- ------------------------------------------------------------------------------
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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Annual Report
From Inception
May 1, 1997
Through
December 31,1997
Catholic Values Investment Trust Equity Fund
<PAGE>
Table of Contents
LETTER TO SHAREHOLDERS....................... 1
MANAGEMENT DISCUSSION........................ 3
DIVIDEND DISTRIBUTIONS........................4
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
Portfolio of Investments................... 5
Statement of Assets and Liabilities........ 7
Statement of Operations.................... 8
Statement of Changes in Net Assets......... 9
Financial Highlights...................... 10
Notes to Financial Statements..............11
Catholic Values Investment Trust Equity Fund
LETTER TO SHAREHOLDERS
================================================================================
January, 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 that should have approximately 70% of its assets in U.S. securities and 30%
in international securities. As of December 31, 1997, the Fund return since
inception was 19.11% in the Individual share class and 19.31% in the
Institutional share class.
The independent Catholic Advisory Board assures that the Fund's investments
are 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 exist. 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 now 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 Vatical 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.
In addition, the Catholic Advisory Board is most fortunate that His
Excellency John Cardinal O'Connor is now its Ecclesiastical Advisor.
Initially, Wright Investors' Service, the Fund's investment Adviser,
<PAGE>
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,Jr.
Walter R. Miller, Ph.D.
Secretary to the
Catholic Advisory Board
WRIGHT CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
- INSTITUTIONAL SERVICE SHARES
- INDIVIDUAL SHARES
Growth of $10,000 invested 5/31/97* through 12/31/97
Total Return
Since Incept*
Wright Catholic Values Investment Trust +17.7%
Lipper Growth Funds +13.6%
NYSE +17.0%
The cumulative total return of a U.S. $10,000 investment in the
WRIGHT CATHOLIC VALUES INVESTMENT TRUST on 5/31/97 would have grown to $11,770
by December 31, 1997.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Catholic Value Lipper Equity NYSE
Investment Trust Growth Funds Index
05/31/97 $10,000 $10,000 $10,000
12/31/97 $11,770 $11,362 $11,699
*: For comparison with other averages, the investment results are shown from
the first month-end since the Fund's inception. Actual performance since
May 1 inception was 19.11% in the Individual share class and 19.31% in the
Institutional Service share class. Lipper Growth Funds are an average of 944
growth funds.
-----------------------------------------------------------------------------
The comparative investment return of the Catholic Values Investment Trust
Equity Fund Institutional Service shares and Individual shares versus the DJIA
and the S&P 500 for the third quarter of 1997, the fourth quarter of 1997,
the last six months of 1997 and cumulative from fund inception on May 1,1997
to December 31, 1997 is as follows.
The following plotting points are used for comparison in the total investment
return bar chart.
3rd Qtr. 4th Qtr. 6 Months Cumulative
CVIT- Inst Svc Shares 14.33% 1.02% 15.50% 19.31%
CVIT- Individual Shares 14.45% 0.94% 15.53% 19.11%
DJIA 4.00% -2.19% 3.98% 14.14%
S&P 500 7.49% 2.86% 10.55% 22.45%
The Total Investment Return is the % return of an initial $10,000 investment
made at the beginning of the period to the ending redeemable value assuming
all dividends and distributions are reinvested. Past performance is not
predictive of future performance.
<PAGE>
Catholic Values Investment Trust Equity Fund
MANAGEMENT DISCUSSION
January 1998
The initial year of operation for the Catholic Values Investment Trust
Equity Fund was a good one in both absolute and relative terms. The stock market
environment from the Fund's inception on May 1, 1997 was generally favorable,
with the Dow Jones Industrial Average returning 14% and the S&P 500 Composite
returning 22%. In comparison, CVIT had a total return of 19% for the May 1 to
December 31 period. For the second half of 1997, CVIT had a 15.5% total
investment return, ahead of both the DJIA's 4% return and the S&P 500's 11%
return.
CVIT holdings at year-end 1997 included 52 (U.S.) stocks diversified across
15 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), financial (12%), recreation (8%), electronics (7%),diversified
(6%) and metal product manufacturers (6%). All of these sectors contributed to
CVIT's positive relative performance during 1997's second half. Working against
1997 relative performance were Fund underweightings in health care, oil & gas,
food and communications utilities.
At the end of 1997, 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 23. The outlook for earnings growth over the coming five years
for CVIT stocks is projected to be at least as good as for the S&P 500, 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 consolidation in U.S.
stock prices over the July 1997 to January 1998 period is a start toward
correcting some of the excesses that built up in the market during 1995-97. If
it extends far enough into 1998, it may allow corporate earnings to catch up
with stock prices, bringing P/E multiples down to sustainable levels. As 1998
began, the S&P 500 was priced at 21 times estimated 1998 earnings, a generous
P/E by historical standards, and especially so 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 Fund
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
May 97 $10.14 100.00 1,014.00 - - - 1.40%
Jun.97 10.33 100.00 1,033.00 - - - 3.30%
Jul.97 11.29 100.00 1,129.00 - - - 12.90%
Aug.97 11.29 100.00 1,129.00 - - - 12.90%
Sep.97 11.81 100.00 1,181.00 - - - 18.10%
Oct.97 11.27 100.00 1,127.00 - - - 12.70%
Nov.97 11.57 100.00 1,157.00 - - - 15.70%
Dec.97 11.89 0.040 0.003431 100.34 1,193.08 - - - 19.31%
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
- -----------------------------------------------
- Individual Shares
5/1/97 $10.00 100.00 $1,000.00
May 97 $10.12 100.00 1,012.00 - - - 1.20%
Jun.97 10.31 100.00 1,031.00 - - - 3.10%
Jul.97 11.26 100.00 1,126.00 - - - 12.60%
Aug.97 11.27 100.00 1,127.00 - - - 12.70%
Sep.97 11.80 100.00 1,180.00 - - - 18.00%
Oct.97 11.25 100.00 1,125.00 - - - 12.50%
Nov.97 11.54 100.00 1,154.00 - - - 15.40%
Dec.97 11.87 0.040 0.003439 100.34 1,191.08 - - - 19.11%
</TABLE>
<PAGE>
Catholic Values Investment Trust Equity Fund
PORTFOLIO OF INVESTMENTS
December 31, 1997
===============================================================================
Equity Interests -- 97.6%
Shares Value
-------- --------
APPAREL -- 3.7%
Russell Corp............... 6,700 $ 177,969
VF Corp.................... 4,300 197,531
-----------
$ 375,500
-----------
AUTOMOTIVE -- 5.8%
Chrysler Corp.............. 5,600 $ 197,050
Eaton Corp................. 2,100 187,425
Modine Mfg. Co............. 5,900 201,338
-----------
$ 585,813
-----------
CHEMICALS -- 5.3%
Cooper Tire & Rubber....... 8,400 $ 204,750
Morton Int'l Inc.-W/I...... 1,800 61,875
PPG Industries, Inc........ 1,100 62,838
Rohm & Haas Company........ 2,100 201,075
-----------
$ 530,538
-----------
CONSTRUCTION -- 14.1%
Caterpillar Inc............ 3,900 $ 189,393
Fleetwood Enterprises, Inc. 5,000 212,188
Jacobs Eng. Group Inc*..... 7,700 195,388
Medusa Corporation......... 4,900 204,881
Oakwood Homes Corp......... 6,300 209,081
Toll Brothers*............. 7,800 208,650
Vulcan Materials Co........ 2,000 204,250
-----------
$ 1,423,831
-----------
DIVERSIFIED -- 6.1%
Crane Company.............. 4,600 $ 199,525
General Signal Corp........ 4,800 202,500
Lancaster Colony........... 3,700 208,588
-----------
$ 610,613
-----------
ELECTRONICS -- 7.3%
Compaq Computer............ 3,050 $ 172,134
Raytheon Co................ 3,600 181,800
Stratus Computer Inc*...... 5,200 196,625
Sun Microsystems, Inc*..... 4,800 191,400
-----------
$ 741,959
-----------
FINANCIAL -- 12.3%
Ambac Fin'l. Group......... 4,600 $ 211,600
A.G. Edwards, Inc.......... 5,600 222,600
BB&T Corporation........... 3,200 205,000
First Virginia Banks, Inc.. 1,650 85,284
Pacific Century Fin'l. Corp 7,400 183,150
Quick and Reilly Group..... 2,900 124,700
Southtrust Corp............ 3,300 209,344
-----------
$ 1,241,678
-----------
FOOD -- 2.0%
Universal Foods Corp....... 4,700 $ 198,575
-----------
MACHINERY & EQUIPMENT -- 5.2%
Deere & Company............ 3,400 $ 198,263
Flowserve Corp............. 2,000 55,875
Ingersoll-Rand Co.......... 4,750 192,375
Pitney Bowes, Inc.......... 900 80,943
-----------
$ 527,456
-----------
METAL PRODUCERS -- 2.0%
Carpenter Technology....... 4,100 $ 197,056
-----------
METAL PRODUCTS MFRS. -- 5.8%
Kaydon Corp................ 5,900 $ 192,487
Snap-on Inc................ 4,400 191,950
Trinity Industries......... 4,500 200,813
-----------
$ 585,250
-----------
<PAGE>
PRINTING & PUBLISHING -- 4.5%
American Greetings Corp.... 5,300 $ 207,363
Banta Corp................. 7,800 210,600
Standard Register.......... 1,100 38,225
-----------
$ 456,188
-----------
RECREATION -- 7.9%
Brunswick Corp............. 6,700 $ 203,094
Kingworld Productions Inc*. 3,500 202,125
Ryans Family Steak Hse*.... 21,900 187,519
Wendy's Int'l.............. 8,400 202,125
-----------
$ 794,863
-----------
RETAILERS -- 1.8%
Lands' End, Inc*........... 5,200 $ 182,325
-----------
TRANSPORTATION -- 4.5%
ASA Holdings Inc........... 6,500 $ 184,843
Comair Holdings Inc........ 8,400 202,650
Illinois Central Corp...... 1,800 61,311
-----------
$ 448,804
-----------
UTLIITIES -- 3.0%
Century Telephone Enter.... 1,900 $ 94,644
Nipsco Industries, Inc..... 4,300 212,581
-----------
$ 307,225
-----------
MISCELLANEOUS -- 6.3%
Arrow Electronics, Inc*.... 5,700 $ 184,894
Kelly Services, Inc........ 6,900 207,000
Marshall Industries*....... 1,800 54,000
Sierra Health Svcs*........ 5,600 188,300
-----------
$ 634,194
-----------
TOTAL EQUITY INTERESTS - 97.6%
(identified cost, $9,264,976) $ 9,841,868
OTHER ASSETS,
LESS LIABILITIES -- 2.4%. 240,777
-----------
NET ASSETS -- 100% $ 10,082,645
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENT OF ASSETS AND LIABILITIES
===============================================================================
December 31,
1997
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost........................................$ 9,264,976
Unrealized appreciation................................ 576,892
------------
Total Value (Note 1A)................................$ 9,841,868
Cash..................................................... 215,078
Dividends receivable..................................... 7,263
Receivable for Fund shares sold.......................... 16,500
Receivable from Investment Adviser (Note 2).............. 39,900
Deferred organization expenses (Note 1B)................. 131,772
------------
Total Assets.........................................$ 10,252,381
------------
LIABILITIES:
Accrued distribution fees................................$ 5,209
Trustee fees payable (Note 2)............................ 2,263
Accrued organization expense............................. 151,500
Accrued expenses and other liabilities................... 10,764
------------
Total Liabilities....................................$ 169,736
------------
NET ASSETS....................................................$ 10,082,645
==============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares issued
to shareholders in payment of distributions declared),
less cost of shares reacquired...........................$ 9,500,628
Accumulated undistributed net realized gain on investments
(computed on the basis of identified cost)................ 5,125
Unrealized appreciation of investments (computed on the
basis of identified cost)................................ 576,892
------------
Net assets applicable to outstanding shares..........$ 10,082,645
==============
Computation of net asset value, offering and redemption price
per share (Note 7):
Institutional Service shares:
Net assets.............................................$ 8,685,768
==============
Shares of beneficial interest outstanding.............. 730,396
==============
Net asset value, offering price, and redemption price
per share of beneficial interest.......................$ 11.89
==============
Individual shares:
Net assets.............................................$ 1,396,877
==============
Shares of beneficial interest outstanding.............. 117,722
==============
Net asset value, offering price, and redemption price
per share of beneficial interes........................$ 11.87
==============
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENT OF OPERATIONS
===============================================================================
May 1, 1997
(start of business) to
December 31, 1997
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income.................................$ 41,662
------------
Expenses --
Investment Adviser fee (Note 2)................. $ 20,795
Administrator fee (Note 2)...................... 1,937
Compensation of Trustees not affiliated with the
Investment Adviser or Administrator............ 14,093
Custodian fee (Note 1C)......................... 40,812
Registration Costs.............................. 12,342
Distribution expenses - Institutional Service
shares (Note 3)................................ 5,361
Distribution expenses - Individual
shares (Note 3)................................ 4,757
Transfer and dividend disbursing agent
fees - Institutional Service shares............ 583
Transfer and dividend disbursing agent
fees - Individual shares....................... 942
Amortization of organization expenses (Note 1B). 19,728
Legal services.................................. 8,073
Miscellaneous................................... 4,015
------------
Total expenses.............................. $ 133,438
------------
Deduct --
Reduction of Investment Adviser fee (Note 2).....$ 20,795
Reduction of Administrator fee (Note 2).......... 1,937
Reduction of Distribution fee - Individual
shares (Note 3)................................. 4,257
Allocation of expenses to Investment
Adviser (Note 2)................................ 54,873
Reduction of custodian fee (Note 1C)............. 7,001
------------
Total deductions............................$ 88,863
------------
Net expenses................................$ 44,575
------------
Net Investment Loss...................... $ (2,913)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments (identified
cost basis)........................................ $ 41,503
Unrealized appreciation of investments.............. 576,892
------------
Net realized and unrealized gain on investments..... $ 618,395
------------
Net increase in net assets from operations...... $ 615,482
==============
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
STATEMENT OF CHANGES IN NET ASSETS
===============================================================================
May 1, 1997
(start of business) to
December 31, 1997
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations --
Net investment loss.................................$ (2,913)
Net realized gain on investments.................... 41,503
Unrealized appreciation of investments.............. 576,892
------------
Increase in net assets from operations............$ 615,482
------------
Distributions to shareholders from net realized gain
on investments:
Institutional Service class.........................$ (29,065)
Individual class.................................... (4,400)
------------
Total distributions to shareholders.............. $ (33,465)
------------
Fund share transactions -- Institutional Service class:
Proceeds from shares sold.........................$ 8,133,814
Issued to shareholders in payment of
distributions declared........................... 23,903
Cost of shares reacquired......................... (9,357)
------------
Net increase in net assets from Fund share
transactions - Institutional Service class.....$ 8,148,360
------------
Individual class:
Proceeds from shares sold.........................$ 1,266,585
Issued to shareholders in payment of
distributions declared........................... 4,133
Cost of shares reacquired......................... (18,450)
------------
Net increase in net assets from Fund share
transactions - Individual class...............$ 1,252,268
------------
Total net increase from Fund share
transactions (Note 4)......................... 9,400,628
------------
Net increase in net assets.................$ 9,982,645
NET ASSETS:
At beginning of period.............................. 100,000
----------
At end of period....................................$ 10,082,645
==============
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
===============================================================================
<TABLE>
<CAPTION>
From May 1, 1997 (start of business) to
December 31, 1997
----------------------------------------------------------
FINANCIAL HIGHLIGHTS Institutional Service Shares Individual Shares
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........ $ 10.000 $ 10.000
-------- --------
Income (Loss) from Investment Operations:
Net investment loss*................... $ (0.000)+ $ (0.024)
Net realized and unrealized gain
on investments....................... 1.930 1.934
-------- --------
Total income
from investment operations....... $ 1.930 $ 1.910
Less distributions from net realized gain
on investments....................... (0.040) (0.040)
-------- --------
Net asset value, end of period.............. $ 11.890 $ 11.870
========= =========
Total Return (1)............................ 19.31% 19.11%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) $ 8,686 $ 1,397
Ratio of expenses to average net assets* 1.73%(3)(4) 2.24%(3)(4)
Ratio of net investment loss to
average net assets................... (0.01%)(3) (0.44%)(3)
Portfolio turnover rate................ 14% 14%
Average commission rate paid (2) ...... $ 0.072 $ 0.072
* During the period, 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:
Institutional Service Shares Individual Shares
Net investment loss per share............... $ (0.047) $ (0.212)
========= =========
Annualized Ratios (As a percentage of average net assets):
Expenses .............................. 4.50%(3) 5.69%(3)
Net investment loss.................... (2.78%)(3) (3.89%)(3)
(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 record date.
(2) Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year on which commissions were charged.
(3) Annualized.
(4) Custodian fees were reduced by credits resulting from cash balances the Fund
maintained with the Custodian (Note 1C). The computation of net expenses to
average daily net assets reported above is computed without consideration of
such credit. If these credits were considered, the ratio of net expenses to
average daily net assets would have been reduced to 1.48% and 1.99% for the
Institutional Service and Individual shares, respectively.
(+) Amount represents less than ($0.001) per share.
</TABLE>
See notes to financial statements
<PAGE>
Catholic Values Investment Trust Equity Fund
NOTES TO FINANCIAL STATEMENTS
===============================================================================
(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>
During the year ended December 31, 1997, $2,913 was reclassified from
net investment loss to accumulated undistributed net realized gain on
investments due to differences between book and tax accounting created
primarily by the deferral of certain losses for tax purposes.
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.
(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 period from
the start of business, May 1, 1997 to December 31, 1997, the effective annual
rate was 0.74%. To enhance the net income of the Fund, Wright made a reduction
of its investment adviser fee by $20,795. 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 period from the start of business, May 1, 1997 to December 31,
1997, the effective annual rate was 0.07%. Eaton Vance made a waiver of its fee
of $1,937. Certain of the Trustees and officers of the 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.
<PAGE>
(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 reduction of its fee for the period from the start
of business, May 1, 1997 to December 31, 1997, of $4,257 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 period from the start
of business May 1, 1997 to December 31, 1997, 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 Period from the Start of Business,
May 1, 1997 to December 31, 1997
- ---------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE SHARES INDIVIDUAL SHARES
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold.................................... 719,002 $8,133,814 118,987 $1,266,585
Reinvested.............................. 2,050 23,903 355 4,133
Reacquired.............................. (656) (9,357) (1,620) (18,450)
------- ---------- ------- ----------
Net increase............................ 720,396 $8,148,360 117,722 $1,252,268
======== ========== ======== ==========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations for the period from the start of business, May 1,
1997 to December 31, 1997, were $9,851,410 and $627,937, respectively.
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in the value of the
investment securities owned at December 31, 1997, as computed on a federal
income tax basis, are as follows:
Aggregate cost............................$ 9,264,976
============
Gross unrealized appreciation.............$ 727,999
Gross unrealized depreciation............. (151,107)
------------
Net unrealized appreciation...............$ 576,892
=============
(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 December 31,1997.
<PAGE>
Catholic Values Investment Trust Equity Fund
INDEPENDENT AUDITORS' REPORT
===============================================================================
To the Trustees and Shareholders of
Catholic Values Investment Trust Equity Fund
We have audited the accompanying statements of assets and liabilities, including
the portfolio of investments, of Catholic Values Investment Trust Equity Fund as
of December 31, 1997, and the related statement of operations, the statement of
changes in net assets, and the financial highlights for the period from the
start of business, May 1, 1997, to December 31, 1997. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights 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 statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned as of December 31,
1997, by correspondence with the custodian. 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 financial statements and financial highlights present
fairly, in all material respects, the financial position of Catholic Values
Investment Trust Equity Fund as of December 31, 1997, the results of its
operations, the changes in its net assets, and its financial highlights for the
period from the start of business, May 1, 1997, to December 31, 1997 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 30, 1998
<PAGE>
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
INDEPENDENT AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
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.
