P R O S P E C T U S March 10,1997
Individual Shares
Institutional Shares
Institutional Service Shares
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Catholic Values Investment Trust Equity Fund
A mutual und seeking long-term growth of capital and reasonable current income
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a series of
Catholic Values Investment Trust
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Write To: Catholic Values Investment Trust, P.O. Box 5123,Westborough,
Massachusetts 01581-5123
Or Call: The Fund Order Room --(800) 225-6265, Ext.7750
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This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference.
A Statement of Additional Information dated March 10,1997 for the Fund has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. This Statement is available without charge from Wright
Investors' Service Distributors, Inc., 1000 Lafayette Boulevard, Bridgeport,
Connecticut 06604 (800-974-4486)or from the Fund's web site
(http://www.catholicinvestment.com). In addition, the Securities and Exchange
Commission maintains a Web site (http://www.sec.gov) that contains the Statement
of Additional Information, material incorporated by reference and other
information regarding the Fund.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE FUND INVOLVE
INVESTMENT RISKS, INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME
OR ALL OF THE PRINCIPAL INVESTMENT.
Table of Contents
An Introduction to the Fund....................... 2
Shareholder and Fund Expenses..................... 4
The Fund's Investment Objective and
Policies.......................................... 5
Other Investment Policies......................... 6
The Investment Adviser............................ 7
Investment Committee and Catholic
Advisory Board.................................... 8
The Administrator................................. 9
Distribution Expenses............................. 9
Service Plan...................................... 10
How the Fund Values its Shares.................... 10
How to Buy Shares................................. 10
Distributions by the Fund......................... 12
Taxes............................................. 12
How to Redeem or Sell Shares...................... 13
Performance Information........................... 16
Other Information................................. 16
Tax-Sheltered Retirement Plans.................... 17
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
An Introduction to the Fund
The information summarized below is qualified in its entirety by the more
detailed information set forth below in this Prospectus.
The Trust................The Catholic Values Investment
Trust (the "Trust") is an open-end management
investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), and
consists of one series (the Fund). The Fund is a
diversified fund.
The Fund.................Catholic Values Investment Trust Equity Fund
(the "Fund").
Individual Shares........Available for purchase by non-institutional investors.
Institutional Shares.....Available for purchase by institutional investors.
and Institutional
Service Shares
Investment Objective.....The Fund seeks long-term growth of
and Policies capital and reasonable current income. The Fund pursues
this objective by investing in a broadly diversified
portfolio of equity securities of well-established U.S.
and non-U.S. companies which meet strict quality and
religious standards. The companies in which the Fund
may invest must offer products or services and
undertake activities that are consistent with the core
teachings of the Roman Catholic Church (the "Catholic
Church").
The Investment...........The Fund has engaged Wright Investors' Service, Inc.,
Adviser 1000 Lafayette Boulevard, Bridgeport,Connecticut 06604
("Wright" or the "Investment Adviser"), as investment
adviser to carry out the investment and reinvestment of
its assets.
Catholic Advisory........The Fund has appointed a Catholic
Board Advisory Board of prominent lay members of the Catholic
Church who are familiar with the basic tenets and core
teachings of the Catholic Church. The Board, guided by
the magisterium of the Catholic Church, consults with
the Investment Adviser and identifies companies and
other issuers of securities to avoid investments in
companies whose products, services or activities are
inconsistent with core Catholic Church teachings.
The Administrator........The Fund has retained Eaton Vance Management
("Eaton Vance" or the "Administrator"), 24 Federal
Street, Boston, Massachusetts 02110, as administrator
to manage its legal and business affairs.
The Distributor..........Wright Investors' Service Distributors, Inc.
("WISDI" or the "Principal Underwriter"), 1000
Lafayette Boulevard, Bridgeport, Connecticut 06604,
is the Distributor of the Fund's shares.
How to Purchase..........Individual Shares of the Fund may
Individual Shares of be purchased at the net asset value per share next
the Fund determined after receipt and acceptance of the purchase
order. There is no initial sales charge on the purchase
of Individual Shares. There is a contingent deferred
sales charge ("CDSC") of 1% imposed on redemptions of
Individual Shares made within one year of the date of
purchase. See "How to Redeem or Sell Shares." The
minimum initial investment is $1,000, which will be
waived for investments in individual retirement plans
and in retirement plans
<PAGE>
for self-employed individuals.
There is no minimum amount for subsequent purchases.
The minimum account size is $500, which will also be
waived for investments in individual retirement plans
and in retirement plans for self-employed individuals.
The $1,000 minimum initial investment and $500 minimum
account size is waived for the Automatic Investment
Program which may be established with an investment of
$50 or more. A minimum of $50 is applicable to each
subsequent investment through an Automatic Investment
Program. See "How to Buy Shares."
How to Purchase..........Institutional Shares and
Institutional Shares Institutional Service Shares of the Fund may be
and Institutional purchased at the net asset value per share next
Service Shares determined after receipt and acceptance of the purchase
of the Fund order. There is no sales charge on the purchase of
Institutional Shares or Institutional Service Shares of
the Fund. The minimum initial investment for
Institutional Shares and Institutional Service Shares
is $3,000,000 and $500,000, respectively. Institutional
Service share minimums will be waived for investments
in 401(k), 403(b) and other qualified retirement plans.
There is no minimum amount for subsequent purchases.
The minimum account size for Institutional Shares and
Institutional Service Shares is $500,000 and $100,000,
respectively. The minimum account size for
Institutional Service Shares shareholders will be
waived for investments in 401(k), 403(b) and other
qualified retirement plans of companies and other
entities. See "How to Buy Shares."
Distribution Options.....Distributions are paid in additional shares
at net asset value or cash as the shareholder elects.
Unless the shareholder has elected to receive dividends
and distributions in cash, dividends and distributions
will be reinvested in additional shares of the same
class of the Fund at the net asset value per share as
of the reinvestment date.
Redemptions..............Shares may be redeemed directly from the Fund at the
net asset value per share next determined after
receipt of the redemption request in good order,
less any applicable CDSC. A telephone redemption
privilege is available. The Fund reserves the right to
redeem any (i) Individual Share account if the net
asset value of such account falls below $500,
(ii) Institutional Share account if the net asset
value of such account falls below $500,000, and
(iii) Individual Service Share account if the net asset
value of such account falls below $100,000. These
minimums will be waived for investments in 401(k),
403(b) and other qualified retirement
plans. See "How to Redeem or Sell Shares."
Net Asset Value..........The net asset value per share of the Fund is
calculated on each day the New York Stock Exchange
("NYSE") is open for trading. Call (800) 888-9471 for
the previous day's net asset value.
Taxation.................The Fund intends to elect to be treated and to
continue to qualify each year as a regulated
investment company under Subchapter M of the
Internal Revenue Code. Consequently, the Fund should
not be liable for federal income tax on net investment
income and net realized capital gains that are
distributed to its shareholders in accordance with
applicable timing requirements.
Shareholder..............Each shareholder will receive annual and semi-annual
Communication reports containing financial statements, and a
statement confirming each share transaction. Financial
statements included in annual reports are audited by
the Fund's independent certified public accountants.
Account statements indicating total shares of the Fund
owned will be mailed quarterly.
<PAGE>
Shareholder and Fund Expenses
The following table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by an investment in the Fund. The percentages shown below
representing "Other Expenses" are based on estimates for the fiscal period ended
December 31, 1997.
Institutional
Individual Institutional Service
Shares Shares Shares
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Shareholder Transaction Expenses
Maximum Initial Sales
Charge on Purchases None None None
Maximum Sales Charge on
Reinvestment of Dividends None None None
Maximum Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable) 1.00% None None
Redemption Fees None None None
Exchange Fee None None None
Annualized Fund Operating Expenses
(as a percentage of average net assets)
Investment Adviser Fee 0.75% 0.75% 0.75%
12b-1 Distribution Expense 0.75%(1) None 0.25%(1)
Other Expenses 0.36%(2) 0.24%(3) 0.36%(4)
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Total Operating Expenses 1.86% 0.99% 1.36%
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(1) This is the maximum annual fee and assumes that the Plan of Distribution is
in effect for an entire year.
(2) Includes an administration fee and a service fee equal to 0.05% and 0.06%,
respectively, of the Fund's average annual net assets attributable to
Individual Shares.
(3) Includes an administration fee and a service fee equal to 0.05% and 0.04%,
respectively, of the Fund's average annual net assets attributable to
Institutional Shares.
(4) Includes an administrative fee and a service fee equal to 0.05% and 0.06%
respectively, of the Fund's average annual net assets attributable to
Institutional Service Shares.
Example of Fund Expenses
The following is an illustration of the total transaction and operating
expenses that an investor in the Fund would bear over different periods of time,
with or without redemption at the end of each time period, assuming an
investment of $1,000 and a 5% annual return on the investment.
1 3
Year Years
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Individual Shares*
- Assuming complete
redemption at end of period $29 $58
- Assuming no redemption $19 $32
Institutional Shares $10 $32
Institutional Service Shares $14 $43
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* Individual Shares redeemed during the first year after purchase are subject to
a 1% CDSC.
** Asuming complete redemption at end of period.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary.
The Fund's payment of a distribution fee for Individual Shares and
Institutional Service Shares may result in a long-term shareholder of Individual
Shares or Institutional Service Shares indirectly paying more than the economic
equivalent of the maximum initial sales charge permitted under the Conduct Rules
of the National Association of Securities Dealers, Inc.
<PAGE>
The Fund's Investment Objective And Policies
The Fund's objective is long-term growth of capital and reasonable current
income. Reasonable current income means that amount of income that can be
achieved, consistent with the Fund's goal of long-term growth of capital,from a
predominantly equity portfolio.
The Fund will, through continuous supervision by Wright and the Catholic
Advisory Board, pursue its objective by investing in a diversified portfolio
consisting primarily of equity securities of high-quality, well-established and
profitable U.S. and non-U.S. companies that offer products or services and
undertake activities that are consistent with the core teachings of the Catholic
Church.
How Investments are Selected
Securities selected for the Fund are drawn from investment lists prepared
by Wright and known as The Approved Wright Investment List (the "AWIL") and The
International Approved Wright Investment List (the "International AWIL").
Securities drawn from these Investment Lists will be reviewed for compliance
with the core teachings of the Catholic Church by the Catholic Advisory Board,
which is appointed by the Board of Trustees of the Trust (the "trustees") and is
made up of prominent lay members of the Catholic Church.
The Approved Wright Investment Lists (AWIL and International AWIL). Wright
systematically reviews about 3,800 U.S. companies and about 11,000 non-U.S.
companies in The Worldscope(R) database which it developed. This review first
identifies those companies which, on the basis of at least five years of audited
records, meet the minimum standards of prudence (e.g. the value of the company's
assets and shareholders' equity exceeds certain minimum standards and its
operations have been profitable during the last three years) and thus are
suitable for consideration by fiduciary investors. Companies meeting these
requirements (about 1,700 companies) are considered by Wright to be suitable for
prudent investment. They may be large or small, may have their securities traded
on exchanges or over the counter and may include companies not currently paying
dividends on their shares.
These approximately 1,700 companies are then subjected to extensive
analysis and evaluation in order to identify those which meet Wright's 32
fundamental standards of Premium Investment Quality. Only those companies which
meet or exceed all of these standards (a subset of the 1,700 companies
considered suitable for prudent investment) are eligible for selection by the
Wright Investment Committee for inclusion in the Investment Lists. See the
Statement of Additional Information for a more detailed description of Wright
Quality Ratings and the Investment Lists.
All companies on the Investment Lists are, in the opinion of Wright,
soundly financed with established records of earnings profitability and equity
growth. All have established investment acceptance and active, liquid markets
for their publicly owned shares. The companies on the Investment Lists will be
referred to in this prospectus as "Blue Chips."
The Catholic Advisory Board. The members of the Catholic Advisory Board are
familiar with the basic tenets and core teachings of the Catholic Church. The
Catholic Advisory Board will make a good faith effort, using the best publicly
available information obtainable by Wright, to identify those companies and
other issuers of securities on the Investment Lists whose products, services
and/or activities are substantially consistent with core Catholic Church
teachings. The Catholic Advisory Board will be guided by the magisterium of the
Catholic Church and will have sole discretion to interpret Catholic Church
teachings and determine which of the above companies meet the Fund's religious
criteria. The Fund generally will not invest in companies before they have been
reviewed by the Catholic Advisory Board. However, Wright will be solely
responsible for evaluating the investment merits of the Fund's portfolio
securities.
Wright and the Catholic Advisory Board will monitor the Fund's portfolio
securities with respect to the Fund's investment and religious criteria,
respectively. The Catholic Advisory Board will re-evaluate an issuer of the
Fund's portfolio securities when information becomes available to them
indicating that the issuer may no longer meet the Fund's religious criteria. In
the event that an issuer of any of the Fund's portfolio securities fails to meet
either the investment or religious criteria, such issuer's securities will be
sold by the Fund. This policy may cause the Fund to dispose of a security at a
time when it may be disadvantageous to do so.
The Fund will consider for investment only securities which meet the Fund's
investment and religious criteria. Consequently, the return on securities chosen
by the Fund may be lower than if the Fund considered only investment criteria
when making its investments. However, Wright does not expect there will be a
material change in performance.
<PAGE>
Primary Investments. The Fund will, under normal market conditions, invest
at least 80% of its net assets in equity securities of Blue Chip companies,
including common stocks, preferred stocks, warrants and securities convertible
into stock. As a matter of nonfundamental policy, it is expected that the Fund
will normally be fully invested in equity securities. However, the Fund may
invest up to 20% of its net assets in the short-term debt securities described
under "Defensive and Certain Short-Term Investments." In addition, for temporary
defensive purposes the Fund may hold cash or invest more than 20% of its net
assets in these short-term debt securities.
Other Investment Policies
The Fund has adopted certain fundamental investment restrictions which are
enumerated in detail in the Statement of Additional Information and which may be
changed only by the vote of a majority of the Fund's outstanding voting
securities.
Foreign Investments. The Fund may invest up to 30% of its total assets in
equity securities of foreign companies that are on the International AWIL and
that are traded on a securities market of the country in which the company is
located or other foreign securities exchanges. In addition, the Fund may
purchase securities in the form of American Depositary Receipts ("ADRs") or
similar securities representing interests in an underlying foreign security.
ADRs are not necessarily denominated in the same currency as the underlying
foreign securities. If an ADR is not sponsored by the issuer of the underlying
foreign security, the institution issuing the ADR may have reduced access to
information about the issuer.
Investments in foreign securities involve risks in addition to those
associated with investments in the securities of U.S. issuers. These risks
include less publicly available financial and other information about foreign
companies; less rigorous securities regulation; the potential imposition of
currency controls, foreign withholding and other taxes; and war, expropriation
or other adverse governmental actions. Foreign equity markets may be less liquid
than United States markets and may be subject to delays in the settlement of
portfolio transactions. Brokerage commissions and other transaction costs in
foreign markets tend to be higher than in the United States. The value of
foreign securities denominated in a foreign currency will vary in accordance
with changes in currency exchange rates, which can be volatile. In addition, the
prices of unsponsored ADRs may be more volatile than if they were sponsored by
the issuers of the underlying securities. These considerations generally are of
greater concern in developing countries.
Warrants and Convertible Securities. The Fund may invest up to 5% of its
net assets in warrants. Warrants acquired by the Fund will entitle it to buy
common stock at a specified price and time. The Fund may invest up to 5% of its
net assets in convertible securities. Convertible debt securities and
convertible preferred stock entitle the Fund to acquire the issuer's stock by
exchange or purchase at a predetermined rate.
Borrowing; Portfolio Securities Loans. The Fund may borrow for temporary or
emergency purposes in an amount up to one-third of the Fund's total assets. The
Fund may lend portfolio securities with a value up to 30% of its total assets to
enhance its income. Each loan must be fully collateralized by cash or other
eligible assets (e.g., U.S. Government securities or cash equivalents such as
certificates of deposit, commercial paper, and other short-term money market
instruments). The Fund may pay reasonable fees in connection with securities
loans. Wright will evaluate the creditworthiness of prospective institutional
borrowers and monitor the adequacy of the collateral to reduce the risk of
default by borrowers.
Diversification. The Fund is diversified and therefore may not, with
respect to 75% of its total assets, (1) invest more than 5% of its total assets
in the securities of any one issuer, other than U.S. Government securities, or
(2) acquire more than 10% of the outstanding voting securities of any one
issuer. The Fund will not concentrate (invest 25% or more of its total assets)
in the securities of issuers in any one industry.
Illiquid Securities. The Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act") and commercial
paper sold in reliance on Section 4(2) of the Securities Act. The Trustees will
monitor the Fund's investments in these securities, focusing on certain factors,
including valuation, liquidity and availability of information. The Trustees may
adopt guidelines and delegate to Wright the daily monioring and determination of
the liquidity of restricted securities. Investing in Rule 144A securities could
make the Fund's portfolio less liquid if qualified institutional buyers
temporarily lose interest in buying these securities. Purchases of restricted
securities, other than liquid Rule 144A securities and Section 4(2) commercial
paper, are subject to an investment restriction limiting all the Fund's illiquid
securities to not more than 15% of the Fund's net assets. Illiquid securities
include repurchase agreements maturing in more than seven days, securities that
are not readily marketable and restricted securities.
<PAGE>
Defensive and Certain Short-Term Investments. Under normal market
conditions up to 20% of the Funds net assets or, during periods of unusual
market conditions, when Wright believes that investing for temporary defensive
purposes is appropriate, all or any portion of the Fund's assets may be held in
cash, money market instruments or other short-term obligations. These include
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collateralized by such securities); and U.S. dollar denominated, high
quality commercial paper, short-term corporate obligations, other debt
instruments, certificates of deposit, bankers' acceptances and time deposits of
domestic and foreign banks. The Fund may invest in instruments and obligations
of banks that have other relationships with the Fund, Wright or Eaton Vance. No
preference will be shown towards investing in banks which have such
relationships.
The prices of fixed income securities vary inversely with interest rates.
Therefore, the value of the Fund's investments in convertible securities and
short-term obligations will decline when interest rates are rising. The
investment objective and, unless otherwise indicated, policies of the Fund may
be changed by the Trustees without a vote of the Fund's shareholders. The Fund
is not a complete investment program and there is no assurance that the Fund
will achieve its investment objective. The market price of securities held by
the Fund and the net asset value of the Fund's shares will fluctuate in response
to stock market developments and currency exchange rate fluctuations.
The Investment Adviser
The Fund has engaged Wright Investors' Service, Inc. ("Wright", or the
"Investment Adviser") to act as its investment adviser pursuant to its
Investment Advisory Contract. Wright, acting under the general supervision of
the Trust's trustees, furnishes the Fund with investment advice and management
services. The address of Wright is 1000 Lafayette Boulevard, Bridgeport,
Connecticut. The trustees of the Trust are responsible for the general oversight
of the conduct of the Fund's business. Wright is a wholly-owned subsidiary of
The Winthrop Corporation ("Winthrop"). The estate of John Winthrop Wright owns
29% of the outstanding shares of Winthrop and may, therefore, be deemed a
controlling person of Winthrop and Wright.
Wright is a leading independent international investment management and
advisory firm which, together with its parent, Winthrop, has more than 30 years
of experience. Its staff of over 150 people includes a highly respected team of
60 economists, investment experts and research analysts. Wright manages assets
for bank trust departments, corporations, unions, municipalities, eleemosynary
institutions, professional associations, institutional investors, fiduciary
organizations, family trusts and individuals as well as mutual funds. Wright
originated one of the world's largest and most complete databases,
Worldscope(R), with financial information on 14,800 domestic and international
corporations. At the end of 1996, Wright managed approximately $4 billion of
assets.
Under the Fund's Investment Advisory Contract, the Fund is required to pay
Wright a monthly advisory fee at the annual rates (as a percentage of average
daily net assets) set forth in the table below.
ANNUAL ADVISORY FEE RATES
Under $500 Million Over
$500 Million to $1 Billion $1 Billion
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0.75% 0.73% 0.68%
Wright has agreed not to impose a portion of its management fee and to make
other arrangements, if necessary, to limit other expenses of the Fund to the
extent required to reduce operating expenses of (i) the Individual Shares to
1.99% of the average daily net assets attributable to Individual Shares, (ii)
the Institutional Shares to 0.99% of the average daily net assets attributable
to Institutional Shares, and (iii) Institutional Service Shares to 1.36% of the
average daily net assets attributable to Institutional Service Shares. This
agreement is voluntary and temporary and may be revised or terminated by Wright
at any time with or without notice to shareholders.
Pursuant to the Investment Advisory Contract, Wright also furnishes for the
use of the Fund office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund. The Fund is responsible for
the payment of all expenses relating to its operations other than those
expressly stated to be payable by Wright under its Investment Advisory Contract.
Wright places the portfolio security transactions for the Fund, which in
some cases may be effected in block transactions
<PAGE>
which include other accounts managed by Wright. Wright provides similar
services directly for bank trust departments and other advisory accounts. Wright
seeks to execute the Fund's portfolio security transactions on the most
favorable terms and in the most effective manner possible. Subject to the
foregoing, Wright may consider sales of shares of the Fund or of other
investment companies sponsored by Wright as a factor in the selection of
broker-dealer firms to execute such transactions.
Wright is also the investment adviser to the funds in The Wright Managed
Equity Trust, The Wright Managed Income Trust, The Wright Managed Blue Chip
Series Trust and The Wright EquiFund Equity Trust (the "Wright Funds").
Additional information may be obtained from the web site maintained by Wright
(http://www.wisi.com).
Investment Committee
and Catholic Advisory Board
Investment Committee
An Investment Committee of eight officers of Wright, all of whom are
experienced analysts, exercises disciplined direction and control over all
purchases and sales of securities, policies and procedures for the Fund. The
members of the Investment Committee are as follows:
Peter M. Donovan, CFA, President and Chief Executive Officer of Wright. Mr.
Donovan received a BA Economics from Goddard College and joined Wright from
Jones, Kreeger & Co., Washington, D.C. in 1966. Mr. Donovan is the president of
The Wright Managed Income Trust, The Wright Managed Equity Trust, The Wright
Managed Blue Chip Series Trust and The Wright EquiFund Equity Trust. He is also
director of Aetna Master Fund, a Luxembourg SICAV. He is a member of the New
York Society of Security Analysts and the Hartford Society of Financial
Analysts.
Judith R. Corchard, chairman of the Investment Committee, Executive Vice
President -- Investment Management of Wright. Ms. Corchard attended the
University of Connecticut and joined Wright in 1960. She is a member of the New
York Society of Security Analysts and the Hartford Society of Financial
Analysts.
Jatin J. Mehta, CFA, Executive Counselor and Director of Education of
Wright. Mr. Mehta received a BS Civil Engineering from University of Bombay,
India and an MBA from the University of Bridgeport. Before joining Wright in
1969, Mr. Mehta was an executive of the Industrial Credit Investment Corporation
of India, a World Bank agency in India for financial assistance to private
industry. He is a member of the New York Society of Security Analysts and the
Hartford Society of Financial Analysts.
Harivadan K. Kapadia, CFA, Senior Vice President -- Investment Analysis and
Information of Wright. Mr. Kapadia received a BA (hon.) Economics and Statistics
and MA Economics from University of Baroda, India and an MBA from the University
of Bridgeport. Before joining Wright in 1969, Mr. Kapadia was Assistant Lecturer
at the College of Engineering and Technology in Surat, India and Lecturer, B.J.
at the College of Commerce & Economics, VVNagar, India. He has published the
textbooks: "Elements of Statistics," "Statistics," "Descriptive Economics," and
"Elements of Economics." He was appointed Adjunct Professor at the Graduate
School of Business, Fairfield University in 1981. He is a member of the New York
Society of Security Analysts and the Hartford Society of Financial Analysts.
Michael F. Flament, CFA, Senior Vice President -- Investment and Economic
Analysis of Wright. Mr. Flament received a BS Mathematics from Fairfield
University; an MA Mathematics from University of Massachusetts and an MBA
Finance from the University of Bridgeport. He is a member of the New York
Society of Security Analysts and the Hartford Society of Financial Analysts.
James P. Fields, CFA, Vice President and Investment Officer of Wright. Mr.
Fields received a BS Accounting from Fairfield University and an MBA Finance
from Pace University. He joined Wright in 1982 and is also a member of the New
York Society of Security Analysts.
Amit S. Khandwala, Vice President of Wright. Mr. Khandwala received a BS
(Economics, Accounting, International Business and Computers) from University of
Bombay, India, and an MBA (Investments, Corporate Finance, International Finance
& International Marketing) from the University of Hartford. Mr. Khandwala has
taught in the Executive MBA Program at the University of Hartford Business
School. Mr. Khandwala was involved in the establishing of the Stamford Society
of Securities Analysts and is a member of the New York Society of Security
Analysts and the Hartford Society of Financial Analysts.
Charles T. Simko, Jr., Vice President - Investment Research of Wright. Mr.
Simko received a BS in Mathematics from Fairfield University. He joined Wright
in 1985.
<PAGE>
Catholic Advisory Board
The Catholic Advisory Board consults with the Investment Adviser in order
to avoid investing in the securities of any issuer whose products and/or
activities are inconsistent with core Catholic Church teachings. The members of
the Catholic Advisory Board are as follows:
Thomas P. Melady, Chairman, former U.S. Ambassador to Burundi and to the
Holy See, President Emeritus of Sacred Heart University.
Margaret M. Heckler, Eight term Congresswoman from the Massachusetts 10th
District, former Secretary of the Department of Health and Human Services,
former Ambassador to Ireland.
Bowie K. Kuhn, former Commissioner of Baseball.
Thomas S. Monaghan, President, CEO and Chairman of the Board of Domino's
Pizza, Inc.
William A. Wilson, former (and first) U.S. Ambassador to the Holy See.
The Administrator
The Trust engages Eaton Vance as its administrator under an Administration
Agreement. Under the Administration Agreement, Eaton Vance is responsible for
managing the legal and business affairs of the Fund, subject to the supervision
of the Trust's trustees. Eaton Vance's services include recordkeeping,
preparation and filing of documents required to comply with federal and state
securities laws, supervising the activities of the Fund's custodian and transfer
agent, providing assistance in connection with the trustees' and shareholders'
meetings and other administrative services necessary to conduct the Fund's
business. Eaton Vance will not provide any investment management or advisory
services to the Fund. For its services under the Administration Agreement, Eaton
Vance receives a monthly administration fee at the annual rates (as a percentage
of average daily net assets) set forth in the following table.
ANNUAL ADMINISTRATION FEE RATES
Under $100 Million $250 Million Over
$100 Million to $250 Million to $500 Million $500 Million
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0.07% 0.04% 0.03% 0.02%
Eaton Vance, its affiliates and its predecessor companies have been
primarily engaged in managing assets of individuals and institutional clients
since 1924 and managing, administering and marketing mutual funds since 1931.
Total assets under management are over $16 billion. Eaton Vance is a
wholly-owned subsidiary of Eaton Vance Corp. ("EVC"), a publicly held holding
company.
Distribution Expenses -- Individual Shares
In addition to the fees and expenses payable by the Fund in accordance with
the Investment Advisory Contract and Administration Agreement, the Fund pays for
distribution expenses of the Individual Shares and Institutional Service Shares
pursuant to a Distribution Plan (the "Plan") adopted by the Trust and designed
to meet the requirements of Rule 12b-1 under the 1940 Act. The Plan authorizes
the Fund to finance any activities primarily intended to result in the sale of
the Fund's Individual Shares and Institutional Service Shares. Authorized
expenses include compensation paid to and expenses incurred by officers,
trustees, employees or sales representatives of the Trust, including telephone
expenses and the cost of printing prospectuses and reports for other than
existing shareholders, preparation and distribution of sales literature and
advertising. The expenses covered by the Plan may include payments to any
separate distributors under agreement with the Trust for activities primarily
intended to result in the sale of the Fund's Individual Shares and Institutional
Service Shares.
The Trust's principal underwriter is Wright Investors' Service
Distributors, Inc. ("WISDI" or the "Principal Underwriter"), a wholly owned
subsidiary of Winthrop. Under the Plan, the Fund will pay on an annual basis up
to 0.75% and 0.25%, respectively, of its average daily net assets attributable
to Individual Shares and Institutional Service Shares to WISDI or to other
providers of distribution services designated by WISDI.
The Principal Underwriter may use the distribution fee for its expenses of
distributing the Fund's Individual Shares and Institutional Service Shares,
including allocable overhead expenses. Distribution expenses not specifically
attributable to the Fund's Individual Shares or Institutional Service Shares are
allocated among the Fund and certain other investment companies for which WISDI
acts as Principal Underwriter, based on the amount of sales of the Fund's
Individual Shares or Institutional Service Shares resulting from the Principal
Underwriter's distribution efforts and
<PAGE>
expenditures. If the distribution fee exceeds the Principal Underwriter's
expenses, the Principal Underwriter may realize a profit from these
arrangements.
The Fund pays no distribution expenses with respect to the Institutional
Shares.
Service Plan
The Trust has adopted a service plan (the "Service Plan" ) which allows the
Fund to reimburse WISDI for payments to intermediaries for providing account
administration and personal and account maintenance services to their customers
who are beneficial owners of shares. The services provided by these
intermediaries may include acting, directly or through an agent, as the sole
shareholder of record, maintaining account records for customers, processing
orders to purchase, redeem or exchange shares for customers, responding to
inquiries from prospective and existing shareholders and assisting customers
with investment procedures. The amount of the service fee payable under the
Service Plan with respect to each class of shares of the Fund may not exceed
0.25% annually of the average daily net assets attributable to the respective
classes.
How the Fund Values its Shares
The Trust values the shares of each class of the Fund once on each day the
NYSE is open as of the close of regular trading on the NYSE (normally 4:00 p.m.
New York time). The net asset value per share of each class is determined by
Investors Bank & Trust Company ("IBT"), the Fund's custodian (as agent for the
Fund) with the assistance of Wright for securities that involve valuation
problems. Such determination is accomplished by dividing the number of
outstanding shares of each class of the Fund into the net assets attributable to
that class. The net asset value of each class can differ.
Securities listed on securities exchanges or in the NASDAQ National Market
are valued at closing sale prices. Unlisted or listed securities, for which
closing sale prices are not available, are valued at the mean between latest bid
and asked prices. Fixed income securities for which market quotations are
readily available are valued on the basis of valuations supplied by a pricing
service. Fixed income and equity securities for which market quotations are
unavailable, restricted securities, and other assets are valued at their fair
value as determined in good faith by or at the direction of the Trustees.
Short-term obligations maturing in 60 days or less are valued at amortized cost,
which approximates market value.
How to Buy Shares
Shares of the Fund are sold without an initial sales charge at the net
asset value next determined after the receipt of a purchase order.
Minimum Initial Investment Individual Shares: $1,000
Institutional Shares: $3,000,000
Institutional Service Shares $500,000
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Waiver of Minimum Initial Investment
o Waived for investments in applicable retirement plans. (Individual Shares
and Institutional Service Shares only.)
o Waived for the Automatic Investment Program. (Individual Shares only.)
- --------------------------------------------------------------------------------
Purchasing By Mail - Initial Purchase
o Obtain an account application form from WISDI, then complete and sign the
form.
o Mail the form with a check, Federal Reserve draft or other negotiable
bank draft, drawn on a U.S. bank and payable in U.S. dollars to the order of
Catholic Values Investment Trust, to Firs Data Investor Services Group (the
"Transfer Agent") at the following address:
First Data Investor Services Group
Catholic Values Investment Trust
P.O. Box 5123
Westborough,Massachusetts 01581-5123
<PAGE>
Purchasing By Mail - Subsequent Purchases
o May be made at any time by check, Federal Reserve draft, or other
negotiable bank draft, drawn on a U.S. bank and payable in U.S. dollars to the
order of Catholic Values Investment Trust, and mailed to the Transfer Agent at
the above address.
o Identify the account and the account number when sending payment.
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Purchasing By Wire - Initial Purchase
o Telephone the Fund at(800)225-6265,Ext.7750, to advise of the action and
to obtain an account number.
o Obtain an account application form from WISDI, then complete, sign and
mail the form to the Transfer Agent at the above address.
o Instruct your bank to wire immediately available funds to:
Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts
ABA: 011001234
Account: 081345
Further Credit: Catholic Values Investment Trust Equity Fund
(Include your Fund account number)
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Purchasing By Wire - Subsequent Purchases
o Telephone the Fund at (800) 225-6265, Ext. 7750, prior to each
transmission.
o Repeat the wire procedure described above.
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Automatic Investment Program (Individual Class only)
o Investments of $50 or more may be made each month or quarter in automatic
withdrawals from your bank account.
o $1,000 minimum initial investment and $500 minimum account requirements
are waived.
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Purchase through Exchange of Portfolio Securities. Investors wishing to
purchase shares of the Fund through an exchange of portfolio securities should
contact WISDI to determine the acceptability of the securities and make the
proper arrangements. Shares of the Fund may be purchased, in whole or in part,
by delivering to the Fund's custodian securities that meet the investment
objective and policies of the Fund, have readily ascertainable market prices and
quotations and are otherwise acceptable to the Investment Adviser and the Fund.
The Trust will only accept securities in exchange for shares of the Fund for
investment purposes and not as agent for the shareholders with a view to a
resale of such securities. The Investment Adviser, WISDI and the Fund reserve
the right to reject all or any part of the securities offered in exchange for
shares of the Fund.
An investor who wishes to make an exchange should furnish to WISDI a list
with a full and exact description of all of the securities which he or she
proposes to deliver. WISDI or the Investment Adviser will specify those
securities which the Fund is prepared to accept and will provide the investor
with the necessary forms to be completed and signed by the investor. The
investor should then send the securities, in proper form for transfer, with the
necessary forms to the Fund's custodian and certify that there are no legal or
contractual restrictions on the free transfer and sale of the securities.
Exchanged securities will be valued at their fair market value as of the
date that the securities in proper form for transfer and the accompanying
purchase order are both
<PAGE>
received by the Trust, using the procedure for valuing portfolio securities
described under "How the Fund Values its Shares." However, if the NYSE or
appropriate foreign stock exchange is not open for unrestricted trading on that
date, the securities will be valued on the next day on which the NYSE or
appropriate foreign stock exchange is so open. Securities to be exchanged must
have a minimum aggregate value of $5,000. An exchange of securities for Fund
shares is a taxable transaction which may result in realization of a gain or
loss for tax purposes.
Account Statements and Confirmations. Account statements indicating total
shares of the Fund owned in the account or each sub-account will be mailed to
investors quarterly. Confirmations will be issued at the time of each purchase
or redemption. The issuance of shares will be recorded on the books of the Fund.
The Trust does not issue share certificates. The Fund reserves the right to
reject any order for the purchase of its shares or to limit or suspend, without
prior notice, the offering of its shares.
Shares of the Fund may be purchased or redeemed through an investment
dealer, bank or other institution ("Authorized Dealer"). Charges may be imposed
by the institution for its services. Any such charges could constitute a
material portion of a smaller account. Shares may be purchased or redeemed
directly from or with the Fund without imposition of any charges other than
those described in this Prospectus.
Distributions by the Fund
The Trust intends to pay dividends from the net investment income of the
Fund at least semi-annually. Any net capital gains realized from the sale of
securities or other transactions in the Fund's portfolio (reduced by any
available capital loss carryforwards from prior years) will be paid at least
annually, shortly before or after the close of the Fund's fiscal year.
Shareholders may reinvest dividends and distributions, if any, in additional
shares of the Fund at the net asset value as of the ex-dividend date. Unless
shareholders otherwise instruct, all distributions and dividends will be
automatically invested in additional shares of the same class of the Fund.
Alternatively, shareholders may reinvest capital gains distributions and direct
that dividends be paid in cash, or that both dividends and capital gains
distributions be paid in cash.
Taxes
The Fund intends to qualify and elect to be treated as a regulated
investment company for federal income tax purposes. In order to so qualify, the
Fund must meet certain requirements with respect to sources of income,
diversification of assets, and distributions to shareholders. The Fund does not
pay federal income or excise taxes to the extent that it distributes to its
shareholders all of its net investment income and net realized capital gains in
accordance with the timing requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). In addition, the Fund will not be subject to Massachusetts
income, corporate excise or franchise taxation as long as it qualifies as a
regulated investment company under the Code.
Dividends paid by the Fund from net investment income, including certain
net realized foreign currency gains, and the excess of net short-term capital
gain over net long term capital loss will be taxable to its shareholders as
ordinary income. Distributions paid by the Fund from the excess of net long-term
capital gain over net short-term capital loss which the Fund designates as
"capital gain dividends" will be taxable as long-term capital gains regardless
of how long shareholders have held their shares. These tax consequences will
apply whether distributions are reinvested in additional shares or received in
cash. The Fund's dividends that are paid to its corporate shareholders and are
attributable to qualifying dividends received by the Fund from U.S. domestic
corporations may be eligible, in the hands of these corporate shareholders, for
the corporate dividends-received deduction, subject to certain holding period
requirements and debt financing limitations under the Code. Shareholders will be
informed annually about the amount and character, for federal income tax
purposes, of distributions received from the Fund.
The realization of capital gains may be affected by shareholder redemption
transactions, economic, market or issuer-specific developments or other
investment considerations.
Investors should consider the adverse tax implications of buying shares
immediately before a distribution. Investors who purchase shares shortly before
the record date for a distribution will pay a per share price that includes the
value of the anticipated distribution and will be taxed on the distribution even
though the distribution represents a return of a portion of the purchase price.
<PAGE>
Shareholders may realize a taxable gain or loss upon a redemption or other
disposition of shares of the Fund. Any loss realized upon the redemption or
other disposition of shares with a tax holding period of six months or less will
be treated as a long-term capital loss to the extent of any distribution of net
long-term capital gains with respect to such shares. All or a portion of a loss
realized upon a redemption or other disposition of Fund shares may be disallowed
under "wash sale" rules if other Fund shares are purchased (whether through
reinvestment of dividends or otherwise) within the period beginning 30 days
before and ending 30 days after the date of such disposition.
Individuals and certain other shareholders may be subject to 31% backup
withholding of federal income tax on distributions and redemptions if they fail
to furnish their correct taxpayer identification number and certain
certifications or if they are otherwise subject to backup withholding.
The Fund anticipates that it may be required to pay foreign taxes on its
income or gains from certain foreign investments, which will reduce its return
from those investments. In some years, the Fund may be permitted to elect to
pass through qualifying foreign taxes it pays to its shareholders. If this
election is made, shareholders will then include their share of such taxes in
income (in addition to actual dividends and distributions) and may be entitled,
subject to applicable limitations, to a corresponding federal income tax credit
or deduction. The Fund will provide appropriate information to shareholders if
this election is made.
Annually, shareholders of the Fund that are not exempt from information
reporting requirements will receive information on Form 1099 to assist in
reporting the prior calendar year's distributions and redemptions (including
exchanges) on federal and state income tax returns. Dividends declared by the
Fund in October, November or December of any calendar year to shareholders of
record as of a date in such a month and paid the following January will be
treated for federal income tax purposes as having been received by shareholders
on December 31 of the year in which they are declared.
Dividends and other distributions, redemptions (including exchanges), and
the value of Fund shares may, of course, also be subject to state, local or
other taxes. Shareholders should consult their own tax advisers with respect to
state and local tax consequences of investing in the Fund.
How To Redeem or Sell Shares
Shares of the Fund will be redeemed at the net asset value next determined
after receipt of a redemption request in good order less any applicable CDSC.
However, if the shares to be redeemed were purchased by check, the Fund may
delay payment of redemption proceeds until the check has been collected which,
depending upon the location of the issuing bank, could take up to 15 days. A
redemption of shares is a taxable transaction which may result in recognition of
a gain or loss.
Shareholders who purchased Fund shares through their dealers may redeem
shares through their dealers. Shares may also be redeemed as follows:
By Telephone: All shareholders eligible unless otherwise ndicated on
account application.
o Shareholders may telephone the Transfer Agent if the redemption is less
than $50,000. Telephone: (800) 555-0644 between 9:00 a.m. and 4:00 p.m.
Eastern time.
o If the redemption amount exceeds $50,000, telephone the Fund at (800)
225-6265,Ext.7750 between 8:30 a.m. and 4:00 p.m. Eastern time.
o Redemptions requested in good order before 4:00 p.m. Eastern time will be
made at that day's net asset value.
<PAGE>
o Redemptions requested after 4:00 p.m. Eastern time will be made at the
net asset value determined for the next business day.
o During times of economic turmoil and market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund by
telephone to institute a redemption. You should contact the Fund in writing if
you are unable to reach the Fund by telephone.
o The Fund may terminate or modify the telephone redemption privilege at
any time with or without notice to shareholders.
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Confirmation Procedures for Telephone Redemptions
o The Fund and the Transfer Agent employ the following procedures to
confirm that instructions received by telephone are genuine. The shareholder's
name, account number, shareholders' identifying number applicable to the account
and other relevant information may be requested. Telephone instructions are
recorded.
o If reasonable procedures, such as those described above, are not
followed, the Fund may be liable for any loss due to unauthorized or fraudulent
telephone instructions. In all other cases, neither the Fund nor the Transfer
Agent will be liable for any loss or expense for acting upon telephone
instructions made according to the telephone transaction procedures described
above.
- -------------------------------------------------------------------------------
By Mail
o Mail the request with a stock power to the following address:
First Data Investor Services Group
Catholic Values Investment Trust
P.O.Box 5123
Westborough, Massachusetts 01581-5123
o Requests and stock powers must:
(i) be endorsed by the record owner(s) exactly as the shares are
registered; and
(ii) have signatures guaranteed (a) by a member of either the Securities
Transfer Association's STAMP program or the NYSE's Medallion Signature Program,
or (b) by certain banks, savings and loans, credit unions, securities dealers,
securities exchanges, clearing agencies or registered securities associations
that are acceptable to the Transfer Agent.
o Additional documents may be required, such as when shares are registered
in the name of a business entity or fiduciary.
- -------------------------------------------------------------------------------
<PAGE>
Payment of Proceeds
o Normally, payment will be made within one business day after receipt of
the redemption request in good order.
o Payment will be made by check to the address of record or by wire
transfer if indicated in the account application.
o Trust departments may redeem and deposit proceeds in accounts of their
clients, as specified in instructions given to the Fund at the time of initial
purchase.
- -------------------------------------------------------------------------------
Minimum Account Balances
o The Fund reserves the right to fully redeem any accounts which, due to
redemption or transfer, contain less than the following amounts:
Individual Share Accounts: $500
Institutional Share Accounts: $500,000
Institutional Servic Share Accounts: $100,000
o The Fund will not redeem accounts that fall below the minimum amounts due
solely to a reduction in net asset value of the Fund's shares.
o Before any such redemption, notice will be sent to the shareholder, and
the shareholder will have 60 days from the notice date to make additional
investments to meet the required minimum.
o No CDSC will be imposed on involuntary redemptions of Individual Shares.
o These minimum account balance requirements will be waived when the
minimum initial investment requirements are waived.
- -------------------------------------------------------------------------------
THE FUND MAY TERMINATE OR MODIFY THE TELEPHONE REDEMPTION PRIVILEGE AT ANY
TIME WITH OR WITHOUT NOTICE TO SHAREHOLDERS.
The Fund also reserves the right to suspend the right of redemption
generally or postpone the payment of redemption proceeds to the extent permitted
by the Securities and Exchange Commission.
Although the Fund normally intends to redeem shares in cash, the Fund
reserves the right to deliver the proceeds of redemptions in the form of
portfolio securities if deemed advisable by the Trustees. The value of any such
portfolio securities distributed will be determined in the manner described
under "How the Fund Values its Shares." If portfolio securities were distributed
in lieu of cash, the shareholder would normally incur transaction costs upon the
disposition of any such securities.
Contingent Deferred Sales Charge -- Individual Shares. Individual Shares
redeemed within the first year of purchase (except shares acquired through the
reinvestment of distributions) generally will be subject to a CDSC equal to 1%
of the net asset value of the redeemed shares. This CDSC is imposed on any
redemption, the amount of which exceeds the aggregate value at the time of
redemption of
<PAGE>
(a) all shares in the account purchased more than one year prior
to the redemption, (b) all shares in the account acquired through reinvestment
of distributions, and (c) the increase, if any, of value in the other shares in
the account (namely those purchased within the year preceding the redemption)
over the purchase price of such shares. Redemptions are processed in a manner to
maximize the amount of redemption proceeds which will not be subject to a CDSC.
That is, each redemption will be assumed to have been made first from the exempt
amounts referred to in clauses (a), (b) and (c) above, and second through
liquidation of those shares in the account referred to in clause (c) on a
first-in-first-out basis. The CDSC will be paid to the Principal Underwriter of
the Fund.
No CDSC will be imposed on Fund shares which have been sold to Wright or
its affiliates, or to their respective employees or clients. The CDSC will also
be waived for shares redeemed as part of a distribution from an individual
retirement plan or a retirement plan for self-employed individuals.
Performance Information
From time to time, the Fund may publish its total return in advertisements
and communications to shareholders. The Fund's total return is determined by
computing the annual percentage change in value of $1,000 invested at net asset
value for specified periods ending with the most recent calendar quarter. This
computation assumes the re-investment of all distributions, a complete
redemption of the investment and, with respect to Individual Shares, the
deduction of any applicable CDSC at the end of the period. The Fund may also
publish total return figures for Individual Shares which do not take into
account any CDSC. The investment results of the Fund will change over time, and
the Fund's past performance is not a prediction of future performance.
Other investments, indices, indicators of economic activity or averages of
mutual fund results may be cited or compared with the Fund's investment results.
Rankings or listings by magazines, newspapers, other periodicals or independent
statistical or rating services, such as Lipper Analytical Services, Inc. and
Morningstar, Inc., may also be referenced.
Other Information
The Fund is a diversified series of the Trust, an open-end management
investment company organized on November 26, 1996 as a business trust under
Massachusetts law. The Trust reserves the right to create and issue multiple
series of shares, or classes of these series, which are separately managed and
have different investment objectives. The trustees have authorized the issuance
of three classes of the Fund, designated as the Individual Shares, the
Institutional Shares and the Institutional Service Shares. The shares of each
class represent an interest in the same portfolio of investments of the Fund.
Each class has equal rights as to voting, redemption, dividends and liquidation.
However, each class bears different distribution fees and other expenses. Also,
each class of shareholders has exclusive voting rights with respect to their
distribution plans, if any.
The Trust is not required and does not intend to hold annual meetings of
shareholders, although special meetings may be held for such purposes as
electing or removing trustees, changing fundamental policies or approving a
management contract. The Trust, under certain circumstances, will assist in
shareholder communications with other Trust shareholders.
The trustees may, without shareholder approval, change the structure of the
Fund from a multiple class fund to a feeder fund in a master-feeder investment
structure. As a feeder fund, the Fund would pursue its investment objective by
investing all of its assets in a separate mutual fund (the "Master Fund") with
an investment objective identical to that of the Fund. Other investors would be
able to purchase interests in the Master Fund. All investors, including the
Fund, would pay a proportionate share of the Master Fund's expenses.
Shareholders of the Fund would also continue to pay a proportionate share of the
Fund's expenses. The trustees of the Trust would be able to withdraw all of the
Fund's assets from the Master Fund if they determined that it is in the best
interest of the Fund to do so.
In order to supply the Fund with capital, Wright expects to beneficially
own 100% of the Fund's issued and outstanding shares immediately prior to the
effectiveness of the Trust's registration statement. The Fund expects to attract
significant assets relative to Wright's initial investment soon after
effectiveness at which time Wright may no longer control the Fund.
<PAGE>
Tax-Sheltered Retirement Plans
Individual Shares are available for investment by retirement account plans
for individuals and their non-employed spouses, and retirement plans for
self-employed individuals. Institutional Shares and Institutional Service Shares
are available for investment by 401(k), 403(b) and other retirement account
plans of corporations, non-profit organizations and other entities. The minimum
initial purchase and account balance requirements will be waived for investments
in Individual Shares and Institutional Service Shares by retirement plans.
For more information, write to:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
or Call:
(800) 974-4486 or (203) 330-5197
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Individual Shares
Institutional Shares
Institutional Service Shares
March 10, 997
CATHOLIC VALUES INVESTMENT TRUST
24 Federal Street
Boston, Massachusetts 02110
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Catholic Investment Trust Equity Fund
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Additional Information about the Trust............ 2
Additional Investment Information................. 2
Investment Restrictions........................... 5
Trustees, Officers and the
Catholic Advisory Board...................... 6
Control Persons and
Principal Holders of Shares.................. 8
Investment Advisory and
Administrative Services...................... 8
Custodian......................................... 10
Independent Certified Public Accountants.......... 10
Brokerage Allocation.............................. 10
Pricing of Shares................................. 11
Principal Underwriter............................. 11
Service Plan...................................... 12
Taxes............................................. 12
Calculation of Performance and
Yield Quotations............................. 13
Financial Statements.............................. 15
Appendix.......................................... 17
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This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by the
current Prospectus of the Catholic Values Investment Trust (the "Trust")
offering shares of the Catholic Values Investment Trust Equity Fund (the
"Fund"), dated March 10, 1997, as supplemented from time to time, which is
incorporated herein by reference. This Statement of Additional Information
should be read in conjunction with the Prospectus. A copy of the Prospectus may
be obtained without charge from Wright Investors' Service Distributors, Inc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604 (Telephone: (800)
974-4486) or from the World Wide Web site (http://www.catholicinvestment.com).
<PAGE>
Additional Information about the Trust
Unless otherwise defined herein, capitalized terms have the meaning given
them in the Prospectus.
The Trust is an open-end, management investment company organized as a
Massachusetts business trust. The Trust was organized in 1996 and currently has
one series (the Fund). The Fund currently has three classes of shares
outstanding -- Individual Shares, Institutional Shares and Institutional Service
Shares. The Fund is a diversified fund.
The Trust's Declaration of Trust (the "Declaration of Trust") may be
amended with the affirmative vote of a majority of the outstanding shares of the
Trust or, if the interests of a particular class of shares of the Fund are
affected, a majority of the outstanding shares of such class. The trustees are
authorized to make amendments to the Declaration of Trust that do not have a
material adverse effect on the interests of shareholders. The Trust may be
terminated (i) upon the sale of the Trust's assets to another diversified
open-end management investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Declaration of Trust also provides that the trustees may change the
structure of the Fund from a multiple class fund to a feeder fund in a
master-feeder investment structure without shareholder approval. As a feeder
fund, the Fund would pursue its investment objective by investing all of its
assets in a Master Fund with an investment objective identical to that of the
Fund. While a master-feeder investment structure may provide opportunities for
growth in the assets of the Master Fund and economies of scale for the Fund,
duplication of fees may also result. Whenever the Fund as an investor in the
Master Fund would be requested to vote on matters pertaining to the Master Fund,
the Fund would hold a meeting of Fund shareholders and vote its interest in the
Master Fund for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund would
vote shares for which it received no voting instructions in the same proportion
as the shares for which it received voting instructions.
The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law; however, nothing in
the Declaration of Trust protects a trustee against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The risk of any shareholder incurring any liability for the
obligations of the Trust is extremely remote.
Additional Investment Information
Description of Investments
U.S. Government, Agency and Instrumentality Obligations -- U.S. Government
obligations in which the Fund may invest are short-term obligations issued by
the Treasury and include bills, certificates of indebtedness, notes, and bonds.
Agencies and instrumentalities of the U.S. Government are established under the
authority of an act of Congress and include, but are not limited to, the
Government National Mortgage Association ("GNMA"), the Tennessee Valley
Authority, the Bank for Cooperatives, the Farmers Home Administration, Federal
Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks, and the
Federal National Mortgage Association ("FNMA").
The Fund has no current intention of investing in securities issued by GNMA
or FNMA or in any other mortgage-backed securities.
<PAGE>
Repurchase Agreements -- involve purchase of U.S. Government obligations.
At the same time the Fund purchases the security, it resells it to the vendor (a
member bank of the Federal Reserve System or recognized securities dealer that
meets Wright credit standards), and is obligated to redeliver the security to
the vendor on an agreed-upon date in the future. The resale price exceeds the
purchase price and reflects an agreed-upon market rate unrelated to the coupon
rate on the purchased security. Such transactions afford an opportunity for the
Fund to earn a return on cash which is only temporarily available. The Fund's
risk is the ability of the vendor to pay an agreed-upon sum upon the delivery
date. The Fund believes this risk is limited to the difference between the
market value of the security and the repurchase price provided for in the
repurchase agreement.
Repurchase agreements must be fully collateralized at all times. In the
event of a default or bankruptcy by a vendor under a repurchase agreement, the
Fund will seek to liquidate such collateral. However, the exercise of the right
to liquidate such collateral could involve certain costs, delays and
restrictions and is not ultimately assured. To the extent that proceeds from any
sale upon a default of the obligations to repurchase are less than the
repurchase price, the Fund could suffer a loss.
In all cases when entering into repurchase agreements with other than
FDIC-insured depository institutions, the Fund will take physical possession of
the underlying collateral security, or will receive written confirmation of the
purchase of the collateral security and a custodial or safekeeping receipt from
a third party under a written bailment for hire contract, or will be the
recorded owner of the collateral security through the Federal Reserve Book-Entry
System.
Short-Term Investments -- The Fund may invest in the following types of
short-term obligations to the extent set forth in its Prospectus:
Certificates of Deposit -- are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
Bankers' Acceptances -- are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
Commercial Paper -- refers to promissory notes issued by corporations in
order to finance their short-term credit needs. Commercial paper acquired by the
Fund must, at the date of investment, be rated A-1 by Standard & Poor's Ratings
Group ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), or, if not
rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
Finance Company Paper -- refers to promissory notes issued by finance
companies in order to finance their short-term credit needs. Finance company
paper must have the same ratings as commercial paper at the time of purchase.
See "Commercial Paper" above.
Corporate Obligations -- include bonds and notes issued by corporations and
other entities in order to finance short-term credit needs. Corporate
obligations and other debt instruments in which the Fund may invest must, at the
date of investment, be rated AA or better by S&P or Aa or better by Moody's or,
if not rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
"When Issued" Securities -- Securities are frequently offered on a
"when-issued" basis. When so offered, the price, which is generally expressed in
terms of yield to maturity, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued securities may take place at
a later date. Normally, the settlement date occurs 15 to 90 days after the date
of the transaction. The payment obligation and the interest rate that will be
received on the securities are fixed at the time the Fund enters into the
purchase commitment. During the period between purchase and settlement, no
payment is made by the Fund to the issuer and no interest accrues to the Fund.
To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities, the Fund would earn no income; however, the Fund
intends to be fully invested to the extent practicable and subject to the
policies stated above. While when-issued securities may be sold prior to the
settlement date, it is intended that such securities will be purchased for the
Fund with the purpose of actually acquiring them unless a sale appears to be
desirable for investment reasons.
At the time a commitment to purchase securities on a when-issued basis is
made for the Fund, the transaction will be recorded and the value of the
security reflected in determining the Fund's net asset value. The Fund will
establish a segregated account with its Custodian in which the Fund will
maintain cash and liquid securities (e.g., U.S. Government securities,
short-term investments as described above
<PAGE>
and equity securities) equal in value to commitments for when-issued
securities. If the value of the securities placed in the separate account
declines, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will at least equal the amount of the
Fund's when-issued commitments. Such segregated securities either will mature
or, if necessary, be sold on or before the settlement date.
Securities purchased on a when-issued basis and the securities held by the
Fund are subject to changes in value based upon the public's perception of the
credit worthiness of the issuer and changes in the level of interest rates.
(Thus, both positions will change in value in the same way, i.e., both
experiencing appreciation when interest rates decline and depreciation when
interest rates rise.) Therefore, to the extent that the Fund remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be greater fluctuations in the market value
of the Fund's net assets than if only cash were set aside to pay for when-issued
securities.
The Fund has no current intention of investing in when-issued securities.
Illiquid and Restricted Securities. The Fund may purchase securities that
are not registered ("restricted securities") under the Securities Act of 1933
("1933 Act"), including securities offered and sold to "qualified institutional
buyers" under Rule 144A under the 1933 Act. However, the Fund will not invest
more than 15% of its net assets in illiquid investments, which include
repurchase agreements maturing in more than seven days, securities that are not
readily marketable and restricted securities. If the value of the Fund's
illiquid investments increased to more than 15% of net assets, Wright would
begin reducing these investments in an orderly manner to the extent necessary to
comply with the 15% limit. If the Board of Trustees determines, based upon a
continuing review of the trading markets for specific Rule 144A securities, that
they are liquid, then such securities may be purchased without regard to the 15%
limit. The Trustees may adopt guidelines and delegate to Wright the daily
function of monitoring and determining the liquidity of restricted securities.
The Trustees, however, will retain sufficient oversight and be ultimately
responsible for the determinations. The Trustees will carefully monitor the
Fund's investments in these securities, focusing on such important factors,
among others, as valuation, liquidity and availability of information. This
investment practice could have the effect of increasing the level of illiquidity
in the Fund if the qualified institutional buyers become for a time uninterested
in purchasing these restricted securities.
The Fund may acquire other restricted securities including securities for
which market quotations are not readily available. These securities may be sold
only in privately negotiated transactions or in public offerings with respect to
which a registration statement is in effect under the 1933 Act. Where
registration is required, the Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell. Restricted securities will be priced at
fair market value as determined in good faith by the Trust's Trustees. The Fund
does not currently intend to purchase restricted securities.
Lending Portfolio Securities
The Fund may seek to increase income by lending portfolio securities to
broker-dealers or other institutional borrowers. Under present regulatory
policies of the Securities and Exchange Commission, such loans are required to
be secured continuously by collateral in cash, cash equivalents or U.S.
Government securities held by the Fund's custodian and maintained on a current
basis at an amount at least equal to the market value of the securities loaned,
which will be marked to market daily. Cash equivalents include certificates of
deposit, commercial paper and other short-term money market instruments. The
Fund would have the right to call a loan and obtain the securities loaned at any
time on up to five business days' notice. The Fund would not have the right to
vote any securities having voting rights during the existence of a loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment.
The Fund does not currently intend to engage in securities loans.
Warrants and Convertible Securities
Warrants are subject to the same market risks as stocks, but may be more
volatile in price. The Fund's investments in warrants will not entitle it to
receive dividends or exercise voting rights and will become worthless if the
warrants cannot be profitably exercised before their expiration dates.
Convertible securities are subject both to the credit and
<PAGE>
interest rate risks associated with debt obligations and to the stock
market risk associated with equity securities. Convertible debt securities in
which the Fund may invest must, at the date of investment, be rated AA or better
by S&P or Aa or better by Moody's or, if not rated by one of these rating
organizations, be deemed by the trustees to be of comparable quality.
Interest Rate Risk
The market value of the U.S. Government obligations, short-term investments
and convertible securities in which the Fund may invest varies inversely with
changes in the prevailing levels of interest rates. For example, if interest
rates rise after one of the foregoing securities has been purchased, the value
of the security would decline.
Short Sales
The Fund may engage in short sales for tax deferral purposes or in order to
profit from an anticipated decline in the value of a security. The Fund may also
engage in short sales to attempt to limit its exposure to a possible market
decline in the value of its portfolio securities through short sales of
securities which Wright believes possess volatility characteristics similar to
those being hedged. To effect such a transaction, the Fund must borrow the
security sold short to make delivery to the buyer. The Fund then is obligated to
replace the security borrowed by purchasing it at the market price at the time
of replacement. Until the security is replaced the Fund is required to pay to
the lender any accrued interest or dividends and may be required to pay a
premium. The Fund may only make short sales "against the box," meaning that the
Fund either owns the securities sold short or, by virtue of its ownership of
other securities, has the right to obtain securities equivalent in kind and
amount to the securities sold and, if the right is conditional, the sale is made
upon the same conditions.
The Fund has no current intention of engaging in short sales.
Financial Futures Contracts and Related Options
The Fund does not currently intend to purchase or sell financial futures
contracts or related options.
Investment Restrictions
The following investment restrictions have been adopted by the Fund and may
be changed only by the vote of a majority of the Fund's outstanding voting
securities, which as used in this Statement of Additional Information means the
lesser of (a) 67% of the shares of the Fund if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the Fund. Accordingly, the Fund may not:
(1) With respect to 75% of the total assets of the Fund, purchase the
securities of any issuer if such purchase at the time thereof would cause
more than 5% of its total assets (taken at market value) to be invested in
the securities of such issuer, or purchase securities of any issuer if such
purchase at the time thereof would cause more than 10% of the total voting
securities of such issuer to be held by the Fund, except obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities and
except securities of other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940. In addition, the Fund may not issue bonds,
debentures or senior equity securities, other than shares of beneficial
interest;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchase and sales of
securities);
(4) Underwrite or participate in the marketing of securities of others;
(5) Make an investment in any one industry if such investment would cause
investments in such industry to equal or exceed 25% of the Fund's total
assets, at market value at the time of such investment (other than
securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities);
(6) Purchase or sell real estate, although it may purchase and sell securities
which are secured by real estate and securities of companies which invest
or deal in real estate;
(7) Purchase or sell commodities or commodity contracts for the purchase or
sale of physical commodities, except that the Fund may purchase and sell
financial futures contracts, options or financial futures contracts and all
types of currency contracts; or
<PAGE>
(8) Make loans to any person except by (a) the acquisition of debt securities
and making portfolio investments (b) entering into repurchase agreements or
(c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund.
The Fund has adopted the following investment policies which may be changed
without approval by the Fund's shareholders. As a matter of nonfundamental
policy, the Fund will not (a) sell or contract to sell any security which it
does not own unless by virtue of its ownership of other securities it has at the
time of sale a right to obtain securities equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions; or (b) invest more than 15% of net assets in illiquid
investments.
Except for the Fund's investment policy with respect to borrowing money, if
a percentage restriction contained in the Fund's investment policies is adhered
to at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value of portfolio securities or the Fund's net
assets will not be considered a violation of such restriction.
Trustees, Officers and the
Catholic Advisory Board
Trustees and Officers
The trustees and officers of the Trust 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. Those trustees who are "interested
persons" (as defined in the 1940 Act) of the Trust, Wright, The Winthrop
Corporation ("Winthrop"), Eaton Vance, Eaton Vance's wholly owned subsidiary,
Boston Management and Research ("BMR"), Eaton Vance's parent company, Eaton
Vance Corp. ("EVC"), or Eaton Vance's and BMR's trustee, Eaton Vance, Inc.
("EV") by virtue of their affiliation with either the Trust, Wright, Winthrop,
Eaton Vance, BMR, EVC or EV, are indicated by an asterisk (*).
PETER M. DONOVAN (53), President and Trustee* President, Chief Executive
Officer and Director of Wright and Winthrop; Vice President, Treasurer and a
Director of Wright Investors' Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, JR. (70), Vice President, Secretary and Trustee*
Retired, formerly Vice President of Eaton Vance, BMR, EVC and EV and Director,
EV and EVC; Director, Trustee and officer of various investment companies
managed by Eaton Vance or BMR.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
WINTHROP S. EMMET (85), Trustee
Retired New York City Attorney at Law; Trust Officer, First National City Bank,
New York, NY (1963-1971).
Address: Box 327, West Center Road, West Stockbridge, MA 01266
LELAND MILES (72), Trustee
President Emeritus, University of Bridgeport (1987-present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company.
Address: 332 North Cedar Road, Fairfield, CT 06430
A.M. MOODY, III (60), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (77), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE.
Address: 125 Gull Circle North, Daytona Beach, FL 32119
RAYMOND VAN HOUTTE (71), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca,
NY (since January 1989); President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaporated
Metal Products and Ithaco, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
<PAGE>
JUDITH R. CORCHARD (57) , Vice President
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director of Wright and Winthrop.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
JAMES L. O'CONNOR (51), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (60), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
WILLIAM J. AUSTIN, JR. (44), Assistant Treasurer
Assistant Vice President of Eaton Vance, BMR and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
A. JOHN MURPHY (33), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor,
The Boston Company (1991-1993) and Registration Specialist, Fidelity
Management & Research Co. (1986-1991). Officer of various investment companies
managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (38), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads and Gaston & Snow. Officer of
various investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
All of the trustees and officers hold identical positions with The Wright
Managed Equity Trust, The Wright Managed Income Trust, The Wright Managed Blue
Chip Series Trust (except Mr. Miles) and The Wright EquiFund Equity Trust. The
fees and expenses of trustees of the Trust who are not affiliated persons of the
Trust are paid by the Fund. Each such non-affiliated trustee receives a fee
equal to $250 per meeting attended plus expenses. It is currently anticipated
that the Trust will hold five trustee meetings per year. Non-affiliated trustees
also receive additional payments from other investment companies for which
Wright provides investment advisory services. The current trustees receive no
compensation from the Trust. The Trust does not have a retirement plan for the
trustees. For estimated trustee compensation for the fiscal year ended December
31, 1997, see the "Compensation Table" below.
The Trust's board of trustees will have a Special Nominating Committee
consisting of the trustees who are not affiliated persons of the Trust. The
Special Nominating Committee's function will be to select and nominate
individuals to fill vacancies, as and when they occur, in the ranks of those
trustees who are not "interested persons" of the Trust, Eaton Vance or Wright.
The Trust does not have a designated audit committee since the full board
performs the functions of such committee.
Catholic Advisory Board
The members of the Catholic Advisory Board and their principal occupations
during the past five years are set forth below. Each of the members of the
Catholic Advisory Board may be contacted at the following address: Catholic
Investment Trust, 24 Federal Street, Boston, Massachusetts 02110.
THOMAS P. MELADY (69), Chairman. Former U.S. Ambassador to Burundi and to the
Holy See, President Emeritus of Sacred Heart University, author of 14 books
and numerous articles.
MARGARET M. HECKLER (65), Eight term Congresswoman from the Massachusetts 10th
District, former Secretary of the Department of Health and Human Services,
former Ambassador to Ireland.
BOWIE K. KUHN (70), former Commissioner of Baseball.
THOMAS S.MONAGHAN (59),President,CEO and Chairman of the Board of Domino's
Pizza, Inc.
WILLIAM A. WILSON (83), former (and first) U.S. Ambassador to the Holy See.
<PAGE>
The members of the Catholic Advisory Board are paid by the Fund. Each
member receives a fee equal to $1,000 per meeting attended plus expenses. It is
currently anticipated that the Trust will hold two Catholic Advisory Board
meetings per year. The Trust does not have a retirement plan for the Catholic
Advisory Board members. The Catholic Advisory Board members only serve the Fund
and no other funds in the Wright Fund complex. For estimated Catholic Advisory
Board member compensation for the fiscal year ended December 31, 1997, see the
"Compensation Table" below.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Aggregate Compensation Pension or Retirement Estimated Annual Benefits Total Compensation
Trustees from the Fund(1) Benefits Accrued Upon Retirement Paid(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Peter M. Donovan $0 None None $0
H. Day Brigham, Jr. $0 None None $0
A. M. Moody, III $0 None None $0
Winthrop S. Emmet $1,250 None None $5,000
Leland Miles $1,250 None None $3,750
Lloyd F. Pierce $1,250 None None $5,000
Raymond Van Houtte $1,250 None None $5,000
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) These compensation amounts are estimated for the Fund's fiscal year ending
December 31, 1997.
(2) Total compensation paid is for the year ended December 31, 1996 and
includes service on the then-existing boards in the Wright fund complex (33 funds).
</FN>
</TABLE>
<TABLE>
<CAPTION>
Aggregate Compensation Pension or Retirement Estimated Annual Benefits
Catholic Advisory Board Members from the Fund(1) Benefits Accrued Upon Retirement
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas P. Melady $2,000 None None
Margaret M. Heckler $2,000 None None
Bowie K. Kuhn $2,000 None None
Thomas S. Monaghan $2,000 None None
William A. Wilson $2,000 None None
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) These compensation amounts are estimated for the Fund's fiscal year ending
December 31, 1997.
</FN>
</TABLE>
Control Persons and
Principal Holders of Shares
As of January 31, 1997, the trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
January 31, 1997, Wright owned (100%) of the Fund's outstanding shares.
Investment Advisory and
Administrative Services
The Trust has engaged Wright to act as the Fund's investment adviser
pursuant to an Investment Advisory Contract (the "Investment Advisory
Contract"). Wright, acting under the general supervision of the Trust's
trustees, furnishes the Fund with investment advice and management services, as
described below. The estate of John Winthrop Wright may be considered a
controlling person of Wright's parent, Winthrop, and Wright by reason of its
ownership of 29% of the outstanding shares of Winthrop.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the Fund, will furnish continuously
an investment program with respect to the Fund, will determine which securities
should be purchased, sold or exchanged in consultation with the Catholic
Advisory Board, and will implement such determinations. Wright will be solely
responsible for evaluating the investment merits of the Fund's portfolio
investments. Wright will furnish to the Fund investment advice and management
services, office space, equipment and clerical personnel, and investment
advisory, statistical and research facilities. In addition, Wright has arranged
for certain members of the Eaton Vance and Wright organizations to serve without
salary as officers or trustees. In return for these services, the Fund is
obligated to pay a monthly advisory fee
<PAGE>
calculated at the rates set forth in the Fund's current Prospectus.
Shareholders of the Fund who are also advisory clients of Wright may have
agreed to pay Wright a fee for such advisory services. Wright does not intend to
exclude from the calculation of the investment advisory fees payable to Wright
by such advisory clients the portion of the advisory fee payable by the Fund.
Accordingly, a client may pay an advisory fee to Wright in accordance with
Wright's customary investment advisory fee schedule charged to investment
advisory clients and at the same time, as a shareholder in the Fund, bear its
share of the advisory fee paid by the Fund to Wright as described above.
The Trust has engaged Eaton Vance to act as the Fund's administrator
pursuant to an Administration Agreement. For its services under the
Administration Agreement, Eaton Vance receives monthly administration fees at
the annual rates set forth in the Fund's current Prospectus.
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons and
John G.L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, and Mr. Hawkes is
president and chief executive officer of EVC, Eaton Vance, BMR and EV. All of
the issued and outstanding shares of Eaton Vance and of EV are owned by EVC. All
of the issued and outstanding shares of BMR are owned by Eaton Vance. All shares
of the outstanding Voting Common Stock of EVC are deposited in a Voting Trust
which expires December 31, 1999, the Voting Trustees of which are Messrs. Clay,
Gardner, Hawkes, and Rowland. The Voting Trustees have unrestricted voting
rights for the election of Directors of EVC. All of the outstanding voting trust
receipts issued under said Voting Trust are owned by certain of the officers of
Eaton Vance and BMR who are also officers and Directors of EVC and EV. As of
October 31, 1996, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting
trust receipts. Mr. Rowland owned 15% of such voting trust receipts. Mr. Brigham
is an officer and trustee of the Trust, and a former member of the Eaton Vance,
EVC, BMR and EV organizations. Messrs. Austin, Murphy, O'Connor and Woodbury and
Ms. Sanders are officers of the Trust and are also members of the Eaton Vance,
BMR and EV organizations. Eaton Vance will receive the fees paid under the
Administration Agreement.
EVC owns all of the stock of Energex Energy Corporation which is engaged in
oil and gas exploration and development. In addition, Eaton Vance owns all the
stock of Northeast Properties, Inc., which is engaged in real estate investment.
EVC owns all of the stock of Fulcrum Management, Inc. and MinVen, Inc., which
are engaged in precious metal mining venture investment and management. EVC, EV,
Eaton Vance and BMR may also enter into other businesses.
The Fund will be responsible for all of its expenses not expressly stated
to be payable by Wright under its Investment Advisory Contract or by Eaton Vance
under its Administration Agreement, including, without limitation, the fees and
expenses of its custodian and transfer agent, including those incurred for
determining the Fund's net asset value and keeping the Fund's books; the cost of
share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; expenses of
trustees not affiliated with Eaton Vance or Wright; distribution expenses
incurred pursuant to the Fund's distribution plan (if any); and investment
advisory and administration fees. The Fund will also bear expenses incurred in
connection with litigation in which the Fund is a party and the legal obligation
the Fund may have to indemnify the officers and trustees of the Trust with
respect thereto.
The Fund's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 1999. The Investment Advisory Contract may
be continued from year to year thereafter so long as such continuance after
February 28, 1999 is approved at least annually (i) by the vote of a majority of
the trustees who are not "interested persons" of the Trust, Eaton Vance or
Wright cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the board of trustees of the Trust or by vote of a
majority of the outstanding shares of the Fund. The Fund's Administration
Agreement may be continued from year to year after February 28, 1999 so long as
such continuance is approved annually by the vote of a majority of the trustees.
Each agreement may be terminated at any time
<PAGE>
without penalty on sixty (60) days written notice by the board of trustees
or directors of either party, or by vote of the majority of the outstanding
shares of the Fund. Each agreement will terminate automatically in the event of
its assignment. Each agreement provides that, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties to the Fund under such agreement on the part of Eaton
Vance or Wright, Eaton Vance or Wright will not be liable to the Fund for any
loss incurred.
Custodian
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston,
Massachusetts, acts as custodian for the Fund. IBT has the custody of all cash
and securities of the Fund, maintains the Fund's general ledgers and computes
the daily net asset value per share. In such capacity it attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the Fund's investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
Fund. IBT charges custody fees which are competitive within the industry. A
portion of the custody fee for the Fund is based upon a schedule of percentages
applied to the aggregate assets of the Fund managed by Wright for which IBT
serves as custodian. These fees are then reduced by a credit for cash balances
of the Fund in the custody of IBT equal to 75% of the 91-day, U.S. Treasury Bill
auction rate applied to the Fund's average daily collected balances for the
week. In addition, the Fund pays a fee based on the number of portfolio
transactions and a fee for bookkeeping and valuation services.
Independent Certified Public Accountants
Deloitte and Touche, 125 Summer Street, Boston, MA 02110-1617, is the
Fund's independent certified public accountant, providing audit services, tax
return preparation, and assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission.
Brokerage Allocation
Wright places the portfolio security transactions for the Fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments and other investment advisory accounts. Wright seeks to execute
portfolio security transactions on the most favorable terms and in the most
effective manner possible. In seeking best execution, Wright will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the size and type of
the transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the value and quality of service rendered by the broker-dealer
in other transactions, and the reasonableness of the brokerage commission or
markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the Fund may give consideration to those firms which
supply brokerage and research services, quotations and statistical and other
information to Wright for its use in servicing its advisory accounts. The Fund
may include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to Wright in servicing all or less than all of its accounts and the
services and information furnished by a particular firm may not necessarily be
used in connection with the account which paid brokerage commissions to such
firm. The advisory fee paid by the Fund to Wright is not reduced as a
consequence of Wright's receipt of such services and information. While such
services and information are not expected to reduce Wright's normal research
activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if it should
attempt to develop comparable services and information through its own staffs.
Subject to the requirement that Wright shall use its best efforts to seek
to execute the Fund's portfolio security transactions
<PAGE>
at advantageous prices and at reasonably competitive commission rates,
Wright, as indicated above, is authorized to consider as a factor in the
selection of any broker-dealer firm with whom the Fund's portfolio orders may be
placed the fact that such firm has sold or is selling shares of the Fund or of
other investment companies sponsored by Wright. This policy is consistent with a
rule of the National Association of Securities Dealers, Inc., which rule
provides that no firm which is a member of the Association shall favor or
disfavor the distribution of shares of any particular investment company or
group of investment companies on the basis of brokerage commissions received or
expected by such firm from any source.
Under the Fund's Investment Advisory Contract, Wright has the authority to
pay commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met. This authority will not be exercised, however, until the
Prospectus or this Statement of Additional Information has been supplemented or
amended to disclose the conditions under which Wright proposes to do so.
The Investment Advisory Contract expressly recognizes the practices which
are provided for in Section 28(e) of the Securities Exchange Act of 1934 by
authorizing the selection of a broker or dealer which charges the Fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
Pricing of Shares
For a description of how the Fund values its shares, see "How the Fund
Values its Shares" in the Fund's current Prospectus. The Fund values securities
with a remaining maturity of 60 days or less by the amortized cost method. The
amortized cost method involves initially valuing a security at its cost (or its
fair market value on the sixty-first day prior to maturity) and thereafter
assuming a constant amortization to maturity of any discount or premium, without
regard to unrealized appreciation or depreciation in the market value of the
security.
The Fund will not price its securities on the following national holidays:
New Year's Day; Presidents' Day; Good Friday; Memorial Day; Independence Day;
Labor Day; Thanksgiving Day; and Christmas Day.
Principal Underwriter
The Fund has adopted a Distribution Plan as defined in Rule 12b-1 under the
1940 Act (the "Plan") with respect to its Individual Shares and its
Institutional Service Shares. The Plan specifically authorizes the Fund to pay
direct and indirect expenses incurred by any separate distributor or
distributors under agreement with the Fund in activities primarily intended to
result in the sale of its Individual Shares and Institutional Service Shares.
The expenses of these activities will not exceed 0.75% per annum of the Fund's
average daily net assets attributable to Individual Shares and 0.25% per annum
of the Fund's average daily net assets attributable to Institutional Service
Shares. Payments under the Plan are reflected as an expense in the Fund's
financial statements relating to the applicable class of shares.
The Trust has entered into a distribution contract with its principal
underwriter, Wright Investors' Service Distributors, Inc. ("WISDI"), a
wholly-owned subsidiary of Winthrop. This contract provides for WISDI to act as
a separate distributor of the Fund's shares.
The Fund will pay per annum 0.75% of its average daily net assets
attributable to Individual Shares and 0.25% of its average daily net assets
attributable to Institutional Service Shares to WISDI for distribution
activities on behalf of the Fund in connection with the sale of its Individual
Shares and Institutional Service Shares, respectively. WISDI will provide on a
quarterly basis documentation concerning the expenses of such activities.
Documented expenses of the Fund will include compensation paid to and
out-of-pocket disbursements of officers, employees or sales representatives of
WISDI, including telephone costs, the printing of prospectuses and reports for
other than existing shareholders, preparation and distribution of sales
literature, advertising and interest or other financing charges. If the
distribution payments to WISDI exceed its expenses, WISDI may realize a profit
from these arrangements. Peter M. Donovan, President, Chief Executive Officer
and a trustee of the Trust and President and a Director of Wright and Winthrop,
is Vice President, Treasurer and a Director of WISDI. A.M. Moody, III, Vice
President and a trustee of the Trust and Senior Vice President of Wright and
Winthrop, is President and a Director of WISDI.
<PAGE>
It is the opinion of the trustees and officers of the Trust that the
following are not expenses primarily intended to result in the sale of
Individual Shares or Institutional Service Shares issued by the Fund: fees and
expenses of registering these shares under federal or state laws regulating the
sale of securities; fees and expenses of registering the Trust as a
broker-dealer or of registering an agent of the Trust under federal or state
laws regulating the sale of securities; and fees and expenses of preparing and
setting in type the Trust's registration statement under the Securities Act of
1933. Should such expenses be deemed by a court or agency having jurisdiction to
be expenses primarily intended to result in the sale of these shares, they will
be considered to be expenses contemplated by and included in the Plan, but not
subject to the 0.75% or 0.25% per annum limitations described above.
Under the Plan, the President or Vice President of the Trust will provide
to the trustees for their review, and the trustees will review at least
quarterly, a written report of the amounts expended under the Plan and the
purposes for which such expenditures were made.
Under its terms, the Plan remains in effect from year to year, provided
such continuance is approved annually by a vote of the Trust's trustees,
including a majority of the trustees who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation of the
Plan. The Plan may not be amended to increase materially the amount to be spent
by the Individual Shares or Institutional Service Shares for the services
described therein without approval of a majority of the outstanding Individual
Shares or Institutional Service Shares, respectively. All material amendments of
the Plans must also be approved by the trustees of the Trust in the manner
described above. The Plan may be terminated as to the Individual Shares or the
Institutional Service Shares at any time without payment of any penalty by vote
of a majority of the trustees of the Trust who are not interested persons of the
Trust and who have no direct or indirect financial interest in the operation of
the Plan or by a vote of a majority of the outstanding Individual Shares or
Institutional Service Shares, respectively. If the Plan is terminated, the Fund
would stop paying the distribution fee and the trustees would consider other
methods of financing the distribution of the Fund's Individual Shares or
Institutional Service Shares, as appropriate.
So long as the Plan is in effect, the selection and nomination of trustees
who are not interested persons of the Trust shall be committed to the discretion
of the trustees who are not such interested persons. The trustees of the Trust
have determined that in their judgment there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of Individual Shares and
Institutional Service Shares.
Service Plan
The Service Plan was adopted by the trustees and will continue in effect
from year to year, provided such continuance is approved annually by a vote of
the Trust's trustees, including a majority of the trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Service Plan. The Service Plan may be
terminated at any time without payment of any penalty by vote of a majority of
the trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Service
Plan. The trustees of the Trust have determined that in their judgment there is
a reasonable likelihood that the Service Plan will benefit the Fund and its
shareholders.
Taxes
For additional information regarding federal and state taxes see "Taxes" in
the Fund's current Prospectus.
In order to avoid federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income for such year, at least 98% of the
excess of its realized capital gains over its realized capital losses (computed
on the basis of the one-year period ending on October 31 of such year, after
reduction by any available capital loss carryforwards) and 100% of any income
and capital gains from the prior year (as previously computed) that was not paid
out during such year and on which the Fund paid no federal income tax.
The Fund may be subject to foreign withholding or other foreign taxes with
respect to income (possibly including, in some cases, capital gains) derived
from securities of foreign issuers. These taxes may in some cases be reduced or
eliminated under the terms of an applicable U.S. income tax treaty. Certain
foreign exchange gains and losses realized by the Fund may be treated as
ordinary income and losses. Certain uses of foreign currency and related
derivatives and investments by the Fund in the stock of certain "passive foreign
<PAGE>
investment companies" may be limited or in the latter case a tax election may be
made, if available, in order to avoid imposition of tax on the Fund.
A portion of the Fund's distributions of net investment income which are
derived from dividends the Fund receives from U.S. corporations may qualify for
the dividends-received deduction for corporations. The dividends-received
deduction is reduced to the extent the shares with respect to which the
dividends are received are treated as debt-financed under the Code and is
eliminated if the shares are deemed to have been held for less than a minimum
period, generally 46 days. Receipt of distributions qualifying for the deduction
may result in liability for the corporate alternative minimum tax and/or
reduction of the tax basis of the corporate shareholder's shares.
The Fund's transactions, if any, in certain foreign currency options,
futures or forward contracts will be subject to special tax rules, the effect of
which may be to accelerate income to the Fund, defer Fund losses, cause
adjustments in the holding periods of Fund securities and convert capital gains
or losses into ordinary gains or losses. These rules may therefore affect the
amount, timing and character of the Fund's distributions to shareholders. In
order to qualify as a regulated investment company for federal income tax
purposes, the Fund must derive less than 30% of its gross income for each
taxable year from gross gains from the sale or other disposition of securities
and certain other investments held for less than three months and will limit its
activities in options, futures or forward contracts and other investments to the
extent necessary to comply with this requirement.
The Fund may follow the accounting practice known as equalization, which
could affect the amount, timing and character of its distributions to
shareholders.
Distributions made by the Fund will generally be subject to state and local
income taxes. A state income (and possibly local income and/or intangible
property) tax exemption may be available to the extent, if any, the Fund's
distributions are derived from interest on (or, in the case of intangible
property taxes, the value of its assets is attributable to) certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. The
Fund does not intend to seek to meet any such thresholds or requirements.
Special tax rules apply to IRA accounts (including penalties on certain
distributions and other transactions) and to other special classes of investors,
such as tax-exempt organizations, banks or insurance companies. Investors should
consult their tax advisers for more information.
Shareholders who are not United States persons should also consult their
tax advisers as to the potential application of certain U.S. taxes, including a
U.S. withholding tax at the rate of 30% (or at a lower treaty rate) on amounts
treated as ordinary income distributions to them, and of foreign taxes to their
investment in the Fund.
Calculation of Performance
and Yield Quotations
The average annual total return of the Fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the Fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the Fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period and that, with
respect to Individual Shares, the CDSC is applied at the end of the period.
Because each class of shares has its own fee structure and the Individual Shares
class has a CDSC, the classes will have different performance results.
The yield of the Fund is computed by dividing its net investment income per
share earned during a recent 30-day period by the maximum offering price (i.e.
net asset value) per share on the last day of the period and annualizing the
resulting figure. Net investment income per share is equal to the Fund's
dividends and interest earned during the period, with the resulting number being
divided by the average daily number of shares outstanding and entitled to
receive dividends during the period.
The Fund's yield is calculated according to the following formula:
Yield = 2 [ ( a-b + 1)6 - 1 ]
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of shares outstanding during the period.
d = the maximum offering price pershare on the last day of the period.
<PAGE>
Yield and effective yield will be based on historical earnings and are not
intended to indicate future performance. Yield and effective yield will vary
based on changes in market conditions and the level of expenses. The Fund's
yield or total return may be compared to the Consumer Price Index and various
domestic securities indices. The Fund's yield or total return and comparisons
with these indices may be used in advertisements and in information furnished to
present or prospective shareholders.
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the Fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. In addition, the performance of the Fund may
be compared to alternative investment or savings vehicles and/or to indexes or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumers Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Smart Money, USA
Today, U.S. News and World Report, The Wall Street Journal and Worth may also be
cited (if the Fund is listed in any such publication) or used for comparison, as
well as performance listings and rankings from various other sources including
Bloomberg Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac,
Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co.,
Lipper Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the Fund.
<PAGE>
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
January 31,1997
- -------------------------------------------------------------------------------
ASSETS:
Cash ................................................ $ 100,000
Deferred Organization expenses (Note 2).............. 95,000
------------
Total Assets.................................... $ 195,000
------------
LIABILITIES:
Accrued organization expenses....................... 95,000
------------
Net assets (applicable to 10,000 shares of
beneficial interest issued and outstanding ... $ 100,000
=============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE............... $ 10.00
=============
NOTES:
(1) Catholic Values Investment Trust Equity Fund is a separate series of
Catholic Values Investment Trust (the "Trust"). A sale of interest
therein at the purchase price of $10 per share was made by Wright
Investors' Service (the "initial interests").
(2) Organization expenses are being deferred and will be amortized on a
straight line basis over a period not to exceed five years, commencing on
the effective date of the Fund's initial offering of its shares. The
amount paid by the Fund on any withdrawal by the holders of the initial
interests of any of the respective initial interests will be reduced by a
portion of any unamortized organization expenses, determined by the
proportion of the amount of the initial interests withdrawn to the
initial interests then outstanding.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of
Catholic Values Investment Trust Equity Fund:
We have audited the accompanying statement of assets and liabilities of
Catholic Values Investment Trust Equity Fund (one of the series of Catholic
Values Investment Trust) (the Trust) as of January 31, 1997. This financial
statement is the responsibility of the Trust's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such statement of assets and liabilities presents
fairly, in all material respects, the financial position of Catholic Values
Investment Trust Equity Fund as of January 31, 1997, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 31, 1997
<PAGE>
APPENDIX
- ---------
Wright Quality Ratings
Wright Quality Ratings provide the means by which the fundamental criteria
for the measurement of quality of an issuer's securities can be objectively
evaluated.
Each rating is based on 32 individual measures of quality grouped into four
components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability
and Stability, and (4) Growth. The total rating is three letters and a numeral.
The three letters measure (1) Investment Acceptance, (2) Financial Strength, and
(3) Profitability and Stability. Each letter reflects a composite measurement of
eight individual standards which are summarized as A: Outstanding, B: Excellent,
C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects
Growth and is a composite of eight individual standards ranging from 0 to 20.
Equity Securities
Investment Acceptance reflects the acceptability of a security by and its
marketability among investors, and the adequacy of the floating supply of its
common shares for the investment of substantial funds.
Financial Strength represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
Profitability and Stability measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
Growth per common share of the corporation's equity capital, earnings, and
dividends -- rather than the corporation's overall growth of dollar sales and
income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
Debt Securities
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are most applicable to fixed income and reserve investments. The
first, Financial Strength, represents the amount, the adequacy and the liquidity
of the corporation's resources in relation to current and potential
requirements. Its principal components are aggregate equity and total capital,
the ratios of (a) invested equity capital, and (b) long-term debt, total of
corporate capital, the adequacy of net working capital, fixed charges coverage
ratio and other appropriate criteria. The second letter represents Profitability
and Stability and measures the record of a corporation's management in terms of:
(a) the rate and consistency of the net return on shareholders' equity capital
investment at corporate book value, and (b) the profits and losses of the
corporation during generally adverse economic periods, and its ability to
withstand adverse financial developments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed-income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric
<PAGE>
growth rating is not included because this element is identified only with
equity investments.
A-1 and P-1 Commercial Paper Ratings
by S&P and Moody's
An S&P Commercial Paper Rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to S&P by the
issuer or obtained from other sources it considers reliable. The ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Bond Ratings
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and S&P. Moody's uses a nine-symbol system with Aaa being the highest
rating and C the lowest. S&P uses a 10-symbol system that ranges from AAA to D.
Bonds within the top four categories of Moody's (Aaa, Aa, A and Baa) and of S&P
(AAA, AA, A and BBB) are considered to be of investment-grade quality. Note that
both S&P and Moody's currently give their highest rating to issuers insured by
the American Municipal Bond Assurance Corporation (AMBAC) or by the Municipal
Bond Investors Assurance Corporation (MBIA).
Bonds rated A by S&P have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher-rated categories. The
rating of AA is accorded to issues where the capacity to pay principal and
interest is very strong and they differ from AAA issues only in small degree.
The AAA rating indicates an extremely strong capacity to pay principal and
interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure.
<PAGE>
While the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong position
of such issuers.
Note Ratings
In addition to Wright quality ratings, municipal notes and other short-term
loans may be assigned ratings by Moody's or S&P.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group.
Standard & Poor's top ratings for municipal notes issued after July 29,
1984 are SP-1 and SP-2. the designation SP-1 indicates a very strong capacity to
pay principal and interest. A "+" is added for those issues determined to
possess overwhelming safety characteristics. An "SP-2" designation indicates a
satisfactory capacity to pay principal and interest.
