CATHOLIC VALUES INVESTMENT TRUST EQUITY TRUST
Individual Shares
Institutional Service Shares
Institutional Shares
SEMI-ANNUAL REPORT
JUNE 30, 2000
<PAGE>
Catholic Values Investment Trust
--------------------------------------------------------------------------------
The Catholic Values Investment Trust was created to offer a series of
mutual fund investment opportunities that combine a fundamental security
selection process with a review by a Catholic Advisory Board. This process
is designed to avoid investments in companies that offer products, services
or engage in activities contrary to the core values of the Roman Catholic
Church. Only one series, the Catholic Values Investment Trust Equity Fund,
is currently available.
Wright Investors' Service, Inc., the fund's investment adviser, selects
securities based on fundamental investment criteria. These selections are
reviewed by the Catholic Advisory Board whose members are guided by the
magisterium of the Catholic Church and who seek the counsel and advice of
ecclesiastics in determining which companies meet the fund's religious
criteria. The board continually monitors the portfolio and when a company
violates core Catholic teachings, the board directs Wright to remove it
from the portfolio.
Table of Contents
-------------------------------------------------------------------------------
Page
Letter to Shareholders................................ 1
Dividend Distributions and Investment Return.......... 3
Management Discussion................................. 4
Catholic Values Investment Trust Equity Fund
Portfolio of Investments.......................... 5
Statement of Assets and Liabilities............... 7
Statement of Operations........................... 8
Statements of Changes in Net Assets............... 9
Financial Highlights..............................10
Notes to Financial Statements.....................13
<PAGE>
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
July 2000
Dear Shareholders:
The Catholic Values Investment Trust Equity Fund (CVIT), which opened on
May 1, 1997, continues to grow in size and stature. The fund invests for
long-term growth of capital and to minimize risk. It pursues these objectives by
investing in a broadly diversified portfolio of well-established U.S. companies
which meet strict financial quality standards. These companies must offer
products or services and undertake activities that are consistent with the core
teachings of the Roman Catholic Church.
At the moment, all investments are in U.S. securities. As the fund grows in
size, international securities may be added resulting in a global fund. As of
June 30, 2000, the fund's annualized return since inception was 10.24% in the
Individual share class, 10.83% in the Institutional Service share class and
17.49% in the Institutional share class which opened in February of 1999. In the
last 12 months, the Individual class had a return of 8.48% and the Institutional
Service class had a return of 9.20%. The S&P 500 had a return of 7.20%.
The independent Catholic Advisory Board reviews the fund's investments to
assure consistency with Catholic values. This is not a simple nor singular
responsibility since there are many Catholics with varying viewpoints and there
are many Catholic institutions with their own views as well. In addition, there
are changing circumstances and varying economic environments in which companies
must operate. Thus, this independent Board must exercise both wisdom and caution
in reviewing each company to assure that the investment conforms to the fund's
objectives.
The Catholic Advisory Board is comprised of six independent lay Catholics.
Information concerning Catholic issues is obtained by participation in numerous
Catholic organizations, the seeking of advice and counsel from various clergy
and Vatican sources, the use of a variety of secondary sources, and the open
discussion of issues and policies. The Board members are:
Thomas P. Melady, Chairman, Former U.S. Ambassador to the Holy See,
Uganda and Burundi, President Emeritus of Sacred Heart University
Margaret M. Heckler, Former U.S. Representative from Massachusetts
10th district, former Secretary of Health and Human Services, former
Ambassador to Ireland
Bowie K. Kuhn, Former Commissioner of Baseball
Timothy J. May, Senior Partner, Patton Boggs, L.L.P.
Thomas S. Monaghan,President, Ave Maria Foundation and former Chairman
and Founder of Domino's Pizza, Inc.
William A. Wilson, Former (and first) U.S. Ambassador to the Holy See
Although he was not in any way connected with the trust, His Eminence John
Cardinal O'Connor served as the Ecclesiastical Advisor to the Catholic Advisory
Board until his death. His successor has not yet been named.
Wright Investors' Service, the fund's investment Adviser, selects the
equities from its approved list of quality blue chip companies. All companies on
this approved list are, in Wright's opinion, soundly financed with established
records of earnings profitability and equity growth. Selections are reviewed by
the Catholic Advisory Board to assure that each issuer complies with Catholic
teachings and doctrine. When a company is found not to be in compliance with
core teachings, it is not purchased. Purchased companies found to be
noncompliant are sold.
<PAGE>
Thus, there is continuous dialogue, continuous information input,
continuous review, and continuous evaluation. Independent thinking and
independent information provides input and assures that the fund adheres to
Catholic doctrine while balancing changes in the marketplace, changes in
informational input, and changes in value systems. In this way, your fund
combines Catholic values with investment values.
The fund has its own website: www.catholicinvestment.com. The site contains
information about your fund, including a recent list of portfolio holdings. You
may also, after following some security protection procedures, access your
account.
Sincerely,
/s/Walter R. Miller
------------------------
Walter R. Miller, Ph.D.
Secretary of the Catholic
Advisory Board
DIVIDEND DISTRIBUTIONS AND INVESTMENT RETURN
<TABLE>
<CAPTION>
N.A.V. Distri- Distri- Shares* 3 Month Yr. to Date 12 Month Cum.
Period Per bution bution Owned Value Invstmnt Invstmnt Invstmnt Invstmnt
Ending Share $ P/S in Shares Based on $1,000 Investment Return Return Return Return
(Annualized)
------------------------------------------------------------------------------------------------------------------------------
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
INSTITUTIONAL SHARES
<S> <C> <C> <C> <C> <C> <C> <C>
2/22/99 $10.00 100.00 $1,000.00
Dec.99 12.49 100.18 1,251.24 14.90% 25.12% - 25.12%
Jan.00 11.90 100.18 1,192.13 3.93% -4.72% - -
Feb.00 12.14 100.18 1,216.17 3.41% -2.80% 22.60% 21.06%
Mar.00 12.92 100.18 1,294.31 3.44% 3.44% 29.56% 26.12%
Apr.00 12.68 100.18 1,270.27 6.55% 1.52% 16.33% 22.19%
May 00 12.19 100.18 1,221.18 0.41% -2.40% 12.24% 16.92%
Jun.00 12.43 100.18 1,245.23 -3.79% -0.48% 9.32% 17.49%
INSTITUTIONAL SERVICE SHARES
5/1/97 $10.00 100.00 $1,000.00
Dec.99 13.86 100.55 1,393.63 14.83% 17.75% 17.75% 13.25%
Jan.00 13.20 100.55 1,327.26 3.94% -4.76% 13.20% 10.84%
Feb.00 13.46 100.55 1,353.41 3.30% -2.89% 22.45% 11.29%
Mar.00 14.33 100.55 1,440.88 3.39% 3.39% 29.42% 13.35%
Apr.00 14.07 100.55 1,414.74 6.59% 1.52% 16.28% 12.27%
May 00 13.52 100.55 1,359.44 0.45% -2.45% 12.19% 10.47%
Jun.00 13.77 100.55 1,384.58 -3.91% -0.65% 9.20% 10.83%
INDIVIDUAL SHARES
5/1/97 $10.00 100.00 $1,000.00
Dec.99 13.69 100.39 1,374.33 14.66% 16.91% 16.91% 12.66%
Jan.00 13.03 100.39 1,308.07 3.91% -4.82% 12.33% 10.25%
Feb.00 13.28 100.39 1,333.17 3.19% -2.99% 21.39% 10.70%
Mar.00 14.12 100.39 1,417.50 3.14% 3.14% 28.25% 12.71%
Apr.00 13.86 100.39 1,391.40 6.37% 1.24% 15.21% 11.65%
May 00 13.30 100.39 1,335.18 0.15% -2.85% 11.30% 9.83%
Jun.00 13.56 100.39 1,361.28 -3.97% -0.95% 8.48% 10.24%
</TABLE>
* Rounded to two decimals.
<PAGE>
MANAGEMENT DISCUSSION
--------------------------------------------------------------------------------
The year 2000 has seen record stock market volatility, although the second
quarter ended in a more stable trend. For Nasdaq, April was the most volatile
month in history, with an average daily change (without regard to sign) of 4.3%,
six times the norm. This moderated to 2.9% in May and 2.2% in June, still above
normal. Fluctuations in non-tech stocks were more muted, but for tech and
non-tech stocks alike, profit disappointments continued to bring severe
retribution.
Tech stocks fell into a bear market in the second quarter; non-tech stocks were
in a correction. From peak to trough, Nasdaq dropped 37%, the S&P 500 11%.
Before the quarter ended, Nasdaq had rallied to a point 21% off its peak, while
the S&P 500 was down 5%. For the entire quarter, the S&P 500 lost 2.7% in total
return terms, the Nasdaq more than 13%. Although S&P 500 tech stocks were hit
hard with a 9.0% loss, the worst performing S&P 500 sector was basic materials,
down about 15%; communications services had a 14% loss. Leading the S&P 500 was
health care, up 23% for the period, well ahead of the next best group, consumer
staples, which returned 6%. As measured by the FTSE indexes, non-U.S. stocks in
total underperformed the U.S. in the second quarter. Europe (-2.3% in dollars)
and non-Japan Asia (-2.1%) declined less, but Japan (-7.6%) was weaker. For the
first six months of 2000, global stock prices were down nominally.
Wright believes the fundamentals support the development of a more positive
equity market. The U.S. economy looks on track to slow to a more sustainable
growth rate in the second half of the year, which should limit the extent of
further Fed tightening since core inflation remains moderate. Moreover,
constructive economic environments appear to be falling into place around the
globe; even Japan seems to be making progress. In the U.S., second-quarter
profits are starting to come in, and early on there are more positive than
negative surprises. Wall Street is looking for only a moderate slowdown in
profit growth in the second half of 2000.
But stocks may not yet be ready to move up in a straight line. For one thing,
despite the market's retreat this year, valuations remain high, with the S&P 500
still valued in excess of 20 times year-ahead earnings and the Nasdaq's trailing
P/E multiple over 100 at mid-year. WIS also believes that it will take more
confirmation of economic cooling - but not so much cooling that profit prospects
suffer - before investors will be comfortable with the notion that Fed
tightening has nearly run its course. Once that happens, stock market prospects
will brighten considerably.
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
The Catholic Values Investment Trust Equity Fund (CVIT) had a 0.6% investment
decline during the first half of the year 2000 (Institutional Service shares).
That result was approximately in line with the 0.4% loss in the S&P 500 Index
for the quarter. During the first quarter, the CVIT Fund had outperformed the
S&P 500 by a net margin of over 1.0%. However, the outperformance was lost in
the volatile second quarter.
During the first half of 2000, the CVIT Fund was positioned to provide defense
against an economic background of rising interest rates. Positions in the
Consumer Cyclicals and the Financial sectors were reduced. New holdings
emphasized the Consumer Staples, Basic Materials, and Capital Goods areas.
Holdings of Technology stocks were realigned, while the sector's overall
weighting was maintained at marginally above that of the S&P 500 Index. In the
first half, the CVIT Fund benefited from stock selection in the Technology
sector, but lagged in Consumer Staples and Financials.
At June 30, 2000, CVIT holdings averaged a P/E of 30.2 times last 12 months'
earnings, somewhat above the S&P 500's 28.4 P/E.
<PAGE>
PORTFOLIO OF INVESTMENTS
--------------------------------------------------------------------------------
June 30, 2000 (Unaudited)
Shares Value
--------------------------------------------------------------------------------
EQUITY INVESTMENTS -- 97.8%
BEVERAGES -- 2.4%
Coca-Cola Co............... 12,700 $ 729,456
------------
CHEMICALS -- 1.3%
Du Pont (E.I.) de Nemours.. 9,300 $ 406,875
------------
COMMUNICATIONS EQUIPMENT-- 6.2%
Cisco Systems, Inc.*....... 17,000 $ 1,080,563
Lucent Technologies........ 13,500 799,875
------------
$ 1,880,438
------------
COMPUTERS & PERIPHERALS-- 9.3%
EMC Corp./Mass*............ 6,700 $ 515,482
Int'l. Business Machines... 8,100 887,456
Sun Microsystems, Inc*..... 15,800 1,436,812
------------
$ 2,839,750
------------
CONSTRUCTION -- 1.1%
Vulcan Materials Co........ 8,100 $ 345,769
------------
DIVERSIFIED -- 6.2%
General Electric Co........ 18,000 $ 954,000
Procter & Gamble Co........ 8,800 503,800
Tyco International Ltd..... 9,400 445,325
------------
$ 1,903,125
------------
DRUGS, COSMETICS & HEALTHCARE-- 9.9%
Avon Products Inc.......... 19,200 $ 854,400
Bard (C.R.)................ 14,400 693,000
Biogen, Inc.*.............. 13,900 896,550
Gillette Co................ 16,700 583,456
------------
$ 3,027,406
------------
ELECTRONIC EQUIPMENT & PRODUCTS-- 2.8%
Solectron Corp.*........... 20,800 $ 871,000
------------
FINANCIAL -- 7.8%
American Int'l Group....... 9,500 $ 1,116,250
Fifth Third Bancorp........ 8,200 518,650
KeyCorp (New).............. 18,800 331,350
Mellon Financial Corp...... 11,600 422,675
------------
$ 2,388,925
------------
METAL PRODUCERS -- 1.2%
Alcoa Inc.................. 13,000 $ 377,000
------------
METAL PRODUCTS MFRS. -- 2.7%
Illinois Tool Works Inc.... 14,500 $ 826,500
------------
OIL, GAS & COAL -- 8.0%
Conoco Inc Clas B - WI..... 14,900 $ 365,981
Exxon Mobil Corp........... 12,144 953,304
Schlumberger Ltd........... 8,600 641,775
Transocean Sedco Forex Inc. 8,848 472,815
------------
$ 2,433,875
------------
PAPER -- 0.9%
Mead Corp.................. 10,500 $ 265,125
------------
RECREATION -- 3.2%
Harley-Davidson............ 18,600 $ 716,100
Hasbro Inc................. 16,500 248,531
------------
$ 964,631
------------
RETAILERS -- 3.2%
Albertson's Inc............ 18,400 $ 611,800
TJX Cos. Inc. New.......... 19,400 363,750
------------
$ 975,550
------------
<PAGE>
SEMICONDUCTOR EQUIP. & PRODUCTS-- 8.9%
Adaptec Inc................ 19,000 $ 432,250
Analog Devices*............ 10,800 820,800
Intel Corporation.......... 8,500 1,136,344
KLA-Tencor Corp............ 5,500 322,094
------------
$ 2,711,488
------------
SOFTWARE & SERVICES -- 7.9%
Adobe Systems Inc.......... 8,700 $ 1,131,000
Computer Associates Int'l. Inc 5,400 276,413
Oracle Corp.*.............. 12,000 1,008,750
------------
$ 2,416,163
------------
UTILITIES -- 9.4%
BellSouth Corp............. 14,600 $ 622,325
Enron Corp................. 9,500 612,750
SBC Communications, Inc.... 20,300 877,975
Worldcom, Inc.*............ 16,700 766,112
------------
$ 2,879,162
------------
MISCELLANEOUS -- 5.4%
Electronic Data Systems Corp 9,600 $ 396,000
Leggett & Platt Inc........ 20,130 332,145
Marsh & McLennan Cos. Inc.. 8,800 919,050
------------
$ 1,647,195
------------
TOTAL EQUITY INVESTMENTS - 97.8%
(identified cost, $25,367,956) $ 29,889,433
------------
RESERVE FUNDS - 2.0%
American Express Corp. Face Amount
-----------
6.884%, 7/03/00.......... $610,000 $ 610,000
------------
TOTAL INVESTMENTS - 99.8%
(identified cost, $25,977,956) $ 30,499,433
OTHER ASSETS,
LESS LIABILITIES - 0.2% 68,553
------------
NET ASSETS - 100% $ 30,567,986
==============
* Non-income-producing security.
See notes to financial statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
-------------------------------------------------------------------------------
(unaudited)
ASSETS:
Investments -
Identified cost................................... $ 25,977,956
Unrealized appreciation........................... 4,521,477
------------
Total Value (Note 1A)........................... $ 30,499,433
Cash................................................ $ 3,848
Dividends and interest receivable................... 12,351
Receivable from investment adviser.................. 24,828
Deferred organization expenses (Note 1B)............ 43,974
------------
Total Assets.................................... $ 30,584,434
------------
LIABILITIES:
Distribution fee payable............................ $ 2,422
Accrued expenses and other liabilities.............. 14,026
------------
Total Liabilities............................... $ 16,448
------------
NET ASSETS ........................................... $ 30,567,986
==============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares reacquired.......... $ 25,701,676
Accumulated undistributed net realized gain on
investments (computed on the basis of
identified cost)................................... 412,847
Unrealized appreciation of investments (computed on
the basis of identified cost)...................... 4,521,477
Accumulated net investment loss..................... (68,014)
------------
Net assets applicable to outstanding shares..... $ 30,567,986
============
Computation of net asset value, offering and redemption
price per share (Note 7):
Institutional shares:
Net assets...................................... $ 5,980,005
============
Shares of beneficial interest outstanding....... 481,251
============
Net asset value, offering price, and redemption
price per share of beneficial interes.......... $ 12.43
============
Institutional Service shares:
Net assets...................................... $ 19,669,411
============
Shares of beneficial interest outstanding....... 1,428,414
============
Net asset value, offering price, and redemption
price per share of beneficial interest......... $ 13.77
============
Individual shares:
Net assets...................................... $ 4,918,570
============
Shares of beneficial interest outstanding....... 362,717
============
Net asset value, offering price, and redemption
price per share of beneficial interest......... $ 13.56
============
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended
June 30, 2000
-------------------------------------------------------------------------------
(unaudited)
INVESTMENT INCOME:
Dividend income................................. $ 131,718
Interest income................................. 14,067
------------
Total investment income.................... $ 145,785
------------
Expenses
Investment Adviser fee (Note 2)................. $ 105,863
Advisory Board fee (Note 2)..................... 6,705
Administrator fee (Note 2)...................... 9,884
Compensation of Trustees not employees of the
Investment Adviser or Administrator............ 10,737
Custodian fee - Institutional shares (Note 1C).. 8,574
Custodian fee - Institutional Service shares (Note 1C) 15,869
Custodian fee - Individual shares (Note 1C).... 10,654
Registration costs - Institutional shares....... 6,358
Registration costs - Institutional Service shares 5,558
Registration costs - Individual shares ......... 7,134
Distribution expenses - Institutional Service
shares (Note 3)................................ 22,346
Distribution expenses - Individual shares (Note 3) 16,642
Transfer and dividend disbursing agent fees -
Institutional shares........................... 601
Transfer and dividend disbursing agent fees -
Institutional Service shares................... 1,788
Transfer and dividend disbursing agent fees -
Individual shares.............................. 4,930
Amortization of organization expenses (Note 1B). 14,096
Auditing expense................................ 15,506
Legal services.................................. 2,832
Printing expense................................ 5,402
Miscellaneous................................... 2,554
------------
Total expenses............................. $ 274,033
------------
Deduct -
Preliminary reduction of Investment Adviser
fee (Note 2)................................... $ 17,920
Preliminary reduction of distribution fee -
Individual shares (Note 3)..................... 12,453
Preliminary allocation of expenses to
Investment Adviser (Note 2).................... 24,828
Reduction of custodian fee - Institutional
shares (Note 1C)............................... 1,057
Reduction of custodian fee - Institutional
Service shares (Note 1C)....................... 3,171
Reduction of custodian fee - Individual
shares (Note 1C)............................... 805
------------
Total deductions........................... $ 60,234
------------
Net expenses............................... $ 213,799
------------
Net investment loss...................... $ (68,014)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments
(identified cost basis)............................ $ 1,030,188
Change in unrealized appreciation of investments.... (1,064,323)
------------
Net realized and unrealized loss on investments..... $ (34,135)
------------
Net decrease in net assets from operations..... . $ (102,149)
==============
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 Dec. 31, 1999
-----------------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From Operations --
<S> <C> <C>
Net investment loss.............................................. $ (68,014) $ (25,622)
Net realized gain (loss) on investments.......................... 1,030,188 (319,834)
Change in unrealized appreciation (depreciation) of investments.. (1,064,323) 4,810,205
------------ ------------
Increase (decrease) in net assets from operations.............. $ (102,149) $ 4,464,749
------------ ------------
Distributions to shareholders:
From net investment income - Institutional shares................ $ -- $ (3,277)
From net realized gain - Institutional Service shares............ -- -
From net realized gain - Individual shares....................... -- -
In excess of realized gains - Institutional Service shares....... -- -
From paid-in capital - Institutional shares...................... -- (6,723)
From paid-in capital - Institutional Service shares.............. -- (21,026)
------------ ------------
Total distributions to shareholders............................ $ -- $ (31,026)
------------ ------------
Fund share transactions -- Institutional shares:
Proceeds from shares sold...................................... $ -- $ 6,400,000
Issued to shareholders in payment of distributions declared.... -- 10,000
Cost of shares reacquired...................................... -- (1,686,115)
------------ ------------
Net increase in net assets from fund share transactions
- Institutional shares....................................... $ -- $ 4,723,885
------------ ------------
Institutional Service shares:
Proceeds from shares sold...................................... $ 3,371,975 $ 6,526,761
Issued to shareholders in payment of distributions declared.... -- 20,988
Cost of shares reacquired...................................... (675,650) (1,259,584)
------------ ------------
Net increase in net assets from fund share transactions
- Institutional Service shares............................... $ 2,696,325 $ 5,288,165
------------ ------------
Individual shares:
Proceeds from shares sold...................................... $ 1,123,443 $ 1,049,946
Issued to shareholders in payment of distributions declared.... -- --
Cost of shares reacquired...................................... (250,151) (1,539,071)
------------ ------------
Net increase (decrease) in net assets from fund share transactions
- Individual shares.......................................... $ 873,292 $ (489,125)
------------ ------------
Total net increase from fund share transactions (Note 4)......... 3,569,617 9,522,925
------------ ------------
Net increase in net assets..................................... $ 3,467,468 $ 13,956,648
NET ASSETS:
At beginning of period............................................. 27,100,518 13,143,870
------------ ------------
At end of period................................................... $ 30,567,986 $ 27,100,518
============== ==============
ACCUMULATED NET INVESTMENT LOSS
INCLUDED IN NET ASSETS AT END OF PERIOD............................ $ (68,014) $ --
============== ==============
</TABLE>
See notes to finanial statements
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 (unaudited)
---------------------------------------------------------------------------------------------------------------------
Institutional Institutional Individual
Shares(3) Service Shares(3) Shares(3)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 12.490 $ 13.860 $ 13.690
--------- --------- ---------
Income from investment operations:
Net investment loss(*) $ (0.015) $ (0.030) $ (0.065)
Net realized and unrealized loss (0.045) (0.060) (0.065)
--------- --------- ---------
Total loss from investment operations $ (0.060) $ (0.090) $ (0.130)
--------- --------- ---------
Less distributions:
Dividends from investment income $ - $ - $ -
Distributions from capital gains - - -
--------- --------- ---------
Total distributions $ - $ - $ -
--------- --------- ---------
Net asset value, end of period $ 12.430 $ 13.770 $ 13.560
========== ========== ==========
Total return(1) (0.48%) (0.65%) (0.95%)
Ratios/Supplemental Data(*):
Net assets, end of period (000 omitted) $ 5,980 $ 19,669 $ 4,919
Ratio of net expenses to average net assets 1.31%(4) 1.51%(4) 2.03%(4)
Ratio of net expenses after custodian fee reduction
to average net assets(2) 1.28%(4) 1.47%(4) 1.99%(4)
Ratio of net investment income (loss) to
average net assets (0.24%)(4) (0.44%)(4) (0.96%)(4)
Portfolio turnover rate 28% 28% 28%
------------------------------------------------------------------------------------------------------------------------
<FN>
* During the period presented, the investment adviser and the distributor of
Individual Shares waived 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:
Six Months Ended June 30, 2000 (unaudited)
-------------------------------------------------------------------------------------------------------------------------
Institutional Institutional Individual
Shares(3) Service Shares(3) Shares(3)
-------------------------------------------------------------------------------------------------------------------------
Net investment loss per share $ (0.042) $ (0.046) $ (0.131)
========== ========== ==========
Annualized Ratios (as a percentage of average net assets):
Expenses 1.75%(4) 1.74%(4) 3.01%(4)
Expenses after custodian fee reduction(2) 1.72%(4) 1.70%(4) 2.97%(4)
Net investment loss (0.68%)(4) (0.67%)(4) (1.94%)(4)
--------------------------------------------------------------------------------------------------------------------------
(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)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.
(3)Certain per share amounts are based on average shares outstanding.
(4)Annualized.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
<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 reduction(3) 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>
See notes to financial statements
<PAGE>
<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 reduction3 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 last day of each period reported. Dividends and distributions, if any,are assumed to be reinvested at the net asset
value on the reinvestment date.
(2)Annualized.
(3)During the periods presented, custodian fees were reduced by credits
resulting from cash balances the fund maintained with the Custodian (Note
1C). The computation of 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>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
--------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Catholic Values Investment Trust Equity Fund (the fund) (one of the
series of the Catholic Values Investment Trust) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-ended
management investment company. The fund seeks long-term growth of capital and
reasonable current income through investments in a broadly diversified portfolio
consisting primarily of equity securities of high-quality, well-established
companies which meet strict quality and religious standards. The companies in
which the fund may invest must offer products or services and undertake
activities that are consistent with the core teachings of the Roman Catholic
Church. The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The policies are in conformity with accounting principles generally
accepted in the United States of America.
A. Investment Valuations - Securities listed on securities exchanges or in
the NASDAQ National Market are valued at closing sale prices if those
prices are deemed to be representative of market values at the close of
business. Unlisted or listed securities, for which closing sale prices
are not available, are valued at the mean between latest bid and asked
prices. Fixed income securities for which market quotations are readily
available are valued on the basis of valuations supplied by a pricing
service. Fixed income and equity securities for which market quotations
are unavailable or deemed not to be representative of market values at
the close of business, restricted securities, and other assets are
valued at their fair value as determined in good faith by or at the
direction of the Trustees of the Trust. Short-term obligations maturing
in 60 days or less are valued at amortized cost, which approximates
market value.
B. Deferred Organization Expenses - Costs incurred by the fund in
connection with its organization are being amortized on the
straight-line basis over five years beginning on the date the fund
commenced operations.
C. Expense Reduction - The fund has entered into an arrangement with its
custodian whereby interest earned on uninvested cash balances is used
to offset custodian fees. All significant reductions are reported as a
reduction of expenses in the Statement of Operations.
D. Federal Taxes - The fund's policy is to comply with the provisions of
the Internal Revenue Code (the Code) available to regulated investment
companies and to distribute to shareholders each year all of its
taxable income, including any net realized gain on investments.
Accordingly, no provision for federal income or excise tax is
necessary.
At December 31, 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
===========
At December 31, 1999, net capital losses of $48,643 attributable to
security transactions incurred after October 31, 1999 are treated as
arising on the first day of the fund's current taxable year.
<PAGE>
E. Distributions - Differences in the recognition or classification of
income between the financial statements and tax earnings and profits
which result only in temporary over-distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized gains. Distributions in
excess of tax basis earnings and profits are reported in the financial
statements as a return of capital. Permanent differences between book
and tax accounting for certain items may result in reclassification of
these items.
F. Multiple Classes of Shares of Beneficial Interest - The fund offers an
Individual Share Class, an Institutional Service Share Class and an
Institutional Share Class. The share classes differ in their respective
distribution and service fees. All shareholders bear the common
expenses of the fund pro rata based on the average daily net assets of
each class, without distinction between share classes. Dividends are
declared separately for each class. Each class has equal rights as to
voting, redemption, dividends and liquidation.
G. Other - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. However, if the
ex-dividend date has passed, certain dividends from foreign securities
are recorded as the fund is informed of the ex-dividend date.
H. Use of Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenue and
expense during the reporting period. Actual results could differ from
those estimates.
I Interim Financial Information - The interim financial statements
relating to June 30, 2000 and for the period then ended have not been
audited by independent certified public accountants, but in the opinion
of the fund's management, reflect adjustments, consisting of normal
recurring adjustments, necessary for the fair presentation of the
financial statements.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The fund has engaged Wright Investors' Service, Inc. (Wright), a wholly
owned subsidiary of The Winthrop Corporation (Winthrop) to perform investment
management, investment advisory, and other services. For its services, Wright is
compensated based upon a percentage of average daily net assets which rate is
adjusted as average daily net assets exceed certain levels. For the six months
ended June 30, 2000, the effective annual rate was 0.75%. To enhance the net
income of the fund, Wright made a preliminary reduction of its investment
adviser fee of $17,920. In addition, $24,828 of expenses were allocated to the
investment adviser on a preliminary basis. The fund has an independent Catholic
Advisory Board which consults with the investment adviser. The fund also has
engaged Eaton Vance Management (Eaton Vance) to act as administrator of the
fund. Under the Administrator Agreement, Eaton Vance is responsible for managing
the business affairs of the fund and is compensated based upon a percentage of
average daily net assets which rate is adjusted as average daily net assets
exceed certain levels. For the six months ended June 30, 2000, the effective
annual rate was 0.07%. Certain of the Trustees and officers of the fund are
Trustees or officers of the above organizations. Except as to Trustees of the
fund who are not employees of Eaton Vance or Wright, Trustees and officers
receive remuneration for their services to the fund out of the fees paid to
Eaton Vance and Wright.
<PAGE>
(3) DISTRIBUTION EXPENSES
The Trustees have adopted a Distribution Plan (the Plan) pursuant to Rule
12b-1 of the Investment Company Act of 1940. The Plan provides that the fund
will pay Wright Investors' Service Distributors, Inc. (Principal Underwriter)
(WISDI), a wholly-owned subsidiary of Winthrop, an annual rate up to 0.75% per
annum of the fund's average net assets attributable to the Individual shares and
up to 0.25% per annum of the fund's average net assets attributable to the
Institutional Service shares. To reduce the net loss of the fund, the Principal
Underwriter made a preliminary reduction of its fee for the six months ended
June 30, 2000, of $12,453 for the Individual shares.
In addition, the Trustees have adopted a service plan (the Service Plan)
which allows the fund to reimburse WISDI for payments to intermediaries for
providing account administration and personal and account maintenance services
to their customers who are beneficial owners of any of the classes of shares.
The amount of service fee payable under the Service Plan with respect to the
Individual shares and the Institutional Service shares of the fund may not
exceed 0.25% annually of the average daily net assets attributable to the
respective classes. For the six months ended June 30, 2000, the fund neither
accrued nor paid any service fees.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
<TABLE>
<CAPTION>
From
For the Feb. 22, 1999 For the
Six Months Ended (start of business) to Year Ended
June 30, 2000 Dec. 31, 1999 Dec. 31, 1999
------------------------------------------------------------------------------------------------------------------------------
Institutional Institutional
Institutional Service Individual Institutional Service Individual
Shares Shares Shares Shares Shares Shares
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold - 249,315 83,737 629,905 555,956 89,577
Shares issued to shareholders
in payment of distribution
declared - - - 895 1,692 -
Shares reacquired - (49,363) (18,349) (149,549) (106,973) (131,351)
-------- -------- -------- -------- -------- --------
Net increase (decrease) - 199,952 65,388 481,251 450,675 (41,774)
========== ========== ========== ========== ========== ==========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations for the six months ended June 30, 2000, were
$10,861,519 and $7,775,379, respectively.
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in the value of the
investment securities owned at June 30, 2000, as computed on a federal income
tax basis, are as follows:
Aggregate cost................................$ 25,977,956
===========
Gross unrealized appreciation.................$ 6,946,878
Gross unrealized depreciation................. (2,425,401)
-----------
Net unrealized appreciation...................$ 4,521,477
===========
(7) Contingent Deferred Sales Charge
A contingent deferred sales charge (CDSC) of 1% is imposed on any
redemption of Individual shares made within one year of purchase. The CDSC is
based on the lower of the net asset value at the date of purchase or the date of
sale of the redeemed shares and is paid to WISDI. No charge is made on shares
acquired through the reinvestment of distributions. Additionally, no CDSC is
charged on shares sold to Wright or its affiliates or to their respective
employees. For the six months ended June 30, 2000, $209 of CDSC was paid by
shareholders to the fund.
(8) LINE OF CREDIT
The fund participates with other funds managed by Wright in a committed $20
million unsecured line of credit agreement with a bank. The fund may temporarily
borrow from the line of credit to satisfy redemption requests or settle
investment transactions. Interest is charged to each fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$20 million line of credit is allocated among the participating funds at the end
of each quarter. The fund did not have significant borrowings or allocated fees
during the six months ended June 30, 2000.
<PAGE>
SEMI-ANNUAL REPORT
CATHOLIC ADVISORY BOARD
Thomas P. Melady, Chairman
Margaret M. Heckler
Bowie K. Kuhn
Timothy J. May
Thomas S. Monaghan
William A. Wilson
INVESTMENT ADVISER
Wright Investors' Service
440 Wheelers Farms Road
Milford, Connecticut 06460
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
440 Wheelers Farms Road
Milford, Connecticut 06460
(800) 888-9471
e-mail: [email protected]
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AND DIVIDEND DISBURSING AGENT
PFPC Global Fund Services
Wright Managed Investment Funds
P.O. Box 5156
Westborough, Massachusetts 01581-9698
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of a mutual fund unless accompanied or preceded by a
fund's current prospectus.
