221 626,221 4.90
622,544 622,544 FNMA Series G93-5 Class Z 6.500% Due 02-25-23 100.58 626,169 626,169 6.50
123,247 123,247 G2SF Pool #3484 3.500% Due 09-20-33 82.51 101,689 101,689 4.10
3,037,444 3,037,444 G2SF Pool #3734 4.500% Due 07-20-35 90.84 2,759,104 2,759,104 5.00
116,380 116,380 G2SF Pool #601135 6.310% Due 09-20-32 100.20 116,607 116,607 6.30
133,894 133,894 G2SF Pool #601255 6.310% Due 01-20-33 100.16 134,102 134,102 6.30
113,703 113,703 G2SF Pool #608120 6.310% Due 01-20-33 100.16 113,880 113,880 6.30
42,758 42,758 GNMA II Pool #000723 7.500% Due 01-20-23 103.90 44,426 44,426 7.20
49 49 GNMA Pool #12526 8.000% Due 11-15-06 100.33 49 49 8.00
4,281 4,281 GNMA Pool #1596 9.000% Due 04-20-21 107.54 4,604 4,604 8.40
5,913 5,913 GNMA Pool #172558 9.500% Due 08-15-16 108.46 6,413 6,413 8.80
2,376 2,376 GNMA Pool #176992 8.000% Due 11-15-16 105.01 2,495 2,495 7.60
2,671 2,671 GNMA Pool #177784 8.000% Due 10-15-16 105.01 2,805 2,805 7.60
12,572 12,572 GNMA Pool #192357 8.000% Due 04-15-17 105.22 13,229 13,229 7.60
19,087 19,087 GNMA Pool #194057 8.500% Due 04-15-17 107.06 20,434 20,434 7.90
5,243 5,243 GNMA Pool #194287 9.500% Due 03-15-17 108.81 5,705 5,705 8.70
1,532 1,532 GNMA Pool #196063 8.500% Due 03-15-17 107.06 1,640 1,640 7.90
7,709 7,709 GNMA Pool #211231 8.500% Due 05-15-17 107.06 8,253 8,253 7.90
4,579 4,579 GNMA Pool #212601 8.500% Due 06-15-17 107.06 4,902 4,902 7.90
4,337 4,337 GNMA Pool #220917 8.500% Due 04-15-17 107.06 4,644 4,644 7.90
8,737 8,737 GNMA Pool #223348 10.000% Due 07-15-18 109.51 9,568 9,568 9.20
65,457 65,457 GNMA Pool #2268 7.500% Due 08-20-26 104.07 68,121 68,121 7.20
7,027 7,027 GNMA Pool #2855 8.500% Due 12-20-29 107.07 7,524 7,524 7.90
13,115 13,115 GNMA Pool #228308 10.000% Due 01-15-19 109.50 14,362 14,362 9.20
3,000 3,000 GNMA Pool #230223 9.500% Due 04-15-18 109.11 3,273 3,273 8.70
868 868 GNMA Pool #247473 10.000% Due 09-15-18 104.20 904 904 9.20
3,684 3,684 GNMA Pool #247872 10.000% Due 09-15-18 109.51 4,034 4,034 9.20
4,391 4,391 GNMA Pool #251241 9.500% Due 06-15-18 109.11 4,791 4,791 8.70
5,732 5,732 GNMA Pool #260999 9.500% Due 09-15-18 109.11 6,254 6,254 8.70
5,926 5,926 GNMA Pool #263439 10.000% Due 02-15-19 109.50 6,490 6,490 9.20
1,511 1,511 GNMA Pool #265267 9.500% Due 08-15-20 109.60 1,656 1,656 8.70
1,944 1,944 GNMA Pool #266983 10.000% Due 02-15-19 109.50 2,128 2,128 9.20
3,180 3,180 GNMA Pool #273690 9.500% Due 08-15-19 109.37 3,478 3,478 8.70
1,559 1,559 GNMA Pool #286556 9.000% Due 03-15-20 107.79 1,680 1,680 8.40
4,933 4,933 GNMA Pool #301366 8.500% Due 06-15-21 107.72 5,314 5,314 7.90
5,945 5,945 GNMA Pool #302933 8.500% Due 06-15-21 107.72 6,404 6,404 7.90
11,591 11,591 GNMA Pool #308792 9.000% Due 07-15-21 107.94 12,511 12,511 8.30
3,617 3,617 GNMA Pool #314222 8.500% Due 04-15-22 107.87 3,902 3,902 7.90
3,804 3,804 GNMA Pool #315187 8.000% Due 06-15-22 105.92 4,029 4,029 7.60
14,193 14,193 GNMA Pool #315754 8.000% Due 01-15-22 105.92 15,033 15,033 7.60
29,056 29,056 GNMA Pool #319441 8.500% Due 04-15-22 107.87 31,342 31,342 7.90
9,734 9,734 GNMA Pool #325165 8.000% Due 06-15-22 105.92 10,310 10,310 7.60
593,406 593,406 GNMA Pool #3259 5.500% Due 07-20-32 96.70 573,841 573,841 5.70
391,134 391,134 GNMA Pool #3284 5.500% Due 09-20-32 96.70 378,238 378,238 5.70
15,626 15,626 GNMA Pool #335950 8.000% Due 10-15-22 105.92 16,551 16,551 7.60
245,510 245,510 GNMA Pool #346987 7.000% Due 12-15-23 103.17 253,288 253,288 6.80
116,225 116,225 GNMA Pool #352001 6.500% Due 12-15-23 101.45 117,908 117,908 6.40
53,384 53,384 GNMA Pool #352110 7.000% Due 08-15-23 103.17 55,075 55,075 6.80
2,156,514 2,156,514 GNMA Pool #3556 5.500% Due 05-20-34 96.64 2,084,011 2,084,011 5.70
98,978 98,978 GNMA Pool #368238 7.000% Due 12-15-23 103.17 102,114 102,114 6.80
51,535 51,535 GNMA Pool #372379 8.000% Due 10-15-26 106.24 54,750 54,750 7.50
95,410 95,410 GNMA Pool #410215 7.500% Due 12-15-25 104.71 99,901 99,901 7.20
18,626 18,626 GNMA Pool #414736 7.500% Due 11-15-25 104.71 19,503 19,503 7.20
62,040 62,040 GNMA Pool #420707 7.000% Due 02-15-26 103.30 64,085 64,085 6.80
36,274 36,274 GNMA Pool #421829 7.500% Due 04-15-26 104.76 38,000 38,000 7.20
19,481 19,481 GNMA Pool #431036 8.000% Due 07-15-26 106.24 20,697 20,697 7.50
73,265 73,265 GNMA Pool #431612 8.000% Due 11-15-26 106.24 77,834 77,834 7.50
20,182 20,182 GNMA Pool #442190 8.000% Due 12-15-26 106.24 21,441 21,441 7.50
23,469 23,469 GNMA Pool #449176 6.500% Due 07-15-28 101.58 23,839 23,839 6.40
58,061 58,061 GNMA Pool #462623 6.500% Due 03-15-28 101.58 58,977 58,977 6.40
415,312 415,312 GNMA Pool #471369 5.500% Due 05-15-33 97.08 403,189 403,189 5.70
113,739 113,739 GNMA Pool #475149 6.500% Due 05-15-13 101.75 115,730 115,730 6.40
145,982 145,982 GNMA Pool #489377 6.375% Due 03-15-29 101.02 147,471 147,471 6.30
139,223 139,223 GNMA Pool #524811 6.375% Due 09-15-29 101.02 140,643 140,643 6.30
51,063 51,063 GNMA Pool #538314 7.000% Due 02-15-32 103.19 52,691 52,691 6.80
395,903 395,903 GNMA Pool #595606 6.000% Due 11-15-32 99.38 393,437 393,437 6.00
63,863 63,863 GNMA Pool #602377 4.500% Due 06-15-18 95.36 60,900 60,900 4.70
55,492 55,492 GNMA Pool #603377 4.500% Due 01-15-18 95.36 52,917 52,917 4.70
970,381 970,381 GNMA Pool #608639 5.500% Due 07-15-24 97.43 945,426 945,426 5.60
581,911 581,911 GNMA Pool #616829 5.500% Due 01-15-25 98.44 572,806 572,806 5.70
490,383 490,383 GNMA Pool #624600 6.150% Due 01-15-34 99.81 489,428 489,428 6.20
612,617 612,617 GNMA Pool #648541 6.000% Due 10-20-35 98.85 605,572 605,572 6.10
85,304 85,304 GNMA Pool #780429 7.500% Due 09-15-26 104.73 89,342 89,342 7.20
192,595 192,595 GNMA Pool #81161 Flt 5.500% Due 11-20-34 98.85 190,372 190,372 5.60
1,833,146 1,833,146 GNMA Ser 1999-4 6.000% Due 02-20-29 99.60 1,825,850 1,825,850 6.00
750,000 750,000 GNMA Ser 2002-47 6.500% Due 07-16-32 101.77 763,250 763,250 6.40
359,887 359,887 GNMA Ser 2002-7 6.500% Due 01-20-32 101.76 364,047 364,047 6.40
62,513 62,513 GNSF Pool #396537 7.490% Due 03-15-25 104.68 65,436 65,436 7.20
46,555 46,555 GNSF Pool #399726 7.490% Due 05-15-25 104.68 48,732 48,732 7.20
181,115 181,115 GNSF Pool #399788 7.490% Due 09-15-25 104.68 189,584 189,584 7.20
90,698 90,698 GNSF Pool #399958 7.490% Due 02-15-27 104.77 95,023 95,023 7.20
71,036 71,036 GNSF Pool #399964 7.490% Due 04-15-26 104.73 74,392 74,392 7.20
64,582 64,582 GNSF Pool #438004 7.490% Due 11-15-26 104.73 67,634 67,634 7.20
708,386 708,386 GNSF Pool #603250 5.500% Due 04-15-34 97.04 687,445 687,445 5.70
217,999 217,999 GNSF Pool #609452 4.000% Due 08-15-33 88.44 192,797 192,797 4.50
805,242 805,242 GNSF Pool #631623 5.500% Due 08-15-34 97.04 781,439 781,439 5.70
839,844 839,844 GNSF Pool #640225 5.500% Due 04-15-35 97.00 814,688 814,688 5.70
1,842,983 1,842,983 GNSF Pool #640940 5.500% Due 05-15-35 97.00 1,787,780 1,787,780 5.70
1,420,999 1,420,999 GNTW Pool #651026 5.500% Due 12-15-25 97.38 1,383,713 1,383,713 5.70
AGENCIES
500,000 500,000 FHLB 4.875% Due 08-22-07 99.32 496,590 496,590 4.90
3,140,000 3,140,000 FHLB 4.000% Due 03-10-08 97.67 3,066,737 3,066,737 4.10
500,000 500,000 FHLB Disc Corp 0.000% Due 07-05-06 99.94 499,719 499,719 0.00
1,345,000 1,345,000 FHLMC 3.030% Due 06-11-08 95.58 1,285,593 1,285,593 3.20
2,335,000 2,335,000 FNMA 3.000% Due 11-22-06 99.08 2,313,597 2,313,597 3.00
GOVERNMENT BONDS
635,000 635,000 U.S. Treasury Notes 3.000% Due 11-15-07 97.12 616,719 616,719 3.10
2,125,000 2,125,000 U.S. Treasury Notes 3.375% Due 11-15-08 96.10 2,042,159 2,042,159 3.50
15,086,641 32,736,104 47,822,745 Total Investments 14,731,303 31,921,397 46,652,700
Other Assets, Less Liabilities 709,541 418,143 1,127,684
Net Assets 15,440,844 32,339,540 47,780,384
(Identified cost) 14,972,279 32,158,900 47,131,179
WRIGHT CURRENT INCOME FUND AND WRIGHT U.S. GOVERNMENT NEAR TERM FUND
PRO FORMA
Statement of Assets and Liabilities
As of June 30, 2006
(Unaudited)
Wright U.S. Wright
Government Current Pro forma Pro Forma
Near Term Fund Income Fund Adjustments Combined
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value $14,731,303 $31,921,397 $46,652,700
(Identified Cost) ($14,972,279) ($32,158,900) ($47,131,179)
Cash 336,826 749,445 1,086,271
Receivables for investments sold 2,843,646 1,088 2,844,734
Receivable for fund shares sold 8,289 29,449 37,738
Receivable from investment adviser 13,669 5,818 19,487
Interest receivable 92,260 153,123 245,383
Prepaid expenses 14,815 19,974 34,789
Total Assets 18,040,808 32,880,294 50,921,102
LIABILITIES
Payable for fund shares reacquired 2,570,558 474,310 3,044,868
Distributions payable 11,418 45,041 56,459
Payable to affiliate for Trustees' fees 36 36 72
Transfer agent fee 3,680 3,167 6,847
Accrued expenses and other liabilities 14,272 18,200 32,472
Total Liabilities 2,599,964 540,754 3,140,718
NET ASSETS 15,440,844 32,339,540 47,780,384
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 acquired 17,472,526 32,360,194 49,832,720
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost) (1,748,669) 246,627 (1,502,042)
Unrealized appreciation/(depreciation) on investments
(computed on the basis on identified cost) (240,976) (237,503) (478,479)
Accumulated undistributed net investment income (42,037) (29,778) (71,815)
Net assets applicable to outstanding shares 15,440,844 32,339,540 47,780,384
SHARES OF BENEFICIAL INTEREST OUTSTANDING 1,590,714 3,472,391 1,657,929 5,130,320
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST $9.71 $9.31 $9.31
See Notes to Pro Forma Financial Statements
WRIGHT CURRENT INCOME FUND AND WRIGHT U.S. GOVERNMENT NEAR TERM FUND
PRO FORMA
Statement of Operations
For the twelve months ended June 30, 2006
(Unaudited)
WNTB WCIF Pro Forma
7/1/05- 7/1/05- Adjust- See Pro Forma
6/30/06 % 6/30/06 % ments Note Combined %
- ----------------------------------------------------------------------------------------------------------------------------------
Interest Income 649,408 1,767,413 2,416,821
Investment Adviser Fee 82,788 0.45% 152,823 0.45% 235,611 0.45%
Administrator Fee 16,557 0.09% 30,564 0.09% 47,121 0.09%
Compensation of Trustees 12,247 0.07% 12,220 0.04% 24,467 0.05%
Custodian 48,923 0.27% 62,653 0.18% (25,000) (3a) 86,576 0.17%
Distribution Expenses 45,993 0.25% 84,901 0.25% 130,894 0.25%
Transfer and dividend disbursing
Agent Fees 21,628 0.12% 18,955 0.06% (12,500) (3b) 28,083 0.05%
Printing 3,209 0.02% 3,057 0.01% 6,266 0.01%
Interest Expense 1,993 0.01% 5,094 0.01% 7,087 0.01%
Shareholder Communications 4,500 0.02% 3,584 0.01% 8,084 0.02%
Audit Services 30,776 0.17% 29,198 0.09% (27,775) (3c) 32,199 0.06%
Legal Services 4,928 0.03% 5,610 0.02% 10,538 0.02%
Registration Costs 22,390 0.12% 31,444 0.09% (22,390) (3d) 31,444 0.06%
Miscellaneous 3,299 0.02% 4,994 0.01% (3,200) (3e) 5,093 0.01%
Total Expenses 299,231 1.63% 445,097 1.31% (90,865) (3f) 653,463 1.25%
Reduction of custodian fee (5,134) -0.03% (4,821) -0.01% (9,955) -0.02%
Allocation of expenses
to the investment adviser (27,486) -0.15% (21,356) -0.06% 48,842 (3g) 0 0.00%
Reduction of adviser fees (46,017) -0.25% (12,138) -0.04% 42,448 (3h) (15,707) -0.03%
Reduction of distribution expenses (45,868) -0.25% (84,901) -0.25% (3i) (130,769) -0.25%
Total Deductions (124,505) -0.68% (123,216) -0.36% (156,431) -0.30%
Net expenses 174,726 0.95% 321,881 0.95% 497,032 0.95%
Net investment income 474,682 2.58% 1,445,532 4.26% 1,919,789 3.67%
Net realized Gain (Loss)
on investment transactions (183,536) 223,858 40,322
Change in unrealized
appreciation/depreciation
of investments (76,874) (1,627,216) (1,704,090)
Net realized and unrealized loss
of investments (260,410) (1,403,358) (1,663,768)
Net increase in net assets
from operations 214,272 42,174 753,053
Average Assets 18,397,200 33,960,400 52,357,600
WRIGHT CURRENT INCOME FUND AND WRIGHT U.S. GOVERNMENT NEAR TERM FUND
PRO FORMA
Statement of Changes in Net Assets
As of June 30, 2006
(Unaudited)
Wright U.S. Wright
Government Current Pro forma Pro Forma
Near Term Fund Income Fund Adjustments Combined
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
From Operations
Net Investment Income $474,682 $1,445,532 $1,920,214
Net realized gain (loss) on investments (183,536) 223,858 40,322
Change in unrealized appreciation (depreciation)
on investments (76,874) (1,627,216) (1,704,090)
Net increase (decrease) in net assets resulting
from operations $214,272 $42,174 $256,446
Distributions to shareholders
From net investment income ($556,710) ($1,585,140) ($2,141,850)
From net realized gain ($59,861) ($59,861)
Total distributions ($556,710) ($1,645,001) ($2,201,711)
Net increase (decrease) in net assets from
fund share transactions ($4,368,590) ($1,642,149) ($6,010,739)
Net increase (decrease) in net assets ($4,711,028) ($3,244,976) ($7,956,004)
NET ASSETS
At beginning of period 18,567,077 35,584,516 54,151,593
At end of period $15,440,844 $32,339,540 $47,780,384
UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD ($42,037) ($29,778) ($71,815)
See Notes to Pro Forma Financial Statements
WRIGHT U.S. GOVERNMENT NEAR TERM FUND
WRIGHT CURRENT INCOME FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2006
(Unaudited)
NOTE 1. BASIS OF COMBINATION
The accompanying unaudited Pro Forma Combining Portfolios of
Investments, Statements of Assets and Liabilities and Statements of Operations
(Pro Forma Financial Statements) reflect the accounts of Wright U.S. Government
Near Term Fund and Wright Current Income Fund, individually referred to as the
"Fund" or collectively as the "Funds", for the year ended June 30, 2006. These
statements have been derived from the books and records utilized in calculating
daily net asset values at June 30, 2006, December 31, 2005 and June 30, 2005.
The Pro Forma Financial Statements should be read in conjunction with
the historical financial statements of the Funds which have been incorporated by
reference in the Statement of Additional Information. The Funds follow generally
accepted accounting principles in the United States of America applicable to
management investment companies which are disclosed in the historical financial
statements of each Fund.
The Pro Forma Financial Statements give effect to the proposed exchange
of assets of Wright U.S. Government Near Term Fund for shares of Wright Current
Income Fund. Under generally accepted accounting principles, Wright Current
Income Fund will be the surviving entity for accounting purposes with its
historical cost of investment securities and results of operations being carried
forward.
The Pro Forma Financial Statements have been adjusted to reflect the
anticipated advisory fee and waiver arrangement for the surviving entity.
Certain other operating costs have also been adjusted to reflect anticipated
expenses of the combined entity. Other costs which may change as a result of the
reorganization are currently undeterminable.
For the year ended June 30, 2006, Wright U.S. Government Near Term Fund
and Wright Current Income Fund paid investment advisory fees computed at the
annual rate of 0.45% as a percentage of average daily net assets.
All costs with respect to the exchange will be borne by Wright
Investors' Service, Inc. or its affiliates.
NOTE 2. SHARES OF BENEFICIAL INTEREST
The Pro Forma Standard Shares net asset value per share assumes the
issuance of 1,657,929 Shares of Wright Current Income Fund in exchange for
1,590,714 Shares of Wright U.S. Government Near Term Fund which would have been
issued at June 30, 2006 in connection with the proposed reorganization.
NOTE 3. PRO FORMA ADJUSTMENTS
(a) Adjustment to reflect the elimination of the $25,000 fee charged by
Investors Bank and Trust company, the custodian,for fund accounting and NAV
calculation of the Wright U. S. Government Near Term Fund. The fee for fund
accounting and NAV calculation for the Wright Current Income Fund remains as do
other custodian fees appropriate to the combined portfolio.
(b) Citigroup Financial Services ("CFS") serves as transfer and
dividend disbursing agent for the Fund. The fee paid to CFS is based on the
number of funds and accounts per fund. The adjustment is due to the combining of
two portfolios into one.
(c) Adjustment to reflect the estimated auditing fee and tax
preparation fee reduction due to the combining of two portfolios into one.
(d) Adjustment to reflect the estimated reduction in Fund registration
costs due to the combining of two portfolios into one.
(e) Miscellaneous expenses are adjusted to reflect estimated savings
to be realized by combining two portfolios into one.
(f) The expense ratio before additional deduction described below for
the combined fund will be 1.25% which is below the pre reorganization 1.63% for
the Wright U.S.Government Near Term Fund and 1.31%for the Wright Current Income
Fund.
(g) Wright Investors' Service, Inc. the Fund's investment adviser (the
"Adviser") has contracted to reimburse the fund for any expenses that would
cause the fund to exceed an expense ratio of 0.95% after reduction of the
custodian fee and waivers or reductions of advisory fees or distribution
expenses. This is an annual agreement that expires on April 30, 2007 but which
may be annually renewed by the Advisor at the same or a different rate.
Adjustment reflects the amount that the is expected to reimburse the fund based
on combined average daily net assets of both funds.
(h) Wright Investors' Service, Inc. the Fund's investment adviser (the
"Adviser") receives for its services an annual investment advisory fee equal to
0.45% of the Funds' average daily net assets. The Adviser may voluntarily choose
to waive a portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion. Adjustment to reflect the
investment adviser fee waiver being brought in line based on combined average
daily net assets of both funds.
(i) Wright Investors' Service Distributors, Inc., ("WISD") the Fund's
principal underwriter receives for its services an annual distribution fee equal
to 0.25% of the Funds' average daily net assets. WISD may voluntarily choose to
waive a portion of its fee. WISD can modify or terminate this voluntary waiver
at any time at its sole discretion. Adjustment to reflect the distribution fee
waiver being brought in line based on combined average daily net assets of both
funds.
PART C
OTHER INFORMATION
THE WRIGHT MANAGED INCOME TRUST
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of the most recently filed
Registration Statement of The Wright Managed Income Trust (the "Registrant") on
Form N-1A under the Securities Act of 1933 and the Investment Company Act of
1940 (File Nos. 2-81915 and 811-03668) as filed with the Securities and Exchange
Commission on April 27, 2006 (Accession No. 0000715165-06-000014), which
information is incorporated herein by reference.
ITEM 16. EXHIBITS
(1)(a) Amended and Restated Declaration of Trust dated April 28, 1997 filed as
Exhibit (1) to Post-Effective Amendment No.22 to the Registrant's Registration
Statement on Form N-1A filed April 29, 1997 and incorporated herein by
reference.
(1)(b) Amended Establishment and Designation of Series dated December 16, 2004
filed as Exhibit (a)(5) to Post-Effective Amendment No. 31 to the Registration
on Form N-1A and incorporated herein by reference.
(1)(c) Amended Establishment and Designation of Series dated June 12, 2003 filed
as Exhibit (a)(3) to Post-Effective Amendment No. 33 to the Registrant's
Registration Statement on Form N-1A filed April 29, 2004 and incorporated herein
by reference.
1(d) Amended Establishment and Designation of Series dated May 19, 2004 filed as
Exhibit (a)(4) to Post-Effective Amendment No. 34 to the Registration on Form
N-1A on February 25, 2005 and incorporated herein by reference.
1(e) Amended Establishment and Designation of Series dated December 16, 2004
filed as Exhibit (a)(5) to Post-Effective Amendment No. 34 to the Registration
on Form N-1A on February 25, 2005 and incorporated herein by reference.
(2) Amended and Restated By-Laws dated March 18, 1997 filed as Exhibit (2) to
Post-Effective Amendment No.22 to the Registrant's Registration Statement on
Form N-1A filed April 29, 1997 and incorporated herein by reference.
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization filed herewith as Exhibit A to
the Prospectus included as Part A of this Registration Statement.
(5) Reference is made to Exhibits (1) and (2) hereof.
(6)(a) Investment Advisory Contract dated September 23, 1998 with Wright
Investors' Service, Inc., on behalf of Wright U.S. Treasury Money Market Fund,
filed as Exhibit(d)(1) to Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A filed February 24, 1999 and incorporated
herein by reference.
(6)(b) Investment Advisory Contract dated September 1, 2000 with Wright
Investors' Service, Inc., on behalf of: Wright U.S.Treasury Fund, Wright U.S.
Government Near Term Fund, Wright Total Return Bond Fund and Wright Current
Income Fund, filed as Exhibit(d)(2) to Post-Effective Amendment No. 28 to the
Registrant's Registration Statement on Form N-1A filed February 28, 2001 and
incorporated herein by reference.
(7) Distribution Contract with MFBT Corporation dated December 19, 1984 filed as
Exhibit (6) to Post-Effective Amendment No. 20 to the Registrant's Registration
Statement on Form N-1A filed February 29, 1996 and incorporated herein by
reference.
(8) Not applicable.
(9) Custodian Agreement with Investors Bank & Trust Company dated December 19,
1990 filed as Exhibit (8)(a) to Post-Effective Amendment No. 20 to the
Registrant's Registration Statement on Form N-1A filed February 29, 1996 and
incorporated herein by reference.
(9)(b) Amendment dated September 20, 1995 to Master Custodian Agreement filed as
Exhibit (8)(b) to Post-Effective Amendment No. 20 to the Registrant's
Registration Statement on Form N-1A filed February 29, 1996 and incorporated
herein by reference.
(9)(c) Amendment dated September 24, 1997 to Master Custodian Agreement filed as
Exhibit (g)(3) to Post-Effective Amendment No. 24 to the Registrant's
Registration Statement on Form N-1A filed February 24, 1999 and incorporated
herein by reference.
(9)(d) Extension Agreement dated January 9, 2001 to the Custodian Agreement with
Investors Bank & Trust Company dated December 19, 990 filed as Exhibit (g)(4) to
Post-Effective Amendment No. 28 to the Registrant's Registration Statement on
Form N-1A filed February 28, 2001 and incorporated herein by reference.
(9)(e) Amendment Agreement dated June 16, 2003 to the Custodian Agreement with
Investors Bank & Trust Company dated December 19, 1990 filed as Exhibit (g)(5)
to Post-Effective Amendment No. 33 to the Registrant's Registration Statement on
Form N-1A filed April 29, 2004 and incorporated herein by reference.
(10)(a) Rule 18f-3 Plan dated May 1, 1997 for Standard and Institutional Shares
filed as Exhibit (18) to Post-Effective Amendment No. 22 to the Registrant's
Registration Statement on Form N-1A filed April 29, 1997 and incorporated herein
by reference.
(10)(b) Standard Shares Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 dated May 1, 1997 filed as Exhibit (15)(c) to
Post-Effective Amendment No. 22 to the Registrant's Registration Statement on
Form N-1A filed April 29, 1997 and incorporated herein by reference.
(11) Form of Opinion of Counsel (legality of securities being registered)
dated , filed herewith as Exhibit (11).
(12) Form of opinion as to tax matters and consent, filed herewith as
Exhibit (12).
(13)(a) Transfer Agency and Services Agreement dated June 14, 2002 between the
Registrant and Forum Shareholder Services, LLC, filed as Exhibit (h)(1) to
Post-Effective Amendment No. 31 to the Registrant's Registration Statement on
Form N-1A filed April 29, 2002 and incorporated herein by reference.
(13)(b) Service Plan dated May 1, 1997 filed as Exhibit (9)(c) to Post-Effective
Amendment No. 22 to the Registrant's Registration Statement on Form N-1A filed
April 29, 1997 and incorporated herein by reference.
(13)(c) Amended and Restated Administration Agreement with Eaton Vance
Management dated February 1, 1998 filed as Exhibit (5)(b)(1) to Post-Effective
Amendment No. 23 to the Registrant's Registration Statement on Form N-1A filed
April 29, 1998 and incorporated herein by reference.
(13)(d) Amendment dated June 6, 2000 to Amended and Restated Administration
Agreement with Eaton Vance Management dated February 1, 1998 filed as Exhibit
(d)(4) to Post-Effective Amendment No. 28 to the Registrant's Registration
Statement on Form N-1A on February 28, 2001 and incorporated herein by
reference.
(13)(e) Amendment dated December 20, 2002 to Amended and Restated Administration
Agreement with Eaton Vance Management dated February 1, 1998, filed as Exhibit
(d)(5) to Post-Effective Amendment No. 32 to the Registrant's Registration
Statement on Form N-1A on April 28, 2003 and incorporated herein by reference.
(13)(f) Expense Limitation Agreement dated October 6,2006, between Wright
Investors' Service, Inc. and The Wright Managed Income Trust filed herewith as
Exhibit 13(f).
(14) Consent of Independent Registered Public Accounting Firm filed herewith
as Exhibit (14).
(15) Not applicable
(16) Power of Attorney dated October 6, 2006, filed herewith as Exhibit (16).
(17)(a) Code of Ethics of Wright Investors' Service Distributors, Inc. filed
as Exhibit (p)(2) to Post-Effective Amendment No. 36 to the Registrant's
Registration Statement on Form N-1A on April 27, 2006 and incorporated herein
by reference.
(b) Wright Investors' Service, Inc. Code of Ethics and Policy Statement on
Insider trading filed as Exhibit (p)(1) to Post-Effective Amendment No. 34 on
April 29, 2005 and incorporated herein by reference.
(c) Code of Ethics of The Wright Managed Income Trust and The Wright
Managed Equity Trust filed as Exhibit (p)(2) to Post-Effective Amendment No.34
on April 29, 2005 and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
Registration Statement by any person or party which is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
reoffering prospectus will contain the information called for by the applicable
registration form for the reoffering by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees that it shall file a final executed
version of the legal and consent opinion as to tax matters as an exhibit to the
subsequent post-effective amendment to its registration statement on Form N-1A
filed with the SEC after the consummation of the reorganization contemplated by
this Registration Statement on Form N-14.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form N-14 has been signed on behalf of the
Registrant, in the City of Milford and the State of Connecticut, on the 13th day
of October, 2006.
The Wright Managed Income Trust
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Peter M Donovan President, Principal Executive Officer October 13, 2006
- ------------------- and Trustee
Peter M. Donovan
Barbara E. Campbell * Treasurer, Principal Financial
- ------------------- and Accounting Officer
Barbara E. Campbell
James J. Clarke *
- ---------------
James J. Clarke Trustee
Dorcas R. Hardy *
- ---------------
Dorcas R. Hardy Trustee
A. M. Moody III *
- ---------------
A. M. Moody III Trustee
Richard E. Taber *
- ----------------
Richard E. Taber Trustee
* By /s/ Peter M. Donovan October 13, 2006
-----------------------
Peter M. Donovan, Attorney-in-Fact
Exhibit Index
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
(11) Form of Opinion of Counsel (legality of securities being registered)
(12) Form of Opinion as to Tax Matters and Consent
(13) (f) Expense Limitation Agreement
(14) Consent of Independent Registered Public Accounting Firm
(16) Power of Attorney