Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-3489
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The Wright Managed Equity Trust
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(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
Janet E. Sanders
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Services)
(617) 482-8260
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(Registrant's Telephone Number)
December 31
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Date of Fiscal Year End
June 30, 2008
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Date of Reporting Period
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ITEM 1. REPORTS TO STOCKHOLDERS
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
SEMI-ANNUAL REPORT
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JUNE 30, 2008
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 Total Return Bond Fund
o Wright Current Income Fund
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
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THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS CONSIST OF THREE EQUITY FUNDS FROM
THE WRIGHT MANAGED EQUITY TRUST AND TWO FIXED INCOME FUNDS FROM THE WRIGHT
MANAGED INCOME TRUST. EACH OF THE FIVE FUNDS HAVE DISTINCT INVESTMENT OBJECTIVES
AND POLICIES. THEY CAN BE USED INDIVIDUALLY OR IN COMBINATION TO ACHIEVE
VIRTUALLY ANY OBJECTIVE. FURTHER, AS THEY ARE ALL "NO-LOAD" FUNDS (NO
COMMISSIONS OR SALES CHARGES), PORTFOLIO ALLOCATION STRATEGIES CAN BE ALTERED AS
DESIRED TO MEET CHANGING MARKET CONDITIONS OR CHANGING REQUIREMENTS WITHOUT
INCURRING ANY SALES CHARGES.
APPROVED WRIGHT INVESTMENT LIST
Securities selected for investment in these funds are chosen mainly from a list
of "investment grade" companies maintained by Wright Investors' Service
("Wright" or the "Adviser"). Over 31,000 global companies (covering 63
countries) in Wright's database are screened as new data becomes available to
determine any eligible additions or deletions to the list. The qualifications
for inclusion as "investment grade" are companies that meet Wright's Quality
Rating criteria. This rating includes fundamental criteria for investment
acceptance, financial strength, profitability & stability and growth. In
addition, securities, which are not included in Wright's "investment grade"
list, may also be selected from companies in the fund's specific benchmark (up
to 20% of the market value of the portfolio) in order to achieve broad
diversification. Different quality criteria may apply for the different funds.
For example, the companies in the Major Blue Chip Fund would require a higher
Investment Acceptance rating than the companies in the Selected Blue Chip Fund.
THREE EQUITY FUNDS
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC) (the Fund) seeks to enhance total
investment return through price appreciation plus income. The Fund's portfolio
is characterized as a blend of growth and value stocks. The market
capitalization of the companies is typically between $1-$10 billion at the time
of the Fund's investment. The Adviser seeks to outperform the Standard & Poor's
400 Index (S&P 400) by selecting stocks using fundamental company analysis and
company specific criteria such as valuation and earnings trends. The portfolio
is then diversified across industries and sectors.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC) (the Fund) seeks to enhance total
investment return through price appreciation plus income by providing a broadly
diversified portfolio of equities of larger well-established companies with
market values of $10 billion or more. The Adviser seeks to outperform the
Standard & Poor's 500 Index (S&P 500) by selecting stocks, using fundamental
company analysis and company specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries and sectors.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC) (the Fund) seeks total
return consisting of price appreciation plus income by investing in a broadly
diversified portfolio of equities of well-established, non-U.S. companies. The
Fund may buy common stocks traded on the securities exchange of the country in
which the company is based or it may purchase American Depositary Receipts
(ADR's) traded in the United States. The portfolio is denominated in U.S.
dollars and investors should understand that fluctuations in foreign exchange
rates may impact the value of their investment. The Adviser seeks to outperform
the MSCI Developed World ex U.S. Index by selecting stocks using fundamental
company analysis and company-specific criteria such as valuation and earnings
trends. The portfolio is then diversified across industries, sectors and
countries.
TWO FIXED-INCOME FUNDS
WRIGHT TOTAL RETURN BOND FUND (WTRB)(the Fund) is a diversified portfolio
of investment grade government and corporate bonds and other debt securities of
varying maturities which, in the Adviser's opinion, will achieve the portfolio
objective of best total return (i.e. the total of ordinary income plus capital
appreciation). Accordingly, investment selections and maturities may differ
depending on the particular phase of the interest rate cycle. Dividends are
accrued daily and paid monthly. The Fund's benchmark is the Lehman U.S.
Aggregate Bond Index.
Wright Current Income Fund (WCIF)(the Fund) may be invested in a variety of
securities and may use a number of strategies, including GNMAs, to produce a
high level of income with reasonable stability of principal. The Fund reinvests
all principal payments. Dividends are accrued daily and paid monthly. The Fund's
benchmark is the Lehman GNMA Backed Bond Index.
TABLE OF CONTENTS
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Investment Objectives...........................inside front & back cover
Letter to Shareholders...................................................2
Management Discussion....................................................4
Fund Expenses............................................................9
Board of Trustees Annual Approval of the Investment Advisory Agreement..53
Important Notices Regarding Privacy, Delivery of Shareholder Documents,
Portfolio Holdings and Proxy Voting.....................................54
FINANCIAL STATEMENTS
THE WRIGHT MANAGED EQUITY TRUST
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Portfolio of Investments..................11
Statement of Assets & Liabilities.........14
Statement of Operations...................14
Statements of Changes in Net Assets.......15
Financial Highlights......................16
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Portfolio of Investments..................17
Statement of Assets & Liabilities.........20
Statement of Operations...................20
Statements of Changes in Net Assets.......21
Financial Highlights......................22
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Portfolio of Investments..................23
Statement of Assets & Liabilities.........26
Statement of Operations...................26
Statements of Changes in Net Assets.......27
Financial Highlights......................28
NOTES TO FINANCIAL STATEMENTS...............29
THE WRIGHT MANAGED INCOME TRUST
WRIGHT TOTAL RETURN BOND FUND
Portfolio of Investments..................35
Statement of Assets & Liabilities.........39
Statement of Operations...................39
Statements of Changes in Net Assets.......40
Financial Highlights......................41
WRIGHT CURRENT INCOME FUND
Portfolio of Investments..................42
Statement of Assets & Liabilities.........45
Statement of Operations...................45
Statements of Changes in Net Assets.......46
Financial Highlights......................47
NOTES TO FINANCIAL STATEMENTS...............48
LETTER TO SHAREHOLDERS
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July 2008
Dear Shareholders:
Given the poor performance of global stock and bond markets in the first half of
2008, this may be an appropriate time for an expanded discussion of the economic
and market prospects over the balance of the year and in 2009. As daunting as
the obstacles to near-term growth are, it is important to remember that market
turns always come well in advance of a return of economic prosperity. With this
in mind, it is not unreasonable to expect a marked improvement in the market
climate during the second half of 2008 in anticipation of better economic and
credit conditions over the course of 2009.
CURRENT CONDITIONS
With the help of multi-billion dollar tax rebates and a strong export sector,
the U.S. economy avoided recession in the first half of 2008, while the S&P 500
flirted with the 20% decline from its peak that generally designates a bear
market. Whether or not the economy continues to advance and markets rebound
appears to depend to a significant degree on the course of oil prices, which
have so far proved unusually resilient to global economic slowdown. Energy
demand has softened, but concerns about potential supply disruptions have
combined with ongoing capital flows into commodities and a weaker dollar to push
crude oil futures to $145 a barrel in early July, a level that, if sustained,
poses both inflation and recession risks around the globe. (Fortunately, oil has
retreated, although further declines are both needed and likely, in our view.)
On the other hand, once oil prices begin to retreat that will act as a catalyst
for receding inflation, rising confidence and renewed economic growth, better in
many ways than the tax cuts and monetary remedies that have been employed so
far. Stock prices ought to anticipate these more favorable trends by six months
or more, lending support to the case for a much improved second-half performance
in the equities markets.
CENTRAL BANK DILEMMA
As July began, the European Central Bank (ECB) bowed to inflation concerns and
raised its base lending rate from 4.00% to 4.25%, the second increase in four
months. The Bank of England (BOE), like the U.S. Federal Reserve (the Fed),
reduced interest rates by one-quarter percentage point during the second
quarter, but it is now wrestling with the possibility of raising rates to head
off inflation pressures. In developing economies, interest rates have increased
and energy subsidies have been reduced, both of which will tend to slow growth
and reduce inflation. In the U.S., the Fed struggled with the growth/inflation
question during the second quarter, holding its fed funds rate target at 2% at
its June policy meeting. In our view, while commodities prices may yet be a
problem, the Fed is likely to leave interest rates at current low levels out of
concern for weak credit conditions, recessions in the home building and auto
industries, and the softening labor market, where more than 500,000 private
sector jobs were lost over the first six months of 2008.
We also believe that the unfolding economic slowdown will be big enough to
produce a cooling off of global inflation pressures - limiting the scope of
further interest rate increases from the ECB or BOE - and yet not so big that
the global economy drops into outright recession. That is the sweet spot that
the world's central bankers are aiming for, and the probability of their success
relies on the fact that no tree grows to the sky - not even the oil tree. Having
seen the way high oil prices resulted in a 6 million barrel per day (10%)
contraction in world oil consumption over the 1980-83 period (which in turn set
the stage for two decades of lower oil prices), we believe that the bubble in
crude is close to the bursting point. Of course, the longer that oil and
commodities prices defy gravity, the greater the risks to world economies and
markets.
STOCK AND BOND MARKET RECAP
Stocks rallied for the first two months of the second quarter before giving up
those gains in June. As the markets took their July 4 holiday break, the S&P 500
stood at 1,263, close to a two-year low and 19% below last October's price peak.
Unlike the first quarter, when all 10 of the S&P 500's market sectors declined,
the second quarter saw gains in four sectors: energy (17%), utilities (7%),
materials (4%) and technology (2%). In fact, excluding stocks in the financial
sector, which hemorrhaged 19% in price during the second quarter (Q2), the rest
of the S&P 500 had a net decline of only 0.3% - although the month of June was
off more than 6%. If you exclude both financials and energy, the other 333
stocks in the S&P 500 lost nearly 3% in the second quarter on top of the first
quarter's 8% decline. Since October's market peak, energy stocks have returned
11%, financials have lost 43%, and the rest of the S&P 500 has averaged a 14%
market correction. Early in the third quarter, energy and materials stocks have
been among the weaker sectors of the market, reinforcing our suspicion that new
market leadership will be required before a new upleg in stock prices can be
sustained.
Since August 2007, the Fed has cut interest rates by 325 basis points, injected
billions of dollars of liquidity into the market, and instituted a number of new
lending facilities for banks and primary securities dealers in an effort to
shore up credit markets. The Fed's efforts met with a modicum of success in the
second quarter, as credit spreads declined modestly. Still, mortgage rates and
interest rates on corporate borrowings rose in the quarter, and credit
conditions must still be considered to be relatively tight, despite the fact
that the real fed funds rate is effectively zero. Mortgage-backed securities and
corporate bonds, particularly at the shorter end of the yield curve, performed
better than Treasuries in Q2, although toward the end of the quarter renewed
evidence of risk aversion began to be seen. Bond markets outside the U.S.
generally trailed the U.S. bond market in Q2 as interest rates rose around the
globe and the U.S. dollar rebounded modestly, recovering less than 5% of the
ground lost to the major foreign currencies over the past six years.
ECONOMIC OUTLOOK
Even if the U.S. manages to avoid recession, pretty clearly the growth outlook
is somewhat muted. In fact, it may be difficult for the U.S. economy to do much
better than the 1% or so growth rate experienced over the past nine months, and
a short shallow recession cannot be ruled out in the event that more credit
problems emerge or energy prices perversely go still higher. Housing figures
detract from Gross Domestic Product (GDP) growth in diminishing amounts, but a
return to robust residential construction will first require a working down of
large inventories of unsold homes. Likewise, the contribution to economic growth
from the auto industry will likely be meager for a while since the capacity to
produce the "green" vehicles that consumers want now is somewhat limited. What's
more, consumers are in no position to step up their spending in any big way -
not with incomes constrained by job losses and confidence shaken by $4 a gallon
gasoline. These depressing effects will be only partially offset by the limited
tax rebates going out to consumers over Q2 and Q3. It may well be the fourth
quarter of 2009 before a return to trend growth of 2.5%-3% can be achieved -
which would make the growth trajectory over the next 18 months similar to the
stunted takeoff from the 2001 recession.
As to the prospects for inflation, we repeat what we said three months ago: "The
Fed's latest moves to bolster credit and economic growth may have inflationary
consequences." Nevertheless, second-quarter price action in gold (down), crude
oil (up) and the dollar (stronger) presents a mixed picture, unlike the first
quarter, when all of these inflation indicators were flashing a red light on
inflation risks. Still, our view is that inflation ought to remain a secondary
consideration for the Fed, subordinate to the need to return the credit markets
to normal functioning and get the economy's growth engines restarted. Without
question, yield spreads got too low, mortgage investors too complacent and
lending standards too lax in 2007, making some of the subsequent tightening
entirely appropriate. A reduction in home prices and some overdue deleveraging
of the U.S. consumer sector, though painful in the short run, can only be
positive in the longer term scheme of things.
RISKS REMAIN
The rise in oil and commodity prices, which is both inflationary and
recessionary, is at odds with the global economic slowdown and demand
destruction now occurring in energy and resource markets. Still, that doesn't
mean these trends will reverse in the near term since the extremes that any
market can get to are often as surprising as they are dramatic. Obviously a key
threat to the economy and markets midway through 2008 is that oil prices
continue to range in slowdown-inducing territory. By the same token, though,
should commodity prices fall sharply, the effect on consumer confidence should
be quite salutary. Nominal GDP growth may not be much higher, but its
composition would take a favorable turn - i.e., more real growth with less
inflation.
Another risk to capital markets heading into 2009 is the possibility of tax
increases next year - capital gains, dividend treatment, income tax rates,
corporate taxes and payroll taxes all appear to be in play. In fact, we suspect
that some of the recent market weakness may be attributed to concerns on how a
sweep of Congress and the White House by the Democrats might lead to tougher
treatment of capital (vis-a-vis labor). Our view is that the likely backdrop of
muted economic expansion over the next couple years will not allow Washington to
impose the large tax increases that some fear.
In the current market environment, it is especially important to maintain a
focus on high-quality securities. In times like this, the wisdom of investing in
a diversified portfolio of high-quality securities becomes abundantly clear. At
Wright Investors' Service, we continue to reject investment fads in favor of
investment principles. In our view, the 2007-08 financial crisis, like earlier
ones, will create as many opportunities as challenges. While the bottom in
stocks may not yet have been seen, we take encouragement from the fact that
stock price/earnings multiples are at multiyear lows as the third quarter gets
under way. If you have any questions or suggestions on how we can better serve
your investment and wealth management needs, please let us know.
Sincerely,
/s/ Peter M. Donovan
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Peter M. Donovan, President
MANAGEMENT DISCUSSION
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EQUITY FUNDS
IN THE FIRST HALF OF 2008, THE S&P 500 LOST NEARLY 12%. STOCKS FELL EARLY IN THE
YEAR AS INVESTORS REALIZED THAT THE EFFECTS OF THE MORTGAGE MELTDOWN ON THE
FINANCIAL SYSTEM THAT KEEPS THE ECONOMY MOVING WAS MORE SEVERE AND LIKELY TO
LAST LONGER THAN PREVIOUSLY EXPECTED. IN MARCH, AFTER THE FEDERAL RESERVE (THE
FED) ENGINEERED THE RESCUE OF COLLAPSED INVESTMENT BANK BEAR STEARNS BY JPMORGAN
CHASE AND TOOK STEPS TO ENHANCE LIQUIDITY IN THE CREDIT MARKETS, INVESTOR
SENTIMENT IMPROVED. THE MARKET RALLY WAS SHORT-LIVED, HOWEVER, AS SENTIMENT
AGAIN TURNED NEGATIVE MIDWAY THROUGH THE SECOND QUARTER. ALTHOUGH THE FED MAY
HAVE PREVENTED THE WORST-CASE OUTCOME FROM THE COLLAPSE OF THE HOUSING BUBBLE,
IT BECAME CLEAR THAT FINANCIAL INSTITUTIONS WOULD BE TAKING MORE WRITE-OFFS OF
DISTRESSED ASSETS, FORCING THEM TO RAISE MORE CAPITAL. THERE WAS ALSO AN
INCREASE IN UNCERTAINTY ABOUT FED POLICY. EARLY IN 2008, THE FED WAS
CONCENTRATING ITS EFFORTS ON EASING THE CREDIT CRUNCH AND TRYING TO GET THE
FINANCIAL SYSTEM RUNNING SMOOTHLY. BUT LATE IN JUNE, THE FED PAUSED IN ITS
EASING PROGRAM AND WAS PUTTING MORE FOCUS ON THE POTENTIAL FOR HIGHER INFLATION
CAUSED BY THE RUN-UP IN COMMODITY PRICES. AT THE SAME TIME, THE RISK OF
RECESSION STILL LOOMED AS CONSUMER SPENDING POWER AND CONFIDENCE WERE BEING
SAPPED BY HIGHER ENERGY PRICES, DECLINING HOME PRICES AND A SOFT JOBS MARKET.
BY THE END OF THE SECOND QUARTER, THE S&P 500 HAD GIVEN BACK JUST ABOUT ALL IT
HAD GAINED IN THE MARCH-MAY RALLY. ON JUNE 30, THE DOW, THE S&P 500 AND NASDAQ
WERE ALL CLOSE TO BEING IN "BEAR MARKET" TERRITORY, I.E., HAVING PRICE DECLINES
APPROACHING 20% FROM 2007'S PEAKS. (EARLY IN THE THIRD QUARTER, THE AVERAGES'
RETREATS DID MEET THE "BEAR MARKET" DEFINITION.) IN TOTAL RETURN TERMS, FOR THE
SECOND QUARTER THE S&P 500 LOST 2.7%, BRINGING ITS HALF-YEAR LOSS TO NEARLY 12%.
THE DOW JONES INDUSTRIALS TOOK A BIGGER HIT IN THE QUARTER, LOSING 6.9% FOR A
FIRST-HALF LOSS OF ABOUT 13%; NASDAQ WAS SLIGHTLY POSITIVE IN THE SECOND QUARTER
WITH A 0.8% RETURN, BUT IT ALSO LOST ABOUT 13% IN THE FIRST HALF OF 2008. LIKE
NASDAQ, THE S&P MIDCAP 400 AND SMALLCAP 600 HAD POSITIVE RETURNS IN THE SECOND
QUARTER (5.4% AND 0.4%, RESPECTIVELY), TOPPING THE S&P 500 AS THEY DID IN THE
FIRST QUARTER. THE MIDCAPS LOST JUST 3.9% IN THE FIRST HALF; THE SMALLCAPS LOST
7.1%. IN THE FIRST HALF OF 2008, MARKETS OUTSIDE OF THE UNITED STATES SHARED THE
ANXIETY ABOUT THE ECONOMIC OUTLOOK AND THE CREDIT CRISIS. IN THE FIRST QUARTER,
THE MSCI WORLD EX U.S. INDEX'S DOLLAR LOSS OF 8.7% BENEFITED FROM THE
DEPRECIATION OF THE DOLLAR; IN THE SECOND QUARTER, SLIGHT APPRECIATION OF THE
DOLLAR HURT RESULTS, THOUGH THE INDEX'S LOSS OF 1.2% WAS STILL SMALLER THAN THE
S&P 500'S.
THE BOTTOMING PROCESS FOR STOCKS COULD BE A PROLONGED, BUMPY ONE. CORPORATE
PROFIT GROWTH WAS DISAPPOINTING IN THE FIRST HALF OF 2008 AND EXPECTATIONS FOR
THE SECOND HALF ARE LIKELY TO BE REVISED LOWER. THIS COULD CONTRIBUTE TO
NEAR-TERM VOLATILITY IN THE STOCK MARKET, WHICH ALREADY FIGURES TO REFLECT
UNCERTAINTY ABOUT THE ECONOMY AND THE HEALTH OF THE CREDIT MARKETS (FACTORS
WHICH CONTRIBUTED TO STOCK MARKET WEAKNESS EARLY IN Q3). POSITIVE FOR STOCKS IS
THE CURRENT LOW VALUATION RESULTING FROM THE LATEST SELL-OFF; AT MID-YEAR, THE
S&P 500'S FORWARD P/E MULTIPLE WAS MORE THAN TWO PERCENTAGE POINTS BELOW ITS
AVERAGE SINCE 1985. EVEN A MODEST INCREASE IN MULTIPLES AS INVESTORS BEGIN TO
ANTICIPATE BETTER CONDITIONS DEVELOPING IN 2009 COULD GENERATE DOUBLE-DIGIT
RETURNS FROM EQUITIES IN THE COMING 12 MONTHS. MANY INTERNATIONAL MARKETS ARE
ATTRACTIVELY VALUED AND THE INCLUSION OF INTERNATIONAL EQUITIES IN PORTFOLIOS IS
LIKELY TO ENHANCE RETURNS AS WELL AS PROVIDE DIVERSIFICATION.
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
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Wright Selected Blue Chip
Equities Fund (WSBC) -7.3% 11.6% 3.8% 11.1% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8% 0.1%
Wright Major Blue Chip
Equities Fund (WMBC) -13.3% 6.0% 11.6% 6.2% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0% 20.4%
Wright International Blue Chip
Equities Fund (WIBC) -9.8% 5.5% 28.5% 21.1% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3% 6.1%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
The S&P MidCap 400 outperformed the S&P 500 in the first half of 2008, posting a
smaller loss in the first quarter and a positive return in the second. The
Wright Selected Blue Chip Fund (WSBC) (the Fund), which is a mid-cap blend fund,
also outperformed the S&P 500 in the first half of 2008, although it lagged the
S&P MidCap 400. WSBC returned 4.7% in the second quarter of 2008 compared to a
5.4% return for the S&P MidCap 400. For the entire first half of 2008, WSBC lost
7.3% compared to a 3.9% loss for the S&P MidCaps. Most of the WSBC's
underperformance in the first quarter of 2008 compared to the S&P MidCaps was
due to the lagging performance of its financial holdings compared to those in
the benchmark. This reversed in the second quarter, when the Fund's financial
holdings outperformed the S&P MidCaps, although in absolute terms financials
remained weak. Among the financial contributors in Q2 were Eaton Vance Corp.(+
31%) and Raymond James Financial, Inc. (+15%), which were among the weakest
holdings in Q1. Offsetting the strong showing in WSBC financials in Q2 was
relative underperformance of the Fund's health care and industrial selections
compared to the index (e.g., Intuitive Surgical, Inc. -17%, Oshkosh Truck Corp.
- -43%). In absolute terms, the WSBC Fund benefitted from the strong showing of
its energy holdings in the first half of 2008, especially during the second
quarter (e.g., Helmerich & Payne +80%, Patterson-Uti Energy, Inc. +86% for the
first half). The S&P MidCap 400's P/E in terms of forward earnings was higher
than the S&P 500's at mid-year 2008, but despite the higher valuation, mid-cap
stocks still look attractive because of their better forecast for earnings
growth. WSBC is well positioned in the mid-cap area with a tilt toward the more
substantial companies in the S&P MidCap 400. In the aggregate, WSBC stocks have
a lower forward P/E than those in the MidCap 400 with similar expected earnings
growth. Wright Investors' Service (WIS) continues to advise diversity in
investment portfolios and sees mid-cap stocks as likely to make a positive
contribution to total portfolio returns going forward.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
The Wright Major Blue Chip Fund (WMBC) (the Fund) is managed as a blend of the
large-cap growth and value stocks in the S&P 500 Composite, selected with a bias
toward the higher-quality issues in the index. After lagging in the first
quarter of 2008 with a loss of 11.4% compared to the S&P 500's 9.4% loss, the
WMBC Fund recovered some ground in Q2 with a loss of 2.1%, smaller than the S&P
500's 2.7% loss. For the first half of 2008, WMBC lost 13.3% compared to an
11.9% loss for the S&P 500. In the second quarter of 2008, many of the WMBC's
best-performing issues were in the energy sector (e.g., ConocoPhillips Co. +24%,
Occidental Petroleum Corp. +23%). Relative to the S&P 500 benchmark, the WMBC
Fund's outperformance in Q2 reflected superior stock selection, particularly in
the financial and consumer discretionary sectors, where the Fund's holdings did
significantly better than the index. Some specific examples of good performance
in Q2 include Big Lots,Inc. (+41%), Hasbro, Inc. (+29%), Progressive Corp.
(+16%) and Goldman Sachs Group, Inc. (+6%). A relatively good showing in the
weak financial sector also helped in the first quarter, but this was offset by
overexposure to the managed health care industry, where performance lagged. For
the first half as a whole, the Fund's results relative to the S&P 500 were
helped by its relatively good showing in the weak financial and consumer
discretionary sectors, while the biggest relative detraction came from its
selections in the health care sector. The third quarter started with a soft tone
to the stock market. Given the high level of economic uncertainty, along with
the prospect of some downward revision of earnings estimates, we wouldn't be
surprised to see more bouts of market volatility in the months ahead. With its
bias toward the higher-quality issues in the S&P 500 and attractive valuations,
the WMBC Fund is well positioned for today's relatively risk-averse environment,
which may persist for a while. At the end of the second quarter, WMBC holdings
were priced at lower current and forward P/E multiples than the S&P 500, with
similar next 12 months expected earnings growth.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
U.S. investors benefited from including international stocks in diversified
portfolios in 2007 and that continued in the first half of 2008 as the MSCI
World ex U.S. stock index outperformed the S&P 500 in dollars for the period. In
the first two quarters of 2008, the Wright International Blue Chip Fund (WIBC)
(the Fund) lost 9.8%, matching the loss of the MSCI World ex U.S. index. In the
second quarter of 2008, WIBC lost 0.3%, a better showing than the MSCI
benchmark's 1.2% loss and making up for a slight shortfall compared to the
benchmark in the first quarter (WIBC -9.5%, MSCI World ex U.S. -8.7%). In the
first quarter of 2008, the WIBC Fund's relative performance was helped by an
underweight position in financial stocks, which was a weak sector globally for
the entire first half. The Fund remained underweight in financials in Q2, but
its relative performance was hurt by weakness in the specific issues it held in
that sector. Being overweight in the defensive utility sector was a positive for
performance in both the first and second quarters of the year; in both quarters,
the Fund also benefited from the strong showing of its energy holdings (e.g.,
Encana Corp.'s +36% first-half return). In the second quarter, the Fund
benefited from a strong showing in its selections in the materials sector.
Holdings in Japanese auto makers detracted from performance in Q1, while in Q2,
performance of the Fund's technology holdings was negative, with Nokia Oyj being
a contributor to this weakness. Although the global economy is slowing in 2008,
near-term earnings prospects for foreign companies generally look relatively
good compared to the U.S. In addition, foreign stocks offer attractive
valuations relative to U.S. stocks. We continue to see the inclusion of
international stocks as likely to enhance risk-adjusted returns in diversified
investment portfolios. Going into the second half of 2008, WIBC weightings in
the defensive health care and utility sectors were increased; the consumer
discretionary sector was also increased (reducing the underweight relative to
the MSCI benchmark) to take advantage of some attractive valuations. Holdings in
the financial sector, which were increased earlier in the year when valuations
were very low, were reduced (to underweight relative to the MSCI benchmark) in
May after some recovery in financials. Holdings in the Euro zone were reduced
because of a worsening of the economic outlook, while weightings in Switzerland
and Hong Kong have been increased through the addition of defensive holdings in
the health care and utility sectors.
FIXED-INCOME FUNDS
THE SECOND QUARTER OF 2008 WAS THE FOURTH QUARTER IN A ROW THAT THE LEHMAN U.S.
AGGREGATE BOND INDEX OUTPERFORMED THE S&P 500. IN THE FIRST QUARTER OF 2008, THE
FEDERAL RESERVE BOARD (FED) WAS AGGRESSIVE IN PROVIDING MONETARY STIMULATION AND
LIQUIDITY TO EASE THE CREDIT CRUNCH, BUT FOR MOST OF THE QUARTER, A HIGH ANXIETY
LEVEL DROVE INVESTORS TO THE SAFETY OF TREASURY BONDS. BY THE BEGINNING OF THE
SECOND QUARTER, THESE FED ACTIONS WERE HAVING SOME EFFECT IN REDUCING INVESTOR
ANXIETY, AND FOR A WHILE, INVESTORS MOVED AWAY FROM TREASURIES TOWARD RISKIER
ASSETS. IN THE SECOND QUARTER, THE FED SEEMED TO BE PUTTING MORE FOCUS ON THE
POTENTIAL FOR HIGHER INFLATION CAUSED BY THE RUN-UP IN COMMODITY PRICES, AS DID
INVESTORS BY AND LARGE. IN JUNE, THE FED PAUSED IN ITS EASING PROGRAM AFTER 325
BASIS POINTS OF RATE CUTS SINCE AUGUST 2007. BUT WHILE INFLATION THREATENED, THE
RISK OF RECESSION STILL LOOMED. ONCE THE BOOST TO CONSUMPTION FROM THE ECONOMIC
STIMULUS PACKAGE HAS RUN ITS COURSE, HIGH ENERGY PRICES, DECLINING HOME PRICES
AND A SOFT JOBS MARKET COULD AGAIN DAMPEN CONSUMER SPENDING POWER AND
CONFIDENCE. BY THE END OF THE SECOND QUARTER, CONCERNS ABOUT THE ECONOMY AND THE
REALIZATION THAT MANY FINANCIAL INSTITUTIONS WOULD BE TAKING MORE WRITE-OFFS OF
DISTRESSED DEBT TURNED INVESTOR SENTIMENT NEGATIVE AGAIN.
THE TREASURY YIELD CURVE FELL AND STEEPENED IN THE FIRST QUARTER OF 2008, THEN
ROSE AND FLATTENED IN THE SECOND QUARTER. AT MID YEAR, THE 10-YEAR TREASURY BOND
WAS YIELDING ABOUT 4%, JUST ABOUT WHERE IT WAS AT THE START OF 2008; THE YIELD
ON THE TWO-YEAR TREASURY WAS AT 2.62%, DOWN ABOUT 40 BASIS POINTS FROM WHERE IT
BEGAN THE YEAR. THE LEHMAN U.S. AGGREGATE BOND INDEX RETURNED 2.2% IN THE FIRST
QUARTER, LED BY TREASURY BONDS, WHICH RETURNED MORE THAN 4% AS INVESTORS
SEARCHED FOR A SAFE HAVEN. IN Q2, THE AGGREGATE INDEX LOST 1.0% AS YIELDS ROSE.
THE SPREAD TIGHTENING ON RISKIER ASSETS EARLY IN THE SECOND QUARTER (AS INVESTOR
CONFIDENCE WAS ON AN UPSWING) RESULTED IN TREASURY BONDS LAGGING THE OVERALL
INDEX IN THE SECOND THREE MONTHS OF 2008. FOR Q2, MORTGAGES AND SECURITIZED
PRODUCTS HAD THE BEST PERFORMANCE AND CORPORATE BONDS ALSO DID BETTER THAN
TREASURIES AND THE AGGREGATE AS A WHOLE. THE LEHMAN U.S. AGGREGATE RETURNED 1.1%
FOR THE FIRST HALF OF 2008 WITH THE BEST RETURNS FOR THE SIX MONTHS COMING FROM
TREASURY BONDS (+2.2%).
IN OUR VIEW, THE FED IS UNLIKELY TO RAISE INTEREST RATES IN THE SECOND HALF OF
2008, THE JUNE PAUSE IN ITS EASING PROGRAM NOTWITHSTANDING. THE ECONOMY IS
STRADDLING A FINE LINE BETWEEN THE RISKS TO GROWTH POSED BY THE FRAGILE
FINANCIAL, HOUSING AND AUTO SECTORS AND THE DANGER OF INFLATION DRIVEN BY RISING
COMMODITY COSTS. THE INFLATION THREAT MAKES A STAND-PAT COURSE BY THE FED MOST
LIKELY FOR THE REST OF THIS YEAR, BUT WE WOULDN'T PUT THE CHANCE OF ANOTHER CUT
AT ZERO SHOULD A SERIOUS THREAT TO THE STABILITY OF THE FINANCIAL SYSTEM
DEVELOP. BONDS COULD BE VOLATILE IN THE NEAR-TERM AS PROBLEMS IN THE MORTGAGE
SECTOR DOMINATE THE HEADLINES AND THE PERCEIVED ECONOMIC RISKS WAVER BETWEEN
RECESSION AND INFLATION. A YEAR FROM NOW, LONG-TERM RATES COULD BE SOMEWHAT
HIGHER THAN THEY WERE AT MID-YEAR 2008, REFLECTING THE PROSPECT OF IMPROVED
ECONOMIC CONDITIONS AND POSSIBLY SOME FED TIGHTENING NEXT YEAR. YIELDS ON
SHORTER MATURITY SECURITIES, WHERE THE PROSPECT OF FED TIGHTENING WAS ALREADY
PRICED IN AT THE END OF THE SECOND QUARTER, MAY NOT BE MUCH CHANGED FROM WHERE
THEY ARE TODAY. WE EXPECT THAT SPREAD TIGHTENING ON CORPORATE, AGENCY AND
MORTGAGE-RELATED BONDS AS WELL AS COUPON INCOME WILL PROVIDE A POSITIVE REAL
RETURN FROM BONDS OVER THE COMING 12 MONTHS. EVEN THOUGH BOND RETURNS ARE LIKELY
TO LAG EQUITY RETURNS OVER THE COMING YEAR, THE EXPERIENCE OF 2007 AND THE FIRST
HALF OF 2008 POINTS OUT THE ADVANTAGE OF INCLUDING BONDS IN DIVERSIFIED
INVESTMENT PORTFOLIOS.
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Total Return 6 Mos. Year Year Year Year Year Year Year Year Year Year
-------------------------------------------------------------------------------------------------------------------
Wright Total Return Bond Fund
(WTRB) 0.4% 5.6% 3.3% 1.5% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9% 9.6%
Wright Current Income Fund
(WCIF) 1.8% 5.8% 3.9% 1.8% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5% 6.5%
WRIGHT TOTAL RETURN BOND FUND
In the first half of 2008, the return on the Lehman Aggregate topped that of the
S&P 500. In the first half of 2008, the Wright Total Return Bond Fund (WTRB)
(the Fund), a diversified bond fund, returned 0.4%, behind the 1.1% return of
the Lehman U.S. Aggregate Bond Index. This performance reflected slight
shortfalls in performance in both the first (WTRB +1.9%, Lehman Agg +2.2%) and
second quarters (WTRB -1.5%, Lehman Agg -1.0%). WTRB had an SEC yield of 4.9%
for June 2008. Dividends paid by this Fund may be more or less than implied by
this yield. WTRB's duration position had a positive impact on performance in the
first quarter of 2008. At the start of the quarter, duration was 0.2 years short
of neutral compared to the Lehman Aggregate benchmark, reflecting the view that
bonds were likely to correct in the near term. This happened early in the first
quarter, and the short duration worked to the Fund's advantage. About midway
through Q1, when bonds were near their lows, the Fund's duration was moved to
neutral in anticipation that the uncertain economic outlook and disrupted credit
markets would keep bonds volatile but in a relatively narrow trading range for a
while. This neutral position was maintained through the second quarter, with the
result that duration had no impact on performance relative to the Lehman
benchmark in Q2. In the first quarter, the Fund also benefited from its
positioning to take advantage of the steepening yield curve, some of which was
reversed in Q2. At mid-year, WTRB's duration was neutral compared to the Lehman
Aggregate and its yield curve positioning anticipated some curve steepening.
During the first quarter, spreads on non-Treasury sectors of the fixed-income
market widened compared to Treasuries. This widening created attractive
valuations and the potential for significant excess return relative to
Treasuries once investor confidence improved. To take advantage of this, WTRB's
relative overweight in corporate bonds was increased during the first and second
quarters, with the additions being funded primarily through reduction in Agency
and mortgage-backed holdings, where the spreads compared to Treasuries were
considered less compelling than those in corporates. The Fund's increased weight
in corporate bonds and its position in commercial mortgages detracted from its
relative return in the first quarter, offsetting some of the positive effect of
duration and yield curve positioning. In the second quarter, the Fund's
performance relative to the Lehman Aggregate benefited from spread tightening in
commercial mortgages (8% of assets at June 30), asset-backed securities (2%) and
corporate bonds (29%). A position in hybrid ARMs (10%) performed relatively well
in both the first and second quarters. Being underweight in Treasury (8%) and
Agency (4%) issues also helped in Q2 but detracted from performance for the
entire first half. Being underweight in mortgage pass-throughs (36%), which had
a good showing in Q2, also detracted from relative performance in the quarter
and first half. The Fund's performance relative to the Lehman Aggregate was also
hurt in Q2 by its position in whole loan mortgages (2%), which underperformed.
WRIGHT CURRENT INCOME FUND
In the first half of 2008, the mortgage-backed sector of the bond market lagged
behind Treasury bonds (+2.2%) but had a better return (+1.9%) that the Lehman
U.S. Aggregate bond index's 1.1% return. In the second quarter, the MBS sector's
loss (-0.5%) was smaller than those of the Lehman Aggregate and the Treasury
sector. The Wright Current Income Fund (WCIF) (the Fund) is managed to be
primarily invested in GNMA issues (mortgage-based securities, known as Ginnie
Maes, guaranteed by the full faith and credit of the U.S. government) and other
mortgage-based securities. The WCIF Fund is actively managed to maximize income
and minimize principal fluctuation. In the second quarter of 2008, the WCIF Fund
returned 0.1%, better than the loss of 0.6% for the Lehman GNMA bond index. This
outperformance in Q2 just about offset a lagging performance in the first
quarter (WCIF +1.6%, Lehman GNMA index + 2.5%); for the first half of 2008, WCIF
returned 1.8%, matching the return of the Lehman GNMA index. For June 2008, the
WCIF Fund had an SEC yield of 4.9%. Dividends paid by this Fund may be more or
less than implied by this yield. WCIF's outperformance compared to the Lehman
GNMA index in Q2 was its underweight in longer maturity mortgage-backed
securities, which lagged shorter issues in the latest three months, a reversal
of their first-quarter performance. At mid-year, WCIF held FNMA-backed (28% of
assets) and FHLMC-backed (15%) mortgage securities. WIS believes that, market
concerns notwithstanding, MBS securities backed by FNMA and FHLMC remain
"money-good" under all reasonable scenarios, a view strongly supported by the
plan recently announced by the U.S. Treasury and the Federal Reserve to restore
confidence in these GSEs.
THE VIEWS EXPRESSED THROUGHOUT THIS REPORT ARE THOSE OF THE PORTFOLIO
MANAGERS AND ARE CURRENT ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS
STATED ON THE COVER. THESE VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
UPON MARKET OR OTHER CONDITIONS, AND THE INVESTMENT ADVISER DISCLAIMS ANY
RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS
INVESTMENT ADVICE AND, BECAUSE INVESTMENT DECISIONS FOR A FUND ARE BASED ON
MANY FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY OF THE WRIGHT MANAGED INVESTMENT FUNDS.
U.S. SECURITIES MARKETS -------------------------------------------------------
The Dow Jones Industrial Average chart shows the point changes in the average
which consists of 30 major NYSE industrial companies and is a price-weighted
arithmetic average, with the divisor adjusted for stock splits. The yield
chart shows the basis point changes in the U.S. Treasury bond which is the
benchmark U.S. Treasury bond with a maturity of 10 years.
The following plotting points are used for comparison in the mountain charts.
Date Dow Jones U.S. 10 Year
Industrial Average Treasury Bond Yield
12/31/98 9181.43 4.65%
12/31/99 11,497.12 6.44%
12/31/00 10,786.85 5.11%
12/31/01 10,021.50 5.00%
12/31/02 8,341.63 3.82%
12/31/03 10,453.92 4.25%
12/31/04 10,783.01 4.22%
12/31/05 10,717.50 4.39%
12/31/06 12,463.15 4.71%
12/31/07 13,264.82 4.03%
06/30/08 11,350.01 3.97%
FUND EXPENSES
- -------------------------------------------------------------------------------
EXAMPLE:
As a shareholder of a fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchases and redemption fees (if
applicable); and (2) ongoing costs including management fees; distribution or
service fees; and other fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in a fund and to compare
these costs with the ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (January 1, 2008 - June 30, 2008).
ACTUAL EXPENSES:
The first line of the tables shown on the following page provides information
about actual account values and actual expenses. You may use the information in
this line, together with the amount you invested, to estimate the expenses that
you paid over the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first line under the heading entitled "Expenses Paid
During Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES:
The second line of the tables provides information about hypothetical account
values and hypothetical expenses based on the actual Fund expense ratio and an
assumed rate of return of 5% per year (before expenses), which is not the actual
return of the Fund. The hypothetical account values and expenses may not be used
to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in your Fund and other funds. To do so, compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption fees (if payable). Therefore, the second line of
the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
EQUITY FUNDS
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/08-
(1/1/08) (6/30/08) 6/30/08)
- ------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $926.60 $6.04
- ------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.60 $6.32
*Expenses are equal to the Fund's annualized expense ratio of 1.26% multiplied
by the average account value over the period, multiplied by 182/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2007.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/08-
(1/1/08) (6/30/08) 6/30/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $867.40 $5.85
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.60 $6.32
*Expenses are equal to the Fund's annualized expense ratio of 1.26% multiplied
by the average account value over the period, multiplied by 182/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2007.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/08-
(1/1/08) (6/30/08) 6/30/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $901.80 $7.14
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,017.40 $7.57
*Expenses are equal to the Fund's annualized expense ratio of 1.51% multiplied
by the average account value over the period, multiplied by 182/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2007.
FIXED INCOME FUNDS
WRIGHT TOTAL RETURN BOND FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/08-
(1/1/08) (6/30/08) 6/30/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,004.00 $3.54
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,021.30 $3.57
*Expenses are equal to the Fund's annualized expense ratio of 0.71% multiplied
by the average account value over the period, multiplied by 182/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2007.
WRIGHT CURRENT INCOME FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (1/1/08-
(1/1/08) (6/30/08) 6/30/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,017.70 $4.87
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.00 $4.87
*Expenses are equal to the Fund's annualized expense ratio of 0.97% multiplied
by the average account value over the period, multiplied by 182/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on December 31, 2007.
WRIGHT SELECTED BLUE CHIP EQUITIES FUNd (WSBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2008 (UNAUDITED)
Shares Value
EQUITY INTERESTS - 103.4%
AEROSPACE & DEFENSE -- 1.1%
Alliant Techsystems, Inc. * 610 $ 62,025
DRS Technologies, Inc. 1,905 149,961
------------
$ 211,986
------------
AUTOMOBILES & COMPONENTS -- 2.9%
BorgWarner, Inc. 8,925 $ 396,091
Lear Corp. * 745 10,564
Oshkosh Truck Corp. 4,945 102,312
Thor Industries, Inc. 1,275 27,107
------------
$ 536,074
------------
BANKS -- 3.4%
Bank of Hawaii Corp. 1,510 $ 72,178
Cullen/Frost Bankers, Inc. 1,740 86,739
New York Community Bancorp, Inc. 8,725 155,654
SVB Financial Group * 5,755 276,873
Wilmington Trust Corp. 1,830 48,385
------------
$ 639,829
------------
CAPITAL GOODS -- 5.8%
AGCO Corp. * 6,295 $ 329,921
SPX Corp. 4,535 597,396
Thomas & Betts Corp. * 4,310 163,133
------------
$ 1,090,450
------------
CHEMICALS -- 0.3%
Olin Corp. 2,030 $ 53,145
------------
COMMERCIAL SERVICES & SUPPLIES -- 4.7%
Belo Corp. 1,260 $ 9,211
Charles River Laboratories
International* 3,270 209,018
ChoicePoint, Inc. * 1,895 91,339
Global Payments, Inc. 875 40,775
Harsco Corp. 1,925 104,739
KBR, Inc. 2,990 104,381
Korn/Ferry International * 2,280 35,864
Republic Services, Inc. 5,302 157,469
Stericycle, Inc. * 2,415 124,856
------------
$ 877,652
------------
COMMUNICATIONS EQUIPMENT -- 2.7%
Adtran, Inc. 2,130 $ 50,779
CommScope, Inc. * 3,935 207,650
Harris Corp. 2,595 131,022
Plantronics, Inc. 5,340 119,189
------------
$ 508,640
------------
COMPUTERS & PERIPHERALS -- 3.3%
Jack Henry & Associates, Inc. 4,230 $ 91,537
Western Digital Corp. * 15,355 530,208
------------
$ 621,745
------------
CONSUMER DURABLES & APPAREL -- 2.4%
Callaway Golf Co. 4,390 $ 51,934
Herman Miller, Inc. 4,240 105,534
Mohawk Industries, Inc. * 2,475 158,647
The Warnaco Group, Inc. * 2,790 122,955
------------
$ 439,070
------------
CONSUMER PRODUCTS -- 0.2%
American Greetings Corp. - Class A 3,675 $ 45,350
------------
DIVERSIFIED FINANCIALS -- 3.6%
Eaton Vance Corp. (1) 5,530 $ 219,873
Raymond James Financial, Inc. 9,367 247,195
SEI Investments Co. 8,425 198,156
------------
$ 665,224
------------
EDUCATION -- 0.8%
Career Education Corp. * 1,780 $ 26,006
Scholastic Corp. * 4,275 122,521
------------
$ 148,527
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 7.8%
Ametek, Inc. 4,105 $ 193,838
Amphenol Corp. - Class A 3,895 174,808
Arrow Electronics, Inc. * 7,385 226,867
Avnet, Inc. * 7,430 202,690
Hubbell, Inc. 1,470 58,609
Ingram Micro, Inc. - Class A* 2,960 52,540
Lincoln Electric Holdings, Inc. 2,980 234,526
Pentair, Inc. 2,985 104,535
Tech Data Corp. * 2,185 74,050
ValueClick, Inc. * 4,130 62,569
Vishay Intertechnology, Inc. * 7,540 66,880
------------
$ 1,451,912
------------
ENERGY -- 12.2%
Cimarex Energy Co. 3,615 $ 251,857
Denbury Resources, Inc. * 7,535 275,027
Energen Corp. 290 22,629
FMC Technologies, Inc. * 6,820 524,663
Forest Oil Corp. * 6,850 510,325
Frontier Oil Corp. 1,875 44,831
Helmerich & Payne, Inc. 3,110 223,982
Patterson-UTI Energy, Inc. 4,325 155,873
Southwestern Energy Co. * 2,535 120,690
Tidewater, Inc. 2,250 146,318
------------
$ 2,276,195
------------
FOOD, BEVERAGE & TOBACCO -- 2.6%
Corn Products International, Inc. 2,155 $ 105,832
PepsiAmericas, Inc. 8,875 175,548
Smucker Co, (J.M.) 1,305 53,035
Universal Corp. 3,450 156,009
------------
$ 490,424
------------
HEALTH CARE EQUIPMENT & SERVICES-- 6.4%
Apria Healthcare Group, Inc. * 4,980 $ 96,562
DENTSPLY International, Inc. 2,685 98,808
Gen-Probe, Inc. * 710 33,711
Health Net, Inc. * 825 19,850
Hologic, Inc. * 3,390 73,902
Intuitive Surgical, Inc. * 1,260 339,444
Invitrogen Corp. * 3,260 127,988
LifePoint Hospitals, Inc. * 2,400 67,920
Lincare Holdings, Inc. * 9,465 268,806
WellCare Health Plans, Inc. * 2,090 75,553
------------
$ 1,202,544
------------
HOUSEHOLD & PERSONAL PRODUCTS -- 2.6%
Energizer Holdings, Inc. * 3,435 $ 251,064
NetFlix, Inc. * 4,420 115,230
Tupperware Brands Corp. 3,260 111,557
------------
$ 477,851
------------
INSURANCE -- 6.4%
American Financial Group Inc. 2,140 $ 57,245
Everest Re Group, Ltd. 2,005 159,819
HCC Insurance Holdings, Inc. 11,840 250,298
Horace Mann Educators Corp. 2,355 33,017
Mercury General Corp. 2,985 139,459
Old Republic International Corp. 1,393 16,493
StanCorp Financial Group, Inc. 5,895 276,829
W.R. Berkley Corp. 10,692 258,319
------------
$ 1,191,479
------------
MATERIALS -- 12.8%
Airgas, Inc. 2,790 $ 162,908
Carpenter Technology Corp. 1,875 81,844
CF Industries Holdings, Inc. 1,780 271,984
Cleveland-Cliffs, Inc. 1,500 178,785
Commercial Metals Co. 3,165 119,320
Crane Co. 2,990 115,205
Flowserve Corp. 1,580 215,986
FMC Corp. 1,545 119,645
Joy Global, Inc. 1,890 143,319
Kennametal, Inc. 960 31,248
Lubrizol Corp. 3,370 156,132
Matthews International Corp. - Class A 1,075 48,654
Reliance Steel & Aluminum Co. 2,640 203,517
RPM International, Inc. 940 19,364
Sonoco Products Co. 3,735 115,598
Steel Dynamics, Inc. 5,295 206,876
Terra Industries, Inc. * 4,065 200,608
------------
$ 2,390,993
------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 1.7%
Endo Pharmaceuticals Holdings, Inc. * 6,905 $ 167,032
NBTY, Inc. * 1,560 50,014
Perrigo Co. 3,430 108,971
------------
$ 326,017
------------
REAL ESTATE -- 2.4%
Cousins Properties, Inc. 3,960 $ 91,476
Jones Lang LaSalle, Inc. 1,665 100,217
NVR, Inc. * 365 182,529
Toll Brothers, Inc. * 1,890 35,400
UDR, Inc. 1,735 38,829
------------
$ 448,451
------------
RETAILING -- 3.4%
Aeropostale, Inc. * 1,907 $ 59,746
American Eagle Outfitters, Inc. 7,797 106,273
Dollar Tree, Inc. * 6,380 208,562
Guess?, Inc. 300 11,235
Phillips-Van Heusen Corp. 2,990 109,494
Regis Corp. 3,450 90,908
Rent-A-Center Inc. * 2,290 47,105
------------
$ 633,323
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.1%
International Rectifier Corp. * 2,125 $ 40,800
Intersil Corp. - Class A 3,630 88,282
Lam Research Corp. * 1,810 65,431
RF Micro Devices, Inc. * 6,875 19,938
------------
$ 214,451
------------
SOFTWARE & SERVICES -- 3.9%
Activision, Inc. * 3,215 $ 109,535
Alliance Data Systems Corp. * 2,195 124,127
F5 Networks, Inc. * 935 26,573
McAfee, Inc. * 7,450 253,524
Sybase, Inc. * 7,015 206,381
------------
$ 720,140
------------
TELECOMMUNICATION SERVICES -- 0.4%
NeuStar, Inc. - Class A* 775 $ 16,709
Telephone & Data Systems, Inc. 1,290 60,978
------------
$ 77,687
------------
TRANSPORTATION -- 2.1%
AirTran Holdings, Inc. * 26,300 $ 53,652
Alaska Air Group, Inc. * 7,630 117,044
Con-way, Inc. 2,025 95,701
J.B. Hunt Transport Services, Inc. 1,445 48,090
JetBlue Airways Corp. * 21,505 80,214
------------
$ 394,701
------------
UTILITIES -- 6.4%
AGL Resources, Inc. 3,655 $ 126,390
Exterran Holdings, Inc. * 300 21,447
MDU Resources Group, Inc. 13,828 482,044
OGE Energy Corp. 1,725 54,700
Oneok, Inc. 10,585 516,865
------------
$ 1,201,446
------------
TOTAL EQUITY INTERESTS - 103.4%
(identified cost, 17,730,601) $ 19,335,306
OTHER ASSETS, LESS LIABILITIES - (3.4)% (628,315)
------------
NET ASSETS - 100.0% $ 18,706,991
============
* Non-income-producing security.
(1) Affiliated investment.
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $17,550,599) (Note 1A) $ 19,115,433
Affiliated investments at value
(identified cost $180,002) 219,873
Cash 140
Receivable for fund shares sold 5,043
Receivable from investment adviser 7,955
Dividends receivable 12,844
Other assets 4,515
------------
Total assets $ 19,365,803
------------
LIABILITIES:
Payable for fund shares reacquired $ 308,498
Demand note payable 331,000
Payable to affiliate for Trustees' fees 4
Accrued expenses and other liabilities 19,310
------------
Total liabilities $ 658,812
------------
NET ASSETS $ 18,706,991
============
NET ASSETS CONSIST OF:
Paid-in capital $ 17,094,783
Accumulated undistributed net realized gain
on investments
(computed on the basis of identified cost) 39,956
Unrealized appreciation of investments
(computed on the basis of identified cost) 1,604,705
Net investment loss (32,453)
------------
Net assets applicable to outstanding shares $ 18,706,991
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 2,004,159
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 9.33
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income $ 93,892
Dividend income from affiliated investment 2,586
------------
Total Investment Income $ 96,478
------------
Expenses -
Investment adviser fee (Note 3) $ 61,983
Administrator fee (Note 3) 12,397
Compensation of Trustees who are not employees
of the investment adviser or administrator 6,465
Custodian fee (Note 1F) 33,847
Distribution expenses (Note 4) 25,826
Transfer and dividend disbursing agent fees 13,650
Printing 1,820
Interest expense 2,308
Shareholder communications 910
Audit services 16,232
Legal services 4,550
Registration costs 7,435
Miscellaneous 4,290
------------
Total expenses $ 191,713
------------
Deduct -
Reimbursement from custodian $ (1,600)
Reduction of investment adviser fee (Note 3) (34,659)
Reduction of distribution expenses
by principal underwriter (Note 4) (25,826)
Reduction of custodian fee (Note 1F) (697)
------------
Total deductions $ (62,782)
------------
Net expenses $ 128,931
------------
Net investment loss $ (32,453)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 84,447
Realized gain on affiliated investment
transactions 6,066
Change in unrealized depreciation on
investments $(1,675,078)
Change in unrealized depreciation on
affiliated investments (129,682)
------------
Net realized and unrealized loss on
investments $ (1,714,247)
------------
Net decrease in net assets from operations $(1,746,700)
============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- ------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2008 December 31, 2007
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss $ (32,453) $ (28,028)
Net realized gain on investments 90,513 6,519,033
Change in unrealized depreciation of investments (1,804,760) (3,232,243)
-------------- --------------
Net increase (decrease) in net assets resulting from operations $ (1,746,700) $ 3,258,762
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ - $ (33,344)
From net realized gain (1,863,251) (5,034,405)
-------------- --------------
Total distributions $ (1,863,251) $ (5,067,749)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5) $ (1,606,050) $(12,619,826)
-------------- --------------
Net decrease in net assets $ (5,216,001) $(14,428,813)
NET ASSETS:
At beginning of period 23,922,992 38,351,805
-------------- --------------
At end of period $ 18,706,991 $ 23,922,992
-------------- --------------
NET INVESTMENT LOSS INCLUDED IN NET ASSETS AT END OF PERIOD $ (32,453) $ -
============== ==============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- ------------------------------------------------------------------------------
Six Months
Ended June 30 Year Ended December 31,
----------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004 2003(3)
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
Net asset value, beginning of period $ 11.100 $ 12.270 $ 13.030 $ 13.226 $ 11.870 $ 9.270
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1) $ (0.015) $ (0.013) $ (0.034) $ (0.053) $ (0.028) $ (0.023)
Net realized and unrealized gain (loss) (0.849) 1.340 0.529 1.476 1.884 2.756
--------- --------- --------- --------- --------- ---------
Total income (loss) from investment operations $ (0.864) $ 1.327 $ 0.495 $ 1.423 $ 1.856 $ 2.733
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income $ - $ (0.016) $ - $ - $ - $ -
Distributions from capital gains (0.906) (2.481) (1.255) (1.619) (0.500) (0.133)
--------- --------- --------- --------- --------- ---------
Total distributions $ (0.906) $ (2.497) $ (1.255) $ (1.619) $ (0.500) $ (0.133)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 9.330 $ 11.100 $ 12.270 $ 13.030 $ 13.226 $ 11.870
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) (7.34)%(6) 11.59% 3.77% 11.09% 15.73% 30.06%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 18,707 $ 23,923 $ 38,352 $ 47,652 $ 43,498 $ 38,190
Ratios (As a percentage of average
daily net assets):
Net expenses 1.26% (5) 1.26% 1.26% 1.27% 1.26% 1.25%
Net expenses after custodian fee reduction(4) 1.25% (5) 1.25% 1.25% 1.25% 1.25% 1.25%
Interest expense 0.02% (5) 0.05% - % - % - % - %
Net investment loss (0.32)%(5) 0.10)% (0.27)% (0.18)% (0.23)% (0.23)%
Portfolio turnover rate 33% (6) 67% 66% 110% 69% 106%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the six months ended June 30, 2008, and for the years ended December
31, 2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund
were reduced by a waiver of fees and/or 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:
2008 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ (0.044) $ (0.064) $ (0.058) $ (0.111) $ (0.050) $ (0.057)
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses 1.86%(5) 1.66% 1.46% 1.45% 1.44% 1.59%
========== ========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.85%(5) 1.66% 1.44% 1.43% 1.43% 1.59%
========== ========= ========= ========= ========= =========
Interest expense 0.02%(5) 0.05% - % - % - % - %
========== ========= ========= ========= ========= =========
Net investment loss (0.91)%(5) (0.51)% (0.46)% (0.38)% (0.41)% (0.57)%
========== ========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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 reinvested at the net asset value on the
reinvestment date.
(3) Certain per share amounts are based on average shares outstanding.
(4) 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.
(5) Annualized.
(6) Not annualized.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2008 (UNAUDITED)
Shares Value
EQUITY INTERESTS - 100.0%
AEROSPACE -- 0.6%
Honeywell International, Inc. 6,130 $ 308,216
------------
AUTOMOBILES & COMPONENTS -- 1.2%
Cooper Industries, Ltd. - Class A 3,540 $ 139,830
Johnson Controls, Inc. 15,045 431,491
------------
$ 571,321
------------
BANKS -- 4.7%
Bank of New York Mellon Corp. 26,350 $ 996,821
Northern Trust Corp. 1,770 121,369
Wells Fargo & Co. 46,315 1,099,981
------------
$ 2,218,171
------------
CAPITAL GOODS -- 6.2%
Caterpillar, Inc. 7,690 $ 567,676
Deere & Co. 5,090 367,142
General Electric Co. 11,850 316,276
Illinois Tool Works, Inc. 3,405 161,771
Lockheed Martin Corp. 12,145 1,198,226
Parker Hannifin Corp. 4,380 312,382
------------
$ 2,923,473
------------
CHEMICALS -- 1.1%
Monsanto Co. 4,135 $ 522,829
------------
COMMUNICATIONS EQUIPMENT -- 2.5%
Cisco Systems, Inc. * 32,530 $ 756,648
JDS Uniphase Corp. * 7,645 86,847
L-3 Communications Holdings, Inc. 3,635 330,312
------------
$ 1,173,807
------------
COMPUTERS & PERIPHERALS -- 9.1%
Affiliated Computer Services,
Inc. - Class A* 3,245 $ 173,575
Apple, Inc. * 3,905 653,853
Hewlett-Packard Co. 37,220 1,645,496
International Business Machines Corp. 15,260 1,808,768
------------
$ 4,281,692
------------
CONSUMER DURABLES & APPAREL -- 1.0%
NIKE, Inc. - Class B 7,655 $ 456,315
------------
DIVERSIFIED FINANCIALS -- 4.2%
American Express Co. 13,545 $ 510,240
Capital One Financial Corp. 6,840 259,988
Citigroup, Inc. 1 17
Federated Investors, Inc. - Class B 7,070 243,349
Goldman Sachs Group, Inc. (The) 1,615 282,464
State Street Corp. 10,555 675,415
------------
$ 1,971,473
------------
EDUCATION -- 0.4%
Apollo Group, Inc. - Class A* 4,050 $ 179,253
------------
ELECTRONICS -- 0.1%
MEMC Electronic Materials, Inc. * 1,140 $ 70,156
------------
ENERGY -- 15.9%
Chesapeake Energy Corp. 4,130 $ 272,415
Chevron Corp. 15,160 1,502,811
ConocoPhillips Co. 12,845 1,212,439
ENSCO International, Inc. 2,870 231,724
Exxon Mobil Corp. 27,945 2,462,793
Hess Corp. 910 114,833
National Oilwell Varco, Inc. * 3,905 346,452
Occidental Petroleum Corp. 11,225 1,008,678
Tesoro Corp. 2,070 40,924
Transocean, Inc. * 705 107,435
Valero Energy Corp. 4,055 166,985
------------
$ 7,467,489
------------
ENTERTAINMENT & LEISURE -- 3.2%
CBS Corp. - Class B 6,390 $ 124,541
Hasbro, Inc. 6,135 219,142
Walt Disney Co. (The) 37,435 1,167,972
------------
$ 1,511,655
------------
FOOD, BEVERAGE & TOBACCO -- 3.7%
Altria Group, Inc. 18,390 $ 378,098
Coca-Cola Enterprises, Inc. 20,805 359,927
Molson Coors Brewing Co. - Class B 3,530 191,785
Pepsi Bottling Group, Inc. 13,965 389,903
PepsiCo, Inc. 3,425 217,796
Philip Morris International, Inc. * 4,275 211,142
------------
$ 1,748,651
------------
HEALTH CARE EQUIPMENT & SERVICES-- 3.4%
Aetna, Inc. 9,320 $ 377,740
Cigna Corp. 6,220 220,126
Express Scripts, Inc. * 2,235 140,179
Humana, Inc. * 3,600 143,172
Laboratory Corp of America Holdings * 2,410 167,808
WellPoint, Inc. * 11,375 542,132
------------
$ 1,591,157
------------
HOTELS, RESTAURANTS & LEISURE -- 1.7%
McDonald's Corp. 13,945 $ 783,988
------------
HOUSEHOLD DURABLES -- 0.8%
Procter & Gamble Co. 5,140 $ 312,564
Stanley Works, (The) 1,510 67,693
------------
$ 380,257
------------
INSURANCE -- 9.5%
ACE, Ltd. 3,295 $ 181,522
AFLAC, Inc. 4,355 273,494
Allstate Corp. (The) 7,395 337,138
American International Group, Inc. 8,950 236,817
Chubb Corp. 12,920 633,209
Hartford Financial Services Group, Inc. 6,635 428,422
Lincoln National Corp. 5,895 267,162
MetLife, Inc. 22,095 1,165,953
Progressive Corp. 11,460 214,531
Torchmark Corp. 3,300 193,545
Travelers Cos, Inc. (The) 5,585 242,389
Unum Group 13,545 276,995
------------
$ 4,451,177
------------
MATERIALS -- 2.6%
Nucor Corp. 7,215 $ 538,744
Precision Castparts Corp. 7,000 674,590
------------
$ 1,213,334
------------
MEDIA -- 0.7%
News Corp. - Class A 11,260 $ 169,350
Omnicom Group, Inc. 3,775 169,422
------------
$ 338,772
------------
METALS -- 1.4%
Freeport-McMoRan Copper & Gold, Inc. 5,550 $ 650,404
------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 6.8%
Biogen Idec, Inc. * 3,480 $ 194,497
Johnson & Johnson, Inc. 18,495 1,189,968
King Pharmaceuticals, Inc. * 12,210 127,839
Merck & Co., Inc. 6,575 247,812
Pfizer, Inc. 63,185 1,103,842
Waters Corp. * 850 54,825
Watson Pharmaceuticals, Inc. * 11,135 302,538
------------
$ 3,221,321
------------
RETAILING -- 3.8%
Autozone, Inc. * 1,510 $ 182,725
Best Buy Co., Inc. 7,120 281,952
Big Lots, Inc. * 11,565 361,291
CVS/Caremark Corp. 6,065 239,992
GameStop Corp. - Class A* 3,725 150,490
Sherwin-Williams Co. 6,780 311,405
SUPERVALU, Inc. 8,500 262,565
------------
$ 1,790,420
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 1.1%
Nvidia Corp. * 21,350 $ 399,672
Texas Instruments, Inc. 3,930 110,669
------------
$ 510,341
------------
SOFTWARE & SERVICES -- 6.8%
BMC Software, Inc. * 9,145 $ 329,220
Computer Sciences Corp. * 6,425 300,947
Compuware Corp. * 16,470 157,124
EMC Corp. * 14,270 209,626
Microsoft Corp. 48,105 1,323,369
Oracle Corp. * 41,945 880,845
------------
$ 3,201,131
------------
TELECOMMUNICATION SERVICES -- 3.7%
AT&T, Inc. 42,465 $ 1,430,646
CenturyTel, Inc. 4,175 148,588
Qwest Communications
International, Inc. 10,010 39,339
Sprint Nextel Corp. 12,240 116,280
------------
$ 1,734,853
------------
TRANSPORTATION -- 1.2%
Boeing Co. (The) 8,485 $ 557,634
------------
TRAVEL -- 0.2%
Expedia, Inc. * 5,775 $ 106,144
------------
UTILITIES -- 2.4%
FPL Group, Inc. 3,085 $ 202,314
Integrys Energy Group, Inc. 12,720 646,558
Public Service Enterprise Group, Inc. 5,695 261,571
------------
$ 1,110,443
------------
TOTAL EQUITY INTERESTS - 100.0%
(identified cost, 46,636,520) $ 47,045,877
OTHER ASSETS, LESS LIABILITIES - 0.0% 4,994
------------
NET ASSETS - 100.0% $ 47,050,871
============
* Non-income-producing security.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $46,636,520) (Note 1A) $ 47,045,877
Cash 186
Receivable for investments sold 763,950
Receivable for fund shares sold 6,366
Dividends receivable 52,867
Other assets 4,639
------------
Total assets $ 47,873,885
------------
LIABILITIES:
Payable for fund shares reacquired $ 189,251
Demand note payable 609,000
Payable to affiliate for Trustees' fees 4
Payable to affiliate for distribution fees 5,191
Investment adviser fee payable 5,959
Accrued expenses and other liabilities 13,609
------------
Total liabilities $ 823,014
------------
NET ASSETS $ 47,050,871
============
NET ASSETS CONSIST OF:
Paid-in capital $ 61,153,965
Accumulated net realized loss on investments
(computed on the basis of identified cost) (14,634,813)
Unrealized appreciation of investments
(computed on the basis of identified cost) 409,357
Accumulated undistributed net investment
income 122,362
------------
Net assets applicable to outstanding shares $ 47,050,871
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,737,484
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 12.59
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2008 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income $ 446,848
------------
Expenses -
Investment adviser fee (Note 3) $ 159,683
Administrator fee (Note 3) 31,156
Compensation of Trustees who are not employees
of the investment adviser or administrator 6,465
Custodian fee (Note 1F) 29,833
Distribution expenses (Note 4) 64,909
Transfer and dividend disbursing agent fees 11,830
Printing 1,456
Interest expense 1,899
Shareholder communications 410
Audit services 14,560
Legal services 4,840
Registration costs 8,130
Miscellaneous 4,549
------------
Total expenses $ 339,720
------------
Deduct -
Reimbursement from custodian $ (1,000)
Reduction of distribution expenses by principal
underwriter (Note 4) (12,512)
Reduction of custodian fee (Note 1F) (1,673)
------------
Total deductions $ (15,185)
------------
Net expenses $ 324,535
------------
Net investment income $ 122,313
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 679,107
Change in unrealized depreciation on
investments (8,308,446)
------------
Net realized and unrealized loss on
investments $(7,629,339)
------------
Net decrease in net assets from operations $(7,507,026)
============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2008 December 31, 2007
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 122,313 $ 381,955
Net realized gain on investments 679,107 5,221,457
Change in unrealized depreciation of investments (8,308,446) (1,973,444)
-------------- --------------
Net increase (decrease) in net assets resulting from operations $ (7,507,026) $ 3,629,968
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ (19,218) $ (362,113)
-------------- --------------
Total distributions $ (19,218) $ (362,113)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5) $ (3,172,655) $ (8,794,028)
-------------- --------------
Net decrease in net assets $(10,698,899) $ (5,526,173)
NET ASSETS:
At beginning of period 57,749,770 63,275,943
-------------- --------------
At end of period $ 47,050,871 $ 57,749,770
============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD $ 122,362 $ 19,267
============== ==============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
Six Months
Ended June 30 Year Ended December 31,
----------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004 2003(3)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 14.520 $ 13.790 $ 12.420 $ 11.780 $ 10.530 $ 8.570
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.031 $ 0.091 $ 0.062 $ 0.077 $ 0.053 $ 0.029
Net realized and unrealized gain (loss) (1.956) 0.728 1.374 0.651 1.247 1.958
--------- --------- --------- --------- --------- ---------
Total income (loss) from investment
operations $ (1.925) $ 0.819 $ 1.436 $ 0.728 $ 1.300 $ 1.987
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income $ (0.005) $ (0.089) $ (0.066) $ (0.088) $ (0.050) $ (0.027)
--------- --------- --------- --------- --------- ---------
Total distributions $ (0.005) $ (0.089) $ (0.066) $ (0.088) $ (0.050) $ (0.027)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 12.590 $ 14.520 $ 13.790 $ 12.420 $ 11.780 $ 10.530
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) (13.26)%(6) 5.96% 11.57% 6.20% 12.36% 23.20%
========= ========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 47,051 $ 57,750 $ 63,276 $ 66,742 $ 65,503 $ 71,539
Ratios (As a percentage of average daily
net assets):
Net expenses 1.26%(5) 1.26% 1.26% 1.26% 1.25% 1.25%
Net expenses after custodian fee reduction(4) 1.25%(5) 1.25% 1.25% 1.25% 1.25% 1.25%
Interest expense 0.01%(5) 0.02% - % - % - % - %
Net investment income 0.47%(5) 0.63% 0.48% 0.66% 0.49% 0.31%
Portfolio turnover rate 30%(6) 55% 97% 82% 74% 143%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the six months ended June 30, 2008, and for the years ended December 31,
2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced
by a waiver of fees and/or 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:
2008 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ 0.028 $ 0.088 $ 0.062 $ 0.077 $ 0.050 $ 0.024
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses 1.31%(5) 1.28% 1.28% 1.26% 1.28% 1.31%
=========== ========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.30%(5) 1.27% 1.27% 1.25% 1.28% 1.31%
=========== ========= ========= ========= ========= =========
Interest expense 0.01%(5) 0.02% - % - % - % - %
=========== ========= ========= ========= ========= =========
Net investment income 0.42%(5) 0.61% 0.46% 0.66% 0.46% 0.26%
=========== ========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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 reinvested at the net asset value on the
reinvestment date.
(3) Certain per share amounts are based on average shares outstanding.
(4) 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.
(5) Annualized.
(6) Not annualized.
See notes to financial statements
Wright International Blue Chip Equities Fund (WIBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2008 (UNAUDITED)
Shares Value
EQUITY INTERESTS - 99.6%
AUSTRALIA -- 3.3%
BHP Billiton, Ltd. (1) 37,746 $ 1,582,942
BlueScope Steel, Ltd. 54,343 591,384
QBE Insurance Group, Ltd. 96,101 2,065,802
Westfield Group (1) 42,808 668,793
------------
$ 4,908,921
------------
AUSTRIA -- 0.8%
Voestalpine AG 15,073 $ 1,238,472
------------
BELGIUM -- 0.6%
Fortis 59,931 $ 959,351
------------
CANADA -- 7.8%
Canadian Pacific Railway, Ltd. 11,399 $ 760,645
CGI Group, Inc. - Class A 75,142 752,494
Encana Corp. 32,913 3,028,690
Husky Energy, Inc. 29,238 1,406,928
Methanex Corp. (1) 34,651 984,320
Petro-Canada 15,285 860,408
Potash Corp. of Saskatchewan, Inc. 7,045 1,642,734
Power Financial Corp. (1) 39,992 1,307,116
Toronto-Dominion Bank (1) 16,462 1,042,515
------------
$ 11,785,850
------------
DENMARK -- 1.6%
Danske Bank A/S (Stammaktie) 18,911 $ 547,340
Novo Nordisk A/S Series B 27,272 1,786,080
------------
$ 2,333,420
------------
FINLAND -- 2.0%
Nokia Oyj 90,844 $ 2,217,072
Rautaruukki Oyj 16,249 743,968
------------
$ 2,961,040
------------
FRANCE -- 10.0%
AXA (Actions Ordinaires) (1) 17,595 $ 522,833
BNP Paribas 25,933 2,351,012
Casino Guichard-Perrachon SA (1) 10,648 1,207,905
EDF (1) 7,744 736,212
France Telecom SA 31,547 929,959
Sanofi-Aventis (1) 11,691 781,550
Schneider Electric SA 5,283 571,084
Societe Generale de France
(Actions Ord.) (1) 8,088 704,563
Total SA (1) 29,746 2,540,154
Unibail-Rodamco 11,385 2,635,398
Vallourec SA 5,918 2,078,436
------------
$ 15,059,106
------------
GERMANY -- 12.4%
Allianz AG Holding (Namensaktie) 4,374 $ 771,154
BASF AG (Stammaktie) 44,660 3,083,353
Bayerische Motoren Werke AG 11,637 560,124
Continental AG (Stammaktie) 6,839 703,297
Deutsche Bank AG (Stammaktie) 5,469 472,625
Deutsche Lufthansa AG 31,012 669,395
E.On AG (Stammaktie) 26,523 5,355,172
Gerresheimer AG 6,043 308,101
Henkel AG & Co KGaA 10,533 420,026
MAN AG 10,726 1,191,573
Muenchener Rueckversicherungs-
Gesellschaft AG 4,345 761,660
Porsche AG (Preferred Stock) 5,471 843,796
RWE AG 9,427 1,191,633
Salzgitter AG 988 181,193
Siemens AG 6,927 769,644
ThyssenKrupp AG 22,763 1,430,266
------------
$ 18,713,012
------------
GREECE -- 1.1%
Alpha Bank A.E. 28,075 $ 849,285
National Bank of Greece SA 18,942 854,137
------------
$ 1,703,422
------------
HONG KONG -- 4.1%
Cheung Kong Holdings, Ltd. 42,000 $ 566,108
CLP Holdings, Ltd. (Ordinary) 380,500 3,259,707
Hang Lung Group, Ltd. 83,000 368,832
Li & Fung, Ltd. 102,000 307,408
Sun Hung Kai Properties, Ltd. 120,000 1,628,225
------------
$ 6,130,280
------------
IRELAND -- 0.4%
Anglo Irish Bank Corp. PLC 58,746 $ 550,716
------------
ITALY -- 4.0%
Eni SpA (Azioni Ordinarie) 137,899 $ 5,149,222
Saipem SpA 18,232 856,880
------------
$ 6,006,102
------------
JAPAN -- 17.7%
Aisin Seiki Co., Ltd. 18,600 $ 610,613
Asahi Kasei Corp. 60,000 314,702
Astellas Pharma, Inc. 24,900 1,057,026
Daikin Industries, Ltd. 9,900 500,580
Fanuc, Ltd. 3,600 352,172
Honda Motor Co., Ltd. (1) 37,000 1,260,035
Kawasaki Kisen Kaisha, Ltd. 123,000 1,156,842
KDDI Corp. 119 736,418
Kobe Steel, Ltd. 196,000 562,087
Makita Corp. 32,200 1,318,315
Mitsubishi Corp. 28,000 924,485
Mitsui OSK Lines, Ltd. 204,000 2,911,674
Murata Manufacturing Co., Ltd. 9,600 452,809
Nintendo Company, Ltd. 3,000 1,695,203
Nippon Steel Corp. 299,000 1,621,857
Nippon Yusen Kabushiki Kaisha 168,000 1,618,112
Nisshin Steel Co., Ltd. 301,000 1,025,055
OKUMA Corp. (1) 52,000 517,523
Sony Corp. 10,500 459,601
Sumitomo Corp. (1) 100,300 1,319,924
Sumitomo Electric Industries, Ltd. 13,900 176,758
Sumitomo Metal Industries, Ltd. 290,000 1,277,581
Tokai Rika Co., Ltd. 25,600 530,088
Toyota Boshoku Corp. 34,800 933,975
Toyota Motor Corp. 48,100 2,273,298
Yamaha Motor Co., Ltd. (1) 50,100 939,094
------------
$ 26,545,827
------------
NETHERLANDS -- 3.4%
ASML Holding NV 18,837 $ 459,623
ING Groep NV (Aandeel) 98,942 3,157,513
Koninklijke Philips
Electronics NV (Aandeel) 42,995 1,463,878
------------
$ 5,081,014
------------
NORWAY -- 2.7%
Norsk Hydro ASA (Ordinaere Aksje) (1) 26,346 $ 384,836
StatoilHydro ASA 17,659 658,384
Telenor Group ASA * 124,990 2,350,870
Yara International ASA (1) 7,499 664,000
------------
$ 4,058,090
------------
REPUBLIC OF KOREA -- 0.5%
SK Telecom Co., Ltd. 35,984 $ 747,388
------------
SINGAPORE -- 1.5%
Jardine Cycle & Carriage, Ltd. 29,000 $ 362,860
Overseas-Chinese Banking Corp., Ltd. 147,000 883,958
Singapore Petroleum Co., Ltd. (1) 107,000 519,781
Singapore Telecommunications, Ltd. 173,000 460,943
------------
$ 2,227,542
------------
SPAIN -- 5.5%
Acciona SA (1) 2,686 $ 638,386
ACS, Actividades de Construccion
y Servicios SA (1) 13,958 701,750
Banco Santander SA 114,396 2,103,361
Repsol YPF SA (Accion) (1) 39,961 1,575,903
Telefonica SA 123,155 3,275,342
------------
$ 8,294,742
------------
SWEDEN -- 1.2%
Scania AB Class B (1) 19,037 $ 261,091
TeliaSonera AB (1) 216,677 1,606,522
------------
$ 1,867,613
------------
SWITZERLAND -- 4.8%
ABB, Ltd. 12,714 $ 362,722
Holcim, Ltd. (1) 4,712 382,798
Nestle SA 21,730 1,098,121
Novartis AG 16,011 884,173
Swatch Group AG (1) 3,924 983,312
Swiss Re AG 19,463 1,300,272
Zurich Financial Services
(Inhaberaktie) 8,633 2,216,306
------------
$ 7,227,704
------------
TAIWAN -- 0.2%
Silicon Motion Technology Corp. (1) 21,220 $ 306,629
------------
UNITED KINGDOM -- 14.0%
Anglo American PLC (Ordinary) 20,261 $ 1,421,768
AstraZeneca PLC 16,641 709,389
Barclays PLC 55,611 42,056
Barclays PLC (Ordinary) 259,522 1,505,561
BHP Billiton PLC 46,896 1,791,936
British American Tobacco PLC 19,895 688,540
Centrica PLC 189,176 1,168,055
Enterprise Inns PLC 39,067 315,662
HBOS PLC 126,228 693,346
HBOS PLC NPR 50,491 10,802
Legal & General Group (Ordinary) 443,732 884,859
Man Group PLC 170,125 2,112,702
Next PLC 12,446 240,139
Persimmon PLC (Ordinary) (1) 42,213 265,472
Rio Tinto PLC 11,070 1,323,840
Royal Bank of Scotland
Group PLC (Ordinary) 145,859 624,104
Royal Dutch Shell PLC 93,757 3,769,126
Unilever PLC 67,815 1,928,606
Vodafone Group PLC 452,344 1,342,696
William Hill PLC 41,719 265,894
------------
$ 21,104,553
------------
TOTAL EQUITY INTERESTS - 99.6%
(identified cost, 143,835,665) $149,810,794
------------
SHORT-TERM INVESTMENTS - 11.1%
State Street Navigator Securities Lending Prime
Portfolio(2) $ 16,745,820
------------
TOTAL SHORT-TERM INVESTMENTS - 11.1%
(identified cost, 16,745,820) $ 16,745,820
------------
TOTAL INVESTMENTS - 110.7%
(identified cost, 160,581,485) $166,556,614
OTHER ASSETS, LESS LIABILITIES - (10.7)% (16,130,759)
------------
NET ASSETS - 100.0% $150,425,855
============
* Non-income-producing security.
(1) All or a portion on these securities were on loan at June 30, 2008.
(2) The amount invested in State Street Navigator Securities Lending Prime
Portfolio represents cash collateral received for securities on loan as of June
30, 2008. Other Assets, Less Liabilities includes an equal and offsetting
liability of the Fund to repay collateral amounts upon the return of loaned
securities.
Top Holdings By Industry
--------------------------
% of net assets at 6/30/08
Financial......23.5% Industrials...12.7%
Materials......14.9% Other.........35.3%
Energy.........13.6%
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value including $15,848,328
of securities loaned (identified cost
$160,581,485) (Note 1A) $166,556,614
Foreign currency, at value
(cost $98,545) (Note 1B) 99,051
Cash 868,164
Receivable for fund shares sold 40,667
Dividends receivable 144,953
Receivable for securities lending 32,071
Tax reclaims receivable 138,675
Other assets 17,116
------------
Total assets $167,897,311
------------
LIABILITIES:
Payable for fund shares reacquired $ 614,391
Collateral for securities loaned 16,745,820
Accrued expenses and other liabilities 111,245
------------
Total liabilities $ 17,471,456
------------
NET ASSETS $150,425,855
============
NET ASSETS CONSIST OF:
Paid-in capital $150,153,544
Accumulated undistributed net
realized loss on investments and
foreign currency (computed on
the basis of identified cost) (8,533,863)
Unrealized appreciation of investments
(computed on the basis of identified cost) 6,018,330
Accumulated undistributed net
investment income 2,787,844
------------
Net assets applicable to outstanding shares $150,425,855
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 7,631,688
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 19.71
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2008 (Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income $ 4,274,404
Income from security lending 183,450
Miscellaneous income 10,091
Less: Foreign taxes (478,880)
------------
Total Investment Income $ 3,989,065
------------
Expenses -
Investment adviser fee (Note 3) $ 636,993
Administrator fee (Note 3) 106,000
Compensation of Trustees who are not employees
of the investment adviser or administrator 6,465
Custodian fee (Note 1F) 156,113
Distribution expenses (Note 4) 200,977
Transfer and dividend disbursing agent fees 30,940
Printing 8,845
Interest expense 21,768
Shareholder communications 1,900
Audit services 16,380
Legal services 4,550
Registration costs 10,134
Miscellaneous 10,919
------------
Total expenses $ 1,211,984
------------
Deduct -
Reimbursement from custodian $ (3,000)
Reduction of custodian fee (Note 1F) (7,763)
------------
Total deductions $ (10,763)
------------
Net expenses $ 1,201,221
------------
Net investment income $ 2,787,844
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss -
Investment transactions
(identified cost basis) $(7,126,955)
Foreign currency transactions (9,352)
------------
Net realized loss $(7,136,307)
------------
Change in unrealized depreciation on
Investments (identified cost basis) $(13,347,804)
Foreign currency (23,744)
------------
Net unrealized loss $(13,371,548)
------------
Net realized and unrealized loss
on investments $(20,507,855)
------------
Net decrease in net assets from operations $(17,720,011)
==============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2008 December 31, 2007
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 2,787,844 $ 4,142,249
Net realized gain (loss) on investment and foreign currency transactions (7,136,307) 32,400,973
Change in unrealized depreciation of investments and translations of assets
and liabilities in foreign currencies (13,371,548) (25,176,405)
--------------- --------------
Net increase (decrease) in net assets resulting from operations $(17,720,011) $ 11,366,817
--------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ -- $ (4,294,177)
From net realized gain (4,298,169) (8,544,757)
--------------- --------------
Total distributions $ (4,298,169) $(12,838,934)
--------------- --------------
Net decrease in net assets from fund share transactions (Note 5) $(11,163,891) $(33,121,129)
--------------- --------------
Net decrease in net assets $(33,182,071) $(34,593,246)
NET ASSETS:
At beginning of period 183,607,926 218,201,172
--------------- --------------
At end of period $ 150,425,855 $ 183,607,926
=============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED IN NET ASSETS
AT END OF PERIOD $ 2,787,844 $ --
=============== ==============
See notes to financial statements
Wright International Blue Chip Equities Fund (WIBC)
- -------------------------------------------------------------------------------
Six Months
Ended June 30 Year Ended December 31,
---------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(1) 2007(1) 2006(1) 2005 (1) 2004 2003(1)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 22.470 $ 22.830 $ 18.060 $ 15.070 $ 12.890 $ 9.840
---------- ---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income $ 0.355 $ 0.434 $ 0.255 $ 0.129 $ 0.128 $ 0.073
Net realized and unrealized gain (loss) (2.557) 0.755 4.859 3.028 2.140 3.044
---------- ---------- ---------- ---------- ---------- ----------
Total income (loss) from
investment operations $ (2.202) $ 1.189 $ 5.114 $ 3.157 $ 2.268 $ 3.117
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from investment income $ - $ (0.491) $ (0.320) $ (0.167) $ (0.088) $(0.067)
Distributions from capital gains (0.558) (1.058) (0.024) - - -
---------- ---------- ---------- ---------- ---------- ----------
Total distributions $ (0.558) $ (1.549) $ (0.344) $ (0.167) $ (0.088) $(0.067)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 19.710 $ 22.470 $ 22.830 $ 18.060 $ 15.070 $12.890
========== ========== ========== ========== ========== ==========
TOTAL RETURN(2) (9.82)%(4) 5.50% 28.49% 21.13% 17.71% 31.96%
========== ========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $ 150,426 $ 183,608 $ 218,201 $ 109,897 $ 62,266 $ 54,586
Ratios (As a percentage of average
daily net assets):
Net expenses 1.51%(3) 1.49% 1.46% 1.66% 1.72% 1.80%
Net expenses after custodian fee reduction 1.50%(3) 1.47% 1.37% 1.62% 1.71% 1.80%
Interest expense 0.01%(3) 0.07% - % - % - % - %
Net investment income 3.48%(3) 1.82% 1.26% 0.81% 0.97% 0.81%
Portfolio turnover rate 38%(4) 138% 116% 99% 121% 77%
- --------------------------------------------------------------------------------------------------------------------------------
(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 reinvested at the net asset value on the
reinvestment date.
(3) Annualized.
(4) Not annualized.
See notes to financial statements
WRIGHT MANAGED EQUITY TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
--------------------------------
The Wright Managed Equity Trust (the Trust), issuer of Wright Select Blue Chip
Equities Fund (WSBC) series, Wright Major Blue Chip Equities Fund (WMBC) series,
and Wright International Blue Chip Equities Fund (WIBC) series (collectively,
the Funds), is registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as a diversified, open-end, management investment company. The
Funds seek to provide total return consisting of price appreciation and current
income.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations -Equity securities listed on a U.S. securities exchange
generally are valued at the last sale price on the day of valuation or, if no
sales took place on such date, at the mean between the closing bid and asked
prices therefore on the exchange where such securities are principally traded.
Equity securities listed on the NASDAQ Global or Global Select Market generally
are valued at the NASDAQ official closing price. Unlisted or listed securities
for which closing sales prices or closing quotations are not available are
valued at the mean between the latest available bid and asked prices or, in the
case of preferred equity securities that are not listed or traded in the
over-the-counter market, by an independent pricing service. The daily valuation
of exchange-traded foreign securities generally is determined as of the close of
trading on the principal exchange on which such securities trade. Events
occurring after the close of trading on foreign exchanges may result in
adjustments to the valuation of foreign securities to more accurately reflect
their fair value as of the close of regular trading on the New York Stock
Exchange. When valuing foreign equity securities that meet certain criteria, the
Trustees have approved the use of a fair value procedure that reflects market
trading that occurs after the close of the applicable foreign markets of
comparable securities or other instruments that have a strong correlation to the
fair-valued securities.
B. Investment Transactions - Investment transactions for financial statement
purposes are accounted for on a trade date basis. Realized gains and losses on
investments sold are determined on the basis of identified cost.
C. Income - Dividend income and distributions to shareholders are recorded on
the ex-dividend date for dividends received in cash and/or securities. However,
if the ex-dividend date has passed, certain dividends from foreign securities
are recorded as the Fund is informed of the ex-dividend date. Withholding taxes
on foreign dividends and capital gains have been provided for in accordance with
the Funds' understanding of applicable countries' tax rules and rates. Interest
income is recorded on the basis of interest accrued, adjusted for amortization
of premium and discount.
D. Federal Taxes - The Trust's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of its taxable income and
all or substantially all of its net realized capital gains. Accordingly, no
provision for federal income or excise tax is necessary. At December 31, 2007,
WMBC, for federal income tax purposes, had capital loss carryovers of
$14,968,848 which will reduce the Fund's taxable income arising from future net
realized gain on investment transactions, if any, to the extent permitted by the
Code, and thus will reduce the amount of the distributions to shareholders which
would otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax. Such capital loss carryovers will expire on December 31,
2010 ($12,738,080) and December 31, 2011 ($2,230,768).
As of June 30, 2008, there are no uncertain tax positions that would require
financial statement recognition, de-recognition, or disclosure. Each of the
Fund's federal tax returns filed in the 3-year period ended December 31, 2007
remains subject to examination by the Internal Revenue Service.
E. Expenses - The majority of expenses of each Fund are directly identifiable to
an individual fund. Expenses which are not readily identifiable to a specific
fund are allocated taking into consideration, among other things, the nature and
type of expense and the relative size of the funds.
F. Expense Reduction - State Street Bank & Trust Company (SSBT) serves as
custodian to the Funds. Pursuant to the custodian agreement, SSBT receives a fee
reduced by credits which are determined based on the average daily cash balance
the Funds maintain with SSBT. All credit balances, if any, used to reduce each
Fund's custodian fees are reported as a reduction of expenses in the Statement
of Operations.
G. Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are translated each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investment securities and income and expenses denominated in
foreign currencies are translated into U.S. dollars based upon currency exchange
rates in effect on the respective dates of such transactions. Recognized gains
or losses on investment transactions attributable to changes in foreign currency
exchange rates are recorded for financial statement purposes as net realized
gains and losses on investments. That portion of unrealized gains and losses on
investments that results from fluctuations in foreign currency exchange rates is
not separately disclosed.
H. Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of income and expense during the reporting period. Actual
results could differ from those estimates.
I. Indemnifications - Under each Fund's organizational documents, its officers
and Trustees may be indemnified against certain liabilities and expenses arising
out of the performance of their duties to the Funds, and shareholders are
indemnified against personal liability for the obligations of the Funds.
Additionally, in the normal course of business, the Funds enter into agreements
with service providers that may contain indemnification clauses. Each Fund's
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Funds that have not yet occurred.
J. Interim Financial Statements - The interim financial statements relating to
June 30, 2008 and for the six months then ended have not been audited by an
independent registered public accounting firm, but in the opinion of the Trust's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
-------------------------------
It is the present policy of the Trust to make annual distributions of all or
substantially all of the net investment income of WSBC, WMBC and WIBC and to
distribute annually all or substantially all of the net realized capital gains
of WSBC, WMBC and WIBC. Distributions to shareholders are recorded on the
ex-dividend date. Shareholders may reinvest income and capital gain
distributions in additional shares of the same Fund at the net asset value as of
the ex-dividend date or, at the election of the shareholder, receive
distributions in cash. The Fund distinguishes between distributions on a tax
basis and a financial reporting basis. Accounting principles generally accepted
in the United States of America require that only distributions in excess of tax
basis earnings and profits be reported in the financial statements as a return
of capital. Permanent differences between book and tax accounting relating to
distributions are reclassified to paid-in capital. For tax purposes,
distributions from short-term capital gains are considered to be from ordinary
income.
3 Investment Adviser Fee and Other Transactions with Affiliates
----------------------------------------------------------------
The investment adviser fee is earned by Wright Investor Services, Inc. (Wright),
as compensation for investment advisory services rendered to the Funds. The fee
is computed at an annual rate of 0.79% of average daily net assets for WIBC, and
at an annual rate of 0.60% of average net assets for WSBC and WMBC, and is
payable monthly. For the six months ended June 30, 2008 the fee and percentage
of average daily net assets, for each of the Funds was as follows:
Fund Fee Percentage of Net Assets
- -------------------------------------------------------------------------
WSBC $ 61,983 0.60%
WMBC 155,783 0.60%
WIBC 636,993 0.79%
The administration fee is earned by Eaton Vance Management for administering the
business affairs of each of the Funds and is computed at an annual rate of 0.12%
for WSBC and WMBC, and 0.13% for WIBC of each Fund's average daily net assets.
For the six months ended June 30, 2008, the administration fee for WSBC, WMBC
and WIBC amounted to $12,397, $31,156 and $106,000, respectively.
Wright has agreed to reimburse expenses to the extent that total annual
operating expenses exceed 1.25% of the average daily net assets of WSBC and WMBC
through April 30, 2009. Thereafter, the reimbursement may be changed or
terminated at any time. Pursuant to this agreement, Wright reimbursed expenses
to WSBC in the amount of $34,659 for the six months ended June 30, 2008.
4 Distribution Plans
---------------------
The Trust has in effect adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the 1940 Act. The Plan provides that each of the Funds will pay Wright
Investors' Service Distributors, Inc. (WISDI) (Principal Underwriter), a
wholly-owned subsidiary of The Winthrop Corporation and an affiliate of Wright,
a distribution and service fee of 0.25% of each fund's average daily net assets
for distribution services and facilities provided to the Funds by Wright, as
well as for personal service and/or maintenance of shareholder accounts.
Distribution and services fees paid or accrued to WISDI for the six months ended
June 30, 2008 for WSBC, WMBC and WIBC were $25,826, $64,909, and $200,977,
respectively. Under a written agreement in effect through April 30, 2009, WISDI
has agreed to waive a portion of its distribution fees and assumes operating
expenses to the extent necessary to limit expense ratios to 1.25% after
custodian fee reductions, if any, for both WSBC and WMBC. Pursuant to this
agreement, the principal underwriter made a reduction of its fees of $25,826 and
$12,512 on behalf of WSBC and WMBC, respectively. In addition, the Trustees have
adopted a service plan (the Service Plan) which allows the funds to reimburse
the Principal Underwriter for payments to intermediaries for providing account
administration and account maintenance services to their customers who are
beneficial owners of shares. The combined amount of service fee payable under
the Service Plan and Rule 12b-1 distribution may not exceed 0.25% of the average
daily net assets of the Funds, annually. For the six months ended June 30, 2008,
the funds did not accrue or pay any service fees.
5 Investment Transactions
Purchases and sales of investments, other than short-term obligations were as
follows:
Six Months Ended June 30, 2008
------------------------------------------------
WSBC WMBC WIBC
- ------------------------------------------------------------------------------
Purchases $ 6,850,540 $ 15,797,200 $ 62,041,284
================ ================ ================
Sales $ 9,356,014 $ 18,764,516 $ 71,223,127
================ ================ ================
Purchases and sales of affiliated investments:
Purchases $ - $ - $ -
================ ================ ================
Sales $ 341,068 $ - $ -
================ ================ ================
6 Shares of Beneficial Interest
-------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
Six Months Ended Year Ended
June 30, 2008 (Unaudited) December 31, 2007
------------------------- -----------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Sold 59,163 $ 582,524 131,958 $ 1,665,341
Issued to shareholders in payment of distributions declared 192,783 1,704,210 401,088 4,525,042
Redemptions (403,784) (3,892,784) (1,501,608) (18,810,209)
------------ ---------------- ------------ ----------------
Net decrease (151,838) $ (1,606,050) (968,562) $(12,619,826)
============ ================ ============ ================
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Sold 305,098 $ 4,064,041 393,484 $ 5,670,384
Issued to shareholders in payment of distributions declared 1,241 15,874 21,159 299,544
Redemptions (547,067) (7,252,570) (4,023,623) (14,763,956)
------------ ---------------- ------------ ----------------
Net decrease (240,728) $ (3,172,655) (608,980) $ (8,794,028)
============ ================ ============ ================
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Sold 658,614 $ 13,534,263 4,830,446 $115,578,462
Issued to shareholders in payment of distributions declared 191,321 3,795,810 504,859 11,019,992
Redemptions 1,389,535) (28,503,034) (6,722,679) (159,773,243)
Redemption Fees - 9,070 - 53,660
------------ ---------------- ------------- ----------------
Net decrease (539,600) $ (11,163,891) (1,387,374) $ (33,121,129)
============ ================ = ============ ================
- --------------------------------------------------------------------------------------------------------------------------------
7 Federal Income Tax Basis of Investments
--------------------------------------------
The cost and unrealized appreciation (depreciation) of the investment securities
owned at June 30, 2008, as determined on a federal income tax basis, are as
follows:
Six Months Ended June 30, 2008
----------------------------------------------
WSBC WMBC WIBC
- ------------------------------------------------------------------------------
Aggregate cost $ 17,781,217 $ 46,638,007 $ 162,653,755
================ ================ ================
Gross unrealized
appreciation 3,771,012 6,112,791 19,135,479
Gross unrealized
depreciation (2,216,923) (5,704,921) (15,232,620)
---------------- ---------------- ----------------
Net unrealized
appreciation 1,554,089 407,870 3,902,859
================ ================= ==================
- ------------------------------------------------------------------------------
8 Line of Credit
------------------
The Funds participate with other funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The Funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each Fund based on its
borrowings at an amount above the Federal Funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. At June 30, 2008, WSBC and WMBC had a balance outstanding
pursuant to this line of credit of $331,000 and $609,000, respectively.
The average borrowings and average interest rate for the six months ended June
30, 2008 are follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Average borrowing $ 180,915 $ 119,673 $ 2,419,724
Average interest rate 2% 2% 2%
- -------------------------------------------------------------------------------
9 Risks Associated With Foreign Investments
---------------------------------------------
Investing in securities issued by companies whose principal business activities
are outside the United States may involve significant risks not present in
domestic investments. For example, there is generally less publicly available
information about foreign companies, particularly those not subject to the
disclosure and reporting requirements of the U.S. securities laws. Certain
foreign issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to those
applicable to domestic issuers. Investments in foreign securities also involve
the risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitation on the removal
of funds or other assets of the Funds, political or financial instability or
diplomatic and other developments which could affect such investments. Foreign
stock markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In general, there is less
overall governmental supervision and regulation of foreign securities markets,
broker-dealers and issuers than in the United States.
10 Security Lending Agreement
----------------------------
The Wright International Blue Chip Fund has established a securities lending
agreement with SSBT as securities lending agent in which the Fund lends
portfolio securities to a broker in exchange for collateral consisting of cash
in an amount at least equal to the market value of the securities on loan. Cash
collateral is invested in State Street Navigator Securities Lending Prime
Portfolio. The Fund earns interest on the amount invested in State Street
Navigator Securities Lending Prime Portfolio, but it must pay the broker a loan
rebate fee computed as a varying percentage of the collateral received. The loan
rebate fee paid by the Fund amounted to $13,962 for the six months ended June
30, 2008. At June 30, 2008, the value of the securities loaned and the value for
the collateral amounted to $15,848,328 and $16,745,820, respectively. In the
event of counterparty default, the Fund is subject to potential loss if it is
delayed or prevented from exercising its right to dispose of the collateral. The
Fund bears risk in the event that invested collateral is not sufficient to meet
obligations due on loans. The Fund has the right under the lending agreement to
recover the securities from the borrower on demand.
11 Fair Valuation Measurements
-----------------------------
Each Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157 (FAS 157), "Fair Value Measurements", effective
January 1, 2008. FAS 157 established a three-tier hierarchy to prioritize the
assumptions, referred to as inputs, used in valuation techniques to measure fair
value. The three-tier hierarchy of inputs is summarized in the three broad
levels listed below.
o Level 1 - quoted prices in active markets for identical investments
o Level 2 - other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment speeds, credit
risk, etc.)
o Level 3 - significant unobservable inputs (including a fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
At June 30, 2008, the inputs used in valuing each Fund's investments, which are
carried at value, were as follows:
WSBC
Valuation Inputs Investments in Securities
- -------------------------------------------------------------------------------
Level 1 Quoted Prices $ 19,335,306
Level 2 Other Significant Observable Inputs -
Level 3 Significant Unobservable Inputs -
- -------------------------------------------------------------------------------
Total $ 19,335,306
WMBC
Valuation Inputs Investments in Securities
- -------------------------------------------------------------------------------
Level 1 Quoted Prices $ 47,045,877
Level 2 Other Significant Observable Inputs -
Level 3 Significant Unobservable Inputs -
- -------------------------------------------------------------------------------
Total $ 47,045,877
WIBC
Valuation Inputs Investments in Securities
- --------------------------------------------------------------------------------
Level 1 Quoted Prices $ 166,556,614
Level 2 Other Significant Observable Inputs -
Level 3 Significant Unobservable Inputs -
- -------------------------------------------------------------------------------
Total $ 166,556,614
The Funds held no investments or other financial instruments as of December 31,
2007 whose fair value was determined using Level 3 inputs.
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2008 (UNAUDITED)
Face Coupon Maturity Current
Amount Description Rate Date Value Yield
- -------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 1.5%
$ 155,000 AEP Texas Central Transition Funding LLC 4.980% 07/01/13 $ 157,021 5.0%
180,000 PSE&G Transition Funding LLC, Series 2001-1 A7 6.750% 06/15/16 194,307 7.3%
------------
Total Asset-Backed Securities (identified cost $349,259) $ 351,328
------------
COMMERCIAL MORTGAGE-BACKED SECURITIES - 8.1%
$ 220,000 Citigroup Commercial Mortgage Trust,
Series 2004-C2 A5 4.733% 10/15/41 $ 208,239 4.5%
285,000 CS First Boston Mortgage Securities
Corp., Series 2003-C3 A5 3.936% 05/15/38 264,433 3.7%
330,000 JP Morgan Chase Commercial Mortgage Securities Corp.,
Series 2004-C3 A5 4.878% 01/15/42 313,940 4.6%
265,000 Lehman Brothers UBS, Series 2006-C6 A4 5.372% 09/15/39 251,230 5.1%
270,000 Merrill Lynch Mortgage Trust, Series 2005-LC1 A4 5.291% 01/12/44 260,249 5.1%
420,000 Merrill Lynch/Countrywide Commercial Mortgage Trust,
Series 2006-2 A4 5.909%(1) 06/12/46 414,575 5.8%
141,100 Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2 A2 4.467% 03/18/36 138,328 4.4%
------------
Total Commercial Mortgage-Backed Securities (identified cost $1,902,341) $1,850,994
------------
NON-AGENCY MORTGAGE-BACKED SECURITIES - 2.4%
$ 252,362 First Horizon Alternative Mortgage Securities,
Series 2005-AA10, 1A2 5.720%(1) 12/25/35 $ 189,945 4.3%
389,373 First Horizon Asset Securities Inc,
Series 2007-AR2, Class 1A1 5.854% 06/25/37 367,334 5.5%
------------
Total Non-Agency Mortgage-Backed Securities (identified cost 641,735) $ 557,279
------------
CORPORATE BONDS - 29.2%
AEROSPACE -- 0.5%
- ------------------
$ 115,000 Lockheed Martin Corp. 8.200% 12/01/09 $ 121,161 8.6%
AUTOMOBILE -- 0.6%
- -------------------
$ 125,000 DaimlerChrysler North America Holding Co. 7.200% 09/01/09 $ 128,606 7.4%
BANKS & MISCELLANEOUS FINANCIAL-- 2.9%
- --------------------------------------
$ 250,000 Capital One Bank USA NA 2.763% 02/23/09 $ 244,234 2.7%
235,000 HSBC Finance Corp. 6.375% 10/15/11 240,522 6.5%
200,000 Royal Bank of Scotland Group PLC 7.648% 08/31/49 195,096 7.5%
CABLE TV-- 0.9%
- ---------------
$ 100,000 Comcast Cable Communications Holdings 5.875% 02/15/18 $ 96,382 5.7%
125,000 Time Warner, Inc. 5.875% 11/15/16 118,060 5.5%
COMMUNICATIONS EQUIPMENT-- 0.6%
- -------------------------------
$ 140,000 Harris Corp. 5.000% 10/01/15 $ 133,849 4.8%
DIVERSIFIED FINANCIALS-- 8.9%
- -----------------------------
$ 240,000 Ameriprise Financial, Inc. 5.350% 11/15/10 $ 240,920 5.4%
125,000 Bear Stearns Cos. Inc, (The) 4.550% 06/23/10 124,005 4.5%
120,000 CIT Group, Inc. 7.625% 11/30/12 99,830 6.3%
235,000 Citigroup, Inc. 6.125% 11/21/17 225,925 5.9%
225,000 General Electric Capital Corp. 6.750% 03/15/32 227,233 6.8%
225,000 Genworth Global Funding Trusts 5.200% 10/08/10 225,180 5.2%
235,000 Goldman Sachs Group, Inc. (The) 6.150% 04/01/18 228,398 6.0%
245,000 International Lease Finance Corp. 5.875% 05/01/13 218,806 5.2%
165,000 Lehman Brothers Holdings Capital Trust V 5.857% 11/29/49 107,747 3.8%
125,000 Merrill Lynch & Co., Inc. 6.050% 05/16/16 115,488 5.6%
210,000 National Rural Utilities Cooperative Finance Corp. 7.250% 03/01/12 223,725 7.7%
ELECTRIC UTILITIES-- 3.2%
- -------------------------
$ 115,000 American Electric Power 5.250% 06/01/15 $? 110,908 5.1%
90,000 Dominion Resources, Inc. 6.300% 03/15/33 84,558 5.9%
115,000 Duke Energy Indiana, Inc. 5.000% 09/15/13 113,077 4.9%
115,000 Exelon Corp. 4.900% 06/15/15 105,968 4.5%
215,000 FPL Group Capital, Inc. 5.350% 06/15/13 218,154 5.4%
100,000 Spectra Energy Capital LLC 7.500% 10/01/09 102,014 7.7%
FOOD - RETAIL-- 0.5%
- --------------------
$ 115,000 Kraft Foods, Inc. 6.000% 02/11/13 $? 116,303 6.1%
INFORMATION TECHNOLOGY-- 0.9%
- -----------------------------
$ 195,000 Oracle Corp. 5.000% 01/15/11 $? 198,914 5.1%
INSURANCE -- 1.9%
- ------------------
$ 130,000 Fund American Cos., Inc. 5.875% 05/15/13 $? 125,890 5.7%
130,000 PartnerRe Finance II 6.440% 12/01/66 103,424 5.1%
200,000 St. Paul Travelers 5.500% 12/01/15 197,706 5.4%
MEDICAL -- 2.0%
- ---------------
$ 245,000 Bristol-Myers Squibb Co. 5.875% 11/15/36 $? 229,306 5.5%
115,000 WellPoint, Inc. 5.875% 06/15/17 111,347 5.7%
115,000 Wyeth 5.500% 02/01/14 116,068 5.6%
OIL & GAS-- 1.9%
- ----------------
$ 110,000 Canadian Natural Resources, Ltd. 5.700% 05/15/17 $? 107,947 5.6%
120,000 EnCana Corp. 5.900% 12/01/17 120,828 5.9%
110,000 Marathon Oil Corp. 6.000% 10/01/17 109,564 6.0%
100,000 Sempra Energy 6.000% 02/01/13 102,762 6.2%
RETAIL -- 0.5%
- ----------------
$ 120,000 Home Depot, Inc. 5.200% 03/01/11 $? 119,086 5.2%
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 0.8%
- -----------------------------------------
$ 165,000 Applied Materials, Inc. 7.125% 10/15/17 $? 181,254 7.8%
TELECOMMUNICATIONS -- 2.6%
- ---------------------------
$ 95,000 AT&T Wireless Services, Inc. 7.875% 03/01/11 $? 101,203 8.4%
70,000 British Telecom PLC 9.125% 12/15/30 84,368 11.0%
100,000 Deutsche Telekom International Finance BV 8.000% 06/15/10 105,836 8.5%
120,000 France Telecom SA 7.750% 03/01/11 127,162 8.2%
175,000 Verizon Global Funding Corp. 7.750% 12/01/30 188,515 8.3%
TRANSPORTATION -- 0.5%
- -----------------------
$ 125,000 Burlington Northern Santa Fe Corp. 5.650% 05/01/17 $? 122,400 5.5%
------------
Total Corporate Bonds (identified cost $6,965,429) $ 6,719,729
------------
GOVERNMENT INTERESTS - 57.8%
AGENCY MORTGAGE-BACKED SECURITIES-- 45.7%
- -----------------------------------------
$ 245,254 FHLMC Gold Pool #A32600 5.500% 05/01/35 $ 242,342 5.4%
69,220 FHLMC Gold Pool #C01646 6.000% 09/01/33 70,333 6.1%
46,032 FHLMC Gold Pool #C27663 7.000% 06/01/29 48,694 7.4%
153,239 FHLMC Gold Pool #C47318 7.000% 09/01/29 164,350 7.5%
571,899 FHLMC Gold Pool #C55780 6.000% 01/01/29 583,415 6.1%
389,311 FHLMC Gold Pool #C66878 6.500% 05/01/32 404,693 6.8%
243,732 FHLMC Gold Pool #C91046 6.500% 05/01/27 251,956 6.7%
93,983 FHLMC Gold Pool #D66753 6.000% 10/01/23 96,082 6.1%
15,981 FHLMC Gold Pool #E00903 7.000% 10/01/15 16,787 7.4%
371,274 FHLMC Gold Pool #G01035 6.000% 05/01/29 378,287 6.1%
115,229 FHLMC Gold Pool #G02662 7.500% 07/01/34 124,808 8.1%
184,250 FHLMC Gold Pool #G03930 6.000% 05/01/29 187,922 6.1%
290,656 FHLMC Gold Pool #H19018 6.500% 08/01/37 296,469 6.6%
243,947 FHLMC Gold Pool #K30262 5.000% 11/01/47 231,293 4.7%
136,738 FHLMC Gold Pool #N30514 5.500% 11/01/28 135,433 5.4%
408,963 FHLMC Gold Pool #P00024 7.000% 09/01/32 428,735 7.3%
63,288 FHLMC Gold Pool #P50031 7.000% 08/01/18 66,928 7.4%
51,702 FHLMC Gold Pool #P50064 7.000% 09/01/30 54,675 7.4%
161,544 FHLMC Pool #1B1291 4.400%(1) 11/01/33 162,315 4.4%
566,879 FHLMC Pool #1G0233 5.001%(1) 05/01/35 572,140 5.0%
130,280 FHLMC Pool #781071 5.183%(1) 11/01/33 129,196 5.1%
106,050 FHLMC Pool #781804 5.061%(1) 07/01/34 105,868 5.1%
53,620 FHLMC Pool #781884 5.146%(1) 08/01/34 54,054 5.2%
123,335 FHLMC Pool #782862 5.004%(1) 11/01/34 124,427 5.0%
172,844 FHLMC Pool #783190 5.864% 03/01/37 175,698 6.0%
301,343 FHLMC Series 1983 Z 6.500% 12/15/23 315,143 6.8%
305,180 FHLMC Series 2044 PE 6.500% 04/15/28 320,570 6.8%
132,552 FNMA Pool #253057 8.000% 12/01/29 144,126 8.7%
147,061 FNMA Pool #254232 6.500% 03/01/22 152,884 6.8%
47,700 FNMA Pool #254845 4.000% 07/01/13 47,462 4.0%
47,581 FNMA Pool #254863 4.000% 08/01/13 46,897 3.9%
34,239 FNMA Pool #479477 6.000% 01/01/29 34,875 6.1%
37,780 FNMA Pool #489357 6.500% 03/01/29 39,297 6.8%
28,089 FNMA Pool #535332 8.500% 04/01/30 30,938 9.4%
201,656 FNMA Pool #545407 5.500% 01/01/32 200,171 5.5%
47,977 FNMA Pool #545782 7.000% 07/01/32 51,196 7.5%
41,601 FNMA Pool #597396 6.500% 09/01/31 43,218 6.8%
346,749 FNMA Pool #725419 4.500% 10/01/33 323,195 4.2%
67,083 FNMA Pool #725866 4.500% 09/01/34 62,421 4.2%
173,039 FNMA Pool #738630 5.500% 11/01/33 171,602 5.5%
420,521 FNMA Pool #745467 5.776%(1) 04/01/36 425,810 5.8%
204,715 FNMA Pool #747529 4.500% 10/01/33 190,809 4.2%
232,842 FNMA Pool #753189 4.000% 12/01/33 211,362 3.6%
709,017 FNMA Pool #781893 4.500% 11/01/31 664,133 4.2%
236,063 FNMA Pool #807804 5.500% 03/01/35 233,440 5.4%
72,635 FNMA Pool #809888 4.500% 03/01/35 67,429 4.2%
154,985 FNMA Pool #906455 5.984% 01/01/37 157,210 6.1%
169,816 GNMA II Pool #2630 6.500% 08/20/28 176,241 6.7%
52,479 GNMA II Pool #2671 6.000% 11/20/28 53,531 6.1%
7,686 GNMA II Pool #2909 8.000% 04/20/30 8,392 8.7%
19,318 GNMA II Pool #2972 7.500% 09/20/30 20,707 8.0%
7,102 GNMA II Pool #2973 8.000% 09/20/30 7,755 8.7%
75,933 GNMA II Pool #3095 6.500% 06/20/31 78,701 6.7%
203,149 GNMA Pool #374892 7.000% 02/15/24 216,906 7.5%
48,180 GNMA Pool #376400 6.500% 02/15/24 50,094 6.8%
72,881 GNMA Pool #379982 7.000% 02/15/24 77,816 7.5%
211,951 GNMA Pool #393347 7.500% 02/15/27 228,335 8.1%
76,477 GNMA Pool #410081 8.000% 08/15/25 83,728 8.8%
36,462 GNMA Pool #427199 7.000% 12/15/27 38,919 7.5%
20,559 GNMA Pool #436214 6.500% 02/15/13 21,330 6.7%
20,788 GNMA Pool #442996 6.000% 06/15/13 21,457 6.2%
103,379 GNMA Pool #448490 7.500% 03/15/27 111,370 8.1%
53,012 GNMA Pool #458762 6.500% 01/15/28 55,117 6.8%
74,053 GNMA Pool #460726 6.500% 12/15/27 76,994 6.8%
29,363 GNMA Pool #463839 6.000% 05/15/13 30,307 6.2%
16,469 GNMA Pool #488924 6.500% 11/15/28 17,123 6.8%
15,988 GNMA Pool #510706 8.000% 11/15/29 17,515 8.8%
82,577 GNMA Pool #581536 5.500% 06/15/33 82,536 5.5%
U.S. GOVERNMENT AGENCIES-- 3.7%
- -------------------------------
$ 425,000 Fannie Mae 3.250% 04/09/13 $ 409,411 3.1%
250,000 Fannie Mae 6.250% 05/15/29 283,690 7.1%
150,000 Federal Home Loan Bank 5.000% 11/17/17 153,222 5.1%
U.S. TREASURIES-- 8.4%
- ----------------------
$ 95,000 U.S. Treasury Bonds 6.250% 08/15/23 $ 113,058 7.4%
45,000 U.S. Treasury Notes 5.000% 08/15/11 47,795 5.3%
500,000 U.S. Treasury Notes 4.250% 11/15/13 521,953 4.4%
380,000 U.S. Treasury Notes 4.875% 08/15/16 407,520 5.2%
325,000 U.S. Treasury Notes 4.625% 02/15/17 342,266 4.9%
350,000 U.S. Treasury Strip 0.000% 02/15/18 231,768 0.0%
115,000 U.S. Treasury Strip 0.000% 02/15/21 64,216 0.0%
460,000 U.S. Treasury Strip 0.000% 02/15/27 190,516 0.0%
------------
Total Government Interests (identified cost $13,235,766) $13,281,377
------------
TOTAL INVESTMENTS (identified cost, $23,094,530)-- 99.0% $22,760,707
OTHER ASSETS, LESS LIABILITIES-- 1.0% 237,008
------------
NET ASSETS-- 100.0% $22,997,715
============
FHLMC -Federal Home Loan Mortgage Corporation
FNMA -Federal National Mortgage Association
GNMA -Government National Mortgage Association
(1) Adjustable rate security. Rate shown is rate at period end.
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $23,094,530) (Note 1A) $ 22,760,707
Cash 19,749
Receivable for investments sold 511,759
Receivable for fund shares sold 1,146
Receivable from investment adviser 20,799
Interest receivable 199,805
Other assets 5,015
------------
Total assets $ 23,518,980
------------
LIABILITIES:
Payable for investments purchased $ 373,500
Payable for fund shares reacquired 113,929
Distributions payable 19,029
Payable to affiliate for Trustees' fees 52
Payable to affiliate for distribution fees 478
Accrued expenses and other liabilities 14,277
------------
Total liabilities $ 521,265
------------
NET ASSETS $ 22,997,715
============
NET ASSETS CONSIST OF:
Paid-in capital $ 26,636,991
Accumulated net realized loss on investments
(computed on the basis of identified cost) (3,277,103)
Unrealized appreciation of investments
(computed on the basis of identified cost) (333,823)
Distributions in excess of net investment
income (28,350)
------------
Net assets applicable to outstanding shares $ 22,997,715
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 1,893,550
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST $ 12.15
============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B)
Interest income $ 668,648
Less: Foreign taxes 53
------------
Total Investment Income $ 668,701
------------
Expenses -
Investment adviser fee (Note 3) $ 55,055
Administrator fee (Note 3) 8,564
Compensation of Trustees who are not employees
of the investment adviser or administrator 9,722
Custodian fee (Note 1F) 34,018
Distribution expenses (Note 4) 30,586
Transfer and dividend disbursing agent fees 10,101
Printing 910
Interest expense 1,154
Shareholder communications 364
Audit services 16,016
Legal services 2,730
Registration costs 9,439
Miscellaneous 5,642
------------
Total expenses $ 184,301
------------
Deduct -
Allocation of expenses to the investment advisor
(Note 3) $ (10,431)
Reimbursement from custodian (1,000)
Reduction of investment adviser fee (Note 3) (55,055)
Reduction of distribution expenses by principal
underwriter (Note 4) (30,586)
Reduction of custodian fee (Note 1F) (1,298)
------------
Total deductions $ (98,370)
------------
Net expenses $ 85,931
------------
Net investment income $ 582,770
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 102,325
Change in unrealized depreciation
on investments $ (568,440)
------------
Net realized and unrealized loss on
investments $ (466,115)
------------
Net increase in net assets from operations $ 116,655
============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -----------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2008 December 31, 2007
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 582,770 $ 1,258,878
Net realized gain (loss) on investments 102,325 (96,499)
Change in unrealized appreciation (depreciation) on investments (568,440) 300,776
-------------- --------------
Net increase in net assets resulting from operations $ 116,655 $ 1,463,155
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ (601,109) $ (1,291,075)
-------------- --------------
Total distributions $ (601,109) $ (1,291,075)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5) $ (1,506,629) $ (6,049,001)
-------------- --------------
Net decrease in net assets $ (1,991,083) $ (5,876,921)
NET ASSETS:
At beginning of period 24,988,798 30,865,719
-------------- --------------
At end of period $ 22,997,715 $ 24,988,798
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF PERIOD $ (28,350) $ (10,011)
============== ==============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -----------------------------------------------------------------------------
Six Months
Ended June 30 Year Ended December 31,
---------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 12.390 $ 12.290 $ 12.430 $ 12.770 $ 12.870 $ 13.010
--------- --------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.293 $ 0.558 $ 0.483 $ 0.465 $ 0.453 $ 0.483
Net realized and unrealized gain (loss) (0.230) 0.115 (0.082) (0.271) (0.011) (0.066)
--------- --------- --------- --------- --------- ---------
Total income from investment operations $ 0.063 $ 0.673 $ 0.401 $ 0.194 $ 0.442 $ 0.417
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from investment income $ (0.303) $ (0.573) $ (0.541) $ (0.534) $ (0.542) $ (0.557)
--------- --------- --------- --------- --------- ---------
Total distributions $ (0.303) $ (0.573) $ (0.541) $ (0.534) $ (0.542) $ (0.557)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 12.150 $ 12.390 $ 12.290 $ 12.430 $ 12.770 $ 12.870
========= ========= ========= ========= ========= =========
TOTAL RETURN(2) 0.40%(5) 5.64% 3.34% 1.54% 3.52% 3.25%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 22,998 $ 24,989 $ 30,866 $ 41,288 $ 38,213 $ 42,317
Ratios (As a percentage of average
daily net assets):
Net expenses 0.71%(4) 0.87% 0.99% 0.98% 0.96% 0.95%
Net expenses after custodian fee reduction 0.70%(4) 0.85% 0.95% 0.95% 0.95% 0.95%
Interest expense 0.01%(4) 0.01% - % - % - % - %
Net investment income 4.76%(4) 4.56% 3.96% 3.66% 3.58% 3.67%
Portfolio turnover rate 67%(5) 119% 90% 86% 64% 131%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the six months ended June 30, 2008, and for the years ended December 31,
2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced by
a waiver of fees and/or 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:
2008 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ 0.244 $ 0.490 $ 0.453 $ 0.439 $ 0.429 $ 0.455
========= ========= ========= ========= ========= =========
Ratios (As a percentage of average net assets):
Expenses 1.50%(4) 1.41% 1.23% 1.18% 1.18% 1.17%
=========== ========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.49%(4) 1.38% 1.19% 1.15% 1.17% 1.17%
=========== ========= ========= ========= ========= =========
Interest expense 0.01%(4) 0.01% - % - % - % - %
=========== ========= ========= ========= ========= =========
Net investment income 3.97%(4) 4.03% 3.72% 3.46% 3.36% 3.46%
=========== ========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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 reinvested at the net asset value on the
reinvestment date.
(3) Certain per share amounts are based on average shares outstanding.
(4) Annualized.
(5) Not annualized.
Aee notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - JUNE 30, 2008 (UNAUDITED)
Face Coupon Maturity Current
Amount Description Rate Date Value Yield
- --------------------------------------------------------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED SECURITIES -- 3.5%
$ 253,069 Bear Stearns Adj. Rate Mortgage Trust,
Series 2003-4, Class 3A1 4.962%(1) 07/25/33 $ 237,303 4.7%
747,775 Chase Mortgage Finance Corporation,
Series 2003-S13, Class A16 5.000% 11/25/33 702,601 4.7%
478,942 Countrywide Home Loans, Series 2006-J1, Class 3A1 6.000% 02/25/36 445,062 5.6%
------------
Total Non-Agency Mortgage-Backed Securities (identified cost $1,447,753) $ 1,384,966
------------
AGENCY MORTGAGE-BACKED SECURITIES -- 98.4%
$ 359,114 FHLMC Series 15 7.000% 07/25/23 $ 379,759 7.4%
41,145 FHLMC Gold Pool #C00548 7.000% 08/01/27 43,614 7.4%
125,564 FHLMC Gold Pool #C00778 7.000% 06/01/29 132,825 7.4%
189,296 FHLMC Gold Pool #C47318 7.000% 09/01/29 203,020 7.5%
382,387 FHLMC Gold Pool #C90580 6.000% 09/01/22 390,888 6.1%
96,611 FHLMC Gold Pool #D81642 7.500% 08/01/27 104,680 8.1%
154,907 FHLMC Gold Pool #D82572 7.000% 09/01/27 164,204 7.4%
97,912 FHLMC Gold Pool #E00678 6.500% 06/01/14 102,572 6.8%
104,425 FHLMC Gold Pool #E00721 6.500% 07/01/14 109,406 6.8%
103,361 FHLMC Gold Pool #E81704 8.500% 05/01/15 113,959 9.4%
518,479 FHLMC Gold Pool #E88471 7.500% 01/01/17 543,843 7.9%
140,794 FHLMC Gold Pool #E90181 6.500% 06/01/17 146,686 6.8%
102,077 FHLMC Gold Pool #G00812 6.500% 04/01/26 106,429 6.8%
230,457 FHLMC Gold Pool #G02662 7.500% 07/01/34 249,616 8.1%
1,105,501 FHLMC Gold Pool #G03930 6.000% 05/01/29 1,127,532 6.1%
200,000 FHLMC Pool #2176 OJ 7.000% 08/15/29 210,020 7.4%
119,978 FHLMC Pool #2201 C 8.000% 11/15/29 127,318 8.5%
263,064 FHLMC Pool #2259 ZM 7.000% 10/15/30 277,819 7.4%
231,340 FHLMC Pool #2410 NG 6.500% 02/15/32 243,095 6.8%
252,169 FHLMC Pool #2457 PE 6.500% 06/15/32 262,051 6.8%
212,967 FHLMC Pool #845802 6.530%(1) 06/01/24 214,676 6.6%
92,999 FHLMC Pool #845830 6.471%(1) 07/01/24 94,209 6.6%
723,833 FNMA Series 2000-T6, Class A1 7.500% 06/25/30 768,462 8.0%
308,768 FNMA Series 2003-W3, Class 2A5 5.356% 06/25/42 304,280 5.3%
425,646 FNMA Series G93-5, Class Z 6.500% 02/25/23 444,532 6.8%
850,763 FNMA Pool #252034 7.000% 09/01/28 908,613 7.5%
41,451 FNMA Pool #254227 5.000% 02/01/09 41,508 5.0%
779,423 FNMA Pool #254232 6.500% 03/01/22 810,287 6.8%
99,165 FNMA Pool #254305 6.500% 05/01/22 103,092 6.8%
17,256 FNMA Pool #254505 5.000% 11/01/09 17,420 5.0%
337,538 FNMA Pool #254588 6.000% 12/01/22 344,795 6.1%
160,908 FNMA Pool #255068 6.000% 01/01/24 164,138 6.1%
548,482 FNMA Pool #255958 5.000% 10/01/35 515,412 4.7%
874,124 FNMA Pool #259796 4.500% 08/01/33 814,745 4.2%
253,358 FNMA Pool #313953 7.000% 12/01/17 269,027 7.4%
248,763 FNMA Pool #532204 7.000% 02/01/20 262,912 7.4%
91,804 FNMA Pool #535131 6.000% 03/01/29 93,509 6.1%
132,890 FNMA Pool #535817 7.000% 04/01/31 140,463 7.4%
119,274 FNMA Pool #545133 6.500% 12/01/28 124,210 6.8%
73,600 FNMA Pool #663689 5.000% 01/01/18 73,519 5.0%
457,922 FNMA Pool #673315 5.500% 11/01/32 454,407 5.5%
271,204 FNMA Pool #705118 4.936%(1) 05/01/33 273,824 5.0%
832,198 FNMA Pool #725419 4.500% 10/01/33 775,667 4.2%
63,093 FNMA Pool #733750 6.310% 10/01/32 64,968 6.5%
601,490 FNMA Pool #735861 6.500% 09/01/33 1,291,056 6.8%
315,391 FNMA Pool #745467 5.776%(1) 04/01/36 319,357 5.8%
284,055 FNMA Pool #745630 5.500% 01/01/29 283,207 5.5%
367,660 FNMA Pool #801357 5.500% 08/01/34 364,838 5.5%
454,534 FNMA Pool #871394 7.000% 04/01/21 473,900 7.3%
275,133 FNMA Pool #889383 6.500% 03/01/23 287,150 6.8%
653,771 FNMA Pool #892522 6.117%(1) 08/01/36 669,413 6.3%
332,922 FNMA Pool #906326 5.628%(1) 01/01/37 338,164 5.7%
1,261,758 GNMA Series 1999-4 6.000% 02/20/29 1,298,206 6.2%
451,040 GNMA Series 2000-14 7.000% 02/16/30 478,386 7.4%
819,621 GNMA Series 2001-2 7.500% 07/20/28 881,960 8.1%
412,042 GNMA Series 2001-4 6.500% 03/20/31 431,651 6.8%
510,834 GNMA Series 2002-22 6.500% 03/20/32 536,240 6.8%
348,882 GNMA Series 2002-40 6.500% 06/20/32 366,409 6.8%
274,378 GNMA Series 2002-45 6.500% 06/20/32 288,053 6.8%
697,047 GNMA Series 2002-47 6.500% 07/16/32 732,924 6.8%
228,377 GNMA Series 2002-7 6.500% 01/20/32 239,517 6.8%
137,610 GNMA I Pool #448970 8.000% 08/15/27 150,687 8.8%
479,416 GNMA I Pool #487108 6.000% 04/15/29 489,266 6.1%
1,032,779 GNMA I Pool #675363 6.000% 01/15/35 1,050,611 6.1%
332,133 GNMA I Pool #780492 7.000% 09/15/24 354,694 7.5%
3,187 GNMA II Pool #1596 9.000% 04/20/21 3,488 9.9%
45,075 GNMA II Pool #2268 7.500% 08/20/26 48,389 8.1%
144,366 GNMA II Pool #2442 6.500% 06/20/27 149,864 6.7%
5,905 GNMA II Pool #2855 8.500% 12/20/29 6,475 9.3%
453,848 GNMA II Pool #3053 6.500% 03/20/31 470,390 6.7%
267,392 GNMA II Pool #3284 5.500% 09/20/32 266,368 5.5%
562,605 GNMA II Pool #3388 4.500% 05/20/33 523,965 4.2%
121,907 GNMA II Pool #3401 4.500% 06/20/33 113,534 4.2%
96,576 GNMA II Pool #3484 3.500% 09/20/33 82,249 3.0%
183,283 GNMA II Pool #3554 4.500% 05/20/34 170,424 4.2%
1,558,432 GNMA II Pool #3556 5.500% 05/20/34 1,551,683 5.5%
525,954 GNMA II pool #3689 4.500% 03/20/35 1,024,969 4.2%
2,248,076 GNMA II Pool #3747 5.000% 08/20/35 2,175,984 4.8%
264,189 GNMA II Pool #3920 6.000% 11/20/36 268,317 6.1%
499,345 GNMA II pool #4149 7.500% 05/20/38 527,455 7.9%
112,952 GNMA II Pool #601135 6.310% 09/20/32 116,091 6.5%
129,599 GNMA II Pool #601255 6.310% 01/20/33 133,070 6.5%
110,038 GNMA II Pool #608120 6.310% 01/20/33 112,985 6.5%
479,528 GNMA II Pool #648541 6.000% 10/20/35 486,259 6.1%
33,915 GNMA II Pool #723 7.500% 01/20/23 36,372 8.0%
90,004 GNMA II Pool #81161 5.500% 11/20/34 90,257 5.5%
1,680 GNMA Pool #176992 8.000% 11/15/16 1,821 8.7%
2,258 GNMA Pool #177784 8.000% 10/15/16 2,448 8.7%
10,955 GNMA Pool #192357 8.000% 04/15/17 11,904 8.7%
14,531 GNMA Pool #194057 8.500% 04/15/17 15,945 9.3%
2,354 GNMA Pool #194287 9.500% 03/15/17 2,602 10.5%
1,271 GNMA Pool #196063 8.500% 03/15/17 1,395 9.3%
6,775 GNMA Pool #211231 8.500% 05/15/17 7,434 9.3%
1,299 GNMA Pool #212601 8.500% 06/15/17 1,425 9.3%
2,345 GNMA Pool #220917 8.500% 04/15/17 2,573 9.3%
6,858 GNMA Pool #223348 10.000% 08/15/18 7,723 11.3%
7,851 GNMA Pool #228308 10.000% 01/15/19 8,837 11.3%
2,699 GNMA Pool #230223 9.500% 04/15/18 2,993 10.5%
3,479 GNMA Pool #251241 9.500% 06/15/18 3,858 10.5%
3,838 GNMA Pool #260999 9.500% 09/15/18 4,257 10.5%
5,420 GNMA Pool #263439 10.000% 02/15/19 6,122 11.3%
1,402 GNMA Pool #265267 9.500% 08/15/20 1,562 10.6%
1,738 GNMA Pool #266983 10.000% 02/15/19 1,963 11.3%
2,211 GNMA Pool #273690 9.500% 08/15/19 2,459 10.6%
796 GNMA Pool #286556 9.000% 03/15/20 873 9.9%
3,694 GNMA Pool #301366 8.500% 06/15/21 4,072 9.4%
4,610 GNMA Pool #302933 8.500% 06/15/21 5,082 9.4%
10,825 GNMA Pool #308792 9.000% 07/15/21 11,894 9.9%
1,885 GNMA Pool #314222 8.500% 04/15/22 2,080 9.4%
3,469 GNMA Pool #315187 8.000% 06/15/22 3,790 8.7%
11,658 GNMA Pool #315754 8.000% 01/15/22 12,738 8.7%
26,461 GNMA Pool #319441 8.500% 04/15/22 29,200 9.4%
8,330 GNMA Pool #325165 8.000% 06/15/22 9,102 8.7%
13,939 GNMA Pool #335950 8.000% 10/15/22 15,230 8.7%
175,999 GNMA Pool #346987 7.000% 12/15/23 187,964 7.5%
78,660 GNMA Pool #352001 6.500% 12/15/23 81,784 6.8%
29,246 GNMA Pool #352110 7.000% 08/15/23 31,235 7.5%
49,880 GNMA Pool #368238 7.000% 12/15/23 53,271 7.5%
49,158 GNMA Pool #372379 8.000% 10/15/26 53,840 8.8%
59,260 GNMA Pool #396537 7.490% 03/15/25 63,838 8.1%
44,234 GNMA Pool #399726 7.490% 05/15/25 47,651 8.1%
135,102 GNMA Pool #399788 7.490% 09/15/25 145,540 8.1%
29,836 GNMA Pool #399958 7.490% 02/15/27 32,131 8.1%
63,302 GNMA Pool #399964 7.490% 04/15/26 68,187 8.1%
66,231 GNMA Pool #410215 7.500% 12/15/25 71,371 8.1%
8,041 GNMA Pool #414736 7.500% 11/15/25 8,665 8.1%
37,991 GNMA Pool #420707 7.000% 02/15/26 40,568 7.5%
20,655 GNMA Pool #421829 7.500% 04/15/26 22,256 8.1%
11,775 GNMA Pool #431036 8.000% 07/15/26 12,897 8.8%
36,872 GNMA Pool #431612 8.000% 11/15/26 40,383 8.8%
60,230 GNMA Pool #438004 7.490% 11/15/26 64,877 8.1%
8,628 GNMA Pool #442190 8.000% 12/15/26 9,450 8.8%
21,668 GNMA Pool #449176 6.500% 07/15/28 22,528 6.8%
33,636 GNMA Pool #462623 6.500% 03/15/28 34,972 6.8%
292,746 GNMA Pool #471369 5.500% 05/15/33 292,601 5.5%
56,437 GNMA Pool #475149 6.500% 05/15/13 58,554 6.7%
140,184 GNMA Pool #489377 6.375% 03/15/29 144,988 6.6%
38,385 GNMA Pool #524811 6.375% 09/15/29 39,700 6.6%
30,804 GNMA Pool #538314 7.000% 02/15/32 32,797 7.5%
321,184 GNMA Pool #595606 6.000% 11/15/32 327,482 6.1%
41,008 GNMA Pool #602377 4.500% 06/15/18 40,295 4.4%
40,481 GNMA Pool #603377 4.500% 01/15/18 39,778 4.4%
826,144 GNMA Pool #608639 5.500% 07/15/24 830,844 5.5%
177,491 GNMA Pool #609452 4.000% 08/15/33 160,377 3.6%
274,481 GNMA Pool #616829 5.500% 01/15/25 280,034 5.6%
475,657 GNMA Pool #624600 6.150% 01/15/34 486,858 6.3%
119,217 GNMA Pool #640940 5.500% 05/15/35 118,971 5.5%
128,586 GNMA Pool #658267 6.500% 02/15/22 133,337 6.7%
58,404 GNMA Pool #780429 7.500% 09/15/26 62,935 8.1%
186,564 GNMA Pool #780977 7.500% 12/15/28 201,014 8.1%
467,366 GNMA Pool #781120 7.000% 12/15/29 498,378 7.5%
475,825 Vendee Mortgage Trust, Series 1996-1, Class 1Z 6.750% 02/15/26 497,534 7.1%
387,866 Vendee Mortgage Trust, Series 1998-1, Class 2E 7.000% 09/15/27 409,959 7.4%
------------
Total Agency Mortgage-Backed Securities (identified cost $38,467,762) $38,733,514
------------
TOTAL INVESTMENTS (identified cost $39,915,515) $40,118,480
OTHER ASSETS, LESS LIABILITIES-- (1.9)% (748,150)
------------
NET ASSETS-- 100.0% $39,370,330
============
FHLMC - Federal Home Loan Mortgage Corporation; FNMA - Federal National Mortgage
Association; GNMA - Government National Mortgage Association; (1) Adjustable
rate security. Rate shown is rate at period end.
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008 (Unaudited)
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $39,915,515) (Note 1A) $ 40,118,480
Cash 321,225
Receivable for investments sold 722,638
Receivable for fund shares sold 47,156
Interest receivable 202,046
Other assets 4,694
------------
Total assets $ 41,416,239
------------
LIABILITIES:
Payable for investments purchased $ 1,970,293
Payable for fund shares reacquired 10,366
Distributions payable 57,352
Payable to affiliate for Trustees' fees 21
Accrued expenses and other liabilities 7,877
------------
Total liabilities $ 2,045,909
------------
NET ASSETS $ 39,370,330
============
NET ASSETS CONSIST OF:
Paid-in capital $ 39,993,117
Accumulated net realized loss on investments
(computed on the basis of identified cost) (1,298,848)
Unrealized appreciation of investments
(computed on the basis of identified cost) 202,965
Accumulated undistributed net investment
income 473,096
------------
Net assets applicable to outstanding shares $ 39,370,330
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 4,130,987
=============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST $ 9.53
==============
See notes to financial statements
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2008 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1B)
Interest income $ 1,526,024
------------
Expenses -
Investment adviser fee (Note 3) $ 89,803
Administrator fee (Note 3) 17,961
Compensation of Trustees who are not employees
of the investment adviser or administrator 9,697
Custodian fee (Note 1F) 30,652
Distribution expenses (Note 4) 49,891
Transfer and dividend disbursing agent fees 11,983
Printing 1,820
Interest expense 1,204
Shareholder communications 546
Audit services 14,560
Legal services 2,730
Registration costs 8,203
Miscellaneous 3,637
------------
Total expenses $ 242,687
------------
Deduct -
Reimbursement from custodian $ (1,000)
Reduction of investment adviser fee (Note 3) (46)
Reduction of distribution expenses
by principal underwriter (Note 4) (48,623)
Reduction of custodian fee (Note 1F) (2,442)
------------
Total deductions $ (52,111)
------------
Net expenses $ 190,576
------------
Net investment income $ 1,335,448
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 105,635
Change in unrealized depreciation
on investments (736,038)
------------
Net realized and unrealized loss
on investments $ (630,403)
------------
Net increase in net assets from operations $ 705,045
============
See notes to financial statements
Wright Current Income Fund (WCIF)
- -------------------------------------------------------------------------------
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 2008 December 31, 2007
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 1,335,448 $ 1,897,291
Net realized gain (loss) on investments 105,635 (186,065)
Change in unrealized appreciation (depreciation) on investments (736,038) 512,985
-------------- --------------
Net increase in net assets resulting from operations $ 705,045 $ 2,224,211
-------------- --------------
Distributions to shareholders (Note 2)
From net investment income $ (957,428) $ (1,853,630)
From net realized gain - (36,891)
-------------- --------------
Total distributions $ (957,428) $ (1,890,521)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 5) $ (76,448) $ (1,108,939)
-------------- --------------
Net decrease in net assets $ (328,831) $ (775,249)
NET ASSETS:
At beginning of period 39,699,161 40,474,410
-------------- --------------
At end of period $ 39,370,330 $ 39,699,161
============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF PERIOD $ 473,096 $ 95,076
============== ==============
WRIGHT CURRENT INCOME FUND (WCIF)
- ------------------------------------------------------------------------------
Six Months
Ended June 30 Year Ended December 31,
------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.590 $ 9.510 $ 9.610 $ 9.890 $ 10.490 $ 10.810
---------- ---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.320 $ 0.455 $ 0.427 $ 0.400 $ 0.447 $ 0.417
Net realized and unrealized gain (loss) (0.150) 0.078 (0.063) (0.230) (0.112) (0.235)
---------- ---------- ---------- ---------- ---------- ----------
Total income from investment operations $ 0.170 $ 0.533 $ 0.364 $ 0.170 $ 0.335 $ 0.182
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from investment income $ (0.230) $ (0.444) $ (0.447) $ (0.430) $ (0.482) $ (0.502)
Distributions from capital gains - (0.009) (0.017) (0.020) (0.453) -
---------- ---------- ---------- ---------- ---------- ----------
Total distributions $ (0.230) $ (0.453) $ (0.464) $ (0.450) $ (0.935) $ (0.502)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.530 $ 9.590 $ 9.510 $ 9.610 $ 9.890 $ 10.490
========== ========== ========== ========== ========== ==========
TOTAL RETURN(2) 1.77% 5.77% 3.92% 1.76% 3.29% 1.73%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of period (000 omitted) $ 39,370 $ 39,699 $40,474 $33,861 $35,013 $36,332
Ratios (As a percentage of average
daily net assets):
Net expenses 0.97%(4) 0.96% 0.96% 0.97% 0.97% 0.95%
Net expenses after custodian fee reduction 0.95%(4) 0.95% 0.95% 0.95% 0.95% 0.95%
Interest expense 0.01%(4) 0.02% 0.02% 0.01% 0.02% 0.01%
Net investment income 6.69%(4) 4.80% 4.47% 4.12% 4.29% 4.43%
Portfolio turnover rate 15%(5) 47% 75% 103% 27% 20%
- ----------------------------------------------------------------------------------------------------------------------------------
(1) For the six months ended June 30, 2008, and for the years ended December 31,
2007, 2006, 2005, 2004, and 2003, the operating expenses of the Fund were reduced
by a waiver of fees and/or 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:
2008 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ 0.310 $ 0.429 $ 0.391 $ 0.369 $ 0.410 $ 0.401
========== ========== ========== ========== ========== ==========
Ratios (As a percentage of average net assets):
Expenses 1.22%(4) 1.23% 1.31% 1.30% 1.28% 1.12%
========== ========== ========== ========== ========== ==========
Expenses after custodian fee reduction 1.20%(4) 1.22% 1.30% 1.28% 1.25% 1.12%
========== ========== ========== ========== ========== ==========
Interest expense 0.01%(4) 0.02% 0.02% 0.01% 0.02% 0.01%
========== ========== ========== ========== ========== ==========
Net investment income 6.45%(4) 4.52% 4.13% 3.80% 3.99% 4.26%
========== ========== ========== ========== ========== ==========
- -----------------------------------------------------------------------------------------------------------------------------------
(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 reinvested at the net asset
value on the reinvestment date.
(3 Certain per share amounts are based on average shares outstanding.
(4) Annualized.
(5) Not annualized.
Wright Managed Income Trust
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
----------------------------------
The Wright Managed Income Trust (the Trust), issuer of Wright Total Return Bond
Fund (WTRB) series, and Wright Current Income Fund (WCIF) series (collectively,
the Funds), is registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as a diversified, open-end, management investment company. WTRB
seeks a superior rate of total return, consisting of a high level of income plus
price appreciation. WCIF seeks a high level of current income consistent with
moderate fluctuations of principal.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Investment Valuations - Debt obligations, including listed securities and
securities for which quotations are available, will normally be valued on the
basis of market quotations provided by independent pricing services. The pricing
services consider various factors relating to bonds and/or market transactions
to determine market value. Short-term debt securities with a remaining maturity
of sixty days or less (excluding those that are non-U.S. dollar denominated,
which typically are valued by a pricing service or dealer quotes) are valued at
amortized cost, which approximates market value. If short-term debt securities
are acquired with a remaining maturity of more than sixty days, they will be
valued by a pricing service.
Investments for which valuations or market quotations are not readily available
are valued at fair value using methods determined in good faith by or at the
direction of the Trustees of the Fund considering relevant factors, data and
information including the market value of freely tradable securities of the same
class in the principal market on which such securities are normally traded.
B. Investment Transactions - Investment transactions for financial statement
purposes are accounted for on a trade date basis. Realized gains and losses on
investments sold are determined on the basis of identified cost.
C. Interest Income - Interest income is recorded on the basis of interest
accrued, adjusted for amortization of premium or accretion of discount.
D. Federal Taxes - The Trust's policy is to comply with the provisions of the
Internal Revenue Code (the Code) applicable to regulated investment companies
and to distribute to shareholders each year substantially all of its net
investment income, and all or substantially all of its net realized gains.
Accordingly, no provision for federal income or excise tax is necessary. At
December 31, 2007, the Trust, for federal income tax purposes, had capital loss
carryovers of $3,311,851 (WTRB) and $1,331,737 (WCIF) which will reduce taxable
income arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distribution to shareholders which would otherwise be necessary to relieve the
respective fund of any liability for federal income or excise tax. Pursuant to
the Code, such capital loss carryovers will expire as follows:
Amount Expiring at December 31,
-------------------------------------------------------------------------------------------------
Fund 2008 2010 2011 2012 2013 2014 2015 Total
- --------------------------------------------------------------------------------------------------------------------------
WTRB $1,244,473 $ 508,606 -- -- $ 270,953 $1,088,772 $ 199,047 $ 3,311,851
WCIF -- -- $ 505,639 $ 469,640 196,117 -- 160,341 1,331,737
- ---------------------------------------------------------------------------------------------------------------------------
As of June 30, 2008, there are no uncertain tax positions that would require
financial statement recognition, de-recognition, or disclosure. Each of the
Funds' federal tax returns filed in the 3-year period ended December 31, 2007
remains subject to examination by the Internal Revenue Service.
E.. Expenses - The majority of expenses of each Fund are directly identifiable
to an individual fund. Expenses which are not readily identifiable to a specific
fund are allocated taking into consideration, among other things, the nature and
type of expense and the relative size of the funds.
F. Expense Reduction - State Street Bank & Trust Company (SSBT) serves as
custodian to the Funds. Pursuant to the custodian agreement, SSBT receives a fee
reduced by credits which are determined based on the average daily cash balance
the Funds maintain with SSBT. All credit balances, if any, used to reduce the
Funds' custodian fees are reported as a reduction of expenses in the Statement
of Operations.
G. Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of income and expense during the reporting period. Actual
results could differ from those estimates.
H. Indemnifications - Under each Fund's organizational documents, its officers
and Trustees may be indemnified against certain liabilities and expenses arising
out of the performance of their duties to the Funds, and shareholders are
indemnified against personal liability for the obligations of the Funds.
Additionally, in the normal course of business, the Funds enters into agreements
with service providers that may contain indemnification clauses. The Funds
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Funds that have not yet occurred.
I. Interim Financial Statements - The interim financial statements relating to
June 30, 2008 and for the six months then ended have not been audited by an
independent registered public accounting firm, but in the opinion of the Trust's
management reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
--------------------------------
The net investment income of each Fund is determined daily, and substantially
all of the net investment income so determined is declared daily as a dividend
to shareholders of record at the time of declaration. Distributions are
generally paid monthly. Distributions of realized capital gains (reduced by
available capital loss carryforwards from prior years, if any) are made at least
annually. Shareholders may reinvest income and capital gain distributions in
additional shares of the same Fund at the net asset value as of the reinvestment
date or, at the election of the shareholder, receive distributions in cash. The
Funds distinguish between distributions on a tax basis and a financial reporting
basis. Accounting principles generally accepted in the United States of America
require that only distributions in excess of tax basis earnings and profits be
reported in the financial statements as a return of capital. Permanent
differences between book and tax accounting relating to distributions are
reclassified to paid-in capital.
3 Investment Adviser Fee and Other Transactions With Affiliates
-----------------------------------------------------------------
The investment adviser fee is earned by Wright Investor Services, Inc. (Wright)
as compensation for investment advisory services rendered to the Funds. The fee
is computed at an annual rate of 0.45% of average daily net assets for WTRB and
WCIF, and is payable monthly. For the six months ended June 30, 2008 the fee and
percentage of average daily net assets, for each of the Funds was as follows:
Fund Fee Percentage of Net Assets
- -------------------------------------------------------------------------------
WTRB $55,055 0.45%
WCIF 89,803 0.45%
The administration fee is earned by Eaton Vance Management for administering the
business affairs of each of the Funds and is computed at an annual rate of 0.07%
of the average daily net assets for WTRB and at an annual rate of 0.09% of the
average daily net assets of WCIF. For the six months ended, the administration
fee for WTRB and WCIF amounted to $8,564 and $17,961, respectively.
Wright has agreed to reimburse expenses to the extent that total annual
operating expenses exceed 0.95% of the average daily net assets of each of WTRB
and WCIF, respectively, through April 30, 2009. Thereafter, the reimbursement
may be changed or terminated at any time. In addition, effective March 22, 2007
and August 28, 2007, Wright and Wright Investors' Service Distributors, Inc.,
have voluntarily agreed to limit the operating expenses of WTRB to 0.70%, after
custodian fee reductions. Such voluntary limitation may be terminated at any
time. Pursuant to this agreement, Wright made reductions of its investment
adviser fee by $55,055 and $46 for WTRB and WCIF, respectively and was allocated
expenses of $11,475 for WTRB, for the six months ended June 30, 2008.
4 Distribution Plans
------------------
The Trust has in effect a Distribution Plan (the Plan) pursuant to Rule 12b-1 of
the 1940 Act. The Plan provides that each of the Funds will pay Wright
Investors' Service Distributors, Inc. (Principal Underwriter), a wholly-owned
subsidiary of The Winthrop Corporation and an affiliate of Wright, a
distribution and service fee of 0.25% per annum of the average daily net assets
of each Fund for distribution services and facilities provided to each Fund by
the Principal Underwriter, as well as for personal services and/or the
maintenance of shareholder accounts. Distribution and service fees paid or
accrued to the Principal Underwriter for the six months ended June 30, 2008 for
WTRB and WCIF amounted to $30,586 and $49,891, respectively. Pursuant to a
written agreement (Note 3) the Principal Underwriter made a reduction of its
fees of $30,586 and $48,623 on behalf of WTRB and WCIF, respectively. In
addition, the Trustees have adopted a service plan (the Service Plan) which
allows the Funds to reimburse the Principal Underwriter for payments to
intermediaries for providing account administration and personal and account
maintenance services to their customers who are beneficial owners of each Fund's
shares. The combined amount of service fees payable under the Service Plan and
Rule 12b-1 distribution fees may not exceed 0.25% annually of each Fund's
average daily net assets. For the six months ended June 30, 2008, the Funds did
not accrue or pay any service fees.
5 Investment Transactions
---------------------------
Purchases and sales (including maturities and paydowns) of investments, other
than short-term obligations, were as follows:
WTRB WCIF
- ------------------------------------------------------------------------------
Purchases -
Non-U.S. Gov't & Agency Obligations $ 3,880,440 $ 6,872
---------------- ----------------
U.S Gov't & Agency Obligations $12,271,002 $10,107,635
---------------- ----------------
Sales -
Non-U.S. Gov't & Agency Obligations $ 2,765,758 $ -
---------------- ----------------
U.S Gov't & Agency Obligations $ 13,571,644 $ 6,028,263
---------------- ----------------
- -------------------------------------------------------------------------------
6 Shares of Beneficial Interest
-------------------------------
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
Six Months Ended Year Ended
June 30, 2008 December 31, 2007
------------- -----------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
Wright Total Return Bond Fund--
Sold................................................. 195,708 $ 2,428,509 298,879 $ 3,663,258
Issued to shareholders in payment of distributions
declared............................................ 38,518 476,622 81,211 994,635
Redemptions.......................................... (357,314) (4,411,760) (875,601) (10,706,894)
------------ --------------- ------------ ---------------
Net decrease..................................... (123,088) $ (1,506,629) (495,511) $ (6,049,001)
============ =============== ============ ===============
Wright Current Income Fund--
Sold................................................. 499,632 $ 4,814,318 788,878 $ 7,459,407
Issued to shareholders in payment of distributions
declared............................................ 67,296 648,036 136,552 1,294,792
Redemptions.......................................... (576,517) (5,538,802) (1,041,404) (9,863,138)
Issued to Wright U.S. Government Near Term Fund...... - - - -
------------ --------------- ------------ ---------------
Net increase (decrease).......................... (9,589) $ (76,448) (115,974) $ (1,108,939)
============ =============== ============ ===============
7 Federal Income Tax Basis of Investments
--------------------------------------------
The cost and unrealized appreciation (depreciation) of the investment securities
owned at June 30, 2008, as computed on a federal income tax basis, are as
follows:
WTRB WCIF
- -------------------------------------------------------------------------------
Aggregate cost $ 23,170,036 $ 8,324,876
================ ================
Gross unrealized appreciation 148,067 772,226
Gross unrealized depreciation (557,396) (180,380)
---------------- ----------------
Net unrealized appreciation (depreciation) (409,329) 591,846
================ ================
- -------------------------------------------------------------------------------
8 Line of Credit
----------------
The Funds participate with other Funds managed by Wright in a committed $10
million unsecured line of credit agreement with a bank. The Funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each Fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$10 million line of credit, is allocated among the participating funds at the
end of each quarter. At June 30, 2008, there were no outstanding balances
pursuant to this line of credit.
The average borrowings and average interest rate for the six months ended June
30, 2008 are as follows:
WTRB WCIF
- -------------------------------------------------------------------------------
Average borrowing $ 21,628 $ 28,864
Average interest rate 2% 2%
- -------------------------------------------------------------------------------
9 Fair Valuation Measures
-------------------------
Each Fund adopted Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 157 (FAS 157), "Fair Value Measurements", effective
January 1, 2008. FAS 157 established a three-tier hierarchy to prioritize the
assumptions, referred to as inputs, used in valuation techniques to measure fair
value. The three-tier hierarchy of inputs is summarized in the three broad
levels listed below.
o Level 1 - quoted prices in active markets for identical investments
o Level 2 - other significant observable inputs (including quoted prices
for similar investments, interest rates, prepayment
speeds, credit risk, etc.)
o Level 3 - significant unobservable inputs (including a fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
At June 30, 2008, the inputs used in valuing each Fund's investments, which are
carried at value, were as follows:
WTRB
Valuation Inputs Investments in Securities
--------------------------------------------------------------
Level 1 Quoted Prices $ -
Level 2 Other Significant Observable Inputs 22,760,707
Level 3 Significant Unobservable Inputs -
-------------------------------------------------------------
Total $ 22,760,707
WCIF
Valuation Inputs Investments in Securities
-------------------------------------------------------------
Level 1 Quoted Prices $ -
Level 2 Other Significant Observable Inputs 38,916,722
Level 3 Significant Unobservable Inputs -
--------------------------------------------------------------
Total $ 38,916,722
The Funds held no investments or other financial instruments as of December 31,
2007 whose fair value was determined using Level 3 inputs.
BOARD OF TRUSTEES
ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
In evaluating the Investment Advisory Contracts, the Independent Trustees met
separately from the Interested Trustees and reviewed and considered materials
furnished by Wright, including information regarding Wright, its affiliates and
personnel, operations and financial condition. The Independent Trustees
discussed with representatives of Wright the portfolio management and operations
of the funds and the capabilities of Wright to provide advisory and other
services to each fund. The Independent Trustees considered, among other things,
the following:
Equity Funds and Income Funds
- -------------------------------
o Whether the advisory arrangements are fair and reasonable relative to
possible alternative arrangements. The Trustees concluded that the
advisory fees paid by the funds are reasonable.
o Whether advisory services are being provided as agreed to. The Trustees
concluded that the services being provided by the adviser are as agreed
to in the advisory contract.
o Whether compensation paid by a Fund to the adviser is fair and
reasonable in relation to the services provided and the charges by
other advisers for similar services. The Trustees concluded that the
compensation paid by the funds to the adviser is in the average range
of compensation charged by other advisers for similar services and is
reasonable.
o Fees and expense ratios compared to similar funds. The Trustees
concluded that the expense ratios of the funds are lower than the
average for similar funds.
o Performance and relationship of fees and performance. The Trustees
concluded that in most cases the performance results of the funds were
at least in the mid-range of similar funds while their expense ratios
were generally lower.
o Analysis of each Fund's profitability to the adviser. The Trustees
concluded that the profitability to the adviser of each fund was
reasonable and not excessive.
o The adviser's financial condition and the overall organization of the
adviser.
o Sales and redemption data. The Trustees reviewed the information which
had been provided to them relating to sales and redemptions and
Wright's marketing strategies to try to increase assets under
management.
o The economic outlook and the general investment outlook in the relevant
investment markets. The Trustees have received a presentation on the
overall economic outlook and investment outlook of both equity and
income markets at each Board meeting.
o The resources devoted to compliance efforts undertaken by the adviser
and the record of compliance with investment policies and restrictions
and with policies on personal securities transactions. The Trustees
have approved and met separately with the Fund's Chief Compliance
Officer.
Additional Considerations for Equity Funds
- --------------------------------------------
o The allocation of brokerage and any benefits received by the adviser as
a result of brokerage allocation. The Trustees reviewed the Trading
Analysis included in the material provided in advance of the meeting.
The Independent Trustees' Committee did not consider any single factor as
controlling in their consideration of the renewal of the Investment Advisory
Contracts, nor are the considerations described above all encompassing. Based on
their consideration of all factors which they considered material, and with the
assistance of independent counsel, the Independent Trustees' Committee concluded
that the renewal of the Investment Advisory Contract with its current fee
structure is in the interests of the shareholders.
IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF
SHAREHOLDER DOCUMENTS, PORTFOLIO HOLDINGS AND PROXY VOTING
Wright Managed Investment Funds
Wright Investors' Service, Inc.
Wright Investors' Service Distributors, Inc.
Eaton Vance Management
Privacy Policy
---------------------
Wright is committed to ensuring your financial privacy. Each of the above
financial institutions has the following policy in effect with respect to
nonpublic personal information about its customers:
o The only such information we collect is information received from
customers, through application forms or otherwise, and information which
we necessarily receive in connection with your Wright fund transactions.
o We will not disclose this information to anyone except as required or
permitted by law. Such disclosure includes that made to other companies
such as transfer agents and their employees and to our employees, in each
case as necessary to service your account.
o We have adopted policies and procedures (including physical, electronic
and procedural safeguards) that are designed to protect the
confidentiality of this information.
For more information about Wright's privacy policies please feel free to
call 1-800-888-9471.
IMPORTANT NOTICE REGARDING DELIVERY OF SHAREHOLDERS DOCUMENTS
---------------------------------------------------------------
The Securities and Exchange Commission permits funds to deliver only one
copy of shareholder documents, including prospectuses, proxy statements and
shareholder reports, to fund investors with multiple accounts at the same
residential or post office box address. This practice is often called
"householding" and it helps eliminate duplicate mailings to shareholders.
Wright, or your financial adviser, may household the mailing of your
documents indefinitely unless you instruct Wright, or your financial adviser,
otherwise.
If you would prefer that your Wright documents not be householded, please
contact Wright at 1-800-888-9471, or your financial adviser.
Your instructions that householding not apply to delivery of your Wright
documents will be effective within 30 days of receipt by Wright or your
financial adviser.
PORTFOLIO HOLDINGS
---------------------------
In accordance with rules established by the SEC, the funds send semi-annual
and annual reports to shareholders that contain a complete list of portfolio
holdings as of the end of the second and fourth quarters, respectively, within
60 days of quarter-end and after filing with the SEC. The funds also disclose
complete portfolio holdings as of the end of the first and third fiscal quarters
on Form N-Q, which is filed with the SEC within 60 days of quarter-end. The
funds' complete portfolio holdings as reported in annual and semi-annual reports
and on Form N-Q are available for viewing on the SEC website at
http:/www.sec.gov and may be reviewed and copied at the SEC's public reference
room (information on the operation and terms of usage of the SEC public
reference room is available at http:/sec.gov/info/edgar/prrules.htm or by
calling 1-800-SEC-0330). After filing, the funds' portfolio holdings as reported
in annual and semi-annual reports are also available on Wright's website at
www.wisi.com and are available upon request at no additional cost by contacting
Wright at 800-888-9471.
PROXY VOTING POLICIES AND PROCEDURES
--------------------------------------------
From time to time funds are required to vote proxies related to the
securities held by the funds. The Wright Managed Funds vote proxies according to
a set of policies and procedures approved by the Funds' Board. You may obtain a
description of these policies and procedures and information on how the Funds
voted proxies relating to portfolio securities during the most recent 12-month
period ended June 30 without charge, upon request, by calling 1-800-888-9471.
This description is also available on the Securities and Exchange Commissions
website at http://www.sec.gov.
SEMI-ANNUAL REPORT
OFFICERS AND TRUSTEES OF THE FUNDS
Peter M. Donovan, President and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President
James J. Clarke, Trustee
Dorcas R. Hardy, Trustee
Richard E. Taber, Trustee
Janet E.Sanders, Secretary
Barbara E. Campbell, Treasurer
William J. Austin, Jr., Assistant Treasurer
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
Wright Investors' Service, Inc.
440 Wheelers Farms Road
Milford, Connecticut 06461
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, Connecticut 06461
(800) 888-9471
e-mail: wright@wisi.com
CUSTODIAN
State Street Bank and Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AND DIVIDEND DISBURSING AGENT
Atlantic Fund Administration, LLC
P.O. Box 588
Portland, ME 04112
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of a mutual fund unless
accompanied or preceded by a Fund's current prospectus.
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer and Principal Financial Officer. The registrant undertakes to
provide a copy of such code of ethics to any person upon request, without
charge, by calling 1-800-888-9471.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated James J. Clarke, an independent
trustee, as its audit committee financial expert. Mr.Clarke is the Principal of
Clarke Consulting, a financial management and strategic planning firm.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required in filing.
ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in Filing
ITEM 6. SCHEDULE OF INVESTMENTS
Please see schedule of investments contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in Filing.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in Filing
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in Filing
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors/trustees.
ITEM 11. CONTROLS AND PROCEDURES
a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 12. EXHIBITS
(a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a) (2) Treasurer's and President's Section 302 certification.
(b) Combined 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Wright Managed Equity Trust(On behalf of Wright Selected Blue Chip Equities
- -------------------------------------------------------------------------------
Fund, Wright Major Blue Chip Equities Fund and Wright International Blue Chip
- -------------------------------------------------------------------------------
Equities Fund)
- ---------------
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Date: August ,2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Barbara E. Campbell
------------------------
Barbara E. Campbell
Treasurer
Date: August 22,2008
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Date: August 21,2008