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Description of art work on cover of report
Catholic Values Investment Trust logo --
Light blue solid circle with letters CVIT printed over it in blue & violet.
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Semi-Annual
Report
June 30, 1998
Catholic Values Investment Trust Equity Fund
<PAGE>
Catholic Values Investment Trust Equity Fund
LETTER TO SHAREHOLDERS
================================================================================
July, 1998
Dear Shareholders:
We hope you are as pleased with the Catholic Values Investment Trust Equity
Fund (CVIT), which opened on May 1, 1997, as we are. The Fund invests for
long-term growth of capital and risk aversion. It pursues this objective by
investing in a broadly diversified portfolio of well-established U.S. and,
eventually, non-U.S. companies which meet strict financial quality and religious
standards. These companies must offer products or services and undertake
activities that are consistent with the core teachings of the Roman Catholic
Church.
At the moment, all investments are in U.S. securities. As the Fund grows in
size, additional international securities may be added resulting in a global
fund. As of June 30, 1998, the Fund's return since inception was 25.69% in the
Individual share class and 26.29% in the Institutional Service share class.
The independent Catholic Advisory Board reviews the Fund's investments so
as to be consistent with Catholic values. This is not a simple nor singular
responsibility since there are many Catholics with varying viewpoints and there
are many Catholic institutions with their own views as well. In addition, there
are changing circumstances and varying economic environments in which companies
must operate. Thus, this independent Board must exercise great wisdom and
caution in reviewing each company and equity to assure that the investment
conforms to the objectives.
The Catholic Advisory Board is comprised of six independent lay Catholics.
Information concerning Catholic issues is obtained by participation in numerous
Catholic organizations, the seeking of advice and counsel from various clergy
and Vatican sources, the use of a variety of secondary sources, and the open
discussion of issues and policies. The board members are:
Thomas P. Melady, Chairman, Former U.S. Ambassador to the Holy See,
Uganda and Burundi, President Emeritus of Sacred Heart University
Margaret M. Heckler, Former U.S. Representative from Massachusetts 10th
district, former Secretary of Health and Human Services, former Ambassador
to Ireland
Bowie K. Kuhn, Former Commissioner of Baseball
Timothy J. May, Senior Partner, Patton Boggs, L.L.P.
Thomas S. Monaghan, President, CEO and Chairman of Domino's Pizza, Inc.
William A. Wilson, Former (and first) U.S. Ambassador to the Holy See
<PAGE>
In addition, the Catholic Advisory Board is most fortunate that His
Excellency John Cardinal O'Connor is its Ecclesiastical Advisor.
Initially, Wright Investors' Service, the Fund's investment Adviser,
selects the equities from its approved list of quality blue chip companies. All
companies on this approved list 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. These selections
are then reviewed by the Catholic Advisory Board to assure that the equity
complies with Catholic teachings of doctrine. When a company is found not to be
in compliance with Church core teachings, the investment Adviser is asked not to
purchase that stock for the CVIT portfolio or remove it, if warranted.
The result is continuous dialogue, continuous information input, continuous
review, and thus continuous evaluation. Independent thinking and independent
information provides input and assures that the Fund adheres to Catholic
doctrine while balancing changes in the marketplace, changes in informational
input, and changes in value systems. Thus, your Fund combines Catholic values
with investment values.
The Fund has its own website: www.catholicinvestment.com. The site contains
information about your fund, including a recent list of portfolio holdings. You
may, after following some security protection procedures, also access your
account.
Sincerely,
/S/Walter R. Miller
Walter R. Miller, Ph.D.
Secretary to the
Catholic Advisory Board
<PAGE>
Catholic Values Investment Trust Equity Fund
MANAGEMENT DISCUSSION
================================================================================
July 1998
The initial year of operation for the Catholic Values Investment Trust
Equity Fund was a relatively good one, as the stock market environment from the
Fund's inception on May 1, 1997 was favorable. For the year ended June 30, 1998,
the CVIT Fund had an annualized total return of 22%, as compared with 19% for
the Dow Jones Industrial Average and 30% for the S&P 500. The first quarter of
1998 showed a return of 11.3% while the second quarter showed a decline of 4.9%.
While the S&P index increased 3.3% in 1998's second quarter due to advances in
selected large-cap stocks, mid-cap stocks actually declined about 2% during the
period and small-cap issues were down almost 5%.
CVIT holdings at June 30, 1998 included 59 (U.S.) stocks diversified across
18 industries. CVIT holdings are essentially equally weighted, with the majority
of individual stock positions representing about 2% of total portfolio market
value. The largest industry concentrations were in construction (14% of total
portfolio value), automotive (9%), electronics (8%), metal products
manufacturers (8%), transportation (8%), financial (7%) and chemicals (7%). Fund
underweightings were in health care, retailers and communications utilities.
At the end of 1998's second quarter, the stocks in the CVIT Fund were
trading at an average P/E multiple of 17 (times trailing earnings), a
considerable discount from the S&P 500's P/E of 27. The outlook for earnings
growth over the coming five years for CVIT stocks is projected to be on the
order of 12% per annum. Considering the favorable profit outlook, CVIT's
valuations are judged to be comparatively attractive.
After three straight strong years for stocks, 1998 is shaping up as a year
of heightened volatility and more modest returns. The recent consolidation in
U.S. stock prices is a start toward correcting some of the excesses that have
built up in the market during 1995-98. If it extends far enough into the ranks
of the big-cap market favorites, it may allow corporate earnings to catch up
with stock prices, bringing P/E multiples down to sustainable levels. At
mid-year 1998, the S&P 500 was priced at 26 times estimated 1998 earnings, a
generous P/E by historical standards, especially in view of the uncertainties
represented by the Asian crisis. For long-term investors, the outlook for
high-quality stocks is relatively favorable, given the demographics and the low
inflation/high productivity trends heading into the early 21st century.
<PAGE>
CATHOLIC VALUES INVESTMENT TRUST EQUITY TRUST
DIVIDEND DISTRIBUTIONS
================================================================================
<TABLE>
<CAPTION>
N.A.V. Distri- Distri- 12 Month 5 Year 10 Year Cum.
Period Per bution bution Shares Invstmnt Invstmnt Invstmnt Invstmnt
Ending Share $ P/S in Shares Owned Value Return Return Return Return
(Annualized) (Annualized)(Annualized)
- ----------------------------------------------------------------------------------------------------------------
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
- Institutional Service Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5/1/97 $10.00 100.00 $1,000.00
Dec.97 11.89 0.040 0.003431 100.34 1,193.04 - - - 19.31%
Jan.98 11.95 100.34 1,199.06 - - - -
Feb.98 12.87 100.34 1,291.38 - - - -
Mar.98 13.23 0.006 0.000455 100.39 1,328.16 - - - -
Apr.98 13.20 100.39 1,325.15 - - - -
May 98 12.74 100.39 1,278.97 26.13% - - 25.55%
Jun.98 12.58 100.39 1,262.91 22.26% - - 22.21%
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
- Individual Shares
5/1/97 $10.00 100.00 $1,000.00
Dec.97 11.87 0.040 0.003439 100.34 1,191.04 - - - 19.11%
Jan.98 11.92 100.34 1,196.05 - - - -
Feb.98 12.83 100.34 1,287.36 - - - -
Mar.98 13.17 0.006 0.000456 100.39 1,322.14 - - - -
Apr.98 13.14 100.39 1,319.12 - - - -
May 98 12.69 100.39 1,273.95 25.88% - - 25.09%
Jun.98 12.52 100.39 1,256.88 21.91% - - 21.71%
</TABLE>
<PAGE>
Catholic Values Investment Trust Equity Fund
PORTFOLIO OF INVESTMENTS
June 30, 1998 (UNAUDITED)
================================================================================
Shares Value
--------------------
Equity Interests -- 96.0%
APPAREL -- 1.9%
VF Corp.................... 4,300 $ 221,450
-----------
AUTOMOTIVE -- 8.5%
Chrysler Corp.............. 5,600 $ 315,700
Dana Corp.................. 2,400 128,400
Eaton Corp................. 2,100 163,275
Modine Mfg. Co............. 5,900 204,288
Superior Industries Int'l. Inc 7,000 197,312
-----------
$ 1,008,975
-----------
CHEMICALS -- 6.7%
Cooper Tire & Rubber....... 8,400 $ 173,250
Lubrizol Corp.............. 6,600 199,650
Morton Int'l Inc.-W/I...... 1,800 45,000
PPG Industries, Inc........ 2,800 194,775
Rohm & Haas Company........ 1,800 187,088
-----------
$ 799,763
-----------
CONSTRUCTION -- 13.9%
Caterpillar Inc............ 3,900 $ 206,213
Fleetwood Enterprises, Inc. 5,000 200,000
Jacobs Eng. Group Inc*..... 6,000 192,750
Medusa Corporation......... 3,900 244,725
Oakwood Homes Corp......... 6,300 189,000
Texas Industries Inc....... 3,500 185,500
Toll Brothers*............. 7,800 223,763
Vulcan Materials Co........ 2,000 213,374
-----------
$ 1,655,325
-----------
DIVERSIFIED -- 4.8%
Crane Company.............. 3,900 $ 189,394
General Signal Corp........ 4,800 172,800
Lancaster Colony........... 5,550 210,206
-----------
$ 572,400
-----------
ELECTRONICS -- 8.3%
Adobe Systems Inc.......... 4,100 $ 173,993
Compaq Computer............ 6,100 173,088
Int'l. Business Machines... 1,900 218,144
Raytheon Co................ 3,600 212,850
Sun Microsystems, Inc*..... 4,800 208,500
-----------
$ 986,575
-----------
FINANCIAL -- 7.3%
Ambac Fin'l. Group Inc..... 4,000 $ 234,000
A.G. Edwards, Inc.......... 4,800 204,900
BB&T Corporation........... 3,200 216,400
Southtrust Corp............ 4,950 215,325
-----------
$ 870,625
-----------
FOOD -- 3.5%
Dean Foods Company......... 4,300 $ 236,231
Universal Foods Corp....... 8,000 177,500
-----------
$ 413,731
-----------
MACHINERY & EQUIPMENT -- 4.6%
Cummins Engine Co.......... 3,000 $ 153,750
Deere & Company............ 3,400 179,775
Ingersoll-Rand Co.......... 4,750 209,297
-----------
$ 542,822
-----------
METAL PRODUCERS -- 1.5%
Carpenter Technology....... 3,600 $ 180,900
-----------
METAL PRODUCTS MFRS. -- 8.0%
Aeroquip-Vickers Inc....... 3,700 $ 215,988
Kaydon Corp................ 4,800 169,500
Mueller Industries*........ 6,000 222,750
Snap-on Inc................ 4,400 159,500
Trinity Industries......... 4,500 186,750
-----------
$ 954,488
-----------
<PAGE>
OIL, GAS & COAL -- 2.0%
Ensco International Inc.... 3,700 $ 64,288
Nabors Inds., Inc.*........ 8,600 170,387
-----------
$ 234,675
-----------
PAPER -- 1.3%
Wausau-Mosinee Paper Corp.. 6,500 $ 148,688
-----------
PRINTING & PUBLISHING -- 3.5%
American Greetings Corp.... 4,500 $ 229,219
Banta Corp................. 6,200 191,425
-----------
$ 420,644
-----------
RECREATION -- 3.0%
Brunswick Corp............. 6,700 $ 165,825
Ryans Family Steak Hse*.... 19,200 196,800
-----------
$ 362,625
-----------
RETAILERS -- 2.7%
Lands' End, Inc............ 5,200 $ 164,450
Ross Stores Inc............ 3,500 150,500
-----------
$ 314,950
-----------
TRANSPORTATION -- 7.9%
ASA Holdings Inc........... 5,500 $ 272,938
Comair Holdings Inc........ 7,200 222,300
U.S. Freightwways Corp..... 6,800 223,337
Werner Enterprises Inc..... 11,375 216,836
-----------
$ 935,411
-----------
UTLIITIES -- 2.0%
Nipsco Industries, Inc..... 8,600 $ 240,800
-----------
MISCELLANEOUS -- 4.6%
Arrow Electronics, Inc*.... 5,700 $ 123,975
Kelly Services, Inc........ 5,800 205,175
Sierra Health Svcs*........ 8,400 211,573
-----------
$ 540,723
-----------
TOTAL EQUITY INTERESTS - 96.0%
(identified cost, $10,400,546) $ 11,405,570
Reserve Funds - 6.5%
Face Amount
-------------
American Express Corp.
5.951%, 7/1/98............. $400,000 $ 400,000
General Electric Cap. Corp.
5.601%, 7/1/98............. $370,000 370,000
-----------
(at amortized cost)...... $770,000 $ 770,000
-----------
TOTAL INVESTMENTS - 102.5%
(identified cost, $11,170,546) $ 12,175,570
OTHER ASSETS,
LESS LIABILITIES -- (2.5%) (292,285)
-----------
NET ASSETS -- 100% $11,883,285
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
================================================================================
June 30,1998
(UNAUDITED)
ASSETS:
Investments -
Identified cost................................... $ 11,170,546
Unrealized appreciation........................... 1,005,024
------------
Total Value (Note 1A)............................. $ 12,175,570
Cash .............................................. 3,983
Dividends and interest receivable................... 8,929
Receivable for Fund shares sold..................... 1,175
Receivable from Investment Adviser (Note 2)......... 29,300
Deferred organization expenses (Note 1B)............ 98,289
------------
Total Assets...................................... $ 12,317,246
------------
LIABILITIES:
Payable for investments purchased................... $ 418,640
Accrued Advisory Board fees payable (Note 2)........ 3,201
Accrued distribution fee............................ 1,500
Accrued expenses and other liabilities.............. 10,620
------------
Total Liabilities................................. $ 433,961
------------
NET ASSETS............................................. $ 11,883,285
==============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares reacquired.......... $ 10,765,524
Accumulated undistributed net realized gain on
investments (computed on the basis of identified cost) 124,381
Unrealized appreciation of investments (computed on
the basis of identified cost)...................... 1,005,024
Accumulated net investment loss...................... (11,644)
------------
Net assets applicable to outstanding shares........ $ 11,883,285
==============
Computation of net asset value, offering and redemption
price per share (Note 7):
Institutional Service shares:
Net assets......................................... $ 8,342,092
==============
Shares of beneficial interest outstanding.......... 663,300
==============
Net asset value, offering price, and redemption
price per share of beneficial interest........... $ 12.58
==============
Individual shares:
Net assets......................................... $ 3,541,193
==============
Shares of beneficial interest outstanding.......... 282,785
==============
Net asset value, offering price, and redemption
price per share of beneficial interest ........... $ 12.52
==============
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENT OF OPERATIONS
================================================================================
For the Six Months
Ended
June 30, 1998
- -------------------------------------------------------------------------------
(UNAUDITED)
INVESTMENT INCOME:
Dividend Income............................. $ 71,323
Interest Income............................. 3,664
------------
Total investment income................... $ 74,987
------------
Expenses
Investment Adviser fee (Note 2)............. $ 42,255
Advisory Board fee (Note 2)................. 8,602
Administrator fee (Note 2).................. 3,944
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator... 1,487
Custodian fee (Note 1C)..................... 26,521
Registration Costs.......................... 12,200
Distribution expenses - Institutional
Service shares (Note 3)................... 11,354
Distribution expenses - Individual
shares (Note 3)........................... 8,186
Transfer and dividend disbursing agent
fees - Institutional Service shares....... 908
Transfer and dividend disbursing agent
fees - Individual shares.................. 968
Amortization of organization expenses (Note 1B) 11,365
Auditing expense........................... 15,600
Legal services............................. 9,912
Printing expense........................... 5,319
Miscellaneous.............................. 10,494
------------
Total expenses........................... $ 169,115
------------
Deduct -
Preliminary reduction of Investment
Adviser fee (Note 2)..................... $ 42,255
Preliminary reduction of Distribution
fee - Individual shares (Note 3)......... 6,686
Preliminary allocation of expenses to
Investment Adviser (Note 2).............. 29,300
Reduction of custodian fee (Note 1C)....... 4,243
------------
Total deductions.......................... $ 82,484
------------
Net expenses.............................. $ 86,631
------------
Net Investment Loss..................... $ (11,644)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments (identified
cost basis)................................. $ 124,584
Change in unrealized appreciation of investments. 428,132
------------
Net realized and unrealized gain on investments. $ 552,716
------------
Net increase in net assets from operations... $ 541,072
==============
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months May 1, 1997
Ended (start of business) to
June 30, 1998 December 31, 1997
- --------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
From Operations --
<S> <C> <C>
Net investment loss.............................................. $ (11,644) $ (2,913)
Net realized gain on investments................................. 124,584 41,503
Change in unrealized appreciation of investments................. 428,132 576,892
------------ ------------
Increase in net assets from operations......................... $ 541,072 $ 615,482
------------ ------------
Distributions to shareholders from net realized gain on investments:
Institutional Service class...................................... $ (4,387) $ (29,065)
Individual class................................................. (941) (4,400)
------------ ------------
Total distributions to shareholders............................ $ (5,328) $ (33,465)
------------ ------------
Fund share transactions -- Institutional Service class:
Proceeds from shares sold...................................... $ 235,805 $ 8,133,814
Issued to shareholders in payment of distributions declared.... 3,611 23,903
Cost of shares reacquired...................................... (1,099,490) (9,357)
------------ ------------
Net increase (decrease) in net assets from Fund share transactions
- Institutional Service class................................ $ (860,074) $ 8,148,360
------------ ------------
Individual class: Proceeds from shares sold................ $ 2,170,534 $ 1,266,585
Issued to shareholders in payment of distributions declared.... 895 4,133
Cost of shares reacquired...................................... (46,459) (18,450)
------------ ------------
Net increase in net assets from Fund share transactions
- Individual class........................................... $ 2,124,970 $ 1,252,268
------------ ------------
Total net increase from Fund share transactions (Note 4)......... 1,264,896 9,400,628
------------ ------------
Net increase in net assets..................................... $ 1,800,640 $ 9,982,645
NET ASSETS:
At beginning of period............................................. 10,082,645 100,000
------------ ------------
At end of period................................................... $ 11,883,285 $ 10,082,645
============== ==============
ACCUMULATED NET INVESTMENT GAIN (LOSS) INCLUDED IN NET ASSETS
AT END OF PERIOD...................................................... $ (11,644) $ 0
============== ==============
See notes to financial statements.
</TABLE>
<PAGE>
Catholic Values Investment Trust Equity Fund
================================================================================
<TABLE>
<CAPTION>
Six Months From May 1, 1997
Ended (start of business) to
June 30, 1998 (UNAUDITED) December 31, 1997
------------------------------------------------------
Institutional Individual Institutional Individual
FINANCIAL HIGHLIGHTS Service Shares Shares Service Shares Shares
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $ 11.890 $ 11.870 $ 10.000 $ 10.000
-------- -------- -------- --------
Income (Loss) from Investment Operations:
Net investment loss*.............................. $ (0.008) $ (0.023) $ (0.000)+ $ (0.024)
Net realized and unrealized gain on investments... 0.704 0.679 1.930 1.934
-------- -------- -------- --------
Total income from investment operations......... $ 0.696 $ 0.656 $ 1.930 $ 1.910
Less distributions from net realized gain on
investments..................................... (0.006) (0.006) (0.040) (0.040)
-------- -------- -------- --------
Net asset value, end of period....................... $ 12.580 $ 12.520 $ 11.890 $ 11.870
========= ========= ========= =========
Total Return (1)..................................... 5.85% 5.52% 19.31% 19.11%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted)........... $ 8,342 $ 3,541 $ 8,686 $ 1,397
Ratio of expenses to average net assets*(2)(3).... 1.54% 1.94% 1.73% 2.24%
Ratio of net investment loss to average net assets(2) (0.11%) (0.59%) (0.01%) (0.44%)
Portfolio turnover rate........................... 22% 22% 14% 14%
<FN>
* During the periods presented, the Investment Adviser, the Administrator and
the Principal Underwriter waived all or a portion of their fees and the
Investment Adviser was allocated a portion of the operating expenses. Had such
actions not been undertaken, net investment loss per share and the ratios would
have been as follows:
From May 1, 1997
Six Months Ended (start of business) to
June 30, 1998 (UNAUDITED) December 31, 1997
- -----------------------------------------------------------------------------------------------------------
Institutional Individual Institutional Individual
Service Shares Shares Service Shares Shares
Net investment loss per share........................ $ (0.100) $ (0.073) $ (0.047) $ (0.212)
========= ========= ========= =========
Annualized Ratios (As a percentage of average net assets):
Expenses(2)....................................... 2.81% 3.21% 4.50% 5.69%
Net investment loss(2)............................ (1.38%) (1.86%) (2.78%) (3.89%)
(1) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the reinvestment date.
(2) Annualized.
(3) During the six months ended June 30, 1998 and the period ended December 31,
1997, custodian fees were reduced by credits resulting from cash balances
the Fund maintained with the Custodian (Note 1C). The computation of net
expenses to average daily net assets reported above is computed without
consideration of such credit. If these credits were considered, the ratio of
net expenses to average daily net assets would have been reduced to 1.46%
and 1.48% for the Institutional Service shares and 1.87% and 1.99% for the
Individual shares.
(+) Amount represents less than ($0.001) per share.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
================================================================================
(1) SIGNIFICANT ACCOUNTING POLICIES
The Catholic Values Investment Trust Equity Fund (the Fund) (one of the
series of the Catholic Values Investment Trust) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-ended
management investment company. The Fund seeks long-term growth of capital and
reasonable current income through investments in a broadly diversified portfolio
consisting primarily of equity securities of high-quality, well-established
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 following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Investment Valuations - 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.
B. Deferred Organization Expenses - Costs incurred by the Fund in
connection with its organization are being amortized on the
straight-line basis over five years beginning on the date the Fund
commenced operations.
C. Expense Reduction - The Fund has entered into an arrangement with its
custodian whereby interest earned on uninvested cash balances is used
to offset custodian fees. All significant reductions are reported as a
reduction of expenses in the Statement of Operations.
D. Federal Taxes - The Fund's policy is to comply with the provisions of
the Internal Revenue Code (the Code) available to regulated investment
companies and distribute to shareholders each year all of its taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is necessary.
E. Distributions - The Fund requires that differences in the recognition
or classification of income between the financial statements and tax
earnings and profits which result only in temporary over-distributions
for financial statement purposes, be classified as distributions in
excess of net investment income or accumulated net realized gains.
Distributions in excess of tax basis earnings and profits are reported
in the financial statements as a return of capital. Permanent
differences between book and tax accounting for certain items may
result in reclassification of these items.
<PAGE>
F. Multiple Classes of Shares of Beneficial Interest - The Fund offers an
Individual Share Class and an Institutional Service Share Class. The
Fund may also offer an Institutional Share Class, although such class
is not currently being offered. The share classes differ in their
respective distribution and service fees. All shareholders bear the
common expenses of the Fund pro rata based on the average daily net
assets of each class, without distinction between share classes.
Dividends are declared separately for each class. Each class has equal
rights as to voting, redemption, dividends and liquidation.
G. Other - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. However, if the
ex-dividend date has passed, certain dividends from foreign securities
are recorded as the Fund is informed of the ex-dividend date.
H. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
I Interim Financial Information - The interim financial statements
relating to June 30, 1998 and for the period then ended have not been
audited by independent certified public accountants, but in the opinion
of the Fund's management, reflect adjustments, consisting of normal
recurring adjustments, necessary for the fair presentation of the
financial statements.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has engaged Wright Investors' Services (Wright), a wholly owned
subsidiary of The Winthrop Corporation (Winthrop) to perform investment
management, investment advisory, and other services. For its services, Wright is
compensated based upon a percentage of average daily net assets which rate is
adjusted as average daily net assets exceed certain levels. For the six month
period ended June 30, 1998, the effective annual rate was 0.75%. To enhance the
net income of the Fund, Wright made a preliminary reduction of its investment
adviser fee by $42,255. In addition, $29,300 of expenses was allocated to the
investment adviser on a preliminary basis. The Fund has an independent Catholic
Advisory Board which consults with the investment adviser. The Fund also has
engaged Eaton Vance Management (Eaton Vance) to act as administrator of the
Fund. Under the Administrator Agreement, Eaton Vance is responsible for managing
the business affairs of the Fund and is compensated based upon a percentage of
average daily net assets which rate is adjusted as average daily net assets
exceed certain levels. For the six month period ended June 30, 1998, the
effective annual rate was 0.07%. Certain of the Trustees and officers of the
<PAGE>
Fund are Trustees or officers of the above organizations. Except as to Trustees
of the Fund who are not affiliated with Eaton Vance or Wright, Trustees and
officers receive remuneration for their services to the Fund out of the fees
paid to Eaton Vance and Wright.
(3) DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that the Fund
will pay Wright Investors' Service Distributors, Inc. (Principal Underwriter)
(WISDI), a wholly-owned subsidiary of Winthrop, an annual rate up to 0.75% per
annum of the Fund's average net assets attributable to the Individual shares and
up to 0.25% per annum of the Fund's average net assets attributable to the
Institutional Service shares. To enhance the net income of the Fund, the
Principal Underwriter made a preliminary reduction of its fee for the six month
period ended June 30, 1998, of $6,686 for Individual shares.
In addition, the Trustees have 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 any of the classes of shares.
The amount of 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. For the six month period
ended June 30, 1998, the Fund neither accrued nor paid any service fees.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
For the Six Months Ended For the Period from the Start of Business,
une 30, 1998 (unaudited May 1, 1997 to December 31, 1997
--------------------------------------------------------------------------------
Institutional Service Individual Institutional Service Individual
Shares Shares Shares Shares
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 17,688 168,568 719,002 118,987
Reinvested 270 68 2,050 355
Reacquired (85,054) (3,573) (656) (1,620)
------- ------- ------- -------
Net increase (decrease) (67,096) 165,063 720,396 117,722
======== ======== ======== ========
</TABLE>
<PAGE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations for the six month period ended June 30, 1998, were
$3,437,531 and $2,426,545, respectively.
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in the value of the
investment securities owned at June 30, 1998, as computed on a federal income
tax basis, are as follows:
Aggregate cost................................$ 11,170,546
===========
Gross unrealized appreciation.................$ 1,402,742
Gross unrealized depreciation................. (397,718)
-----------
Net unrealized appreciation...................$ 1,005,024
===========
(7) CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge (CDSC) of 1% is imposed on any
redemption of Individual shares made within one year of purchase. The CDSC is
based on the lower of the net asset value at the date of purchase or the date of
sale of the redeemed shares and is paid to WISDI. No charge is made on shares
acquired through the reinvestment of distributions. Additionally, no CDSC is
charged on shares sold to Wright or its affiliates or to their respective
employees.
(8) LINE OF CREDIT
The Fund participates with other funds managed by Wright in a committed $20
million unsecured line of credit agreement with a bank. The Fund may temporarily
borrow from the line of credit to satisfy redemption requests or settle
investment transactions. Interest is charged to each Fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$20 million line of credit, is allocated among the participating funds at the
end of each quarter. The Fund did not have significant borrowings or allocated
fees during the period ended June 30, 1998.
<PAGE>
SEMI-ANNUAL REPORT
Catholic Advisory Board
Thomas P. Melady, Chairman
Margaret M. Heckler
Bowie K. Kuhn
Timothy J. May
Thomas S. Monaghan
William A. Wilson
Ecclestiastical Advisor
His Excellency John Cardinal O`Connor
Investment Adviser
Wright Investors' Service
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
Administrator
Eaton Vance Management
24 Federal Street
Boston, Massachusetts 02110
Principal Underwriter
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
Custodian
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
Transfer and Dividend Disbursing Agent
First Data Investor Services Group
Wright Managed Investment Funds
P.O. Box 5156
Westborough, Massachusetts 01581-9698
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of a mutual fund unless accompanied or preceded by a
Fund's current prospectus.
