CATHOLIC VALUES INVESMENT TRUST EQUITY FUND
Individual Shares
Institutional Service Shares
Institutional Shares
SEMI-ANNUAL REPORT
JUNE 30, 1999
<PAGE>
CATHOLIC VALUES INVESTMENT TRUST
The Catholic Values Investment Trust was created to offer a series of
mutual fund investment opportunities that combine a fundamental security
selection process with a review by a Catholic Advisory Board. This process
is designed to avoid investments in companies that offer products, services
or engage in activities contrary to the core values of the Roman Catholic
Church. Only one series, the Catholic Values Investment Trust Equity Fund,
is currently available.
Wright Investors' Service, Inc., the fund's investment adviser, selects
securities based on fundamental investment criteria. These selections are
reviewed by the Catholic Advisory Board whose members are guided by the
magisterium of the Catholic Church and seek the counsel and advice of
ecclesiastics in determining which companies meet the fund's religious
criteria. The board continually monitors the portfolio and when a company
violates core Catholic teachings, the board asks Wright to remove it from
the portfolio.
The members of the Catholic Advisory Board are:
Thomas P. Melady Chairman of the Advisory Board, 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, LLP
Thomas S. Monaghan President, Ave Maria foundation and former
President, CEO and Chairman of Domino's Pizza, Inc.
William A. Wilson Former (and first) U.S. Ambassador to the Holy See
Although he is not in any way connected with the trust, His Eminence John
Cardinal O'Connor serves as the ecclesiastical advisor to the Catholic
Advisory Board.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Letter to Shareholders.............................................. 1
Dividend Distributions and Investment Return........................ 2
Management Discussion............................................... 3
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
Portfolio of Investments............................................ 4
Statement of Assets and Liabilities................................. 7
Statement of Operations............................................. 8
Statement of Changes in Net Assets.................................. 9
Financial Highlights................................................10
Notes to Financial Statements.......................................12
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
July, 1999
Dear Shareholders:
The Catholic Values Investment Trust Equity Fund (CVIT), which opened on
May 1, 1997, is growing in size and stature. The fund invests for long-term
growth of capital and risk aversion. It pursues these objectives 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, 1999, the fund's annualized return since inception was
11.2% in the Individual share class and 11.6% in the Institutional Service share
class. A third option, the Institutional class, was opened in February and the
return since inception was 13.9%.
The independent Catholic Advisory Board reviews the fund's investments to
assure consistency 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 financial
investment conforms to the fund's 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, Ave Maria Foundation and former Chairman
of Domino's Pizza, Inc.
William A. Wilson, Former (and first) U.S. Ambassador to the Holy See
Although he is not in any way connected to the fund, His Eminence John
Cardinal O'Connor is the ecclesiastical advisor to the Catholic Advisory Board.
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 Wright's opinion, soundly financed with established
records of earnings profitability and equity growth. Selections are reviewed by
the Catholic Advisory Board to assure that each issurer complies with Catholic
teachings and doctrine. When a company is found not to be in compliance with
core teachings, it is not purchased. Purchased companies found to be
noncompliant are sold.
Thus, there is continuous dialogue, continuous information input,
continuous review, and 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. In this way, 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 also, after following some security protection procedures, access your
account.
Sincerely,
/s/ Walter R. Miller
Walter R. Miller, Ph.D.
Secretary of the
Catholic Advisory Board
<PAGE>
DIVIDEND DISTRIBUTIONS AND INVESTMENT RETURN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
N.A.V. Distri- Distri- 3 Month Yr.to Date 12 Month 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 Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/22/99 $10.00 100.00 $1,000.00 Inception
Jan.99 _ _ _ - - - -
Feb.99 9.92 100.00 992.00 - -0.80% - -0.80%
Mar.99 9.99 100.00 999.00 - -0.10% - -0.10%
Apr.99 10.92 100.00 1,092.00 - 9.20% - 9.20%
May 99 10.88 100.00 1,088.00 9.60% 8.80% - 8.80%
Jun.99 11.37 0.020 0.001791 100.18 1,139.04 14.00% 13.90% - 13.90%
Institutional Service Shares
5/1/97 $10.00 100.00 $1,000.00 Inception
Dec.98 11.79 0.006 0.000451 100.39 1,183.58 -0.80% - - 10.64%
Jan.99 11.68 100.39 1,172.54 5.04% -0.93% -2.22% 10.00%
Feb.99 11.01 100.39 1,105.28 -4.01% -6.62% -14.41% 5.87%
Mar.99 11.09 100.39 1,113.31 -5.94% -5.94% -16.18% 6.04%
Apr.99 12.12 100.39 1,216.71 3.77% 2.80% -8.18% 10.78%
May 99 12.07 100.39 1,211.69 9.63% 2.37% -5.26% 10.08%
Jun.99 12.61 0.020 0.001613 100.55 1,267.94 13.89% 7.13% 0.40% 12.07%
Individual Shares
5/1/97 $10.00 100.00 $1,000.00 Inception
Dec.98 11.71 0.006 0.000452 100.39 1,175.56 -1.30% - - 10.19%
Jan.99 11.60 100.39 1,164.52 4.98% -0.94% -2.64% 9.55%
Feb.99 10.94 100.39 1,098.26 -4.04% -6.58% -14.69% 5.49%
Mar.99 11.01 100.39 1,105.29 -5.98% -5.98% -16.40% 5.62%
Apr.99 12.03 100.39 1,207.68 3.71% 2.73% -8.45% 10.35%
May 99 11.95 100.39 1,199.65 9.23% 2.05% -5.83% 9.54%
Jun.99 12.50 100.39 1,254.87 13.53% 6.75% -0.16% 11.51%
</TABLE>
<PAGE>
MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
Considering the rise in interest rates and some serious profit taking in
Internet issues, U.S. stocks performed quite well during the first half of 1999.
A spurt early in the second quarter, taking the market to new peaks, was
followed by a period in which little upward progress was made. Investors fretted
about rising interest rates, higher inflation, and a possible tightening by the
Fed. On the last day of June, when the Fed raised rates 25 basis points (but
also shifted monetary policy into neutral), stocks rallied on relief that the
action wasn't more extreme.
The second quarter saw the start of a correction in some of the stock
market imbalances that had developed over the previous year. For most of 1998
and the first quarter of 1999, the market was dominated by a few large
technology stocks, especially Internet-related issues. In the second quarter,
however, the earnings prospects of cyclical stocks improved on evidence that the
U.S. economy remained on solid ground, while many high-P/E growth stocks were
done in by rising interest rates. Investors took profits in some of the
high-priced stocks in the Internet, health care and consumer staples sectors.
The value half of the S&P 500 outperformed the growth half, while basic
materials and capital goods stocks outperformed technology in the quarter. The
small- and mid-cap sectors outdistanced large-cap stocks by 7%-8% for the
quarter, their best relative performance in 18 months. The breadth of the market
advance improved over the course of the quarter.
The CVIT Fund averaged around a 7% investment return during the first half
of 1999 (Individual and Institutional Service shares); that result trailed the
12.4% return of the S&P 500 Composite. Since its inception on February 19, the
Institutional share class had a return of almost 14% through June 30. During the
second quarter, all three CVIT share classes produced returns in the 13.5% to
14% range, as compared with the 7% return by the S&P 500 Composite for the same
period. CVIT benefited from the market's turn toward small- and mid-cap stocks
and value stocks.
In Wright's view, the second quarter's market flip-flop away from the
big-cap favorites is a sign that fundamentals still matter. As the third quarter
got underway, at first it seemed that the market was trying to reestablish tech
stocks as the market leaders, but this was followed by another bout of profit
taking in the sector. Market leadership is shifting from day to day. We are
hopeful that the better sense of value that returned to the market in the second
quarter will win out; this, along with improvement in market breadth, would be
positive for the long-term survival of the bull market.
Economic fundamentals are mostly favorable for stocks. There is no evidence
that the U.S. expansion will falter (barring excessive tightening by the Fed,
which we believe is unlikely), and profit prospects are improving. Nevertheless,
the fact that the market is at near record P/Es even though bond yields are up
some 100 basis points from last fall's lows points up the market's risk. If a
correction does develop, most affected will be the overvalued favorites that
have dominated the market for the last 18 months. Many lower-profile,
high-quality stocks are priced at levels that still offer attractive investment
returns.
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1999 (Unaudited)
- -------------------------------------------------------------------------------
Shares Value
- -------------------------------------------------------------------------------
EQUITY INTERESTS -- 98.0%
APPAREL -- 1.5%
VF Corp.................... 8,200 $ 350,550
------------
AUTOMOTIVE -- 3.2%
Dana Corp.................. 5,600 $ 257,950
Johnson Controls........... 3,500 242,594
Superior Industries Int'l. Inc 8,400 229,425
------------
$ 729,969
------------
BEVERAGES -- 0.6%
Coca-Cola Company.......... 2,300 $ 143,750
------------
CHEMICALS -- 3.1%
Du Pont (E.I.) de Nemours.. 3,900 $ 266,418
PPG Industries, Inc........ 5,400 318,938
Rohm & Haas Company........ 2,987 128,068
------------
$ 713,424
------------
CONSTRUCTION -- 3.1%
Jacobs Eng. Group Inc*..... 6,400 $ 243,200
Southdown, Inc............. 4,832 310,456
Toll Brothers*............. 7,800 167,213
------------
$ 720,869
------------
DIVERSIFIED -- 6.0%
Crane Company.............. 7,500 $ 235,781
General Electric........... 3,100 350,300
Lancaster Colony........... 8,350 288,075
Tyco International......... 5,200 492,700
------------
$ 1,366,856
------------
DRUGS, COSMETICS & HEALTHCARE -- 3.9%
Bard (C.R.)................ 7,200 $ 344,250
Biogen, Inc................ 8,600 553,088
------------
$ 897,338
------------
ELECTRONICS -- 18.1%
Adobe Systems Inc.......... 4,100 $ 336,841
Cisco Systems, Inc......... 2,400 154,800
Dallas Semiconductor Corp.. 5,400 272,700
EMC Corp./Mass............. 10,000 550,000
Gateway Inc................ 5,300 312,700
Intel Corporation.......... 6,200 368,900
Int'l. Business Machines... 4,800 620,400
Microsoft Corp............. 4,000 360,750
Solectron Corp............. 9,200 613,525
Sun Microsystems, Inc*..... 8,000 551,000
------------
$ 4,141,616
------------
FINANCIAL -- 20.0%
Amsouth Bancorporation..... 12,450 $ 288,683
Ambac Fin'l. Group Inc..... 7,500 428,438
A.G. Edwards, Inc.......... 14,500 467,625
BB&T Corporation........... 11,200 410,900
Chase Manhattan Corp....... 2,900 251,213
Commerce Bancshares........ 6,100 245,525
Compass Bancshares......... 8,250 224,813
Federal Nat'l. Mort. Assoc. 5,700 389,738
First Security CP.......... 21,200 577,700
KeyCorp (New).............. 13,000 417,625
MBIA Inc................... 6,900 446,775
Southtrust Corp............ 11,350 435,556
------------
$ 4,584,591
------------
FOOD -- 2.4%
Hormel Foods Corp.......... 8,000 $ 322,000
Universal Foods Corp....... 10,500 221,813
------------
$ 543,813
------------
MACHINERY & EQUIPMENT -- 2.4%
Ingersoll-Rand Co.......... 8,550 $ 552,544
------------
METAL PRODUCERS -- 3.0%
Alcoa, Inc................. 9,200 $ 569,250
Carpenter Technology....... 4,000 114,250
------------
$ 683,500
------------
<PAGE>
METAL PRODUCTS MFRS. -- 2.4%
Illinois Tool Work, Inc.... 1,400 $ 114,800
Snap-on Inc................ 6,500 235,219
Trinity Industries......... 5,800 194,300
------------
$ 544,319
------------
OIL, GAS & COAL -- 5.1%
Exxon Corporation.......... 6,100 $ 470,462
Halliburton Company........ 9,600 434,400
Mobil Corporation.......... 2,600 257,400
------------
$ 1,162,262
------------
RECREATION -- 2.2%
Brinker International Inc*. 7,900 $ 214,780
Brunswick Corp............. 10,400 289,900
------------
$ 504,680
------------
RETAILERS -- 4.5%
Office Depot, Inc.......... 20,400 $ 450,075
Ross Stores, Inc........... 4,600 231,725
TJX Cos. Inc. (New)........ 10,600 353,113
------------
$ 1,034,913
------------
TRANSPORTATION -- 1.7%
Comair Holdings Inc........ 10,800 $ 224,775
U.S. Freightways Corp...... 3,700 171,356
------------
$ 396,131
------------
UTILITIES -- 9.0%
Alltel Corp................ 7,600 $ 543,400
BellSouth Corp............. 10,400 487,500
NiSource, Inc.............. 7,100 183,268
SBC Communications, Inc.... 10,400 603,200
Teco Energy................ 10,500 238,875
------------
$ 2,056,243
------------
MISCELLANEOUS -- 5.8%
Ethan Allen Interiors...... 7,800 $ 294,450
Leggett & Platt, Inc....... 22,300 620,218
Marsh & McLennan Cos., Inc. 5,500 415,250
------------
$ 1,329,918
------------
TOTAL EQUITY INTERESTS - 98.0%
(identified cost, $19,660,856) $ 22,457,286
------------
RESERVE FUNDS - 2.8%
Face Amount
American Express Corp.
5.501%, 7/1/99............. $650,000 $ 650,000
------------
(at amortized cost).... $ 650,000
------------
TOTAL INVESTMENTS - 100.8%
(identified cost, $20,310,856) $23,107,286
OTHER ASSETS,
LESS LIABILITIES - (0.8%) (194,526)
------------
NET ASSETS - 100% $22,912,760
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
Six Months Ended
STATEMENT OF ASSETS AND LIABILITES June 30, 1999
- -------------------------------------------------------------------------------
(Unaudited)
ASSETS:
Investments -
Identified cost............................... $ 20,310,856
Unrealized appreciation....................... 2,796,430
------------
Total Value (Note 1A)....................... $ 23,107,286
Cash............................................ 283
Dividends and interest receivable............... 16,676
Receivable from Investment Adviser (Note 2)..... 12,292
Deferred organization expenses (Note 1B)........ 72,321
------------
Total Assets................................. $ 23,208,858
------------
LIABILITIES:
Payable for investments purchased................ $ 262,470
Accrued Advisory Board fees payable (Note 2)..... 3,008
Distribution fee payable......................... 5,841
Accrued expenses and other liabilities........... 24,779
------------
Total Liabilities............................ $ 296,098
------------
NET ASSETS ........................................ $ 22,912,760
==============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares reacquired........ $ 20,437,911
Accumulated undistributed net realized loss on
investments (computed on the basis of identified
cost)............................................ (298,180)
Unrealized appreciation of investments (computed
on the basis of identified cost)................. 2,796,430
Distributions in excess of net investment income. (23,401)
------------
Net assets applicable to outstanding shares... $ 22,912,760
------------
Computation of net asset value, offering and redemption price per share Note 7):
Institutional shares:
Net assets..................................... $ 5,694,670
==============
Shares of beneficial interest outstanding...... 500,895
==============
Net asset value, offering price, and redemption
price per share of beneficial interest......... $ 11.37
==============
Institutional Service shares:
Net assets...................................... $ 13,281,282
==============
Shares of beneficial interest outstanding....... 1,052,919
==============
Net asset value, offering price, and redemption
price per share of beneficial interest......... $ 12.61
==============
Individual shares:
Net assets...................................... $ 3,936,808
==============
Shares of beneficial interest outstanding....... 314,924
==============
Net asset value, offering price, and redemption
price per share of beneficial interes.......... $ 12.50
==============
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Six Months Ended
June 30, 1999
- ------------------------------------------------------------------------------
(Unaudited)
INVESTMENT INCOME:
Dividend Income........................... $ 125,715
Interest Income........................... 9,295
------------
Total investment income.............. $ 135,010
------------
Expenses
Investment Adviser fee (Note 2)........... $ 68,550
Advisory Board fee (Note 2)............... 6,730
Administrator fee (Note 2)................ 6,398
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator.. 10,838
Custodian fee - Institutional shares (Note 1C) 8,607
Custodian fee - Institutional Service
shares (Note 1C)......................... 20,109
Custodian fee - Individual shares (Note 1C) 11,417
Registration Costs - Institutional shares.. 1,150
Registration Costs - Institutional Service shares 5,923
Registration Costs - Individual shares .... 7,062
Distribution expenses - Institutional
Service shares (Note 3)................... 13,294
Distribution expenses - Individual shares (Note 3) 12,255
Transfer and dividend disbursing
agent fees - Institutional shares......... 542
Transfer and dividend disbursing
agent fees - Institutional Service shares. 1,529
Transfer and dividend disbursing
agent fees - Individual shares............ 5,072
Amortization of organization expenses (Note 1B) 12,195
Auditing expense........................... 12,956
Legal services............................. 8,418
Printing expense........................... 5,084
Miscellaneous.............................. 2,016
------------
Total expenses........................ $ 220,145
------------
Deduct -
Preliminary reduction of Investment
Adviser fee (Note 2)...................... $ 68,550
Preliminary reduction of Distribution
fee - Individual shares (Note 3).......... 6,413
Preliminary allocation of expenses to
Investment Adviser (Note 2)............... 12,292
Reduction of custodian fee - Institutional
shares (Note 1C).......................... 1,155
Reduction of custodian fee - Institutional
Service shares (Note 1C).................. 3,204
Reduction of custodian fee - Individual
shares (Note 1C).......................... 1,147
------------
Total deductions...................... $ 92,761
------------
Net expenses.......................... $ 127,384
------------
Net investment income............... $ 7,626
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized loss on investments (identified
cost basis)................................... $ (673)
Change in unrealized appreciation of
investments................................... 2,020,835
------------
Net realized and unrealized gain on investments. $ 2,020,162
------------
Net increase in net assets from operations.. $ 2,027,788
==============
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 1999 Dec. 31, 1998
- ------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From Operations --
<S> <C> <C>
Net investment income (loss)..................................... $ 7,626 $ (10,128)
Net realized loss on investments................................. (673) (297,507)
Change in unrealized appreciation of investments................. 2,020,835 198,703
------------ ------------
Increase (decrease) in net assets from operations.............. $ 2,027,788 $ (108,932)
------------ ------------
Distributions to shareholders:
From net investment income - Institutional shares................ $ 5,316 $ -
From net investment income - Institutional service shares........ 11,162 -
From net realized gain - Institutional service shares............ - (2,644)
From net realized gain income - Individual shares................ - (941)
In excess of realized gains - Institutional service shares....... - (1,743)
In excess of investment income - Institutional shares............ (4,684) -
In excess of investment income - Institutional service shares.... (9,865) -
------------ ------------
Total distributions to shareholders............................ $ (31,027) $ (5,328)
------------ ------------
Fund share transactions -- Institutional shares:
Proceeds from shares sold...................................... $ 5,400,000 $ -
Issued to shareholders in payment of distributions declared.... 10,000 -
Cost of shares reacquired...................................... (436,120) -
------------ ------------
Net increase in net assets from fund share transactions
- Institutional shares....................................... $ 4,973,880 $ -
------------ ------------
Institutional Service shares:
Proceeds from shares sold...................................... $ 4,199,535 $ 2,656,493
Issued to shareholders in payment of distributions declared.... 20,988 3,611
Cost of shares reacquired...................................... (1,148,721) (2,222,070)
------------ ------------
Net increase in net assets from fund share transactions
- Institutional Service shares............................... $ 3,071,802 $ 438,034
------------ ------------
Individual shares:
Proceeds from shares sold...................................... $ 566,046 $ 3,115,248
Issued to shareholders in payment of distributions declared.... - 896
Cost of shares reacquired...................................... (839,599) (378,693)
------------ ------------
Net increase (decrease) in net assets from fund share transactions
- Individual shares.......................................... $ (273,553) $ 2,737,451
------------ ------------
Total net increase from fund share transactions (Note 4)......... 7,772,129 3,175,485
------------ ------------
Net increase in net assets..................................... $ 9,768,890 $ 3,061,225
NET ASSETS:
At beginning of period............................................. 13,143,870 10,082,645
------------ ------------
At end of period................................................... $ 22,912,760 $ 13,143,870
============== ==============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
INCLUDED IN NET ASSETS............................................. $ (23,401) $ -
============== ==============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
From Feb. 22, 1999
(start of business) to Six Months Ended
June 30, 1999 June 30, 1999
---------------------------------------------------
Institutional Institutional Individual
Shares Service Shares Shares
- ---------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.000 $ 11.790 $ 11.710
--------- --------- ---------
Income from investment operations:
Net investment income (loss)(*) $ 0.011 $ 0.011 $ (0.009)
Net realized and unrealized gain 1.379 0.829 0.799
--------- --------- ---------
Total from investment operations $ 1.390 $ 0.840 $ 0.790
--------- --------- ---------
Less distributions:
Dividends from investment income $ (0.011) $ (0.011) $ -
Distributions from capital gains - - -
Return of capital(+) (0.009) (0.009) -
--------- --------- ---------
Total distributions $ (0.020) $ (0.020) $ -
--------- --------- ---------
Net asset value, end of period $ 11.370 $ 12.610 $ 12.500
========== ========== ==========
Total return(1) 13.90% 7.13% 6.75%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) $ 5,695 $ 13,281 $ 3,937
Ratio of total expenses to average net assets(*)(3) 1.25%(2) 1.32%(2) 2.03%(2)
Ratio of net income (loss) to average net assets 0.28%(2) 0.21%(2) (0.46%)(2)
Portfolio turnover rate 33% 33% 33%
- -----------------------------------------------------------------------------------------------------------------
(*)During the periods presented, the investment adviser and the distributor
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 Feb. 22, 1999
(start of business) to Six Months Ended
June 30, 1999 June 30, 1999
- --------------------------------------------------------------------------------------------------------------------
Institutional Institutional Individual
Shares Service Shares Shares
Net investment loss per share $ (0.024) $ (0.035) $ (0.033)
========== ========== ==========
Annualized Ratios (as a percentage of average net assets):
Expenses 2.13%(2) 2.20%(2) 3.25%(2)
Net investment loss (0.60%)(2) (0.67%)(2) (1.68%)(2)
- ----------------------------------------------------------------------------------------------------------------------
(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 periods presented, 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 1.19% for the Institutional shares, 1.26% for the
Institutional Service shares and 1.97% for the Individual shares.
(+)Amount represents a distribution in excess of net investment income.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS - continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
From May 1, 1997
Year Ended (start of business) to
December 31, 1998 December 31, 1997
----------------------------------------------------------
Institutional Individual Institutional Individual
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 from investment operations:
Net investment income (loss)(*) $ 0.003 $ (0.036) $ (0.000)+ $ (0.024)
Net realized and unrealized gain (loss) (0.097) (0.118) 1.930 1.934
--------- --------- --------- ---------
Total from investment operations $ (0.094) $ (0.154) $ 1.930 $ 1.910
--------- --------- --------- ---------
Less distributions:
Dividends from investment income $ - $ - $ - $ -
Distributions from capital gains (0.004) (0.006) (0.040) (0.040)
Return of capital(++) (0.002) - - -
--------- --------- --------- ---------
Total distributions $ (0.006) $ (0.006) $ (0.040) $ (0.040)
--------- --------- --------- ---------
Net asset value, end of period $ 11.790 $ 11.710 $ 11.890 $ 11.870
========== ========== ========== ==========
Total return(1) (0.80%) (1.30%) 19.31% 19.11%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) $ 9,174 $ 3,970 $ 8,686 $ 1,397
Ratio of total expenses to average net assets(*)(3) 1.49% 1.95% 1.73%(2) 2.24%(2)
Ratio of net income (loss) to average net assets 0.02% (0.42%) (0.01%)(2) (0.44%)(2)
Portfolio turnover rate 50% 50% 14% 14%
- --------------------------------------------------------------------------------------------------------------
(*) During the periods presented, the investment adviser and the distributor
waived all or a portion of their fees and the investment adviser was
allocated a portion of the operating expenses. In addition, for the period
ended December 31, 1997 the administrator waived their fee. Had such actions
not been undertaken, net investment loss per share and the ratios would have
been as follows:
Net investment loss per share $ (0.170) $ (0.212) $ (0.047) $ (0.212)
========== ========== ========== ==========
Annualized Ratios (as a percentage of average net assets):
Expenses 2.64% 4.00% 4.50%(2) 5.69%(2)
Net investment loss (1.13%) (2.47%) (2.78%)(2) (3.89%)(2)
- ----------------------------------------------------------------------------------------------------------------
(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 periods presented, 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 as follows:
1998 1997
-------------------------------------------------------
Institutional Individual Institutional Individual
Service Shares Shares Service Shares Shares
- -------------------------------------------------------------------------------------------------------------
Actual ratio of net expenses 1.42% 1.88% 1.48% 1.99%
- -------------------------------------------------------------------------------------------------------------
(+) Amount represents less than ($0.001) per share.
(++)Amount represents a distribution in excess of capital gains.
</TABLE>
See notes to financial statements
<PAGE>
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 if
those prices are deemed to be representative of market values at the
close of business. 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 or deemed not to be
representative of market values at the close of business, restricted
securities, and other assets are valued at their fair value as
determined in good faith by or at the direction of the Trustees of the
Trust. 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.
At December 31, 1998, the fund, for federal income tax purposes, had a
capital loss carryover of $140,614, which will reduce taxable income
arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distribution to shareholders which would otherwise be necessary to
relieve the fund of any liability for federal income or excise tax.
Pursuant to the Code, such capital loss carryover will expire on
December 31, 2006.
At December 31, 1998, net capital losses of $156,893 attributable to
security transactions incurred after October 31, 1998 are treated as
arising on the first day of the fund's current taxable year.
<PAGE>
E. Distributions - 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, are 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.
F. Multiple Classes of Shares of Beneficial Interest - The fund offers an
Individual Share Class, Institutional Service Share Class and an
Institutional Share Class. 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, 1999 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 months
ended June 30, 1999, 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 of $68,550. In addition, $12,292 of expenses were allocated on a
preliminary basis to the investment adviser. 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 months ended June 30, 1999, the
effective annual rate was 0.07%. 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 preliminary reduction of its fee for the six months
ended June 30, 1999, of $6,413 for the 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 months ended June
30, 1999, 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 Year Ended
June 30, 1999 (unaudited) December 31, 1998
---------------------------------------------------------------------------------
Institutional Institutional
Institutional Service Individual Service Individual
Shares Shares Shares Shares Shares
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Sold 539,326 371,832 51,117 228,111 254,404
Shares issued to shareholders in
payment of distribution declared 895 1,693 - 271 68
Shares Reacquired (39,326) (98,393) (75,296) (180,991) (33,091)
-------- -------- -------- -------- --------
Net increase (decrease) 500,895 275,132 (24,179) 47,391 221,381
========== ========== ========== ========== ==========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations for the six months ended June 30, 1999, were
$13,744,503 and $5,972,849, respectively.
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in the value of the
investment securities owned at June 30, 1999, as computed on a federal income
tax basis, are as follows:
Aggregate cost................................$ 20,310,856
===========
Gross unrealized appreciation.................$ 3,342,794
Gross unrealized depreciation................. (546,364)
-----------
Net unrealized appreciation...................$ 2,796,430
===========
(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 six months ended June 30, 1999.
<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 TO THE CATHOLIC ADVISORY BOARD
His Eminence John Cardinal O`Connor
INVESTMENT ADVISER
Wright Investors' Service
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
(800) 888-9471
e-mail: [email protected]
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.
