CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
Individual Shares
Institutional Service Shares
Institutional Shares
ANNUAL REPORT
DECEMBER 31, 1999
<PAGE>
CATHOLIC VALUES INVESTMENT TRUST
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The Catholic Values Investment Trust was created to offer a series of
mutual fund investment opportunities that combine a fundamental security
selection process with a review by a Catholic Advisory Board. This process is
designed to avoid investments in companies that offer products, services or
engage in activities contrary to the core values of the Roman Catholic Church.
Only one series, the Catholic Values Investment Trust Equity Fund, is currently
available.
Wright Investors' Service, Inc., the fund's investment adviser, selects
securities based on fundamental investment criteria. These selections are
reviewed by the Catholic Advisory Board whose members are guided by the
magisterium of the Catholic Church and seek the counsel and advice of
ecclesiastics in determining which companies meet the fund's religious criteria.
The board continually monitors the portfolio and when a company violates core
Catholic teachings, the board directs Wright to remove it from the portfolio.
The members of the Catholic Advisory Board are:
Thomas P. Melady Chairman of the Advisory Board, Former U.S.
Ambassador to the Holy See, Uganda and Burundi,
President Emeritus of Sacred Heart University
Margaret M. Heckler Former U.S. Representative from Massachusetts
10th district, former Secretary of Health and
Human Services, former Ambassador to Ireland
Bowie K. Kuhn Former Commissioner of Baseball
Timothy J. May Senior Partner, Patton Boggs, LLP
Thomas S. Monaghan President, Ave Maria Foundation and former
Chairman and Founder of Domino's Pizza, Inc.
William A. Wilson Former(and first) U.S.Ambassador to the Holy See
Although he is not in any way connected with the trust, His Eminence John
Cardinal O'Connor serves as the ecclesiastical advisor to the Catholic
Advisory Board.
TABLE OF CONTENTS
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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...................................12
<PAGE>
LETTER TO SHAREHOLDERS
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February 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, additional international securities may be added resulting in a global
fund. As of December 31, 1999, the fund's annualized return since inception was
12.66% in the Individual share class, 13.25% in the Institutional Service share
class and 25.12% in the Institutional share Class which opened in February of
1999. In the last 12 months, the Individual class had a return of 16.91% and the
Institutional Service class had a return of 17.75%.
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 is not connected to the fund, His Eminence John Cardinal
O'Connor is the ecclesiastical advisor to the Catholic Advisory Board.
Wright Investors' Service, the fund's investment Adviser, selects the
equities from its approved list of quality blue chip companies. All companies on
this approved list are, in Wright's opinion, soundly financed with established
records of earnings profitability and equity growth. Selections are reviewed by
the Catholic Advisory Board to assure that each 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.
Thus, there is continuous dialogue, continuous information input,
continuous review, and continuous evaluation. Independent thinking and
independent information provides input and assures that the fund adheres to
Catholic doctrine while balancing changes in the marketplace, changes in
informational input, and changes in value systems. In this way, your fund
combines Catholic values with investment values.
The fund has its own website: www.catholicinvestment.com. The site contains
information about your fund, including a recent list of portfolio holdings. You
may also, after following some security protection procedures, access your
account.
Sincerely,
/s/ Walter R. Miller
Walter R. Miller, Ph.D.
Secretary of the Catholic Advisory Board
<PAGE>
LETTER TO SHAREHOLDERS -- continued
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CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND - INDIVIDUAL SHARES Growth of
$10,000 invested 6/1/97* through 12/31/99
Annual Total Return
Lst 1 Yr Since Incept*
CVIT 16.9% 12.6%
S&P 500 21.0% 25.4%
NYSE 10.9% 18.1%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CATHOLIC
VALUES INVESTMENT TRUST on 6/1/97 would have grown to $13,580 by December 31,
1999.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Catholic Values NYSE
Investment Trust S&P 500 Index
05/31/97 $10,000 $10,000 $10,000
12/31/97 $11,770 $11,551 $11,699
12/31/98 $11,616 $14,846 $13,864
12/31/99 $13,580 $17,965 $15,371
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CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND - INSTITUTIONAL SERVICE SHARES
Growth of $10,000 invested 6/1/97* through 12/31/99
Annual Total Return
Lst 1 Yr Since Incept*
CVIT 17.7% 13.1%
S&P 500 21.0% 25.4%
NYSE 10.9% 18.1%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT
CATHOLIC VALUES INVESTMENT TRUST on 6/1/97 would have grown to $13,744 by
December 31, 1999.
The following plotting points are used for comparison in the total
investment return mountain chart.
Date Wright Catholic Values NYSE
Investment Trust S&P 500 Index
05/31/97 $10,000 $10,000 $10,000
12/31/97 $11,766 $11,551 $11,699
12/31/98 $11,672 $14,846 $13,864
12/31/99 $13,744 $17,965 $15,371
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CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND - INSTITUTIONAL SHARES Growth of
$10,000 invested 3/1/99* through 12/31/99
Total Return Since Inception
CVIT 26.1%
S&P 500 19.9%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT CATHOLIC
VALUES INVESTMENT TRUST on 3/1/99 would have grown to $12,613 by December 31,
1999.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Catholic Values
Investment Trust S&P 500
03/1/99 $10,000 $10,000
12/31/97 $11,770 $11,551
12/31/99 $12,613 $11,987
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NOTES: The Total Investment Return is the percent return of an initial
$10,000 investment made at the beginning of the period to the ending
redeemable value assuming all dividends and distributions are reinvested.
For comparison with other averages, the investment results are shown from
the first month-end since the fund's inception. Actual performance since
May 1 inception was 13.24% in the Individual share class, and 12.65% in
the Institutional Service share class. Actual performance since February
22, 1999 inception was 25.12% in the Institutional share class. The
Benchmark for the Catholic Values Investment Trust has been changed to
the S&P 500 Index as this is more consistent with the fund manager's
objective. The Lipper Growth Funds Index used last year is no longer
reported by Lipper. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
PERFORMANCE.
<PAGE>
DIVIDEND DISTRIBUTIONS AND INVESTMENT RETURN
<TABLE>
<CAPTION>
N.A.V. Distri- Distri- Shares Value 3 Month Yr. to Date 12 Month Cum.
Period Per bution bution Owned Invstmnt Invstmnt Invstmnt Invstmnt
Ending Share $ P/S in Shares (Based on $1,000 Return Return Return Return
investment) (Annualized) (Annualized)(Annualized)
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CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
Institutional Shares
- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/22/99 $10.00 100.00 $1,000.00
Jan. 99 _ _ _ - - - -
Feb.99 9.92 100.00 992.00 - -0.80% - -0.80%
Mar.99 9.99 100.00 999.00 - -0.10% - -0.10%
Apr.99 10.92 100.00 1,092.00 - 9.20% - 9.20%
May 99 10.88 100.00 1,088.00 9.60% 8.80% - 8.80%
Jun.99 11.37 0.020 0.001791 100.18 1,139.04 14.00% 13.90% - 13.90%
Jul.99 11.25 100.18 1,127.01 3.21% 12.70% - 12.70%
Aug.99 11.04 100.18 1,105.98 1.65% 10.60% - 10.60%
Sep.99 10.87 100.18 1,088.95 -4.40% 8.89% - 8.89%
Oct.99 11.45 100.18 1,147.05 1.78% 14.71% - 14.71%
Nov.99 11.74 100.18 1,176.10 6.34% 17.61% - 17.61%
Dec.99 12.49 100.18 1,251.24 14.90% 25.12% - 25.12%
Institutional Service Shares
- --------------------------------
5/1/97 $10.00 100.00 $1,000.00
Dec.98 11.79 0.006 0.000451 100.39 1,183.58 -0.80% - - 10.64%
Jan.99 11.68 100.39 1,172.54 5.04% -0.93% -2.22% 10.00%
Feb.99 11.01 100.39 1,105.28 -4.01% -6.62% -14.41% 5.87%
Mar.99 11.09 100.39 1,113.31 -5.94% -5.94% -16.18% 6.04%
Apr.99 12.12 100.39 1,216.71 3.77% 2.80% -8.18% 10.78%
May 99 12.07 100.39 1,211.69 9.63% 2.37% -5.26% 10.08%
Jun.99 12.61 0.020 0.001613 100.55 1,267.94 13.89% 7.13% 0.40% 12.07%
Jul.99 12.48 100.55 1,254.87 3.14% 6.02% 6.66% 10.63%
Aug.99 12.25 100.55 1,231.74 1.65% 4.07% 25.20% 9.35%
Sep.99 12.07 100.55 1,213.64 -4.28% 2.54% 20.17% 8.35%
Oct.99 12.70 100.55 1,276.99 1.76% 7.89% 14.39% 10.28%
Nov.99 13.03 100.55 1,310.17 6.37% 10.70% 13.78% 11.03%
Dec.99 13.86 100.55 1,393.63 14.83% 17.75% 17.75% 13.25%
Individual Shares
- ----------------------
5/1/97 $10.00 100.00 $1,000.00
Dec.98 11.71 0.006 0.000452 100.39 1,175.56 -1.30% - - 10.19%
Jan.99 11.60 100.39 1,164.52 4.98% -0.94% -2.64% 9.55%
Feb.99 10.94 100.39 1,098.26 -4.04% -6.58% -14.69% 5.49%
Mar.99 11.01 100.39 1,105.29 -5.98% -5.98% -16.40% 5.62%
Apr.99 12.03 100.39 1,207.68 3.71% 2.73% -8.45% 10.35%
May 99 11.95 100.39 1,199.65 9.23% 2.05% -5.83% 9.54%
Jun.99 12.50 100.39 1,254.87 13.53% 6.75% -0.16% 11.51%
Jul.99 12.35 100.39 1,239.81 2.66% 5.47% 5.83% 10.04%
Aug.99 12.13 100.39 1,217.72 1.51% 3.59% 24.41% 8.81%
Sep.99 11.94 100.39 1,198.65 -4.48% 1.96% 19.28% 7.79%
Oct.99 12.54 100.39 1,258.88 1.54% 7.09% 13.48% 9.65%
Nov.99 12.87 100.39 1,292.01 6.10% 9.91% 12.89% 10.43%
Dec.99 13.69 100.39 1,374.33 14.66% 16.91% 16.91% 12.66%
</TABLE>
<PAGE>
MANAGEMENT DISCUSSION
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Following last summer's correction, global stock prices rebounded strongly in
the fourth quarter to close 1999 at record levels in most major markets. Global
economic conditions continued to firm over the final three months of 1999, led
by the U.S. economy, which completed its fourth straight year of 4% growth.
Corporate profit reports generally made for good reading, and inflation remained
subdued - although the U.S. economy's strong growth, along with improving
business overseas, caused the Federal Reserve to raise interest rates in
November before the Y2K changeover effectively put policy in a
liquidity-supplying mode. Despite higher interest rates, global stock markets
took on an increasingly confident tone as Y2K neared, and every one of the 29
largest national markets advanced in the fourth quarter.
Once again, the technology sector was the prime mover in the fourth quarter
market. Driven by a manic demand for tech stocks, the Nasdaq rose 48% in the
last three months of 1999, bringing its 1999 gain to 86%, the biggest annual
increase ever for a U.S. stock market index. Most stocks didn't fare as well as
Nasdaq in 1999. In fact, while tech stocks were soaring, the NYSE cumulative
advance/decline line hit a four-year low in December. Even Nasdaq saw 2,000 of
its 4,800 constituent stocks decline last year. Clearly, without the great
returns racked up by tech stocks this past year, the S&P 500 would not have been
able to earn its fifth straight yearly return in excess of 20%.
Wright expects that underlying economic conditions will remain favorable for
stocks in the New Year. U.S. GDP growth will probably slow from the 4% pace of
the last three years, but growth approaching 3.5% seems well within the
economy's capabilities. Core consumer prices may rise as much as 2.5% in the
U.S. this year; even so, it would still be the fourth lowest rate in three
decades. The Federal Reserve worries that tight labor markets will boost wages
to the point that they can't be offset by productivity gains, but there is
little sign of this yet.
No doubt the steep rise in technology share prices - perhaps the real target of
the Fed's interest rate hikes - has perplexed the Fed, indeed, most of us. From
the Fed's point of view, there was a logical basis for tech stocks to surge 50%
in the six months following the start of Fed easing in September 1998. But how
does one explain the 40% price advance in the six months since the Fed began to
tighten at midyear 1999? So far at least, about the only people chastened by the
Fed's rate hikes have been bond investors and shareholders in companies in the
"old economy" (including many with something most e-businesses lack - profits).
The record highs in the DJIA and the S&P 500 have swelled consumer confidence to
30-year highs. But the wealth effect on economic growth is a two-edged sword.
Should tech stocks lead the rest of the market lower, then consumer spending may
be hard hit by falling confidence. Ironically, this is what the Fed is hoping to
avoid. But it may, in fact, be set on such a course.
CATHOLIC VALUES INVESTMENT TRUST EQUITY FUND
The Catholic Values Investment Trust Equity Fund (CVIT) earned a 14.8%
investment return during 1999's fourth quarter (Individual and Institutional
shares). That result was nominally behind the 14.9% return of the S&P 500
Composite. For all of 1999, CVIT's 17.3% return trailed the 21.0% return of the
S&P 500, but for the final three quarters of 1999, CVIT outperformed the S&P 500
benchmark by a 24.9% to 15.3% margin. Fund shares have continued to outperform
the S&P 500 so far during the first quarter of 2000.
During the second half of 1999, the CVIT Fund was repositioned substantially.
Holdings of the technology stocks and other larger capitalization stocks were
increased, while weights of financial and consumer cyclical stocks and mid-cap
stocks were reduced. In the fourth quarter, the CVIT Fund benefited from stock
selection in the technology sector, where it has 34% weight vs 30% for the S&P
500. Detracting from CVIT results was the laggard action of some stocks in the
consumer cyclical and staples sectors.
At December 31, 1999, CVIT holdings averaged a P/E of 31.6 times last 12 months'
earnings, nominally below the S&P 500's 31.7 P/E.
<PAGE>
PORTFOLIO OF INVESTMENTS
December 31, 1999
Shares Value
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Equity Investments -- 99.0%
BEVERAGES -- 1.3%
Coca-Cola Co............... 6,200 $ 361,150
------------
CHEMICALS -- 2.0%
Du Pont (E.I.) de Nemours.. 8,400 $ 553,350
------------
DIVERSIFIED -- 7.4%
General Electric Co........ 5,700 $ 882,075
Procter & Gamble Co........ 8,200 898,412
Tyco International Ltd..... 5,400 209,925
------------
$ 1,990,412
------------
DRUGS -- 5.2%
Bard (C.R.)................ 12,800 $ 678,400
Biogen, Inc.*.............. 8,600 726,700
------------
$ 1,405,100
------------
ELECTRONICS -- 35.0%
Adobe Systems Inc.......... 13,600 $ 914,600
Analog Devices*............ 4,800 446,400
Cisco Systems, Inc.*....... 7,200 771,300
Computer Associates Int'l Inc 4,600 321,712
EMC Corp./Mass*............ 10,000 1,092,500
Intel Corporation.......... 8,300 683,194
Int'l. Business Machines... 7,700 831,600
Lucent Technologies........ 8,000 598,500
Microsoft Corporation*..... 10,400 1,214,200
Oracle Corp.*.............. 5,500 616,343
Solectron Corp.*........... 8,300 789,537
Sun Microsystems, Inc*..... 15,400 1,192,537
------------
$ 9,472,423
------------
FINANCIAL -- 9.4%
BB&T Corporation........... 22,100 $ 604,987
Chase Manhattan Corp....... 6,200 481,663
Fifth Third Bancorp........ 7,600 557,650
First Security CP.......... 21,200 541,264
KeyCorp (New).............. 16,700 369,488
------------
$ 2,555,052
------------
FOOD -- 0.4%
Hormel Foods Corp.......... 3,000 $ 121,875
------------
METAL PRODUCERS -- 1.7%
Alcoa Inc.................. 5,700 $ 473,100
------------
METAL PRODUCTS MFRS. -- 2.1%
Illinois Tool Works Inc.... 8,500 $ 574,281
------------
OIL, GAS & COAL -- 6.5%
Conoco Inc Clas B - WI..... 13,300 $ 330,838
Exxon Mobil Corp........... 11,644 938,070
Schlumberger Ltd........... 8,000 450,000
Transocean Sedco Forex Inc. 1,548 52,175
------------
$ 1,771,083
------------
PAPER -- 2.0%
Kimberly-Clark Corp........ 8,200 $ 535,050
------------
RECREATION -- 2.9%
Harley-Davidson............ 8,300 $ 531,719
Hasbro Inc................. 13,800 263,063
------------
$ 794,782
------------
RETAILERS -- 5.8%
Albertson's Inc............ 11,800 $ 380,550
Gap Stores................. 18,100 832,600
TJX Cos. Inc. New.......... 17,200 351,525
------------
$ 1,564,675
------------
UTILITIES -- 11.9%
Alltel Corp................ 9,500 $ 785,531
AT&T Corp.................. 10,800 548,100
Enron Corp................. 12,900 572,438
MCI Worldcom, Inc.*........ 9,600 509,400
SBC Communications, Inc.... 16,300 794,625
------------
$ 3,210,094
------------
<PAGE>
MISCELLANEOUS -- 5.4%
Electronic Data Systems Corp 4,600 $ 307,913
Leggett & Platt Inc........ 17,800 381,588
Marsh & McLennan Cos. Inc.. 8,000 765,500
------------
$ 1,455,001
------------
TOTAL EQUITY INVESTMENTS - 99.0%
(identified cost, $21,251,628) $ 26,837,428
------------
OTHER ASSETS,
LESS LIABILITIES - 1.0% 263,090
------------
NET ASSETS - 100% $ 27,100,518
==============
* Non-income-producing security.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
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December 31,
1999
- -------------------------------------------------------------------------------
ASSETS:
Investments -
Identified cost.....................................$ 21,251,628
Unrealized appreciation............................. 5,585,800
------------
Total Value (Note 1A).............................$ 26,837,428
Cash.................................................. 183,133
Dividends and interest receivable..................... 17,739
Receivable for fund shares sold....................... 28,074
Deferred organization expenses (Note 1B).............. 58,070
------------
Total Assets......................................$ 27,124,444
------------
LIABILITIES:
Distribution fee payable..............................$ 6,018
Accrued expenses and other liabilities................ 17,908
------------
Total Liabilities.................................$ 23,926
------------
NET ASSETS .............................................$ 27,100,518
==============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares reacquired.............$ 22,132,059
Accumulated undistributed net realized loss on
investments (computed on the basis of identified cost) (617,341)
Unrealized appreciation of investments (computed on
the basis of identified cost)......................... 5,585,800
------------
Net assets applicable to outstanding shares...... $ 27,100,518
==============
Computation of net asset value, offering and redemption
price per share (Note 7):
Institutional shares:
Net assets....................................... $ 6,010,673
==============
Shares of beneficial interest outstanding........ 481,251
==============
Net asset value, offering price, and redemption
price per share of beneficial interest........... $ 12.49
==============
Institutional Service shares:
Net assets....................................... $ 17,020,682
==============
Shares of beneficial interest outstanding........ 1,228,462
==============
Net asset value, offering price, and redemption
price per share of beneficial interest........... $ 13.86
==============
Individual shares:
Net assets....................................... $ 4,069,163
==============
Shares of beneficial interest outstanding........ 297,329
==============
Net asset value, offering price, and redemption
price per share of beneficial interest........... $ 13.69
==============
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
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For the Year Ended
December 31, 1999
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income................................. $ 273,510
Interest income................................. 13,741
------------
Total investment income.................... $ 287,251
------------
Expenses
Investment Adviser fee (Note 2)................. $ 154,883
Advisory Board fee (Note 2)..................... 7,722
Administrator fee (Note 2)...................... 15,261
Compensation of Trustees not employees of
the Investment Adviser or Administrator........ 18,325
Custodian fee - Institutional shares (Note 1C).. 18,304
Custodian fee - Institutional Service shares (Note 1C) 33,621
Custodian fee - Individual shares (Note 1C).... 17,960
Registration costs - Institutional shares....... 3,860
Registration costs - Institutional Service shares 12,513
Registration costs - Individual shares ......... 9,972
Distribution expenses - Institutional Service shares (Note 3) 32,555
Distribution expenses - Individual shares (Note 3) 29,037
Transfer and dividend disbursing agent fees -
Institutional shares...................... 1,515
Transfer and dividend disbursing agent fees -
Institutional Service shares.............. 3,702
Transfer and dividend disbursing agent fees -
Individual shares......................... 12,650
Amortization of organization expenses (Note 1B).. 26,446
Auditing expense................................. 16,056
Legal services................................... 11,287
Printing expense................................. 13,493
Miscellaneous.................................... 34
------------
Total expenses.............................. $ 439,196
------------
Deduct -
Reduction of Investment Adviser fee (Note 2)..... $ 99,392
Reduction of distribution fee -
Individual shares (Note 3)................. 19,018
Allocation of expenses to Investment Adviser (Note 2) 492
Reduction of custodian fee -
Institutional shares (Note 1C)............. 1,855
Reduction of custodian fee -
Institutional Service shares (Note 1C)..... 4,304
Reduction of custodian fee -
Individual shares (Note 1C)................ 1,262
------------
Total deductions............................ $ 126,323
------------
Net expenses................................ $ 312,873
------------
Net investment loss....................... $ (25,622)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (identified cost basis) $ (319,834)
Change in unrealized appreciation of investments...... 4,810,205
------------
Net realized and unrealized gain on investments....... $ 4,490,371
------------
Net increase in net assets from operations........ $ 4,464,749
==============
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
- ---------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations --
<S> <C> <C>
Net investment loss.............................................. $ (25,622) $ (10,128)
Net realized loss on investments................................. (319,834) (297,507)
Change in unrealized appreciation of investments................. 4,810,205 198,703
------------ ------------
Increase (decrease) in net assets from operations.............. $ 4,464,749 $ (108,932)
------------ ------------
Distributions to shareholders:
From net investment income - Institutional shares................ $ (3,277) $ -
From net realized gain - Institutional Service shares............ - (2,644)
From net realized gain - Individual shares....................... - (941)
In excess of realized gains - Institutional Service shares....... - (1,743)
From paid-in capital - Institutional shares...................... (6,723) -
From paid-in capital - Institutional Service shares.............. (21,026) -
------------ ------------
Total distributions to shareholders............................ $ (31,026) $ (5,328)
------------ ------------
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...................................... $ 6,526,761 $ 2,656,493
Issued to shareholders in payment of distributions declared.... 20,988 3,611
Cost of shares reacquired...................................... (1,259,584) (2,222,070)
------------ ------------
Net increase in net assets from fund share transactions
- Institutional Service shares............................... $ 5,288,165 $ 438,034
------------ ------------
Individual shares:
Proceeds from shares sold...................................... $ 1,049,946 $ 3,115,248
Issued to shareholders in payment of distributions declared.... - 896
Cost of shares reacquired...................................... (1,539,071) (378,693)
------------ ------------
Net increase (decrease) in net assets from fund share transactions
- Individual shares.......................................... $ (489,125) $ 2,737,451
------------ ------------
Total net increase from fund share transactions (Note 4)......... 9,522,925 3,175,485
------------ ------------
Net increase in net assets..................................... $ 13,956,648 $ 3,061,225
NET ASSETS:
At beginning of year............................................... 13,143,870 10,082,645
------------ ------------
At end of year..................................................... $ 27,100,518 $ 13,143,870
============== ==============
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<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>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS -- continued
<TABLE>
<CAPTION>
From May 1, 1997
Year Ended (start of business) to
December 31, 1998 December 31, 1997
-------------------------------------------------------
Institutional Individual Institutional Individual
Service Shares Shares Service Shares Shares
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.890 $ 11.870 $ 10.000 $ 10.000
--------- --------- --------- ---------
Income (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>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Catholic Values Investment Trust Equity Fund (the fund) (one of the
series of the Catholic Values Investment Trust) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-ended
management investment company. The fund seeks long-term growth of capital and
reasonable current income through investments in a broadly diversified portfolio
consisting primarily of equity securities of high-quality, well-established
companies which meet strict quality and religious standards. The companies in
which the fund may invest must offer products or services and undertake
activities that are consistent with the core teachings of the Roman Catholic
Church. The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Investment Valuations - Securities listed on securities exchanges or in
the NASDAQ National Market are valued at closing sale prices if those
prices are deemed to be representative of market values at the close of
business. Unlisted or listed securities, for which closing sale prices
are not available, are valued at the mean between latest bid and asked
prices. Fixed income securities for which market quotations are readily
available are valued on the basis of valuations supplied by a pricing
service. Fixed income and equity securities for which market quotations
are unavailable or deemed not to be representative of market values at
the close of business, restricted securities, and other assets are
valued at their fair value as determined in good faith by or at the
direction of the Trustees of the Trust. Short-term obligations maturing
in 60 days or less are valued at amortized cost, which approximates
market value.
B. Deferred Organization Expenses - Costs incurred by the fund in
connection with its organization are being amortized on the
straight-line basis over five years beginning on the date the fund
commenced operations.
C. Expense Reduction - The fund has entered into an arrangement with its
custodian whereby interest earned on uninvested cash balances is used
to offset custodian fees. All significant reductions are reported as a
reduction of expenses in the Statement of Operations.
D. Federal Taxes - The fund's policy is to comply with the provisions of
the Internal Revenue Code (the Code) available to regulated investment
companies and 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. During the year ended December 31, 1999, $56,648 was
reclassified to proceeds from sales of shares and $56,648 was
reclassified from net investment loss due to differences between book
and tax accounting created primarily by the deferral of certain losses
for tax purposes.
F. Multiple Classes of Shares of Beneficial Interest - The fund offers an
Individual Share Class, 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 generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The fund has engaged Wright Investors' 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 year ended
December 31, 1999, the effective annual rate was 0.75%. To enhance the net
income of the fund, Wright made a reduction of its investment adviser fee of
$99,392. In addition, $492 of expenses were allocated to the investment adviser.
The fund has an independent Catholic Advisory Board which consults with the
investment adviser. The fund also has engaged Eaton Vance Management (Eaton
Vance) to act as administrator of the fund. Under the Administrator Agreement,
Eaton Vance is responsible for managing the business affairs of the fund and is
compensated based upon a percentage of average daily net assets which rate is
adjusted as average daily net assets exceed certain levels. For the year ended
December 31, 1999, the effective annual rate was 0.07%. Certain of the Trustees
and officers of the fund are Trustees or officers of the above organizations.
Except as to Trustees of the fund who are not 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 enhance the net income of the fund, the
Principal Underwriter made a reduction of its fee for the year ended December
31, 1999, of $19,018 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 year ended December 31, 1999, the fund neither
accrued nor paid any service fees.
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in fund shares were as follows:
<TABLE>
<CAPTION>
From
February 22, 1999 For the For the
(start of business) to Year Ended Year Ended
Dec. 31, 1999 Dec. 31, 1999 Dec. 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------
Institutional Institutional
Institutional Service Individual Service Individual
Shares Shares Shares Shares Shares
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares sold 629,905 555,956 89,577 228,111 254,404
Shares issued to shareholders in
payment of distribution declared 895 1,692 - 271 68
Shares reacquired (149,549) (106,973) (131,351) (180,991) (33,091)
-------- -------- -------- -------- --------
Net increase (decrease) 481,251 450,675 (41,774) 47,391 221,381
========== ========== ========== ========== ==========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than U.S. Government securities
and short-term obligations for the year ended December 31, 1999, were
$29,323,709 and $55,662,448, respectively.
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in the value of the
investment securities owned at December 31, 1999, as computed on a federal
income tax basis, are as follows:
Aggregate cost................................$ 21,251,628
===============
Gross unrealized appreciation.................$ 6,434,282
Gross unrealized depreciation................. (848,482)
-----------
Net unrealized appreciation...................$ 5,585,800
================
(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 year ended December 31, 1999, $177 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 year ended December 31, 1999.
<PAGE>
INDEPENDENT AUDITORS REPORT
- -------------------------------------------------------------------------------
To the Trustees and Shareholders of
Catholic Values Investment Trust Equity Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Catholic Values Investment Trust Equity Fund
(the "fund") as of December 31, 1999, and the related statement of operations
for the year then ended, and the statements of changes in net assets for the
years ended December 31, 1999 and 1998 and the financial highlights for each of
the years in the three-year period ended December 31, 1999. These financial
statements and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
December 31, 1999 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Catholic Values
Investment Trust Equity Fund as of December 31, 1999, the results of its
operations, the changes in its net assets, and its financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 4, 2000
<PAGE>
ANNUAL REPORT
CATHOLIC ADVISORY BOARD
Thomas P. Melady, Chairman
Margaret M. Heckler
Bowie K. Kuhn
Timothy J. May
Thomas S. Monaghan
William A. Wilson
ECCLESTIASTICAL ADVISOR TO THE ADVISORY BOARD
His Eminence John Cardinal O`Connor
INVESTMENT ADVISER
Wright Investors' Service
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
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
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116-5022
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.
