FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-3668
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The Wright Managed Income 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
December 31, 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
ANNUAL REPORT
DECEMBER 31, 2008
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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.
(continued on inside back cover)
TABLE OF CONTENTS
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INVESTMENT OBJECTIVES ................................INSIDE FRONT & BACK COVER
LETTER TO SHAREHOLDERS .......................................................2
MANAGEMENT DISCUSSION ........................................................4
PERFORMANCE SUMMARIES ........................................................9
FUND EXPENSES ...............................................................14
MANAGEMENT AND ORGANIZATION .................................................64
BOARD OF TRUSTEES ANNUAL APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT.......66
IMPORTANT NOTICES REGARDING PRIVACY, DELIVERY OF SHAREHOLDER DOCUMENTS,
PORTFOLIO HOLDINGS AND PROXY VOTING .........................................67
FINANCIAL STATEMENTS
THE WRIGHT MANAGED EQUITY TRUST
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Portfolio of Investments..................16
Statement of Assets and Liabilities.......19
Statement of Operations...................19
Statements of Changes in Net Assets.......20
Financial Highlights......................21
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Portfolio of Investments..................22
Statement of Assets and Liabilities.......25
Statement of Operations...................25
Statements of Changes in Net Assets.......26
Financial Highlights......................27
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Portfolio of Investments..................28
Statement of Assets and Liabilities.......31
Statement of Operations...................31
Statements of Changes in Net Assets.......32
Financial Highlights......................33
NOTES TO FINANCIAL STATEMENTS...............34
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM....................41
FEDERAL TAX INFORMATION.....................42
THE WRIGHT MANAGED INCOME TRUST
WRIGHT TOTAL RETURN BOND FUND
Portfolio of Investments..................43
Statement of Assets and Liabilities.......47
Statement of Operations...................47
Statements of Changes in Net Assets.......48
Financial Highlights......................49
WRIGHT CURRENT INCOME FUND
Portfolio of Investments..................50
Statement of Assets and Liabilities.......53
Statement of Operations...................53
Statements of Changes in Net Assets.......54
Financial Highlights......................55
NOTES TO FINANCIAL STATEMENTS...............56
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM....................62
FEDERAL TAX INFORMATION.....................63
LETTER TO SHAREHOLDERS
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January 2009
Dear Shareholders:
GLOBAL CREDIT CRUNCH AND BEAR MARKET - The year 2008 brought a
once-in-a-lifetime collapse in global financial markets, with stock prices
declining and credit conditions deteriorating virtually everywhere. No market,
whether developed or emerging; oil producer or oil consumer; capital saver or
capital spender; was spared. Storied firms like Lehman Brothers and Merrill
Lynch breathed their last in 2008, victims of reckless lending and investing.
Household net worth dwindled with house prices and stock values shrinking so
precipitously as to put economic activity into a sharp decline in the fourth
quarter. And in a cruel bit of irony, the year was punctuated by a $50 billion
Ponzi scheme that further sapped confidence and faith in American capitalism.
What the big bear markets of the postwar period did in two years (1973-74) or
three years (2000-02), 2008 did in less than 12 months, producing more fear and
volatility and negative returns than all but the most wizened of today's
investors had ever experienced. This secular decline for equities represents the
unwinding of the postwar build-up in debt throughout the U.S. financial system.
FINANCIAL CONDITIONS SHOW SIGNS OF IMPROVEMENT AS 2009 BEGINS - While risk
aversion was the order of the day last year, there were some signs as the new
year began that investors might be a bit more inclined to take on risk in 2009.
For one thing, last year's indiscriminate selling created some attractive
opportunities in the stock and credit markets. Over the past month, credit
spreads between risky securities and U.S. Treasuries have narrowed by some
three-quarters of a percentage point, and the S&P 500's price/earnings multiple
has bounced off of 20-year lows.
It may take longer for economic activity and corporate profits to turn higher.
Economic data for the month of December have been decidedly weak, and leading
indictors suggest that economic activity is likely to stay soft at least through
midyear. Given that the U.S. economy is judged to have peaked in December 2007,
a decline longer than 16 months in duration (the case in 1973-75 and 1981-82)
and deeper than the 3% peak-to-trough declines in GDP seen in those two
recessions is possible. Fortunately, U.S. monetary and fiscal policy has become
increasingly aggressive - which may set in motion inflation pressures down the
road, but that is a worry for another day.
THE ECONOMIC POLICY RESPONSE - The Federal Reserve (the "Fed") is having some
success in lowering mortgage rates. House affordability has improved
significantly due to the declines in rates and prices, and increased real estate
traffic even in the softest markets suggests that the worst of the forecasts for
how much more house prices need to decline are exaggerated. The European Central
Bank is playing catch-up in the area of interest rate reductions, but further
rate cutting is expected, and central banks everywhere are in easing mode.
The Congressional Budget Office is projecting a $1.2 trillion deficit for the
U.S. in fiscal 2009. The stimulus plan working its way toward President Obama's
signature may produce a trillion dollar deficit in 2010 as well. In the 1980s,
President Reagan's Budget Director, David Stockman famously predicted $200
billion budget deficits as far as the eye can see. Since Reagan's inauguration,
the average federal deficit has in fact been $160 billion or about 2.5% of U.S.
GDP. In today's bigger economy, a $1.2 trillion deficit equates to 8% of GDP, a
postwar record, but not entirely out of line with our history in deep recessions
- - e.g., 6% in fiscal 1983. While one wonders how many bridges to nowhere might
be included in such a budget, there is reason to think it will produce a
worthwhile stimulus for the U.S. economy.
THE TOPSY-TURVY ENVIRONMENT OF 2009: VIRTUE AS A RISK - When an individual
increases his savings, his financial condition improves. When too many
individuals boost savings, the resulting downturn in spending can crimp the
overall level of economic activity, having the perverse result of weakening
everyone's finances. For the U.S., where savings rates have been in decline for
25 years, there may be no way around an increase in savings (deferred spending)
ahead, since the Chinese and others that we have relied on to finance our growth
may no longer be willing to invest as freely in U.S. dollar assets. While
becoming more self reliant - whether it be in savings or in energy - may be a
laudable long-term objective, realistically we can't get from here to there
without a period of reduced economic growth.
While the private sector is deleveraging, the government is rapidly adding debt
- - including an unprecedented expansion of the Fed's balance sheet. Trying to
cure the economy's excess of debt by throwing trillions of dollars in new credit
facilities at the financial system is at the very least counterintuitive. The
point of this expansion of the government sector is to mitigate some of the pain
caused by the contraction in the private sector; the risk in this unbridled
growth in the public sector is a return of inflation and debasement of the U.S.
dollar. Investors have already endured a lot of pain, and workers and consumers
are increasingly finding their finances strained by the recession of 2008-09,
which stands to be the worst since 1973-75. It stands to reason in this
environment that volatility will remain elevated.
THE OUTLOOK FOR INFLATION AND THE ECONOMY - As 2009 gets under way, there is
some reason to think that the economy will get back into a growth mode before
the end of the year. The Fed's stimulation efforts and the bailout steps taken
by the Fed and Treasury have put the financial system on a sounder footing.
Policy efforts have provided new capital to financial institutions and brought
down the short-term interest rates at which banks borrow. Bond issuance picked
up late in the fourth quarter, also a signal that the credit markets are
loosening. Mortgage rates have declined, with the rate on conventional mortgages
down close to 5% in early 2009. In addition, spending power for both consumer
and businesses has benefited from the drop in energy prices, which are less than
one-third their peak levels.
Before the economy returns to a growth mode, Wright expects that GDP will
contract for at least the first two quarters of 2009 and that the recovery may
be subpar for a while thereafter. With home values still falling and stock
market values 40% below their peaks, consumer balance sheets are in need of
strengthening. Add to this the prospect of a weak jobs market through 2009 and
it looks like consumer spending, which constitutes 70% of U.S. economic
activity, will be soft for several more quarters even with the benefits of lower
energy prices and the Obama stimulus package. In the short run, we expect
inflation to moderate, possibly by a good amount. The inflationary effects of
increases in money supply resulting from the liquidity the Fed and Treasury
continue to pump into the financial system are likely to be offset to a large
extent by the deflationary pressures of a global economy operating well below
its potential. During the first half of 2009, headline inflation will be
depressed by the sharp decline in energy prices compared to a year ago, and
sellers of most consumer goods are cutting prices as much as possible to
stimulate demand. Eventually the huge increase in the nation's money supply may
contribute to higher inflation, but that shouldn't be a problem in 2009.
STOCK AND CORPORATE BONDS ARE PRICED AT ATTRACTIVE LEVELS - By virtue of the
worst markets in over 60 years, stock prices and corporate bond yield spreads
(the excess over Treasury yields) have reached levels that one would have to
consider bargain basement cheap. At their lows, stocks were discounting severe
economic distress, the worst conditions in perhaps 50 years. At their widest,
corporate yield spreads were priced for depression.
Investors struggling with what the losses of 2008 mean for their retirement
plans are understandably doubtful about trusting stocks. The 2008 financial
crisis and its resolution will have a significant impact on the U.S. economy and
financial markets for some time to come. Certainly the effects of tight credit
and a mood of risk avoidance will take a long time to be purged from the economy
even after recovery begins. One likely positive is that, to the extent that
excessively risky behavior is reduced through regulation or self-discipline, a
stronger financial system will come out of this turmoil. Human nature being what
it is, the risk/return (greed/fear) cycle will come round to these same mistakes
again, but we hope not for a long time.
We expect that over the next several years both stocks and bonds will provide
investors with positive real investment returns. 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 cheapness of equities and the fact that credit conditions
are starting to improve.
Sincerely,
/s/ Peter M. Donovan
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Peter M. Donovan
Chairman & CEO
MANAGEMENT DISCUSSION
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EQUITY FUNDS
THE YEAR 2008 BROUGHT ONCE-IN-A-LIFETIME TURMOIL TO THE GLOBAL FINANCIAL
MARKETS, WITH STOCK PRICES DECLINING AND CREDIT CONDITIONS DETERIORATING
VIRTUALLY EVERYWHERE. LAST YEAR, THE WISDOM OF DIVERSITY IN INVESTMENT
PORTFOLIOS WAS PROVEN AGAIN AS U.S EQUITIES HAD THEIR WORST YEAR IN DECADES AND
INTERNATIONAL STOCK MARKETS ALSO FELL, WHILE THE BARCLAYS CAPITAL U.S. AGGREGATE
BOND INDEX HAD A SOLIDLY POSITIVE RETURN. THE STOCK MARKET STABILIZED SOMEWHAT
AFTER REACHING ITS LOW FOR THE YEAR IN LATE NOVEMBER, PERHAPS ENCOURAGED BY THE
MYRIAD OF STEPS TAKEN BY GLOBAL POLICYMAKERS TO STEM AND EVENTUALLY REVERSE THE
DAMAGE CAUSED BY THE FINANCIAL CRISIS. STIMULATION EFFORTS FROM CENTRAL BANKERS
AROUND THE WORLD HAVE SHIFTED INTO HIGH GEAR, WITH THE U.S. FEDERAL RESERVE
CUTTING THE FED FUNDS TARGET RATE ESSENTIALLY TO ZERO. INVESTORS MAY ALSO HAVE
BEEN ENCOURAGED BY THE FACT THAT PRESIDENT-ELECT BARACK OBAMA WAS QUICK TO
ANNOUNCE KEY APPOINTMENTS TO HIS FINANCIAL TEAM AND INDICATED THAT HE WILL MOVE
QUICKLY TO ADDRESS THE FINANCIAL CRISIS. BUT WHILE THERE MAY BE SOME REASON TO
THINK THAT THE WORST OF THE CRISIS IS OVER FOR FINANCIAL INSTITUTIONS AND THE
CREDIT CRUNCH HAS EASED A BIT, THE EFFECTS OF THE CRISIS ON THE REAL ECONOMY
DEEPENED DURING THE FOURTH QUARTER. GDP DECLINED SHARPLY IN Q4. WALL STREET CUT
ITS FORECAST FOR Q4 OPERATING PROFITS FOR S&P 500 COMPANIES TO SHOW A DECLINE
FOR THE QUARTER, COMPARED TO NEARLY A 50% INCREASE EXPECTED AS RECENTLY AS
OCTOBER 1.
EVEN WITH A RECOVERY OF 20% FROM ITS NOVEMBER LOW BY YEAR END, THE S&P 500 LOST
22% IN TOTAL RETURN TERMS IN THE FOURTH QUARTER AND 37% FOR THE YEAR. COMPARED
TO ITS 2007 PEAK, THE S&P WAS DOWN 42% IN PRICE AT THE END OF 2008. FOR THE
OTHER MARKET AVERAGES, THE RESULTS WERE JUST ABOUT AS BLEAK: THE DOW LOST 18% IN
Q4 AND 32% FOR THE YEAR IN TOTAL RETURN, WHILE NASDAQ'S LOSSES WERE 24% AND 40%,
RESPECTIVELY, FOR THE QUARTER AND YEAR. AS RISKS TO ECONOMIC GROWTH INCREASED
AND THE OUTLOOK FOR CORPORATE PROFITS DETERIORATED, SMALLER STOCKS, WHICH IN
THEORY HAVE FEWER RESOURCES TO WEATHER THE FINANCIAL STORM, LAGGED BIGGER ISSUES
IN THE FOURTH QUARTER. THE S&P MIDCAP 400 LOST 26% AND THE S&P SMALLCAP 600 LOST
25%. BOTH EDGED OUT THE S&P 500 FOR ALL OF 2008 BUT THEIR LOSSES STILL TOPPED
30%. IF THERE IS A DOWNSIDE TO GLOBALIZATION, IT IS THAT FINANCIAL INSTITUTIONS
AROUND THE WORLD HAVE SUFFERED FROM HOLDING TOXIC INVESTMENTS AND EXTREME
LEVERAGE. THE SLOWDOWN IN THE REAL ECONOMY HAS CERTAINLY GONE GLOBAL. FOR THE
YEAR, THE MSCI WORLD EX U.S. STOCK INDEX LOST ABOUT 40% IN LOCAL CURRENCY; THE
OVERALL APPRECIATION OF THE DOLLAR DURING THE PERIOD INCREASED THE INDEX'S LOSS
TO 44% IN DOLLARS, COMPARED TO THE S&P 500'S 37% LOSS. IN THE FOURTH QUARTER,
THE MSCI INDEX LOST 21% IN DOLLAR TERMS, SIMILAR TO THE S&P 500'S LOSS.
AS 2009 GOT UNDERWAY, THERE WAS SOME REASON FOR OPTIMISM THAT THE ECONOMY WOULD
GET BACK INTO A GROWTH MODE BEFORE THE END OF THE YEAR. NEVERTHELESS, WRIGHT
INVESTORS' SERVICE (WIS) EXPECTS THAT THE ECONOMY WILL CONTRACT FOR AT LEAST THE
FIRST TWO QUARTERS OF 2009 AND THAT THE SUBSEQUENT RECOVERY WILL BE SUBPAR. IT
WILL TAKE SOME TIME BEFORE EFFORTS TO COMPLETELY THAW THE CREDIT MARKETS AND GET
THE ECONOMY MOVING AGAIN REVERSE THE TREND OF DECLINING PROFIT FORECASTS, AT
THIS POINT, IT LOOKS LIKE S&P 500 COMPANY PROFITS IN 2009 WILL AT BEST MATCH THE
2008 LEVEL, BUT 2010 SHOULD SEE SIGNIFICANT PROFIT GROWTH. INVESTOR CONFIDENCE
MAY SLOWLY IMPROVE OVER THE COURSE OF 2009 AS PROFIT EXPECTATIONS BOTTOM BUT THE
DAMAGE TO CONFIDENCE CAUSED BY THE RISKY BEHAVIOR OF BANKS, INVESTMENT BANKS,
HEDGE FUNDS AND OTHERS IS GOING TO TAKE A WHILE TO BE FULLY REPAIRED. THE S&P
500'S YEAR-END P/E OF ABOUT 12 TIMES NEXT 12 MONTHS' EARNINGS WAS CLOSER TO ITS
AVERAGE DURING THE DEPRESSED MARKETS OF THE 1970S AND EARLY 1980S THAN TO THE
AVERAGE OF THE LAST 20 YEARS. ONCE CONFIDENCE IS RESTORED, THERE IS ROOM FOR
SIGNIFICANT PRICE APPRECIATION IN STOCKS, AND WE EXPECT 2009 TO SEE A MODESTLY
POSITIVE REAL RETURN FROM EQUITIES.
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Total Return Year Year Year Year Year Year Year Year Year Year
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Wright Selected Blue Chip
Equities Fund (WSBC) -39.8% 11.6% 3.8% 11.1% 15.7% 30.1% -17.0% -10.2% 10.8% 5.8%
Wright Major Blue Chip
Equities Fund (WMBC) -34.9% 6.0% 11.6% 6.2% 12.4% 23.2% -24.5% -16.9% -12.5% 24.0%
Wright International Blue Chip
Equities Fund (WIBC) -47.7% 5.5% 28.5% 21.1% 17.7% 32.0% -14.5% -24.2% -17.6% 34.3%
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
The S&P MidCap 400 outperformed the S&P 500 in the first half of 2008 but lagged
in the second half as economic conditions deteriorated. The Wright Selected Blue
Chip Fund (WSBC), which is a mid-cap blend fund, lagged the S&P MidCap 400
benchmark in each of the first three quarters of 2008. In the fourth quarter,
however, WSBC's loss of 24.8% was smaller than the S&P MidCap's 25.6% loss. For
all of 2008, the WSBC lost 39.8% compared to a 36.2% loss for the S&P MidCaps.
For all of 2008, the smaller stocks in the S&P MidCap 400 outperformed the
bigger ones, and this hurt the Fund's performance for the year since it is
biased toward the more substantial stocks in the index. Reflecting this
big-stock bias, stock selection overall was a negative factor for WSBC during
the past year, with its holdings in energy, consumer staples and utilities in
particular detracting from Fund performance. In the fourth quarter, however, the
Fund was able to outperform the MidCap benchmark on strong stock selection. This
was especially positive in the industrial sector, where WSBC's airline holdings
(e.g., Alaska Air Group, JetBlue, AirTran) had strong showings as they benefited
from lower fuel prices. The S&P MidCap 400's P/E in terms of forward earnings
was higher than the S&P 500's at December 30, but despite the higher valuation,
mid-cap stocks still look attractive because of better forecast earnings growth.
We expect that the pattern of 2008 is reversing, and that WSBC's tilt toward the
more substantial companies in the S&P MidCap 400 will serve it well in the
period of economic uncertainty ahead. In the aggregate, WSBC companies have a
lower forward P/E than those in the MidCap 400 with similar expected earnings
growth. WIS continues to advise diversity in investment portfolios as the best
way to navigate difficult economic times.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
The Wright Major Blue Chip Fund (WMBC) is managed as a blend of the large-cap
growth and value stocks in the S&P 500 Composite, selected with a bias toward
the higher-quality issues in the index. After lagging in the first quarter of
2008 with a bigger loss than the S&P 500's, WMBC more than made up the ground in
the second, third and fourth quarters, with smaller losses in each period than
the benchmark index. In the fourth quarter of 2008, which was the worst for
stocks in more than 20 years, WMBC lost 19.5% compared to a 21.9% loss for the
S&P 500. In all of 2008, WMBC lost 34.9% compared to a 37.0% loss for the S&P
500. Stock selection was the key to WMBC's favorable performance compared to the
S&P 500 in both the fourth quarter and the full year 2008. In the fourth
quarter, stock selection resulted in WMBC's outperformance in eight of ten
industry sectors. For the year, the Fund was stronger than the S&P in six of ten
sectors. For the year as a whole, the Fund's showing was particularly strong in
the financial sector. Though this was the weakest sector in the S&P 500 with a
loss of more than 55% in 2008, WMBC's loss in the sector was significantly
smaller (less than 40%) even though it was overweight in financials because of
some of the attractive values there. Among the Fund's holdings in the financial
sector with relatively strong showings were Wells Fargo, CB Richard Ellis and
Assurant. Stock selection in the consumer discretionary sector (e.g., McDonalds,
Hasbro) and information technology (e.g., Applied Materials, Computer Sciences)
also contributed significantly to the Fund's relatively good showing. For the
year, the most negative impact on relative performance came from stock selection
in health care, but in the fourth quarter this turned favorable also. We expect
that the next five years will provide steadfast investors with positive real
returns from equities, but it may take a while for confidence in the markets to
be restored. The new year started with continued volatility in the stock market.
Given the high level of uncertainty about the health of the financial system and
the economic environment, along with the prospect of downward revisions 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 is well positioned for a
relatively risk-averse environment that may persist for a while. At the end of
2008, WMBC holdings were priced at lower current and forward P/E multiples than
the S&P 500 with similar expected earnings prospects.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
U.S. investors benefited from including international stocks in diversified
portfolios for each year from 2002 through 2007. But in 2008, the MSCI World ex
U.S. Index lost 43.6% compared to the S&P 500's 37% loss for the year. The bulk
of the MSCI Index's loss for the year compared to the S&P 500 reflected the
currency effect, i.e., the dollar's appreciation against the aggregate of
currencies in the index. After matching the MSCI benchmark's performance in the
first half of the year, the Wright International Blue Chip Fund (WIBC) lagged in
the second half. In the fourth quarter, WIBC lost 24.3% compared to a 21.2% loss
for the MSCI benchmark. For all of 2008, WIBC lost 47.7% compared to 43.6% for
the benchmark. In the first half of 2008, WIBC's relative performance was helped
by overweight positions in energy and materials stocks, which were strong
performers early in the year. But in the second half of the year, WIBC was hurt
by an overall pattern in international markets in which low-quality stocks
performed better than high quality and small stocks outperformed big. (Both of
these trends may have reflected the closing out of hedge fund positions and
international mutual fund redemptions.) Another factor that worked against
WIBC's 2008 performance was the appreciation of the yen while other major
currencies depreciated against the dollar. The increased value of the yen, which
resulted from demand for the Japanese currency in response to the unwinding of
the yen carry trade as interest rates in the U.S. declined, gave a boost to the
dollar returns of Japanese stocks. The WIBC was underweight in Japanese stocks
based on their earnings outlook and for macroeconomic reasons. With the global
recession deepening as 2008 was winding down, WIBC took a more defensive stance,
adding to its positions in consumer staples and health care while reducing its
holdings in energy and materials stocks. Because of some attractive values, WIBC
also added some industrial positions and brought the consumer discretionary
sector up to neutral. WIBC remains underweight in the financial sector. WIBC
reduced its overweight position in the Eurozone and added to its Japanese
positions, though it remains underweight in Japan. Foreign stocks offer
attractive valuations relative to U.S. stocks, allowing for significant
appreciation potential once confidence in the financial markets improves. WIBC
holdings are valued at a discount to the MSCI World ex U.S. Index. We continue
to see the inclusion of international stocks as likely to enhance returns in
diversified investment portfolios over the long term.
FIXED-INCOME FUNDS
THE YEAR 2008 BROUGHT ONCE-IN-A LIFETIME TURMOIL TO THE GLOBAL FINANCIAL
MARKETS, WITH STOCK PRICES DECLINING AND CREDIT CONDITIONS DETERIORATING
VIRTUALLY EVERYWHERE. LAST YEAR, THE VALUE OF DIVERSITY IN INVESTMENT PORTFOLIOS
WAS PROVEN AGAIN AS U.S EQUITIES HAD THEIR WORST YEAR IN DECADES AND
INTERNATIONAL STOCK MARKETS ALSO FELL, WHILE BARCLAYS CAPITAL U.S. AGGREGATE
BOND INDEX HAD A SOLIDLY POSITIVE RETURN. THE BOND MARKET'S GAIN, MOST OF WHICH
CAME IN THE FOURTH QUARTER, WAS ACTUALLY SENDING A NEGATIVE SIGNAL ON ECONOMIC
CONDITIONS, AT LEAST THROUGH NOVEMBER, SINCE IT PRIMARILY REFLECTED WORRIED
INVESTORS SEEKING THE SAFETY OF TREASURY BONDS, SENDING THEIR PRICES SOARING.
LATE IN THE YEAR, SPREADS ON NON-TREASURY SECTORS OF THE BOND MARKET TIGHTENED A
LITTLE FROM RECORD LEVELS, PERHAPS, LIKE THE STOCK MARKET'S LATE RALLY,
SIGNALING A GLIMMER OF HOPE FOR BETTER TIMES AHEAD. BUT WHILE THERE MAY BE SOME
REASON TO THINK THAT THE WORST OF THE CREDIT CRISIS IS OVER, THE EFFECTS OF THE
CRISIS ON THE REAL ECONOMY DEEPENED DURING THE FOURTH QUARTER. GDP DECLINED
SHARPLY IN Q4. THE FEDERAL RESERVE'S REDUCTION OF THE FED FUNDS TARGET RATE
ESSENTIALLY TO ZERO IN DECEMBER INDICATED JUST HOW SEVERE THE CURRENT ECONOMIC
SLOWDOWN HAS BECOME. WITH LITTLE AMMUNITION LEFT TO CUT RATES, THE FED SAID THAT
IF NEEDED IT WOULD INJECT MONEY INTO THE SYSTEM BY BUYING TREASURY BONDS
OUTRIGHT, ALSO IMPLYING THAT IT WOULD BUY AGENCY, MORTGAGE AND CORPORATE
SECURITIES IF NEEDED. THE SPEED AND MAGNITUDE OF THE RETREAT IN COMMODITY PRICES
(OIL WAS TRADING UNDER $40 A BARREL FOR A WHILE IN DECEMBER COMPARED TO A PEAK
OF $147 IN JULY) ALSO ARE TESTAMENT TO THE DEPTH OF THE GLOBAL SLOWDOWN. THE
CONSUMER PRICE INDEX TURNED LOWER IN OCTOBER AND NOVEMBER, WHILE THE CORE CPI
WAS ESSENTIALLY FLAT IN THE LATEST THREE MONTHS.
THE BARCLAYS CAPITAL (FORMERLY LEHMAN BROTHERS) U.S. AGGREGATE BOND INDEX
RETURNED 4.6% IN THE FOURTH QUARTER OF 2008, WHICH ACCOUNTED FOR ALMOST ALL OF
ITS 5.2% RETURN FOR THE YEAR. TREASURY BONDS LED THE AGGREGATE HIGHER WITH A
RETURN OF NEARLY 9% FOR THE QUARTER AND 14% FOR THE YEAR. THE BUBBLE-LIKE SURGE
IN TREASURIES, WHICH TOOK THE YIELD ON THE 10-YEAR TREASURY TO A RECORD LOW OF
2.08% NEAR THE END OF THE YEAR, REFLECTED THE SEARCH FOR SAFETY IN DIFFICULT
TIMES AND ALSO A DECLINE IN INFLATION EXPECTATIONS. THE YIELD ON THE 90-DAY
TREASURY BILL WAS CLOSE TO ZERO AT YEAR END; THE YIELD ON THE TWO-YEAR TREASURY
WAS UNDER 1%. ALONG WITH TREASURY BONDS, AGENCY AND MORTGAGE-BACKED DEBT HAD
POSITIVE RETURNS FOR THE YEAR, WHILE CORPORATE, ASSET-BACKED AND COMMERCIAL
MORTGAGE DEBT DECLINED. IN THE FOURTH QUARTER, CORPORATE BONDS ALSO HAD POSITIVE
RETURNS ON THE COATTAILS OF TREASURY BONDS, THOUGH RETURNS ON ALL SECTORS LAGGED
THOSE OF TREASURIES. IN DECEMBER, HOWEVER, SPREAD SECTORS, WITH THE EXCEPTION OF
ASSET-BACKED SECURITIES, HAD POSITIVE EXCESS RETURNS COMPARED TO TREASURIES AS
SPREADS TIGHTENED.
IN THE SHORT-RUN, WE EXPECT INFLATION TO MODERATE. IN THE COMING MONTHS, THE
INFLATIONARY EFFECTS OF THE INCREASE IN THE MONEY SUPPLY THAT RESULTS FROM THE
LIQUIDITY THAT THE FED AND TREASURY CONTINUE TO PUMP INTO THE FINANCIAL SYSTEM
ARE LIKELY TO BE OFFSET TO A LARGE EXTENT BY THE DEFLATIONARY PRESSURES OF AN
ECONOMY TAKING A LONG TIME GETTING BACK TO TREND GROWTH. (EVENTUALLY THE HUGE
INCREASE IN MONEY SUPPLY MAY CONTRIBUTE TO HIGHER INFLATION, BUT THAT SHOULDN'T
BE A PROBLEM IN 2009, IN OUR VIEW.) LIKE STOCKS, BONDS COULD CONTINUE TO BE
VOLATILE FOR A WHILE. WITH YIELDS NEAR RECORD LOWS, WE DON'T SEE MUCH UPSIDE
POTENTIAL FOR TREASURY BONDS, THOUGH SKITTISH INVESTORS MAY CONTINUE TO FAVOR
TREASURIES IN THE NEAR TERM. THERE IS POTENTIAL FOR SIGNIFICANT SPREAD
TIGHTENING TO GENERATE VERY ATTRACTIVE RETURNS IN SPREAD PRODUCTS AS INVESTOR
CONFIDENCE IMPROVES, BUT THE TIMING ON THIS IS UNCERTAIN, SINCE, AS WITH EQUITY
INVESTORS, IT MAY TAKE A WHILE FOR FIXED-INCOME INVESTORS' CONFIDENCE TO RECOVER
FROM ITS RECENT BATTERING. WIS EXPECTS THAT FOR 2009, THE BARCLAYS U.S.
AGGREGATE WILL GENERATE A POSITIVE REAL RETURN DUE TO SPREAD TIGHTENING, AND WE
CONTINUE TO RECOMMEND HOLDING A MIX OF ASSET CLASSES IN LONG-TERM INVESTMENT
PORTFOLIOS.
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Total Return Year Year Year Year Year Year Year Year Year Year
---------------------------------------------------------------------------------------------------------------------
Wright Total Return Bond Fund
(WTRB) 1.7% 5.6% 3.3% 1.5% 3.5% 3.3% 9.0% 5.0% 10.6% -3.9%
Wright Current Income Fund
(WCIF) 6.1% 5.8% 3.9% 1.8% 3.3% 1.7% 7.7% 7.2% 10.3% 0.5%
WRIGHT TOTAL RETURN BOND FUND
In 2008, the return on the Barclays Capital U.S. Aggregate Bond Index was 5.2%,
well ahead of the S&P 500's 37% loss for the year. The Wright Total Return Bond
Fund (WTRB) (the Fund), a diversified bond fund, lagged the Barclays Aggregate
during 2008, returning 1.7%. In the fourth quarter of 2008, WTRB returned 3.2%
compared to 4.6% for the Barclays benchmark. WTRB had a yield of 5.1% calculated
according to SEC guidelines for December 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. A neutral position
was maintained through the second quarter, with the result that duration had no
impact on performance relative to the Barclays benchmark in Q2. The neutral
duration was maintained through the early part of the third quarter, then in
mid-September as Treasury yields moved to low levels and appeared to be due for
a correction, the Fund's duration was shortened by a quarter of a year compared
to the benchmark. This move allowed the Fund's performance to benefit from the
sell-off in Treasuries that ensued. By the start of the fourth quarter, the
duration position was moved back to neutral, where it remained for the rest of
the year. Throughout 2008, WTRB has been positioned to benefit from a steepening
yield curve and for the year as a whole this worked to the Fund's advantage. For
the year, the Fund's sector weights offset the positive effect of duration and
yield curve positioning. Early in the year, spreads on non-Treasury sectors of
the fixed-income market widened compared to Treasuries. To take advantage of the
attractive values created by this widening, the Fund increased its overweight
position in corporate bonds and the overweight was maintained through the rest
of the year. This benefited the Fund in Q2, but detracted for the year as a
whole as corporate spreads widened significantly in the third and fourth
quarters (though this began to reverse in December). A specific corporate
holding that hurt performance in the third quarter was the Fund's small position
in a Lehman Brothers issue. The Fund benefited from being overweight in
mortgage-backed issues in the second half of the year, but being underweight in
Treasury and Agency issues dampened performance. An overweight position in
commercial mortgages, which were the worst performing fixed-income sector for
both the fourth quarter and the year, significantly detracted from the Fund's
showing relative to its benchmark. As 2009 got underway, the Fund maintained its
overweight position in corporate bonds (32% of net assets) and mortgage-backed
issues (46% of net assets), which appear to be valued at levels that offer
significant appreciation potential once investor confidence improves. The Fund
was also overweight in commercial mortgages (7%) and asset-backed (1%)
securities. At December 31, the Fund was underweight in Treasury securities
(6%), which appeared to have little upside potential after their strong Q4
rally, and in Agency issues (6%).
WRIGHT CURRENT INCOME FUND
In 2008, the mortgage-backed sector of the bond market lagged behind Treasury
bonds but had a better return (8.3%) than the Barclays Capital U.S. Aggregate
Bond Index (5.2%). In the fourth quarter, the MBS sector returned 4.3% compared
to a return of 4.6% for the Barclays Aggregate. The Wright Current Income Fund
(WCIF) 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. WCIF is actively managed
to maximize income and minimize principal fluctuation. After matching the return
of the Barclays GNMA Bond Index in the first half of 2008, in the second half
WCIF lagged. In the fourth quarter, WCIF returned 3.1% compared to 4.1% for the
Barclays benchmark. For all of 2008, WCIF returned 6.1%, compared to 7.9% for
the Barclays GNMA Bond Index. For December 2008, WCIF had a yield of 5.0% as
calculated by SEC guidelines. Dividends paid by this Fund may be more or less
than implied by this yield. In addition to its holdings in Ginnie Maes (about
55% of net assets at year end), WCIF also held MBS securities backed by Fannie
Mae (FNMA) and Freddie Mac (FHLMC). These issues outperformed Ginnie Maes in the
third and fourth quarters, as the government strengthened its backing of these
issues by placing Fannie Mae and Freddie Mac in temporary conservatorship.
WCIF's second-half shortfall in performance compared to the Barclays Ginnie Mae
Bond Index in part reflected its overweighting of higher-coupon issues, which
underperformed lower-coupon issues. Fund expenses also figured in the WCIF's
modest 2008 shortfall in performance compared to the Barclays GNMA Bond Index.
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
12/31/99 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%
12/31/08 8,776.39 2.24%
PERFORMANCE SUMMARIES
- -------------------------------------------------------------------------------
Important
The Total Investment Return is the percent return of an initial $10,000
investment made at the beginning of the period to the ending redeemable value
assuming all dividends and distributions are reinvested. After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates, and do not reflect the impact of state and local taxes. Actual after-tax
returns depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. Past performance is not predictive of future performance.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Growth of $10,000 Invested 1/1/99 Through 12/31/08
Average Annual Total Return
-------------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- --------------------------------------------------------------------------------------------------------------------
WSBC
- Return before taxes -39.81% -2.17% 0.18%
- Return after taxes on distributions -40.65% -3.76% -1.69%
- Return after taxes on distributions and sales of fund shares -40.65% -3.76% -1.69%
S&P MidCap 400* -36.23% -0.08% 4.46%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED
BLUE CHIP EQUITIES FUND on 12/31/98 would have grown to $10,181 by
December 31, 2008.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Selected S&P MidCap
Blue Chip Fund 400
12/31/1998 $10,000 $10,000
12/31/1999 $10,575 $11,472
12/31/2000 $11,712 $13,481
12/31/2001 $10,523 $13,399
12/31/2002 $ 8,737 $11,454
12/31/2003 $11,363 $15,534
12/31/2004 $13,151 $18,094
12/31/2005 $14,608 $20,367
12/31/2006 $15,159 $22,469
12/31/2007 $16,916 $24,262
12/31/2008 $10,181 $15,471
* The Fund's average annual return is compared with that of the S&P Mid-Cap 400,
an unmanaged index of stocks in a broad range of industries with a market
capitalization of a few billion or less. The performance of the S&P Mid-Cap 400,
unlike that of the Fund, reflects no deductions for fees, expenses or taxes.
Industry Weightings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
Insurance 9.7% Real Estate 3.0%
Energy 9.1% Household & Personal Products 2.8%
Electronic Equipment&Instruments 7.4% Computers & Peripherals 2.0%
Materials 6.7% Food, Beverage & Tobacco 1.8%
Retailing 6.7% Consumer Durables & Apparel 1.3%
Utilities 5.7% Consumer Products 1.3%
Banks 5.3% Automobiles & Components 1.2%
Health Care Equipment & Services 5.1% Education 1.0%
Software & Services 5.0% Machinery 1.0%
Transportation 4.1% Communications Equipment 0.8%
Pharmaceuticals & Biotechnology 3.9% Aerospace & Defense 0.4%
Commercial Services & Supplies 3.8% Chemicals 0.3%
Capital Goods 3.4% Telecommunication Services 0.3%
Diversified Financials 3.1% Semiconductor Equip. & Prods. 0.3%
Ten Largest Stock Holdings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
W.R. Berkley Corp. 2.7%
HCC Insurance Holdings, Inc. 2.5%
Lincare Holdings, Inc. 2.5%
MDU Resources Group, Inc. 2.4%
Dollar Tree, Inc. 2.1%
StanCorp Financial Group, Inc. 2.0%
Oneok, Inc. 1.8%
Alaska Air Group, Inc. 1.8%
Perrigo Co. 1.6%
Energen Corp. 1.5%
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Growth of $10,000 Invested 1/1/99 Through 12/31/08
Average Annual Total Return
-----------------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- -------------------------------------------------------------------------------------------------------------------------
WMBC
- Return before taxes -34.85% -1.67% -2.58%
- Return after taxes on distributions -35.14% -1.92% -2.92%
- Return after taxes on distributions and sales of fund shares -35.14% -1.92% -2.92%
S&P 500* -37.00% -2.19% -1.38%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT MAJOR BLUE CHIP EQUITIES FUND on 12/31/98 would have
been $7,702 by December 31, 2008.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Major Blue
Chip Fund S&P 500
12/31/1998 $10,000 $10,000
12/31/1999 $12,395 $12,104
12/31/2000 $10,839 $11,002
12/31/2001 $ 9,010 $ 9,695
12/31/2002 $ 6,802 $ 7,552
12/31/2003 $ 8,380 $ 9,718
12/31/2004 $ 9,417 $10,776
12/31/2005 $10,000 $11,305
12/31/2006 $11,157 $13,091
12/31/2007 $11,822 $13,810
12/31/2008 $ 7,702 $ 8,700
* The Fund's average annual return is compared with that of the S&P 500,
an unmanaged index of 500 widely held common stocks that generally indicates the
performance of the market. The performance of the S&P 500, unlike that of the
Fund, reflects no deductions for fees, expenses or taxes.
Industry Weightings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
Energy 13.7%
Pharmaceuticals & Biotechnology 10.1%
Computers & Peripherals 8.4%
Insurance 8.2%
Software & Services 6.4%
Capital Goods 5.8%
Banks 5.6%
Retailing 5.1%
Health Care Equipment & Services 4.5%
Food, Beverage & Tobacco 3.9%
Diversified Financials 3.0%
Entertainment & Leisure 2.8%
Aerospace 2.6%
Telecommunication Services 2.6%
Utilities 2.4%
Hotels, Restaurants & Leisure 2.3%
Household Durables 2.0%
Transportation 1.9%
Communications Equipment 1.4%
Materials 1.1%
Metals 1.0%
Construction & Engineering 0.6%
Education 0.5%
Electronics 0.4%
Heavy Machinery 0.4%
Automobiles & Components 0.3%
Media 0.3%
Office Electronics 0.1%
Semiconductor Equipment & Prods. 0.1%
Ten Largest Stock Holdings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
Exxon Mobil Corp. 4.8%
Chevron Corp. 3.5%
Hewlett-Packard Co. 3.5%
Int'l. Business Machines Corp. 3.3%
Pfizer, Inc. 3.0%
Johnson & Johnson, Inc. 3.0%
Microsoft Corp. 2.6%
Lockheed Martin Corp. 2.4%
McDonald's Corp. 2.3%
AT&T, Inc. 2.3%
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Growth of $10,000 Invested 1/1/99 Through 12/31/08
Average Annual Total Return
-----------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- ---------------------------------------------------------------------------------------------------------------------
WIBC
- Return before taxes -47.74% 0.20% -0.45%
- Return after taxes on distributions -48.93% -0.78% -1.26%
- Return after taxes on distributions and sales of fund shares -48.93% -0.78% -1.26%
MSCI World ex U.S. Index* -43.56% 1.91% 1.18%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT INT'L BLUE CHIP EQUITIES FUND on 12/31/98 would have
been $ 9,561 by December 31, 2008.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Int'l Blue Chip MSCI World Ex U.S.
Equities Fund Index
12/31/1998 $10,000 $10,000
12/31/1999 $13,426 $12,793
12/31/2000 $11,066 $11,082
12/31/2001 $ 8,390 $ 8,711
12/31/2002 $ 7,173 $ 7,335
12/31/2003 $ 9,466 $10,226
12/31/2004 $11,142 $12,310
12/31/2005 $13,497 $14,092
12/31/2006 $17,342 $17,715
12/31/2007 $18,296 $19,918
12/31/2008 $ 9,561 $11,243
* The Fund's average annual return is compared with that of the MSCI World ex
U.S. Index. While the Fund does not seek to match the returns of this index,
this unmanaged index generally indicates foreign stock market performance. The
performance of the MSCI World ex U.S. Index, unlike that of the Fund, reflects
no deductions for fees, expenses, or taxes.
Country Weightings
- ------------------------------------------------------------------------------
% of net assets @ 12/31/08
Japan 16.3%
United Kingdom 15.8%
Germany 10.6%
France 9.5%
Spain 8.0%
Canada 7.8%
Switzerland 6.3%
Hong Kong 5.9%
Italy 3.9%
Netherlands 3.4%
Australia 3.2%
United States 3.2%
Singapore 1.4%
Norway 1.3%
Greece 1.2%
Denmark 1.2%
Finland 1.2%
Sweden 0.8%
Ireland 0.4%
Austria 0.3%
Ten Largest Stock Holdings
- ------------------------------------------------------------------------------
% of net assets @ 12/31/08
Telefonica SA 3.8%
Eni SpA (Azioni Ordinarie) 3.5%
CLP Holdings, Ltd. (Ordinary) 2.9%
Zurich Financial Services
(Inhaberaktie) 2.9%
E.On AG (Stammaktie) 2.8%
Royal Dutch Shell PLC 2.7%
Groupe Danone 2.3%
BASF AG (Stammaktie) 2.2%
AstraZeneca PLC 2.1%
Astellas Pharma, Inc. 2.1%
WRIGHT TOTAL RETURN BOND FUND
Growth of $10,000 Invested 1/1/99 Through 12/31/08
Average Annual Total Return
----------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- --------------------------------------------------------------------------------------------------------------------
WTRB
- Return before taxes 1.69% 3.14% 3.90%
- Return after taxes on distributions -0.05% 1.52% 2.05%
- Return after taxes on distributions and sales of fund shares -0.05% -1.24% 0.88%
Barclays Capital U.S. Aggregate Bond Index* 5.24% 4.65% 5.63%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT TOTAL RETURN BOND FUND on 12/31/98 would have grown to $14,655 by
December 31, 2008.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Total Retun Barclays Capital U.S.
Bond Fund Aggregate Bond Index
12/31/1998 $10,000 $10,000
12/31/1999 $ 9,609 $ 9,918
12/31/2000 $10,629 $11,071
12/31/2001 $11,156 $12,006
12/31/2002 $12,164 $13,237
12/31/2003 $12,559 $13,780
12/31/2004 $13,001 $14,378
12/31/2005 $13,201 $14,727
12/31/2006 $13,642 $15,365
12/31/2007 $14,411 $16,436
12/31/2008 $14,655 $17,297
* The Fund's average annual return is compared with that of the Barclays Capital
U.S. Aggregate Bond Index, an unmanaged index that is a broad representation of
the investment-grade fixed income market in the U.S. The Barclays Capital U.S.
Aggregate Bond Index, unlike the Fund, reflects no deductions for fees,
expenses, or taxes.
Holdings by Sector
- ------------------------------------------------------------------------------
% of net assets @ 12/31/08
Asset-Backed Securities 1.4%
Corporate Bonds 31.9%
Mortgage-Backed Securities 52.3%
U.S. Treasuries 6.4%
U.S. Government Agencies 5.9%
Holdings by Credit Quality*
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
AAA 2%
AA 3%
A 20%
BBB 8%
<BBB 0%
Agency-Backed Securities 1%
Mortgage-Backed Securities 52%
U.S. Treasuries 6%
U.S. Government Agencies 6%
* based on the lower of Standard & Poor's or Moody's Investors' Service.
Five Largest Bond Holdings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
U.S. Treasury Notes 3.50% 02/15/10 3.6%
FNMA Pool #781893 4.50% 11/01/31 3.0%
FHLMC Gold Pool #C55780 6.00% 01/01/29 2.5%
FNMA Pool #725515 5.00% 04/01/19 2.5%
FNMA Pool #745755 5.00% 12/01/35 2.5%
Weighted Average Maturity
@12/31/08 5.5 years
WRIGHT CURRENT INCOME FUND
Growth of $10,000 Invested 1/1/99 Through 12/31/08
Average Annual Total Return
-------------------------------------------------
Last 1 Yr Last 5 Yrs Last 10 Yrs
- -----------------------------------------------------------------------------------------------------------------------
WCIF
- Return before taxes 6.10% 4.16% 4.79%
- Return after taxes on distributions 4.34% 2.33% 2.75%
- Return after taxes on distributions and sales of fund shares 4.20% 2.33% 2.75%
Barclays Capital GNMA Backed Bond Index* 7.87% 5.39% 5.94%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CURRENT
INCOME FUND on 12/31/98 would have grown to $15,963 by December 31, 2008.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Current Lehman GNMA
Income Fund Index
12/31/98 $10,000 $10,000
12/31/99 $10,052 $10,193
12/31/2000 $11,088 $11,325
12/31/2001 $11,885 $12,256
12/31/2002 $12,800 $13,321
12/31/2003 $13,022 $13,701
12/31/2004 $13,451 $14,297
12/31/2005 $13,688 $14,755
12/31/2006 $14,224 $15,435
12/31/2007 $15,044 $16,512
12/31/2008 $15,963 $17,812
* The Fund's average annual return is compared with that of the Barclays Capital
GNMA Backed Bond Index. While the Fund does not seek to match the returns of the
Barclays Capital GNMA Backed Bond Index, Wright believes that this unmanaged
index generally indicates the performance of government and corporate
mortgage-backed bond markets. The Barclays Capital GNMA Backed Bond Index,
unlike the Fund, reflects no deductions for fees, expenses, or taxes.
Holdings by Sector
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
Mortgage-Backed Securities 98.1%
Weighted Average Maturity
@ 12/31/08 3.3 Years
Five Largest Bond Holdings
- -------------------------------------------------------------------------------
% of net assets @ 12/31/08
GNMA II Pool #3747 5.00% 08/20/35 5.6%
GNMA II Pool #696908 4.50% 07/20/38 5.4%
GNMA Series 2002-47 6.50% 07/16/32 4.9%
FNMA Series 2002-T4, Class A2 7.00% 12/25/41 3.2%
GNMA Series 1999-4 6.00% 02/20/29 3.1%
FUND EXPENSES
- -------------------------------------------------------------------------------
EXAMPLE:
As a shareholder of a fund, you incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchases and redemption fees (if
applicable); and (2) ongoing costs including management fees; distribution or
service fees; and other fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in a fund and to compare
these costs with the ongoing costs of investing in other mutual funds. The
example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2008 - December 31, 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 tables 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 tables 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 (7/1/08-
(7/1/08) (12/31/08) 12/31/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $649.50 $5.18
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.90 $6.34
*Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2008.
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/08-
(7/1/08) (12/31/08) 12/31/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $751.10 $5.50
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,018.90 $6.34
*Expenses are equal to the Fund's annualized expense ratio of 1.25% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2008.
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/08-
(7/1/08) (12/31/08) 12/31/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $579.40 $6.31
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,017.10 $8.06
*Expenses are equal to the Fund's annualized expense ratio of 1.59% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2008.
FIXED INCOME FUNDS
WRIGHT TOTAL RETURN BOND FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/08-
(7/1/08) (12/31/08) 12/31/08)
- ------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,021.90 $3.59
- ------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,021.60 $3.61
*Expenses are equal to the Fund's annualized expense ratio of 0.71% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2008.
WRIGHT CURRENT INCOME FUND
Expenses Paid
Beginning Ending During Period*
Account Value Account Value (7/1/08-
(7/1/08) (12/31/08) 12/31/08)
- -------------------------------------------------------------------------------
Actual Fund Shares $1,000.00 $1,042.60 $4.88
- -------------------------------------------------------------------------------
Hypothetical (5% return per year before expenses)
Fund Shares $1,000.00 $1,020.40 $4.82
*Expenses are equal to the Fund's annualized expense ratio of 0.95% multiplied
by the average account value over the period, multiplied by 184/366 (to
reflect the one-half year period). The example assumes that the $1,000 was
invested at the net asset value per share determined at the close of business
on June 30, 2008.
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008
Shares Value
EQUITY INTERESTS - 96.5%
AEROSPACE & DEFENSE -- 0.4%
Alliant Techsystems, Inc. * 685 $ 58,746
------------
AUTOMOBILES & COMPONENTS -- 1.2%
Advance Auto Parts, Inc. 2,825 $ 95,061
BorgWarner, Inc. 3,100 67,487
------------
$ 162,548
------------
BANKS -- 5.3%
Bank of Hawaii Corp. 3,345 $ 151,094
Commerce Bancshares, Inc. 2,139 94,009
Cullen/Frost Bankers, Inc. 3,090 156,601
New York Community Bancorp, Inc. 5,375 64,285
SVB Financial Group * 6,185 162,233
Westamerica Bancorporation 625 31,969
Wilmington Trust Corp. 1,955 43,479
------------
$ 703,670
------------
CAPITAL GOODS -- 3.4%
AGCO Corp. * 6,775 $ 159,822
SPX Corp. 4,505 182,678
Thomas & Betts Corp. * 4,620 110,972
------------
$ 453,472
------------
CHEMICALS -- 0.3%
Cytec Industries, Inc. 2,215 $ 47,002
------------
COMMERCIAL SERVICES& SUPPLIES -- 3.8%
Charles River Laboratories
International* 3,540 $ 92,748
FirstMerit Corp. 3,845 79,169
Global Payments, Inc. 2,795 91,648
Harsco Corp. 2,300 63,664
Manpower, Inc. 3,845 130,691
Navigant Consulting, Inc. * 2,860 45,388
------------
$ 503,308
------------
COMMUNICATIONS EQUIPMENT -- 0.8%
CommScope, Inc. * 2,255 $ 35,043
Plantronics, Inc. 5,785 76,362
------------
$ 111,405
------------
COMPUTERS & PERIPHERALS -- 2.0%
Jack Henry & Associates, Inc. 4,600 $ 89,286
Western Digital Corp. * 15,630 178,964
------------
$ 268,250
------------
CONSUMER DURABLES & APPAREL -- 1.3%
Herman Miller, Inc. 4,560 $ 59,417
Mohawk Industries, Inc. * 2,660 114.300
------------
$ 173,717
------------
CONSUMER PRODUCTS -- 1.3%
John Wiley & Sons, Inc. - Class A 1,530 $ 54,437
Priceline.com, Inc. * 1,540 113,421
------------
$ 167,858
------------
DIVERSIFIED FINANCIALS -- 3.1%
Eaton Vance Corp. 4,595 $ 96,541
Raymond James Financial, Inc. 10,112 173,219
SEI Investments Co. 9,050 142,175
------------
$ 411,935
------------
EDUCATION -- 1.0%
Career Education Corp. * 1,930 $ 34,624
DeVry, Inc. 1,720 98,745
------------
$ 133,369
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS-- 7.4%
Ametek, Inc. 3,485 $ 105,282
Arrow Electronics, Inc. * 7,985 150,437
Avnet, Inc. * 7,995 145,589
Hubbell, Inc. 4,570 149,348
Ingram Micro, Inc. - Class A* 3,240 43,384
Lincoln Electric Holdings, Inc. 2,525 128,598
Pentair, Inc. 5,025 118,942
Synopsys, Inc. * 2,870 53,152
Tech Data Corp. * 2,330 41,567
Vishay Intertechnology, Inc. * 15,010 51,334
------------
$ 987,633
------------
ENERGY -- 9.1%
Cimarex Energy Co. 3,875 $ 103,772
Cliffs Natural Resources, Inc. 1,945 49,811
Denbury Resources, Inc. * 8,100 88,452
Energen Corp. 6,925 203,110
FMC Technologies, Inc. * 7,355 175,270
Forest Oil Corp. * 7,320 120,707
Helmerich & Payne, Inc. 3,365 76,554
Patterson-UTI Energy, Inc. 6,070 69,866
SCANA Corp. 3,890 138,484
Superior Energy Services, Inc. * 1,835 29,232
Tidewater, Inc. 2,415 97,252
UGI Corp. 2,665 65,079
------------
$ 1,217,589
------------
FOOD, BEVERAGE & TOBACCO -- 1.8%
Corn Products International, Inc. 2,365 $ 68,230
PepsiAmericas, Inc. 4,580 93,249
Ralcorp Holdings, Inc. * 1,350 78,840
------------
$ 240,319
------------
HEALTH CARE EQUIPMENT & SERVICES-- 5.1%
Community Health Systems, Inc. * 3,390 $ 49,426
Health Management Associates,
Inc. - Class A* 36,305 64,986
LifePoint Hospitals, Inc. * 2,600 59,384
Lincare Holdings, Inc. * 12,190 328,277
STERIS Corp. 4,070 97,232
WellCare Health Plans, Inc. * 6,495 83,526
------------
$ 682,831
------------
HOUSEHOLD & PERSONAL PRODUCTS -- 2.8%
Church & Dwight Co., Inc. 2,595 $ 145,631
NetFlix, Inc. * 4,765 142,426
Tupperware Brands Corp. 3,515 79,791
------------
$ 367,848
------------
INSURANCE -- 9.7%
American Financial Group Inc. 5,325 $ 121,836
Everest Re Group, Ltd. 1,765 134,387
Hanover Insurance Group, Inc. 800 34,376
HCC Insurance Holdings, Inc. 12,700 339,725
Horace Mann Educators Corp. 2,345 21,550
Protective Life Corp. 1,305 18,727
StanCorp Financial Group, Inc. 6,375 266,284
W.R. Berkley Corp. 11,497 356,407
------------
$ 1,293,292
------------
MACHINERY -- 1.0%
IDEX Corp. 1,425 $ 34,414
Wabtec Corp. 2,350 93,412
------------
$ 127,826
MATERIALS -- 6.7%
Airgas, Inc. 3,415 $ 133,151
Carpenter Technology Corp. 1,255 25,778
Crane Co. 3,105 53,530
FMC Corp. 1,675 74,923
Joy Global, Inc. 3,225 73,820
Kennametal, Inc. 995 22,079
Lubrizol Corp. 3,635 132,278
Matthews International Corp. - Class A 1,790 65,657
Reliance Steel & Aluminum Co. 2,795 55,732
Sonoco Products Co. 4,035 93,451
Steel Dynamics, Inc. 5,730 64,061
Terra Industries, Inc. 4,360 72,681
Worthington Industries, Inc. 3,010 33,170
------------
$ 900,311
------------
PHARMACEUTICALS & BIOTECHNOLOGY -- 3.9%
Endo Pharmaceuticals Holdings, Inc. * 7,410 $ 191,771
Omnicare, Inc. 1,820 50,523
Perrigo Co. 6,545 211,469
Pharmaceutical Product
Development, Inc. 2,430 70,494
------------
$ 524,257
------------
REAL ESTATE -- 3.0%
NVR, Inc. * 310 $ 141,437
Toll Brothers, Inc. * 8,725 186,977
UDR, Inc. 5,095 70,260
------------
$ 398,674
------------
RETAILING -- 6.7%
Aeropostale, Inc. * 3,277 $ 52,760
American Eagle Outfitters, Inc. 8,952 83,791
BJ's Wholesale Club, Inc. * 4,020 137,725
Dollar Tree, Inc. * 6,855 286,539
Phillips-Van Heusen Corp. 3,220 64,818
Regis Corp. 3,745 54,415
Rent-A-Center Inc. * 2,490 43,948
Ross Stores, Inc. 5,860 174,218
------------
$ 898,214
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS -- 0.3%
Intersil Corp. - Class A 3,825 $ 35,152
------------
SOFTWARE & SERVICES -- 5.0%
Alliance Data Systems Corp. * 2,340 $ 108,880
Ansys, Inc. * 4,835 134,848
Mantech International Corp. - Class A *1,670 90,497
McAfee, Inc. * 4,385 151,590
Sybase, Inc. * 7,550 187,014
------------
$ 672,829
------------
TELECOMMUNICATION SERVICES -- 0.3%
Telephone & Data Systems, Inc. 1,345 $ 42,704
------------
TRANSPORTATION -- 4.1%
AirTran Holdings, Inc. * 28,310 $ 125,696
Alaska Air Group, Inc. * 8,015 234,439
Con-way, Inc. 1,345 35,777
JetBlue Airways Corp. * 21,345 151,550
------------
$ 547,462
------------
UTILITIES -- 5.7%
MDU Resources Group, Inc. 14,863 $ 320,745
Northeast Utilities 8,365 201,262
Oneok, Inc. 8,260 240,531
------------
$ 762,538
------------
TOTAL EQUITY INTERESTS - 96.5%
(identified cost, $16,295,643) $ 12,894,759
OTHER ASSETS, LESS LIABILITIES - 3.5% 469,049
------------
NET ASSETS - 100.0% $ 13,363,808
============
Industry classifications included in the Portfolio of Investments are unaudited.
* Non-income-producing security.
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $16,295,643) (Note 1A) $ 12,894,759
Cash 475,445
Receivable for fund shares sold 3,433
Receivable from affiliates 5,749
Dividends receivable 22,646
Other assets 3,440
------------
Total assets $ 13,405,472
------------
LIABILITIES:
Payable for fund shares reacquired $ 16,774
Payable to affiliate for investment
adviser fee 1,153
Payable to affiliate for
distribution expenses 87
Accrued expenses and other liabilities 23,650
------------
Total liabilities $ 41,664
------------
NET ASSETS $ 13,363,808
============
NET ASSETS CONSIST OF:
Paid-in capital $ 18,184,581
Accumulated net realized loss on investments
(computed on the basis of identified cost) (1,419,889)
Unrealized appreciation (depreciation)
of investments(computed on the basis
of identified cost) (3,400,884)
------------
Net assets applicable to outstanding shares $ 13,363,808
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 2,205,103
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 6.06
============
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income $ 197,911
------------
Expenses -
Investment adviser fee (Note 3) $ 108,213
Administrator fee (Note 3) 21,643
Compensation of Trustees who are not employees
of the investment adviser or administrator 12,961
Custodian fee (Note 1F) 63,992
Distribution expenses (Note 4) 45,089
Transfer and dividend disbursing agent fees 23,878
Printing 2,106
Interest expense 3,567
Shareholder communications 1,750
Audit services 27,685
Legal services 4,270
Registration costs 19,181
Miscellaneous 7,918
------------
Total expenses $ 342,253
------------
Deduct -
Waiver and/or reimbursement by the principal
underwriter and/or investment adviser
(Note 3 and 4) $ (115,081)
Reduction of custodian fee (Note 1F) (1,728)
------------
Total deductions $ (116,809)
------------
Net expenses $ 225,444
------------
Net investment loss $ (27,533)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis) $(1,371,940)
Net change in unrealized appreciation
(depreciation) on investments (6,810,349)
------------
Net realized and unrealized loss
on investments $ (8,182,289)
------------
Net decrease in net assets from operations $(8,209,822)
============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Year Ended
December 31,
------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2008 2007
- --------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss $ (27,533) $ (28,028)
Net realized gain (loss) on investment transactions (1,371,940) 6,519,033
Net change in unrealized appreciation (depreciation) on investments (6,810,349) (3,232,243)
-------------- --------------
Net increase (decrease) in net assets from operations $ (8,209,822) $ 3,258,762
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ - $ (33,344)
From net realized gains (1,863,251) (5,034,405)
-------------- --------------
Total distributions $ (1,863,251) $ (5,067,749)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 6) $ (486,111) $(12,619,826)
-------------- --------------
Net decrease in net assets $(10,559,184) $(14,428,813)
NET ASSETS:
At beginning of year 23,922,992 38,351,805
-------------- --------------
At end of year $ 13,363,808 $ 23,922,992
============== ==============
See notes to financial statements
WRIGHT SELECTED BLUE CHIP EQUITIES FUND (WSBC)
- -------------------------------------------------------------------------------
Year Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 11.100 $ 12.270 $ 13.030 $ 13.226 $ 11.870
--------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1) $ (0.013) $ (0.013) $ (0.034) $ (0.053) $ (0.028)
Net realized and unrealized gain (loss) (4.121) 1.340 0.529 1.476 1.884
--------- --------- --------- --------- ---------
Total income (loss) from investment operations $ (4.134) $ 1.327 $ 0.495 $ 1.423 $ 1.856
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From net investment income $ - $ (0.016) $ - $ - -
From net realized gains (0.906) (2.481) (1.255) (1.619) $ (0.500)
--------- --------- --------- --------- ---------
Total distributions $ (0.906) $ (2.497) $ (1.255) $ (1.619) $ (0.500)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 6.060 $ 11.100 $ 12.270 $ 13.030 $ 13.226
========= ========= ========= ========= =========
TOTAL RETURN(2) (39.81)% 11.59% 3.77% 11.09% 15.73%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of year (000 omitted) $ 13,364 $ 23,923 $ 38,352 $ 47,652 $ 43,498
Ratios (As a percentage of average daily net assets):
Net expenses 1.26% 1.26% 1.26% 1.27% 1.26%
Net expenses after custodian fee reduction 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment loss (0.15)% (0.10)% (0.27)% (0.18)% (0.23)%
Portfolio turnover rate 72% 67% 66% 110% 69%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the
operating expenses of the Fund were reduced by a waiver of fees and/or an
allocation of expenses to the principal underwriter and/or investment
adviser. Had such action not been undertaken, net investment loss per share
and the ratios would have been as follows:
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net investment loss per share $ (0.068) $ (0.064) $ (0.058) $ (0.111) $ (0.050)
========= ========= ========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses 1.90% 1.66% 1.46% 1.45% 1.44%
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.89% 1.66% 1.44% 1.43% 1.43%
========= ========= ========= ========= =========
Net investment loss (0.79)% (0.51)% (0.46)% (0.38)% (0.41)%
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008
Shares Value
EQUITY INTERESTS - 97.5%
AEROSPACE -- 2.6%
General Dynamics Corp. 4,630 $ 266,642
Honeywell International, Inc. 8,885 291,694
Northrop Grumman Corp. 2,345 105,619
Raytheon Co. 3,540 180,682
------------
$ 844,637
------------
AUTOMOBILES & COMPONENTS -- 0.3%
Cooper Industries, Ltd. - Class A 3,135 $ 91,636
------------
BANKS -- 5.6%
Bank of America Corp. 12,905 $ 181,703
Bank of New York Mellon Corp. 25,155 712,641
Hudson City Bancorp, Inc. 13,605 217,136
M&T Bank Corp. 1,230 70,614
Wells Fargo & Co. 21,185 624,534
------------
$ 1,806,628
------------
CAPITAL GOODS -- 5.8%
Caterpillar, Inc. 9,830 $ 439,106
Cummins, Inc. 1,775 47,446
Deere & Co. 4,580 175,505
General Electric Co. 10,215 165,483
Illinois Tool Works, Inc. 3,075 107,779
Lockheed Martin Corp. 9,155 769,752
Parker Hannifin Corp. 3,955 168,246
------------
$ 1,873,317
------------
COMMUNICATIONS EQUIPMENT -- 1.4%
Cisco Systems, Inc. * 13,290 $ 216,627
L-3 Communications Holdings, Inc. 3,155 232,776
------------
$ 449,403
------------
COMPUTERS & PERIPHERALS -- 8.4%
Affiliated Computer Services,
Inc. - Class A* 2,930 $ 134,633
Apple, Inc. * 4,220 360,177
Hewlett-Packard Co. 30,930 1,122,450
International Business Machines Corp. 12,720 1,070,515
Lexmark International, Inc. - Class A *1,690 45,461
------------
$ 2,733,236
------------
CONSTRUCTION & ENGINEERING -- 0.6%
Fluor Corp. 4,325 $ 194,063
------------
DIVERSIFIED FINANCIALS -- 3.0%
American Express Co. 7,840 $ 145,432
Capital One Financial Corp. 7,570 241,407
Citigroup, Inc. 10,191 68,382
Federated Investors, Inc. - Class B 6,365 107,950
Goldman Sachs Group, Inc. (The) 1,325 111,817
PNC Financial Services Group, Inc. 6,005 294,245
------------
$ 969,233
------------
EDUCATION -- 0.5%
Apollo Group, Inc. - Class A* 2,205 $ 168,947
------------
ELECTRONICS -- 0.4%
Emerson Electric Co. 3,930 $ 143,877
------------
ENERGY -- 13.7%
Apache Corp. 1,250 $ 93,162
Chesapeake Energy Corp. 3,375 54,574
Chevron Corp. 15,470 1,144,316
ConocoPhillips Co. 12,630 654,234
ENSCO International, Inc. 1,920 54,509
Exxon Mobil Corp. 19,660 1,569,458
Hess Corp. 1,625 87,165
National Oilwell Varco, Inc. * 3,520 86,029
Noble Energy, Inc. 1,740 85,643
Occidental Petroleum Corp. 9,790 587,302
Transocean, Inc. * 625 29,531
------------
$ 4,445,923
------------
ENTERTAINMENT & LEISURE -- 2.8%
Hasbro, Inc. 5,315 $ 155,039
Walt Disney Co. (The) 32,550 738,559
------------
$ 893,598
------------
FOOD, BEVERAGE & TOBACCO -- 3.9%
Altria Group, Inc. 32,970 $ 496,528
Molson Coors Brewing Co. - Class B 5,860 286,671
PepsiCo, Inc. 3,085 168,966
Philip Morris International, Inc. 7,115 309,574
------------
$ 1,261,739
------------
HEALTH CARE EQUIPMENT & SERVICES-- 4.5%
Aetna, Inc. 8,050 $ 229,425
Baxter International, Inc. 2,965 158,894
Express Scripts, Inc. * 6,480 356,270
Laboratory Corp of America Holdings * 2,210 142,346
Medtronic, Inc. 7,775 244,291
WellPoint, Inc. * 8,105 341,464
------------
$ 1,472,690
------------
HEAVY MACHINERY -- 0.4%
Dover Corp. 3,270 $ 107,648
Manitowoc Co., Inc. (The) 2,480 21,477
------------
$ 129,125
------------
HOTELS, RESTAURANTS & LEISURE -- 2.3%
McDonald's Corp. 12,175 $ 757,163
------------
HOUSEHOLD DURABLES -- 2.0%
Fortune Brands, Inc. 2,085 $ 86,069
Leggett & Platt, Inc. 11,205 170,204
Procter & Gamble Co. 5,730 354,229
Stanley Works, (The) 1,455 49,615
------------
$ 660,117
------------
INSURANCE -- 8.2%
Aflac, Inc. 12,495 $ 572,771
Assurant, Inc. 2,220 66,600
Chubb Corp. 11,265 574,515
Hartford Financial Services Group, Inc. 6,185 101,558
MetLife, Inc. 19,920 694,411
Progressive Corp. 5,175 76,642
Torchmark Corp. 2,955 132,088
Travelers Cos, Inc. (The) 4,790 216,508
Unum Group 11,590 215,574
------------
$ 2,650,667
------------
MATERIALS -- 1.1%
CF Industries Holdings, Inc. 1,645 $ 80,868
Nucor Corp. 6,285 290,367
------------
$ 371,235
------------
MEDIA -- 0.3%
Omnicom Group, Inc. 3,330 $ 89,644
------------
METALS -- 1.0%
AK Steel Holding Corp. 2,435 $ 22,694
Freeport-McMoRan Copper & Gold, Inc. 5,005 122,322
Newmont Mining Corp. 2,880 117,216
United States Steel Corp. 1,830 68,076
------------
$ 330,308
------------
OFFICE ELECTRONICS -- 0.1%
Xerox Corp. 5,765 $ 45,947
------------
PHARMACEUTICALS & BIOTECHNOLOGY-- 10.1%
Amgen, Inc. * 10,900 $ 629,475
Biogen Idec, Inc. * 3,135 149,320
Forest Labs * 5,825 148,363
Johnson & Johnson, Inc. 16,470 985,400
King Pharmaceuticals, Inc. * 11,010 116,926
Pfizer, Inc. 55,825 988,661
Watson Pharmaceuticals, Inc. * 9,565 254,142
------------
$ 3,272,287
------------
RETAILING -- 5.1%
Best Buy Co., Inc. 6,355 $ 178,639
Big Lots, Inc. * 7,175 103,966
CVS/Caremark Corp. 5,415 155,627
eBay, Inc. * 3,110 43,416
GameStop Corp. - Class A* 7,125 154,327
Sherwin-Williams Co. 5,860 350,135
SUPERVALU, Inc. 4,245 61,977
TJX Cos., Inc. 6,015 123,729
Wal-Mart Stores, Inc. 8,835 495,290
------------
$ 1,667,106
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 0.1%
QLogic Corp. * 2,810 $ 37,766
------------
SOFTWARE & SERVICES -- 6.4%
BMC Software, Inc. * 8,250 $ 222,007
Computer Sciences Corp. * 1,910 67,117
Compuware Corp. * 14,665 98,989
EMC Corp. * 12,865 134,697
Microsoft Corp. 43,065 837,184
Oracle Corp. * 36,525 647,588
Symantec Corp. * 5,330 72,062
------------
$ 2,079,644
------------
TELECOMMUNICATION SERVICES -- 2.6%
AT&T, Inc. 26,205 $ 746,842
CenturyTel, Inc. 3,760 102,761
------------
$ 849,603
------------
TRANSPORTATION -- 1.9%
Boeing Co. (The) 3,030 $ 129,290
Burlington Northern Santa Fe Corp. 4,135 313,061
CSX Corp. 1,900 61,693
Norfolk Southern Corp. 2,345 110,332
------------
$ 614,376
------------
UTILITIES -- 2.4%
Integrys Energy Group, Inc. 14,605 $ 627,723
Public Service Enterprise Group, Inc. 4,900 142,933
------------
$ 770,656
------------
TOTAL EQUITY INTERESTS - 97.5%
(identified cost, $40,243,137) $ 31,674,571
------------
INVESTMENT FUNDS -- 1.3%
CAPITAL MARKETS -- 1.3%
SPDR Trust Series 1 4,535 $ 409,238
------------
TOTAL INVESTMENT FUNDS - 1.3%
(identified cost, $399,352) $ 409,238
------------
TOTAL INVESTMENTS - 98.8%
(identified cost, $40,642,489) $ 32,083,809
OTHER ASSETS, LESS LIABILITIES - 1.2% 399,775
------------
NET ASSETS - 100.0% $ 32,483,584
============
Industry classifications included in the Portfolio of Investments are unaudited.
* Non-income-producing security.
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
- ------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $40,642,489) (Note 1A) $ 32,083,809
Cash 244,676
Receivable for fund shares sold 126,052
Receivable from affiliates 2,361
Dividends receivable 65,678
Other assets 2,840
------------
Total assets $ 32,525,416
------------
LIABILITIES:
Payable for fund shares reacquired $ 4,484
Payable to affiliate for investment
adviser fee 1,502
Payable to affiliate for distribution
expenses 5,183
Accrued expenses and other liabilities 30,663
------------
Total liabilities $ 41,832
------------
NET ASSETS $ 32,483,584
============
NET ASSETS CONSIST OF:
Paid-in capital $ 58,659,125
Accumulated net realized loss on investments
(computed on the basis of identified cost) (17,624,522)
Unrealized appreciation (depreciation)
of investments (computed on the basis
of identified cost) (8,558,680)
Accumulated undistributed net investment
income 7,661
------------
Net assets applicable to outstanding shares $ 32,483,584
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 3,478,991
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 9.34
============
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
- ------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income $ 961,590
------------
Expenses -
Investment adviser fee (Note 3) $ 274,083
Administrator fee (Note 3) 54,817
Compensation of Trustees who are not employees
of the investment adviser or administrator 12,961
Custodian fee (Note 1F) 67,506
Distribution expenses (Note 4) 114,201
Transfer and dividend disbursing agent fees 19,657
Printing 3,195
Interest expense 5,055
Shareholder communications 1,865
Audit services 30,003
Legal services 10,366
Registration costs 20,536
Miscellaneous 8,901
------------
Total expenses $ 623,146
------------
Deduct -
Waiver and/or reimbursement by the principal
underwriter and/or investment adviser
(Note 3 and 4) $ (50,060)
Reduction of custodian fee (Note 1F) (2,081)
------------
Total deductions $ (52,141)
------------
Net expenses $ 571,005
------------
Net investment income $ 390,585
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis) $ (2,313,558)
Net change in unrealized appreciation
(depreciation on investments (17,276,483)
------------
Net realized and unrealized loss on
investments $(19,590,041)
------------
Net decrease in net assets from operations $(19,199,456)
============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- -------------------------------------------------------------------------------
Year Ended
December 31,
------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2008 2007
- --------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 390,585 $ 381,955
Net realized gain (loss) on investment transactions (2,313,558) 5,221,457
Net change in unrealized appreciation (depreciation) on investments (17,276,483) (1,973,444)
-------------- --------------
Net increase (decrease) in net assets from operations $(19,199,456) $ 3,629,968
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ (399,235) $ (362,113)
-------------- --------------
Total distributions $ (399,235) $ (362,113)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 6) $ (5,667,495) $ (8,794,028)
-------------- --------------
Net decrease in net assets $(25,266,186) $ (5,526,173)
NET ASSETS:
At beginning of year 57,749,770 63,275,943
-------------- --------------
At end of year $ 32,483,584 $ 57,749,770
============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF YEAR $ 7,661 $ 19,267
============== ==============
See notes to financial statements
WRIGHT MAJOR BLUE CHIP EQUITIES FUND (WMBC)
- ------------------------------------------------------------------------------
Year Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006(3) 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 14.520 $ 13.790 $ 12.420 $ 11.780 $ 10.530
--------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.104 $ 0.091 $ 0.062 $ 0.077 $ 0.053
Net realized and unrealized gain (loss) (5.169) 0.728 1.374 0.651 1.247
--------- --------- --------- --------- ---------
Total income (loss) from investment operations $ (5.065) $ 0.819 $ 1.436 $ 0.728 $ 1.300
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From net investment income $ (0.115) $ (0.089) $ (0.066) $ (0.088) $ (0.050)
--------- --------- --------- --------- ---------
Total distributions $ (0.115) $ (0.089) $ (0.066) $ (0.088) $ (0.050)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 9.340 $ 14.520 $ 13.790 $ 12.420 $ 11.780
========= ========= ========= ========= =========
TOTAL RETURN(2) (34.85)% 5.96% 11.57% 6.20% 12.36%
========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of year (000 omitted) $ 32,484 $ 57,750 $ 63,276 $ 66,742 $ 65,503
Ratios (As a percentage of average daily net assets):
Net expenses 1.26% 1.26% 1.26% 1.26% 1.25%
Net expenses after custodian fee reduction 1.25% 1.25% 1.25% 1.25% 1.25%
Net investment income 0.86% 0.63% 0.48% 0.66% 0.49%
Portfolio turnover rate 58% 55% 97% 82% 74%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the
operating expenses of the Fund were reduced by a waiver of fees and/or an allocation
of expenses to the principal underwriter 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
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ 0.091 $ 0.088 $ 0.062 $ 0.077 $ 0.050
========= ========= ========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses 1.37% 1.28% 1.28% 1.26% 1.28%
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.36% 1.27% 1.27% 1.25% 1.28%
========= ========= ========= ========= =========
Net investment income 0.75% 0.61% 0.46% 0.66% 0.46%
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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.
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- ------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008
Shares Value
EQUITY INTERESTS - 98.5%
AUSTRALIA -- 3.2%
BHP Billiton, Ltd. 34,756 $ 722,210
BlueScope Steel, Ltd. 52,563 127,089
Caltex Australia, Ltd. (1) 20,461 101,094
QBE Insurance Group, Ltd. 40,597 724,371
Sims Metal Management, Ltd. 9,087 108,772
Westpac Banking Corp. 30,204 352,018
------------
$ 2,135,554
------------
AUSTRIA -- 0.3%
Voestalpine AG 8,557 $ 184,503
------------
CANADA -- 7.8%
Canadian National Railway Co. 18,198 $ 662,762
Canadian Natural Resources, Ltd. 3,095 122,118
Canadian Pacific Railway, Ltd. 11,330 379,443
CGI Group, Inc. - Class A * 74,788 581,758
Encana Corp. 24,223 1,130,750
Husky Energy, Inc. 23,742 586,861
Manulife Financial Corp. 13,104 220,674
Methanex Corp. 34,407 392,924
Petro-Canada 12,483 272,713
Potash Corp. of Saskatchewan, Inc. 4,934 368,289
Toronto-Dominion Bank 15,519 545,802
------------
$ 5,264,094
------------
DENMARK -- 1.2%
Danske Bank A/S (Stammaktie) 4,161 $ 41,622
Novo Nordisk A/S - Series B 14,826 772,889
------------
$ 814,511
------------
FINLAND -- 1.2%
Nokia Oyj 49,306 $ 784,617
------------
FRANCE -- 9.5%
AXA (Actions Ordinaires) (1) 14,810 $ 331,219
BNP Paribas 10,763 462,903
Casino Guichard-Perrachon SA 7,678 577,886
Compagnie Generale des Etablisssements
Michelin - Class B 4,009 213,803
France Telecom SA 12,645 365,736
Groupe Danone 24,337 1,515,452
Sanofi-Aventis (1) 11,893 780,041
Schneider Electric SA 4,301 328,834
Total SA 22,636 1,272,099
Vallourec SA 4,355 501,472
------------
$ 6,349,445
------------
GERMANY -- 10.6%
Allianz AG Holding (Namensaktie) 3,537 $ 380,305
BASF AG (Stammaktie) 37,967 1,509,355
Bayer AG 10,957 652,676
Bayerische Motoren Werke AG 7,851 243,229
Deutsche Bank AG (Stammaktie) 11,881 474,025
Deutsche Lufthansa AG 18,850 302,396
E.On AG (Stammaktie) 46,138 1,881,151
MAN AG 6,634 368,253
Muenchener Rueckversicherungs-
Gesellschaft AG 4,365 694,612
Porsche AG (Preferred Stock) 2,887 227,017
ThyssenKrupp AG 13,318 362,003
------------
$ 7,095,022
------------
GREECE -- 1.2%
Alpha Bank A.E. 24,324 $ 236,428
Coca Cola Hellenic Bottling Co. SA 18,688 273,274
National Bank of Greece SA 16,822 325,572
------------
$ 835,274
------------
HONG KONG -- 5.9%
BOC Hong Kong Holdings, Ltd. 186,000 $ 208,952
Cheung Kong Holdings, Ltd. 40,000 371,415
CLP Holdings, Ltd. (Ordinary) 285,000 1,964,248
Hang Seng Bank, Ltd. 41,500 558,475
Henderson Land Development Co., Ltd. 110,000 404,240
Sun Hung Kai Properties, Ltd. 58,000 489,247
------------
$ 3,996,577
------------
IRELAND -- 0.4%
CRH PLC 10,670 $ 275,342
------------
ITALY -- 3.9%
Eni SpA (Azioni Ordinarie) 97,644 $ 2,343,345
Saipem SpA 14,773 250,335
------------
$ 2,593,680
------------
JAPAN -- 16.3%
Aisin Seiki Co., Ltd. 18,400 $ 255,401
Astellas Pharma, Inc. 34,400 1,403,469
Daihatsu Motor Co., Ltd. 9,000 79,203
Denso Corp. 10,000 165,217
Honda Motor Co., Ltd. 28,500 610,528
Kirin Holdings Co., Ltd. 13,000 171,826
Komatsu, Ltd. 18,000 226,179
Makita Corp. 28,000 619,013
Marubeni Corp. 43,000 162,385
Mitsubishi Corp. 28,000 389,598
Mitsubishi Electric Corp. 29,000 179,918
Mitsubishi Gas Chemical Co., Inc. 45,000 183,087
Mitsui & Co., Ltd. 23,000 232,911
Mitsui OSK Lines, Ltd. 175,000 1,066,044
Nintendo Company, Ltd. 1,200 455,190
Nippon Oil Corp. 59,000 296,413
Nippon Steel Corp. 157,000 511,723
Nippon Yusen Kabushiki Kaisha 132,000 808,552
Nisshin Steel Co., Ltd. (1) 245,000 501,158
Omron Corp. 11,200 150,930
Panasonic Corp. 8,000 100,074
Sankyo Co., Ltd. 4,400 222,537
Sumitomo Corp. (1) 80,000 701,330
Tokai Rika Co., Ltd. 26,000 227,348
Tokyo Electron, Ltd. 4,100 142,851
Toyota Motor Corp. 33,900 1,106,836
------------
$ 10,969,721
------------
NETHERLANDS -- 3.4%
ING Groep NV (Aandeel) 78,733 $ 870,593
Koninklijke (Royal) KPN NV 49,376 733,349
Koninklijke Philips
Electronics NV (Aandeel) 35,244 702,826
------------
$ 2,306,768
------------
NORWAY -- 1.3%
StatoilHydro ASA 12,500 $ 206,122
Telenor Group ASA * 96,973 650,014
------------
$ 856,136
------------
SINGAPORE -- 1.4%
Jardine Cycle & Carriage, Ltd. (1) 89,000 $ 606,831
Overseas-Chinese Banking Corp., Ltd. 100,000 355,003
------------
$ 961,834
------------
SPAIN -- 8.0%
Acciona SA (1) 2,682 $ 342,203
Banco Bilbao Vizcaya Argentaria SA 14,523 180,306
Banco Santander SA 104,004 1,006,443
Iberdrola Renovables SA * 90,000 393,530
Mapfre SA 117,796 405,300
Repsol YPF SA (Accion) 21,258 460,187
Telefonica SA 112,959 2,566,760
------------
$ 5,354,729
------------
SWEDEN -- 0.8%
TeliaSonera AB 109,718 $ 558,659
------------
SWITZERLAND -- 6.3%
ABB, Ltd. * 14,982 $ 224,825
Holcim, Ltd. 3,540 205,603
Nestle SA 13,350 534,913
Roche Holding AG 4,228 661,754
Swatch Group AG 1,922 269,910
Swiss Re AG 7,961 385,695
Zurich Financial Services
(Inhaberaktie) 8,859 1,936,952
------------
$ 4,219,652
------------
UNITED KINGDOM -- 15.8%
Anglo American PLC (Ordinary) 16,052 $ 365,030
AstraZeneca PLC 35,899 1,442,673
Barclays PLC (Ordinary) 99,680 217,202
BG Group PLC 10,637 150,734
BHP Billiton PLC 40,865 763,750
BP PLC 45,872 348,835
British Airways PLC 95,143 246,970
British American Tobacco PLC 19,696 515,585
Centrica PLC 48,246 184,502
GlaxoSmithKline PLC 10,700 197,005
HSBC Holdings PLC 43,538 413,221
Legal & General Group (Ordinary) 361,748 396,768
Lloyds TSB Group PLC 219,116 405,353
Lloyds TSB Group PLC Rights 95,249 --
Man Group PLC 157,944 542,223
Next PLC 14,886 237,940
Rio Tinto PLC 11,165 236,426
Royal Bank of Scotland Group
PLC (Ordinary) 190,836 134,517
Royal Dutch Shell PLC 72,317 1,825,366
Tate & Lyle PLC 17,424 100,969
Unilever PLC 59,165 1,366,205
Vodafone Group PLC 254,799 507,136
------------
$ 10,598,410
------------
TOTAL EQUITY INTERESTS - 98.5%
(identified cost, $93,692,893) $ 66,154,528
------------
SHORT-TERM INVESTMENTS - 3.2%
State Street Navigator Securities
Lending Prime Portfolio, 2.17%(2) 2,105,799 $ 2,105,799
------------
TOTAL SHORT-TERM INVESTMENTS - 3.2%
(identified cost, $2,105,799) $ 2,105,799
------------
TOTAL INVESTMENTS - 101.7%
(identified cost, $95,798,692) $ 68,260,327
OTHER ASSETS, LESS LIABILITIES - (1.7)% (1,114,793)
------------
NET ASSETS - 100.0% $ 67,145,534
============
* Non-income-producing security.
(1) All or a portion on these securities were on loan at December 31, 2008.
(2) The amount invested in State Street Navigator Securities Lending Prime
Portfolio represents cash collateral received for securities on loan as of
December 31, 2008. Other Assets, Less Liabilities includes an equal and
offsetting liability of the Fund to repay collateral amounts upon the return
of loaned securities.
Portfolio Composition By Sector
-----------------------------------
% of net assets at 12/31/08
(Unaudited)
Financial............................21.3%
Energy...............................14.2%
Industrials..........................11.3%
Materials............................10.3%
Health Care...........................9.0%
Other................................32.4%
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value including
$1,977,119 of securities loaned
(identified cost $95,798,692) (Note 1A) $ 68,260,327
Foreign currency, at value
(cost $58,591) (Note 1A) 58,562
Cash 127
Receivable for investments sold 1,110,063
Receivable for fund shares sold 167,680
Dividends receivable 95,630
Receivable for securities lending 2,147
Tax reclaims receivable 117,987
Other assets 657
------------
Total assets $ 69,813,180
------------
LIABILITIES:
Demand note payable (Note 8) $ 244,000
Payable for investments purchased 189,914
Payable for fund shares reacquired 34,247
Collateral for securities loaned 2,105,799
Payable to affiliate for distribution
expenses 17,887
Accrued expenses and other liabilities 75,799
------------
Total liabilities $ 2,667,646
------------
NET ASSETS $ 67,145,534
============
NET ASSETS CONSIST OF:
Paid-in capital $130,629,404
Accumulated net realized loss on investments
and foreign currency (computed on
the basis of identified cost) (35,983,173)
Unrealized appreciation (depreciation) of
investments and foreign currency
(computed on the basis of identified cost) (27,500,697)
------------
Net assets applicable to outstanding shares $ 67,145,534
============
SHARES OF BENEFICIAL INTEREST OUTSTANDING 6,211,095
============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST $ 10.81
============
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
- ------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Dividend income (net of foreign
taxes, $595,667) $ 5,302,207
Income from securities lending 246,977
Other income 12,621
------------
Total Investment Income $ 5,561,805
------------
Expenses -
Investment adviser fee (Note 3) $ 1,045,198
Administrator fee (Note 3) 184,837
Compensation of Trustees who are not employees
of the investment adviser or administrator 12,965
Custodian fee (Note 1F) 272,753
Distribution expenses (Note 4) 329,057
Transfer and dividend disbursing agent fees 47,672
Printing 4,675
Interest expense 28,129
Shareholder communications 1,640
Audit services 40,265
Legal services 14,248
Registration costs 24,180
Miscellaneous 11,774
------------
Total expenses $ 2,017,393
------------
Deduct -
Reduction of custodian fee (Note 1F) $ (9,613)
------------
Total deductions $ (9,613)
------------
Net expenses $ 2,007,780
------------
Net investment income $ 3,554,025
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss -
Investment transactions (identified
cost basis) $(34,577,073)
Foreign currency transactions (103,013)
------------
Net realized loss $(34,680,086)
------------
Change in unrealized appreciatio
(depreciation) -
Investments (identified cost basis) $(46,861,298)
Foreign currency (29,277)
------------
Net change in unrealized appreciation
(depreciation) $(46,890,575)
------------
Net realized and unrealized loss on
investments $(81,570,661)
------------
Net decrease in net assets from operations $(78,016,636)
=============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- -------------------------------------------------------------------------------
Year Ended
December 31,
---------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2008 2007
- ------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 3,554,025 $ 4,142,249
Net realized gain (loss) on investment and foreign currency transactions (34,680,086) 32,400,973
Net change in unrealized appreciation (depreciation) of investments and
foreign currency (46,890,575) (25,176,405)
--------------- --------------
Net increase (decrease) in net assets from operations $(78,016,636) $ 11,366,817
--------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ (3,451,012) $ (4,294,177)
From net realized gains (4,298,181) (8,544,757)
Tax return of capital (48,984) --
--------------- --------------
Total distributions $ (7,798,177) $(12,838,934)
--------------- --------------
Net decrease in net assets from fund share transactions (Note 6) $(30,647,579) $(33,121,129)
--------------- --------------
Net decrease in net assets $(116,462,392) $(34,593,246)
NET ASSETS:
At beginning of year 183,607,926 218,201,172
--------------- --------------
At end of year $ 67,145,534 $183,607,926
=============== ==============
See notes to financial statements
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND (WIBC)
- ------------------------------------------------------------------------------
Year Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(1) 2007(1) 2006(1) 2005(1) 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 22.470 $ 22.830 $ 18.060 $ 15.070 $12.890
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income $ 0.483 $ 0.434 $ 0.255 $ 0.129 $ 0.128
Net realized and unrealized gain (loss) (11.002) 0.755 4.859 3.028 2.140
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations $ (10.519) $ 1.189 $ 5.114 $ 3.157 $ 2.268
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
From net investment income $ (0.575) $ (0.491) $ (0.320) $ (0.167) $(0.088)
From net realized gains (0.558) (1.058) (0.024) - -
Tax return of capital (0.008) - - - -
---------- ---------- ---------- ---------- ----------
Total distributions $ (1.141) $ (1.549) $ (0.344) $ (0.167) $(0.088)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 10.810 $ 22.470 $ 22.830 $ 18.060 $15.070
========== ========== ========== ========== ==========
TOTAL RETURN(2) (47.74)% 5.50% 28.49% 21.13% 17.71%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000 omitted) $ 67,146 $ 183,608 $ 218,201 $ 109,897 $ 62,266
Ratios (As a percentage of average daily net assets):
Net expenses 1.54% 1.49% 1.46% 1.66% 1.72%
Net expenses after custodian fee reduction 1.53% 1.47% 1.37% 1.62% 1.71%
Net investment income 2.71% 1.82% 1.26% 0.81% 0.97%
Portfolio turnover rate 82% 138% 116% 99% 121%
- --------------------------------------------------------------------------------------------------------------------------------
(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.
See notes to financial statements
WRIGHT MANAGED EQUITY TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
--------------------------------
The Wright Managed Equity Trust (the Trust), issuer of Wright 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.
Investments in open-end mutual funds are valued at net asset value. Short-term
debt securities with a remaining maturity of sixty days or less 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. 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 are monitored by the investment adviser and 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. Foreign securities and currencies are valued in U.S. dollars,
based on foreign currency exchange rate quotations supplied by an independent
quotation service. The independent service uses a proprietary model to determine
the exchange rate. Inputs to the model include reported trades and implied
bid/ask spreads. 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 Funds 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. Income - Dividend income is 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 accretion of
discount.
D. Federal Taxes - Each Fund'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 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, 2008, WSBC, WMBC and WIBC, for federal income tax purposes, had
capital loss carryovers of $640,031, $15,844,437 and $18,850,926, respectively,
which will reduce the respective 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 distributions to shareholders which
would otherwise be necessary to relieve the respective Fund of any liability for
federal income or excise tax. The amounts and expiration dates of the capital
loss carryforwards are as follows:
December 31, WSBC WMBC WIBC
- -------------------------------------------------------------------------------
2010 $ - $ 12,738,080 $ -
2011 - 2,230,768 -
2016 640,031 875,589 18,850,926
- -------------------------------------------------------------------------------
Additionally, at December 31, 2008, WSBC, WMBC and WIBC had net capital losses
of $593,005, $1,749,806 and $12,196,103, respectively, attributable to security
transactions incurred after October 31, 2008. These net capital losses are
treated as arising on the first day of the Funds' taxable year ending December
31, 2009.
As of December 31, 2008, the Funds had 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,
2008 remains subject to examination by the Internal Revenue Service.
E. Expenses - The majority of expenses of the Trust 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 Statements
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 the Trust'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.
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 the Funds and to distribute
annually all or substantially all of the net realized capital gains (reduced by
available capital loss carryforwards from prior years, if any). 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 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. For tax purposes, distributions from short-term capital gains are
considered to be from ordinary income.
The tax character of distributions paid for the year ended December 31, 2008 and
December 31, 2007 was as follows:
Year Ended 12/31/08 WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $ 115,945 $ 399,235 $ 3,451,012
Long-term capital gains 1,747,306 - 4,298,181
Tax return of capital - - 48,984
- -------------------------------------------------------------------------------
Year Ended 12/31/07 WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $ 33,344 $ 362,113 $ 4,294,177
Long-term capital gains 5,034,405 - 8,544,757
- -------------------------------------------------------------------------------
During the year ended December 31, 2008, the following amounts were reclassified
due to differences between book and tax accounting, primarily for net operating
losses, foreign currency gain (loss), distributions from real estate investment
trusts, and return of capital distributions from securities.
Increase (decrease): WSBC SMBC WIBC
- -------------------------------------------------------------------------------
Paid-in capital $ (30,141) $ - $ 8,532
Accumulated net realized
gain (loss) 2,608 2,956 94,481
Accumulated undistributed
net investment income
(loss) 27,533 (2,956) (103,013)
- -------------------------------------------------------------------------------
These reclassifications had no effect on the net assets or net asset value per
share of the Funds.
As of December 31, 2008, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Undistributed ordinary income $ - $ 7,661 $ -
Capital loss carryforward and
post October losses (1,233,036) (17,594,243) (31,047,029)
Net unrealized depreciation (3,587,737) (8,588,959) (32,436,841)
- -------------------------------------------------------------------------------
The differences between components of distributable earnings (accumulated
losses) on a tax basis and the amounts reflected in the Statements of Assets and
Liabilities are primarily due to wash sales.
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. For
WIBC, the fee is computed at an annual rate of 0.80% of its average daily net
assets up to $100 million and at reduced rates as net assets exceed that level,
and is payable monthly. For WSBC and WMBC, the fee is computed at an annual rate
of 0.60% of their average daily net assets up to $100 million and at reduced
rates as net assets exceed that level, and is payable monthly. For the year
ended December 31, 2008, the fee and the effective annual rate, as a percentage
of average daily net assets for each of the Funds were as follows:
Fund Investment Adviser Fee Effective Annual Rate
--------------------------------------------------------------------------
WSBC $ 108,213 0.60%
WMBC 274,083 0.60%
WIBC 1,045,198 0.80%
- -------------------------------------------------------------------------------
The administrator fee is earned by Eaton Vance Management (Eaton Vance) for
administering the business affairs of each Fund. The fee is computed at an
annual rate of 0.17% of WIBC's average daily net assets up to $100 million and
0.07% of average daily net assets over $100 million. The fee is computed at an
annual rate of 0.12% of WSBC's and WMBC's average daily net assets up to $100
million and 0.07% of average daily net assets over $100 million. For the year
ended December 31, 2008, the administrator fee for WSBC, WMBC and WIBC amounted
to $21,643, $54,817 and $184,837, respectively. Wright also waived and/or
reimbursed expenses for WSBC and WMBC (see Note 4).
Certain of the Trustees and officers of the Trust are Trustees or officers of
the above organizations and/or of the Funds' principal underwriter. Except as
to Trustees of the Trust who are not employees of Eaton Vance or Wright,
Trustees and officers receive remuneration for their services to the Trust out
of fees paid to Eaton Vance and Wright.
4. Distribution and Service 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 Fund will pay Wright Investors'
Service Distributors, Inc. (WISDI), the principal underwriter, a wholly-owned
subsidiary of The Winthrop Corporation and an affiliate of Wright, a
distribution fee of 0.25% of the average daily net assets of each Fund for
distribution services and facilities provided to the Funds by WISDI.
Distribution fees paid or accrued to WISDI for the year ended December 31, 2008
for WSBC, WMBC and WIBC were $45,089, $114,201, and $329,057, 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 year ended December 31, 2008, the Funds did
not accrue or pay any service fees. Pursuant to an Expense Limitation Agreement,
Wright and WISDI have agreed to waive all or a portion of their fees and
reimburse expenses to the extent that total annual operating expenses after
custodian fee reductions, if any, exceed 1.25% of the average daily net assets
of each of WSBC and WMBC through April 30, 2009. Thereafter, the waiver and
reimbursement may be changed or terminated at any time. Pursuant to this
agreement, Wright and WISDI waived and/or reimbursed expenses in the aggregate
of $115,081 and $50,060 for WSBC and WMBC, respectively.
5. Investment Transactions
-----------------------------
Purchases and sales of investments, other than short-term obligations, were as
follows:
Year Ended December 31, 2008
--------------------------------------
WSBC WMBC WIBC
- ------------------------------------------------------------------------------
Purchases $ 13,200,747 $ 26,718,651 $ 108,451,665
============== ============== ==============
Sales $ 16,019,794 $ 32,687,333 $ 140,326,162
============== ============== ==============
- -------------------------------------------------------------------------------
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:
Year Ended Year Ended
December 31, 2008 December 31, 2007
---------------------- ----------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
WRIGHT SELECTED BLUE CHIP EQUITIES FUND
Sold 427,666 $ 2,870,659 131,958 $ 1,665,341
Issued to shareholders in payment of distributions declared 192,784 1,704,210 401,088 4,525,042
Redemptions (571,344) (5,060,980) (1,501,608) (18,810,209)
------------ ---------------- ------------ ----------------
Net increase (decrease) 49,106 $ (486,111) (968,562) $ (12,619,826)
============ ================ ============ ================
WRIGHT MAJOR BLUE CHIP EQUITIES FUND
Sold 604,845 $ 7,164,833 393,484 $ 5,670,384
Issued to shareholders in payment of distributions declared 34,851 314,669 21,159 299,544
Redemptions (1,138,917) (13,146,997) (1,023,623) (14,763,956)
------------ ---------------- ------------ ----------------
Net decrease (499,221) $ (5,667,495) (608,980) $ (8,794,028)
============ ================ ============ ================
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES FUND
Sold 1,072,677 $ 19,169,564 4,830,446 $ 115,578,462
Issued to shareholders in payment of distributions declared 435,264 6,310,860 504,859 11,019,992
Redemptions (3,468,134) (56,133,850) (6,722,679) (159,773,243)
Redemption fees - 5,847 - 53,660
------------ ---------------- ------------ ----------------
Net decrease (1,960,193) $ (30,647,579) (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 December 31, 2008, as determined on a federal income tax basis, were as
follows:
Year Ended December 31, 2008
---------------------------------------------------------
WSBC WMBC WIBC
- --------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $ 16,482,496 $ 40,672,768 $ 100,734,836
================ ================ ================
Gross unrealized appreciation 287,020 1,843,681 2,077,657
Gross unrealized depreciation (3,874,757) (10,432,640) (34,552,166)
---------------- ---------------- ----------------
Net unrealized depreciation $ (3,587,737) $ (8,588,959) $ (32,474,509)
================ ================ =================
- --------------------------------------------------------------------------------------------------------------------------------
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 December 31, 2008, WIBC had a balance outstanding pursuant
to this line of credit of $244,000 at an interest rate of 1%.
The average borrowings and average interest rate for the year ended December 31,
2008 were follows:
WSBC WMBC WIBC
- -------------------------------------------------------------------------------
Average borrowings $ 58,598 $ 143,964 $ 920,667
Average interest rate 3.0% 2.2% 2.9%
- -------------------------------------------------------------------------------
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. Securities 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 Portfolio). The Fund earns interest on the amount invested in the
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 $779 for the year ended December 31, 2008. At December 31, 2008, the
value of the securities loaned and the value of the collateral amounted to
$1,977,119 and $2,105,799, 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 securities lending agreement to recover
the securities from the borrower on demand.
11. Fair Value Measurements
-------------------------
The Funds 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 December 31, 2008, the inputs used in valuing each Fund's investments, which
are carried at value, were as follows:
WSBC WMBC WIBC
-------------------------------------------------------------
Valuation Inputs
---------------------------------------------------------------------------------------------------------
Level 1 Quoted Prices $ 12,894,759 $ 32,083,809 $ 68,260,327
Level 2 Other Significant Observable Inputs - - -
Level 3 Significant Unobservable Inputs - - -
---------------------------------------------------------------------------------------------------------
Total $ 12,894,759 $ 32,083,809 $ 68,260,327
The Funds held no investments or other financial instruments as of December 31,
2007 whose fair value was determined using Level 3 inputs.
WRIGHT MANAGED EQUITY TRUST
- ------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees of Wright Managed Equity Trust and the Shareholders of Wright
Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and
Wright International Blue Chip Equities Fund:
We have audited the accompanying statements of assets and liabilities of Wright
Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund, and
Wright International Blue Chip Equities Fund (collectively, the
"Funds")(together comprising Wright Managed Equity Trust), including the
portfolios of investments, as of December 31, 2008, and the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods presented. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Funds
are not required to have, nor were we engaged to perform, an audit of their
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Funds' internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2008, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Wright Selected Blue Chip Equities Fund, Wright Major Blue Chip Equities Fund,
and Wright International Blue Chip Equities Fund as of December 31, 2008, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 16, 2009
WRIGHT MANAGED EQUITY TRUST AS OF DECEMBER 31, 2008
- ------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED)
The Form 1099-DIV you received in January 2009 showed the tax status of all
distributions paid to your account in calendar 2008. Shareholders are advised to
consult their own tax adviser with respect to the tax consequences of their
investment in the Funds. As required by the Internal Revenue Code regulations,
shareholders must be notified within 60 days of a Fund's fiscal year end
regarding capital gain dividends, and the status of qualified dividend income
for individuals, the dividends received deduction for corporations and the
foreign tax credit.
CAPITAL GAIN DIVIDENDS - Wright Selected Blue Chip Equities Fund and Wright
International Blue Chip Equities Fund designate $1,863,310 and $4,306,699,
respectively, as a capital gain dividend.
DIVIDENDS RECEIVED DEDUCTION - Corporate shareholders are generally entitled to
take the dividends received deduction on the portion of a fund's dividend
distribution that qualifies under tax law. For the Wright Selected Blue Chip
Equities Fund's, Wright Major Blue Chip Equities Fund's and Wright International
Blue Chip Equities Fund's fiscal 2008 ordinary income dividends, 99.49%, 100%
and 1.30%, respectively, qualifies for the corporate dividends received
deduction.
QUALIFIED DIVIDEND INCOME - Wright Selected Blue Chip Equities Fund, Wright
Major Blue Chip Equities Fund and Wright International Blue Chip Equities Fund
designate approximately $177,714, $937,409 and $6,154,751, respectively, or up
to the maximum amount of such dividends allowable pursuant to the Internal
Revenue Code, as qualified dividend income eligible for the reduced tax rate of
15%.
FOREIGN TAX CREDIT - Wright International Blue Chip Equities Fund paid foreign
taxes of $595,667 and recognized foreign source income of $5,897,874.
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- ------------------------------------------------------
Portfolio of Investments - As of December 31, 2008
Face Coupon Maturity
Amount Description Rate Date Value
- ---------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 1.4%
$ 155,000 AEP Texas Central Transition Funding LLC,
Series 2006-A, Class A2 4.980% 07/01/13 $ 153,565
180,000 PSE&G Transition Funding LLC,
Series 2001-1, Class A7 6.750% 06/15/16 183,012
------------
Total Asset-Backed Securities (identified cost, $348,198) $ 336,577
------------
COMMERCIAL MORTGAGE-BACKED SECURITIES - 6.8%
$ 220,000 Citigroup Commercial Mortgage Trust,
Series 2004-C2, Class A5 4.733% 10/15/41 $ 181,777
285,000 CS First Boston Mortgage Securities Corp.,
Series 2003-C3, Class A5 3.936% 05/15/38 243,081
330,000 JP Morgan Chase Commercial Mortgage Securities Corp.,
Series 2004-C3, Class A5 4.878% 01/15/42 265,413
265,000 Lehman Brothers UBS, Series 2006-C6, Class A4 5.372% 09/15/39 208,691
270,000 Merrill Lynch Mortgage Trust,
Series 2005-LC1 Class A4 5.291% (1) 01/12/44 222,275
420,000 Merrill Lynch/Countrywide Commercial Mortgage Trust,
Series 2006-2, Class A4 5.909% (1) 06/12/46 337,839
126,645 Salomon Brothers Mortgage Securities VII, Series 2002-KEY2,
Class A2 4.467% 03/18/36 118,091
-----------
Total Commercial Mortgage-Backed Securities (identified cost, $1,888,442) $ 1,577,167
-----------
NON-AGENCY MORTGAGE-BACKED SECURITIES - 1.3%
$ 238,491 First Horizon Alternative Mortgage Securities,
Series 2005-AA10, Class 1A2 5.707% (1) 12/25/35 $ 71,425
367,643 First Horizon Asset Securities Inc,
Series 2007-AR2, Class 1A1 5.846% (1) 06/25/37 239,778
------------
Total Non-Agency Mortgage-Backed Securities (identified cost, $606,134) $ 311,203
------------
CORPORATE BONDS - 31.9%
AEROSPACE -- 0.5%
- -----------------
$ 115,000 Lockheed Martin Corp. 8.200% 12/01/09 $ 119,520
BANKS & MISCELLANEOUS FINANCIAL-- 3.7%
- --------------------------------------
$ 60,000 American Express Credit Corp. 7.300% 08/20/13 $ 61,475
250,000 Capital One Bank USA NA 2.278% (1) 02/23/09 249,016
110,000 Credit Suisse USA, Inc. 6.125% 11/15/11 111,177
235,000 HSBC Finance Corp. 6.375% 10/15/11 231,350
200,000 Royal Bank of Scotland Group PLC 7.648% (1) 08/31/49 96,845
110,000 Wells Fargo & Co. 4.375% 01/31/13 107,813
CABLE TV-- 0.9%
- ---------------
$ 100,000 Comcast Cable Communications Holdings 5.875% 02/15/18 $ 94,924
125,000 Time Warner, Inc. 5.875% 11/15/16 112,231
COMMUNICATIONS EQUIPMENT-- 0.5%
- -------------------------------
$ 140,000 Harris Corp. 5.000% 10/01/15 $ 116,490
COMPUTERS & PERIPHERALS-- 0.5%
- ------------------------------
$ 105,000 International Business Machines Corp. 7.625% 10/15/18 $ 126,141
DIVERSIFIED FINANCIALS-- 7.9%
- -----------------------------
$ 240,000 Ameriprise Financial, Inc. 5.350% 11/15/10 $ 216,366
115,000 Bank of America Corp. 5.650% 05/01/18 115,890
125,000 Bear Stearns Cos. Inc. (The) 4.550% 06/23/10 124,858
75,000 CIT Group, Inc. 7.625% 11/30/12 63,363
115,000 Citigroup, Inc. 6.125% 11/21/17 116,410
110,000 Daimler Finance North America LLC 6.500% 11/15/13 85,885
225,000 General Electric Capital Corp. 6.750% 03/15/32 239,945
90,000 Genworth Global Funding Trusts 5.200% 10/08/10 71,098
235,000 Goldman Sachs Group, Inc. (The) 6.150% 04/01/18 226,216
245,000 International Lease Finance Corp. 5.875% 05/01/13 163,705
125,000 Merrill Lynch & Co., Inc. 6.050% 05/16/16 117,104
100,000 Morgan Stanley 5.300% 03/01/13 90,771
210,000 National Rural Utilities Cooperative Finance Corp. 7.250% 03/01/12 216,372
ELECTRIC UTILITIES-- 3.0%
- -------------------------
$ 115,000 American Electric Power 5.250% 06/01/15 $ 106,284
110,000 Consolidated Edison Co. of New York, Inc. 7.125% 12/01/18 118,492
90,000 Dominion Resources, Inc. 6.300% 03/15/33 81,130
100,000 Duke Cap Corp. 7.500% 10/01/09 99,201
115,000 FPL Group Capital Inc. 7.300% (1) 09/01/67 64,485
50,000 Pacific Gas & Electric Co. 8.250% 10/15/18 60,178
115,000 PSI Energy, Inc. 5.000% 09/15/13 109,123
60,000 Public Service Electric & Gas Co. 5.300% 05/01/18 58,384
FOOD - RETAIL-- 0.7%
- --------------------
$ 115,000 Kraft Foods, Inc. 6.000% 02/11/13 $ 116,971
50,000 Safeway, Inc. 6.500% 03/01/11 50,172
FOOD, BEVERAGE & TOBACCO-- 1.8%
- -------------------------------
$ 55,000 Altria Group, Inc. 9.700% 11/10/18 $ 59,541
55,000 Diageo Capital PLC 7.375% 01/15/14 58,650
55,000 General Mills, Inc. 6.000% 02/15/12 57,096
100,000 PepsiCo, Inc. 7.900% 11/01/18 122,784
105,000 Philip Morris International, Inc. 6.875% 03/17/14 110,463
INFORMATION TECHNOLOGY-- 0.9%
- -----------------------------
$ 195,000 Oracle Corp. 5.000% 01/15/11 $ 200,357
INSURANCE -- 2.0%
- --------------------
$ 130,000 Fund American Cos., Inc. 5.875% 05/15/13 $ 94,697
125,000 MetLife, Inc. 5.000% 06/15/15 117,244
130,000 PartnerRe Finance II 6.440% (1) 12/01/66 51,737
200,000 St. Paul Travelers 5.500% 12/01/15 191,917
MEDICAL -- 2.1%
- -------------------
$ 245,000 Bristol-Myers Squibb Co. 5.875% 11/15/36 $ 261,463
115,000 WellPoint, Inc. 5.875% 06/15/17 104,834
115,000 Wyeth 5.500% 02/01/14 116,944
MINING -- 0.3%
- ------------------
$ 80,000 Barrick Gold Financeco LLC 6.125% 09/15/13 $ 75,933
OIL & GAS-- 2.8%
- ----------------
$ 105,000 Baker Hughes, Inc. 7.500% 11/15/18 $ 116,616
110,000 Canadian Natural Resources, Ltd. 5.700% 05/15/17 96,087
120,000 EnCana Corp. 5.900% 12/01/17 100,281
80,000 Halliburton Co. 6.700% 09/15/38 86,828
100,000 Sempra Energy 6.000% 02/01/13 96,089
170,000 TransCanada Pipelines, Ltd. 6.500% 08/15/18 167,074
RETAIL -- 0.5%
- ----------------
$ 120,000 Home Depot, Inc. 5.200% 03/01/11 $ 116,741
SEMICONDUCTOR EQUIPMENT & PRODUCTS-- 0.7%
- -----------------------------------------
$ 165,000 Applied Materials, Inc. 7.125% 10/15/17 $ 152,342
TELECOMMUNICATIONS -- 2.6%
- -----------------------------
$ 95,000 AT&T Wireless Services, Inc. 7.875% 03/01/11 $ 98,397
70,000 British Telecom PLC 9.125% 12/15/30 74,588
100,000 Deutsche Telekom International Finance BV 8.000% 06/15/10 103,042
120,000 France Telecom SA 7.750% 03/01/11 126,339
175,000 Verizon Global Funding Corp. 7.750% 12/01/30 194,593
TRANSPORTATION -- 0.5%
- ------------------------
$ 125,000 Burlington Northern Santa Fe Corp. 5.650% 05/01/17 $ 120,218
------------
Total Corporate Bonds (identified cost, $7,903,739) $ 7,412,280
------------
U.S. GOVERNMENT INTERESTS - 56.5%
AGENCY MORTGAGE-BACKED SECURITIES-- 44.2%
- -----------------------------------------
$ 243,144 FHLMC Gold Pool #A32600 5.500% 05/01/35 $ 249,233
65,536 FHLMC Gold Pool #C01646 6.000% 09/01/33 67,741
45,564 FHLMC Gold Pool #C27663 7.000% 06/01/29 47,968
146,244 FHLMC Gold Pool #C47318 7.000% 09/01/29 155,064
555,206 FHLMC Gold Pool #C55780 6.000% 01/01/29 576,743
352,059 FHLMC Gold Pool #C66878 6.500% 05/01/32 367,406
239,977 FHLMC Gold Pool #C91046 6.500% 05/01/27 249,631
83,550 FHLMC Gold Pool #D66753 6.000% 10/01/23 85,380
14,220 FHLMC Gold Pool #E00903 7.000% 10/01/15 14,916
345,702 FHLMC Gold Pool #G01035 6.000% 05/01/29 358,248
252,230 FHLMC Gold Pool #G02478 5.500% 12/01/36 258,507
290,469 FHLMC Gold Pool #H19018 6.500% 08/01/37 299,546
243,017 FHLMC Gold Pool #K30262 5.000% 11/01/47 238,129
134,242 FHLMC Gold Pool #N30514 5.500% 11/01/28 138,853
365,812 FHLMC Gold Pool #P00024 7.000% 09/01/32 379,609
59,833 FHLMC Gold Pool #P50031 7.000% 08/01/18 62,787
50,719 FHLMC Gold Pool #P50064 7.000% 09/01/30 53,224
127,256 FHLMC Pool #1B1291 4.998% (1) 11/01/33 127,700
554,647 FHLMC Pool #1G0233 5.001% (1) 05/01/35 559,882
123,554 FHLMC Pool #781071 5.183% (1) 11/01/33 122,850
98,222 FHLMC Pool #781804 5.056% (1) 07/01/34 98,620
49,606 FHLMC Pool #781884 5.141% (1) 08/01/34 50,236
117,995 FHLMC Pool #782862 5.002% (1) 11/01/34 122,661
301,343 FHLMC Series 1983 Z 6.500% 12/15/23 300,972
283,696 FHLMC Series 2044 PE 6.500% 04/15/28 301,516
130,170 FNMA Pool #253057 8.000% 12/01/29 137,900
40,516 FNMA Pool #254845 4.000% 07/01/13 41,242
40,423 FNMA Pool #254863 4.000% 08/01/13 41,002
24,530 FNMA Pool #479477 6.000% 01/01/29 25,427
28,014 FNMA Pool #489357 6.500% 03/01/29 29,323
26,112 FNMA Pool #535332 8.500% 04/01/30 28,258
190,843 FNMA Pool #545407 5.500% 01/01/32 196,577
45,398 FNMA Pool #545782 7.000% 07/01/32 48,192
38,697 FNMA Pool #597396 6.500% 09/01/31 40,505
557,340 FNMA Pool #725515 5.000% 04/01/19 574,396
64,823 FNMA Pool #725866 4.500% 09/01/34 65,878
162,897 FNMA Pool #727374 4.000% 08/01/18 167,195
163,826 FNMA Pool #738630 5.500% 11/01/33 168,363
396,081 FNMA Pool #745467 5.770% (1) 04/01/36 406,193
557,999 FNMA Pool #745755 5.000% 12/01/35 570,926
197,963 FNMA Pool #747529 4.500% 10/01/33 201,310
691,054 FNMA Pool #781893 4.500% 11/01/31 707,875
69,614 FNMA Pool #809888 4.500% 03/01/35 70,704
149,132 FNMA Pool #906455 5.978% (1) 01/01/37 152,603
155,883 GNMA II Pool #2630 6.500% 08/20/28 164,115
7,071 GNMA II Pool #2909 8.000% 04/20/30 7,509
17,880 GNMA II Pool #2972 7.500% 09/20/30 18,883
6,341 GNMA II Pool #2973 8.000% 09/20/30 6,734
70,705 GNMA II Pool #3095 6.500% 06/20/31 74,478
199,545 GNMA Pool #374892 7.000% 02/15/24 211,516
44,356 GNMA Pool #376400 6.500% 02/15/24 46,484
67,138 GNMA Pool #379982 7.000% 02/15/24 71,165
198,012 GNMA Pool #393347 7.500% 02/15/27 209,896
72,367 GNMA Pool #410081 8.000% 08/15/25 77,016
36,026 GNMA Pool #427199 7.000% 12/15/27 38,184
16,876 GNMA Pool #436214 6.500% 02/15/13 17,793
101,886 GNMA Pool #448490 7.500% 03/15/27 108,001
51,971 GNMA Pool #458762 6.500% 01/15/28 54,634
72,952 GNMA Pool #460726 6.500% 12/15/27 76,631
26,606 GNMA Pool #463839 6.000% 05/15/13 28,08
16,258 GNMA Pool #488924 6.500% 11/15/28 17,091
15,750 GNMA Pool #510706 8.000% 11/15/29 16,808
77,285 GNMA Pool #581536 5.500% 06/15/33 79,887
U.S. GOVERNMENT AGENCIES-- 5.9%
- -------------------------------
$ 225,000 Citigroup, Inc. (FDIC guaranteed) 2.875% 12/09/11 $ 232,176
150,000 Federal Home Loan Bank 5.000% 11/17/17 172,289
325,000 Federal National Mortgage Association 3.250% 04/09/13 338,988
200,000 Federal National Mortgage Association 6.250% 05/15/29 273,957
110,000 JPMorgan Chase & Co. (FDIC guaranteed) 3.125% 12/01/11 114,358
220,000 Regions Bank (FDIC guaranteed) 3.250% 12/09/11 229,039
U.S. TREASURIES-- 6.4%
- ----------------------
$ 815,000 U.S. Treasury Notes 3.500% 02/15/10 $ 844,226
625,000 U.S. Treasury Strip 0.000% 02/15/18 480,850
275,000 U.S. Treasury Strip 0.000% 02/15/27 156,722
------------
Total U.S. Government Interests (identified cost, $12,707,529) $13,128,803
------------
TOTAL INVESTMENTS (identified cost, $23,454,042)-- 97.9% $22,766,030
OTHER ASSETS, LESS LIABILITIES-- 2.1% 496,373
------------
NET ASSETS-- 100.0% $23,262,403
============
Industry classifications included in the Portfolio of Investments are unaudited.
FHLMC - Federal Home Loan Mortgage Corporation; FNMA - Federal National Mortgage
Association; GNMA - Government National Mortgage Association
(1) Adjustable rate security. Rate shown is the rate at December 31, 2008.
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $23,454,042) (Note 1A) $ 22,766,030
Cash 266,114
Receivable for fund shares sold 12,102
Receivable from affiliates 25,118
Interest receivable 206,147
Other assets 180,390
------------
Total assets $ 23,455,901
------------
LIABILITIES:
Payable for investments purchased $ 146,979
Payable for fund shares reacquired 4,351
Distributions payable 16,308
Payable to affiliate for distribution expenses 478
Accrued expenses and other liabilities 25,382
------------
Total liabilities $ 193,498
------------
NET ASSETS $ 23,262,403
============
NET ASSETS CONSIST OF:
Paid-in capital $ 26,109,560
Accumulated net realized loss on investments
(computed on the basis of identified cost) (2,142,837)
Unrealized appreciation (depreciation)
of investments(computed on the basis of
identified cost) (688,012)
Accumulated distributions in excess of
net investment income (16,308)
------------
Net assets applicable to outstanding shares $ 23,262,403
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 1,940,235
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST $ 11.99
============
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
- -------------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Interest income $ 1,278,987
------------
Expenses -
Investment adviser fee (Note 3) $ 105,943
Administrator fee (Note 3) 16,480
Compensation of Trustees who are not employees
of the investment adviser or administrator 19,420
Custodian fee (Note 1F) 65,754
Distribution expenses (Note 4) 58,857
Transfer and dividend disbursing agent fees 18,178
Printing 2,834
Interest expense 2,100
Shareholder communications 1,322
Audit services 28,436
Legal services 5,908
Registration costs 22,663
Miscellaneous 8,927
------------
Total expenses $ 356,822
------------
Deduct -
Waiver and/or reimbursement by the principal
underwriter and/or investment adviser
(Note 3 and 4) $ (189,917)
Reduction of custodian fee (Note 1F) (2,052)
------------
Total deductions $ (191,969)
------------
Net expenses $ 164,853
------------
Net investment income $ 1,114,134
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis) $ 224,053
Net change in unrealized appreciation
(depreciation) on investments $ (922,629)
------------
Net realized and unrealized loss
on investments $ (698,576)
------------
Net increase in net assets from operations $ 415,558
============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Year Ended
December 31,
--------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2008 2007
- ---------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 1,114,134 $ 1,258,878
Net realized gain (loss) on investment transactions 224,053 (96,499)
Net change in unrealized appreciation (depreciation) on investments (922,629) 300,776
-------------- --------------
Net increase in net assets from operations $ 415,558 $ 1,463,155
-------------- --------------
Distributions to shareholders (Note 2) -
From net investment income $ (1,166,826) $ (1,291,075)
-------------- --------------
Total distributions $ (1,166,826) $ (1,291,075)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 6) $ (975,127) $ (6,049,001)
-------------- --------------
Net decrease in net assets $ (1,726,395) $ (5,876,921)
NET ASSETS:
At beginning of year 24,988,798 30,865,719
-------------- --------------
At end of year $ 23,262,403 $ 24,988,798
============== ==============
ACCUMULATED DISTRIBUTIONS IN EXCESS OF NET INVESTMENT
INCOME INCLUDED IN NET ASSETS AT END OF YEAR $ (16,308) $ (10,011)
============== ==============
See notes to financial statements
WRIGHT TOTAL RETURN BOND FUND (WTRB)
- -------------------------------------------------------------------------------
Year Ended December 31,
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 12.390 $ 12.290 $ 12.430 $ 12.770 $ 12.870
--------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.573 $ 0.558 $ 0.483 $ 0.465 $ 0.453
Net realized and unrealized gain (loss) (0.373) 0.115 (0.082) (0.271) (0.011)
--------- --------- --------- --------- ---------
Total income from investment operations $ 0.200 $ 0.673 $ 0.401 $ 0.194 $ 0.442
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From net investment income $ (0.600) $ (0.573) $ (0.541) $ (0.534) $ (0.542)
--------- --------- --------- --------- ---------
Total distributions $ (0.600) $ (0.573) $ (0.541) $ (0.534) $ (0.542)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 11.990 $ 12.390 $ 12.290 $ 12.430 $ 12.770
========= ========= ========= ========= =========
TOTAL RETURN(2) 1.69% 5.64% 3.34% 1.54% 3.52%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of year (000 omitted) $ 23,262 $ 24,989 $ 30,866 $ 41,288 $ 38,213
Ratios (As a percentage of average daily net assets):
Net expenses 0.71% 0.87% 0.99% 0.98% 0.96%
Net expenses after custodian fee reduction 0.70% 0.85% 0.95% 0.95% 0.95%
Net investment income 4.73% 4.56% 3.96% 3.66% 3.58%
Portfolio turnover rate 125% 119% 90% 86% 64%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the
operating expenses of the Fund were reduced by a waiver of fees and/or an allocation
of expenses to the principal underwriter 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
------------------------------------------------------------------
Net investment income per share $ 0.475 $ 0.490 $ 0.453 $ 0.439 $ 0.429
========= ========= ========= ========= =========
Ratios (As a percentage of average daily net assets):
Expenses 1.52% 1.41% 1.23% 1.18% 1.18%
========= ========= ========= ========= =========
Expenses after custodian fee reduction 1.51% 1.38% 1.19% 1.15% 1.17%
========= ========= ========= ========= =========
Net investment income 3.93% 4.03% 3.72% 3.46% 3.36%
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
(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.
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS - AS OF DECEMBER 31, 2008
Face Coupon Maturity
Amount Description Rate Date Value
- --------------------------------------------------------------------------------------------------------------------------------
NON-AGENCY MORTGAGE-BACKED SECURITIES -- 3.2%
$ 240,917 Bear Stearns Adj. Rate Mortgage Trust,
Series 2003-4, Class 3A1 4.960%(1) 07/25/33 $ 191,676
729,434 Chase Mortgage Finance Corporation,
Series 2003-S13, Class A16 5.000% 11/25/33 687,389
462,697 Countrywide Home Loans, Series 2006-J1, Class 3A1 6.000% 02/25/36 357,929
------------
Total Non-Agency Mortgage-Backed Securities (identified cost $1,374,142) - 3.2% $1,236,994
------------
AGENCY MORTGAGE-BACKED SECURITIES -- 94.9%
$ 38,950 FHLMC Gold Pool #C00548 7.000% 08/01/27 $ 41,004
118,360 FHLMC Gold Pool #C00778 7.000% 06/01/29 124,605
180,655 FHLMC Gold Pool #C47318 7.000% 09/01/29 191,550
354,274 FHLMC Gold Pool #C90580 6.000% 09/01/22 366,956
75,689 FHLMC Gold Pool #D81642 7.500% 08/01/27 79,960
152,318 FHLMC Gold Pool #D82572 7.000% 09/01/27 160,350
85,557 FHLMC Gold Pool #E00678 6.500% 06/01/14 88,393
89,382 FHLMC Gold Pool #E00721 6.500% 07/01/14 92,362
89,015 FHLMC Gold Pool #E81704 8.500% 05/01/15 102,288
475,331 FHLMC Gold Pool #E88471 7.500% 01/01/17 499,268
134,264 FHLMC Gold Pool #E90181 6.500% 06/01/17 139,519
95,596 FHLMC Gold Pool #G00812 6.500% 04/01/26 100,301
662,105 FHLMC Gold Pool #G02478 5.500% 12/01/36 678,582
198,919 FHLMC Pool #2176 OJ 7.000% 08/15/29 208,253
110,276 FHLMC Pool #2201 C 8.000% 11/15/29 116,699
241,457 FHLMC Pool #2259 ZM 7.000% 10/15/30 254,033
218,385 FHLMC Pool #2410 NG 6.500% 02/15/32 228,870
232,686 FHLMC Pool #2457 PE 6.500% 06/15/32 241,997
84,706 FHLMC Pool #845830 5.738%(1) 07/01/24 85,518
338,649 FHLMC Series 15 7.000% 07/25/23 357,061
759,454 FNMA Pool #252034 7.000% 09/01/28 805,366
15,386 FNMA Pool #254227 5.000% 02/01/09 15,331
92,205 FNMA Pool #254305 6.500% 05/01/22 96,371
14,594 FNMA Pool #254505 5.000% 11/01/09 14,640
315,643 FNMA Pool #254588 6.000% 12/01/22 326,688
151,614 FNMA Pool #255068 6.000% 01/01/24 156,819
539,239 FNMA Pool #255958 5.000% 10/01/35 536,482
1,034,186 FNMA Pool #256600 5.500% 02/01/27 1,062,911
223,879 FNMA Pool #313953 7.000% 12/01/17 237,164
174,417 FNMA Pool #532204 7.000% 02/01/20 184,616
86,478 FNMA Pool #535131 6.000% 03/01/29 89,644
123,509 FNMA Pool #535817 7.000% 04/01/31 130,722
112,191 FNMA Pool #545133 6.500% 12/01/28 117,704
441,861 FNMA Pool #673315 5.500% 11/01/32 454,583
802,199 FNMA Pool #725419 4.500% 10/01/33 815,759
235,836 FNMA Pool #727374 4.000% 08/01/18 242,058
62,575 FNMA Pool #733750 6.310% 10/01/32 65,06
546,876 FNMA Pool #735861 6.500% 09/01/33 572,425
264,346 FNMA Pool #745630 5.500% 01/01/29 273,940
339,877 FNMA Pool #801357 5.500% 08/01/34 349,663
415,586 FNMA Pool #871394 7.000% 04/01/21 433,811
453,729 FNMA Pool #888129 5.500% 02/01/37 465,730
672,007 FNMA Pool #888339 4.500% 04/01/37 682,527
661,172 FNMA Series 2000-T6, Class A1 7.500% 06/25/30 686,702
1,218,091 FNMA Series 2002-T4, Class A2 7.000% 12/25/41 1,255,688
288,159 FNMA Series 2003-W3, Class 2A5 5.356% 06/25/42 290,699
389,915 FNMA Series G93-5, Class Z 6.500% 02/25/23 413,484
106,217 GNMA I Pool #448970 8.000% 08/15/27 113,437
449,014 GNMA I Pool #487108 6.000% 04/15/29 465,848
728,805 GNMA I Pool #675363 6.000% 01/15/35 753,510
305,184 GNMA I Pool #780492 7.000% 09/15/24 323,885
3,091 GNMA II Pool #1596 9.000% 04/20/21 3,298
41,168 GNMA II Pool #2268 7.500% 08/20/26 43,493
133,490 GNMA II Pool #2442 6.500% 06/20/27 140,522
4,688 GNMA II Pool #2855 8.500% 12/20/29 5,055
247,950 GNMA II Pool #3284 5.500% 09/20/32 255,744
527,207 GNMA II Pool #3388 4.500% 05/20/33 533,072
116,656 GNMA II Pool #3401 4.500% 06/20/33 117,953
95,270 GNMA II Pool #3484 3.500% 09/20/33 88,270
174,220 GNMA II Pool #3554 4.500% 05/20/34 176,258
919,901 GNMA II Pool #3556 5.500% 05/20/34 947,797
504,007 GNMA II Pool #3689 4.500% 03/20/35 510,125
2,124,067 GNMA II Pool #3747 5.000% 08/20/35 2,181,125
355,304 GNMA II Pool #4149 7.500% 05/20/38 369,172
1,000,000 GNMA II pool #4308 5.000% 12/20/38 1,005,000
112,020 GNMA II Pool #601135 6.310% 09/20/32 117,514
128,281 GNMA II Pool #601255 6.310% 01/20/33 134,136
109,042 GNMA II Pool #608120 6.310% 01/20/33 114,019
475,684 GNMA II Pool #648541 6.000% 10/20/35 489,988
2,087,896 GNMA II Pool #696908 4.500% 07/20/38 2,110,754
27,261 GNMA II Pool #723 7.500% 01/20/23 28,794
89,265 GNMA II Pool #81161 5.500% 11/20/34 89,037
1,487 GNMA Pool #176992 8.000% 11/15/16 1,589
2,144 GNMA Pool #177784 8.000% 10/15/16 2,290
10,517 GNMA Pool #192357 8.000% 04/15/17 11,253
9,018 GNMA Pool #194057 8.500% 04/15/17 9,653
2,267 GNMA Pool #194287 9.500% 03/15/17 2,461
1,199 GNMA Pool #196063 8.500% 03/15/17 1,283
6,517 GNMA Pool #211231 8.500% 05/15/17 6,975
1,246 GNMA Pool #212601 8.500% 06/15/17 1,333
1,712 GNMA Pool #220917 8.500% 04/15/17 1,833
6,320 GNMA Pool #223348 10.000% 08/15/18 7,032
5,571 GNMA Pool #228308 10.000% 01/15/19 6,197
2,614 GNMA Pool #230223 9.500% 04/15/18 2,843
3,370 GNMA Pool #251241 9.500% 06/15/18 3,666
3,727 GNMA Pool #260999 9.500% 09/15/18 4,054
5,276 GNMA Pool #263439 10.000% 02/15/19 5,853
1,371 GNMA Pool #265267 9.500% 08/15/20 1,494
1,683 GNMA Pool #266983 10.000% 02/15/19 1,867
776 GNMA Pool #286556 9.000% 03/15/20 832
3,581 GNMA Pool #301366 8.500% 06/15/21 3,831
4,506 GNMA Pool #302933 8.500% 06/15/21 4,822
10,610 GNMA Pool #308792 9.000% 07/15/21 11,362
1,846 GNMA Pool #314222 8.500% 04/15/22 1,975
3,375 GNMA Pool #315187 8.000% 06/15/22 3,591
10,955 GNMA Pool #315754 8.000% 01/15/22 11,653
25,626 GNMA Pool #319441 8.500% 04/15/22 27,411
7,764 GNMA Pool #325165 8.000% 06/15/22 8,259
9,006 GNMA Pool #335950 8.000% 10/15/22 9,580
170,409 GNMA Pool #346987 7.000% 12/15/23 180,927
74,062 GNMA Pool #352001 6.500% 12/15/23 77,294
27,032 GNMA Pool #352110 7.000% 08/15/23 28,700
48,993 GNMA Pool #368238 7.000% 12/15/23 52,016
48,503 GNMA Pool #372379 8.000% 10/15/26 51,642
58,372 GNMA Pool #396537 7.490% 03/15/25 61,903
43,589 GNMA Pool #399726 7.490% 05/15/25 46,226
133,104 GNMA Pool #399788 7.490% 09/15/25 141,156
29,432 GNMA Pool #399958 7.490% 02/15/27 31,190
31,757 GNMA Pool #399964 7.490% 04/15/26 33,668
62,956 GNMA Pool #410215 7.500% 12/15/25 66,781
7,345 GNMA Pool #414736 7.500% 11/15/25 7,791
37,141 GNMA Pool #420707 7.000% 02/15/26 39,358
20,276 GNMA Pool #421829 7.500% 04/15/26 21,502
11,277 GNMA Pool #431036 8.000% 07/15/26 12,007
14,678 GNMA Pool #431612 8.000% 11/15/26 15,628
29,381 GNMA Pool #438004 7.490% 11/15/26 31,149
8,484 GNMA Pool #442190 8.000% 12/15/26 9,033
14,844 GNMA Pool #449176 6.500% 07/15/28 15,605
33,215 GNMA Pool #462623 6.500% 03/15/28 34,917
289,594 GNMA Pool #471369 5.500% 05/15/33 299,344
27,941 GNMA Pool #475149 6.500% 05/15/13 29,458
138,597 GNMA Pool #489377 6.375% 03/15/29 145,203
37,920 GNMA Pool #524811 6.375% 09/15/29 39,728
29,356 GNMA Pool #538314 7.000% 02/15/32 30,876
285,564 GNMA Pool #595606 6.000% 11/15/32 295,734
33,431 GNMA Pool #602377 4.500% 06/15/18 34,762
38,435 GNMA Pool #603377 4.500% 01/15/18 39,965
175,543 GNMA Pool #609452 4.000% 08/15/33 172,870
205,555 GNMA Pool #616829 5.500% 01/15/25 217,510
471,694 GNMA Pool #624600 6.150% 01/15/34 489,091
107,947 GNMA Pool #640940 5.500% 05/15/35 111,480
97,397 GNMA Pool #658267 6.500% 02/15/22 102,670
50,451 GNMA Pool #780429 7.500% 09/15/26 53,509
172,954 GNMA Pool #780977 7.500% 12/15/28 183,385
443,413 GNMA Pool #781120 7.000% 12/15/29 469,478
1,180,054 GNMA Series 1999-4, Class 2B 6.000% 02/20/29 1,218,109
423,158 GNMA Series 2000-14, Class PD 7.000% 02/16/30 448,195
762,690 GNMA Series 2001-2, Class GD 7.500% 07/20/28 818,798
375,495 GNMA Series 2001-4, Class PM 6.500% 03/20/31 393,461
466,714 GNMA Series 2002-22, Class GF 6.500% 03/20/32 488,836
318,796 GNMA Series 2002-40, Class UK 6.500% 06/20/32 333,953
254,686 GNMA Series 2002-45, Class QE 6.500% 06/20/32 266,676
1,800,830 GNMA Series 2002-47, Class PG 6.500% 07/16/32 1,886,931
209,641 GNMA Series 2002-7, Class PG 6.500% 01/20/32 225,924
366,038 Vendee Mortgage Trust, Series 1998-1, Class 2E 7.000% 09/15/27 383,681
452,019 Vendee Mortgage Trust, Series 1996-1, Class 1Z 6.750% 02/15/26 476,903
------------
Total Agency Mortgage-Backed Securities (identified cost $35,269,675)-- 94.9% $36,821,980
------------
TOTAL INVESTMENTS (identified cost $36,643,817)-- 98.1% $38,058,974
OTHER ASSETS, LESS LIABILITIES-- 1.9% 747,235
------------
NET ASSETS-- 100.0% $38,806,209
============
Industry classifications included in the Portfolio of Investments are unaudited.
FHLMC - Federal Home Loan Mortgage Corporation; FNMA - Federal National Mortgage Association; GNMA - Government National
Mortgage Association
(1) Adjustable rate security. Rate shown is the rate at period end.
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2008
- -------------------------------------------------------------------------------
ASSETS:
Investments, at value
(identified cost $36,643,817) (Note 1A) $ 38,058,974
Cash 567,368
Receivable for fund shares sold 64,692
Receivable from affiliates 7,119
Interest receivable 189,801
Other assets 2,840
------------
Total assets $ 38,890,794
------------
LIABILITIES:
Payable for fund shares reacquired $ 5,627
Distributions payable 52,131
Accrued expenses and other liabilities 26,827
------------
Total liabilities $ 84,585
------------
NET ASSETS $ 38,806,209
============
NET ASSETS CONSIST OF:
Paid-in capital $ 38,769,198
Accumulated net realized loss on investments
(computed on the basis of identified cost) (1,497,882)
Unrealized appreciation of investments
(computed on the basis of identified cost) 1,415,157
Accumulated undistributed net
investment income 119,736
------------
Net assets applicable to outstanding shares $ 38,806,209
============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING 3,999,928
============
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PRICE PER SHARE OF
BENEFICIAL INTEREST $ 9.70
=============
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
- -----------------------------------------------------------------------------
INVESTMENT INCOME (Note 1C)
Interest income $ 2,221,982
------------
Expenses -
Investment adviser fee (Note 3) $ 178,144
Administrator fee (Note 3) 35,629
Compensation of Trustees who are not employees
of the investment adviser or administrator 19,426
Custodian fee (Note 1F) 63,405
Distribution expenses (Note 4) 98,969
Transfer and dividend disbursing agent fees 21,727
Printing 3,660
Interest expense 2,138
Shareholder communications 1,534
Audit services 28,966
Legal services 6,296
Registration costs 22,321
Miscellaneous 9,278
------------
Total expenses $ 491,493
------------
Deduct -
Waiver and/or reimbursement by the principal
underwriter and/or investment adviser
(Note 3 and 4) $ (111,340)
Reduction of custodian fee (Note 1F) (4,073)
------------
Total deductions $ (115,413)
------------
Net expenses $ 376,080
------------
Net investment income $ 1,845,902
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis) $ (20,196)
Net change in unrealized appreciation
(depreciation)on investments 476,154
------------
Net realized and unrealized gain
on investments $ 455,958
------------
Net increase in net assets from operations $ 2,301,860
============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Year Ended
December 31,
---------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 2008 2007
- --------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 1,845,902 $ 1,897,291
Net realized loss on investment transactions (20,196) (186,065)
Net change in unrealized appreciation (depreciation) on investments 476,154 512,985
-------------- --------------
Net increase in net assets from operations $ 2,301,860 $ 2,224,211
-------------- --------------
Distributions to shareholders (Note 2)
From net investment income $ (1,894,445) $ (1,853,630)
From net realized gain - (36,891)
-------------- --------------
Total distributions $ (1,894,445) $ (1,890,521)
-------------- --------------
Net decrease in net assets from fund share transactions (Note 6) $ (1,300,367) $ (1,108,939)
-------------- --------------
Net decrease in net assets $ (892,952) $ (775,249)
NET ASSETS:
At beginning of year 39,699,161 40,474,410
-------------- --------------
At end of year $ 38,806,209 $ 39,699,161
============== ==============
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS AT END OF YEAR $ 119,736 $ 95,076
============== ==============
See notes to financial statements
WRIGHT CURRENT INCOME FUND (WCIF)
- -------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 2008(3) 2007(3) 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 9.590 $ 9.510 $ 9.610 $ 9.890 $ 10.490
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1) $ 0.447 $ 0.455 $ 0.427 $ 0.400 $ 0.447
Net realized and unrealized gain (loss) 0.122 0.078 (0.063) (0.230) (0.112)
---------- ---------- ---------- ---------- ----------
Total income from investment operations $ 0.569 $ 0.533 $ 0.364 $ 0.170 $ 0.335
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
From net investment income $ (0.459) $ (0.444) $ (0.447) $ (0.430) $ (0.482)
From net realized gains - (0.009) (0.017) (0.020) (0.453)
---------- ---------- ---------- ---------- ----------
Total distributions $ (0.459) $ (0.453) $ (0.464) $ (0.450) $ (0.935)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 9.700 $ 9.590 $ 9.510 $ 9.610 $ 9.890
========== ========== ========== ========== ==========
TOTAL RETURN(2) 6.10% 5.77% 3.92% 1.76% 3.29%
RATIOS/SUPPLEMENTAL DATA(1):
Net assets, end of year (000 omitted) $ 38,806 $ 39,699 $40,474 $33,861 $35,013
Ratios (As a percentage of average daily net assets):
Net expenses 0.96% 0.96% 0.96% 0.97% 0.97%
Net expenses after custodian fee reduction 0.95% 0.95% 0.95% 0.95% 0.95%
Net investment income 4.66% 4.80% 4.47% 4.12% 4.29%
Portfolio turnover rate 57% 47% 75% 103% 27%
- --------------------------------------------------------------------------------------------------------------------------------
(1) For the years ended December 31, 2008, 2007, 2006, 2005 and 2004, the
operating expenses of the Fund were reduced by a waiver of fees and/or an allocation
of expenses to the principal underwriter 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
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income per share $ 0.420 $ 0.429 $ 0.391 $ 0.369 $ 0.410
========== ========== ========== ========== ==========
Ratios (As a percentage of average daily net assets):
Expenses 1.24% 1.23% 1.31% 1.30% 1.28%
========== ========== ========== ========== ==========
Expenses after custodian fee reduction 1.23% 1.22% 1.30% 1.28% 1.25%
========== ========== ========== ========== ==========
Net investment income 4.38% 4.52% 4.13% 3.80% 3.99%
========== ========== ========== ========== ==========
- --------------------------------------------------------------------------------------------------------------------------------
(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.
See notes to financial statements
WRIGHT MANAGED INCOME TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
----------------------------------
The Wright Managed Income Trust (the Trust), issuer of Wright 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 readily available, will normally be valued
on the basis of reported trades or market quotations obtained by independent
pricing services, when in the services' judgment, these prices are
representative of the securities' market values. For debt securities where
market quotations are not readily available, the pricing services will use
various techniques that consider factors including, but not limited to, prices
or yields of securities with similar characteristics, benchmark yields,
broker/dealer quotes, issuer spreads, as well as industry and economic events.
Short-term debt securities with a remaining maturity of sixty days or less 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 Funds
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 - Each Fund'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 capital
gains. Accordingly, no provision for federal income or excise tax is necessary.
At December 31, 2008, WTRB and WCIF, for federal income tax purposes, had
capital loss carryovers of $2,067,378 and $1,302,373, respectively, which will
reduce the respective Fund's 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 distributions 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:
December 31, WTRB WCIF
- ------------------------------------------------------------------------------
2010 $ 508,606 $ -
2011 - 476,275
2012 - 469,640
2013 270,953 196,117
2014 1,088,772 -
2015 199,047 160,341
- -------------------------------------------------------------------------------
Additionally, at December 31, 2008, WCIF had net capital losses of $98,225,
attributable to security transactions incurred after October 31, 2008. The net
capital losses are treated as arising on the first day of the Fund's taxable
year ending December 31, 2009.
A capital loss carryover of $1,302,373, included in WCIF's amount in the table
above, is available to the Fund as a result of the reorganization of Wright U.S.
Government Near Term Fund on December 9, 2006. Utilization of this capital loss
carryover may be limited in accordance with certain income tax regulations.
As of December 31, 2008, the Funds had 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,
2008 remains subject to examination by the Internal Revenue Service.
E. Expenses - The majority of expenses of the Trust 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 Statements
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 the Trust'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.
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 net 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.
The tax character of distributions paid for the years ended December 31, 2008
and December 31, 2007 was as follows:
Year Ended 12/31/08 WTRB WCIF
- ------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $ 1,166,826 $ 1,894,445
- ------------------------------------------------------------------------------
Year Ended 12/31/07 WTRB WCIF
- ------------------------------------------------------------------------------
Distributions declared from:
Ordinary income $ 1,291,075 $ 1,853,836
Long-term capital gains - 36,685
- ------------------------------------------------------------------------------
During the year ended December 31, 2008, the following amounts were reclassified
due to expired capital loss carryforwards and differences between book and tax
accounting, primarily for premium amortization and paydown gain (loss).
Increase (decrease): WTRB WCIF
- ------------------------------------------------------------------------------
Paid-in capital $ (1,058,933) $ -
Accumulated net realized gain (loss) $ 1,012,538 $ (73,203)
Accumulated undistributed
(distributions in excess of) net
investment income $ 46,395 $ 73,203
- -------------------------------------------------------------------------------
These reclassifications had no effect on the net assets or net asset value per
share of the Funds.
As of December 31, 2008, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
WTRB WCIF
- -------------------------------------------------------------------------------
Undistributed ordinary income $ - $ 119,736
Capital loss carryforward and
post October losses (2,067,378) (1,400,598)
Unrealized appreciation (depreciation) (763,471) 1,317,873
Other temporary differences (16,308) -
- -------------------------------------------------------------------------------
The differences between components of distributable earnings (accumulated
losses) on a tax basis and the amounts reflected in the Statements of Assets and
Liabilities are primarily due to wash sales, premium amortization and the timing
of recognizing distributions to shareholders.
3. Investment Adviser Fee and Other Transactions With Affiliates
---------------------------------------------------------------
The investment adviser fee is earned by Wright Investors' Service, Inc. (Wright)
as compensation for investment advisory services rendered to the Funds. The fee
is computed at an annual rate of 0.45% of the average daily net assets for WTRB
and WCIF up to $100 million and at reduced rates as net assets exceed that
level, and is payable monthly. For the year ended December 31, 2008, the fee and
the effective annual rate as a percentage of average daily net assets for each
of the Funds were as follows:
Fund Investment Adviser Fee Effective Annual Rate
---------------------------------------------------------------------------
WTRB $105,943 0.45%
WCIF 178,144 0.45%
- -------------------------------------------------------------------------------
The administrator fee is earned by Eaton Vance Management (Eaton Vance)for
administering the business affairs of each Fund and is computed at an annual
rate of 0.07% of the average daily net assets up to $100 million for WTRB and an
annual rate of 0.09% of the average daily net assets up to $100 million for
WCIF, and at reduced rates as net assets exceed that level. For the year ended
December 31, 2008, the administrator fee for WTRB and WCIF amounted to $16,480
and $35,629, respectively. Wright also waived and/or reimbursed expenses for
WTRB and WCIF (see Note 4).
Certain of the Trustees and officers of the Trust are Trustees or officers of
the above organizations and/or of the Funds' principal underwriter. Except as
to Trustees of the Trust who are not employees of Eaton Vance or Wright,
Trustees and officers receive remuneration for their services to the Trust out
of fees paid to Eaton Vance and Wright.
4. Distribution and Service 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 Fund will pay Wright Investors'
Service Distributors, Inc. (WISDI), the principal underwriter, a wholly-owned
subsidiary of The Winthrop Corporation and an affiliate of Wright, a
distribution 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 WISDI.
Distribution fees paid or accrued to WISDI for the year ended December 31, 2008
for WTRB and WCIF amounted to $58,857 and $98,969, 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 year ended December 31, 2008, the Funds did not accrue or pay
any service fees. Pursuant to an Expense Limitation Agreement, Wright and WISDI
have agreed to waive all or a portion of their fees and reimburse expenses to
the extent that total annual operating expenses after custodian fee reductions,
if any, exceed 0.95% of the average daily net assets of each of WTRB and WCIF
through April 30, 2009. Thereafter, the waiver and reimbursement may be changed
or terminated at any time. In addition, Wright and WISDI have voluntarily agreed
to further limit the total annual operating expenses after custodian fee
reductions, if any, of WTRB to 0.70% of its average daily net assets. Such
voluntary limitation may be terminated at any time. Pursuant to this agreement
and voluntary limitation, Wright and WISDI waived and/or reimbursed expenses in
the aggregate of $189,917 and $111,340 for WTRB and WCIF, respectively.
5. Investment Transactions
--------------------------
Purchases and sales (including maturities and paydowns) of investments, other
than short-term obligations, were as follows:
Year Ended December 31, 2008
------------------------------
WTRB WCIF
- --------------------------------------------------------------------------------------------------------------------------------
Purchases -
Non-U.S. Government & Agency Obligations $ 5,836,803 $ -
---------------- ----------------
U.S. Government & Agency Obligations $ 23,146,468 $ 22,099,840
---------------- ----------------
Sales -
Non-U.S. Government & Agency Obligations $ 3,590,550 $ 109,996
---------------- ----------------
U.S. Government & Agency Obligations $ 26,213,867 $ 22,611,571
---------------- ----------------
- --------------------------------------------------------------------------------------------------------------------------------
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:
Year Ended Year Ended
December 31, 2008 December 31, 2007
-------------------- ---------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
WRIGHT TOTAL RETURN BOND FUND--
Sold 496,389 $ 5,923,634 298,879 $ 3,663,258
Issued to shareholders in payment of
distributions declared 77,959 940,667 81,211 994,635
Redemptions (650,751) (7,839,428) (875,601) (10,706,894)
------------ --------------- ------------ ---------------
Net decrease (76,403) $ (975,127) (495,511) $ (6,049,001)
============ =============== ============ ===============
WRIGHT CURRENT INCOME FUND--
Sold 902,053 $ 8,661,740 788,878 $ 7,459,407
Issued to shareholders in payment of
distributions declared 131,890 1,262,992 136,552 1,294,792
Redemptions (1,174,591) (11,225,099) (1,041,404) (9,863,138)
------------ --------------- ------------ ---------------
Net decrease (140,648) $ (1,300,367) (115,974) $ (1,108,939)
============ =============== ============ ===============
7. Federal Income Tax Basis of Investments
---------------------------------------------
The cost and unrealized appreciation (depreciation) of the investment securities
owned at December 31, 2008, as computed on a federal income tax basis, were as
follows:
WTRB WCIF
- --------------------------------------------------------------------------------------------------------------------------------
Aggregate cost $ 23,529,501 $ 36,741,101
================ ================
Gross unrealized appreciation 542,806 1,432,612
Gross unrealized depreciation (1,306,277) (114,739)
---------------- ----------------
Net unrealized appreciation (depreciation) $ (763,471) $ 1,317,873
================ ================
- --------------------------------------------------------------------------------------------------------------------------------
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 December 31, 2008, there were no outstanding balances
pursuant to this line of credit.
The average borrowings and average interest rate for the year ended December 31,
2008 were as follows:
WTRB WCIF
- ------------------------------------------------------------------------------
Average borrowings $ 7,282 $ 9,287
Average interest rate 3.7% 3.3%
- -------------------------------------------------------------------------------
9. Fair Value Measurements
-------------------------
The Funds 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 December 31, 2008, the inputs used in valuing each Fund's investments, which
are carried at value, were as follows:
WTRB WCIF
--------------------------------------------
Valuation Inputs
------------------------------------------------------------------------------------------------------------
Level 1 Quoted Prices $ - $ -
Level 2 Other Significant Observable Inputs 22,766,030 38,058,974
Level 3 Significant Unobservable Inputs - -
------------------------------------------------------------------------------------------------------------
Total $ 22,766,030 $ 38,058,974
------------------------------------------------------------------------------------------------------------
The Funds held no investments or other financial instruments as of December 31,
2007 whose fair value was determined using Level 3 inputs.
WRIGHT MANAGED INCOME TRUST
- ------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees of Wright Managed Income Trust and the Shareholders of
Wright Total Return Bond Fund and Wright Current Income Fund:
We have audited the accompanying statements of assets and liabilities
of Wright Total Return Bond Fund and Wright Current Income Fund
(collectively, the "Funds") (together comprising Wright Managed Income
Trust), including the portfolios of investments, as of December 31,
2008, and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the
periods presented. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial
highlights are free of material misstatement. The Funds are not
required to have, nor were we engaged to perform, an audit of their
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of December 31,
2008, by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial positions of Wright Total Return Bond Fund and Wright Current
Income Fund as of December 31, 2008, the results of their operations
for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and the financial highlights
for each of the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 16, 2009
WRIGHT MANAGED INCOME TRUST AS OF DECEMBER 31, 2008
- -------------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED)
The Form 1099-DIV you received in January 2009 showed the tax status of all
distributions paid to your account in calendar 2008. Shareholders are advised to
consult their own tax adviser with respect to the tax consequences of their
investment in the Funds.
MANAGEMENT AND ORGANIZATION
- ------------------------------------------------------------------------------
FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall
management and supervision of the affairs of the Trust. The Trustees and
principal officers of the Trusts are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. The business address of each Trustee and principal officer
is 255 State Street, Boston, Massachusetts 02109.
Definitions:
- -----------
"WISDI" means Wright Investors' Service Distributors, Inc., the principal underwriter of the fund.
"Winthrop" means The Winthrop Corporation, a holding company which owns all of the shares of Wright and WISDI.
Number of Other Trustee/
Term* Funds in Director/
Name, Position(s) of Office Fund Complex Partnership/
Address with the and Length Principal Occupation Overseen Employment
and Age Trusts of Service During Past Five Years By Trustee Positions Held
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
Peter M. Donovan** President President Chairman, Chief Executive Officer 5 Director of
Age 65 and and Trustee and Director of Wright and Winthrop; Wright and
Trustee since Chief Investment Officer and Chairman Winthrop
Inception of the Investment Committee;a Director
of WISDI; President of 5 funds managed
by Wright
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A.M. Moody, III*** Vice President Vice President President, AM Moody Consulting LLC 5 None
Age 72 and of the Trusts (compliance and administrative services
Trustee since December, to the mutual fund industry)since
1990; Trustee of July 1,2003; President and Director
the Trusts since of the WISDI since 2005; Vice President
January 1990 of 5 funds managed by Wright; Retired
Senior Vice President of Wright and
Winthrop; Retired President of WISDI
June 30, 2003 to May 2005
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* Trustees serve an indefinite term. Officers are elected annually.
** Mr. Donovan is an interested person of the Trusts because of his positions
as President of the Trusts, Chairman, Chief Executive Officer and Director
of Wright and Winthrop and Director of WISDI.
*** Mr. Moody is an interested person of the Trusts because of his positions
as Vice President of the Trusts, President and Director of WISDI, and his
affiliation as a consultant to Wright.
- --------------------------------------------------------------------------------------------------------------------------------
Number of Other Trustee/
Term* Funds in Director/
Name, Position(s) of Office Fund Complex Partnership/
Address with the and Length Principal Occupation Overseen Employment
and Age [Trust/Fund] of Service During Past Five Years By Trustee Positions Held
- --------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
James J. Clarke Trustee Trustee President, Clarke Consulting (bank 5 None
Age 67 since consultant - financial management and
December, 2002 strategic planning);Director - Reliance
Bank, Altoona PA since August 1995;
Director - Quaint Oak Bank, Southampton,
PA since March 2007, Associate Professor of
Finance at Villanova University 1972-2002
- --------------------------------------------------------------------------------------------------------------------------------
Dorcas R. Hardy Trustee Trustee President, Dorcas R. Hardy & Associates 5 None
Age 62 since (a public policy and government relations
December, 1998 firm) Spotsylvania, VA; Director, The
Options Clearing Corporation 1997-2005;
Director, First Coast Service Options
since 1998
- --------------------------------------------------------------------------------------------------------------------------------
Richard E. Taber Trustee Trustee since Chairman and Chief Executive 5 None
Age 60 March, 1997 Officer of First County Bank,
Stamford, CT
- --------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
Judith R. Corchard Vice President Vice President Executive Vice President, Investment
Age 70 of the Trusts Management; Senior Investment Officer
since June,1998 and Director of Wright and Winthrop;
Vice President of 5 funds managed
by Wright, Fund Chief Compliance
Officer since 2004
- --------------------------------------------------------------------------------------------------------------------------------
Janet E. Sanders Secretary Secretary of the Vice President Eaton Vance Management,
Age 73 and Assistant Trusts since Administrator for the funds; Officer of
Treasurer March 17, 2005, 5 funds managed by Wright and 173
Ass't. Secretary funds managed by Eaton Vance and
1983 to 2005, its affiliates
Ass't. Treasurer
since 1989
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Barbara E. Campbell Treasurer Treasurer of Vice President Eaton Vance Management;
Age 51 the Trusts Administrator for the funds; Officer of
since 2005 5 funds managed by Wright and 173
funds managed by Eaton Vance and
its affiliates
- --------------------------------------------------------------------------------------------------------------------------------
* Trustees serve an indefinite term. Officers are elected annually.
Additional information about the Funds' Trustees is available in the Statement
of Additional Information, which is available without charge, upon request, by
calling 1-800-888-9471.
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 Funds' 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 Contracts 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.
THE WRIGHT MANAGED BLUE CHIP INVESTMENT FUNDS
- -------------------------------------------------------------------------------
(continued from inside front cover)
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 Barclays Capital
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 Barclays Capital GNMA Backed Bond
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
440 Wheelers Farms Road, Milford, CT 06461
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
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
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of a mutual fund unless
accompanied or preceded by a Fund's current prospectus.
Item 2. CODE OF ETHICS
The registrant has adopted a code of ethics applicable to its Principal
Executive Officer and Principal Financial Officer. The registrant undertakes to
provide a copy of such code of ethics to any person upon request, without
charge, by calling 1-800-888-9471.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board has designated James J. Clarke, an independent trustee,
as its audit committee financial expert. Mr. Clarke is the Principal of Clarke
Consulting, a financial management and strategic planning firm.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
------------
The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the audit of the
registrant's annual financial statements or services that are normally provided
by the accountant in connection with statutory and filings or engagements for
those fiscal years were as follows: 2008: $61,200 and 2007: $60,700.
(b) Audit-Related Fees
---------------------
None
(c) Tax Fees
-----------
The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning were 2008: $9,780 and 2007: $9,440. The nature of
the services comprising these fees was tax compliance, tax advice and tax
planning including fees for tax return preparation.
(d) All Other Fees
---------------
None.
(e) (1) The registrant's audit committee has adopted an Audit Committee
Charter which contains policies and procedures relating to the pre-approval of
services provided by the registrant's principal accountant (the "Pre-Approval
Policies"). The Pre-Approval Policies establish a framework intended to assist
the audit committee in the proper discharge of its pre-approval
responsibilities. As a general matter, the Pre-Approval Policies (i) specify
certain types of audit, audit-related, tax, and other services determined to be
pre-approved by the audit committee; and (ii) delineate specific procedures
governing the mechanics of the pre-approval process, including the approval and
monitoring of audit and non-audit service fees with the exception of any de
minimus engagement meeting applicable requirements. Unless a service is
specifically pre-approved under the Pre-Approval Policies, it must be separately
pre-approved by the registrant's audit committee. The Pre-Approval Policies and
the types of audit and non-audit services pre-approved therein must be reviewed
and ratified by the registrant's audit committee at least annually. The
registrant's audit committee maintains full responsibility for the appointment,
compensation, and oversight of the work of the registrant's principal
accountant.
(2) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
Items 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not required in Filing
Item 6. SCHEDULE OF INVESTMENTS
Please see schedule of investments contained in the Report to Stockholders
included under Item 1 of this Form N-CSR.
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not required in Filing.
Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not required in Filing
Item 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not required in Filing
Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which a Fund's
shareholders may recommend nominees to the registrant's board of Trustees, where
those changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A(17
CFR240.14a-101), or this item.
Item 11. CONTROLS AND PROCEDURES
(a) It is the conclusion of the registrant's principal executive officer and
principal financial officer that the effectiveness of the registrant's current
disclosure controls and procedures (such disclosure controls and procedures
having been evaluated within 90 days of the date of this filing) provide
reasonable assurance that the information required to be disclosed by the
registrant has been recorded, processed, summarized and reported within the time
period specified in the Commission's rules and forms and that the information
required to be disclosed by the registrant has been accumulated and communicated
to the registrant's principal executive officer and principal financial officer
in order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Item 12. EXHIBITS
(a) (1) Registrant's Code of Ethics - Not applicable (please see Item 2).
(a) (2) Treasurer's and President's Section 302 certification.
(b) Combined 906 certification.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Wright Managed Income Trust (On behalf of Wright Total Return Bond Fund
- -----------------------------------------------------------------------------
and Wright Current Income Fund)
- --------------------------------
By: /s/ Peter M. Donovan
---------------------
Peter M. Donovan
President
Date: February 26,2009
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: February 27,2009
By: /s/ Peter M.Donovan
---------------------
Peter M. Donovan
President
Date: February 26,2009