As filed with the Securities and Exchange Commission on April 27, 2000.
1933 Act File No. 333-17161
1940 Act File No. 811-07951
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 6 [x]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 7 [x]
Catholic Values Investment Trust
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(Exact Name of Registrant as Specified in Charter)
255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
617-482-8260
-----------------------------------
(Registrant's Telephone Number)
Alan R. Dynner
255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective pursuant to Rule 485
(check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[ ] On (date) pursuant to paragraph (a)(1)
[x] On May 1, 2000 pursuant to paragraph (b)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
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Description of art work on cover of prospectus
Catholic Values Investment Trust logo --
Light blue solid circle with letters CVIT printed over it in blue & violet.
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CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
Individual Shares
Institutional Service Shares
Institutional Shares
PROSPECTUS
MAY 1, 2000
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined whether the information
in this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.
An investment in a mutual fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
<PAGE>
TABLE OF CONTENTS
Page
OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUND......... 1
Objective.......................................................... 2
Principal Investment Strategies.................................... 2
Principal Risks.................................................... 2
Who May Want to Invest............................................. 2
Past Performance................................................... 2
Fees and Expenses.................................................. 3
INFORMATION ABOUT YOUR ACCOUNT.......................................... 4
How the Fund Values its Shares..................................... 4
Purchasing Shares.................................................. 4
Selling Shares..................................................... 5
Exchanging Shares.................................................. 5
DIVIDENDS AND TAXES..................................................... 6
MANAGING THE FUND....................................................... 7
FINANCIAL HIGHLIGHTS.................................................... 9
How to Use this Prospectus
Reading this prospectus will help you decide if investing in the fund is
right for you. Please keep this prospectus for future reference. Included
in this prospectus are descriptions telling you about the fund's:
(Graphic -- ship's wheel)
OBJECTIVE: what the fund seeks to achieve.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES: how the fund intends to achieve its investment
objective and the strategies used by Wright Investors' Service, the fund's
investment adviser.
(Graphic -- life preserver)
PRINCIPAL RISKS: the risks associated with the fund's primary investments.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST: decide if the fund is a suitable investment for you.
(Graphic -- ship's log)
PAST PERFORMANCE: the total return on your investment, including income from
dividends and interest, and the increase or decrease in price over various time
periods.
(Graphic -- two crossed anchors with a $ in the center)
FEES AND EXPENSES: what overall costs you bear by investing in the fund.
<PAGE>
OVERVIEW OF PRINCIPAL STRATEGIES AND INFORMATION ABOUT THE FUND
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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, Catholic Values Investment Trust Equity Fund,
is currently available.
THE SECURITY SELECTION PROCESS
THE APPROVED WRIGHT INVESTMENT LIST (AWIL)
Using fundamental investment analysis techniques, Wright Investors'
Service, the fund's investment adviser, systematically identifies those
companies in the Worldscope(R) database that meet minimum standards of
prudence and thus are suitable for consideration by fiduciary investors.
Wright considers companies meeting these requirements to be "investment
grade." These companies are then extensively analyzed and evaluated to
identify those which meet Wright's standards of investment quality. These
standards measure the investment acceptance, financial strength,
profitability, stability and growth of a company. Companies meeting or
exceeding these standards are eligible for inclusion on an AWIL. There are
separate AWILs for U.S. companies, non-U.S. companies and small companies.
All the companies on the AWILs are considered by Wright to be "Blue Chips."
This means that the companies have established records of earnings
profitability and equity growth. All these companies have established
investment acceptance and active, liquid markets.
- ------ SIDE BAR TEXT-------
Fundamental Analysis and
"Bottom-up" Approach
to Investing
Fundamental analysis is the analysis of company financial statements to
forecast future price movements using past records of assets, earnings, sales,
products, management and markets. It differs from technical analysis which
relies on price and volume movements of stocks and does not concern itself with
financial statistics.
Bottom-up investing is the analysis of company information before
considering the impact of industry and economic trends. It differs from the
"top-down" approach which looks first at the economy, then the industry and last
the company.
Blue Chip
Financial dictionaries define Blue Chip as the common stock of a company that
has a long record of profit growth and dividend payment and a reputation for
quality management, products and service. Wright further refines this to include
only securities issued by companies that meet its quanlitative standards.
- ------ END SIDE BAR TEXT ------
THE CATHOLIC ADVISORY BOARD
The fund's proposed portfolio and any subsequent additions are reviewed by
the Catholic Advisory Board ensuring that the companies offer products and
services and undertake activities that are consistent with the core
teachings of the Catholic Church.
The Catholic Advisory Board is comprised of independent lay members
familiar with the basic tenets and core teachings of the Roman Catholic
Church. The Catholic Advisory Board identifies companies whose products,
services and/or activities are substantially consistent with the core
Catholic Church teachings, based on the best publicly available information
obtained by Wright and information received from shareholders and other
interested sources. Its 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.
<PAGE>
Catholic Values Investment Trust Equity Fund
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CUSIP: Individual Shares 148916109 Ticker Symbol: CITRY (Unofficial)
Institutional Service Shares 148916307 CITSY (Unofficial)
Institutional Shares 148916208 CITIY (Unofficial)
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks long-term growth of capital and reasonable current income
from investments consistent with the core values of the Catholic Church.
Reasonable income means the income that can be achieved from an equity
portfolio.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, the fund invests at least 80% of its net assets
in the equity securities of well-established companies. These securities are
included on the quality oriented Approved Wright Investment Lists (AWILs). Up to
30% of the fund's investments may be in foreign securities or American
Depositary Receipts (ADRs). ADRs represent interests in an underlying security.
Using a bottom-up fundamental approach, Wright evaluates a company's recent
valuation and price/earnings momentum to determine whether it presents the best
value in terms of current price, and current and forecasted earnings. The
investment process at Wright is directed and controlled by an investment
committee of experienced analysts. The committee's selection suggestions
are reviewed by the Catholic Advisory Board.
Typically, the fund sells an individual security when it no longer
meets Wright's investment criteria or the Catholic Advisory Board's
religious criteria.
For temporary defensive purposes, the fund may hold cash or invest without
limit in short-term debt securities. Although the fund would do this to reduce
losses, defensive investments may conflict with and hurt the fund's efforts to
achieve its objective.
The fund's objective may be changed by the trustees without shareholder
approval.
(Graphic -- life preserver)
PRINCIPAL RISKS
The Catholic Advisory Board has sole discretion in determining which
companies meet the fund's religious criteria. When a company violates core
Catholic teachings, the board asks Wright to remove it from the portfolio. This
policy may lead to the sale of a security at a disadvantageous time causing a
loss to the fund or adverse tax consequences.
Because the fund only considers securities that meet its investment and
religious criteria, the fund's return may be lower than if the fund considered
only investment criteria when selecting investments.
In addition to market and management risk, there are risks associated with
investing in foreign countries. These include currency risk (changes in foreign
currency rates reducing the value of the fund's assets), seizure, expropriation
or nationalization of a company's assets, and the impact of political, social or
diplomatic events.If an ADR is not sponsored by the issuer of the underlying
security, there may be reduced access to information about the issuer.
The fund cannot eliminate risk or assure achievement of its objective. If
the risks above are realized you may lose money on your investment in the fund.
- ------ SIDE BAR TEXT------
A Word About Risk
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o MARKET RISK: When the price of stock falls, the value of the
fund's investments may fall and you could lose money on your
investment.
o MANAGEMENT RISK: Wright's strategy may not produce the expected
results, causing losses.
- ------ END SIDE BAR TEXT--------
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is designed for individuals, dioceses, parishes, other
institutions and organizations seeking a long-term growth fund that does
not invest in companies whose products, services and activities violate the
core values and teachings of the Roman Catholic Church.
(Graphic -- ship's log)
PAST PERFORMANCE
The information on the next page shows the fund's performance of its
Individual Shares for the periods indicated through December 31, 1998.
Total return includes reinvestment of all dividends and capital gain
distributions, and reflects fund expenses. As with all mutual funds,
past performance does not guarantee future results.
<PAGE>
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
20%
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10% 16.91%
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0%
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(10)% -1.30%
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1998 1999
Best quarter: 16.98% (4th quarter 1998)Worst quarter: -20.05% (3rd quarter 1998)
The fund's average annual return is compared with that of the Standard and
Poor's 500 Index (S&P 500). While the fund does not seek to match the returns of
the S&P 500, this unmanaged index is a good indicator of general stock market
performance. The S&P 500, unlike the fund, does not incur fees or charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1999
1 Year Life of the Class
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Individual Shares 16.91% 12.66%(1)
Institutional Service Shares 17.75% 13.25%(1)
Institutional Shares _ 25.12%(2)
S&P 500 21.01% 25.44%
(1)From May 1, 1997 (start of business).
(2)From February 22, 1999 (start of business).
(Graphic -- two crossed anchors with a $ in the center)
FEES AND EXPENSES
The table escribes the fees and expenses you may pay if you buy and hold
shares of the fund.
Institutional
Individual Service Institutional
Shares Shares Shares(4)
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Shareholder Fees
(paid directly from
your investment)
Maximum deferred sales charge(load) 1.00%(1) None None
(% of redemption proceeds)
Annual Fund Operating Expenses
(deducted directly from
fund assets)
Management fee 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.75% 0.25% None
Other expenses 1.45% 0.85% 0.99%
- -------------------------------------------------------------------------------
Total Operating Expenses 2.95% 1.85% 1.74%
Fee Waiver and Expense
Reimbursement(2)(3) (0.95%) (0.46%) (0.46%)
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NET OPERATING EXPENSES(2) 2.00% 1.39% 1.28%
(1)Shares redeemed during the first year after purchase are subject to
a fee of 1.00% deducted from redemption proceeds.
(2)Under an expense offset arrangement, custodian fees are reduced by credits
based on the fund's average daily cash balance. Under SEC reporting
requirements, these reductions are not reflected in the expense ratios
above. If reflected, the ratios would be:
NET OPERATING EXPENSES AFTER
CUSTODIAN FEE REDUCTIONS 1.97% 1.36% 1.25%
(3)Under a written agreement, Wright waives a portion of its advisory fee
and assumes operating expensesto the extent necessary to limit expense
ratios to 1.99%, 1.50%, and 1.25%.
(4)Annualized
- ------ SIDE BAR TEXT ------
Understanding
Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- ------END SIDE BAR TEXT ------
EXAMPLE
The following example allows you to compare the cost of investing in the
fund to the cost of investing in other mutual funds by showing what your
costs may be over time. It uses the same assumptions that other funds use
in their prospectuses: $10,000 initial investment, 5% total return for each
year, fund operating expenses remain the same for each period and
redemption after the end of each period.
Your actual costs may be higher or lower, so use this example for
comparison only. Based on these assumptions your costs at the end of each
period would be:
1 Year 3 Years 5 Years 10 Years
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Individual Shares with
redemption $303 $ 627 $1,078 $2,327
Individual Shares without
redemption 203 627 1,078 2,327
Institutional Service Shares 142 440 761 1,669
Institutional Shares 130 406 702 1,545
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<PAGE>
INFORMATION ABOUT YOUR ACCOUNT
HOW THE FUND VALUES ITS SHARES
The price at which you buy or sell fund shares is the net asset value per
share or NAV. The price for each share class is determined by adding the value
of the fund's cash and other assets attributable to that class, deducting
liabilities, and then dividing that amount by the total number of shares
outstanding for that class.
The NAV is calculated for each class at the close of regular trading of the
New York Stock Exchange (normally 4:00 p.m. New York time) each day the Exchange
is open. It is not calculated on days the Exchange is closed. The price for a
purchase or redemption of fund shares is the next NAV calculated after your
order is received. The NAV for each class can differ.
When the fund calculates its NAV it values its portfolio securities at the
last current sales price on the market where the security is normally traded.
Securities that cannot be valued at these prices will be valued by Wright at
fair value in accordance with procedures adopted by the trustees. For example,
this may happen when an event occurs that affects the value of a security at a
time it is not trading, such as during a weekend, or after the close of the
Exchange, or if the security is illiquid.
Foreign securities may trade during hours and on days that the Exchange is
closed and the fund's NAV is not calculated. Although the fund's NAV may be
affected, you will not be able to purchase or redeem shares on these days.
PURCHASING SHARES
PURCHASING SHARES FOR CASH
Shares of each class may be purchased without a front-end sales charge at
NAV. There are no investment minimums for purchases through bank trust
departments or qualified retirement plans. The fund may reject any purchase
order, or limit or suspend the offering of its shares.
Type of Initial Additional
Account Investment Investment
- -------------------------------------------------------------------------------
Individual Shares $1,000 None
Institutional Service Shares $500,000 None
Institutional Shares $3,000,000 None
Automatic Investments $100 $100
(monthly or quarterly)
Authorized dealers, including investment dealers, banks or other
institutions, may impose investment minimums higher than those imposed by the
fund. They may also charge for their services. There are no transaction charges
if you purchase your shares directly from the fund.
HOW TO BUY SHARES
o If you buy shares directly from the fund, please refer to your
Shareholder Manual for additional instructions on how to buy fund shares.
o If you buy shares through bank trust departments or other fiduciary
institutions, please consult your trust or investment officer.
o If you buy shares through a broker, please consult your broker for
purchase instructions.
o If you buy shares through an account with a registered investment adviser
or financial planner, please consult your investment adviser or planner.
o If you buy shares through a retirement plan, please consult your plan
documents or speak with your plan administrator.
- -------SIDE BAR TEXT---------
Paying for Shares
You may buy shares by wire, check, Federal Reserve draft, or other
negotiable bank draft, payable in U.S. dollars and drawn on U.S. banks. Third
party checks will not be accepted. A charge is imposed on any returned checks.
- -------END SIDE BAR TEXT--------
PURCHASING SHARES THROUGH EXCHANGE OF SECURITIES
You may buy shares by delivering to the fund's custodian securities that
meet the fund's investment objective and policies, have easily determined
market prices and are otherwise acceptable. Exchanged securities must have
<PAGE>
a minimum aggregate value of $5,000. Securities are valued as of the date
they are received by the fund. If you want to exchange securities for fund
shares, you should furnish a list with a full description of these
securities that are proposed to be delivered. See the Shareholder Manual
for detailed instructions.
DISTRIBUTION AND SERVICE PLANS
The fund has adopted a 12b-1 plan permitting it to pay a fee to finance the
distribution of its shares. Wright Investors' Service Distributors, Inc.
(WISDI), the principal underwriter and distributor of the fund's shares,
receives a distribution fee of up to 0.75% of the average daily net assets
of the Individual Share class and up to 0.25% of the Institutional Service
Share class's average daily net assets. Because this fee is paid on an
ongoing basis, it may cost you more than other types of sales charges over
time.
The fund has also adopted a service plan. This plan allows WISDI to be
reimbursed for payments to intermediaries for providing account
administration and personal and account maintenance services to fund
shareholders. The annual service fee may not exceed 0.25% of the average
daily net assets of each class of shares.
SELLING SHARES
You may redeem or sell fund shares on any business day. NO REDEMPTION
REQUEST WILL BE PAID UNTIL YOUR SHARES HAVE BEEN PAID FOR IN FULL. IF THE
SHARES TO BE REDEEMED WERE PURCHASED BY CHECK, THE REDEMPTION PAYMENT WILL
BE DELAYED UNTIL THE CHECK HAS BEEN COLLECTED, WHICH MAY TAKE UP TO 15 DAYS
FROM THE DATE OF PURCHASE. Telephone, mail and internet redemption
procedures are described in the Shareholder Manual.
In times of drastic economic or market conditions, you may have difficulty
selling shares by telephone or the internet so you should send your request
by mail or overnight delivery. These redemption options may be modified or
terminated without notice to shareholders.
Redemption requests received in "proper form" before 4:00 p.m. New York
time will be processed at that day's NAV. "Proper form" means that the fund
has received your request, all shares are paid for, and all documentation
along with any required signature guarantee, are included. The fund
normally pays redemption proceeds by check within one business day to the
address of record. Payment will be by wire if you specified this option on
your account application.
For more information about selling your shares, please refer to your
Shareholder Manual, or consult your trust officer, adviser or plan
administrator.
REDEMPTIONS IN-KIND
Although the fund expects to pay redemption proceeds in cash, it reserves
the right to redeem shares in-kind giving the shareholder readily
marketable portfolio securities instead of cash. This is done to protect
the interests of remaining shareholders. If this occurs, you will incur
transaction costs if you sell the securities.
INVOLUNTARY REDEMPTION
If your account falls below $500 the fund may redeem your shares. You will
receive notice 60 days before this happens. Your account will not be
redeemed if the balance is below the minimum due to investment losses. No
redemption fee or contingent deferred sales charges will be assessed on
involuntary redemptions.
- -----SIDE BAR TEXT-----
Deferred Sales Charge
If you redeem individual shares within the first year after purchase, you will
pay a contingent deferred sales charge of 1.0%. This charge may be waived
under certaincircumstances. Please refer to your Shareholder Manual for details
on the contingent deferred sales charge.
- -----END SIDE BAR TEXT----
EXCHANGING SHARES
Shares of the fund may be exchanged for shares of the same class of other
Wright funds. The exchange of shares results in the sale of the fund's
shares and the purchase of another fund's shares. An exchange results in a
gain or loss and is therefore a taxable event for you. For more information
on exchanging shares please see the Shareholder Manual or consult your
adviser.
<PAGE>
DIVIDENDS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Unless you tell us that you want to receive your distributions in cash,
they will be reinvested automatically in fund shares. The fund generally
makes two different kinds of distributions:
o CAPITAL GAINS FROM THE SALE OF PORTFOLIO SECURITIES. The fund distributes
any net realized capital gains annually, normally in December.
o NET INVESTMENT INCOME FROM INTEREST OR DIVIDENDS RECEIVED. The fund
distributes its investment income at least semi-annually. Most of the
fund's distributions are expected to be from capital gains.
TAX CONSEQUENCES
Buying, selling, holding or exchanging mutual fund shares may result in a
gain or a loss and is a taxable event. Distributions, whether received in
cash or additional fund shares, are subject to federal income tax.
Transaction Tax Status
- -------------------------------------------------------------------------------
Income dividends Ordinary income
Short-term capital gains Ordinary income
Long-term capital gains Capital gains
The fund may be subject to foreign withholding taxes or other foreign taxes
on some of its foreign investments. This will reduce the yield or total
return on those investments.
Your investment in the fund may have additional tax consequences.
Please consult your tax advisor on state, local or other applicable
tax laws.
- ------- SIDE BAR TEXT -------
Tax Considerations
Unless your investment is in a tax-deferred account you may want to avoid:
o Investing in the fund near the end of its fiscal year. If the fund makes a
capital gains distribution you will receive some of your investment back as a
taxable distribution.
o Selling shares at a loss for tax purposes and then making an identical
investment within 30 days. This results in a "wash sale" and you will not be
allowed to claim a tax loss.
- ------- END SIDE BAR TEXT --------
<PAGE>
MANAGING THE FUND
Wright Investors' Service, Inc. is a leading independent international
investment management and advisory firm with more than 35 years experience.
Wright manages about $4 billion of assets in portfolios of all sizes and
styles as well as a family of mutual funds. The company developed
Worldscope(R), one of the world's largest and most complete databases of
financial information, which currently includes more than 23,000
corporations in 54 nations.
Wright manages the fund's investments. Wright is located at 440 Wheelers
Farms Road, Milford, CT 06460. For the fiscal year ended December 31, 1999,
Wright received an advisory fee at the annual rate of 0.269% of the fund's
average daily net assets. Wright's fee may be as much as 0.75% of the
fund's average daily net assets.
INVESTMENT COMMITTEE
An investment committee of senior officers controls the investment
selections, policies and procedures of the fund. These officers are all
experienced analysts with different areas of expertise and over 195 years
of combined service with Wright. The investment committee consists of the
following members:
<TABLE>
<CAPTION>
Committee Member Title Joined Wright in
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter M. Donovan, CFA President and Chief Executive Officer 1966
Judith R. Corchard Chairman of the investment committee 1960
Executive Vice President - Investment Management
Jatin J. Mehta, CFA Executive Vice President 1969
Michael F. Flament, CFA Senior Vice President - Investment and Economic Analysis 1972
James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982
Amit S. Khandwala Senior Vice President - International Investments 1986
Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985
Patricia J. Pierce, CFA Senior Vice President - Equities 1999
George F. Faherty, CFA Vice President - Equities 2000
</TABLE>
CATHOLIC ADVISORY BOARD
The Catholic Advisory Board reviews the investments selected by Wright. The
members of the Catholic Advisory Board are:
Board Member Title
- ------------------------------------------------------------------------------
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 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 fund, His Eminence John
Cardinal O'Connor is the ecclesiastical advisor to the Catholic Advisory
Board.
Each member of the board is involved in various Catholic
organizations and activities while in contact with numerous Catholic
institutions and clergy.
- ------ SIDE BAR TEXT-----
Administrator
Eaton Vance Management serves as the fund's administrator and is responsible for
managing its daily business affairs. Eaton Vance's services include operating
the fund's order room, recordkeeping, preparing and filing documents required to
comply with federal and state securities laws, supervising the activities of the
fund's custodian and transfer agent, providing assistance in connection with the
trustees' and shareholders' meetings and other necessary administrative
services.
- ------ END SIDE BAR TEXT -------
<PAGE>
THE EURO
The European countries have adopted the Euro as their common currency. Existing
national currencies of these countries will be sub-currencies of the Euro until
July 1, 2002, when the old currencies will disappear entirely. The introduction
of the Euro presents some possible risks, which could adversely affect the value
of securities held by the fund, as well as possible adverse tax consequences.
There could be unpredictable effects on trade and commerce, resulting in
increased volatility for all financial markets.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights will help you understand the fund's financial
performance since the fund started.Certain information reflects financial
results for a single fund share. Total return shows how much your investment in
the fund increased or decreased during the period, assuming you reinvested all
dividends and distributions. Deloitte & Touche LLP, independent certified public
accountants, audited this information. Their reports, along with the funds'
financial statements, are included in the funds' annual report, which is
available upon request.
FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
From Feb. 22, 1999
(start of business) to Year Ended
Dec. 31, 1999 Dec. 31, 1999
----------------------------------------------------
Institutional Institutional Individual
Shares(4) Service Shares(4) Shares(4)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.000 $ 11.790 $ 11.710
--------- --------- ---------
Income from investment operations:
Net investment income (loss(*) $ 0.006 $ (0.005) $ (0.074)
Net realized and unrealized gain 2.504 2.095 2.054
--------- --------- ---------
Total income from investment operations $ 2.510 $ 2.090 $ 1.980
--------- --------- ---------
Less distributions:
Dividends from investment income $ (0.006) $ - $ -
Distributions from capital gains - - -
Return of capital(+) (0.014) (0.020) -
--------- --------- ---------
Total distributions $ (0.020) $ (0.020) $ -
--------- --------- ---------
Net asset value, end of period $ 12.490 $ 13.860 $ 13.690
========== ========== ==========
Total return(1) 25.12% 17.75% 16.91%
Ratios/Supplemental Data(*):
Net assets, end of period (000 omitted) $ 6,011 $ 17,021 $ 4,069
Ratio of net expenses to average net assets 1.28%(2) 1.39% 2.00%
Ratio of net expenses after custodian fee reduction
to average net assets(3) 1.25%(2) 1.36% 1.97%
Ratio of net investment income (loss) to average net assets 0.07%(2) (0.04%) (0.61%)
Portfolio turnover rate 94% 94% 94%
- ---------------------------------------------------------------------------------------------------------------------
<FN>
(*)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 Year Ended
Dec. 31, 1999 Dec. 31, 1999
- -----------------------------------------------------------------------------------------------------------------------
Institutional Institutional Individual
Shares Service Shares Shares
Net investment loss per share $ (0.033) $ (0.063) $ (0.189)
========== ========== ==========
Annualized Ratios (as a percentage of average net assets):
Expenses 1.74%(2) 1.85% 2.95%
Expenses after custodian fee reduction3 1.71%(2) 1.82% 2.92%
Net investment loss (0.39%)(2) (0.50%) (1.56%)
- --------------------------------------------------------------------------------------------------------------------------
(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)Custodian fees were reduced by credits resulting from cash balances the fund
maintained with the custodian (Note 1C). The computation of total expenses
to average daily net assets reported above is computed without consideration
of such credits.
(4)Certain per share amounts are based on average shares outstanding.
(+) Amount represents a distribution in excess of net investment income.
</FN>
</TABLE>
<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 (loss) 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 income (loss) 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 net expenses to average net assets 1.49% 1.95% 1.73%(2) 2.24%(2)
Ratio of expenses after custodian fee reduction
to average net assets(3) 1.42% 1.88% 1.48%(2) 1.99%(2)
Ratio of net investment income (loss) to
average net assets 0.02% (0.42%) (0.01%)(2) (0.44%)(2)
Portfolio turnover rate 50% 50% 14% 14%
- -----------------------------------------------------------------------------------------------------------------------
<FN>
(*) 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)
Expenses after custodian fee reduction(3) 2.57% 3.93% 4.25%(2) 5.44%(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 las
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 total expenses to average daily net assets reported
above is computed without consideration of such credits.
(+) Amount represents less than ($0.001) per share.
(++)Amount represents a distribution in excess of capital gains.
</FN>
</TABLE>
FOR MORE INFORMATION
Additional information about the fund's investments is available in the
fund's semi-annual and annual reports to shareholders. The fund's annual
report contains a discussion of the market conditions and investment
strategies that affected the fund's performance over the past year.
You may want to read the statement of additional information (SAI) for more
information on the fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the
SAI, request other information or get answers to your questions about
the fund by writing or calling:
Catholic Values Investment Trust
c/o Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, CT 06460
(888) 974-4486
e-mail: [email protected]
Copies of documents and application forms can be viewed and downloaded from
the fund's website: www.catholicinvestment.com. Text-only versions of fund
documents can be viewed online or downloaded from the SEC's web site at
http://www.sec.gov. You can also obtain copies by visiting the SEC's Public
Reference Room in Washington DC. For information on the operation of the Public
Reference Room, call (800) SEC-0330. Copies of documents may also be obtained by
sending your request and the appropriate duplicating fee to the SEC's Public
Reference Section, Washington, DC 20549-0102 or by electronic mail at
[email protected].
Investment Company Act file number......................811-079511
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Individual Shares
Institutional Shares
Institutional Service Shares
May 1, 2000
CATHOLIC VALUES INVESTMENT TRUST
255 State Street
Boston, Massachusetts 02109
------------------------------------------------------------------------
Catholic Values Investment Trust Equity Fund
------------------------------------------------------------------------
TABLE OF CONTENTS
The Fund's Investment Policies..............................2
Additional Investment Policies and Other Information........3
Additional Information about the Trust......................6
Investment Restriction......................................7
Trustee, Officers and the Catholic Advisory Board...........7
Control Person and Principal Holders of Shares.............10
Investment Advisory and Administrative Services............10
Custodian and Transfer Agent...............................12
Independent Certified Public Accountants...................12
Brokerage Allocation.......................................12
Pricing of Shares..........................................13
Principal Underwriter......................................13
Service Plan...............................................14
Taxes ...................................................15
Calculation of Performance and Yield Quotations............16
Financial Statements.......................................17
Appendix...................................................18
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by the
current Prospectus of Catholic Values Investment Trust (the "Trust")
offering shares of Catholic Values Investment Trust Equity Fund (the
"fund"), dated May 1, 2000, as supplemented from time to time, which is
incorporated herein by reference. This Statement of Additional Information
should be read in conjunction with the Prospectus. A copy of the Prospectus may
be obtained without charge from Wright Investors' Service Distributors, Inc.,
440 Wheelers Farms Road, Milford, CT 06460 (Telephone: 888-974-4486) or from the
fund's website (http://www.catholicinvestment.com).
<PAGE>
THE FUND'S INVESTMENT POLICIES
The fund is a series of a diversified, open-end management investment
company. The fund's objective is described in the Prospectus.
The fund will, through continuous supervision by Wright and the Catholic
Advisory Board, pursue its objective by investing in a broadly diversified
portfolio consisting primarily of equity securities of high-quality,
well-established and profitable U.S. and non-U.S. companies that offer products
or services and undertake activities that are consistent with the core teachings
of the Catholic Church.
HOW INVESTMENTS ARE SELECTED
Securities selected for the fund are drawn from investment lists prepared
by Wright and known as The Approved Wright Investment List (the "AWIL") and The
International Approved Wright Investment List (the "International AWIL").
Securities drawn from these Investment Lists will be reviewed for compliance
with the core teachings of the Catholic Church by the Catholic Advisory Board,
which is appointed by the Board of Trustees of the Trust (the "trustees") and is
made up of prominent lay members of the Catholic Church.
The Approved Wright Investment Lists (AWIL and International AWIL). Wright
systematically reviews about 10,000 U.S. companies and about 13,000 non-U.S.
companies in The Worldscope(R) database which it developed. This review first
identifies those companies which meet the minimum standards of prudence (e.g.
the value of the company's assets and shareholders' equity exceeds certain
minimum standards) and thus are suitable for consideration by fiduciary
investors. Companies meeting these requirements (about 4,000 companies) are
considered by Wright to be suitable for prudent investment. They may be large or
small, may have their securities traded on exchanges or over the counter and may
include companies not currently paying dividends on their shares.
These approximately 4,000 companies are then subjected to extensive
analysis and evaluation in order to identify those which meet Wright's
fundamental standards of Investment Quality. Only those companies which meet or
exceed all of these standards (a subset of the 4,000 companies considered
suitable for prudent investment) are eligible for selection by the Wright
Investment Committee for inclusion in the Investment Lists.
All companies on the Investment Lists are, in the opinion of Wright,
soundly financed with established records of earnings profitability and equity
growth. All have established investment acceptance and active liquid markets for
their publicly owned shares. The companies on the Investment Lists will be
referred to herein as "Blue Chips."
The Catholic Advisory Board. The Catholic Advisory Board assures that the
fund's investments are consistent with Catholic values. Each member of the Board
is involved in various Catholic organizations and activities and is in contact
with numerous Catholic institutions and Catholic clergy. Using the best publicly
available information obtainable by Wright, the Catholic Advisory Board will
identify those companies recommended by Wright whose products, services and/or
activities are substantially consistent with core Catholic Church teachings. In
addition, information received from shareholders, secondary materials, and
general input from interested sources is consistently revised and evaluated. The
result is continuous dialogue, continuous information input, continuous review,
and thus continuous evaluation. It is believed that independent thinking and
independent information support a fund that adheres to Catholic doctrine while
balancing changes in the marketplace, changes in informational input, and
changes in value systems. Thus, the fund combines Catholic values with
investment values.
The Catholic Advisory Board will have sole discretion to determine which
companies meet the fund's religious criteria. Wright will be solely responsible
for evaluating the investment merits of the fund's portfolio holdings. When a
company is found not to be in compliance with core Catholic teachings, Wright is
asked to remove it from the portfolio. This policy may cause the fund to dispose
of a security at a time when it may be disadvantageous from an investment
viewpoint to do so.
As the fund will consider for investment only securities which meet the
fund's investment and religious criteria, the return on securities chosen may be
lower than if the fund considered only investment criteria when selecting
investments. However, Wright does not expect there will be a material effect on
the performance.
Primary Investments. The fund will, under normal market conditions, invest
at least 80% of its net assets in equity securities of Blue Chip companies,
including common stocks, preferred stocks, warrants and securities convertible
into stock. As a matter of nonfundamental policy, it is expected that the fund
will normally be fully invested in equity securities. However, the fund may
invest up to 20% of its net assets in the short-term debt securities described
under "Defensive and Certain Short-Term Investments." In addition, for temporary
defensive purposes the fund may hold cash or invest without limit in these
short-term debt securities.
<PAGE>
ADDITIONAL INVESTMENT POLICIES AND OTHER INFORMATION
U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY SECURITIES.--U.S. Government
securities in which the fund may invest are short-term obligations issued by the
Treasury and include bills, certificates of indebtedness, notes, and bonds.
Agencies and instrumentalities of the U.S. Government are established under the
authority of an act of Congress and include, but are not limited to, the
Government National Mortgage Association ("GNMA"), the Tennessee Valley
Authority, the Bank for Cooperatives, the Farmers Home Administration, Federal
Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks, and the
Federal National Mortgage Association ("FNMA").
The fund has no current intention of investing in securities issued by GNMA
or FNMA or in any other mortgage-backed securities.
FOREIGN INVESTMENTS. The fund may invest up to 30% of its total assets in
equity securities of foreign companies that are on the International AWIL and
that are traded on a securities market of the country in which the company is
located or other foreign securities exchanges. In addition, the fund may
purchase securities in the form of American Depositary Receipts ("ADRs") or
similar securities representing interests in an underlying foreign security.
ADRs are not necessarily denominated in the same currency as the underlying
foreign securities. If an ADR is not sponsored by the issuer of the underlying
foreign security, the institution issuing the ADR may have reduced access to
information about the issuer.
Investments in foreign securities involve risks in addition to those associated
with investments in the securities of U.S. issuers. These risks include less
publicly available financial and other information about foreign companies; less
rigorous securities regulation; the potential imposition of currency controls,
foreign withholding and other taxes; and war, expropriation or other adverse
governmental actions. Foreign equity markets may be less liquid than United
States markets and may be subject to delays in the settlement of portfolio
transactions. Brokerage commissions and other transaction costs in foreign
markets tend to be higher than in the United States. The value of foreign
securities denominated in a foreign currency will vary in accordance with
changes in currency exchange rates, which can be volatile. In addition, the
prices of unsponsored ADRs may be more volatile than if they were sponsored by
the issuers of the underlying securities. These considerations generally are of
greater concern in developing countries.
REPURCHASE AGREEMENTS involve purchase of U.S. Government securities. At
the same time the fund purchases the security, it resells it to the vendor (a
member bank of the Federal Reserve System or recognized securities dealer that
meets Wright credit standards), and is obligated to redeliver the security to
the vendor on an agreed-upon date in the future. The resale price exceeds the
purchase price and reflects an agreed-upon market rate unrelated to the coupon
rate on the purchased security. Such transactions afford an opportunity for the
fund to earn a return on cash which is only temporarily available. The fund's
risk is the ability of the vendor to pay an agreed-upon sum upon the delivery
date. The fund believes this risk is limited to the difference between the
market value of the security and the repurchase price provided for in the
repurchase agreement.
Repurchase agreements must be fully collateralized at all times. In the
event of a default or bankruptcy by a vendor under a repurchase agreement, the
fund will seek to liquidate such collateral. However, the exercise of the right
to liquidate such collateral could involve certain costs, delays and
restrictions and is not ultimately assured. To the extent that proceeds from any
sale upon a default of the obligations to repurchase are less than the
repurchase price, the fund could suffer a loss.
In all cases when entering into repurchase agreements with other than
FDIC-insured depository institutions, the fund will take physical possession of
the underlying collateral security, or will receive written confirmation of the
purchase of the collateral security and a custodial or safekeeping receipt from
a third party under a written bailment for hire contract, or will be the
recorded owner of the collateral security through the Federal Reserve Book-Entry
System.
Repurchase agreements are considered to be loans under the Investment
Company Act of 1940.
DEFENSIVE AND CERTAIN SHORT-TERM INVESTMENTS. Under normal market
conditions up to 20% of the fund's net assets or, during periods of unusual
market conditions, when Wright believes that investing for temporary defensive
purposes in appropriate, all or any portion of the fund's assets may be held in
cash, money market instruments or other short-term obligations. These include
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collateralized by such securities).
<PAGE>
The fund may invest in the following U.S. dollar denominated, high quality
short-term obligations to the extent set forth above:
CERTIFICATES OF DEPOSIT -- are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
BANKERS' ACCEPTANCES -- are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
COMMERCIAL PAPER -- refers to promissory notes issued by corporations in
order to finance their short-term credit needs. Commercial paper acquired by the
fund must, at the date of investment, be rated A-1 by Standard & Poor's Ratings
Group ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's"), or, if not
rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
FINANCE COMPANY PAPER -- refers to promissory notes issued by finance
companies in order to finance their short-term credit needs. Finance company
paper must have the same ratings as commercial paper at the time of purchase.
See "Commercial Paper" above.
CORPORATE OBLIGATIONS -- include bonds and notes issued by corporations and
other entities in order to finance short-term credit needs. Corporate
obligations and other debt instruments in which the fund may invest must, at the
date of investment, be rated AA or better by S&P or Aa or better by Moody's or,
if not rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
The fund may invest in instruments and obligations of banks that have other
relationships with the fund, Wright or Eaton Vance. No preference will be shown
towards investing in banks which have such relationships.
The prices of fixed income securities vary inversely with interest rates.
Therefore, the value of the fund's investments in convertible securities and
short-term obligations will decline when interest rates are rising. The
investment objective and, unless otherwise indicated, policies of the fund may
be changed by the Trustees without a vote of the fund's shareholders. The fund
is not a complete investment program and there is no assurance that the fund
will achieve its investment objective. The market price of securities held by
the fund and the net asset value of the fund's shares will fluctuate in response
to stock market developments and currency exchange rate fluctuations.
"WHEN ISSUED" SECURITIES -- Securities are frequently offered on a
"when-issued" basis. When so offered, the price, which is generally expressed in
terms of yield to maturity, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued securities may take place at
a later date. Normally, the settlement date occurs 15 to 90 days after the date
of the transaction. The payment obligation and the interest rate that will be
received on the securities are fixed at the time the fund enters into the
purchase commitment. During the period between purchase and settlement, no
payment is made by the fund to the issuer and no interest accrues to the fund.
To the extent that assets of the fund are held in cash pending the settlement of
a purchase of securities, the fund would earn no income; however, the fund
intends to be fully invested to the extent practicable and subject to the
policies stated above. While when-issued securities may be sold prior to the
settlement date, it is intended that such securities will be purchased for the
fund with the purpose of actually acquiring them unless a sale appears to be
desirable for investment reasons.
At the time a commitment to purchase securities on a when-issued basis is
made for the fund, the transaction will be recorded and the value of the
security reflected in determining the fund's net asset value. The fund will
establish a segregated account in which the fund will maintain cash and liquid
securities equal in value to commitments for when-issued securities. If the
value of the securities placed in the separate account declines, additional cash
or securities will be placed in the account on a daily basis so that the value
of the account will at least equal the amount of the fund's when-issued
commitments. Such segregated securities either will mature or, if necessary, be
sold on or before the settlement date.
Securities purchased on a when-issued basis and the securities held by the
fund are subject to changes in value based upon the public's perception of the
creditworthiness of the issuer and changes in the level of interest rates.
(Thus, both positions will change in value in the same way, i.e., both
experiencing appreciation when interest rates decline and depreciation when
interest rates rise.) Therefore, to the extent that the fund remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be greater fluctuations in the market value
of the fund's net assets than if only cash were set aside to pay for when-issued
securities.
The fund has no current intention of investing in when-issued securities.
<PAGE>
ILLIQUID AND RESTRICTED SECURITIES. The fund may purchase securities that
are not registered ("restricted securities") under the Securities Act of 1933
("1933 Act"), including securities offered and sold to "qualified institutional
buyers" under Rule 144A under the 1933 Act and commercial paper sold in reliance
on Section 4(2) of the 1933 Act. However, the fund will not invest more than 15%
of its net assets in illiquid investments, which include repurchase agreements
maturing in more than seven days, securities that are not readily marketable and
restricted securities. If the value of the fund's illiquid investments increased
to more than 15% of net assets, Wright would begin reducing these investments in
an orderly manner to the extent necessary to comply with the 15% limit. If the
Board of Trustees determines, based upon a continuing review of the trading
markets for specific Rule 144A securities, that they are liquid, then such
securities may be purchased without regard to the 15% limit. The trustees may
adopt guidelines and delegate to Wright the daily function of monitoring and
determining the liquidity of restricted securities. The trustees, however, will
retain sufficient oversight and be ultimately responsible for the
determinations. The trustees will carefully monitor the fund's investments in
these securities, focusing on such important factors, among others, as
valuation, liquidity and availability of information.
The fund may acquire other restricted securities including securities for
which market quotations are not readily available. These securities may be sold
only in privately negotiated transactions or in public offerings with respect to
which a registration statement is in effect under the 1933 Act. Where
registration is required, the fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the fund might obtain a less favorable price
than prevailed when it decided to sell. Restricted securities will be priced at
fair market value as determined in good faith by the Trust's trustees.
The fund does not currently intend to purchase restricted securities.
BORROWING; LENDING PORTFOLIO SECURITIES. The fund may borrow for temporary
or emergency purposes in an amount up to one-third of the fund's total assets.
The fund may lend portfolio securities with a value up to 30% of its total
assets to enhance its income. The fund may seek to increase income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Securities and Exchange Commission, such
loans are required to be secured continuously by collateral in cash or liquid
securities held by the fund's custodian and maintained on a current basis at an
amount at least equal to the market value of the securities loaned, which will
be marked to market daily. Cash equivalents include certificates of deposit,
commercial paper and other short-term money market instruments. The fund would
have the right to call a loan and obtain the securities loaned at any time on up
to five business days' notice. The fund would not have the right to vote any
securities having voting rights during the existence of a loan, but would call
the loan in anticipation of an important vote to be taken among holders of the
securities or the giving or withholding of their consent on a material matter
affecting the investment. The fund may pay reasonable fees in connection with
securities loans. Wright will evaluate the creditworthiness of prospective
institutional borrowers and monitor the adequacy of the collateral to reduce the
risk of default by borrowers.
The fund does not currently intend to engage in securities loans.
WARRANTS AND CONVERTIBLE SECURITIES. The fund may invest up to 5% of its
net assets in warrants. Warrants acquired by the fund will entitle it to buy
common stock at a specified price and time. The fund may invest up to 5% of its
net assets in convertible securities. Convertible debt securities and
convertible preferred stock entitle the fund to acquire the issuer's stock by
exchange or purchase at a predetermined rate.
Warrants are subject to the same market risks as stocks, but may be more
volatile in price. The fund's investments in warrants will not entitle it to
receive dividends or exercise voting rights and will become worthless if the
warrants cannot be profitably exercised before their expiration dates.
Convertible securities are subject both to the credit and interest rate risks
associated with debt obligations and to the stock market risk associated with
equity securities. Convertible debt securities in which the fund may invest
must, at the date of investment, be rated AA or better by S&P or Aa or better by
Moody's or, if not rated by one of these rating organizations, be deemed by the
trustees to be of comparable quality.
INTEREST RATE RISK. The market value of the U.S. Government securities,
short-term investments and convertible securities in which the fund may invest
varies inversely with changes in the prevailing levels of interest rates. For
example, if interest rates rise after one of the foregoing securities has been
purchased, the value of the security would decline.
SHORT SALES. The fund may engage in short sales in order to profit from an
anticipated decline in the value of a security. The fund may also engage in
short sales to attempt to limit its exposure to a possible market decline in the
value of its portfolio securities through short sales of securities which Wright
believes possess volatility characteristics similar to those being hedged. To
effect such a transaction, the fund must borrow the security sold short to make
delivery to the buyer. The fund then is obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. Until
the security is replaced the fund is required to pay to the lender any accrued
interest or dividends and may be required to pay a premium. The fund may only
make short sales "against the box," meaning that the fund either owns the
securities sold short or, by virtue of its ownership of other securities, has
the right to obtain securities equivalent in kind and amount to the securities
sold and, if the right is conditional, the sale is made upon the same
conditions.
<PAGE>
The fund has no current intention of engaging in short sales.
DIVERSIFICATION. The fund is diversified and therefore may not, with
respect to 75% of its total assets, (1) invest more than 5% of its total assets
in the securities of any one issuers, other than U.S. Government securities, or
(2) acquire more than 10% of the outstanding voting securities of any one
issuer. The fund will not concentrate (invest 25% or more of its total assets)
in the securities of issuers in any one industry.
FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS. The fund does not
currently intend to purchase or sell financial futures contracts or related
options.
ADDITIONAL INFORMATION ABOUT THE TRUST
Unless otherwise defined herein, capitalized terms have the meaning given
them in the Prospectus.
The Trust is an open-end, management investment company organized as a
Massachusetts business trust. The Trust was organized in 1996 and currently has
one series (the fund). The fund currently has three classes of shares
outstanding -- Individual Shares, Institutional Shares and Institutional Service
Shares. The fund is a diversified fund.
The Trust's Declaration of Trust (the "Declaration of Trust") may be
amended with the affirmative vote of a majority of the outstanding shares of the
Trust or, if the interests of a particular class of shares of the fund are
affected, a majority of the outstanding shares of such class. The trustees are
authorized to make amendments to the Declaration of Trust that do not have a
material adverse effect on the interests of shareholders. The Trust may be
terminated (i) upon the sale of the Trust's assets to another diversified
open-end management investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Declaration of Trust also provides that the trustees may change the
structure of the fund from a multiple class fund to a feeder fund in a
master-feeder investment structure without shareholder approval. As a feeder
fund, the fund would pursue its investment objective by investing all of its
assets in a master fund with an investment objective identical to that of the
fund. While a master-feeder investment structure may provide opportunities for
growth in the assets of the master fund and economies of scale for the fund,
duplication of fees may also result. Whenever the fund as an investor in the
master fund would be requested to vote on matters pertaining to the master fund,
the fund would hold a meeting of fund shareholders and vote its interest in the
master fund for or against such matters proportionately to the instructions to
vote for or against such matters received from fund shareholders. The fund would
vote shares for which it received no voting instructions in the same proportion
as the shares for which it received voting instructions.
The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law; however, nothing in
the Declaration of Trust protects a trustee against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The risk of any shareholder incurring any liability for the
obligations of the Trust is extremely remote.
<PAGE>
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the fund and may
be changed only by the vote of a majority of the fund's outstanding voting
securities, which as used in this Statement of Additional Information means the
lesser of (a) 67% of the shares of the fund if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the fund. Accordingly, the fund may not:
(1) With respect to 75% of the total assets of the fund, purchase the
securities of any issuer if such purchase at the time thereof would
cause more than 5% of its total assets (taken at market value) to be
invested in the securities of such issuer, or purchase securities of
any issuer if such purchase at the time thereof would cause more than
10% of the total voting securities of such issuer to be held by the
fund, except obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and except securities of other
investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940. In addition, the fund may not issue
bonds, debentures or senior equity securities, other than shares of
beneficial interest;
(3) Purchase securities on margin (but the fund may obtain such
short-term credits as may be necessary for the clearance of purchase
and sales of securities);
(4) Underwrite or participate in the marketing of securities of others;
(5) Make an investment in any one industry if such investment would cause
investments in such industry to equal or exceed 25% of the fund's
total assets, at market value at the time of such investment (other
than securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities);
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of
companies which invest or deal in real estate;
(7) Purchase or sell commodities or commodity contracts for the purchase
or sale of physical commodities, except that the fund may purchase
and sell financial futures contracts, options on financial futures
contracts and all types of currency contracts; or
(8) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments (b) entering into
repurchase agreements or (c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the fund, the
fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
fund.
The fund has adopted the following investment policies which may be changed
without approval by the fund's shareholders. As a matter of nonfundamental
policy, the fund will not (a) sell or contract to sell any security which it
does not own unless by virtue of its ownership of other securities it has at the
time of sale a right to obtain securities equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions; or (b) invest more than 15% of net assets in illiquid
investments.
The 1940 Act currently allows the fund to borrow (1) for any reason from
banks or by entering into reverse repurchase agreements in an amount not
exceeding one-third of the fund's total assets and (2) for temporary purposes
(presumed to mean not more than 60 days). If the fund's borrowings under clause
(1) later exceed one-third of the fund's total assets, the fund must reduce its
borrowings below this level within three business days.
Except for the fund's investment policy with respect to borrowing money, if
a percentage restriction contained in the fund's investment policies is adhered
to at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value of portfolio securities or the fund's net
assets will not be considered a violation of such restriction.If such a change
causes the fund to exceed its percentage limitation on illiquid investments, the
fund will reduce these investments, in an orderly manner, to a level that does
not exceed this limitation.
TRUSTEES, OFFICERS AND THE CATHOLIC ADVISORY BOARD
TRUSTEES AND OFFICERS
The trustees and officers of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those trustees who are "interested
persons" (as defined in the 1940 Act) of the Trust, Wright, The Winthrop
<PAGE>
Corporation ("Winthrop"), Eaton Vance, Eaton Vance's wholly owned subsidiary,
Boston Management and Research ("BMR"), Eaton Vance's parent company, Eaton
Vance Corp. ("EVC"), or Eaton Vance's and BMR's trustee, Eaton Vance, Inc.
("EV") by virtue of their affiliation with either the Trust, Wright, Winthrop,
Eaton Vance, BMR, EVC or EV, are indicated by an asterisk (*).
PETER M. DONOVAN (57), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 440 Wheelers Farms Road, Milford, CT 06460
H. DAY BRIGHAM, JR. (73), Vice President, Secretary and Trustee*
Retired, Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, BMR, EVC and EV and Director of EV and EVC; Director of
Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02467
JUDITH R. CORCHARD (61) , Vice President and Trustee*
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director of Wright and Winthrop. Ms.
Corchard was appointed a Trustee of the Trust on December 10, 1997.
Address: 440 Wheelers Farms Road, Milford, CT 06460
DORCAS R. HARDY (53), Trustee
President, Dorcas R. Hardy & Associates (a public policy and government
relations firm), Spotsylvania, VA; Director, The Options Clearing Corporation
and First Coast Service Options, Jacksonville, FL (FL Blue Cross Blue Shield
subsidiary); 1996-1998 - Chairman and CEO of Work Recovery, Inc. (an advanced
rehabilitation technology firm), Tucson, AZ; 1986-1989 - U.S. Commissioner of
Social Security. Ms. Hardy was elected a Trustee on December 9, 1998.
Address: 11407 Stonewall Jackson Drive, Spotsylvania, VA 22553
LELAND MILES (76), Trustee
President Emeritus, University of Bridgeport (1987-present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company.
Address: 332 North Cedar Road, Fairfield, CT 06430
A.M. MOODY, III (63), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors' Service
Distributors, Inc.
Address: 440 Wheelers Farms Road, Milford, CT 06460
LLOYD F. PIERCE (81), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE.
Address: 140 Snow Goose Court, Daytona Beach, FL 32119
RICHARD E. TABER (51), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed a Trustee of the Trust on March 18,
1997.
Address: 117 Prospect Street, Stamford, CT 06904
RAYMOND VAN HOUTTE (75), Trustee
President Emeritus and Counselor of The Tompkins County Trust Company, Ithaca,
NY (since January 1989); President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaporated
Metal Products and Ithaco, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JAMES L. O'CONNOR (55), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
JANET E. SANDERS (64), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
<PAGE>
WILLIAM J. AUSTIN, JR. (48), Assistant Treasurer
Assistant Vice President of Eaton Vance, BMR and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
A. JOHN MURPHY (37), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since March 1, 1994; employee of Eaton
Vance since March 1993. Officer of various investment companies managed by Eaton
Vance or BMR.
Address: 255 State Street, Boston, MA 02109
ERIC G. WOODBURY (42), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993. Officer of
various investment companies managed by Eaton Vance or BMR.
Address: 255 State Street, Boston, MA 02109
All of the trustees and officers hold identical positions with The Wright
Managed Equity Trust, The Wright Managed Income Trust, The Wright Managed Blue
Chip Series Trust, The Wright EquiFund Equity Trust, The Wright Asset Allocation
Trust, and The Wright Blue Chip Master Portfolio Trust. Each trustee who is not
an employee of Wright, Winthrop, Eaton Vance, its parents or subsidiaries,
including Mr. Brigham, receives annual compensation from the Trust. The trustees
who are employees of Wright receive no compensation from the Trust.
Non-affiliated trustees, including Mr. Brigham, also receive additional payments
from other investment companies for which Wright provides investment advisory
services. The Trust does not have a retirement plan for the trustees. For
estimated trustee compensation for the current fiscal year, see the
"Compensation Table" on the next page.
The Trust's Board of Trustees has established an Independent Trustees'
Committee and an Audit Committe, each consisting of all of the Independent
Trustees who are Messrs. Miles, Pierce (Chairman), Taber, Van Houtte and Ms.
Hardy. The responsibilities of the Independent Trustees' Committee include those
of a nominating committee for additional or replacement trustees of the Trust
and a contract review committee for consideration of renewals or changes in the
investment advisory agreements, distribution agreements and distribution plans
and other agreements as appropriate. The responsibilities of the Audit Committee
are: (a) to oversee the Trusts' accounting and financial reporting practices,
their internal controls and, as appropriate, the internal controls of certain
service providers; (b) to oversee the quality and objectivity of the Trusts'
financial statements and the independent audit thereof; and (c) to act as a
liaison between the Trusts' independent auditors and the full Board of Trustees.
CATHOLIC ADVISORY BOARD
The members of the Catholic Advisory Board and their principal occupations
during the past five years are set forth below. Each of the members of the
Catholic Advisory Board may be contacted at the following address: Catholic
Investment Trust, 255 State Street, Boston, Massachusetts 02109.
THOMAS P. MELADY (73), Chairman. Former U.S. Ambassador to Burundi and to
the Holy See, President Emeritus of Sacred Heart University, author of 14 books
and numerous articles.
MARGARET M. HECKLER (68), Eight term Congresswoman from the Massachusetts 10th
District, former Secretary of the Department of Health and Human Services,
former Ambassador to Ireland.
BOWIE K. KUHN (73), former Commissioner of Baseball.
TIMOTHY J. MAY (67), Senior Partner, Patton Boggs, L.L.P.
THOMAS S. MONAGHAN (63), President, CEO and Chairman of the Board of Domino's
Pizza, Inc.
WILLIAM A. WILSON (85), former (and first) U.S. Ambassador to the Holy See.
The members of the Catholic Advisory Board are paid by the fund. Each
member receives a fee equal to $1,000 per meeting attended plus expenses. The
Trust does not have a retirement plan for the Catholic Advisory Board members.
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
For the fund's fiscal year ended December 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Aggregate Pension or Estimated Total Compensation
Compensation Retirement Annual Benefits Paid from Fund and
Trustees from the Fund(1) Benefits Accrued Upon Retirement Funds' Complex(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Day Brigham, Jr. $1,750 None None $11,250
Dorcas R. Hardy $1,750 None None $11,250
Leland Miles $1,750 None None $11,250
Lloyd F. Pierce $1,750 None None $11,250
Richard E. Taber $1,750 None None $11,250
Raymond Van Houtte $1,250 None None $8,250
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Total compensation paid is for the year ended December 31, 1999 and includes
service on the then-existing boards in the Wright fund complex (22 funds).
</TABLE>
<TABLE>
<CAPTION>
For the Fund's fiscal year ended December 31, 1999
- --------------------------------------------------------------------------------------------------------------------------------
Catholic Advisory Aggregate Compensation Pension or Retirement Estimated Annual Benefits
Board Member from the Fund Benefits Accrued Upon Retirement
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas P. Melady $ - None None
Margaret M. Heckler $2,000 None None
Bowie K. Kuhn $2,000 None None
Timothy J. May $1,000 None None
Thomas S. Monaghan $ 2,000 None None
William A. Wilson $ 2,000 None None
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of April 1, 2000, the trustees and officers of the Trust, and members of
the Catholic Advisory Board as a group, owned in the aggregate 31.2% of the
outstanding Institutional Service Shares of the fund and less than 1% of the
outstanding shares of each of the Institutional Shares and Individual Shares of
the fund.
As of April 1, 2000, Dingle & Co., Detroit, MI owned beneficially and of
record 100% of the Institutional Shares of the fund; and Thomas S. Monaghan, Ann
Arbor, MI, Community Foundation for Southeastern Michigan, Detroit, Michigan,
Archdiocese of New York, New York, NY, Franciscan University of Steubenville,
Steubenville, OH and Diocese of Lansing, Lansing, MI owned beneficially and of
record 31.2%, 24.3%, 6.5%, 6.5% and 5.7%, respectively, of the Institutional
Service Shares of the fund.
As of April 1, 2000, to the knowledge of the Trust, no other person owned
of record or beneficially 5% or more of the fund's outstanding Individual or
Institutional Service Shares as of such date.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
The Trust has engaged Wright to act as the fund's investment adviser
pursuant to an Investment Advisory Contract (the "Investment Advisory
Contract"). Wright, acting under the general supervision of the Trust's
trustees, furnishes the fund with investment advice and management services, as
described below.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the fund, will furnish continuously
an investment program with respect to the fund, will determine which securities
should be purchased, sold or exchanged in consultation with the Catholic
Advisory Board, and will implement such determinations. Wright will be solely
responsible for evaluating the investment merits of the fund's portfolio
investments. Wright will furnish to the fund investment advice and management
services, office space, equipment and clerical personnel, and investment
advisory, statistical and research facilities. In addition, Wright has arranged
for certain members of the Eaton Vance and Wright organizations to serve without
salary as officers or trustees. In return for these services, the fund is
obligated to pay a monthly advisory fee calculated at the rates set forth in the
fund's current Prospectus.
The investment adviser, the distributor and the fund have adopted Codes of
Ethics governing personal securities transactions. Under the Codes, Wright
employees may purchase and sell securities subject to certain pre-clearance and
reporting requirements and other procedures. These Codes of Ethics are on public
file with, and available from, the Securities and Exchange Commission.
<PAGE>
The following table sets forth the net assets of the fund at December 31,
1999 and the advisory fees paid by the fund during the fiscal years ended
December 31, 1999, 1998 and 1997.
Aggregate Net Assets Advisory Fees Paid for the Fiscal Years Ended Dec. 31
of 12/31/99 1999 1998 1997(2)(3)
- -------------------------------------------------------------------------------
$27,100,518 $154,883(1) $83,198(1) $20,795
- -------------------------------------------------------------------------------
(1) To enhance the net income of the fund, Wright made a reduction of its
investment adviser fee by $99,392 and $83,092, resepctively, for the years
ended 12/31/99 and 12/31/98. In addition, $492 and $44,300, respectively,
of expenses were allocated to the investment adviser for 1999 and 1998.
(2) For the period from May 1, 1997 to December 31, 1997.
(3) To enhance the net income of the fund, Wright made a reduction of its
advisory fee in the full amount and was allocated a portion of the expenses
related to the operation of the fund in the amount of $54,873.
Shareholders of the fund who are also advisory clients of Wright may have
agreed to pay Wright a fee for such advisory services. Wright does not intend to
exclude from the calculation of the investment advisory fees payable to Wright
by such advisory clients the portion of the advisory fee payable by the fund.
Accordingly, a client may pay an advisory fee to Wright in accordance with
Wright's customary investment advisory fee schedule charged to investment
advisory clients and at the same time, as a shareholder in the fund, bear its
share of the advisory fee paid by the fund to Wright as described above.
The Trust has engaged Eaton Vance to act as the fund's administrator
pursuant to an Administration Agreement. For its services under the
Administration Agreement, Eaton Vance receives monthly administration fees. For
the fiscal year ended December 31, 1999 the effective annual rate was 0.07% of
the fund's average net assets.
For the fiscal years ended December 31, 1999 and 1998, respectively, the
fund paid administration fees of $15,261 and $7,766 to Eaton Vance. For the
period from the start of business, May 1, 1997, to December 31, 1997, the fund
would have paid an administration fee equivalent to $1,937, however, Eaton Vance
waived the full amount of the administration fee.
Eaton Vance is a business trust organized under Massachusetts law. Eaton
Vance, Inc. ("EV") serves as trustee of Eaton Vance. Eaton Vance and EV are
wholly owned subsidiaries of Eaton Vance Corporation ("EVC"), a Maryland
corporation and publicly held holding company. EVC through its subsidiaries and
affiliates engages primarily in investment management, administration and
marketing activities.
The fund will be responsible for all of its expenses not expressly stated
to be payable by Wright under its Investment Advisory Contract or by Eaton Vance
under its Administration Agreement, including, without limitation, the fees and
expenses of its custodian and transfer agent, including those incurred for
determining the fund's net asset value and keeping the fund's books; the cost of
share certificates; membership dues to investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; expenses of
trustees not affiliated with Eaton Vance or Wright; distribution expenses
incurred pursuant to the fund's distribution plan (if any); and investment
advisory and administration fees. The fund will also bear expenses incurred in
connection with litigation in which the fund is a party and the legal obligation
the fund may have to indemnify the officers and trustees of the Trust with
respect thereto.
The fund's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 2001. The Investment Advisory Contract may
be continued from year to year thereafter so long as such continuance after
February 28, 2001 is approved at least annually (i) by the vote of a majority of
the trustees who are not "interested persons" of the Trust, Eaton Vance or
Wright cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the board of trustees of the Trust or by vote of a
majority of the outstanding shares of the fund. The fund's Administration
Agreement may be continued from year to year after February 28, 2001 so long as
such continuance is approved annually by the vote of a majority of the trustees.
Each agreement may be terminated at any time without penalty on sixty (60) days
written notice by the board of trustees or directors of either party, or by vote
of the majority of the outstanding shares of the fund. Each agreement will
terminate automatically in the event of its assignment. Each agreement provides
that, in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations or duties to the fund under such agreement
on the part of Eaton Vance or Wright, Eaton Vance or Wright will not be liable
to the fund for any loss incurred.
<PAGE>
CUSTODIAN AND TRANSFER AGENT
IBT, 200 Clarendon Street, Boston, MA 02116, acts as custodian for the
fund. IBT has the custody of all cash and securities of the fund, maintains the
fund's general ledgers and computes the daily net asset value per share. In such
capacity it attends to details in connection with the sale, exchange,
substitution, transfer or other dealings with the fund's investments, receives
and disburses all funds and performs various other ministerial duties upon
receipt of proper instructions from the fund.
PFPC, Inc., P.O. Box 9697, Providence, RI 02940 is the fund's transfer agent.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, 200 Berkeley Street, Boston, MA 02116-5022, is the
fund's independent certified public accountant, providing audit services, tax
return preparation, and assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission.
BROKERAGE ALLOCATION
Wright places the portfolio security transactions for the fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments and other investment advisory accounts. Wright seeks to execute
portfolio security transactions on the most favorable terms and in the most
effective manner possible. In seeking best execution, Wright will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the size and type of
the transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the value and quality of service rendered by the broker-dealer
in other transactions, and the reasonableness of the brokerage commission or
markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the fund may give consideration to those firms which
supply brokerage and research services, quotations and statistical and other
information to Wright for its use in servicing its advisory accounts. The fund
may include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to Wright in servicing all or less than all of its accounts and the
services and information furnished by a particular firm may not necessarily be
used in connection with the account which paid brokerage commissions to such
firm. The advisory fee paid by the fund to Wright is not reduced as a
consequence of Wright's receipt of such services and information. While such
services and information are not expected to reduce Wright's normal research
activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if it should
attempt to develop comparable services and information through its own staff.
From the start of business, May 1, 1997 to December 31, 1997, the fund paid
aggregate brokerage commissions of $16,144 on portfolio transactions. For the
fiscal years ended December 31, 1999 and 1998, the fund paid aggregate brokerage
commissions of $49,118 and $16,054, respectively, on portfolio transactions.
Subject to the requirement that Wright use its best efforts to seek
to execute the fund's portfolio security transactions at advantageous prices and
at reasonably competitive commission rates, Wright, as indicated above, is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom the fund's portfolio orders may be placed the fact that such firm has
sold or is selling shares of the fund or of other investment companies sponsored
by Wright. This policy is consistent with a rule of the National Association of
Securities Dealers, Inc., which rule provides that no firm which is a member of
the Association may favor or disfavor the distribution of shares of any
particular investment company or group of investment companies on the basis of
brokerage commissions received or expected by such firm from any source.
<PAGE>
Under the fund's Investment Advisory Contract, Wright has the authority to
pay commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met. This authority will not be exercised, however, until the
Prospectus or this Statement of Additional Information has been supplemented or
amended to disclose the conditions under which Wright proposes to do so.
The Investment Advisory Contract expressly recognizes the practices which
are provided for in Section 28(e) of the Securities Exchange Act of 1934 by
authorizing the selection of a broker or dealer which charges the fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
PRICING OF SHARES
For a description of how the fund values its shares, see "Information About
Your Account - How the Fund Values its Shares" in the fund's current Prospectus.
The fund values securities with a remaining maturity of 60 days or less by the
amortized cost method. The amortized cost method involves initially valuing a
security at its cost (or its fair market value on the sixty-first day prior to
maturity) and thereafter assuming a constant amortization to maturity of any
discount or premium, without regard to unrealized appreciation or depreciation
in the market value of the security.
The fund will not price its securities on the following national holidays:
New Year's Day; Martin Luther King, Jr. Day; Presidents' Day; Good Friday;
Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.
PRINCIPAL UNDERWRITER
The fund has adopted a Distribution Plan as defined in Rule 12b-1 under the
1940 Act (the "Plan") with respect to its Individual Shares and its
Institutional Service Shares. The Plan specifically authorizes the fund to pay
direct and indirect expenses incurred by any separate distributor or
distributors under agreement with the fund in activities primarily intended to
result in the sale of its Individual Shares and Institutional Service Shares.
The expenses of these activities will not exceed 0.75% per annum of the fund's
average daily net assets attributable to Individual Shares and 0.25% per annum
of the fund's average daily net assets attributable to Institutional Service
Shares. Payments under the Plan are reflected as an expense in the fund's
financial statements relating to the applicable class of shares.
The Trust has entered into a distribution contract with the principal
underwriter. This contract provides for WISDI to act as a separate distributor
of the fund's shares.
The fund will pay per annum 0.75% of its average daily net assets
attributable to Individual Shares and 0.25% of its average daily net assets
attributable to Institutional Service Shares to WISDI for distribution
activities on behalf of the fund in connection with the sale of its Individual
Shares and Institutional Service Shares, respectively. WISDI will provide on a
quarterly basis documentation concerning the expenses of such activities.
Documented expenses of the fund will include compensation paid to and
out-of-pocket disbursements of officers, employees or sales representatives of
WISDI, including telephone costs, the printing of prospectuses and reports for
other than existing shareholders, preparation and distribution of sales
literature, advertising and interest or other financing charges. If the
distribution payments to WISDI exceed its expenses, WISDI may realize a profit
from these arrangements. Peter M. Donovan, President and a trustee of the Trust
and President, Chief Executive Officer and a Director of Wright and Winthrop, is
Vice President, Treasurer and a Director of WISDI. A.M. Moody, III, Vice
President and a trustee of the Trust and Senior Vice President of Wright and
Winthrop, is President and a Director of WISDI.
It is the opinion of the trustees and officers of the Trust that the
following are not expenses primarily intended to result in the sale of
Individual Shares or Institutional Service Shares issued by the fund: fees and
expenses of registering these shares under federal or state laws regulating the
sale of securities; fees and expenses of registering the Trust as a
broker-dealer or of registering an agent of the Trust under federal or state
laws regulating the sale of securities; and fees and expenses of preparing and
setting in type the Trust's registration statement under the Securities Act of
1933. Should such expenses be deemed by a court or agency having jurisdiction to
be expenses primarily intended to result in the sale of these shares, they will
be considered to be expenses contemplated by and included in the Plan, but not
subject to the 0.75% or 0.25% per annum limitations described above.
<PAGE>
Under the Plan, the President or Vice President of the Trust will provide
to the trustees for their review, and the trustees will review at least
quarterly, a written report of the amounts expended under the Plan and the
purposes for which such expenditures were made. From time to time, WISDI may
enter into special arrangements with broker-dealers for assistance with its
principal underwriting and distribution activities. WISDI has entered into such
an arrangement with Talbot Financial Services, Inc. (Talbot), a registered
broker-dealer. WISDI may compensate Talbot up to 0.25% of net assets upon the
initial sale of shares, and up to 0.15% per year of net assets retained after
one year. This compensation is payable by WISDI, and not the fund. There is no
additional cost to the fund by this arrangement.
The following table shows the fee payable to WISDI under the Plan and the
amount of such fee actually paid by each class during the fiscal year ended
December 31, 1999.
<TABLE>
<CAPTION>
Distribution Distribution Expenses Distribution Distribution Expenses
Expenses Reduced by the Expenses Paid as a % of Fund's
Class Allowable Principal Underwriter Paid by Fund Average Net Asset Value
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Individual Shares $ 29,037 $19,018 $10,019 0.26%
Institutional Service Shares 32,555 - 0 - 32,555 0.25%
</TABLE>
For the fiscal year ended December 31, 1999, it is estimated that WISDI
spent approximately the following amounts on behalf of the Catholic Values
Investment Trust. WISDI spent more than it received on behalf of individual
shares.
Wright Investors' Service Distributors, Inc.
Financial Summaries for the year ended December 31, 1999
<TABLE>
<CAPTION>
Printing & Mailing Travel & Commissions & Administration
Class Promotional Prospectuses Entertainment Service Fees and Other TOTAL
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Individual Shares $ 7,814 $ 529 $ 480 $2,236 $ 963 $12,022
Institutional Service Shares 21,161 1,432 1,302 6,055 2,604 32,555
</TABLE>
The Plan was adopted by the Trustees on January 22, 1997. Under its terms,
the Plan remains in effect from year to year, provided such continuance is
approved annually by a vote of the Trust's trustees, including a majority of the
trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan. The Plan may not be
amended to increase materially the amount to be spent by the Individual Shares
or Institutional Service Shares for the services described therein without
approval of a majority of the outstanding Individual Shares or Institutional
Service Shares, respectively. All material amendments of the Plans must also be
approved by the trustees of the Trust in the manner described above. The Plan
may be terminated as to the Individual Shares or the Institutional Service
Shares at any time without payment of any penalty by vote of a majority of the
trustees of the Trust who are not interested persons of the Trust and who have
no direct or indirect financial interest in the operation of the Plan or by a
vote of a majority of the outstanding Individual Shares or Institutional Service
Shares, respectively. If the Plan is terminated, the fund would stop paying the
distribution fee and the trustees would consider other methods of financing the
distribution of the fund's Individual Shares or Institutional Service Shares, as
appropriate.
So long as the Plan is in effect, the selection and nomination of trustees
who are not interested persons of the Trust shall be committed to the discretion
of the trustees who are not such interested persons. The trustees of the Trust
have determined that in their judgment there is a reasonable likelihood that the
Plan will benefit the fund and the holders of Individual Shares and
Institutional Service Shares.
SERVICE PLAN
The Service Plan was adopted by the trustees on January 22, 1997 and will
continue in effect from year to year, provided such continuance is approved
annually by a vote of the Trust's trustees, including a majority of the trustees
who are not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Service Plan. The Service Plan may be
terminated at any time without payment of any penalty by vote of a majority of
the trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Service
Plan. The trustees of the Trust have determined that in their judgment there is
a reasonable likelihood that the Service Plan will benefit the fund and its
shareholders.
The fund paid no service fees for the fiscal year ended December 31, 1999.
<PAGE>
TAXES
For additional information regarding federal and state taxes see "Taxes" in
the fund's current Prospectus.
In order to avoid federal excise tax, the Code requires that the fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income for such year, at least 98% of the
excess of its realized capital gains over its realized capital losses (computed
on the basis of the one-year period ending on October 31 of such year, after
reduction by any available capital loss carryforwards) and 100% of any income
and capital gains from the prior year (as previously computed) that was not paid
out during such year and on which the fund paid no federal income tax.
The fund may be subject to foreign withholding or other foreign taxes with
respect to income (possibly including, in some cases, capital gains) derived
from securities of foreign issuers. These taxes may in some cases be reduced or
eliminated under the terms of an applicable U.S. income tax treaty. Certain
foreign exchange gains and losses realized by the fund may be treated as
ordinary income and losses. Certain uses of foreign currency and related
derivatives and investments by the fund in the stock of certain "passive foreign
investment companies" may be limited or in the latter case a tax election may be
made, if available, in order to avoid imposition of tax on the fund.
A portion of the fund's distributions of net investment income which are
derived from dividends the fund receives from U.S. corporations may qualify for
the dividends-received deduction for corporations. The dividends-received
deduction is reduced to the extent the shares with respect to which the
dividends are received are treated as debt-financed under the Code and is
eliminated if the shares are deemed to have been held for less than a minimum
period, generally 46 days, which must be satisfied over a prescribed period
immediately before or after the shares become ex-dividend. Receipt of
distributions qualifying for the deduction may result in liability for the
corporate alternative minimum tax and/or, for "extraordinary dividends,"
reduction of the tax basis (possibly requiring current recognition of income to
the extent such basis would otherwise be reduced below zero) of the corporate
shareholder's shares.
As a result of federal tax legislation enacted on August 5, 1997 (H.R.
2014, the Taxpayer Relief Act of 1997 (the "1997 TRA")), gain recognized after
May 6, 1997 from the sale of a capital asset is taxable to individual
(noncorporate) investors at different maximum federal income tax rates,
depending generally upon the tax holding period for the asset, the federal
income tax bracket of the taxpayer, and the dates the asset was acquired and/or
sold. The Treasury Department has issued guidance under the 1997 TRA that
enables the fund to pass through to its shareholders the benefits of the capital
gains tax rates enacted in the 1997 TRA. The fund will provide appropriate
information to its shareholders regarding the tax rate(s) applicable to its
distributions from its net capital gain, if any, in accordance with this and any
future guidance. Shareholders should consult their own tax advisers on the
correct application of these new rules in their particular circumstances.
Redemptions (including exchanges) and other dispositions of fund shares in
transactions that are treated as sales for tax purposes will generally result in
the recognition of taxable gain or loss by shareholders that are subject to tax.
Shareholders should consult their own tax advisers with reference to their
individual circumstances to determine whether any particular redemption,
exchange or other disposition of fund shares is properly treated as a sale for
tax purposes, as this discussion assumes. Any loss realized upon the redemption,
exchange or other sale of shares of the fund with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
distributions of long-term capital gains designated as capital gain dividends
with respect to such shares. All or a portion of a loss realized upon the
redemption, exchange or other sale of fund shares may be disallowed under "wash
sale" rules to the extent shares of the fund are purchased (including shares
acquired by means of reinvested dividends) within the period beginning 30 days
before and ending 30 days after the date of such redemption, exchange or other
sale.
At December 31, 1999, the fund, for federal income tax purposes, had a
capital loss carryover of $568,698, which will reduce taxable income arising
from future net realized gain on investments, if any, to the extent permitted by
the Code, and thus will reduce the amount of the distribution to shareholders
which would otherwise be necessary to relieve the fund of any liability for
federal income or excise tax. Pursuant to the Code, such capital loss carryover
will expire as follows:
December 31, 2007.......................$ 428,084
December 31, 2006........................ 140,614
-------
$ 568,698
It should be noted that future Treasury Department regulations or other
pronouncements that may be issued pursuant to regulatory authority contained in
the provisions of the 1997 TRA that affect the taxation of capital gains (as
described above) may prescribe rules that modify some of the provisions
described above.
The fund may follow the accounting practice known as equalization, which
could affect the amount, timing and character of its distributions to
shareholders.
<PAGE>
Distributions made by the fund will generally be subject to state and
local income taxes. A state income (and possibly local income and/or intangible
property) tax exemption may be available to the extent, if any, the fund's
distributions are derived from interest on (or, in the case of intangible
property taxes, the value of its assets is attributable to) certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. The
fund does not intend to seek to meet any such thresholds or requirements.
Special tax rules apply to IRA accounts (including penalties on certain
distributions and other transactions) and to other special classes of investors,
such as tax-exempt organizations, banks or insurance companies. Investors should
consult their tax advisers for more information.
CALCULATION OF PERFORMANCE AND YIELD QUOTATIONS
The average annual total return of the fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period and that, with
respect to Individual Shares, the CDSC is applied at the end of the period.
Because each class of shares has its own fee structure and the Individual Shares
class has a CDSC, the classes will have different performance results.
The yield of the fund is computed by dividing its net investment income
per share earned during a recent 30-day period by the maximum offering price
(i.e. net asset value) per share on the last day of the period and annualizing
the resulting figure. Net investment income per share is equal to the fund's
dividends and interest earned during the period, with the resulting number being
divided by the average daily number of shares outstanding and entitled to
receive dividends during the period.
The fund's yield is calculated according to the following formula:
6
Yield = 2 [ ( a-b + 1) - 1 ]
---
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of shares outstanding during the period.
d = the maximum offering price per share on the last day of the period.
Yield and effective yield will be based on historical earnings and are not
intended to indicate future performance. Yield and effective yield will vary
based on changes in market conditions and the level of expenses. The fund's
yield or total return may be compared to the Consumer Price Index and various
domestic securities indices. The fund's yield or total return and comparisons
with these indices may be used in advertisements and in information furnished to
present or prospective shareholders.
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. In addition, the performance of the fund may
be compared to alternative investment or savings vehicles and/or to indexes or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumers Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Smart Money, USA
Today, U.S. News and World Report, The Wall Street Journal and Worth may also be
cited (if the fund is listed in any such publication) or used for comparison, as
well as performance listings and rankings from various other sources including
Bloomberg Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac,
Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co.,
Lipper Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
<PAGE>
The average annual total return for the fund for the fiscal year ended
December 31, 1999 was 16.91% for the Individual Share Class, 17.75% for the
Institutional Service Share Class and 25.12% for the Institutional Class.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the fund.
FINANCIAL STATEMENTS
The audited financial statements of, and the independant auditors' report
for the fund appear in the fund's most recent annual report to shareholders and
are incorporated by reference into this Statement of Additional Information. A
copy of the annual report is attached to this Statement of Additional
Information.
Registrant incorporates by reference the audited financial information for
the fund for the fiscal year ended December 31,1999 as previously filed
electronically with the Securities and Exchange Commission (Accession Number
0000715165-00-000007).
<PAGE>
APPENDIX
- -------------------------------------------------------------------------------
WRIGHT QUALITY RATINGS
Wright Quality Ratings provide the means by which the fundamental criteria
for the measurement of quality of an issuer's securities can be objectively
evaluated.
Each rating is based on individual measures of quality grouped into four
components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability
and Stability, and (4) Growth. The total rating is three letters and a numeral.
The three letters measure (1) Investment Acceptance, (2) Financial Strength, and
(3) Profitability and Stability. Each letter reflects a composite measurement of
eight individual standards which are summarized as A: Outstanding, B: Excellent,
C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects
Growth and is a composite of eight individual standards ranging from 0 to 20.
EQUITY SECURITIES
INVESTMENT ACCEPTANCE reflects the acceptability of a security by and its
marketability among investors, and the adequacy of the floating supply of its
common shares for the investment of substantial funds.
FINANCIAL STRENGTH represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
PROFITABILITY AND STABILITY measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
GROWTH per common share of the corporation's equity capital, earnings, and
dividends -- rather than the corporation's overall growth of dollar sales and
income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
DEBT SECURITIES
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are most applicable to fixed income and reserve investments. The
first, Financial Strength, represents the amount, the adequacy and the liquidity
of the corporation's resources in relation to current and potential
requirements. Its principal components are aggregate equity and total capital,
the ratios of (a) invested equity capital, and (b) long-term debt, total of
corporate capital, the adequacy of net working capital, fixed charges coverage
ratio and other appropriate criteria. The second letter represents Profitability
and Stability and measures the record of a corporation's management in terms of:
(a) the rate and consistency of the net return on shareholders' equity capital
investment at corporate book value, and (b) the profits and losses of the
corporation during generally adverse economic periods, and its ability to
withstand adverse financial developments.
<PAGE>
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed-income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 AND P-1 COMMERCIAL PAPER RATINGS BY S&P AND MOODY'S
An S&P Commercial Paper Rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to S&P by the
issuer or obtained from other sources it considers reliable. The ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
BOND RATINGS
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and S&P. Moody's uses a nine-symbol system with Aaa being the highest
rating and C the lowest. S&P uses a 10-symbol system that ranges from AAA to D.
Bonds within the top four categories of Moody's (Aaa, Aa, A and Baa) and of S&P
(AAA, AA, A and BBB) are considered to be of investment-grade quality. Bonds in
the lowest investment grade category (BBB) may have speculative characteristics.
Note that both S&P and Moody's currently give their highest rating to issuers
insured by the American Municipal Bond Assurance Corporation (AMBAC) or by the
Municipal Bond Investors Assurance Corporation (MBIA).
Bonds rated A by S&P have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher-rated categories. The
rating of AA is accorded to issues where the capacity to pay principal and
interest is very strong and they differ from AAA issues only in small degree.
The AAA rating indicates an extremely strong capacity to pay principal and
interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
<PAGE>
NOTE RATINGS
In addition to Wright quality ratings, municipal notes and other short-term
loans may be assigned ratings by Moody's or S&P.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group.
S&P's top ratings for municipal notes issued after July 29, 1984 are SP-1
and SP-2. the designation SP-1 indicates a very strong capacity to pay principal
and interest. A "+" is added for those issues determined to possess overwhelming
safety characteristics. An "SP-2" designation indicates a satisfactory capacity
to pay principal and interest.
<PAGE>
PART C
===============================================================================
Other Information
Item 23. Exhibits
(a) (1 Declaration of Trust dated November 25, 1996 filed as
Exhibit (1) to the Registration Statement filed on December 2,
1996 and incorporated herein by reference.
(2) Amendment dated February 24, 1997 to the Declaration of Trust
filed as Exhibit (1)(b) to Post-Effective Amendment No. 2
filed on September 10, 1997 and incorporated herein by
reference.
(b) By-Laws filed as Exhibit (2) to Pre-Effective Amendment No. 1
filed on February 24, 1997 and incorporated herein by
reference.
(c) Not Applicable
(d) (1) Investment Advisory Contract with Wright Investors' Service,
Inc. dated September 23, 1998 filed as Exhibit (d)(1)
to Post-Effective Amendment No. 4 on February 24, 1999 and
incorporated herein by reference.
(2) Amended and Restated Administration Agreement with Eaton Vance
Management dated February 1, 1998 filed as Exhibit (5)(b) to
Post-Effective Amendment No. 24 filed April 30, 1998 and
incorporated herein by reference.
(e) Distribution Contract between the Fund and Wright Investors'
Service Distributors, Inc. dated March 10, 1997 filed as
Exhibit (6) to Post-Effective Amendment No. 2 filed on September
10, 1997 and incorporated herein by reference.
(f) Not Applicable
(g) (1) Master Custodian Agreement between Wright Managed
Investment Funds and Investors Bank & Trust Company adopted
March 10, 1997 filed as Exhibit (8) to Post-Effective
Amendment No. 2 filed on September 10, 1997 and incorporated
herein by reference.
(2) Amendment dated September 24, 1997 to Master Custodian
Agreement filed as Exhibit (g)(2) to Post-Effective Amendment
No. 4 on February 24, 1999 and incorporated herein by
reference.
(h) Not Applicable
(i) (1) Opinion of Counsel dated April 7, 1998 filed as Exhibit 10 to
Post-Effective Amendment No. 3 and incorporated herein
by reference.
(2) Consent of Counsel filed herewith.
(j) Consent of Independent Auditors filed herewith.
(k) Not Applicable
(l) Share Purchase Agreement dated January 31, 1997 filed as Exhibit
(13) to Pre-Effective Amendment No.1 filed on February 24, 1997
and incorporated herein by reference.
(m) (1) Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 dated March 10, 1997 filed as
Exhibit (15)(a) to Post-Effective Amendment No. 2 filed on
September 10, 1997 and incorporated herein by reference.
(2) Service Plan dated March 10, 1997 filed as Exhibit (15)(b) to
Post-Effective Amendment No. 2 filed on September 10, 1997 and
incorporated herein by reference.
(n) Not Applicable
(o) Multiple Class Plan pursuant to Rule 18f-3 dated March 10, 1997
filed as Exhibit (18) to Post-Effective Amendment No. 2 filed on
September 10, 1997 and incorporated herein by reference.
(p) (1) Power of Attorney dated March 26, 1998 filed as Exhibit
17(a) to Post-Effective Amendment No. 4 filed April 30, 1998
and incorporated herein by reference.
(2) Power of Attorney dated December 9, 1998 filed as Exhibit
(p)(2) to Post-Effective Amendment No. 4 on February 24, 1999
and incorporated herein by reference.
(q) Codes of Ethics filed herewith.
<PAGE>
Item 24. Persons Controlled by or under Common Control with Registrant
Not Applicable.
Item 25. Indemnification
The Registrant's By-Laws filed as Exhibit (2) to Pre-Effective Amendment No. 1
contain provisions limiting the liability, and providing for indemnification, of
the Trustees and officers under certain circumstances.
The Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reasons
of negligent errors and omissions committed in their capacities as such.
Item 26. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the captions "Officers and
Trustees" and "Investment Advisory and Administrative Services" in the Statement
of Additional Information, which information is incorporated herein by
reference.
Item 27. Principal Underwriter
(a) Wright Investors' Service Distributors, Inc. (a wholly-owned
subsidiary of The Winthrop Corporation) acts as principal
underwriter for each of the investment companies named below.
Catholic Values Investment Trust
The Wright EquiFund Equity Trust
The Wright Managed Equity Trust
The Wright Managed Income Trust
The Wright Asset Allocation Trust
<TABLE>
<CAPTION>
(b) (1) (2) (3)
Name and Principal Positions and Officers Positions and Offices
Business Address with Principal Underwriter with Registrant
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. M. Moody III* President Vice President and Trustee
Peter M. Donovan* Vice President and Treasurer President and Trustee
Vincent M. Simko* Vice President and Secretary None
- ----------------------------------------------------------------------------------------------------------------------------------
* Address is 440 Wheelers Farms Road, Milford, CT 06460
</TABLE>
(c) Not Applicable.
Item 28. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the registrant's
custodian, Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA
02116, and its transfer agent, PFPC, Inc., 4400 Computer Drive, Westborough, MA
01581-5120, with the exception of certain corporate documents and portfolio
trading documents which are either in the possession and custody of the
Registrant's administrator, Eaton Vance Management, 255 State Street, Boston, MA
02109 or of the investment adviser, Wright Investors' Service, Inc., 440
Wheelers Farms Road, Milford, CT 06460. Registrant is informed that all
applicable accounts, books and documents required to be maintained by registered
investment advisers are in the custody and possession of the Registrant's
administrator, Eaton Vance Management, or of the investment adviser, Wright
Investors' Service, Inc.
<PAGE>
Item 29. Management Services
Not Applicable.
Item 30. Undertakings
(a) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the latest annual report to
shareholders, upon request and without charge.
(b) The Registrant undertakes to assist shareholders seeking to remove a
trustee(s) of the Registrant in the manner set forth in Section 16(c)
of the Investment Company Act of 1940.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bridgeport, and the State
of Connecticut on the 26th day of April, 2000.
CATHOLIC VALUES INVESTMENT TRUST
By: Peter M. Donovan*
---------------------------------
Peter M. Donovan, Vice President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the 26th day of April, 2000.
SIGNATURE TITLE
- -------------------------------------------------------------------------------
Peter M. Donovan* President, Principal
- ------------------- Executive Officer & Trustee
Peter M. Donovan
James L. O'Connor* Treasurer, Principal
- ------------------- Financial and Accounting Officer
James L. O'Connor
H. Day Brigham, Jr.* Trustee
- ---------------------
H. Day Brigham, Jr.
Judith R. Corchard* Trustee
- ---------------------
Judith R. Corchard
Dorcas R. Hardy* Trustee
- ---------------------
Dorcas R. Hardy
Leland Miles* Trustee
- ---------------------
Leland Miles
/s/A. M. Moody III Trustee
- ---------------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- ---------------------
Lloyd F. Pierce
Richard E. Taber* Trustee
- ---------------------
Richard E. Taber
Raymond Van Houtte* Trustee
- --------------------
Raymond Van Houtte
*By: /s/ A. M. Moody III
- ---------------------------
A. M. Moody III
Attorney-in-Fact
<PAGE>
Exhibit Index
The following Exhibits are filed as part of this Amendment to the
Registration Statement pursuant to Rule 483 of Regulation C.
Exhibit No. Description
- -------------------------------------------------------------------------------
(i) (2) Consent of Counsel
(j) Consent of Independent Certified Public Accountants
(q) Codes of Ethics
Exhibit (i)(2)
Hale and Dorr LLP
Counsellors at Law
60 State Street
Boston,Massachusetts 02109
617-526-6000 FAX 617-526-5000
April 25, 2000
Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549
Re: Post-Effective Amendment No. 6 to the Registration
Statement of Catholic Values Investment Trust (Trust)
File Nos. 333-17161; 811-07951 (PEA no. 6)
---------------------------------------------------
Gentlemen:
Hale and Dorr LLP hereby consents to the incorporation by reference into
PEA no. 6 of its opinion, dated April 7, 1998, filed with the Securities and
Exchange Commission on April 30, 1998, as exhibit no. 10 to post-effective
amendment no. 3.
The consent may not be used for any purpose other than as set forth above
without our further consent.
Very truly yours,
/s/Hale and Dorr LLP
Hale and Dorr LLP
EXHIBIT j
Independent Auditors' Consent
We consent to the incorporation by reference in this Post-Effective
Amendment No. 6 to the Registration Statement of the Catholic Values Investment
Trust (1993 Act File No. 333-17161) on behalf of the Catholic Values Investment
Trust Equity Fund of our report dated February 4, 2000, included in the Annual
Report to Shareholders for the year ended December 31, 1999, in the Statement of
Additional Information which is part of such Registration Statement.
We also consent to the reference to our Firm under the heading "Financial
Highlights" in the Prospectus and under the caption "Independent Certified
Public Accountants" in the Statement of Additional Information.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 26, 2000
4
CODE OF ETHICS
ADOPTED BY
THE WRIGHT MANAGED INCOME TRUST
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT EQUIFUND EQUITY TRUST
THE WRIGHT ASSET ALLOCATION TRUST
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
THE WRIGHT BLUE CHIP MASTER PORTFOLIO TRUST
THE CATHOLIC VALUES INVESTMENT TRUST
As Adopted March 23, 2000
Each of The Wright Managed Income Trust, The Wright Managed Equity
Trust, The Wright EquiFund Equity Trust, The Wright Asset Allocation Trust, The
Wright Managed Blue Chip Series Trust, The Wright Blue Chip Master Portfolio
Trust and The Catholic Values Investment Trust (the "Funds") has adopted this
Code of Ethics, pursuant to Rule 17j-1 under the Investment Company Act of 1940,
as amended (the "1940 Act"), with respect to certain types of personal
securities transactions by the officers and Trustees of the Funds which might be
deemed to create possible conflicts of interest and to establish reporting
requirements and enforcement procedures with respect to such transactions.
I. Code Provisions Applicable Only to Affiliated Officers and Trustees of
the Funds.
A. INCORPORATION OF ADVISER'S CODE OF ETHICs. The provisions of the
Adviser's Code of Ethics of Wright Investors' Service (the "Adviser"), which is
attached as APPENDIX A hereto, are hereby incorporated herein as each Fund's
Code of Ethics applicable to Officers and Trustees of such Fund who are
employees or affiliates of the Adviser. A violation of the Adviser's Code of
Ethics by any such Officer or Trustee of a Fund shall constitute a violation of
the Fund's Code of Ethics. Reports of the Adviser's personnel required by the
Adviser's Code of Ethics shall be deemed to be reports with the Funds under this
Code of Ethics, and shall at all times be available to the Funds.
B. REPORTS UNDER THE ADMINISTRATOR'S CODE OF ETHICS. Officers and
Trustees of the Funds who are employees of the Administrator shall file copies
of the reports required by the Administrator's Code of Ethics with the Review
Officer (as defined in Section I.C. of this Code). Such filings shall be deemed
to be filings with the Funds under this Code of Ethics, and shall at all
times be available to the Funds.
C. REVIEW. The person designated as the review officer by the Trustees
of each Fund (the "Review Officer") shall compare the reported personal
securities transactions with completed and contemplated portfolio transactions
of the Funds to determine whether a violation of this Code may have occurred.
Before making any determination that a violation has been committed by any
person, the Review Officer shall give such person an opportunity to supply
additional explanatory material. If the Review Officer determines that a
material violation of this Code has or may have occurred, he or she shall submit
his or her written determination, together with the transaction report and any
additional explanatory material provided by the individual, to the President of
the Adviser, who shall make an independent determination of whether a material
violation has occurred.
D. SANCTIONS. If the Review Officer or the President of the Adviser
finds that a material violation has occurred, he shall report the violation and
any sanctions imposed by the Adviser to the Trustees of the affected Funds. If a
securities transaction of the Review Officer or the President of the Adviser is
under consideration, an alternate review officer appointed by the Trustees of
each Fund, who may be a Vice President or other senior officer of the Adviser or
an unaffiliated third party, shall act in all respects in the manner prescribed
herein for the Review Officer or the President of the Adviser.
II. CODE PROVISIONS APPLICABLE ONLY TO INDEPENDENT TRUSTEES OF THE FUNDS.
A. DEFINITIONS.
(1) "Beneficial ownership" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions of Section
16 of the Securities Exchange Act of 1934 and the rules and regulations
thereunder. Application of this definition is explained in more detail in the
form of report attached as Appendix B hereto.
(2) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act. Generally, it means the power to exercise a controlling
influence over the management or policies of a company, unless such power is
solely the result of an official position with such company.
(3) "Independent Trustee" means a Trustee of any Fund who is not an
employee or affiliate of the Adviser or the Administrator.
(4) "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.
(5) "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act (generally, all securities) except that it shall not
include direct obligations of the Government of the United States, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term debt instruments (including repurchase agreements) and shares of
registered open-end investment companies.
(6) A Security is "being considered for purchase or sale" by a Fund when a
recommendation that the Fund purchase or sell the Security has been communicated
by a member of the Adviser's Investment Department to an officer of such Fund.
B. PROHIBITED PURCHASES AND SALES. No Independent Trustee of any Fund
shall purchase or sell, directly or indirectly, any Security in which he has,
or by reasons of such transaction acquires, any direct or indirect beneficial
ownership and which to his actual knowledge at the time of such purchase or
sale:
(1) is being considered for purchase or sale by such Fund; or
(2) is being purchased or sold by such Fund.
C. EXEMPTED TRANSACTIONS. The prohibitions of Section IIB of this Code
shall not apply to:
(1) purchases or sales effected in any account over which the Independent
Trustee has no direct or indirect influence or control;
(2) purchases or sales
which are non-volitional on the part of the Independent Trustee or a Fund;
(3)purchases which are part of an automatic dividend reinvestment plan;
(4)purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such rights were
acquired from such issuer, and sales of such rights so acquired;
(5) purchases or sales other than those exempted in Paragraphs (1) through
(4) above, (a) which will not cause the Independent Trustee to gain improperly a
personal profit as a result of his relationship with any Fund, or (b) which will
only remotely affect a Fund because the proposed transaction would be unlikely
to affect a highly institutional market, or (c) which, because of the
circumstances of the proposed transaction, are not related economically to the
Securities purchased or sold or to be purchased or sold by a Fund, and in each
case which are previously approved by the Review Officer, which approval shall
be confirmed in writing.
D. REPORTING. Whether or not one of the exemptions listed in Section IIC
hereof applies, each Independent Trustee of each Fund shall file with the Review
Officer a written report containing the information described below in this
Section IID with respect to each transaction in any Security in which such
Independent Trustee has, or by reasons of such transaction acquires, any direct
or indirect beneficial ownership, if such Independent Trustee, at the time he
entered into that transaction, actually knew or, in the ordinary course of
fulfilling his official duties as a Trustee of such Fund should have know,1 that
during the 15-day period immediately preceding or after the date of that
transaction:
(a) such Security was or is to be purchased or sold by the Fund, or
(b) such Security was or is being considered for purchase or sale by the Fund;
PROVIDED, HOWEVER, that such Independent Trustee shall not be required to make a
report with respect to any transaction effected for any account over which he
does not have any direct or indirect influence or control. Each such report
shall be deemed to be filed with the Funds for purposes of this Code, and may
contain a statement that the report shall not be construed as an admission by
the Independent Trustee that he has any direct or indirect beneficial ownership
in the Security to which the report relates.
Such report shall be made not later than 10 days after the end of the
calendar quarter in which the transaction to which the report relates was
effected, and shall contain the following information:
(i) The date of the transaction, the title, interest rate and maturity date
(if applicable), the number of shares, and the principal amount of each
security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any other type of
acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(v) The date that the report is submitted.
Any report concerning a purchase or sale prohibited under Section IIB hereof
with respect to which the Independent Trustee relies upon one of the exemptions
provided in Section IIC shall contain a brief statement of the exemption relied
upon and the circumstances of the transaction.
E. REVIEW. The Review Officer shall compare the reported personal
securities transactions with completed and contemplated portfolio transactions
of each Fund to determine whether any transaction ("Reviewable Transaction") of
the type listed in Section IIB (without regard to exemptions provided by Section
IIC(1) through (5)) may have occurred. If the Review Officer determines that a
Reviewable Transaction may have occurred, he shall submit the pertinent
information regarding the transaction to counsel for the Funds. Such counsel
shall determine whether a material violation of this Code has occurred, taking
into account all the exemptions provided under Section IIC. Before making any
determination that a violation has occurred, such counsel shall give the person
involved an opportunity to supply additional information regarding the
transaction in question.
F. SANCTIONS. If such counsel determines that a material violation of this
Code has occurred, such counsel shall so advise the President of the affected
Fund and an ad hoc committee consisting of the Independent Trustees of such
Fund, other than the person whose transaction is under consideration, and such
counsel shall provide the committee with a report of the matter, including any
additional information supplied by such person. The committee may impose such
sanctions as it deems appropriate.
III. MISCELLANEOUS CODE PROVISIONS.
A. AMENDMENT OR REVISION OF THE ADVISER'S CODE OF ETHICS. Any material
change or amendment to the Adviser's Code of Ethics must be approved by the
Board of Trustees of the Funds (including a majority of Independent Trustees) no
later than six months of its adoption by the Adviser. Such amendment or revision
shall be deemed to be an amendment or revisions of Section IA of this Code, and
a copy of such amendment or revision shall be appended hereto.
B. ANNUAL REPORT AND CERTIFICATION OF THE ADVISER. No later than once
annually, the Adviser shall prepare and submit a written report and
certification to the Trustees of the Funds, as required by Paragraph C.8. of the
Adviser's Code of Ethics (Appendix A hereto).
C. RECORDS. Each Fund shall maintain records in the manner and to the
extent set forth below, which records may be maintained in electronic format
under the conditions described in Rule 31a-2(f)(a) under the 1940 Act and shall
be available for examination by representatives of the Securities and Exchange
Commission:
(1) A copy of this Code and any other code which is, or at any time within
the past five years has been, in effect shall be preserved in an easily
accessible place;
(2) A record of any violation of this Code and of any action taken as a
result of such violation shall be preserved in an easily accessible place for a
period of not less than five years following the end of the fiscal year in which
the violation occurs;
(3) A copy of each report made by an Officer or Trustee pursuant to this
Code shall be preserved for a period of not less than five years after the end
of the fiscal year in which it is made, the first two years in an easily
accessible place;
(4) A list of all persons who are, or within the past five years have been,
required to make reports pursuant to this Code shall be maintained in a easily
accessible place;
(5) A copy of each annual written report and certification made by the
Adviser to the Board of Trustees of the Funds must be maintained for a period of
five years after the end of the fiscal year in which it is made, the first two
years in an easily accessible place; and
(6) A record of any decision, and the reasons supporting the decision, to
approve the acquisition by Access Persons of any initial public offering or
private placement securities shall be maintained for at least five years after
the end of the fiscal year in which the approval was granted.
C. CONFIDENTIALITY. All reports of securities transactions and any other
information filed with the Funds or furnished to any person pursuant to this
Code shall be treated as confidential, but are subject to review as provided
herein and by representatives of the Securities and Exchange Commission.
D. INTERPRETATION OF PROVISIONS. The Trustees of each Fund may from time to
time adopt such interpretations of this Code as they deem appropriate.
E. EFFECT OF VIOLATION OF THE CODE. In adopting Rule 17j-1 under the
1940 Act, the Securities and Exchange Commission specifically noted in
Investment Company Act Release No. IC-11421 that a violation of any provision of
a particular code of ethics, such as this Code, would not be considered a per se
unlawful act prohibited by the general anti-fraud provisions of the Rule. As
stated in the Release:
"....the Commission believes that such a violation should and would be
considered, with all the surrounding facts and circumstances, merely as one
piece of evidence in determining whether, in addition to a violation of the code
of ethics, a violation of the anti-fraud provisions of the Rule also has
occurred."
In adopting this Code of Ethics, it is not intended that a violation of this
Code is or should be considered to be a violation of Rule 17j-1.
<PAGE>
WRIGHT INVESTORS' SERVICE, INC.
CODE OF ETHICS - PERSONAL INVESTMENTS
A. STATEMENT OF GENERAL PRINCIPLES
All directors, officers and employees of Wright Investors' Service,
Inc. ("Wright") shall conduct themselves with integrity and dignity and act in a
thoroughly ethical manner in dealings with clients, the public and fellow
employees. All such persons shall have the duty at all times to place the
interests of the shareholders of Wright-managed mutual funds (the "Funds") and
Wright's other clients first, and may not in any respect take advantage of
client transactions. It is essential that we avoid not only actual conflicts,
but also any appearance of conflicts of interest and any abuse of an
individual's position of trust and responsibility. No Code of Ethics can cover
every possible circumstance, and an individual's conduct must depend ultimately
upon his sense of fiduciary obligation to the Funds and Wright's direct advisory
clients.
This Code of Ethics ("Code") supersedes Wright's prior code and Statement
of Policy. The management of Wright believes this Code meets current SEC
requirements and is appropriate and desirable for the Company.
All requests and reports provided to anyone pursuant to this Code shall
be treated as confidential, but are subject to review as provided herein and by
representatives of the Securities and Exchange Commission.
B. APPLICABILITY OF RESTRICTIONS AND PROCEDURES
PERSONS AFFECTED.
ALL EMPLOYEES* located in any office of Wright must comply with the
requirements of Paragraphs C-1 through C-3, below and all provisions of
Section E. Employees must also familiarize themselves with all other
parts of this Code.
ACCESS PERSONS (as defined in Exhibit A) must comply with the
requirements of Paragraphs C-1 through C-6, inclusive, and all
provisions of Section E. Access Persons must also familiarize
themselves with all other parts of this Code.
ACCOUNTS INCLUDED.
Wright's policies and procedures concerning personal investments apply
to all securities accounts in which the affected employee has "a direct
or indirect beneficial ownership," unless the employee has no "direct
or indirect influence or control" over the account. The concept of
BENEFICIAL OWNERSHIP is an important part of this Code and is more
extensively defined in Exhibit A.
* For purposes of clarity, all employees of The Winthrop Corporation
performing services for Wright are referred to as employees of Wright.
TYPES OF SECURITIES COVERED.
In general this Code employs the terms Security to mean shares of any
publicly-traded company, including puts, calls, options and warrants
for such securities, and open-end and closed-end mutual funds, except
direct obligations of the US Government, bank certificates of deposit
and money market funds.
C. COMPLIANCE PROCEDURES
1. Disclosure of Personal Holdings. As a condition to employment, each
newly-hired person must (i) make full disclosure of any brokerage account and
all publicly-traded securities beneficially owned by the employee or members of
the employee's immediate family; (ii) agree to comply with the Company's written
policies restricting personal trading and prohibiting insider trading; and (iii)
provide a written acknowledgment of receipt of such policies. This disclosure
must include all of the information requested on Exhibit B-1.
2. Preclearance. No employee of Wright may buy or sell shares of any
Security without the prior approval of the Chief Executive Officer (CEO) or the
Chief Investment Officer (CIO) of Wright. Any such approval will only be given
in accordance with the provisions of Paragraph D, "Guidelines for Approval of
Securities Transactions." The approval will remain valid for three days.
Employees who receive approvals for trades must have the broker send a copy of
the confirmation to the Legal Department.
3. Annual Certification of Compliance. All employees shall certify
annually that they (i) have read and understand this Code; (ii) recognize that
they are subject thereto; (iii) have complied with its requirements, including
any necessary preclearance; and (iv) have disclosed or reported all personal
securities transactions required to be disclosed or reported pursuant to this
Code. The form of such certification is set forth in Exhibit B-2.
4. Broker/Dealer Reports. All employees shall cause each broker/dealer
at which they have an account to send a copy of all quarterly and annual account
statements to the Legal Department.
5. Quarterly Report of Transactions. Each Access Person must file every
quarter with the Legal Department a report of all transactions in Securities.
(See Exhibit B-3) Transactions encompass sales, purchases and other acquisitions
or dispositions, including gifts and exercise of conversion rights or
subscription rights. In addition, if the Access Person established a securities
account during the quarter, the report must disclose the name of the broker,
dealer or bank with whom the account is established and the date the account was
established. The report must be filed with the Legal Department even if there
were no reportable transactions during the prior calendar quarter, in which case
the employee should state on the form that there were no such transactions. The
report is due ten days after the end of each calendar quarter. Failure to submit
the report in a timely manner is a violation of SEC regulations and this Code,
and may be a cause for sanctions. Copies of all brokerage statements should be
attached to an Access Person's signed report.
6. Annual Disclosure. No less than once annually, all Access Persons shall
submit to the Legal Department a list of all of his/her securities holdings. The
specific information of this report is identical to that of the Initial
Disclosure of Investments. Brokerage statements may be substituted for a
separate report.
7. Monitoring of Compliance. Within thirty days after the end of each
quarter, the Legal Department* shall review the Quarterly and Annual Reports for
reconciliation with the Initial Disclosure, Annual Disclosure, and the
Preclearance Approvals given in the same quarter or year, as applicable. The
Legal Department will investigate all apparent violations of this Code and will
prepare a report for the President of Wright.
8. Review by the Board of Trustees. No less than once each year, Wright
shall prepare and submit a written report to the Trustees of the Funds that
o describes any issues arising under this Code of Ethics since the last
report to the Board of Trustees, including, but not limited to,
information about material violations of the Code or procedures, and
sanctions imposed in response to the material violations; and
o certifies that Wright has adopted procedures reasonably necessary to
prevent violations of this Code.
If there have been any material changes to the Code of Ethics, Wright
will submit such changes to the Trustee at the next meeting of the Board.
The Trustees shall review any violations of the Code specified in the
annual report and any recommended changes in existing restrictions and
procedures. They should then take such action, if any, as they may deem
appropriate.
9. Additional Disclosure. Wright's Code of Ethics shall be filed with
the SEC as an exhibit to the registration statement of each Wright-managed
mutual fund. There will be disclosure in the Funds' prospectuses or their
statements of additional information that (i) Wright has a code of ethics, (ii)
whether personnel of Wright are permitted to invest in securities for their own
accounts, and (iii) that the code is on public file, and available from the SEC.
* As of March, 2000, Helen George, Senior Vice President of Legal Affairs, is
the person responsible for reviewing the reports.
D. GUIDELINES FOR APPROVAL OF SECURITIES TRANSACTIONS
1. Initial Public Offerings. Generally no approval will be given for
any employee to purchase securities of a publicly owned corporation that is
making an initial public offering of its securities, except in connection with
the exercise of rights issued in respect of securities such employee owns. The
reason for this rule is that it precludes the appearance that an employee has
used our clients' market stature as a means of obtaining for himself or herself
"hot" issues which would otherwise not be offered to him or her. Any realization
of short-term profits may create at least the appearance that an investment
opportunity that should have been available to a direct advisory account or a
Fund account was diverted to the personal benefit of an employee.
2. Limited Offerings. Any prior approval of any acquisition of
securities in a limited offering (such as a private placement) should take into
account, among other factors, whether the investment opportunity should be
reserved for a Fund and its shareholders or other client, and whether the
opportunity is being offered to an individual by virtue of his or her position
with the investment adviser.
3. Blackout Periods. No employee shall be authorized to exercise a
securities transaction within seven calendar days before or after a direct
advisory account or a Fund in the Wright complex has a pending "buy" or "sell"
order in that same security until that order is executed or withdrawn.
4. Short Sales and Options. Usually no approval will be given for short
sales. Also prohibited are buying, selling or exercising put or call options or
combinations thereof of securities held by a Fund or other advisory client or
which are being considered for purchase for them. It should be noted, for
example, that an exercise of an option or the covering of a short sale could
conflict with current trading for clients. However, where any such option is
held by a member of an employee's family, approval may be given provided there
is no conflict with the interests of the Funds or other Wright clients.
5. Short-Term Trading Profits. Short-term trading, i.e., profiting in
the purchase and sale or sale and purchase of the same (or equivalent)
securities within 60 calendar days, is prohibited and approval will generally
not be given. The management of Wright believes that short-term trading by
Access Persons may increase the risk of conflicts of interest, affect an
individual's investment judgment, and in some instances divert an individual's
attention from the best interests of our Funds and other clients. Where one or
both sides of a short-term trade have not been pre-cleared, there is presumably
already a violation and the whole matter should be handled under the Sanctions
section of this Code, with disgorgement of profits being only one alternative
available to the President of Wright.
6. Margin Accounts. Margin Accounts are absolutely prohibited and no
approval will be given.
7. By-Law Violation. No approval will be given which would result in an
employee's holdings exceeding 1/2 of 1% of the shares or securities of any
publicly-owned issuer.
8. General Standards. In the rare case where approval is given for a
transaction involving an initial public offering or a limited offering,
additional written disclosure will be required and will be maintained in the
Legal Department. In authorizing any other types of transactions, the CEO or CIO
may consider the extent to which the employee has access to pending investment
decisions, the number of transactions already approved for such employee within
the past six months, whether the employee has made unreasonable use of the
company's resources during business hours in arriving at a personal investment
decision, and any other factors that are, in the opinion of the CEO or CIO,
pertinent to the matter.
E. RESPONSIBILITIES OF ALL EMPLOYEES RELATING TO PERSONAL INVESTMENTS.
1. Securities Recommended by a Member of the Investment Committee. Each
member of the Investment Committee who makes a recommendation as to whether a
security shall be purchased, sold or held in the account of a Fund or client
shall fully apprise the CEO or CIO of Wright of any direct or indirect
beneficial ownership the employee has in such security.
2. By-Law Provision. The by-laws of the Wright Funds generally provide
that a Wright Fund shall not purchase or retain in its portfolio any securities
issued by an issuer any of whose officers, directors or security holders is an
officer or director of the Fund, or is an officer or director of the investment
adviser of the Fund, if after the purchase of the securities of such issuer by
the Fund one or more of such persons owns beneficially more than 1/2 of 1% of
the shares or securities, or both, of such issuer, and such persons owning more
than 1/2 of 1% of such shares or securities together own beneficially more than
5% of such shares or securities, or both. In view of the foregoing, and to avoid
any possibility of an inadvertent violation of this by-law provision, no
approval will be given that would result in an employee's holdings exceeding 1/2
of 1% of the shares or securities of any publicly-owned issuer. Any request for
prior approval of a trade in this type of security must state whether this
provision applies.
3. Gifts. No employee shall accept gifts of a value in excess of $35
from any person or entity that does business with or on behalf of a Wright Fund
or direct advisory account. Any gift in excess of $35 shall be disclosed to the
President of Wright before acceptance by the employee.
4. Service As a Director. No employee shall serve on the board of
directors of a publicly traded company, absent prior authorization based upon a
determination by the President of Wright that the board service would be
consistent with the interests of the Fund and its shareholders which may have an
investment in such public company. In the relatively small number of instances
in which board service may be authorized, Access Persons serving as directors
should be isolated from those making investment decisions through written
procedures applicable to the person's position in Wright.
5. Sanctions. Careful adherence to this Code of Ethics is one of the
basic conditions of employment of every employee. Any employee violating any
provision of this Code of Ethics, including the Compliance Procedures, may be
subject to sanction, including but not limited to suspension or termination of
employment, censure or disgorgement of profits, at the determination of the
President of Wright.
Exhibit A
ACCESS PERSONS*
Using the Investment Company Act definition, an Access Person includes:
(i) any officer or director of Wright;
(ii) any employee of Wright who, in connection with his regular
functions or duties, makes, participates in or obtains information
regarding the purchase or sale of a security by a registered investment
company, or whose functions relate to the making of any recommendations
with respect to such purchases or sales; and
(iii) any natural person in a control relationship to Wright who
obtains information concerning recommendations regarding the
purchase or sale of a security for a Wright-managed mutual fund.
The current list of positions at Wright deemed to be "Access Persons"
are: directors, officers, trading department personnel, analysts and others
involved in making recommendations to portfolio managers, and any employee who
has direct contact with clients and/or receives advance notice from the
Investment Committee of contemplated portfolio transactions.
BENEFICIAL OWNERSHIP
Under current SEC interpretations, Beneficial Ownership includes
securities accounts of a spouse, minor children and relatives resident in the
employee's home, as well as accounts of another person if by reason of any
contract, understanding, relationship, agreement or other arrangement the
employee obtains therefrom benefits substantially equivalent to those of
ownership.
When an employee has a substantial measure of influence or control over
an account, but not direct or indirect beneficial ownership (as for example when
the employee serves as executor or trustee for someone outside his immediate
family, or manages or helps to manage a charitable a account), the rules set
forth in this Code of Ethics will not be considered to be directly applicable,
but in all transactions involving any such account the employee will be expected
to conform to the spirit of these rules and specifically avoid any activity that
conflicts or might appear to conflict with the interests of our clients.
* Since all provisions of this Code restrict all Access Persons, no special
mention of Investment Personnel, as defined by the SEC, has been made. Further,
any director of Wright who is not an "interested person" of Wright (as defined
in applicable SEC regulations) need not make any initial, annual or quarterly
report, unless the director knows, or should have known, of a possible conflict
of interest between his/her securities transaction and the investment decisions
of Wright or the Funds. Within thirty days after the adoption of this Code, the
Legal Department of Wright shall send each such director a notice that includes
a full explanation of the types of transactions that are, in any case,
prohibited and the circumstances under which it may be necessary to report a
transaction.
<PAGE>
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
CODE OF ETHICS - PERSONAL INVESTMENTS
A. STATEMENT OF GENERAL PRINCIPLES
Wright Investors' Service Distributors, Inc. ("Distributors") is the
principal underwriter of a family of mutual funds (the "Funds") managed by
Distributors' affiliate, Wright Investors' Service, Inc. ("Wright"). All
directors, officers and employees of Distributors shall conduct themselves with
integrity and dignity and act in a thoroughly ethical manner in dealings with
clients, the public and fellow employees. All such persons shall have the duty
at all times to place the interests of the shareholders of the Funds, and may
not in any respect take advantage of transactions made by or on behalf of the
Funds. It is essential that we avoid not only actual conflicts, but also any
appearance of conflicts of interest and any abuse of an individual's position of
trust and responsibility. No Code of Ethics can cover every possible
circumstance, and an individual's conduct must depend ultimately upon his sense
of fiduciary obligation to the Funds.
This Code of Ethics ("Code") supersedes Distributors's prior code and
Statement of Policy. The management of Distributors believes this Code meets
current SEC requirements and is appropriate and desirable for the Company.
All requests and reports provided to anyone pursuant to this Code shall
be treated as confidential, but are subject to review as provided herein and by
representatives of the Securities and Exchange Commission.
B. APPLICABILITY OF RESTRICTIONS AND PROCEDURES
Persons Affected.
ALL EMPLOYEES* located in any office of Distributors must comply with
the requirements of Paragraphs C-1 through C-3, below and all
provisions of Section E. Employees must also familiarize themselves
with all other parts of this Code.
ACCESS PERSONS (as defined in Exhibit A) must comply with the
requirements of Paragraphs C-1 through C-6, inclusive, and all
provisions of Section E. Access Persons must also familiarize
themselves with all other parts of this Code.
ACCOUNTS INCLUDED.
Distributors's policies and procedures concerning personal investments
apply to all securities accounts in which the affected employee has "a
direct or indirect beneficial ownership," unless the employee has no
"direct or indirect influence or control" over the account. The concept
of Beneficial Ownership is an important part of this Code and is more
extensively defined in Exhibit A.
* For purposes of clarity, all employees of The Winthrop Corporation
performing services for Distributors are referred to as employees of
Distributors.
TYPES OF SECURITIES COVERED.
In general this Code employs the terms Security to mean shares of any
publicly-traded company, including puts, calls, options and warrants
for such securities, and open-end and closed-end mutual funds, except
direct obligations of the US Government, bank certificates of deposit
and money market funds.
C. COMPLIANCE PROCEDURES*
1. Disclosure of Personal Holdings. As a condition to employment, each
newly-hired person must (i) make full disclosure of any brokerage account and
all publicly-traded securities beneficially owned by the employee or members of
the employee's immediate family; (ii) agree to comply with the Company's written
policies restricting personal trading and prohibiting insider trading; and (iii)
provide a written acknowledgment of receipt of such policies. This disclosure
must include all of the information requested on Exhibit B-1.
2. Preclearance. No employee of Distributors may buy or sell shares of
any Security without the prior approval of the President of Distributors. Any
such approval will only be given in accordance with the provisions of Paragraph
D, "Guidelines for Approval of Securities Transactions." The approval will
remain valid for three days. Employees who receive approvals for trades must
have the broker send a copy of the confirmation to the President of
Distributors.
3. Annual Certification of Compliance. All employees shall certify
annually that they (i) have read and understand this Code; (ii) recognize that
they are subject thereto; (iii) have complied with its requirements, including
any necessary preclearance; and (iv) have disclosed or reported all personal
securities transactions required to be disclosed or reported pursuant to this
Code. The form of such certification is set forth in Exhibit B-2.
4. Broker/Dealer Reports. All employees shall cause each broker/dealer
at which they have an account to send a copy of all quarterly and annual account
statements to the president of Distributors.
5. Quarterly Report of Transactions. Each Access Person must file every
quarter with the President of Distributors a report of all transactions in
Securities. (See Exhibit B-3) Transactions encompass sales, purchases and other
acquisitions or dispositions, including gifts and exercise of conversion rights
or subscription rights. In addition, if the Access Person established a
securities account during the quarter, the report must disclose the name of the
broker, dealer or bank with whom the account is established and the date the
account was established. The report must be filed with the President of
Distributors even if there were no reportable transactions during the
prior calendar quarter, in which case the employee should state on the form that
there were no such transactions. The report is due ten days after the end of
each calendar quarter. Failure to submit the report in a timely manner is a
violation of SEC regulations and this Code, and may be a cause for sanctions.
Copies of all brokerage statements should be attached to an Access Person's
signed report.
*At the present time, all employees of Distributors also perform services for
Wright. Therefore, a copy of any disclosure, preclearance (whether approved or
disapproved), report or certification required under Wright's Code of Ethics may
be submitted to the President of Distributors in order to comply with this Code.
6. Annual Disclosure. No less than once annually, all Access Persons shall
submit to the President of Distributors a list of all of his/her securities
holdings. The specific information of this report is identical to that of the
Initial Disclosure of Investments. Brokerage statements may be substituted for a
separate report.
7. Monitoring of Compliance. Within thirty days after the end of each
quarter, Internal Counsel for Distributors shall review the Quarterly and Annual
Reports for reconciliation with the Initial Disclosure, Annual Disclosure, and
the Preclearance Approvals given in the same quarter or year, as applicable. The
Internal Counsel will investigate all apparent violations of this Code and will
prepare a report for the President of Distributors.
8. Review by the Board of Trustees. No less than once each year,
Distributors shall prepare and submit a written report to the Trustees of the
Funds that
o describes any issues arising under this Code of Ethics since the last
report to the Board of Trustees, including, but not limited to,
information about material violations of the Code or procedures, and
sanctions imposed in response to the material violations; and
o certifies that Distributors has adopted procedures reasonably necessar
to prevent violations of this Code.
If there have been any material changes to the Code of Ethics,
Distributors will submit such changes to the Trustee at the next meeting of the
Board.
The Trustees shall review any violations of the Code specified in the
annual report and any recommended changes in existing restrictions and
procedures. They should then take such action, if any, as they may deem
appropriate.
9. Additional Disclosure. Distributors's Code of Ethics shall be filed
with the SEC as an exhibit to the registration statement of each Fund. There
will be disclosure in the Funds' prospectuses or their statements of additional
information that (i) Distributors has a code of ethics, (ii) whether personnel
of Distributors are permitted to invest in securities for their own accounts,
and (iii) that the code is on public file, and available from the SEC.
* As of March, 2000, Helen W. George is Internal Counsel for Distributors and
the person responsible for reviewing the reports.
D. GUIDELINES FOR APPROVAL OF SECURITIES TRANSACTIONS
1. Initial Public Offerings. Generally no approval will be given for
any employee to purchase securities of a publicly owned corporation that is
making an initial public offering of its securities, except in connection with
the exercise of rights issued in respect of securities such employee owns. The
reason for this rule is that it precludes the appearance that an employee has
used the Funds' market stature as a means of obtaining for himself or herself
"hot" issues which would otherwise not be offered to him or her. Any realization
of short-term profits may create at least the appearance that an investment
opportunity that should have been available to a Fund account was diverted to
the personal benefit of an employee.
2. Limited Offerings. Any prior approval of any acquisition of
securities in a limited offering (such as a private placement) should take into
account, among other factors, whether the investment opportunity should be
reserved for a Fund and its shareholders, and whether the opportunity is being
offered to an individual by virtue of his or her position with the principal
underwriter of the Funds.
3. Blackout Periods. No employee shall be authorized to exercise a
securities transaction within seven calendar days before or after a direct
advisory account or a Fund in the Wright complex has a pending "buy" or "sell"
order in that same security until that order is executed or withdrawn.
4. Short Sales and Options. Usually no approval will be given for short
sales. Also prohibited are buying, selling or exercising put or call options or
combinations thereof of securities held by a Fund, or which are being considered
for purchase for a Fund. It should be noted, for example, that an exercise of an
option or the covering of a short sale could conflict with current trading for a
Fund. However, where any such option is held by a member of an employee's
family, approval may be given provided there is no conflict with the interests
of the Fund(s).
5. Short-Term Trading Profits. Short-term trading, i.e., profiting in
the purchase and sale or sale and purchase of the same (or equivalent)
securities within 60 calendar days, is prohibited and approval will generally
not be given. The management of Distributors believes that short-term trading by
Access Persons may increase the risk of conflicts of interest, affect an
individual's investment judgment, and in some instances divert an individual's
attention from the best interests of the Funds. Where one or both sides of a
short-term trade have not been pre-cleared, there is presumably already a
violation and the whole matter should be handled under the Sanctions section of
this Code, with disgorgement of profits being only one alternative available to
the President of Distributors.
6. Margin Accounts. Margin Accounts are absolutely prohibited and no
approval will be given.
7. By-Law Violation. No approval will be given which would result in an
employee's holdings exceeding 1/2 of 1% of the shares or securities of any
publicly-owned issuer.
8. General Standards. In the rare case where approval is given for a
transaction involving an initial public offering or a limited offering,
additional written disclosure will be required and will be maintained by the
President of Distributors. In authorizing any other types of transactions, the
President may consider the extent to which the employee has access to pending
investment decisions, the number of transactions already approved for such
employee within the past six months, whether the employee has made unreasonable
use of the company's resources during business hours in arriving at a personal
investment decision, and any other factors that are, in the opinion of the
President, pertinent to the matter.
E. RESPONSIBILITIES OF ALL EMPLOYEES RELATING TO PERSONAL INVESTMENTS.
1. Securities Recommended by a Member of the Investment Committee. Each
member of the Investment Committee of Wright who is an employee of Distributors
and who makes a recommendation as to whether a security shall be purchased, sold
or held in the account of a Fund or client shall fully apprise the President of
Distributors of any direct or indirect beneficial ownership the employee has in
such security.
2. By-Law Provision. The by-laws of the Wright Funds generally provide
that a Wright Fund shall not purchase or retain in its portfolio any securities
issued by an issuer any of whose officers, directors or security holders is an
officer or director of the Fund, or is an officer or director of the principal
underwriter of the Fund, if after the purchase of the securities of such issuer
by the Fund one or more of such persons owns beneficially more than 1/2 of 1% of
the shares or securities, or both, of such issuer, and such persons owning more
than 1/2 of 1% of such shares or securities together own beneficially more than
5% of such shares or securities, or both. In view of the foregoing, and to avoid
any possibility of an inadvertent violation of this by-law provision, no
approval will be given that would result in an employee's holdings exceeding 1/2
of 1% of the shares or securities of any publicly-owned issuer. Any request for
prior approval of a trade in this type of security must state whether this
provision applies.
3. Gifts. No employee shall accept gifts of a value in excess of $35
from any person or entity that does business with or on behalf of a Wright Fund
or Distributors. Any gift in excess of $35 shall be disclosed to the President
of Distributors before acceptance by the employee.
4. Service As a Director. No employee shall serve on the board of
directors of a publicly traded company, absent prior authorization based upon a
determination by the President of Distributors that the board service would be
consistent with the interests of the Fund and its shareholders which may have an
investment in such public company. In the relatively small number of instances
in which board service may be authorized, Access Persons serving as directors of
Distributors should be isolated from personnel of Wright making investment
decisions through written procedures applicable to the person's position in
Distributors.
5. Sanctions. Careful adherence to this Code of Ethics is one of the
basic conditions of employment of every employee. Any employee violating any
provision of this Code of Ethics, including the Compliance Procedures, may be
subject to sanction, including but not limited to suspension or termination of
employment, censure or disgorgement of profits, at the determination of the
President of Distributors.
Exhibit A
ACCESS PERSONS*
Using the Investment Company Act definition, an Access Person includes
any director or officer of Distributors who, in the ordinary course of business,
makes, participates in or obtains information regarding, the purchase or sale of
Securities by any Fund for which Distributor acts, or whose functions or duties
in the ordinary course of business relate to the making of any recommendation to
any of the Funds regarding the purchase or sale of Securities.
The current list of positions at Distributors deemed to be "Access
Persons" are: directors, officers, and any employee who receives advance notice
from the Investment Committee of Wright of contemplated portfolio transactions.
BENEFICIAL OWNERSHIP
Under current SEC interpretations, Beneficial Ownership includes
securities accounts of a spouse, minor children and relatives resident in the
employee's home, as well as accounts of another person if by reason of any
contract, understanding, relationship, agreement or other arrangement the
employee obtains therefrom benefits substantially equivalent to those of
ownership.
When an employee has a substantial measure of influence or control over
an account, but not direct or indirect beneficial ownership (as for example when
the employee serves as executor or trustee for someone outside his immediate
family, or manages or helps to manage a charitable a account), the rules set
forth in this Code of Ethics will not be considered to be directly applicable,
but in all transactions involving any such account the employee will be expected
to conform to the spirit of these rules and specifically avoid any activity that
conflicts or might appear to conflict with the interests of our clients.
* Since all provisions of this Code restrict all Access Persons, no special
mention of Investment Personnel, as defined by the SEC, has been made. Further,
any director of Distributors who is not an "interested person" of Distributors
(as defined in applicable SEC regulations) need not make any initial, annual or
quarterly report, unless the director knows, or should have known, of a possible
conflict of interest between his/her securities transaction and the investment
decision of the Funds. Within thirty days after the adoption of this Code, the
Internal Counsel for Distributors shall send each such director a notice that
includes a full explanation of the types of transactions that are, in any case,
prohibited and the circumstances under which it may be necessary to report a
transaction.
