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Description of art work on front cover of Prospectus.
Two thin vertical red lines on right side of page.
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PROSPECTUS
MAY 1, 1995, AS REVISED SEPTEMBER 22, 1995
THE WRIGHT
MANAGED INCOME TRUST
<PAGE>
P R O S P E C T U S MAY 1, 1995, AS REVISED SEPTEMBER 22, 1995
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THE WRIGHT MANAGED INCOME TRUST
A MUTUAL FUND CONSISTING OF FIVE SERIES, OR FUNDS,
SEEKING A HIGH LEVEL OF RETURN
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WRIGHT U.S. TREASURY FUND
WRIGHT U.S. TREASURY NEAR TERM FUND
WRIGHT TOTAL RETURN BOND FUND
WRIGHT INSURED TAX-FREE BOND FUND
WRIGHT CURRENT INCOME FUND
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Write To: THE WRIGHT MANAGED INVESTMENT FUNDS, BOS 725, BOX 1559,
BOSTON, MA 02104
Or Call: THE FUND ORDER ROOM -- (800) 225-6265
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This combined Prospectus is designed to provide you with information you
should know before investing. Please retain this document for future reference.
A combined Statement of Additional Information dated May 1, 1995, as
revised September 22, 1995, for the Funds has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This Statement is
available without charge from Wright Investors' Service Distributors, Inc.,1000
Lafayette Boulevard, Bridgeport, Connecticut 06604 (Telephone 800-888-9471).
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR
GUARANTEED BY ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OFSOME
OR ALL OF THE PRINCIPAL INVESTMENT.
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TABLE OF CONTENTS
PAGE
An Introduction to the Funds...................... 2
Shareholder and Fund Expenses..................... 4
Financial Highlights.............................. 5
Performance and Yield Information................. 10
The Funds and their Investment Objectives and Policies 10
Wright U.S. Treasury Fund (WUSTB)............... 10
Wright U.S. Treasury Near Term Fund (WNTB)...... 10
Wright Total Return Bond Fund (WTRB)............ 10
Wright Insured Tax-Free Bond Fund (WTFB)........ 11
Wright Current Income Fund (WCIF)............... 12
Other Investment Policies......................... 12
Special Investment Considerations................. 13
The Investment Adviser............................ 15
The Administrator................................. 17
Distribution Expenses............................. 18
How the Funds Value their Shares.................. 19
How to Buy Shares................................. 19
How Shareholder Accounts are Maintained........... 21
Distributions by the Funds........................ 21
Taxes............................................. 21
How to Exchange Shares............................ 24
How to Redeem or Sell Shares...................... 25
Other Information................................. 27
Tax-Sheltered Retirement Plans.................... 28
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<PAGE>
AN INTRODUCTION TO THE FUNDS
THE INFORMATION SUMMARIZED BELOW IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION SET FORTH IN THIS PROSPECTUS.
The Trust................The Wright Managed Income Trust
(the "Trust") is an open-end investment management
company known as a mutual fund, is registered under the
Investment Company Act of 1940, as amended, and
consists of six series (the "Funds") including one
series that is being offered under a separate
prospectus. Each Fund is a diversified fund and
represents a separate and distinct series of the
Trust's shares of beneficial interest.
Investment Objective.....Each Fund seeks to provide a high level of return
consistent with the quality standards and average
maturity for such Fund.
The Funds................WRIGHT U.S. TREASURY FUND (WUSTB) invests in U.S.
Treasury bills, notes and bonds. See page 10.
WRIGHT U.S. TREASURY NEAR TERM FUND (WNTB) invests in
U.S. Treasury bills, notes and bonds, with an average
weighted maturity of less than five years. See page 10.
WRIGHT TOTAL RETURN BOND FUND (WTRB) invests in
high-quality bonds or other debt securities of varying
maturities which will, in the Investment Adviser's
opinion, achieve the best total return of ordinary
income plus capital appreciation. Accordingly,
investment selections and maturities will differ
depending on the particular phase of the interest rate
cycle. See page 10.
WRIGHT INSURED TAX-FREE BOND FUND (WTFB) invests
primarily in high-grade municipal bonds and other
intermediate or long-term securities that provide
interest income which is exempt from Federal income
taxes and which are covered by insurance guaranteeing
the timely payment of principal and interest. The
portfolio will have an average weighted maturity that
produces the best compromise between generous return
and stability of principal. See page 11.
WRIGHT CURRENT INCOME FUND (WCIF) invests in debt
obligations issued or guaranteed by the U.S. Government
or any of its agencies, especially mortgage pass-
through securities of the Government National Mortgage
Association (GNMA). The Fund reinvests all principal
payments. See page 12 and "Special Investment
Considerations -- Mortgage-Related Securities" page 14.
The Investment...........Each Fund has engaged Wright Investors' Service,
Adviser 1000 Lafayette Boulevard, Bridgeport,
CT 06604 ("Wright" or the "Investment Adviser") as
investment adviser to carry out the investment and
reinvestment of the Fund's assets.
The Administrator........Each Fund also has retained Eaton Vance Management
("Eaton Vance" r the"Administrator"), 24 Federal Street,
Boston, MA 02110 as administrator to manage the Fund's
legal and business affairs.
The Distributor..........Wright Investors' Service Distributors, Inc. is the
Distributor of the Fund's shares and receives a
distribution fee equal on an annual basis to 2/10 of 1%
of each Fund's average daily net assets.
<PAGE>
How to Purchase..........There is no sales charge on the purchase of Fund
Fund Shares shares. Shares of any Fund may be purchased at the net
asset value per share next determined after receipt
and acceptance of a purchase order. The minimum initial
investment is $1,000 which may be waived for
investments in 401(k) tax-sheltered retirement
plans. There is no minimum for subsequent purchases.
The $1,000 minium initial investment is waived for Bank
Draft Investing accounts which may be established
with an investment of $50 or more with a minimum of $50
applicable to each subsequent investment. Shares also
may be purchased through an exchange of securities.See
"How to Buy Shares."
Distribution Options ...Any net investment income earned by the
Funds will be declared daily and distributed monthly.
Distributions of net short-term and long-term capital
gains will be made at least annually. Distributions
including dividends are paid in additional shares at
net asset value or cash as the shareholder elects.
Unless the shareholder has elected to receive dividends
and distributions in cash, dividends and distributions
will be reinvested in additional shares of the Fund at
net asset value per share as of the ex-dividend date.
Redemptions..............Shares may be redeemed directly from a Fund at the net
asset value per share next determined after receipt of
the redemption request in good order.
See "How to Redeem or Sell Shares."
Exchange Privilege .....Shares of the Funds may be exchanged
for shares of certain other funds managed by the
Investment Adviser at the net asset value next
determined after receipt of the exchange request. There
may be limits on the number and frequency of exchanges.
See "How to Exchange Shares."
Net Asset Value..........Net asset value per share of each Fund is calculated
on each day the New York Stock Exchange is open for
trading.
Taxation.................Each Fund has elected to be treated, has qualified and
intends to continue to qualify each year as a regulated
investment company under Subchapter M of the Internal
Revenue Code and, consequently, should not be liable
for federal income tax on net investment income and net
realized capital gains that are distributed to
shareholders in accordance with applicable timing
requirements.
Shareholder..............Each shareholder will receive annual and semi-annual
Communications reports containing financial statements,
and a statement confirming each share
transaction. Financial statements included in annual
reports are audited by the Trust's independent
certified public accountants. Where possible,
shareholder confirmations and account statements will
consolidate all Wright investment fund holdings of the
shareholder.
THE PROSPECTUSES OF THE FUNDS ARE COMBINED IN THIS PROSPECTUS. EACH FUND OFFERS
ONLY ITS OWN SHARES, YET IT IS POSSIBLE THAT A FUND MIGHT BECOME LIABLE FOR A
MISSTATEMENT IN THE PROSPECTUS OF ANOTHER FUND. THE TRUSTEES OF THE TRUST HAVE
CONSIDERED THIS IN APPROVING THE USE OF A COMBINED PROSPECTUS.
<PAGE>
SHAREHOLDER AND FUND EXPENSES --
THE WRIGHT MANAGED INCOME TRUST
The following table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by an investment in each Fund. The percentages shown below
representing total operating expenses are based on actual amounts incurred for
the fiscal year ended December 31, 1994, except as noted.
<TABLE>
<CAPTION>
Wright Wright Wright Wright Wright
U.S. Treasury U.S. Treasury Total Return Insured Tax-Free Current
Fund Near Term Fund Bond Fund Bond Fund Income Fund
(WUSTB) (WNTB) (WTRB) (WTFB) (WCIF)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses None None None None None
Annualized Fund Operating Expenses after expense allocations
and fee reductions (as a percentage of average net assets)
Investment Adviser Fee (after fee reduction) 0.40% 0.44% 0.43% 0.19% 0.40%
Rule 12b-1 Distribution Expense
(after expense reduction) 0.03% 0.20% 0.20% 0.00% 0.20%
Other Expenses (including administration fee) [1] 0.47% 0.11% 0.14% 0.71% 0.22%
------ ------ ------ ------ ------
Total Operating Expenses* 0.90% 0.75% 0.77% 0.90% 0.82%
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<FN>
[1] Administration fees were as follows: 0.10% for WUSTB, WTFB and WCIF; 0.06% for WNTB; and 0.07% for WTRB.
* If there had been no reduction of management or distribution fees for WUSTB
and WTFB, WUSTB's distribution expense and total operating expenses as a
percentage of net assets would be 0.20% and 1.10% and WTFB's investment
adviser fee, distribution expense and total operating expenses as a
percentage of net assets would be 0.40%, 0.20% and 1.32%.
</FN>
</TABLE>
EXAMPLE OF FUND EXPENSES
The following is an illustration of the total transaction and operating expenses
that an investor in each Fund would bear over different periods of time,
assuming an investment of $1,000, a 5% annual return on the investment and
redemption at the end of each period:
<TABLE>
<CAPTION>
Wright Wright Wright Wright Wright
U.S. Treasury U.S. Treasury Total Return Insured Tax-Free Current
Fund Near Term Fund Bond Fund Bond Fund Income Fund
(WUSTB) (WNTB) (WTRB) (WTFB) (WCIF)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year $ 9 $ 8 $ 8 $ 9 $ 8
3 Years 29 24 25 29 26
5 Years 50 42 43 50 46
10 Years 111 93 95 111 101
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</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF ACTUAL PAST
EXPENSES OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN DEPENDING UPON A VARIETY OF FACTORS INCLUDING THE ACTUAL PERFORMANCE OF
EACH FUND.
<PAGE>
FINANCIAL HIGHLIGHTS
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Deloitte & Touche
LLP, independent certified public accountants, as experts in accounting and
auditing, which is contained in the Funds' Statement of Additional Information.
Further information regarding the performance of each Fund is contained in the
Funds' annual report to shareholders which may be obtained without charge by
contacting the Funds' Principal Underwriter, Wright Investors' Service
Distributors, Inc. at 800-888-9471.
<TABLE>
<CAPTION>
WRIGHT
U.S. TREASURY FUND Year Ended December 31,
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FINANCIAL HIGHLIGHTS 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. $14.360 $ 13.190 $ 13.220 $12.100 $12.300 $ 11.440 $ 11.540 $13.070 $11.800 $10.280
------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Income (loss) from Investment Operations:
Net investment income([1]......... $ 0.880 $ 0.892 $ 0.911 $ 0.902 $ 0.912 $ 0.937 $ 0.950 $ 0.978 $ 1.012 $ 1.010
Net realized and unrealized gain
(loss) on investments........... (2.110) 1.170 (0.030) 1.120 (0.202) 0.859 (0.100) (1.398) 1.258 1.510
-------- ------- -------- -------- ------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations.................... $ (1.230) $ 2.062 $ 0.881 $ 2.022 $ 0.710 $ 1.796 $ 0.850 $(0.420) $ 2.270 $ 2.520
------- -------- -------- -------- ------ --------- -------- -------- -------- --------
Less Distributions:
From net investment income....... $ (0.880)$ (0.892) $(0.911) $(0.902)$ (0.910)$(0.936)$ (0.950) $ (1.100)$(1.000)$(1.000)
From net realized gain on investment
transactions.................... -- -- -- -- -- -- -- (0.010) -- --
-------- ------- -------- -------- -------- ------- -------- -------- -------- --------
Total distributions........... $ (0.880)$ (0.892) $(0.911) $(0.902)$ (0.910)$(0.936) $(0.950) $(1.110) $(1.000)$(1.000)
-------- ------- -------- -------- --------- ------- -------- -------- -------- --------
Net asset value, end of year....... $ 12.250 $ 14.360 $ 13.190 $13.220 $12.100 $ 12.300 $ 11.440 $11.540 $13.070 $11.800
======= ======== ======== ======== ====== ======== ======== ======== ======== ========
Total Return....................... (8.66%) 15.90% 7.07% 17.56% 6.33% 16.26% 7.60% (2.96%) 19.91% 26.33%
Ratios/Supplemental Data:
Net assets, end of year(000
omitted)........................$ 16,658 $ 29,846 $ 29,703 $33,857 $37,293 $ 49,445 $ 36,037 $41,337 $46,602 $16,831
Ratio of net expenses to average
net assets ..................... 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.7% 0.9% 0.9%
Ratio of net investment income to
average net assets.............. 6.9% 6.3% 7.1% 7.4% 8.1% 7.9% 8.3% 8.1% 8.0% 9.4%
Portfolio Turnover Rate.......... 1% 12% 15% 15% 32% 15% 14% 68% 7% 3%
<FN>
[1] During the year ended December 31, 1987, and the year ended December 31, 1985,
the operating expenses of the Fund were reduced either by a reduction of the
investment adviser fee, administrator fee, or distribution fee or through
certain expense allocations to the Adviser or a combination of these. During
each of the three years ended December 31,1994, the operating expenses of the
Fund were reduced either by an allocation of expenses to the Adviser or a
reduction in distribution fee, or a combination of these. Had such actions not
been undertaken, the net investment income per share and the ratios would have
been as follows:
Year Ended December 31,
--------------------------------------------
1994 1993 1992 1987 1985
Net investment income per share.... $ 0.854 $ 0.878 $ 0.898 $ 0.960 $ 0.985
======== ======== ================ ========
Ratios (As a percentage of average net assets):
Expenses........................ 1.1% 1.0% 1.0% 0.8% 1.1%
======== ======== ================ ========
Net investment income........... 6.7% 6.2% 7.0% 8.0% 9.2%
======== ======== ================ ========
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT U.S. TREASURY
NEAR TERM FUND Year Ended December 31,
----------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. $ 10.840 $ 10.660 $ 10.750 $10.260 $10.330 $ 10.160 $ 10.500 $11.400 $11.020 $10.480
-------- -------- -------- -------- ------- -------- -------- -------- -------- -------
Income (loss) from Investment Operations:
Net investment income[1]......... $ 0.588 $ 0.655 $ 0.739 $ 0.795 $ 0.871 $ 0.928 $ 0.928 $ 0.969 $ 0.999 $ 0.979
Net realized and unrealized gain
(loss) on investments........... (0.920) 0.180 (0.090) 0.489 (0.068) 0.160 (0.340) (0.739) 0.391 0.521
--------- --------- ------- -------- ------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations..................... $ (0.332) $ 0.835 $ 0.649 $ 1.284 $ 0.803 $ 1.088 $ 0.588 $ 0.230 $1.390 $1.500
--------- --------- ------ -------- ------- -------- -------- -------- -------- --------
Less Distributions:
From net investment income....... $ (0.588) $(0.655)$ (0.739)$(0.794) $(0.873)$ (0.918)$ (0.928) $(1.120)$(0.990) $(0.960)
From net realized gain on investment
transactions.................... -- -- -- -- -- -- -- (0.010) (0.020) --
-------- ---------- ------ -------- ------- -------- -------- -------- -------- --------
Total distributions........... $ (0.588) $(0.655)$ (0.739)$(0.794) $(0.873)$ (0.918) $ (0.928) $(1.130)$(1.010) $(0.960)
Net asset value, end of year....... $ 9.920 $10.840 $ 10.660 $10.750 $10.260 $ 10.330 $ 10.160 $10.500 $11.400 $11.020
======= ======== ======== ======== ================ ======== ======== ======== ========
Total Return....................... (3.10%) 7.95% 6.26% 13.08% 8.23% 11.17% 5.75% 2.34% 13.12% 15.30%
Ratios/Supplemental Data:
Net assets, end of year
(000 omitted)................... $212,122 $380,917 $371,074 $232,407 $253,537 $237,558 $199,200 $192,947 $152,809 $71,626
Ratio of net expenses to average
net assets..................... 0.7% 0.7% 0.8% 0.8% 0.8% 0.8% 0.8% 0.6% 0.8% 0.9%
Ratio of net investment income to
average net assets.............. 5.7% 6.0% 6.9% 7.7% 8.6% 9.0% 8.9% 9.1% 8.9% 9.5%
Portfolio Turnover Rate.......... 33% 22% 6% 18% 25% 28% 23% 7% 12% 18%
<FN>
[1] During the year ended December 31, 1987, the Adviser and the Administrator
reduced their fees. Had such actions not been undertaken, the net investment
income per share and the ratios would have been as follows:
Year Ended December 31,
1987
Net investment income per share.... $ 0.949
========
Ratios (As a percentage of average net assets):
Expenses........................ 0.8%
========
Net investment income........... 8.9%
========
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN
BOND FUND Year Ended December 31,
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FINANCIAL HIGHLIGHTS 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. $ 13.010 $ 12.610 $ 12.580 $11.700 $12.010 $ 11.430 $ 11.560 $13.120 $11.930 $10.330
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Income (loss) from Investment Operations:
Net investment income[1]......... $ 0.740 $ 0.789 $ 0.830 $ 0.854 $ 0.886 $ 0.923 $ 0.947 $ 0.957 $ 0.996 $ 1.004
Net realized and unrealized gain (loss)
on investments.................. (1.580) 0.580 0.030 0.880 (0.312) 0.573 (0.130) (1.367) 1.364 1.596
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations..................... $ (0.840)$ 1.369 $ 0.860 $ 1.734 $ 0.574 $ 1.496 $ 0.817 $(0.410) $ 2.360 $ 2.600
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Less Distributions:
From net investment income....... $ (0.740)$(0.789) $ (0.830)$(0.854) $(0.884)$ (0.916) $ (0.947)$(1.140)$(1.000) $(1.000)
From net realized gain on investments -- (0.177) -- -- -- -- -- (0.010) (0.170) --
In excess of net realized gain on
investments..................... -- (0.003) -- -- -- -- -- -- -- --
------- --------- -------- -------- ------- -------- -------- -------- -------- --------
Total distributions........... $ (0.740)$(0.969) $(0.830) $(0.854) $(0.884) $(0.916) $ (0.947)$(1.150)$(1.170) $(1.000)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of year....... $ 11.430 $13.010 $12.610 $12.580 $11.700 $12.010 $ 11.430 $11.560 $13.120 $11.930
======= ======== ======== ======== ======= ========= ======== ======== ======== ========
Total Return....................... (6.57%) 11.03% 7.13% 15.38% 5.29% 13.58% 7.24% (3.13%) 20.54% 27.01%
Ratios/Supplemental Data:
Net assets, end of year
(000 omitted).................. $143,497 $259,513 $217,564 $134,728 $112,408 $82,141 $ 31,410 $ 28,051 $19,278 $ 5,056
Ratio of net expenses to average
net assets.................... 0.8% 0.8% 0.8% 0.8% 0.8% 0.9% 0.9% 0.8% 0.9% 0.9%
Ratio of net investment income to
average net assets.............. 6.1% 6.0% 6.7% 7.2% 7.7% 7.7% 8.2% 8.2% 7.8% 9.3%
Portfolio Turnover Rate.......... 32% 36% 13% 56% 48% 33% 11% 120% 20% 14%
<FN>
[1]The Principal Underwriter reduced its distribution fees during each of the
five years in the period ended December 31, 1989. The Adviser and the
Administrator also reduced their fees during the year ended December 31,
1987. In addition, for the year ended December 31, 1985, certain expenses
were allocated to the Adviser. Had such actions not been undertaken, the net
investment income per share and the ratios would have been as follows:
Year Ended December 31,
----------------------------------------
1989 1988 1987 1986 1985
-----------------------------------------------------------------------------------------------------------------------
Net investment income per share.... $ 0.911 $ 0.934 $ 0.937 $ 0.981 $ 0.911
======== ======== ================ ========
Ratios (As a percentage of average net assets):
Expenses....................... 1.0% 1.0% 1.0% 1.1% 1.8%
======== ======== ================ ========
Net investment income........... 7.6% 8.1% 8.0% 7.6% 8.4%
======== ======== ================ ========
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT INSURED
TAX-FREE BOND FUND Year Ended December 31,
----------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985[2]
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year. $ 12.170 $ 11.600 $ 11.330 $10.840 $10.870 $ 10.730 $ 10.660 $11.170 $10.370 $10.000
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income[1]......... $ 0.560 $ 0.556 $ 0.601 $ 0.614 $ 0.647 $ 0.603 $ 0.601 $ 0.594 $ 0.663 $ 0.457
Net realized and unrealized gain (loss)
on investments.................. (1.050) 0.570 0.270 0.492 (0.030) 0.137 0.070 (0.354) 0.807 0.113
--------- ------- -------- -------- -------- ------- -------- -------- -------- --------
Total income from investment
operations.....................$ (0.490) $ 1.126 $ 0.871 $ 1.106 $ 0.617 $ 0.740 $ 0.671 $0.240 $1.470 $ 0.570
-------- -------- -------- -------- ------- -------- -------- -------- -------- --------
Less Distributions:
From net investment income......$ (0.560) $ (0.556)$ (0.601)$(0.616)$ (0.647)$ (0.600) $(0.601) $(0.750) $(0.670)$(0.200)
From net realized gains......... (0.100) -- -- -- -- -- -- -- -- --
-------- --------- -------- -------- ------ --------- -------- -------- -------- --------
Total distributions...........$ (0.660) $ (0.556)$ (0.601)$(0.616)$ (0.647)$ (0.600) $(0.601) $(0.750) $(0.670)$(0.200)
------- ---------- -------- -------- ------- -------- -------- -------- -------- --------
Net asset value, end of year...... $ 11.020 $ 12.170 $ 11.600 $11.330 $10.840 $ 10.870 $ 10.730 $10.660 $11.170 $10.370
========= ======== ======== ======== ================ ======== ======== ======== ========
Total Return....................... (4.08%) 9.89% 7.91% 10.50% 5.93% 7.11% 6.42% 2.26% 14.67% 5.83%
Ratios/Supplemental Data:
Net assets, end of year
(000 omitted)...................$ 10,647 $18,205 $ 13,454 $8,396 $5,513 $ 6,989 $ 7,983 $ 9,440 $ 8,050 $ 2,475
Ratio of net expenses to
average net assets............. 0.9% 0.9% 0.9% 0.9% 1.0% 0.9% 0.9% 1.0% 0.9% 0.9%[3]
Ratio of net investment income to
average net assets.............. 4.8% 4.7% 5.3% 5.6% 6.0% 5.6% 5.6% 5.5% 6.1% 6.2%[3]
Portfolio Turnover Rate.......... 4% 7% 10% 2% 28% 61% 5% 16% 4% 35%
<FN>
[1] During each of the ten years in the period ended December 31, 1994, the
operating expenses of the Fund were reduced either by a reduction of the
investment adviser fee, administrator fee, or distribution fee or through
the allocation of expenses to the Adviser, or a combination of these. Had
such actions not been undertaken, the net investment income per share and
the ratios would have been as follows:
Year Ended December 31,
-------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985[2]
---------------------------------------------------------------------------------------------------------------------------
Net investment income per share.... $ 0.513 $ 0.521 $ 0.556 $ 0.537 $ 0.528 $ 0.506 $ 0.520 $ 0.559 $ 0.610 $ 0.379
======= ========= ======== ======== ====== ========= ======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses....................... 1.3% 1.1% 1.3% 1.6% 2.1% 1.8% 1.6% 1.3% 1.7% 2.6%[3]
======= ======= ======== ======== ======= ======= ======== ======== ======== ========
Net investment income........... 4.4% 4.4% 4.9% 4.9% 4.9% 4.7% 4.9% 5.2% 5.3% 4.5%[3]
======= ======== ======== ======== ======= ======= ======== ======== ======== ========
[2] For the period from April 10,1985 (commencement of operations) to December 31, 1985. The 1985 per share figures are based on
average shares outstanding during the period.
[3] Computed on an annualized basis.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT CURRENT
INCOME FUND Year Ended December 31,
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FINANCIAL HIGHLIGHTS 1994 1993 1992 1991 1990 1989 1988 1987[2]
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $ 10.750 $ 10.780 $10.850 $10.160 $ 10.090 $ 9.660 $ 9.760 $10.000
-------- -------- -------- ------- -------- -------- -------- --------
Income (loss) from Investment Operations:
Net investment income[1].......... $ 0.690 $ 0.728 $ 0.767 $ 0.798 $ 0.859 $ 0.870 $ 0.929 $ 0.628
Net realized and unrealized gain (loss)
on investments................... (1.040) (0.030) (0.069) 0.690 0.080 0.440 (0.100) (0.240)
-------- -------- -------- -------- ------- -------- -------- --------
Total income (loss) from investment
operations...................... $ (0.350) $ 0.698 $ 0.698 $ 1.488 $ 0.939 $ 1.310 $0.829 $ 0.388
-------- -------- -------- ------- -------- ------ -------- --------
Less Distributions:
From net investment income........ $ (0.690)[4]$(0.728)$(0.767)$(0.798)$(0.859) $ (0.870)$(0.929)$(0.628)
From net realized gain............ -- -- (0.001) -- (0.010) (0.010) -- --
-------- -------- -------- -------- ------- -------- -------- --------
Total distributions.............. $ (0.690) $ (0.728)$(0.768)$(0.798)$(0.869) $ (0.880) $(0.929)$(0.628)
Net asset value, end of year........ $ 9.710 $ 10.750 $10.780 $10.850 $10.160 $ 10.090 $ 9.660 $ 9.760
======== ======== ======== ======= ======== ======== ======== ========
Total Return........................ (3.30%) 6.59% 6.73% 15.31% 9.85% 14.15% 8.71% 4.06%
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $84,178 $ 115,158 $99,676 $ 65,700 $ 17,601 $13,925 $10,990 $5,435[3]
Ratio of net expenses to
average net assets.............. 0.8% 0.8% 0.9% 0.9% 0.9% 0.9% 0.0% 0.0%[3]
Ratio of net investment income to
average net assets............... 6.9% 6.7% 7.2% 7.6% 8.6% 8.8% 9.5% 9.2%
Portfolio Turnover Rate........... 10% 4% 13% 5% 10% 15% 12% 2%
<FN>
[1] During each of the five years in the period ended December 31, 1991, the
operating expenses of the Fund were reduced either by a reduction of the
investment adviser fee, administrator fee, or distribution fee or through
the allocation of expenses to the Adviser, or a combination of these. Had
such actions not been undertaken, the net investment income per share and
the ratios would have been as follows:
Year Ended December 31,
-----------------------------------------
1991 1990 1989 1988 1987[2]
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Net investment income per share.... $ 0.787 $ 0.809 $ 0.821 $ 0.807 $ 0.524
======== ================ ======== ========
Ratios (As a percentage of average net assets):
Expenses....................... 1.0% 1.4% 1.4% 1.8% 1.8%[3]
======== ================ ======== ========
Net investment income........... 7.5% 8.1% 8.3% 7.7% 7.4%[3]
======== ================ ======== ========
[2] Period from April 15, 1987 (commencement of operations) to December 31, 1987.
[3] Computed on an annualized basis.
[4] Includes distribution in excess of net investment income of $.00013 per share.
</FN>
</TABLE>
<PAGE>
PERFORMANCE AND YIELD INFORMATION
From time to time a Fund may publish its yield and/or average annual total
return in advertisements and communications to shareholders. The current yield
for a Fund will be calculated by dividing the net investment income per share
during a recent 30 day period by the maximum offering price per share (net asset
value) of a Fund on the last day of the period. A Fund's average annual total
return is determined by computing the annual percentage change in value of
$1,000 invested at the maximum public offering price (net asset value) for
specified periods ending with the most recent calendar quarter, assuming
reinvestment of all distributions. Investors should note that the investment
results of a Fund will fluctuate over time, and any presentation of a Fund's
current yield or total return for any prior period should not be considered as a
representation of what an investment may earn or what an investor's yield or
total return may be in any future period. If the expenses of a Fund were reduced
by Wright, WISDI, or Eaton Vance, the Fund's performance would be higher.
THE FUNDS AND THEIR
INVESTMENT OBJECTIVES AND POLICIES
Each Fund's investment objective is to provide a high level of return consistent
with the quality standards and average maturity for such Fund. Each Fund seeks
to achieve its objective through the investment policies described below. Except
as otherwise indicated, the investment objectives have not been identified as
fundamental and the objectives and policies of each Fund may be changed by the
Trust's Trustees without a vote of the Fund's shareholders. Any such change of
the investment objective of a Fund will be preceded by thirty days advance
notice to each shareholder of such Fund. If such changes were made, the Funds
might have investment objectives different from the objectives which an investor
considered appropriate at the time the investor became a shareholder in the
Fund.
There is no assurance that any of the Funds will achieve its investment
objective. The market prices of securities held by the Funds will vary inversely
with interest rate changes, which will cause the net asset value of each Fund's
shares to fluctuate.
WRIGHT U.S. TREASURY FUND (WUSTB). WUSTB invests in U.S. Treasury bills, notes
and bonds. Under normal market conditions, the Fund will invest substantially
all, but in any case at least 65%, of its net assets in such U.S. Treasury
obligations and in repurchase agreements with respect to such obligations. The
Fund will not invest in mortgage-related securities.
WRIGHT U.S. TREASURY NEAR TERM FUND (WNTB). WNTB invests in U.S. Treasury
obligations with an average weighted maturity of less than five years. This Fund
is designed to appeal to the investor seeking a high level of income that is
normally somewhat less variable and normally somewhat higher than that available
from short-term U.S. Treasury money market securities and who is also seeking to
limit fluctuation of capital (i.e., compared with longer term U.S. Treasury
securities). Portfolio securities will consist entirely of U.S. Treasury
obligations, such as U.S. Treasury bills, notes and bonds.
WRIGHT TOTAL RETURN BOND FUND (WTRB). WTRB invests in bonds or other debt
securities of high quality selected by the Investment Adviser with an average
weighted maturity that, in the Investment Adviser's judgment, produces the best
total return, i.e., the highest total of ordinary income plus capital
appreciation. Accordingly, investment selections may differ depending on the
particular phase of the interest rate cycle. Assets of this Fund may be invested
in U.S. Government and agency obligations, certificates of deposit of federally
insured banks and corporate obligations rated at the date of investment "A" or
<PAGE>
better (high grade) by Standard & Poor's Ratings Group ("Standard & Poor's") or
by Moody's Investors Service, Inc. ("Moody's") or, if not rated by such rating
organizations, of comparable quality as determined by Wright pursuant to
guidelines established by the Trust's Trustees. In any case, they must also meet
Wright Quality Rating Standards.
WRIGHT INSURED TAX FREE BOND FUND (WTFB). WTFB invests primarily in high-grade
municipal bonds and other high-grade, long-term debt securities that provide
current interest income exempt from regular Federal income tax. In addition to
meeting the Investment Adviser's quality standards, such securities will be
rated A or better by Standard & Poor's or Moody's or, if not rated by such
rating organizations, be of at least comparable quality as determined by the
Investment Adviser.
During normal market conditions the Fund will invest at least 80% of the
value of its total assets in municipal securities the interest on which is
exempt from regular Federal income tax; in addition, under normal market
conditions, at least 65% of the Fund's investments will consist of municipal
securities that are covered by insurance guaranteeing the timely payment of
principal and interest. This is a fundamental investment policy which may be
changed only by the vote of a majority of the Fund's outstanding voting
securities. (For information on the insurance coverage for the Fund's
securities, see "Portfolio Insurance" on page 14.) Such municipal securities are
described under "Special Investment Considerations" below and normally will not
include certain "private activity" obligations, the interest on which is a tax
preference item that could subject shareholders to or increase their liability
for the Federal alternative minimum tax.
For temporary defensive purposes the Fund may invest more than 20% of its
net assets in taxable securities, as also described under "Special Investment
Considerations," and may invest more than 35% of its assets in securities that
are not covered by insurance. The Fund may also invest up to 20% of its net
assets in such "private activity" obligations and taxable securities (1) if, in
the Investment Adviser's opinion, investment considerations make it advisable to
do so, (2) to meet temporary liquidity requirements, and (3) during the period
between a commitment to purchase municipal bonds and the settlement date of such
purchase.
Rather than simply hold a fixed portfolio of bonds, the Investment Adviser
will attempt to take advantage of opportunities in the marketplace to achieve a
higher total return (i.e., the combination of income and capital performance
over the long term) when such action is not inconsistent with the objective of
providing a high level of tax-free income. The Fund will have an average
weighted maturity that, in the Investment Adviser's judgment, produces the best
compromise between return and stability of principal. Distributions of the
Fund's annual interest income from its tax-exempt securities will generally be
exempt from regular Federal income tax. Distributions exempt from regular
Federal income tax may not be exempt from the Federal alternative minimum tax or
from state or local taxes, and distributions, if any, made from realized capital
gains or other taxable income will be subject to Federal, state and local taxes
where applicable. In addition, the market prices of municipal bonds, like those
of taxable debt securities, vary inversely with interest rate changes. As a
result, the Fund's net asset value per share can be expected to fluctuate and
shareholders may receive more or less than the purchase price for shares which
they redeem.
The Fund intends all municipal securities in which it invests will be
covered by insurance guaranteeing the timely payment of principal and interest.
The insurance covering municipal securities in the Fund's portfolio may be
provided (i) under a "new issue" insurance policy obtained by the issuer or
underwriter of a municipal security, (ii) under a "secondary market" policy
purchased by the Fund with respect to a municipal security or (iii) under a
<PAGE>
portfolio insurance policy maintained by the Fund. These forms of insurance,
which are more fully described below under "Portfolio Insurance", are available
from a number of insurance companies. The Fund will only acquire insurance from,
and purchase municipal securities insured by, companies whose claims paying
ability is rated AAA or Aaa at the time of purchase. Changes in the financial
condition of an insurer could result in a subsequent reduction or withdrawal of
such rating. In each case, such insurance policies guarantee only the timely
payment of principal and interest on the insured municipal security. Market
value, which may fluctuate due to changes in interest rates or factors affecting
the credit of the issuer or the insurer, is not insured.
WRIGHT CURRENT INCOME FUND (WCIF). WCIF invests primarily in debt obligations
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, mortgage-related securities of governmental or corporate
issuers and corporate debt securities. The U.S. Government securities in which
the Fund may invest include direct obligations of the U.S. Government, such as
bills, notes, and bonds issued by the U.S. Treasury; obligations of U.S.
Government agencies and instrumentalities secured by the full faith and credit
of the U.S. Treasury, such as securities of the Government National Mortgage
Association (GNMA) or the Export-Import Bank; obligations secured by the right
to borrow from the U.S. Treasury, such as securities issued by the Federal
Financing Bank or the Student Loan Marketing Association; and obligations backed
only by the credit of the government agency itself, such as securities of the
Federal Home Loan Bank, the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corporation (FHLMC).
The Fund may invest in mortgage-related securities issued by certain of the
agencies or federally chartered corporations listed above. These include
mortgage-backed securities of GNMA, FNMA and FHLMC, debentures and short-term
notes issued by FNMA and collateralized mortgage obligations issued by FHLMC.
WCIF expects to concentrate its investments in Ginnie Mae pass-through
securities guaranteed by the Government National Mortgage Association (GNMA or
Ginnie Mae). These securities are backed by a pool of mortgages which pass
through to investors the principal and interest payments of homeowners. Ginnie
Mae guarantees that investors will receive timely principal payments even if
homeowners do not make their mortgage payments on time. See "Special Investment
Considerations -- Mortgage-Related Securities" below.
The corporate debt securities in which the Fund may invest include
commercial paper and other short-term instruments rated A-1 by Standard & Poor's
or P-1 by Moody's. The Fund may invest in unrated debt securities if these are
determined by Wright pursuant to guidelines established by the Trust's Trustees
to be of a quality comparable to that of the rated securities in which the Fund
may invest. All of the corporate debt securities purchased by the Fund must meet
Wright Quality Rating Standards.
The Fund may enter into repurchase agreements with respect to any
securities in which it may invest.
OTHER INVESTMENT POLICIES
The Trust has adopted certain fundamental investment restrictions which are
enumerated in detail in the Statement of Additional Information and which may be
changed as to a Fund only by the vote of a majority of the Fund's outstanding
voting securities. Among these restrictions, the Trust may not borrow money in
excess of 1/3 of the current market value of the net assets of a Fund (excluding
the amount borrowed), invest more than 5% of a Fund's total assets taken at
current market value in the securities of any one issuer, allow a Fund to
purchase more than 10% of the voting securities of any one issuer or invest 25%
or more of a Fund's total assets in the securities of issuers in the
<PAGE>
same industry. There is, however, no limitation in respect to investments
in obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. None of the Funds has any current intention of borrowing for
leverage or speculative purposes.
The Trust may, with respect to WTFB, invest more than 25% of the total
assets of the Fund in municipal securities of one of more issuers of the
following types: public housing authorities; state and local housing finance
authorities; and municipal utilities systems, provided that they are secured or
backed by the U.S. Treasury or other U.S. Government agencies or by any agency,
insurance company, bank or other financial organization acceptable to the
Trust's Trustees. There could be economic, business or political developments
which might affect all municipal securities of a similar type. However, the
Trust believes that the most important consideration affecting risk is the
quality of municipal securities and/or the creditworthiness of any guarantor
thereof.
None of the Funds is intended to be a complete investment program, and the
prospective investor should take into account his objectives and other
investments when considering the purchase of any Fund's shares. The Funds cannot
eliminate risk or assure achievement of their objectives.
SPECIAL INVESTMENT CONSIDERATIONS
REPURCHASE AGREEMENTS. Each of the Funds may enter into repurchase agreements to
the extent permitted by its investment policies. A repurchase agreement is an
agreement under which the seller of securities agrees to repurchase and the Fund
agrees to resell the securities at a specified time and price. A Fund may enter
into repurchase agreements only with large, well-capitalized banks or government
securities dealers that meet Wright credit standards. In addition, such
repurchase agreements will provide that the value of the collateral underlying
the repurchase agreement will always be at least equal to the repurchase price,
including any accrued interest earned under the repurchase agreement. In the
event of a default or bankruptcy by a seller under a repurchase agreement, the
Fund will seek to liquidate such collateral. However, the exercise of the right
to liquidate such collateral could involve certain costs, delays and
restrictions and is not ultimately assured. To the extent that proceeds from any
sale upon a default of the obligation to repurchase are less than the repurchase
price, the Fund could suffer a loss.
DEFENSIVE INVESTMENTS. During periods of unusual market conditions, when Wright
believes that investing for temporary defensive purposes is appropriate, all or
a portion of each Fund's assets may be held in cash or invested in short-term
obligations. Short-term obligations that may be held by WTRB, WTFB and WCIF
include but are not limited to short-term obligations issued or guaranteed as to
interest and principal by the U.S. Government or any agency or instrumentality
thereof (including repurchase agreements collateralized by such securities);
commercial paper which at the date of investment is rated A-1 by Standard &
Poor's or P-1 by Moody's, or, if not rated by such rating organizations, is
deemed by Wright pursuant to procedures established by the Trustees to be of
comparable quality; short-term corporate obligations and other debt instruments
which at the date of investment are rated AA or better by Standard & Poor's or
Aa or better by Moody's or, if unrated by such rating organizations, are deemed
by Wright pursuant to procedures established by the Trustees to be of comparable
quality; and certificates of deposit, bankers' acceptances and time deposits of
domestic banks which are determined to be of high quality by Wright pursuant to
procedures established by the Trustees. The Funds may invest in instruments and
obligations of banks that have other relationships with the Funds, Wright, Eaton
Vance or Investors Bank & Trust Company, an affiliate of Eaton Vance. No
preference will be shown towards investing in banks which have such
relationships.
<PAGE>
MUNICIPAL SECURITIES. Municipal securities in which the WTFB may invest include
municipal notes and municipal bonds. Municipal notes are generally used to
provide for short-term capital needs and generally have maturities of one year
or less. Municipal bonds include general obligation bonds, which are secured by
the issuer's pledge of its faith, credit and taxing power for payment of
principal and interest, and revenue bonds, which are generally paid from the
revenues of a particular facility or a specific excise tax or other source.
PORTFOLIO INSURANCE. The three types of insurance are "new issue" insurance,
portfolio insurance and "secondary market" insurance. WTFB will obtain a
portfolio insurance policy which would guarantee payment of principal and
interest on eligible municipal securities owned by WTFB which are not otherwise
insured by "new issue" insurance or "secondary market" insurance and which would
therefore require insurance coverage under WTFB's investment policies. Under a
portfolio policy, the insurer may from time to time establish criteria for
determining municipal securities eligible for insurance. WTFB will not purchase
a municipal security which is not eligible for coverage under a portfolio policy
unless the municipal security is otherwise insured.
Unlike "new issue" insurance, which continues in force for the life of the
security, a municipal security will be entitled to the benefit of insurance
under a portfolio policy only so long as WTFB owns the security. If WTFB sells
the security, the insurance protection ends. As a result, the Trust will
generally not attribute any value to portfolio insurance in valuing WTFB's
investments. However, if any municipal security is in default or presents a
material risk of default, the Trust intends to continue to hold the security in
its portfolio and to place a value on the insurance protection. Thus, the
Investment Adviser's ability to manage the portfolio of WTFB or to obtain
portfolio insurance from other insurers may be limited to the extent that it
holds defaulted municipal securities. Portfolio insurance cannot be cancelled by
the insurer with respect to any municipal security already held by WTFB except
for non-payment of premiums. However, there is no assurance that portfolio
insurance will be available at reasonable premium rates. WTFB may at times
purchase "secondary market" insurance on municipal securities which it holds or
acquires. Like "new issue" insurance, this insurance continues in force for the
life of the municipal security for the benefit of any holder of the security.
The purchase of secondary market insurance would be reflected in the market
value of the municipal security and, if available, may enable WTFB to dispose of
a defaulted security at a price similar to that of comparable, undefaulted
securities.
Insurance premiums paid by WTFB for portfolio insurance would be treated as
an expense of WTFB, reducing WTFB's net investment income. While the amount of
premiums depends on the composition of WTFB's portfolio, WTFB estimates that, at
current rates, its annual premium expense for portfolio insurance, if purchased,
would range from 0.1% to 0.5% of that portion of WTFB's assets covered by such
insurance. Premiums paid, however, for secondary market insurance would be
treated as capital costs, increasing WTFB's cost basis in its investments and
reducing its effective yield. During the year ended December 31, 1994, WTFB did
not incur any insurance premiums.
MORTGAGE-RELATED SECURITIES. WTRB and WCIF may invest in mortgage-related
securities, including collateralized mortgage obligations ("CMOs") and other
derivative mortgage-related securities. These securities will either be issued
by the U.S. Government or one of its agencies or instrumentalities or, if
privately issued, supported by mortgage collateral that is insured, guaranteed
or otherwise backed by the U.S. Government or its agencies or instrumentalities.
THE FUNDS DO NOT INVEST IN THE RESIDUAL CLASSES OF CMOS, STRIPPED
MORTGAGE-RELATED SECURITIES, LEVERAGED FLOATING RATE INSTRUMENTS OR INDEXED
SECURITIES.
<PAGE>
Mortgage-related securities represent participation interests in pools of
adjustable and fixed mortgage loans. Unlike conventional debt obligations,
mortgage-related securities provide monthly payments derived from the monthly
interest and principal payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans. The mortgage loans underlying
mortgage-related securities are generally subject to a greater rate of principal
prepayments in a declining interest rate environment and to a lesser rate of
principal prepayments in an increasing interest rate environment. Under certain
interest and prepayment rate scenarios, a Fund may fail to recover the full
amount of its investment in mortgage-related securities purchased at a premium,
notwithstanding any direct or indirect governmental or agency guarantee. The
Fund may realize a gain on mortgage-related securities purchased at a discount.
Since faster than expected prepayments must usually be invested in lower
yielding securities, mortgage-related securities are less effective than
conventional bonds in "locking in" a specified interest rate. Conversely, in a
rising interest rate environment, a declining prepayment rate will extend the
average life of many mortgage-related securities. Extending the average life of
a mortgage-related security increases the risk of depreciation due to future
increases in market interest rates.
A Fund's investments in mortgage-related securities may include
conventional mortgage pass-through securities and certain classes of multiple
class CMOs. Senior CMO classes will typically have priority over residual CMO
classes as to the receipt of principal and/or interest payments on the
underlying mortgages. The CMO classes in which a Fund may invest include
sequential and parallel pay CMOs, including planned amortization class ("PAC")
and target amortization class ("TAC") securities.
Different types of mortgage-related securities are subject to different
combinations of prepayment, extension, interest rate and/or other market risks.
Conventional mortgage pass-through securities and sequential pay CMOs are
subject to all of these risks, but are typically not leveraged. PACs, TACs and
other senior classes of sequential and parallel pay CMOs involve less exposure
to prepayment, extension and interest rate risk than other mortgage-related
securities, provided that prepayment rates remain within expected prepayment
ranges or "collars."
THE INVESTMENT ADVISER
The Trust has engaged Wright Investors' Service ("Wright"), 1000 Lafayette
Boulevard, Bridgeport, Connecticut, to act as its investment adviser pursuant to
an Investment Advisory Contract. Under the general supervision of the Trustees
of the Trust, Wright furnishes the Funds with investment advice and management
services. The Trustees of the Trust are responsible for the general oversight of
the conduct of the Funds' business.
Wright is a leading independent international investment management and
advisory firm with more than 30 years' experience. Its staff of over 175 people
includes a highly respected team of 70 economists, investment experts and
research analysts. Wright manages assets for bank trust departments,
corporations, unions, municipalities, eleemosynary institutions, professional
associations, institutional investors, fiduciary organizations, family trusts
and individuals as well as mutual funds. Wright operates one of the world's
largest and most complete databases of financial information on 12,000 domestic
and international corporations. At the end of 1994, Wright managed approximately
$4 billion of assets.
Under Wright's Investment Advisory Contract with the Trust, Wright receives
monthly advisory fees at the annual rates (as a percentage of average daily net
assets) set forth in the table below. The following table also lists each Fund's
aggregate net asset value at December 31, 1994.
<PAGE>
<TABLE>
<CAPTION>
ANNUAL % ADVISORY FEE RATES Aggregate Fee Rate Paid
Under $100 Million$250 Million$500 Million Net Assets for the Fiscal
$100 to to to Over at Year Ended
Million $250 Million$500 Million$1 Billion$1 Billion 12/31/94 12/31/94
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) 0.40% 0.46% 0.42% 0.38% 0.33% $16,658,415 0.40%
Wright U.S. Treasury Near Term Fund (WNTB) 0.40% 0.46% 0.42% 0.38% 0.33%$212,122,222 0.44%
Wright Total Return Bond Fund (WTRB) 0.40% 0.46% 0.42% 0.38% 0.33% $143,496,734 0.43%
Wright Insured Tax Free Bond Fund (WTFB)0.40% 0.46% 0.42% 0.38% 0.33% $10,646,877 0.40%(1)
Wright Current Income Fund (WCIF) 0.40% 0.46% 0.42% 0.38% 0.33% $84,177,604 0.40%
--------------------------------------------------------------------------------------------------------------------------
<FN>
(1) To enhance the net income of the Fund, Wright reduced its advisory fee by $29,956 or from 0.40% to 0.19%.
</FN>
</TABLE>
Shareholders of the Funds who are also advisory clients of Wright may have
agreed to pay Wright a fee for such advisory services. Wright does not intend to
exclude from the calculation of the investment advisory fees payable to Wright
by such advisory clients the portion of the advisory fee payable to the Funds.
Accordingly, a client may pay an advisory fee to Wright in accordance with
Wright's customary investment advisory fee schedule charged to investment
advisory clients and at the same time, as a shareholder in a Fund, bear its
share of the advisory fee paid by the Fund to Wright as described above.
Pursuant to the Investment Advisory Contract, Wright also furnishes for the
use of each Fund office space and all necessary office facilities, equipment and
personnel for servicing the investments of each Fund. Each Fund is responsible
for the payment of all expenses relating to its operations other than those
expressly stated to be payable by Wright under its Investment Advisory Contract.
An Investment Committee of six senior officers, all of whom are experienced
analysts, exercises disciplined direction and control over all investment
selections, policies and procedures for each Fund's portfolio. The Committee,
following highly disciplined buy-and-sell rules, makes all decisions for the
selection, purchase and sale of all securities. The members of the Committee are
as follows:
JOHN WINTHROP WRIGHT, Chairman of the Investment Committee, Chairman and
Chief Executive Officer of Wright Investors' Service. AB Amherst College. Before
founding Wright Investors' Service in 1960, Mr. Wright was treasurer, St. John's
College; Commander, USNR; Executive Vice President, Standard Air Services;
President, Wright Power Saw & Tool Corp.; Senior Partner, Andris Trubee & Co.
(financial consultants); and Chairman, Rototiller, Inc. Mr. Wright has
frequently been interviewed on radio and television in the United States and
Europe and his published investment and financial writings are widely quoted.
His testimony has often been requested by various House and Senate Committees of
the Congress on matters concerning monetary policy and taxes. He participated in
the 1974 White House Financial Summit on Inflation and the 1980 Congressional
Economic Conference. He is a director of the Center for Financial Studies and a
member of the Board of Visitors of the School of Business at Fairfield
University, a fellow of the University of Bridgeport Business School and a
Trustee of the Institutes for the Development of Human Potential in
Philadelphia. He is also a member of the New York Society of Security Analysts.
JUDITH R. CORCHARD, Vice Chairman of the Investment Committee, Executive
Vice President-Investment Management of Wright Investors' Service. Ms. Corchard
attended the University of Connecticut and joined Wright Investors' in 1960. She
is a member of the New York Society of Security Analysts and the Hartford
Society of Financial Analysts.
<PAGE>
PETER M. DONOVAN, CFA, President of Wright Investors' Service. Mr. Donovan
received a BA Economics, Goddard College and joined Wright Investors' Service
from Jones, Kreeger & Co., Washington, DC in 1966. Mr. Donovan is the president
of The Wright Managed Blue Chip Series Trust, The Wright Managed Income Trust,
The Wright Managed Equity Trust and The Wright EquiFund Equity Trust. He is also
director of EquiFund - Wright National Equity Fund, a Luxembourg SICAV. He is a
member of the New York Society of Security Analysts and the Hartford Society of
Financial Analysts.
JATIN J. MEHTA, CFA, Executive Counselor and Director of Education of
Wright Investors' Service. Mr. Mehta received a BS Civil Engineering, University
of Bombay, India and an MBA from the University of Bridgeport. Before joining
Wright in 1969, Mr. Mehta was an executive of the Industrial Credit Investment
Corporation of India, a development bank promoted by the World Bank for
financial assistance to private industry. He is a Trustee of The Wright Managed
Blue Chip Series Trust. He is a member of the New York Society of Security
Analysts and the Hartford Society of Financial Analysts.
HARIVADAN K. KAPADIA, CFA, Senior Vice President - Investment Analysis and
Information of Wright Investors' Service. Mr. Kapadia received a BA (hon.)
Economics and Statistics and MA Economics, University of Baroda, India and an
MBA from the University of Bridgeport. Before joining Wright in 1969, Mr.
Kapadia was Assistant Lecturer at the College of Engineering and Technology in
Surat, India and Lecturer, B.J. at the College of Commerce & Economics, VVNagar,
India. He has published the textbooks: "Elements of Statistics," "Statistics,"
"Descriptive Economics," and "Elements of Economics." He was appointed Adjunct
Professor at the Graduate School of Business, Fairfield University in 1981. He
is a member of the New York Society of Security Analysts and the Hartford
Society of Financial Analysts.
MICHAEL F. FLAMENT, CFA, Senior Vice President - Investment and Economic
Analysis of Wright Investors' Service. Mr. Flament received a BS Mathematics,
Fairfield University; MA Mathematics, University of Massachusetts and an MBA
Finance, University of Bridgeport. He is a member of the New York Society of
Security Analysts and the Hartford Society of Financial Analysts.
Wright places the portfolio security transactions for each Fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments. Wright seeks to execute the Funds' portfolio security transactions
on the most favorable terms and in the most effective manner possible. Subject
to the foregoing, Wright may consider sales of shares of the Funds or of other
investment companies sponsored by Wright as a factor in the selection of
broker-dealer firms to execute such transactions.
Wright is also the investment adviser to the other funds in The Wright
Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed Blue
Chip Series Trust and The Wright EquiFund Equity Trust (the "Wright Funds").
THE ADMINISTRATOR
The Trust engages Eaton Vance as its administrator under an Administration
Agreement. Under the Administration Agreement, Eaton Vance is responsible for
managing the legal and business affairs of each Fund, subject to the supervision
of the Trust's Trustees. Eaton Vance's services include recordkeeping,
preparation and filing of documents required to comply with federal and state
securities laws, supervising the activities of the custodian and transfer agent,
providing assistance in connection with the Trustees' and shareholders' meetings
and other administrative
<PAGE>
services necessary to conduct each Fund's business. Eaton Vance will not
provide any investment management or advisory services to the Funds. For its
services under the Administration Agreement, Eaton Vance receives monthly
administration fees at the annual rates (as a percentage of average daily net
assets) set forth in the table below.
<TABLE>
<CAPTION>
ANNUAL % -- ADMINISTRATION FEE RATES Fee Rate
Under $100 Million $250 Million Over Paid for the
$100 to to $500 Fiscal Year
Million $250 Million $500 Million Million Ended 12/31/94
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) 0.10% 0.04% 0.03% 0.02% 0.10%
Wright U.S. Treasury Near Term Fund (WNTB) 0.10% 0.04% 0.03% 0.02% 0.06%
Wright Total Return Bond Fund (WTRB) 0.10% 0.04% 0.03% 0.02% 0.07%
Wright Insured Tax Free Bond Fund (WTFB) 0.10% 0.04% 0.03% 0.02% 0.10%
Wright Current Income Fund (WCIF) 0.10% 0.04% 0.03% 0.02% 0.10%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Eaton Vance, its affiliates and its predecessor companies have been
managing assets of individuals and institutions since 1924 and managing
investment companies since 1931. In addition to acting as the administrator of
the Funds, Eaton Vance or its affiliates act as investment adviser to investment
companies and various individual and institutional clients with assets under
management of approximately $15 billion. Eaton Vance is a wholly-owned
subsidiary of Eaton Vance Corp. ("EVC"), a publicly held holding company. EVC,
through its subsidiaries and affiliates, engages in investment management and
marketing activities, fiduciary and banking services, oil and gas operations,
real estate investment consulting and management and the development of precious
metals properties.
DISTRIBUTION EXPENSES
In addition to the fees and expenses payable by each Fund in accordance with its
Investment Advisory Contract and Administration Agreement, each Fund pays for
certain expenses pursuant to a Distribution Plan (the "Plans") as adopted by the
Trust and designed to meet the requirements of Rule 12b-1 under the Investment
Company Act of 1940.
The Trust's Plan provides that monies may be spent by a Fund on any
activities primarily intended to result in the sale of the Fund's shares,
including, but not limited to, compensation paid to and expenses incurred by
officers, Trustees, employees or sales representatives of the Trust, including
telephone expenses, the printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of sales literature, and
advertising of any type. The expenses covered by the Trust's Plan may include
payments to any separate distributors under agreement with the Trust for
activities primarily intended to result in the sale of the Trust's shares.
The Trust has entered into a distribution contract with Wright Investors'
Service Distributors, Inc. ("WISDI" or the "Principal Underwriter"), a
wholly-owned subsidiary of Wright. Under the Plan, it is intended that each Fund
will pay 2/10 of 1% of its average daily net assets to WISDI. Subject to the
2/10 of 1% per annum limitation imposed by the Plans, each Fund may pay
separately for expenses of any other activities primarily intended to result in
the sale of its shares.
<PAGE>
The table below shows the distribution expenses allowable to WISDI and paid
by each Fund for the fiscal year ended December 31, 1994.
<TABLE>
<CAPTION>
Distribution Distribution Distribution Expenses Paid
Expenses Expenses As a % of Fund's
Allowable Paid by Fund Average Net Asset Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) $42,491 $ 7,486(1) 0.04%
Wright U.S. Treasury Near Term Fund (WNTB) $584,569 $584,569 0.20%
Wright Total Return Bond Fund (WTRB) $384,631 $384,631 0.20%
Wright Insured Tax Free Bond Fund (WTFB) $28,863 0(2) 0.00%
Wright Current Income Fund (WCIF) $200,298 $200,298 0.20%
--------------------------------------------------------------------------------------------------------------------------
<FN>
(1) WISDI reduced its fee to WUSTB by $35,005.
(2) WISDI reduced its fee to WTFB by $28,863.
</FN>
</TABLE>
The Principal Underwriter may use the distribution fee for its expenses of
distributing each Fund's shares, including allocable overhead expenses. Any
distribution expenses exceeding the amounts paid by the Funds to the Principal
Underwriter were not incurred by the Principal Underwriter but were paid by
Wright from its own assets. Distribution expenses not specifically attributable
to a particular Fund are allocated among the Funds based on the amount of sales
of each Fund's shares resulting from the Principal Underwriter's distribution
efforts and expenditures. If the distribution fee exceeds the Principal
Underwriter's expenses, the Principal Underwriter may realize a profit from
these arrangements. The Trust's Plan is a compensation plan. If the Plan is
terminated, the Funds will stop paying the distribution fee and the Trustees
will consider other methods of financing the distribution of the Funds' shares.
HOW THE FUNDS VALUE THEIR SHARES
The net asset value of each Fund is determined by Investors Bank & Trust Company
("IBT"), the Funds' custodian (as agent for the Funds), in the manner authorized
by the Trustees of the Trust. EVC owns 77.3% of the stock of IBT. Briefly, this
determination is made as of the close of regular trading (presently at 4:00
P.M.) on the New York Stock Exchange (the "Exchange") each day on which the
Exchange is open for trading. The net asset value per share is determined by
dividing the number of outstanding shares of the particular Fund into its net
worth (the excess of the Fund's assets over its liabilities). Securities of the
various Funds for which market quotations are readily available are valued at
current market value. These valuations are furnished to the Funds by a pricing
service. Valuations of securities for which quotations are not readily available
are determined in good faith by or at the direction of the Trust's Trustees.
HOW TO BUY SHARES
Shares of each Fund are sold without a sales charge at the net asset value next
determined after the receipt of a purchase order as described below. The minimum
initial purchase of shares is $1,000 per Fund, although this may be waived for
investments in 401(k) tax-sheltered retirement plans or for Bank Draft Investing
accounts, which may be established with an investment of $50 or more. There is
no minimum amount required for subsequent purchases, except that subsequent
investments for Bank Draft Investing accounts must be at least $50. Each Fund
reserves the right
<PAGE>
to reject any order for the purchase of its shares or to
limit or suspend, without prior notice, the offering of its shares.
Shares of each Fund may be purchased or redeemed through an investment
dealer, bank or other institution. Charges may be imposed by the institution for
its services. Any such charges could constitute a material portion of a smaller
account. Shares may be purchased or redeemed directly from or with each Fund
without imposition of any charges other than those described in this Prospectus.
BY WIRE: Investors may purchase shares by transmitting immediately
available funds (Federal Funds) by wire to:
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA
ABA: 011001234
Account 081345
Further Credit: (Name of Fund)
(Include your Fund account number)
Initial purchase -- Upon making an initial investment by wire, an investor
must first telephone the Order Department of the Funds at 800-225-6265 to advise
of the action and to be assigned an account number. If this telephone call is
not made, it may not be possible to process the order promptly. In addition, an
Account Instructions form, which is available through WISDI, should be promptly
forwarded to The Shareholder Services Group, Inc. (the "Transfer Agent") at the
following address:
Wright Managed Investment Funds
BOS 725
P.O. Box 1559
Boston, Massachusetts 02104
Subsequent Purchases -- Additional investments may be made at any time
through the wire procedure described above. The Funds' Order Department must be
immediately advised by telephone at 800-225-6265 of each transmission of funds
by wire.
BY MAIL: Initial Purchases -- The Account Instructions form available
through WISDI should be completed by an investor, signed and mailed with a
check, Federal Reserve Draft, or other negotiable bank draft, drawn on a U.S.
bank and payable in U.S. dollars, to the order of the Fund whose shares are
being purchased, as the case may be, and mailed to the Transfer Agent at the
above address.
Subsequent Purchases -- Additional purchases may be made at any time by an
investor by check, Federal Reserve draft, or other negotiable bank draft, drawn
on a U.S. bank and payable in U.S. dollars, to the order of the relevant Fund at
the above address. The sub-account, if any, to which the subsequent purchase is
to be credited should be identified together with the sub-account number and,
unless otherwise agreed, the name of the sub-account.
BANK DRAFT INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made through the shareholder's checking account via bank
draft each month or quarter. The $1,000 minimum initial investment and small
account redemption policy are waived for Bank Draft Investing accounts.
PURCHASE THROUGH EXCHANGE OF SECURITIES: Investors wishing to purchase
shares of a Fund through an exchange of portfolio securities should contact
WISDI to determine the acceptability of the securities and make the proper
arrangements. The shares of a Fund may be purchased, in whole or in part, by
delivering to the Fund's custodian securities that meet the investment objective
and policies of the Fund, have readily ascertainable market prices and
quotations and which are otherwise acceptable to the Investment Adviser and the
Fund. The Trust will only accept
<PAGE>
securities in exchange for shares of the Funds
for investment purposes and not as agent for the shareholders with a view to a
resale of such securities. The Investment Adviser, WISDI and the Funds reserve
the right to reject all or any part of the securities offered in exchange for
shares of a Fund. An investor who wishes to make an exchange should furnish to
WISDI a list with a full and exact description of all of the securities which he
proposes to deliver. WISDI or the Investment Adviser will specify those
securities which the Fund is prepared to accept and will provide the investor
with the necessary forms to be completed and signed by the investor. The
investor should then send the securities, in proper form for transfer, with the
necessary forms to the Fund's custodian and certify that there are no legal or
contractual restrictions on the free transfer and sale of the securities.
Exchanged securities will be valued at their fair market value as of the date
that the securities in proper form for transfer and the accompanying purchase
order are both received by the Fund, using the procedures for valuing portfolio
securities as described under "How the Funds Value their Shares" on page 19.
However, if the NYSE or appropriate foreign stock exchange is not open for
unrestricted trading on such date, such valuation shall be on the next day on
which such Exchange is so open. The net asset value used for purposes of pricing
shares sold under the exchange program will be the net asset value next
determined following the receipt of both the securities offered in exchange and
the accompanying purchase order. Securities to be exchanged must have a minimum
aggregate value of $5,000. An exchange of securities is a taxable transaction
which may result in realization of a gain or loss for Federal and state income
tax purposes.
HOW SHAREHOLDER ACCOUNTS ARE MAINTAINED
Upon the initial purchase of a Fund's shares, an account will be opened for the
account or sub-account of an investor. Subsequent investments may be made at any
time by mail to the Transfer Agent or by wire, as noted above. Distributions
paid in additional shares are credited monthly to the accounts. Confirmation
statements indicating total shares of each Fund owned in the account or each
sub-account will be mailed to investors quarterly and at the time of each
purchase or redemption. The issuance of shares will be recorded on the books of
the relevant Fund. The Trust does not issue share certificates.
DISTRIBUTIONS BY THE FUNDS
Any net investment income earned by the Funds will be declared daily as a
dividend to shareholders of record at the time of declaration. Such dividends
will be distributed to shareholders monthly and will be reinvested in additional
shares of the same Fund unless the shareholder elects to receive the dividends
in cash. Dividends to be reinvested will be reinvested as of the first business
day of the month following their declaration. Dividends paid in cash will
normally be mailed on the second business day of the month following their
declaration. Net investment income will consist of interest accrued and discount
earned, if any, less any accrued estimated expenses subsequent to the prior
calculation of net income, if any, on the assets of the Fund. Distributions of
net short-term and long-term capital gains of each Fund (reduced by any
available capital loss carryforwards from prior years) will be made at least
annually.
TAXES
Each Fund is treated as a separate entity for Federal income tax purposes under
the Internal Revenue Code of 1986, as amended (the "Code"). Each Fund has
qualified and elected to be treated as a regulated investment company for
Federal income tax purposes and intends to continue to qualify as such. In order
to so qualify, each Fund must meet certain requirements with respect to sources
<PAGE>
of income, diversification of assets, and distributions to shareholders. Each
Fund does not pay Federal income or excise taxes to the extent that it
distributes to its shareholders all of its net investment income and net
realized capital gains in accordance with the timing requirements of the Code.
In addition, each Fund will not be subject to income, corporate excise or
franchise taxes in Massachusetts as long as it qualifies as a regulated
investment company under the Code.
In order to avoid Federal excise tax, the Code requires that each Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses (after reduction by any available capital loss
carryforwards) for the one-year period ending on October 31 of such year or, at
the election of a Fund with a taxable year ending on December 31, for such
taxable year and 100% of any income and capital gains from the prior year (as
previously computed) that was not paid out during such year and on which the
Fund paid no Federal income tax.
Net realized capital gains of each Fund for a given taxable year are
computed by taking into account any capital loss carryforward of the Fund. As of
December 31, 1994 the Funds, for Federal income tax purposes, had capital loss
carryovers of $963,970 (WUSTB), $23,344,003 (WNTB), $698,168 (WCIF) and
$1,884,088 (WTRB) which will reduce each of the aforementioned Fund's 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 each
of the aforementioned Funds of liability for Federal income tax.
TAXABLE FUNDS. For Federal income tax purposes, distributions derived from
ordinary income and net short-term capital gains of WUSTB, WNTB, WTRB and WCIF
Funds (the "Taxable Funds") are taxable to the shareholders as ordinary income
whether a shareholder elects to have these dividends reinvested in additional
shares or paid in cash. Distributions derived from net long-term capital gains
are taxable as long-term capital gains, whether reinvested or paid in cash, and
regardless of the length of time a shareholder has owned shares of the Fund. A
portion of certain distributions on shares of the Taxable Funds received shortly
after their purchase, although in effect a return of a portion of the purchase
price, may be subject to Federal income tax.
Since it is anticipated that virtually all of the ordinary income from each
of the Taxable Funds will be derived from interest income rather than dividends,
it is unlikely that any portion of the dividends paid by any of the Taxable
Funds will be eligible for the dividends received deduction for corporations.
Distributions made by the Taxable Funds will generally be subject to state
and local income taxes. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent a Fund's
distributions are derived from interest on (or, in the case of intangible taxes,
the value of its assets is attributable to) certain U.S. Government obligations,
provided in some states that certain thresholds for holdings of such obligations
and/or reporting requirements are satisfied. The Trust will report to
shareholders of the Taxable Funds annually the percentages of distributions
which are derived from such interest income.
WRIGHT INSURED TAX FREE BOND FUND. Distributions of net tax exempt interest
income of the WTFB Fund (the "Fund") that are properly designated as
"exempt-interest dividends" may be treated by shareholders as interest
excludable from gross income in computing regular Federal income tax. In order
to qualify as a regulated investment company and be entitled to pay
exempt-interest dividends
<PAGE>
to its shareholders, the Fund must and intends to
satisfy certain requirements, including the requirement that, at the close of
each quarter of its taxable year, at least 50% of the value of its total assets
consists of obligations the interest on which is excludable from gross income
under Section 103 of the Code.
Interest on indebtedness incurred or continued by a shareholder to purchase
or carry shares of the Fund is not deductible to the extent it is deemed related
to the Fund's exempt-interest dividends. Further, entities or persons who are
"substantial users" (or persons related to "substantial users") of facilities
financed by industrial development or private activity bonds should consult
their tax advisers before purchasing shares of the Fund. The term "substantial
user" is defined in applicable Treasury regulations to include a "non-exempt
person" who regularly uses in a trade or business a part of a facility financed
from the proceeds of industrial development bonds and would likely be
interpreted to include private activity bonds issued to finance similar
facilities. Exempt-interest dividends attributable to interest on certain
private activity bonds issued after August 7, 1986 are treated as a tax
preference item for purposes of the alternative minimum tax applicable to
individuals and corporations, and all exempt-interest dividends are taken into
account in determining "adjusted current earnings" (to the extent not already
included in alternative minium taxable income as income attributable to private
activity bonds) for purposes of the alternative minimum tax applicable to
corporations.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the Federal income tax exemption for
interest on certain types of municipal obligations, and it can be expected that
similar proposals may be introduced in the future. Federal tax legislation
enacted in 1986 eliminated the Federal income tax exemption for interest on
certain state and municipal obligations and has required interest on other
obligations, although exempt from regular Federal income tax, to be treated as a
tax preference item for purposes of the individual and corporate alternative
minimum tax. Tax-exempt distributions are also required to be reported by
shareholders on their Federal income tax returns. The availability of state and
municipal obligations for investment by the Fund and the value of the assets of
the Fund may be affected by such legislation or future legislation. The Trust
intends to monitor the effect legislation may have upon the operations and
policies of the Fund.
The Fund may realize some short-term or long-term capital gains (and/or
losses) as a result of market transactions, including sales of portfolio
securities and rights to when-issued securities. Any distributions derived from
net short-term capital gains would be taxable to the shareholders as ordinary
income, and any distributions derived from net long-term capital gains would be
taxable to shareholders as long-term capital gains. However, it is expected that
such amounts, if any, would be insubstantial in relation to the tax-exempt
interest generated by the Fund. Any capital loss realized upon the redemption of
shares of the Fund with a tax holding period of six months or less will be
disallowed to the extent of any exempt-interest dividends received on such
shares. Distributions of income derived by the Fund from repurchase agreements,
securities lending, certain market discount, and a portion of the discount on
certain stripped municipal obligations and their coupons will also be taxed to
shareholders as ordinary income. No portion of the Fund's distributions will be
eligible for the dividends received deduction for corporations.
Distributions of tax exempt income are taken into consideration in
computing the portion, if any, of social security benefits and railroad
retirement benefits subject to federal and, in some cases, state taxes.
The exemption of interest income for Federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any state
or local taxing authority. In certain states, shareholders of the Fund may be
<PAGE>
exempt from state and local taxes on distributions of tax-exempt interest income
derived from obligations of the state and/or municipalities of the state in
which they are resident, but taxable generally on income derived from
obligations of other jurisdictions. The Trust will report annually to
shareholders of the Fund the percentage of net tax exempt income earned by such
Fund which represents interest on obligations of issuers located in each state.
ALL FUNDS
Annually shareholders of each Fund that are not exempt from information
reporting requirements will receive information on Form 1099 (except
exempt-interest dividends are not reportable on such form) to assist in
reporting the prior calendar year's distributions and redemptions (including
exchanges) on Federal and state income tax returns. Dividends declared by a Fund
in October, November or December of any calendar year to shareholders of record
as of a date in such a month and paid the following January will be treated for
Federal income tax purposes as having been received by shareholders on December
31 of the year in which they are declared. Shareholders may realize a taxable
gain or loss upon a redemption (including an exchange) of shares of a Fund. Any
loss realized upon the redemption or exchange of shares of a Fund with a tax
holding period of six months or less and not otherwise disallowed will be
treated as a long-term capital loss to the extent of any distributions of
long-term capital gains with respect to such shares. All or a portion of a loss
realized upon the redemption or exchange of shares may be disallowed under "wash
sale" rules to the extent shares are purchased (including shares acquired by
means of reinvested dividends) within the period beginning 30 days before and
ending 30 days after the date of such redemption or exchange. Shareholders
should consult their own tax advisers with respect to the tax status of
distributions from the Funds or redemption or exchange of Fund shares in their
own states and localities.
Under Section 3406 of the Code, individuals and other nonexempt
shareholders who have not provided to a Fund their correct taxpayer
identification numbers and certain required certifications will be subject to
backup withholding of 31% on taxable distributions made by all of the Funds,
usually excluding the WTFB Fund, and on proceeds of redemptions (including
exchanges) of shares of all Funds. Taxable distributions of WTFB Fund, if any,
will not be subject to backup withholding, provided that it is reasonably
expected that at least 95% of the dividends of that Fund for the year will be
exempt-interest dividends. In addition, the Trust may be required to impose
backup withholding if it is notified by the IRS or a broker that the taxpayer
identification number is incorrect or that backup withholding applies because of
underreporting of interest or dividend income. If such withholding is
applicable, such distributions and proceeds will be reduced by the amount of tax
required to be withheld.
Special tax rules apply to IRA accounts (including penalties on certain
distributions and other transactions) and to other special classes of investors,
such as tax-exempt organizations, banks or insurance companies. Investors should
consult their tax advisers for more information.
Shareholders who are not United States persons should also consult their
tax advisers as to the potential application of certain U.S. taxes, including a
30% U.S. withholding tax (or withholding tax at a lower treaty rate) on
dividends representing ordinary income to them, and of foreign taxes to their
investment in the Funds.
HOW TO EXCHANGE SHARES
Shares of any Fund may be exchanged for shares of the other funds in The Wright
Managed Income Trust, The Wright Managed Equity Trust or The Wright EquiFund
Equity Trust at net asset value at the time of the exchange.
<PAGE>
This exchange offer is available only in states where shares of such other
fund may be legally sold. Each exchange is subject to a minimum initial
investment of $1,000 in each fund.
The prospectus of each fund describes its investment objectives and
policies and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
Shareholders purchasing shares from an Authorized Dealer may effect
exchanges between the above funds through their Authorized Dealer who will
transmit information regarding the requested exchanges to the Transfer Agent.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving a request in writing mailed to the address
provided under "How to Buy Shares." Telephone exchanges are also accepted if the
exchange involves shares valued at less than $50,000 and on deposit with The
Shareholder Services Group, Inc. and the investor has not disclaimed in writing
the use of the privilege. To effect such exchanges, call The Shareholder
Services Group, Inc. at 800-262-1122 or within Massachusetts, 617-573-9403,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). All such
telephone exchanges must be registered in the same name(s) and with the same
address and social security or other taxpayer identification number as are
registered with the Fund from which the exchange is being made. Neither the
Trust, the Principal Underwriter nor The Shareholder Services Group, Inc. will
be responsible for the authenticity of exchange instructions received by
telephone, provided that reasonable procedures have been followed to confirm
that instructions communicated are genuine, and if such procedures are not
followed, the Trust, the Funds, the Principal Underwriter or The Shareholder
Services Group, Inc. may be liable for any losses due to unauthorized or
fraudulent telephone instructions. Telephone instructions will be tape recorded.
In times of drastic economic or market changes, a telephone exchange may be
difficult to implement. Additional documentation may be required for written
exchange requests if shares are registered in the name of a corporation,
partnership or fiduciary. Any exchange request may be rejected by a Fund or the
Principal Underwriter at its discretion. The exchange privilege may be changed
or discontinued without penalty at any time. Shareholders will be given sixty
(60) days' notice prior to any termination or material amendment of the exchange
privilege. Contact the Transfer Agent, The Shareholder Services Group, Inc., for
additional information concerning the Exchange Privilege.
Shareholders should be aware that for Federal and state income tax
purposes, an exchange is a taxable transaction which may result in recognition
of a gain or loss.
HOW TO REDEEM OR SELL SHARES
Shares of a Fund will be redeemed at the net asset value next determined after
receipt of a redemption request in good order as described below. Proceeds will
be mailed within seven days of such receipt. However, at various times a Fund
may be requested to redeem shares for which it has not yet received good
payment. If the shares to be redeemed represent an investment made by check,
each Fund may delay payment of redemption proceeds until the check has been
collected which, depending upon the location of the issuing bank, could take up
to 15 days. For Federal and state income tax purposes, a redemption of shares is
a taxable transaction and may result in recognition of a gain or loss.
THROUGH AUTHORIZED DEALERS: Shareholders using Authorized Dealers may
redeem shares through such Dealers.
<PAGE>
BY TELEPHONE: All shareholders are automatically eligible for the telephone
redemption privilege, unless the account application indicates otherwise.
Shareholders may effect a redemption by calling the Funds' Order Department at
800-225-6265 (8:30 a.m. to 4:00 p.m. Eastern time). In times when the volume of
telephone redemptions is heavy, additional phone lines will automatically be
added by the Funds. However, in times of drastic economic or market changes, a
telephone redemption may be difficult to implement. When calling to make a
telephone redemption, shareholders should have available their account number. A
telephone redemption will be made at that day's net asset value, provided that
the telephone redemption request is received prior to 4:00 p.m. on that day.
Telephone redemption requests received after 4:00 p.m. will be effected at the
net asset value determined for the next trading day. Payment will be made by
wire transfer to the bank account designated and normally, as indicated above,
within one business day after receipt of the redemption request in good order.
Trust Departments may make redemptions and deposit the proceeds in checking or
other accounts of clients, as specified in instructions furnished to the Funds
at the time of initially purchasing Fund shares. Neither the Trust, the
Principal Underwriter nor The Shareholder Services Group, Inc. will be
responsible for the authenticity of redemption instructions received by
telephone, provided that reasonable procedures have been followed to confirm
that instructions communicated are genuine, and if such procedures are not
followed, the Trust, the Funds, the Principal Underwriter or The Shareholder
Services Group, Inc. may be liable for any losses due to unauthorized or
fraudulent telephone instructions.
Also, shareholders may effect a redemption by calling the Funds' Transfer
Agent, The Shareholder Services Group, Inc., at 800-262-1122 (8:30 a.m. to 4:00
p.m. Eastern time) if the redemption involves shares valued at less than $50,000
and on deposit with The Shareholder Services Group, Inc. Payment will be made by
check to the address of record. Telephone instructions will be tape recorded.
BY MAIL: A shareholder may also redeem all or any number of shares at any
time by mail by delivering the request with a stock power to the Transfer Agent,
The Shareholder Services Group, Inc., Wright Managed Investment Funds, P.O. Box
1559, Boston, Massachusetts 02104. As in the case of wire requests, payments
will normally be made within one business day after receipt of the redemption
request in good order. Good order means that written redemption requests or
stock powers must be endorsed by the record owner(s) exactly as the shares are
registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a regulation of the Securities
and Exchange Commission and acceptable to The Shareholder Services Group, Inc.
In addition, in some cases, good order may require the furnishing of additional
documents, such as where shares are registered in the name of a corporation,
partnership or fiduciary.
The right to redeem shares of a Fund and to receive payment therefor may be
suspended at times (a) when the securities markets are closed, other than
customary weekend and holiday closings, (b) when trading is restricted for any
reason, (c) when an emergency exists as a result of which disposal by the Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets, or (d)
when the Securities and Exchange Commission by order permits a suspension of the
right of redemption or a postponement of the date of payment or redemption.
Although the Funds normally intend to redeem shares in cash, each Fund,
subject to compliance with applicable
<PAGE>
regulations, reserves the right to deliver the proceeds of redemptions in
the form of portfolio securities if deemed advisable by the Trustees of the
Trust. The value of any such portfolio securities distributed will be determined
in the manner described under "How the Funds Value their Shares" and may be more
or less than a shareholder's cost depending upon the market value of portfolio
securities at the time the redemption is made. If the amount of a Fund's shares
to be redeemed for a shareholder or a sub-account within a 90-day period exceeds
the lesser of $250,000 or 1% of the aggregate net asset value of the Fund at the
beginning of such period, such Fund reserves the right to deliver all or any
part of such excess in the form of portfolio securities. If portfolio securities
were distributed in lieu of cash, the shareholder would normally incur
transaction costs upon the disposition of any such securities.
Due to the relatively high cost of maintaining small accounts, each Fund
reserves the right to redeem fully at net asset value any Fund account which at
any time, due to redemption or transfer, amounts to less than $1,000 for that
Fund; any shareholder who makes a partial redemption which reduces his account
in a Fund to less than $1,000 would be subject to the Fund's right to redeem
such account. Prior to the execution of any such redemption, notice will be sent
and the shareholder will be allowed 60 days from the date of notice to make an
additional investment to meet the required minimum of $1,000 per Fund. However,
no such redemption would be required by the Fund if the cause of the low account
balance was a reduction in the net asset value of Fund shares.
OTHER INFORMATION
The Trust is a business trust established under Massachusetts law and is a
no-load, open-end management investment company. The Trust was established
pursuant to a Declaration of Trust dated February 17, 1983, as amended.
The Trust's shares of beneficial interest have no par value. Shares of the
Trust may be issued in two or more series or "Funds". The Trust currently has
six Funds, five of which are offered in this Prospectus. Each Fund's shares may
be issued in an unlimited number by the Trustees of the Trust. Each share of a
Fund represents an equal proportionate beneficial interest in that Fund and,
when issued and outstanding, the shares are fully paid and non-assessable by the
relevant Fund. Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted in proportion to the amount of the net asset
value of a Fund which they represent. Voting rights are not cumulative, which
means that the holders of more than 50% of the shares voting for the election of
Trustees of the Trust can elect 100% of the Trustees and, in such event, the
holders of the remaining less than 50% of the shares voting on the matter will
not be able to elect any Trustees. Shares have no preemptive or conversion
rights and are freely transferable. Upon liquidation of a Fund, shareholders are
entitled to share pro rata in the net assets of the particular Fund available
for distribution to shareholders, and in any general assets of the Trust not
allocated to a particular Fund by the Trustees.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees holding office have been elected by
shareholders. In such an event the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's by-laws, the Trustees shall continue to hold office and may
appoint successor Trustees. The Trustees shall only be liable in cases of their
willful misfeasance, bad faith, gross negligence, or reckless disregard of their
duties.
The Trust's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding
<PAGE>
shares have removed him from that office either by a written declaration
filed with the Trust's custodian or by votes cast at a meeting called for that
purpose. The Trustees shall promptly call a meeting of the shareholders for the
purpose of voting upon a question of removal of a Trustee when requested so to
do by the record holders of not less than 10 per centum of the outstanding
shares.
The Prospectuses of the Funds are combined in this Prospectus. Each Fund
offers only its own shares, yet it is possible that a Fund might become liable
for a misstatement in the Prospectus of another Fund. The Trustees have
considered this in approving the use of a combined Prospectus.
TAX-SHELTERED RETIREMENT PLANS
The Funds (but not the WTFB Fund) are suitable investments for individual
retirement account plans for individuals and their non-employed spouses, pension
and profit sharing plans for self-employed individuals, corporations and
non-profit organizations, or 401(k) tax-sheltered retirement plans.
For more information, write to:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
or call:
(203) 330-5060
<PAGE>
THE WRIGHT
MANAGED INCOME TRUST
PROSPECTUS
MAY 1, 1995, AS REVISED SEPTEMBER 22, 1995
THE WRIGHT MANAGED INCOME TRUST
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INVESTMENT ADVISER
Wright Investors' Service
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
PRINCIPAL UNDERWRITER
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, Massachusetts 02110
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
Wright Managed Investment Funds
BOS 725
P.O. Box 1559
Boston, Massachusetts 02104
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
24 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995, as revised September 22, 1995
THE WRIGHT MANAGED INCOME TRUST
24 Federal Street
Boston, Massachusetts 02110
------------------------------------------------------------------------------
Wright U.S. Treasury Fund
Wright U.S. Treasury Near Term Fund
Wright Total Return Bond Fund
Wright Insured Tax Free Bond Fund
Wright Current Income Fund
------------------------------------------------------------------------------
Table of Contents Page
General Information And History...................... 2
Investment Objectives And Policies................... 3
Investment Restrictions.............................. 6
Officers And Trustees................................ 7
Control Persons And Principal Holders Of Shares...... 9
Investment Advisory And Administrative Services...... 10
Custodian............................................ 12
Independent Certified Public Accountants............. 13
Brokerage Allocation................................. 13
Fund Shares And Other Securities..................... 14
Purchase, Exchange, Redemption And Pricing Of Shares. 15
Principal Underwriter................................ 15
Calculation Of Performance And Yield Quotations...... 17
Financial Statements................................. 20
Appendix ............................................ 50
THIS COMBINED STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE CURRENT COMBINED PROSPECTUS OF THE WRIGHT MANAGED INCOME
TRUST (THE "TRUST') DATED MAY 1, 1995, AS REVISED SEPTEMBER 22, 1995; A COPY OF
WHICH MAY BE OBTAINED WITHOUT CHARGE FROM WRIGHT INVESTORS' SERVICE
DISTRIBUTORS, INC., 1000 LAFAYETTE BOULEVARD, BRIDGEPORT, CONNECTICUT 06604
(TELEPHONE: 800-888-9471).
<PAGE>
GENERAL INFORMATION AND HISTORY
The Trust is a no-load, open-end, management investment company organized
as a Massachusetts business trust. The Trust was established pursuant to a
Declaration of Trust dated February 17, 1983, as amended and restated December
21, 1987 and further amended March 28, 1991 to change the name of the Trust from
"The Wright Managed Bond Trust" to "The Wright Managed Income Trust." On
September 22, 1995, Wright Government Obligations Fund and Wright Near Term Bond
Fund changed their names to Wright U.S. Treasury Fund and Wright U.S. Treasury
Near Term Fund, respectively. The Trust has the five series described herein
(the "Funds") plus one series offered under a separate prospectus and statement
of additional information. Each Fund is a diversified fund.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees of the Trust unless and until
such time as less than a majority of the Trustees holding office have been
elected by its shareholders. In such an event, the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Subject to the
foregoing circumstances, the Trustees will continue to hold office and may
appoint successor or new Trustees except that, pursuant to provisions of the
Investment Company Act of 1940 (the "1940 Act"), which are set forth in the
By-laws of the Trust, the shareholders can remove one or more of its Trustees.
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if the interests of a
particular Fund are affected, a majority of such Fund's outstanding shares. The
Trustees are authorized to make amendments to the Declaration of Trust that do
not have a material adverse affect on the interests of shareholders. The Trust
may be terminated (i) upon the sale of the Trust's assets to another diversified
open-end management investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the Trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its Trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Trust's Declaration of Trust further provides that the Trust's Trustees
will not be liable for errors of judgment or mistakes of fact or law; however,
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Trust's Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The risk of any shareholder incurring any liability for the
obligations of the Trust is extremely remote.
<PAGE>
The Trust has retained Wright Investors' Service of Bridgeport, Connecticut
("Wright" or "Investment Adviser") as investment adviser to carry out the
management, investment and reinvestment of its assets. The Trust has retained
Eaton Vance Management ("Eaton Vance"), 24 Federal Street, Boston, Massachusetts
02110, as administrator of the Trust's business affairs.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is to provide a high level of return
consistent with the quality standards and average maturity for such Fund. The
securities in which each Fund may invest are described below. Except as
otherwise indicated, the investment objective and policies of the Funds may be
changed by the Trustees of the The Wright Managed Income Trust (the "Trust")
without a vote of the Funds' shareholders.
WRIGHT U.S. TREASURY FUND (WUSTB). WUSTB invests in U.S. Treasury bills,
notes and bonds. For a further description of the WUSTB Fund's investments, see
the Appendix beginning at page 50.
WRIGHT U.S. TREASURY NEAR TERM FUND (WNTB). WNTB invests in U.S. Treasury
obligations with an average weighted maturity of less than five years. This Fund
is designed to appeal to the investor seeking a high level of income that is
normally somewhat less variable and normally somewhat higher than that available
from short-term U.S. Treasury money market securities and who is also seeking to
limit fluctuation of capital (i.e., compared with longer-term U.S. Treasury
securities). Portfolio securities will consist entirely of U.S. Treasury
obligations, such as U.S. Treasury bills, notes and bonds.
WRIGHT TOTAL RETURN BOND FUND (WTRB). WTRB invests in a diversified
portfolio of high-quality bonds and other debt securities of high quality with
an average weighted maturity that, in the judgment of the Fund's investment
adviser, produces the best total return, i.e., the highest total of ordinary
income plus capital appreciation. Accordingly, investment selections may differ
depending on the particular phase of the interest rate cycle. Assets of this
Fund may be invested in U.S. Government and agency obligations, certificates of
deposit of federally insured banks and corporate obligations rated at the date
of investment A or better (high grade) by Standard & Poor's Ratings Group
("Standard & Poor's") or by Moody's Investors Service, Inc. ("Moody's") or, if
not rated by such rating organizations, of comparable quality as determined by
the Investment Adviser pursuant to guidelines established by the Trust's
Trustees. In any case, they must also meet Wright Quality Rating Standards.
WRIGHT INSURED TAX FREE BOND FUND (WTFB). WTFB invests in a high-grade
portfolio consisting primarily of Municipal Securities (as defined in the
Appendix) that provide current interest income exempt from regular Federal
income tax. In addition, under normal market conditions, at least 65% of the
Fund's investments will consist of municipal securities that are covered by
insurance guaranteeing the timely payment of principal and interest. However,
assets of this Fund may be temporarily invested in securities the interest
income from which may be subject to regular Federal income tax (1) if, in the
Investment Adviser's opinion, investment considerations make it advisable to do
so; (2) to meet temporary liquidity requirements; and (3) during the period
between the commitment to purchase municipal bonds and the settlement date of
such purchases.
Except as provided above, the Fund's annual income is expected to consist
of interest exempt from regular Federal income tax. Rather than simply hold a
fixed portfolio of bonds, the Investment Adviser will attempt to take advantage
of opportunities in the market place to achieve a higher total return (i.e., the
<PAGE>
combination of income and capital performance over the long term) when such
action is not inconsistent with the objective of providing a high level of
tax-free income. Distributions by the Fund that are exempt from regular Federal
income tax may not be exempt from the Federal alternative minimum tax or from
state or local taxes and distributions, if any, made from realized capital gains
are subject to Federal, state and local taxes where applicable.
In addition, the market prices of municipal bonds, like those of taxable
debt securities, vary inversely with interest rate changes during the period
prior to maturity. As a result, the net asset value per share of the Fund can be
expected to fluctuate and shareholders may receive more or less than the
purchase price for shares which they redeem. The Fund will have an average
weighted maturity that, in the judgment of the Fund's investment adviser,
produces the best compromise between return and stability of principal.
All municipal securities purchased for WTFB will be covered by insurance
guaranteeing the timely payment of principal and interest, such insurance to be
"new issue" insurance, "secondary market" insurance, or "portfolio" insurance,
all as defined in the current Prospectus of the Trust.
If the Investment Adviser believes that "defensive" or other investment
considerations make it advisable to do so, up to 20% of the Fund's net assets
may be held in cash or invested in short-term taxable investments such as (1)
U.S. Treasury bills, notes, and bonds; (2) obligations of agencies and
instrumentalities of the U.S. Government; and (3) money market instruments, such
as high-quality domestic bank certificates of deposit, finance company and
corporate commercial paper and bankers' acceptances.
WRIGHT CURRENT INCOME FUND (WCIF). WCIF invests primarily in debt
obligations issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities, mortgage-related securities of governmental or corporate
issuers and corporate debt securities. The U.S. Government securities in which
the Fund may invest include direct obligations of the U.S. Government, such as
U.S. Treasury bills, notes, and bonds; obligations of U.S. Government agencies
and instrumentalities secured by the full faith and credit of the U.S. Treasury,
such as securities of the Government National Mortgage Association (GNMA) or the
Export-Import Bank; obligations secured by the right to borrow from the U.S.
Treasury, such as securities issued by the Federal Financing Bank or the Student
Loan Marketing Association; and obligations backed by the credit of the
government agency itself, such as securities of the Federal Home Loan Bank, the
Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage
Corporation (FHLMC).
The Fund may invest in mortgage-related securities issued by certain of the
agencies or federally chartered corporations listed above. These include
mortgage-backed securities of GNMA, FNMA and FHLMC, debentures and short-term
notes issued by FNMA and collateralized mortgage obligations issued by FHLMC. In
addition, the Fund may invest in collateralized mortgage obligations issued by
such private entities as financial institutions, mortgage bankers and
subsidiaries of home building companies, provided that they meet Wright Quality
Rating Standards. WCIF expects to concentrate its investments in Ginnie Mae
pass-through securities guaranteed by the Government National Mortgage
Association (GNMA or Ginnie Mae). These securities are backed by a pool of
mortgages which pass through to investors the principal and interest payments of
homeowners. Ginnie Mae guarantees that investors will receive timely princpal
payments even if homeowners do not make their mortgage payments on time.
The corporate debt securities in which the Fund may invest include
commercial paper and other short-term
<PAGE>
instruments rated A-1 by Standard & Poor's or P-1 by Moody's. The Fund may
invest in unrated debt securities if these are determined by the Investment
Adviser pursuant to guidelines established by the Trust's Trustees to be of a
quality comparable to that of the rated securities in which the Fund may invest.
All of the corporate debt securities purchased by the Fund must meet Wright
Quality Rating Standards.
The Fund may enter into repurchase agreements with respect to any
securities in which it may invest.
GENERAL POLICIES OF THE FUNDS. The Trust does not ordinarily expect to
establish investment reserves in cash equivalent securities (i.e., non-equity
securities which are readily converted into cash) in its taxable intermediate
and longer term Funds, but may do so from time to time should there be an influx
of investors' cash at a time when securities of an appropriate character or
quality are in short supply. Each of the taxable Funds, other than WUSTB and
WNTB, may invest in certificates of deposit, bankers' acceptances and other
obligations of domestic banks, including thrift institutions. In all cases,
high-quality standards will apply to such Funds' bank investments, meaning that
such investments will be rated within the two highest ratings by any major
rating service or, if the instrument is not rated, will be of comparable quality
as determined by the Trust's Trustees. The Funds may invest in bank obligations
and instruments of banks which have other relationships with the Funds, Eaton
Vance, Wright or Investors Bank & Trust Company, an affiliate of Eaton Vance.
Investments by WTFB will be confined to securities of those issuers which
meet the quality standards of Wright and to obligations that consist of:
(1) Municipal Securities which are rated at the time of purchase within the
two highest grades by Moody's (Aaa or Aa) or by Standard and Poor's
(AAA or AA), or, in the case of municipal notes, rated at least MIG 1
by Moody's or SP-1 by Standard & Poor's;
(2) Unrated Municipal Securities which, in the opinion of the Investment
Adviser, have credit characteristics equivalent to or better than
obligations rated Aa or MIG 1 by Moody's, or AA or SP-1 by Standard and
Poor's;
(3) Tax-exempt commercial (municipal) paper which is rated in the highest
grade by such rating services (P-1 or A-1, respectively) or which, in
the opinion of the Investment Adviser, has credit characteristics
equivalent to or better than such rated paper;
(4) Obligations, the interest on which is exempt from Federal income tax
which at the time of purchase are backed by the full faith and
credit of the U.S.Government as to payment of principal and interest;
(5) Obligations, the interest on which is exempt from Federal income tax
which at the time of purchase are insured as to principal and interest
by an agency, insurance company, or financial organization acceptable
to the Funds' investment adviser (e.g., the Municipal Bond Investors
Assurance Corporation [MBIA]);
(6) Temporary investments in taxable securities as noted above in the
sections relating to WTFB, and
(7) Cash.
For a further description of the instruments and ratings discussed above in
connection with the various Income Funds see the Appendix.
<PAGE>
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by each Fund and
may be changed with respect to a Fund only by the vote of a majority of the
Fund's outstanding voting securities, which as used in this Statement of
Additional Information means the lesser of (a) 67% of the shares of the Fund if
the holders of more than 50% of the shares are present or represented at the
meeting or (b) more than 50% of the shares of the Fund. Accordingly, each Fund
may not:
(1) Borrow money in excess of 1/3 of the current market value of the net
assets of a Fund (excluding the amount borrowed) and then only if such
borrowing is incurred as a temporary measure for extraordinary or
emergency purposes or to facilitate the orderly sale of portfolio
securities to accommodate redemption requests; or issue any securities
of a Fund other than its shares of beneficial interest except as
appropriate to evidence indebtedness which the Fund is permitted to
incur. To the extent that a Fund purchases additional portfolio
securities while such borrowings are outstanding, such Fund may be
considered to be leveraging its assets, which entails the risk that the
costs of borrowing may exceed the return from the securities purchased.
(The Trust anticipates paying interest on borrowed money at rates
comparable to a Fund's yield and the Trust has no intention of
attempting to increase any Fund's net income by means of borrowing);
(2) Pledge, mortgage or hypothecate the assets of any Fund to an extent
greater than 1/3 of the total assets of the Fund taken at market;
(3) Invest more than 5% of a Fund's total assets taken at current market
value in the securities of any one issuer (other than securities issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities) or allow a Fund to purchase more than 10% of the
voting securities of any one issuer;
(4) Purchase or retain securities of any issuer if 5% of the issuer's
securities are owned by those officers and Trustees of the Trust or its
manager, investment adviser or administrator who own individually more
than 1/2 of 1% of the issuer's securities;
(5) Purchase securities on margin, make short sales except sales against
the box, write or purchase or sell any put options (except with respect
to securities held by any Fund investing primarily in U.S. Government
securities or in securities the interest on which is exempt from
Federal income tax), or purchase warrants;
(6) Buy or sell real estate unless acquired as a result of ownership of
securities;
(7) Purchase any securities which would cause more than 25% of the market
value of a Fund's total assets at the time of such purchase to be
invested in the securities of issuers having their principal business
activities in the same industry, provided that there is no limitation
in respect to investments in securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities and utility
companies, gas, electric, water and telephone companies are considered
as separate industries; except that, with respect to any Fund which has
a policy of being primarily invested in obligations whose interest
income is exempt from Federal income tax, the restriction shall be that
the Trust will not purchase for that Fund either (i) pollution control
and industrial development bonds issued by non-governmental users or
(ii) securities whose interest income is not exempt from Federal income
tax, if in either case the purchase would cause more than 25% of the
market value of the assets of the Fund at the time of such purchase
<PAGE>
to be invested in the securities of one or more issuers having their
principal business activities in the same industry;
(8) Underwrite securities issued by other persons except insofar as the
Trust may technically be deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security;
(9) Make loans, except to the extent that the purchase of debt instruments
in accordance with the Trust's investment objective and policies may be
deemed to be loans; or
(10) Purchase from or sell to any of its Trustees and officers, its manager,
administrator, or investment adviser, its principal underwriter, if
any, or the officers and directors of said manager, administrator,
investment adviser or principal underwriter, portfolio securities of
any Fund.
The issuer of a pollution control or industrial development bond for
purposes of investment restriction (7) is the entity or entities whose assets
and revenues will provide the source for payment of principal and interest on
the bond. A governmental or other entity that guarantees such a bond may also be
considered the issuer of a separate security for purposes of this restriction.
In addition, while not fundamental policies, so long as the shares of any
Fund are registered for sale in Texas, and while the following are generally
required conditions of registration in that State, the Trust undertakes that
each Fund will limit its investment in warrants, valued at the lower of cost or
market, to 5% of the value of the Fund's net assets (included within that
amount, but not to exceed 2% of the value of the Fund's net assets, may be
warrants which are not listed on the New York or American Stock Exchange.
Warrants acquired by the Fund in units or attached to securities may be deemed
to be without value); no Fund will purchase oil, gas or other mineral leases or
purchase partnership interests in oil, gas or other mineral exploration or
development programs; no Fund will purchase or sell real property (including
limited partnership interests, but excluding readily marketable interests in
real estate investment trusts or readily marketable securities of companies
which invest in real estate).
If a percentage restriction contained in any Fund's investment policies is
adhered to at the time of investment, a later increase or decrease in the
percentage resulting from a change in the value of portfolio securities or the
Fund's net assets will not be considered a violation of such restriction.
OFFICERS AND TRUSTEES
The officers and Trustees of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those Trustees who are "interested
persons" of the Trust, Wright, Eaton Vance, Eaton Vance's wholly owned
subsidiary, Boston Management and Research ("BMR"), Eaton Vance's parent
company, Eaton Vance Corp. (`EVC'), or Eaton Vance's and BMR's Trustee, Eaton
Vance, Inc. ("EV"), as defined in the 1940 Act by virtue of their affiliation
with either the Trust, Wright, Eaton Vance, BMR, EVC or EV, are indicated by an
asterisk (*).
PETER M. DONOVAN (52), PRESIDENT AND TRUSTEE*
President and Director of Wright Investors' Service; Vice President, Treasurer
and a Director of Wright Investors' Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, JR. (68), VICE PRESIDENT, SECRETARY AND TRUSTEE*
Vice President of Eaton Vance, BMR, EVC and EV and Director, EV and EVC;
Director, Trustee and officer of various investment companies managed by Eaton
Vance or BMR; Director, Investors Bank & Trust Company
Address: 24 Federal Street, Boston, MA 02110
<PAGE>
WINTHROP S. EMMET (85), TRUSTEE
Attorney at Law, Stockbridge, MA; Trust Officer, First National City Bank,
New York, NY (1963-1971)
Address: Box 327, West Center Road, West Stockbridge, MA 01266
LELAND MILES (71), TRUSTEE
President Emeritus, University of Bridgeport (1987- present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company
Address: Tide Mill Landing, 2425 Post Road, Suite 102, Southport, CT 06490
A.M. MOODY III (58), VICE PRESIDENT & TRUSTEE*
Senior Vice President, Wright Investors' Service; President, Wright
Investors' Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (76), TRUSTEE
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,CT;
Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of Directors,
Southern Connecticut Gas Company; Chairman, Board of Directors, COSINE
Address: 125 Gull Circle North, Daytona Beach, FL 32119
GEORGE R. PREFER (60), TRUSTEE
Retired President and Chief Executive Officer, Muller Data Corp., New York,NY
(President 1983- 1986 and 1989-1990); President and Chief Executive Officer,
InvestData Corporation, A Mellon Financial Services Company (1986-1989)
Address: 7738 Silver Bell Drive, Sarasota, FL 34241
RAYMOND VAN HOUTTE (71), TRUSTEE
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca,NY
(since January 1989); President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaported
Metal Products and Ithaco, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JUDITH R. CORCHARD (56), VICE PRESIDENT
Executive Vice President, Investment Management: Senior Investment Officer;
Vice Chairman of the Investment Committee and Director, Wright Investors'
Service.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
JAMES L. O'CONNOR (50), TREASURER
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (59), ASSISTANT SECRETARY AND
ASSISTANT TREASURER
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
WILLIAM J. AUSTIN, JR. (43), ASSISTANT TREASURER
Assistant Vice President of Eaton Vance, BMR and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 18, 1991.
Address: 24 Federal Street, Boston, MA 02110
A. JOHN MURPHY (32), ASSISTANT SECRETARY
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993) and Registration Specialist, Fidelity Management &
Research Co. (1986-1991). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust on
June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (38), ASSISTANT SECRETARY
Vice President of Eaton Vance since February 1993; formerly, associate at
Dechert, Price & Rhoades and Gaston & Snow. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Woodbury was elected Assistant
Secretary of the Trust on June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
<PAGE>
All of the Trustees and officers hold identical positions with The Wright
Managed Equity Trust, The Wright Managed Blue Chip Series Trust (except Mr.
Miles) and The Wright EquiFund Equity Trust. The fees and expenses of those
Trustees of the Trust (Messrs. Emmet, Miles, Pierce, Prefer and Van Houtte) who
are not affiliated persons of the Trust are paid by the Funds and other series
of the Trust. They also received additional payments from other investment
companies for which Wright provides investment advisory services. The Trustees
who are interested persons of the Trust receive no compensation from the Trust.
For Trustee compensation for the fiscal year ended December 31, 1994, see the
table below.
Messrs. Emmet, Miles, Pierce, Prefer and Van Houtte are members of the
Special Nominating Committee of the Trustees of the Trust. The Special
Nominating Committee's function is selecting and nominating individuals to fill
vacancies, as and when they occur, in the ranks of those Trustees who are not
"interested persons" of the Trust, Eaton Vance or Wright. The Trust does not
have a designated audit committee since the full board performs the functions of
such committee.
<TABLE>
<CAPTION>
COMPENSATION TABLE - FISCAL YEAR ENDED DECEMBER 31, 1994
The Wright Managed Income Trust -- Registered Investment Companies (6)
Aggregate Compensation from Pension Benefits Estimated Total Compensation
Trustees The Wright Managed Income Trust Accrued Annual Benefits Paid(1)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Winthrop S. Emmet $1,100 None None $5,000
Leland Miles $1,100 None None $5,000
Lloyd F. Pierce $1,100 None None $5,000
George R. Prefer $1,100 None None $5,000
Raymond Van Houtte $1,100 None None $5,000
-------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Total compensation paid is from The Wright Managed Income Trust (6 funds) and the other boards in the Wright Fund
complex (17 Funds) for a total of 23 Funds.
</FN>
</TABLE>
CONTROL PERSONS AND
PRINCIPAL HOLDERS OF SHARES
As of March 31, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of each Fund. The
Funds' shares are held primarily by trust departments of depository institutions
and trust companies either for their own account or for the accounts of their
clients. From time to time, several of these trust departments are the record
owners of 5% or more of the outstanding shares of a particular Fund. To date,
the Funds' experience has been that such shareholders do not continuously hold
in excess of 5% or more of a Fund's outstanding shares for extended periods of
time. Should a shareholder continuously hold 5% or more of a Fund's outstanding
shares for an extended period of time (a period in excess of a year), this would
be disclosed by an amendment to this Statement of Additional Information showing
such shareholder's name, address and percentage of ownership. Upon request, the
Trust will provide shareholders with a list of all shareholders holding 5% or
more of a Fund's outstanding shares as of a current date.
On March 31, 1995, the number of trust departments which were the record
owners of more than 5%
<PAGE>
of the outstanding shares of the Funds was as follows:
WUSTB, 5; WNTB, 3; WTRB, 4; WTFB, 5; and WCIF, 1.
INVESTMENT ADVISORY AND
ADMINISTRATIVE SERVICES
The Trust has engaged Wright to act as each Fund's investment adviser
pursuant to an Investment Advisory Contract dated December 21, 1987 (the
"Investment Advisory Contract"). Wright, located at 1000 Lafayette Boulevard,
Bridgeport, Connecticut, was founded in 1960 and currently provides investment
services to clients throughout the United States and abroad. John Winthrop
Wright may be considered a controlling person of Wright by virtue of his
position as Chairman of the Board of Directors of Wright, and by reason of his
ownership of more than a majority of the outstanding shares of Wright.
The Investment Advisory Contract provides that Wright will carry out the
investment and reinvestment of the assets of the Funds, will furnish
continuously an investment program with respect to the Funds, will determine
which securities should be purchased, sold or exchanged, and will implement such
determinations. Wright will furnish to the Funds investment advice and
management services, office space, equipment and clerical personnel, and
investment advisory, statistical and research facilities. In addition, Wright
has arranged for certain members of the Eaton Vance and Wright organizations to
serve without salary as officers or Trustees of the Trust. In return for these
services, each Fund is obligated to pay a monthly advisory fee calculated at the
rates set forth in the table below.
The Trust has engaged Eaton Vance to act as the administrator for each Fund
pursuant to an Administration Agreement dated November 1, 1990. Eaton Vance, or
its affiliates act as investment adviser to investment companies and various
individual and institutional clients with assets under management of
approximately $15 billion. Eaton Vance is a wholly-owned subsidiary of EVC, a
publicly held holding company.
<TABLE>
<CAPTION>
Annual % Advisory Fee Rates
Under $100 Mil $250 Mil $500 Mil Over Fees Earned for the
$100 to to to $1 Fiscal Year Ended December 31
Million $250 Mil $500 Mil $1 Billion Billion 1992 1993 1994
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) 0.40% 0.46% 0.42% 0.38% 0.33% $ 122,714 $ 122,610 $ 84,992
Wright U.S. Treasury Near Term Fund (WNTB) 0.40% 0.46% 0.42% 0.38% 0.33% $1,203,812 $1,549,112 $1,266,025
Wright Total Return Bond Fund (WTRB) 0.40% 0.46% 0.42% 0.38% 0.33% $ 709,495 $1,054,524 $ 824,625
Wright Insured Tax Free Bond Fund (WTFB)(1) 0.40% 0.46% 0.42% 0.38% 0.33% $ 41,686 $ 66,443 $ 57,725(1)
Wright Current Income Fund (WCIF) 0.40% 0.46% 0.42% 0.38% 0.33% $ 327,551 $ 437,383 $ 403,012
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)To enhance the net income of the Fund, Wright reduced its advisory fees
during each of the fiscal years ended December 31, 1994, 1993 and 1992 by
$29,956, $8,267 and $24,753, respectively.
</FN>
</TABLE>
<PAGE>
Under the Administration Agreement, Eaton Vance is responsible for managing
the business affairs of each Fund, subject to the supervision of the Trust's
Trustees. Eaton Vance's services include recordkeeping, preparation and filing
of documents required to comply with Federal and state securities laws,
supervising the activities of the Trust's custodian and transfer agent,
providing assistance in connection with the Trustees' and shareholders' meetings
and other administrative services necessary to conduct each Fund's business.
Eaton Vance will not provide any investment management or advisory services to
the Funds. For its services under the Administration Agreement, Eaton Vance
receives monthly administration fees at the annual rates set forth in the table
below.
<TABLE>
<CAPTION>
Annual % Administration Fee Rates
Under $100 Million $250 Million Over Fees Paid for the
$100 to to $500 Fiscal Year Ended December 31
Million $250 Million $500 Million Million 1992 1993 1994
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) 0.10% 0.04% 0.03% 0.02% $ 30,678 $ 30,653 $ 21,245
Wright U.S. Treasury Near Term Fund (WNTB) 0.10% 0.04% 0.03% 0.02% $167,817 $192,794 $172,293
Wright Total Return Bond Fund (WTRB) 0.10% 0.04% 0.03% 0.02% $126,913 $156,793 $136,920
Wright Insured Tax Free Bond Fund (WTFB) 0.10% 0.04% 0.03% 0.02% $ 10,425 $ 16,607 $ 14,431
Wright Current Income Fund (WCIF) 0.10% 0.04% 0.03% 0.02% $ 81,949 $107,639 $ 97,754
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner,
James B. Hawkes and Benjamin A. Rowland, Jr. The Directors of EVC consist of the
same persons and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman,
and Mr. Gardner is president and chief executive officer of EVC, Eaton Vance,
BMR and EV. All of the issued and outstanding shares of Eaton Vance and of EV
are owned by EVC. All of the issued and outstanding shares of BMR are owned by
Eaton Vance. All shares of the outstanding Voting Common Stock of EVC are
deposited in a Voting Trust which expires December 31, 1996, the Voting Trustees
of which are Messrs. Brigham, Clay, Gardner, Hawkes, and Rowland. The Voting
Trustees have unrestricted voting rights for the election of Directors of EVC.
All of the outstanding voting trust receipts issued under said Voting Trust are
owned by certain of the officers of Eaton Vance and BMR who are also officers
and Directors of EVC and EV. As of April 1, 1995, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts. Messrs. Rowland and Brigham
each owned 15% and 13%, respectively, of such voting trust receipts. Mr. Brigham
is an officer and Trustee of the Trust, and a member of the Eaton Vance, EVC,
BMR and EV organizations. Messrs. Austin, Murphy, O'Connor and Woodbury and Ms.
Sanders are officers of the Trust and are also members of the Eaton Vance, BMR
and EV organizations. Eaton Vance will receive the fees paid under the
Administration Agreements.
Eaton Vance owns all of the stock of Energex Corporation which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which engages in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, which provides custodial, trustee and other fiduciary
<PAGE>
services to investors, including individuals, employee benefit plans,
corporations, investment companies, savings banks and other institutions. In
addition, Eaton Vance owns all the stock of Northeast Properties, Inc., which is
engaged in real estate investment and consulting and management. EVC owns all of
the stock of Fulcrum Management, Inc. and MinVen, Inc., which are engaged in the
development of precious metal properties. EVC, EV, Eaton Vance and BMR may also
enter into other businesses.
The Trust will be responsible for all of its expenses not expressly stated
to be payable by Wright under its Investment Advisory Contract or by Eaton Vance
under its Administration Agreement, including, without limitation, the fees and
expenses of its custodian and transfer agent, including those incurred for
determining each Fund's net asset value and keeping each Fund's books; the cost
of share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; expenses of
Trustees not affiliated with Eaton Vance or Wright; distribution expenses
incurred pursuant to the Trust's distribution plan; and investment advisory and
administration fees. The Trust will also bear expenses incurred in connection
with litigation in which the Trust is a party and the legal obligation the Trust
may have to indemnify its officers and Trustees with respect thereto.
The Trust's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 1996. The Trust's Investment Advisory
Contract may be continued with respect to a Fund from year to year thereafter so
long as such continuance after February 28, 1996 is approved at least annually
(i) by the vote of a majority of the Trustees who are not "interested persons"
of the Trust, Eaton Vance or Wright cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding shares of that
Fund. The Trust's Administration Agreement may be continued from year to year
after February 28, 1996 so long as such continuance is approved annually by the
vote of a majority of the Trustees. Each agreement may be terminated as to a
Fund at any time without penalty on sixty (60) days written notice by the Board
of Trustees or Directors of either party, or by vote of the majority of the
outstanding shares of that Fund, and each agreement will terminate automatically
in the event of its assignment. Each agreement provides that, in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties to the Trust under such agreement on the part of Eaton
Vance or Wright, Eaton Vance or Wright will not be liable to the Trust for any
loss incurred. The Trust's Investment Advisory Contract and Administration
Agreement were most recently approved by its Trustees, including the
"non-interested Trustees," at a meeting held on January 25, 1995 and by the
shareholders of each of its Funds at a meeting held on December 9, 1987.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston, Massachusetts
(a 77.3% owned subsidiary of EVC) acts as custodian for the Funds. IBT has the
custody of all cash and securities of the Funds, maintains the Funds' general
ledgers and computes the daily net asset value per share. In such capacity it
attends to details in connection with the sale, exchange, substitution, transfer
or other dealings with the Funds' investments, receives and disburses all funds
and performs various other ministerial duties upon receipt of proper
instructions from the Funds.
<PAGE>
IBT charges custody fees which are competitive
within the industry. A portion of the custody fee for each fund served by IBT is
based upon a schedule of percentages applied to the aggregate assets of those
funds managed by Eaton Vance for which IBT serves as custodian, the fees so
determined being then allocated among such funds relative to their size. These
fees are then reduced by a credit for cash balances of the particular fund at
IBT equal to 75% of the 91-day, U.S. Treasury Bill auction rate applied to the
particular fund's average daily collected balances for the week. In addition,
each fund pays a fee based on the number of portfolio transactions and a fee for
bookkeeping and valuation services. During the fiscal year ended December 31,
1994, the Funds paid IBT the following fees:
------------------------------------------------------------
Wright U.S. Treasury Fund......................... $32,620
Wright U.S. Treasury Near Term Fund............... 71,746
Wright Total Return Bond Fund..................... 56,469
Wright Insured Tax Free Bond Fund................. 37,901
Wright Current Income Fund........................ 62,477
-----------------------------------------------------------
EVC and its affiliates and its officers and employees from time to time
have transactions with various banks, including the Funds' custodian, IBT. Those
transactions with IBT which have occurred to date have included loans to certain
of Eaton Vance's officers and employees. It is Eaton Vance's opinion that the
terms and conditions of such transactions were not and will not be influenced by
existing or potential custodian or other relationships between the Funds and
IBT.
INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts are the Trust's
independent certified public accountants, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the Securities and Exchange Commission.
BROKERAGE ALLOCATION
Wright places the portfolio security transactions for each Fund, which in some
cases may be effected in block transactions which include other accounts managed
by Wright. Wright provides similar services directly for bank trust departments.
Wright seeks to execute portfolio security transactions on the most favorable
terms and in the most effective manner possible. In seeking best execution,
Wright will use its best judgment in evaluating the terms of a transaction, and
will give consideration to various relevant factors, including without
limitation the size and type of the transaction, the nature and character of the
markets for the security, the confidentiality, speed and certainty of effective
execution required for the transaction, the reputation, experience and financial
condition of the broker-dealer and the value and quality of service rendered by
the broker-dealer in other transactions, and the reasonableness of the brokerage
commission or markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the Funds may give consideration to those firms
which supply brokerage and research services, quotations and statistical and
other information to Wright for their use in servicing their accounts. The Funds
may include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers,
<PAGE>
industries, securities, economic factors and trends, portfolio strategy and
the performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement). Such
services and information may be useful and of value to Wright in servicing all
or less than all of their accounts and the services and information furnished by
a particular firm may not necessarily be used in connection with the account
which paid brokerage commissions to such firm. The advisory fee paid by the
Funds to Wright is not reduced as a consequence of Wright's receipt of such
services and information. While such services and information are not expected
to reduce Wright's normal research activities and expenses, Wright would,
through use of such services and information, avoid the additional expenses
which would be incurred if it should attempt to develop comparable services and
information through its own staffs.
Subject to the requirement that Wright shall use its best efforts to seek
to execute each Fund's portfolio security transactions at advantageous prices
and at reasonably competitive commission rates, Wright, as indicated above, is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom a Fund's portfolio orders may be placed the fact that such firm has
sold or is selling shares of the Funds or of other investment companies
sponsored by Wright. This policy is consistent with a rule of the National
Association of Securities Dealers, Inc., which rule provides that no firm which
is a member of the Association shall favor or disfavor the distribution of
shares of any particular investment company or group of investment companies on
the basis of brokerage commissions received or expected by such firm from any
source.
Under the Investment Advisory Contract, Wright has the authority to pay
commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met. This authority will not be exercised, however, until the
Trust's Prospectus or this Statement of Additional Information has been
supplemented or amended to disclose the conditions under which Wright proposes
to do so.
The Investment Advisory Contract expressly recognizes the practices which
are provided for in Section 28(e) of the Securities Exchange Act of 1934 by
authorizing the selection of a broker or dealer which charges a Fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
During the year ended December 31, 1994, each Fund's purchases and sales of
portfolio investments were with the issuers or with major dealers acting as
principal. The cost of securities purchased from underwriters includes a
disclosed, fixed underwriting commission or concession, and the prices for which
securities are purchased from and sold to dealers usually include an undisclosed
dealer mark-up or mark-down. The Funds paid no brokerage commissions during the
years ended December 31, 1992, 1993 and 1994.
FUND SHARES AND OTHER SECURITIES
The shares of beneficial interest of the Trust, without par value, may be
issued in two or more series, or Funds. The Trust currently has six Funds.
Shares of each Fund may be issued in an unlimited
<PAGE>
number by the Trustees of the Trust. Each share of a Fund represents an
equal proportionate beneficial interest in that Fund and, when issued and
outstanding, the shares are fully paid and non-assessable by the Trust.
Shareholders are entitled to one vote for each full share held. Fractional
shares may be voted in proportion to the amount of a Fund's net asset value
which they represent. Voting rights are not cumulative, which means that the
holders of more than 50% of the shares voting for the election of Trustees can
elect 100% of the Trustees and, in such event, the holders of the remaining less
than 50% of the shares voting on the matter will not be able to elect any
Trustees. Shares have no preemptive or conversion rights and are freely
transferable. Upon liquidation of the Trust or a Fund, shareholders are entitled
to share pro rata in the net assets of the Trust or Fund available for
distribution to shareholders, and in any general assets of the Trust not
previously allocated to a particular Fund by the Trustees.
PURCHASE, EXCHANGE,
REDEMPTION AND PRICING OF SHARES
For information regarding the purchase of shares, see "How to Buy Shares"
in the Funds' current Prospectus.
For information about exchanges between Funds, see "How to Exchange Shares"
in the Funds' current Prospectus.
For a description of how the Funds value their shares, see "How the Funds
Value their Shares" in the Funds' current Prospectus. The Funds value securities
with a remaining maturity of 60 days or less by the amortized cost method. The
amortized cost method involves initially valuing a security at its cost (or its
fair market value on the sixty-first day prior to maturity) and thereafter
assuming a constant amortization to maturity of any discount or premium, without
regard to unrealized appreciation or depreciation in the market value of the
security.
For information about the redemption of shares, see "How to Redeem or Sell
Shares" in the Funds' current Prospectus.
PRINCIPAL UNDERWRITER
The Trust has adopted a Distribution Plan as defined in Rule 12b-1 under
the 1940 Act (the "Plan") on behalf of its Funds. The Trust's Plan specifically
allows that expenses covered by the Plan may include direct and indirect
expenses incurred by any separate distributor or distributors under agreement
with the Trust in activities primarily intended to result in the sale of its
shares. The expenses of such activities shall not exceed two-tenths of one
percent (2/10 of 1%) per annum of each Fund's average daily net assets. Payments
under the Plan are reflected as an expense in each Fund's financial statements.
Such expenses do not include interest or other financing charges.
The Trust has entered into a distribution contract on behalf of its Funds
with its principal underwriter, Wright Investors' Service Distributors, Inc.
("WISDI"), a wholly-owned subsidiary of Wright, providing for WISDI to act as a
separate distributor of each Fund's shares.
It is intended that each Fund will pay 2/10 of 1% of its average daily net
assets to WISDI for distribution
<PAGE>
activities on behalf of the Fund in connection with the sale of its shares.
WISDI shall provide on a quarterly basis documentation concerning the expenses
of such activities. Documented expenses of a Fund shall include compensation
paid to and out-of-pocket disbursements of officers, employees or sales
representatives of WISDI, including telephone costs, the printing of
prospectuses and reports for other than existing shareholders, preparation and
distribution of sales literature, and advertising of any type intended to
enhance the sale of shares of the Fund. Subject to the 2/10 of 1% per annum
limitation imposed by the Trust's Plan, a Fund may pay separately for expenses
of activities primarily intended to result in the sale of the Fund's shares. It
is contemplated that the payments for distribution described above will be made
directly to WISDI. If the distribution payments to WISDI exceed its expenses,
WISDI may realize a profit from these arrangements. Peter M. Donovan, President
and a Trustee of the Trust and President and a Director of Wright, is Vice
President, Treasurer and a Director of WISDI. A.M. Moody, III, Vice President
and a Trustee of the Trust and Senior Vice President of Wright, is President and
a Director of WISDI.
It is the opinion of the Trustees and officers of the Trust that the
following are not expenses primarily intended to result in the sale of shares
issued by any Fund; fees and expenses of registering shares of the Fund under
Federal or state laws regulating the sale of securities; fees and expenses of
registering the Trust as a broker-dealer or of registering an agent of the Trust
under Federal or state laws regulating the sale of securities; fees of
registering, at the request of the Trust, agents or representatives of a
principal underwriter or distributor of any Fund under Federal or state laws
regulating the sale of securities, provided that no sales commission or "load"
is charged on sales of shares of the Fund; and fees and expenses of preparing
and setting in type the Trust's registration statement under the Securities Act
of 1933. Should such expenses be deemed by a court or agency having jurisdiction
to be expenses primarily intended to result in the sale of shares issued by a
Fund, they shall be considered to be expenses contemplated by and included in
the applicable Plan but not subject to the 2/10 of 1% per annum limitation
described above.
Under the Trust's Plan, the President or Vice President of the Trust shall
provide to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amounts expended under the Plan and the
purposes for which such expenditures were made. For the fiscal year ended
December 31, 1994, it is estimated that WISDI spent approximately the following
amounts on behalf of The Wright Managed Investment Funds, including the Funds in
the Income Trust:
<TABLE>
<CAPTION>
Wright Investors Service Distributors, Inc.
Financial Summaries for the Year 1994
Printing & Mailing Travel and Commissions and Administration
FUNDS Promotional Prospectuses Entertainment Service Fees and Other TOTAL
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund $4,140 $1,235 $1,018 -- $1,093 $7,486
Wright U.S. Treasury Near Term Fund $323,267 $96,454 $79,501 -- $85,347 $584,569
Wright Total Return Bond Fund $212,701 $63,464 $52,310 -- $56,156 $384,631
Wright Insured Tax Free Bond Fund -- -- -- -- -- --
Wright Current Income Fund $110,765 $33,049 $27,241 -- $29,244 $200,298
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Distribution Expenses
Distribution Distribution Paid As a % of
Expenses Expenses Fund's Average
Allowable Paid by Fund Net Asset Value
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright U.S. Treasury Fund (WUSTB) $ 42,491 $ 7,486 (1) 0.04%
Wright U.S. Treasury Near Term Fund (WNTB) $ 584,569 $ 584,569 0.20%
Wright Total Return Bond Fund (WTRB) $ 384,631 $ 384,631 0.20%
Wright Insured Tax Free Bond Fund (WTFB) $ 28,863 0 (2) 0.00%
Wright Current Income Fund (WCIF) $ 200,298 $ 200,298 0.20%
----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) WISDI reduced its fee to WUSTB by $35,005.
(2) WISDI reduced its fee to WTRB by $28,863.
</FN>
</TABLE>
The table above shows the distribution expenses allowable to WISDI and paid
by each Fund for the year ended December 31, 1994.
Under its terms, the Trust's Plan remains in effect from year to year,
provided such continuance is approved annually by a vote of its Trustees,
including a majority of the Trustees who are not interested persons of the Trust
and who have no direct or indirect financial interest in the operation of the
Trust's Plan. The Plan may not be amended to increase materially the amount to
be spent for the services described therein as to any Fund without approval of a
majority of the outstanding voting securities of that Fund and all material
amendments of the Plan must also be approved by the Trustees of the Trust in the
manner described above. The Trust's Plan may be terminated at any time as to any
Fund without payment of any penalty by vote of a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or by a vote of a
majority of the outstanding voting securities of that Fund. So long as the
Trust's Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Trust and its shareholders.
The continuation of the Trust's Plan was most recently approved by the
Trustees of the Trust on January 25, 1995 and by the shareholders of each Fund
on December 9, 1987.
CALCULATION OF PERFORMANCE
AND YIELD QUOTATIONS
The average annual total return of each Fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the Fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the Fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period.
<PAGE>
The table below shows the average annual total return of each Fund for the
one, three, five and ten-year periods ended December 31, 1994 and the period
from inception to December 31, 1994.
Each Fund's yield is computed by dividing its net investment income per
share earned during a recent 30-day period by the maximum offering price (i.e.
net asset value) per share on the last day of the period and annualizing the
resulting figure. Net investment income per share is equal to the Fund's
dividends and interest earned during the period, with the resulting number being
divided by the average daily number of shares outstanding and entitled to
receive dividends during the period.
For the 30-day period ended December 31, 1994, the yield of each Fund was
as follows:
30-Day Period
Ended
December 31, 1994*
------------------------------------------------------------
Wright U.S. Treasury Fund............... 7.16%
Wright U.S. Treasury Near Term Fund..... 6.94%
Wright Total Return Bond Fund........... 7.43%
Wright Insured Tax Free Bond Fund....... 4.87%
Wright Current Income Fund.............. 7.47%
-------------------------------------------------------------
* according to the following formula:
6
Yield = 2 [ ( a-b + 1) - 1 ]
---
cd
<TABLE>
Period Ended 12/31/94 Inception
One Three Five Ten To Inception
Year Years Years Years 12/31/94 Date
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wright U.S. Treasury Fund (1) -8.7% 4.3% 7.2% 10.1% 10.2% 7/25/83
Wright U.S. Treasury Near Term Fund (2) -3.1% 3.6% 6.3% 7.9% 8.3% 7/25/83
Wright Total Return Bond Fund (3) -6.6% 3.6% 6.2% 9.3% 9.6% 7/25/83
Wright Insured Tax Free Bond Fund (4) -4.1% 4.4% 5.9% -- 6.7% 4/10/85
Wright Current Income Fund (5) -3.3% 3.2% 6.9% -- 7.9% 4/15/87
----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) If a portion of the WUSTB Fund's expenses had not been subsidized for the
years ended December 31, 1993,1992, 1987,1985 and 1984, the Fund would have
had lower returns.
(2) If a portion of the WNTB Fund's expenses had not been subsidized during the year ended December 31, 1987, the Fund would have
had lower returns.
(3) If a portion of the WTRB Fund's expenses had not been subsidized during the five years ended December 31,1989, the Fund would
have had lower returns.
(4) If a portion of the WTFB Fund's expenses had not been subsidized during the ten years ended December 31, 1994, the Fund would
have had lower returns.
(5) If a portion of the WCIF Fund's expenses had not been subsidized during the five years ended December 31,1991, the Fund would
have had lower returns.
</FN>
</TABLE>
<PAGE>
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of accumulation units outstanding
during the period.
d = the maximum offering price per accumulation unit on the last
day of the period.
NOTE: "a" has been estimated for debt securities other than mortgage
certificates by dividing the year-end market value times the yield to maturity
by 360. "a" for mortgage securities, such as GNMA's, is the actual income
earned. Neither discount nor premium have been amortized.
"b" has been estimated by dividing the actual 1992 expense amounts by 360
or the number of days the Fund was in existence.
A Fund's yield or total return may be compared to the Consumer Price Index
and various domestic securities indices. A Fund's yield or total return and
comparisons with these indices may be used in advertisements and in information
furnished to present or prospective shareholders.
From time to time, evaluations of a Fund's performance made by independent
sources may be used in advertisements and in information furnished to present or
prospective shareholders. According to the rankings prepared by Lipper
Analytical Services, Inc., an independent service which monitors the performance
of mutual funds. The Lipper performance analysis includes the reinvestment of
dividends and capital gain distributions, but does not take sales charges into
consideration and is prepared without regard to tax consequences.
<PAGE>
<TABLE>
<CAPTION>
WRIGHT GOVERNMENT OBLIGATIONS FUND (WGOF)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
================================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
--------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 1,500,000 U.S. Treasury Notes 8.500% 2/15/20 $105.391 $ 1,580,865 8.07% 8.00%
900,000 U.S. Treasury Bonds 11.625% 11/15/04 125.250 1,127,250 9.28% 7.89%
1,300,000 U.S. Treasury Bonds 10.000% 5/15/10 113.953 1,481,389 8.78% 8.37%
1,400,000 U.S. Treasury Bonds 14.000% 11/15/11 145.562 2,037,868 9.62% 8.77%
1,000,000 U.S. Treasury Bonds 11.250% 2/15/15 132.125 1,321,250 8.52% 8.01%
2,200,000 U.S. Treasury Bonds 7.250% 5/15/16 92.469 2,034,318 7.84% 7.99%
2,100,000 U.S. Treasury Bonds 7.500% 11/15/16 94.906 1,993,026 7.90% 7.96%
1,500,000 U.S. Treasury Bonds 8.125% 8/15/19 101.328 1,519,920 8.02% 7.96%
2,400,000 U.S. Treasury Bonds 7.875% 2/15/21 98.750 2,370,000 7.98% 7.99%
250,000 U.S. Treasury Bonds 8.125% 5/15/21 101.594 253,985 8.00% 7.98%
450,000 U.S. Treasury Bonds 7.250% 8/15/22 92.312 415,404 7.85% 7.94%
------------
Total Investments (identified cost, $16,272,905)-- 96.9% $16,135,275 8.17% 8.04%
===== =====
Other Assets, less Liabilities-- 3.1% 523,140
------------
Net Assets-- 100.0% $16,658,415
============
Average Maturity -- 20.7 Years[1]
[1] Unaudited.
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT GOVERNMENT OBLIGATIONS FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments --
Identified cost.................................. $ 16,272,905
Unrealized depreciation.......................... (137,630)
-------------
Total value (Note 1A).......................... $ 16,135,275
Cash............................................... 282,256
Interest receivable................................ 320,104
Receivable for fund shares sold.................... 233
-------------
Total Assets..................................... $ 16,737,868
-------------
LIABILITIES:
Payable for fund shares reacquired................. $ 5,595
Payable to dividend disbursing agent............... 51,572
Trustees' fees payable............................. 208
Custodian fee payable.............................. 8,491
Investment adviser fee payable..................... 12,342
Accrued expenses and other liabilities............. 1,245
-------------
Total Liabilities................................ $ 79,453
-------------
NET ASSETS............................................ $ 16,658,415
=============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares redeemed............ $ 17,752,571
Accumulated net realized loss on investments
(computed on the basis of identified cost)......... (963,970)
Unrealized depreciation of investments (computed
on the basis of identified cost)................... (137,630)
Undistributed net investment income................... 7,444
-------------
Net assets applicable to outstanding shares........ $ 16,658,415
=============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................................ 1,360,117
=============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............................. $12.25
=============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income (Note 1B).......................... $ 1,630,680
-------------
Expenses --
Investment adviser fee (Note 3).................. $ 84,992
Administrator fee (Note 3)....................... 21,245
Compensation of trustees not affiliated with
the investment adviser or administrator........ 1,268
Distribution expenses (Note 4)................... 42,491
Custodian fee (Note 3)........................... 32,620
Audit services................................... 21,606
Transfer and dividend disbursing agent fees...... 7,775
Registration costs............................... 8,886
Printing......................................... 1,590
Legal services................................... 1,019
Miscellaneous.................................... 2,739
-------------
Total expenses................................. $ 226,231
-------------
Deduct --
Reduction of distribution expenses
(Note 4)....................................... $ 35,005
-------------
Net expenses................................... $ 191,226
-------------
Net investment income........................ $ 1,439,454
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis).......................... $ 358,064
Change in unrealized appreciation
of investments................................... (3,989,643)
-------------
Net realized and unrealized loss
on investments............................... $ (3,631,579)
-------------
Net decrease in net assets
from operations.............................. $ (2,192,125)
=============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT GOVERNMENT OBLIGATIONS FUND
================================================================================
Year Ended
December 31,
---------------------------
STATEMENT OF CHANGES IN NET ASSETS 1994 1993
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income.................................................. $ 1,439,454 $ 1,926,701
Net realized gain on investment
transactions......................................................... 358,064 765,128
Change in unrealized appreciation
of investments....................................................... (3,989,643) 1,820,047
-------------- -------------
Increase (decrease) in net assets from operations................. $ (2,192,125) $ 4,511,876
Distributions to shareholders from net investment income................... (1,439,554) (1,926,695)
Net decrease from Fund share transactions
(Note 5) ................................................................ (9,556,034) (2,441,667)
- -------------- -------------
Net increase (decrease) in net assets............................. $ (13,187,713) $ 143,514
NET ASSETS:
At beginning of year....................................................... 29,846,128 29,702,614
-------------- -------------
At end of year............................................................. $ 16,658,415 $ 29,846,128
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS............................................................. $ 7,444 $ 7,544
============== ==============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT NEAR TERM BOND FUND (WNTB)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
================================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
--------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 3,500,000 U.S. Treasury Notes 5.125% 3/31/98 $ 92.344 $ 3,232,040 5.55% 7.84%
10,000,000 U.S. Treasury Notes 5.125% 11/15/95 98.297 9,829,700 5.24% 7.16%
2,350,000 U.S. Treasury Notes 7.125% 10/15/98 97.937 2,301,520 7.28% 7.76%
3,000,000 U.S. Treasury Notes 5.125% 12/31/98 90.812 2,724,360 5.64% 7.85%
7,700,000 U.S. Treasury Notes 6.875% 10/31/96 98.656 7,596,512 6.97% 7.67%
10,550,000 U.S. Treasury Notes 5.500% 4/30/96 97.484 10,284,562 5.64% 7.53%
3,450,000 U.S. Treasury Notes 9.000% 5/15/98 103.359 3,565,886 8.71% 7.84%
6,000,000 U.S. Treasury Notes 6.000% 6/30/96 97.844 5,870,640 6.13% 7.55%
2,000,000 U.S. Treasury Notes 7.875% 11/15/99 100.250 2,005,000 7.86% 7.81%
4,800,000 U.S. Treasury Notes 7.250% 11/15/96 99.219 4,762,512 7.31% 7.70%
7,500,000 U.S. Treasury Notes 7.625% 4/30/96 100.172 7,512,900 7.61% 7.47%
2,200,000 U.S. Treasury Notes 8.125% 2/15/98 100.766 2,216,852 8.06% 7.84%
2,000,000 U.S. Treasury Notes 8.000% 8/15/99 100.578 2,011,560 7.96% 7.85%
1,500,000 U.S. Treasury Notes 8.500% 2/15/00 102.734 1,541,010 8.27% 7.84%
3,000,000 U.S. Treasury Notes 7.000% 4/15/99 96.906 2,907,180 7.22% 7.86%
2,000,000 U.S. Treasury Notes 6.375% 1/15/99 94.937 1,898,740 6.72% 7.86%
3,000,000 U.S. Treasury Notes 6.875% 3/31/97 98.187 2,945,610 7.00% 7.76%
3,300,000 U.S. Treasury Notes 5.875% 5/15/95 99.781 3,292,773 5.89% 6.43%
15,900,000 U.S. Treasury Notes 6.375% 6/30/97 96.922 15,410,598 6.58% 7.75%
7,000,000 U.S. Treasury Notes 4.625% 8/15/95 98.594 6,901,580 4.69% 6.95%
14,000,000 U.S. Treasury Notes 5.625% 8/31/97 94.844 13,278,160 5.94% 7.81%
1,000,000 U.S. Treasury Notes 6.000% 10/15/99 92.812 928,120 6.47% 7.83%
12,000,000 U.S. Treasury Notes 6.000% 11/30/97 95.359 11,443,080 6.29% 7.81%
1,500,000 U.S. Treasury Notes 5.125% 6/30/98 91.797 1,376,955 5.58% 7.85%
3,000,000 U.S. Treasury Notes 4.750% 10/31/98 89.875 2,696,250 5.29% 7.86%
20,000,000 U.S. Treasury Notes 7.875% 4/15/98 100.094 20,018,800 7.87% 7.84%
500,000 U.S. Treasury Bonds 10.500% 2/15/95 100.547 502,735 10.44% 5.86%
3,500,000 U.S. Treasury Bonds 12.625% 5/15/95 102.266 3,579,310 12.35% 6.31%
10,600,000 Federal Home Loan Banks 8.250% 5/27/96 100.625 10,666,250 8.20% 7.76%
6,000,000 Federal Home Loan Banks 8.250% 6/25/96 100.531 6,031,860 8.21% 7.86%
5,500,000 Federal Home Loan Banks 8.000% 7/25/96 100.125 5,506,875 7.99% 7.91%
14,500,000 Federal Home Loan Banks 8.250% 9/25/96 100.625 14,590,625 8.20% 7.85%
</TABLE>
<PAGE>
<TABLE>
WRIGHT NEAR TERM BOND FUND (WNTB)
PORTFOLIO OF INVESTMENTS (continued)
DECEMBER 31, 1994
================================================================================================================================
<C> <S> <C> <C> <C> <C> <C> <C>
$ 3,300,000 Federal Home Loan Banks 8.600% 6/25/99 $102.937 $ 3,396,921 8.36% 7.81%
4,000,000 Federal Home Loan Banks 8.450% 7/26/99 102.531 4,101,240 8.24% 7.78%
2,500,000 Federal Home Loan Banks 8.600% 8/25/99 104.156 2,603,900 8.26% 7.52%
1,500,000 Federal Home Loan Banks 8.400% 1/25/95 100.044 1,500,660 8.40% 7.48%
2,000,000 Federal Home Loan Banks 6.070% 6/30/03 87.306 1,746,120 6.95% 8.17%
1,000,000 Federal Home Loan Banks 5.600% 9/22/03 84.165 841,650 6.65% 8.17%
2,500,000 Federal Home Loan Banks 5.610% 9/29/03 84.201 2,105,025 6.66% 8.17%
2,000,000 Federal Home Loan Banks 5.450% 10/29/03 83.103 1,662,060 6.56% 8.17%
3,400,000 Federal Home Loan Banks 5.020% 11/16/98 90.054 3,061,835 5.57% 8.06%
RESERVE FUNDS
440,000 American Express Corp. 5.754% 1/03/95 100.000 440,000
-----------
Total Investments (identified cost, $216,713,961) -- 99.4% 210,889,966 7.06% 7.85%
============ ==== =========== ===== =====
Other Assets, Less Liabilities -- 0.6% 1,232,256
-----------
Net Assets -- 100.0% $212,122,222
============
Average Maturity -- 2.5 Years[1]
<FN>
[1] Unaudited.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT NEAR TERM BOND FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments --
Identified cost.................................. $216,713,961
Unrealized depreciation.......................... (5,823,995)
Total value (Note 1A).......................... $210,889,966
Receivable for fund shares sold.................... 15,361
Interest receivable................................ 3,584,119
Total Assets..................................... $214,489,446
LIABILITIES:
Payable for fund shares reacquired................. $ 1,944,553
Payable to dividend disbursing agent............... 356,371
Due to bank........................................ 43,731
Trustees' fees payable............................. 208
Custodian fee payable.............................. 17,135
Accrued expenses and other liabilities............. 5,226
Total Liabilities................................ $ 2,367,224
NET ASSETS............................................ $212,122,222
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including
shares issued to shareholders in payment of
distributions declared), less cost of shares
redeemed............................................. $241,100,467
Accumulated net realized loss on investment
transactions (computed on the basis of
identified cost)................................... (23,344,003)
Unrealized depreciation of investments
(computed on the basis of identified cost)......... (5,823,995)
Undistributed net investment income................... 189,753
Net assets applicable to outstanding shares........ $212,122,222
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................................ 21,387,764
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............................. $9.92
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income (Note 1B).......................... $ 18,859,242
Expenses --
Investment adviser fee (Note 3).................. $ 1,266,025
Administrator fee (Note 3)....................... 172,293
Compensation of trustees not affiliated with
the Investment adviser or administrator........ 1,267
Distribution expenses (Note 4)................... 584,569
Custodian fee (Note 3)........................... 71,746
Transfer and dividend disbursing agent fees...... 34,730
Audit services................................... 26,206
Registration costs............................... 10,248
Printing......................................... 2,633
Legal services................................... 2,352
Miscellaneous.................................... 8,078
Total expenses................................. $ 2,180,147
Net investment income........................ $ 16,679,095
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (6,936,070)
Change in unrealized appreciation
of investments......................... (20,360,712)
Net realized and unrealized loss
on investments..................... $(27,296,782)
Net decrease in net assets
from operations.................... $(10,617,687)
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT NEAR TERM BOND FUND
================================================================================
Year Ended
December 31,
-------------------------------------
STATEMENT OF CHANGES IN NET ASSETS 1994 1993
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income.................................................. $ 16,679,095 $ 21,539,533
Net realized gain (loss) on investment
transactions......................................................... (6,936,070) 1,941,983
Change in unrealized appreciation
of investments....................................................... (20,360,712) 3,874,250
-------------- --------------
Increase (decrease) in net assets from operations................. $ (10,617,687) $ 27,355,766
Distributions to shareholders from net investment income................... (16,671,903) (21,551,322)
Net increase (decrease) from Fund share transactions (Note 5).............. (141,505,123) 4,038,621
- -------------- --------------
Net increase (decrease) in net assets............................. $(168,794,713) $ 9,843,065
NET ASSETS:
At beginning of year....................................................... 380,916,935 371,073,870
-------------- ---------------
At end of year............................................................. $ 212,122,222 $ 380,916,935
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS............................................................. $ 189,753 $ 194,350
=============== ==============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN BOND FUND (WTRB)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
CORPORATE BONDS -- 42.1%
-------------------------
FINANCIAL -- 2.8%
$ 1,500,000 GE Capital Corp. 7.670% 5/22/02 $96.278 $ 1,444,170 7.97% 8.35%
2,000,000 GE Capital Corp. 7.875% 12/01/06 95.548 1,910,960 8.24% 8.47%
700,000 Rockland Trust Co.1 9.500% 10/15/96 89.500 626,500 10.62% 16.47%
-----------
$ 3,981,630
-----------
INDUSTRIALS -- 21.2%
$ 2,850,000 Abbott Labs 5.600% 10/01/03 $ 84.186 $ 2,399,301 6.65% 8.16%
2,000,000 Anheuser Busch 6.900% 10/01/02 91.477 1,829,540 7.54% 8.42%
2,000,000 Archer Daniels Midland Co. 6.250% 5/15/03 87.953 1,759,060 7.11% 8.27%
2,000,000 Dillard Dept. Stores 7.150% 9/01/02 92.933 1,858,660 7.69% 8.42%
2,500,000 Disney (Walt) Company 5.800% 10/27/08 78.942 1,973,550 7.35% 8.68%
4,000,000 E.I. Dupont Nemour 6.750% 10/15/02 91.401 3,656,040 7.39% 8.27%
1,000,000 General Mills 7.420% 6/01/00 96.052 960,520 7.72% 8.34%
1,050,000 Johnson & Johnson 7.375% 6/29/02 94.738 994,749 7.79% 8.33%
1,000,000 Kimberly Clark 9.125% 6/01/97 101.875 1,018,750 8.96% 8.25%
3,100,000 Minnesota Mining & Mfg. 6.250% 3/29/99 93.011 2,883,341 6.72% 8.23%
1,800,000 Pfizer Inc 6.500% 2/01/97 97.188 1,749,384 6.69% 7.99%
1,500,000 Proctor & Gamble Co. 8.000% 11/15/03 97.675 1,465,125 8.19% 8.37%
5,000,000 Sara Lee Corp. 5.750% 9/03/03 83.782 4,189,100 6.86% 8.42%
1,100,000 Upjohn Co. 6.170% 10/08/99 91.876 1,010,636 6.72% 8.26%
3,000,000 Wal-Mart Stores 6.375% 3/01/03 88.729 2,661,870 7.19% 8.30%
-----------
$30,409,626
-----------
UTILITIES -- 18.1%
$ 5,000,000 Bell Atlantic - New Jersey 5.875% 2/01/04 $ 85.018 $ 4,250,900 8.25% 6.91%
5,000,000 Bellsouth Telecommunication 6.375% 6/15/04 88.438 4,421,900 7.21% 8.15%
1,000,000 Citizens Utilities Co. 7.450% 1/15/04 94.830 948,300 7.86% 8.27%
2,000,000 Consolidated Edison 7.625% 3/01/04 94.471 1,889,420 8.07% 8.50%
7,600,000 Consolidated Edison 6.375% 4/01/03 88.265 6,708,140 7.22% 8.37%
1,000,000 Duke Power Co. 7.000% 6/01/00 94.106 941,060 7.44% 8.37%
2,000,000 Duke Power Co. 7.000% 9/01/05 90.426 1,808,520 7.74% 8.37%
3,000,000 Pacific Bell 7.250% 7/01/02 94.130 2,823,900 7.70% 8.32%
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
UTILITIES - continued
$ 2,000,000 Pacific Tel & Tel 6.500% 7/01/03 $ 87.951 $ 1,759,020 7.39% 8.52%
500,000 Wisconsin Telephone Co. 7.250% 2/01/07 91.524 457,620 7.92% 8.38%
-----------
$26,008,780
-----------
U.S. GOVERNMENT AGENCIES -- 17.8%
----------------------------------
$ 6,200,000 Federal Home Loan Banks 8.600% 6/25/99 $102.937 $ 6,382,094 8.36% 7.81%
5,700,000 Federal Home Loan Banks 8.375% 10/25/99 101.594 5,790,858 8.24% 7.79%
4,600,000 Federal Home Loan Banks 8.600% 1/25/00 102.312 4,706,352 8.41% 8.03%
3,000,000 Federal Home Loan Banks 6.070% 6/30/03 87.306 2,619,180 6.95% 8.17%
1,700,000 Federal Home Loan Banks 5.600% 9/22/03 84.165 1,430,805 6.65% 8.17%
2,500,000 Federal Home Loan Banks 5.610% 9/29/03 84.201 2,105,025 6.66% 8.17%
3,000,000 Federal Home Loan Banks 5.450% 10/29/03 83.103 2,493,090 6.56% 8.17%
-----------
$25,527,404
-----------
U.S. TREASURIES -- 38.5%
------------------------------
$ 5,300,000 U.S. Treasury Bonds 10.375% 5/15/95 $101.422 $ 5,375,366 10.23% 6.39%
700,000 U.S. Treasury Bonds 13.750% 8/15/04 138.969 972,783 9.89% 7.89%
25,000 U.S. Treasury Bonds 11.250% 2/15/15 132.125 33,031 7.78% 7.83%
3,750,000 U.S. Treasury Bonds 8.250% 5/15/05 100.281 3,760,537 8.23% 8.21%
150,000 U.S. Treasury Notes 6.875% 10/31/96 98.656 147,984 6.97% 7.67%
2,700,000 U.S. Treasury Notes 6.375% 8/15/02 91.562 2,472,174 6.96% 7.87%
10,900,000 U.S. Treasury Notes 6.375% 6/30/97 96.922 10,564,498 6.58% 7.75%
2,000,000 U.S. Treasury Notes 6.250% 2/15/03 90.437 1,808,740 6.91% 7.86%
250,000 U.S. Treasury Notes 5.125% 11/30/98 90.969 227,423 5.63% 7.85%
1,500,000 U.S. Treasury Notes 5.750% 8/15/03 86.960 1,303,590 6.62% 7.87%
1,500,000 U.S. Treasury Notes 8.000% 8/15/99 100.578 1,508,670 7.95% 7.84%
9,000,000 U.S. Treasury Notes 6.000% 11/30/97 95.359 8,582,310 6.29% 7.81%
3,000,000 U.S. Treasury Notes 8.500% 2/15/00 102.734 3,082,020 8.28% 7.84%
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
U.S. TREASURIES - continued
$ 3,000,000 U.S. Treasury Notes 7.750% 2/15/01 $ 99.594 $ 2,987,820 7.78% 7.83%
550,000 U.S. Treasury Notes 7.500% 11/15/01 98.172 539,946 7.64% 7.85%
12,500,000 U.S. Treasury Notes 6.375% 1/15/99 94.937 11,867,125 6.72% 7.86%
-----------
$55,234,017
-----------
RESERVE FUNDS -- 0.4%
$ 615,000 American Express Corp. 5.754% 1/03/95 100.000 $ 615,000
-----------
Total Investments (identified cost, $151,610,155)-- 98.8% $141,776,457 7.55% 8.20%
============ ==== ============ ===== =====
Other Assets, Less Liabilities -- 1.2% 1,720,277
------------
Net Assets -- 100.0% $143,496,734
============
Average Maturity -- 6.5 Years[1]
<FN>
[1] Unaudited.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN BOND FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments --
Identified cost.................................. $151,610,155
Unrealized depreciation.......................... (9,833,698)
-------------
Total value (Note 1A).......................... $141,776,457
Cash............................................... 4,225
Receivable for fund shares sold.................... 35,715
Interest receivable................................ 2,870,361
-------------
Total Assets..................................... $144,686,758
-------------
LIABILITIES:
Payable for fund shares reacquired................. $ 1,013,055
Payable to dividend disbursing agent............... 159,730
Trustees' fees payable............................. 208
Custodian fee payable..................... ........ 13,406
Accrued expenses and other liabilities............. 3,625
Total Liabilities................................ $ 1,190,024
-------------
NET ASSETS............................................ $143,496,734
=============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares redeemed............ $155,168,307
Accumulated net realized loss on investment
transactions (computed on the basis of
identified cost)................................... (1,884,088)
Unrealized depreciation of investments (computed
on the basis of identified cost)................... (9,833,698)
Undistributed net investment income................... 46,213
--------------
Net assets applicable to outstanding shares........ $ 143,496,734
==============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................................ 12,556,303
==============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................... $11.43
==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income (Note 1B).......................... $ 13,239,635
------------
Expenses --
Investment adviser fee (Note 3).................. $ 824,625
Administrator fee (Note 3)....................... 136,920
Compensation of trustees not affiliated with
the Investment adviser or administrator........ 1,268
Distribution expenses (Note 4)................... 384,631
Custodian fee (Note 3)........................... 56,469
Audit services................................... 26,806
Transfer and dividend disbursing agent fees...... 23,785
Registration costs............................... 12,536
Legal services................................... 1,910
Printing......................................... 1,892
Miscellaneous.................................... 7,359
------------
Total expenses................................. $ 1,478,201
------------
Net investment income........................ $ 11,761,434
------------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis).......................... $ (1,884,088)
Change in unrealized appreciation
of investments................................... (23,935,733)
-------------
Net realized and unrealized loss
on investments............................... $(25,819,821)
-------------
Net decrease in net assets
from operations.............................. $(14,058,387)
=============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN BOND FUND
=============================================================================================================================
Year Ended
December 31,
------------------------------------
STATEMENT OF CHANGES IN NET ASSETS 1994 1993
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income.................................................. $ 11,761,434 $ 14,484,062
Net realized gain (loss) on investment
transactions......................................................... (1,884,088) 5,335,956
Change in unrealized appreciation
of investments....................................................... (23,935,733) 4,449,598
-------------- -------------
Increase (decrease) in net assets from operations................. $ (14,058,387) $ 24,269,616
-------------- --------------
Distributions to shareholders --
From net investment income............................................. $ (11,757,984) $ (14,484,937)
From net realized gain on investments.................................. -- (3,516,307)
In excess of net realized gain on investments.......................... -- (53,186)
-------------- --------------
Total distributions............................................... $ (11,757,984) $ (18,054,420)
-------------- --------------
Net increase (decrease) from Fund share transactions (Note 5).............. $ (90,200,306) $ 35,734,399
- -------------- --------------
Net increase (decrease) in net assets............................. $(116,016,677) $ 41,949,585
NET ASSETS:
At beginning of year....................................................... 259,513,411 217,563,826
-------------- --------------
At end of year............................................................. $ 143,496,734 $ 259,513,411
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS............................................................. $ 46,213 $ 95,94
============== ==============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT INSURED TAX-FREE BOND FUND (WTFB)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
==================================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[*][1]
----------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS -- 105.0%
-------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
EDUCATION -- 18.7%
$ 250,000 Berkeley Calif Uni Sch Dist 6.150% 8/01/05 $ 99.916 $ 249,791 6.16% 6.16% M
25,000 Bristol Twp PA Sch Dist 8.700% 1/15/01 100.300 25,075 8.67% 8.63% M
25,000 Calcasieu Parish LA Sch Dist 9.100% 6/01/02 119.129 29,782 7.64% 5.88% M
300,000 Goshen-Chandler Ind Sch Bldg 5.950% 1/15/03 99.619 298,855 5.97% 6.01% M
150,000 Greensburg Salem PA Sch Dist 7.100% 1/01/09 105.276 157,914 6.74% 6.52% M
250,000 Lancaster NY Cent Sch Dist 5.750% 6/01/05 98.154 245,385 5.86% 5.99% M
200,000 Mars Penn Area Sch Dist 6.550% 3/01/02 103.441 206,882 6.33% 5.95% M
150,000 Sarasota Cnty FL Sch Brd 6.900% 7/01/98 105.184 157,776 6.56% 5.26% M
50,000 Southwestern Texas St Uni 8.750% 10/01/01 104.466 52,233 8.38% 7.88% M
150,000 Sumter SC Sch Dist 7.155% 6/01/09 106.731 160,096 6.70% 6.43% M
50,000 Thurston Cnty WA Sch Dist No 3 8.750% 6/01/01 101.690 50,845 8.61% 8.40% M
200,000 Washoe County Nev Sch Dist 5.100% 8/01/99 97.997 195,994 5.20% 5.60% M
150,000 Williamsville NY Cent Sch Dist 6.500% 12/01/99 104.341 156,511 6.23% 5.48% M
------------
$ 1,987,139
------------
GENERAL OBLIGATION -- 36.3%
$ 150,000 Brookhaven NY Ser B GO 7.000% 5/01/04 $107.650 $ 161,475 6.50% 5.92% M
15,000 Buffalo Grove ILL GO 9.300% 1/01/05 102.012 15,302 9.18% 8.99% M
200,000 Central Lake Cnty IL 6.250% 5/01/99 103.043 206,086 6.07% 5.45% M
250,000 Cook County Ill Ser A 5.100% 11/15/05 91.015 227,538 5.60% 6.25% M
250,000 Cumberland Cnty NC 5.700% 2/01/05 98.341 245,853 5.80% 5.92% M
200,000 District of Columbia 6.300% 6/01/05 100.416 200,832 6.27% 6.24% P
25,000 Ennis TX 9.000% 6/01/01 101.792 25,448 8.84% 8.63% M
300,000 State of Massachusetts 4.125% 10/01/01 90.403 271,209 4.56% 5.86% M
250,000 Michigan Muni Bd Auth 4.950% 5/01/04 91.897 229,743 5.39% 6.10% M
5,000 New York, New York 6.000% 8/01/01 101.841 5,092 5.89% 5.66% M
250,000 New York, City of NY 7.000% 8/01/04 105.635 264,088 6.63% 6.21% M
195,000 New York NY Ser C 6.000% 8/01/01 100.694 196,355 5.96% 5.87% M
125,000 New York NY General Obl Ser A 7.000% 8/01/99 104.966 131,207 6.67% 5.75% M
200,000 O Fallon Missouri 5.350% 3/01/04 95.052 190,104 5.63% 6.06% M
200,000 Pennsylvania State 6.500% 11/01/04 103.664 207,328 6.27% 6.00% M
250,000 Prince Georges County MD 5.400% 9/01/02 97.543 243,858 5.54% 5.80% M
250,000 Providence Rhode Island 5.600% 1/15/05 95.849 239,623 5.84% 6.16% M
200,000 Smithfield Rhode Island 6.500% 4/15/02 103.747 207,494 6.27% 5.86% M
200,000 Travis County Texas 6.400% 3/01/04 102.544 205,088 6.24% 6.03% M
250,000 West University Place TX 5.600% 2/01/03 97.585 243,963 5.74% 5.98% M
150,000 Wilmington Del 6.150% 7/01/05 100.733 151,100 6.11% 6.06% M
------------
$ 3,868,786
------------
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
HEALTH CARE -- 14.4%
$ 200,000 California Health Fac 5.500% 8/01/00 $ 98.955 $ 197,910 5.56% 5.72% M
250,000 Dade Cnty FLA Health Facs Aut 5.000% 5/15/05 90.982 227,455 5.50% 6.19% M
205,000 Decatur Illinois Hosp 6.400% 10/01/01 102.908 210,961 6.22% 5.87% M
250,000 Fulton De Kalb GA Hosp Auth 5.300% 1/01/05 93.083 232,708 5.69% 6.24% M
100,000 Massachusetts, State Health & Ed 7.300% 10/01/18 103.308 103,308 7.07% 7.01% M
200,000 Massachusetts, State Health & Edl Facs 4.500% 7/01/02 90.987 181,974 4.95% 6.01% M
15,000 Monangalia Cnty Hosp Rev W. VA 9.000% 6/01/00 103.755 15,563 8.67% 8.13% M
120,000 Rhode Island St Health & Ed 5.800% 6/01/99 101.510 121,812 5.71% 5.41% M
250,000 Tallahassee Fla Health Fac 5.400% 12/01/01 97.353 243,383 5.55% 5.87% M
-----------
$ 1,535,074
-----------
PUBLIC FACILITIES -- 4.6%
$ 175,000 Kane Cnty Ill Pub Bldg Comm 6.700% 12/01/03 $103.410 $ 180,968 6.48% 6.20% M
100,000 Louisiana Public Facs Auth 6.000% 5/15/01 101.630 101.630 5.91% 5.69% M
200,000 Louisiana Public Facs Auth 6.100% 5/15/02 101.831 203,662 5.99% 5.79% M
------------
$ 486,260
------------
UTILITIES -- 19.6%
$ 150,000 Alabama St Mun Elec Auth Pwr 5.750% 9/01/01 $100.210 $ 150.315 5.74% 5.71% M
125,000 Allegheny Cnty Pa San Aut 9.625% 6/01/00 102.047 127,559 9.43% 9.13% M
275,000 Beloit Wisconsin Sewer System 6.750% 7/01/05 101.349 278,710 6.66% 6.57% M
250,000 East Bay CA Mun Util Sist Wtr 5.000% 6/01/05 90.456 226,140 5.53% 6.26% M
300,000 Georgia Mun Elec Auth Pwr 4.700% 1/01/05 87.920 263,760 5.35% 6.35% M
300,000 North Carolina Mun Pwr Agy 5.000% 1/01/04 93.121 279,363 5.37% 6.00% M
250,000 Ohio State Wtr Dev 5.600% 12/01/02 98.676 246,690 5.68% 5.81% M
200,000 Oklahoma St Mun Pwr Auth 5.300% 1/01/01 98.139 196,278 5.40% 5.67% M
100,000 Ottawa Kansas Water Rev H 9.250% 12/01/02 105.082 105,082 8.80% 8.36% M
150,000 Pasadena Tex Wtr & Swr 5.900% 10/01/00 101.891 152,837 5.79% 5.51% M
50,000 Pecan Grove TX Muni Utl Dist 8.700% 9/01/02 112.352 56,176 7.74% 6.62% M
-----------
$ 2,082,910
-----------
MISCELLANEOUS -- 11.4%
$ 70,000 Arizona St. Transn Brd Excise Rev 7.000% 7/01/05 $107.022 $ 74,915 6.54% 6.09% M
80,000 Arizona St. Transn Brd Excise Rev 7.000% 7/01/05 104.826 83,861 6.68% 6.36% M
250,000 Broomfield CO Sales & Use Tax 7.050% 12/01/06 106.110 265,275 6.64% 6.31% M
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS-- continued
$ 150,000 Dearborn MI Econ Dev Corp 6.350% 8/15/02 $104.295 $ 156,443 6.09% 5.65% M
250,000 Fairbanks N Star Boro AK 4.700% 3/01/99 97.120 242,800 4.84% 5.48% M
150,000 NJ Wastewtr Treatment Ln Rev SerA 7.000% 5/15/07 105.135 157,703 6.66% 6.39% M
250,000 Tucson Ariz Str & Hwy User 5.200% 7/01/04 93.649 234,124 5.55% 6.09% M
-----------
$ 1,215,121
-----------
Total Investments (identified cost, $11,284,130)-- 105.0% $11,175,290 6.44% 6.39%
=========== ===== =========== ===== =====
Other Assets, Less Liabilities -- (5.0%) (528,413)
-----------
Net Assets-- 100.0% $10,646,877
===========
Average Maturity -- 8.4 Years[1]
<FN>
[*] -- (C): Price to Call; (F): Prerefunded; (M): Price to Maturity; (P): Price to Par Call; (X): Called.
[1] Unaudited.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT INSURED TAX-FREE BOND FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments --
Identified cost.................................. $ 11,284,130
Unrealized depreciation.......................... (108,840)
-------------
Total value (Note 1A).......................... $ 11,175,290
Receivable for fund shares sold.................... 9,939
Interest receivable................................ 197,141
-------------
Total Assets..................................... $ 11,382,370
-------------
LIABILITIES:
Payable for fund shares reacquired................. $ 40,117
Payable to dividend disbursing agent............... 35,979
Loan payable....................................... 650,436
Trustees' fees payable............................. 208
Custodian fee payable.............................. 7,428
Accrued expenses and other liabilities............. 1,325
Total Liabilities................................ $ 735,493
-------------
NET ASSETS............................................ $ 10,646,877
=============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares redeemed............ $ 10,747,503
Accumulated net realized gain on investment
transactions (computed on the basis of
identified cost)................................... 701
Unrealized depreciation of investments (computed
on the basis of identified cost)................... (108,840)
Undistributed net investment income................... 7,513
-------------
Net assets applicable to outstanding shares........ $ 10,646,877
=============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING........................................ 966,095
=============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............................. $11.02
=============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income (Note 1B).......................... $ 829,636
-------------
Expenses --
Investment adviser fee (Note 3).................. $ 57,725
Administrator fee (Note 3)....................... 14,431
Compensation of trustees not affiliated with
the Investment adviser or administrator........ 1,267
Distribution expenses (Note 4)................... 28,863
Custodian fee (Note 3)........................... 37,901
Audit services................................... 18,106
Interest expense................................. 10,183
Transfer and dividend disbursing agent fees ..... 9,146
Registration costs............................... 8,316
Printing......................................... 2,005
Legal fees....................................... 985
Miscellaneous.................................... 1,920
-------------
Total expenses................................. $ 190,848
-------------
Deduct --
Reduction of investment adviser
fee (Note 3)................................. $ 29,956
Reduction of distribution expenses
by principal underwriter (Note 4)............ 28,863
-------------
Total........................................ $ 58,819
-------------
Net expenses................................... $ 132,029
-------------
Net investment income........................ $ 697,607
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on investment transactions
(identified cost basis).......................... $ 103,902
Change in unrealized appreciation
of investments................................... (1,505,272)
-------------
Net realized and unrealized gain (loss)
on investments............................... $ (1,401,370)
-------------
Net decrease in net assets
from operations.............................. $ (703,763)
=============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT INSURED TAX-FREE BOND FUND Year Ended
December 31,
----------------------------------------
STATEMENT OF CHANGES IN NET ASSETS 1994 1993
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income.................................................. $ 697,607 $ 773,709
Net realized gain on investment
transactions......................................................... 103,903 58,990
Change in unrealized appreciation
of investments....................................................... (1,505,272) 713,614
--------------- --------------
Increase (decrease) in net assets from operations................. $ (703,763) $ 1,546,313
--------------- --------------
Distributions to shareholders --
From net investment income............................................. $ (697,473) $ (772,506)
From net realized gains on investment transactions..................... (103,201) --
-------------- --------------
Total distributions............................................... $ (800,674) $ (772,506)
-------------- --------------
Net increase (decrease) from Fund share transactions (Note 5).............. $ (6,053,899) $ 3,977,128
- -------------- --------------
Net increase (decrease) in net assets............................. $ (7,558,336) $ 4,750,935
NET ASSETS:
At beginning of year....................................................... 18,205,213 13,454,278
------------- --------------
At end of year............................................................. $ 10,646,877 $ 18,205,213
============== ==============
UNDISTRIBUTED NET INVESTMENT INCOME INCLUDED
IN NET ASSETS............................................................. $ 7,513 $ 5,123
============== ==============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
WRIGHT CURRENT INCOME FUND (WCIF)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 1,777,733 GNMA POOL # 000169 7.500% 9/20/22 $ 92.156 $ 1,638,288 8.14% 8.31%
862,972 GNMA POOL # 000394 7.500% 10/20/22 92.156 795,280 8.14% 8.31%
7,341 GNMA POOL # 000434 8.000% 4/15/01 99.934 7,337 8.01% 7.97%
936,154 GNMA POOL # 000446 7.500% 11/20/22 92.156 862,722 8.14% 8.31%
2,230 GNMA POOL # 000473 7.500% 4/15/01 98.332 2,193 7.63% 7.64%
1,688,674 GNMA POOL # 000545 7.500% 11/20/22 92.156 1,556,215 8.14% 8.31%
2,657,174 GNMA POOL # 000723 7.500% 1/20/23 92.156 2,448,746 8.14% 8.31%
871,798 GNMA POOL # 000810 7.500% 2/20/23 92.156 803,414 8.14% 8.31%
2,710,881 GNMA POOL # 001268 8.000% 7/20/23 94.843 2,571,081 8.44% 8.52%
4,694 GNMA POOL # 001408 6.500% 3/15/02 93.001 4,365 6.99% 7.18%
216,004 GNMA POOL # 001596 9.000% 4/20/21 99.625 215,194 9.03% 9.00%
181,083 GNMA POOL # 001774 8.000% 2/20/22 94.843 171,745 8.43% 8.52%
675,556 GNMA POOL # 001792 8.000% 3/20/22 94.843 640,718 8.44% 8.52%
5,998 GNMA POOL # 003026 8.000% 1/15/04 99.782 5,985 8.02% 7.99%
2,797 GNMA POOL # 003331 8.000% 1/15/04 99.602 2,786 8.03% 8.06%
6,759 GNMA POOL # 004183 8.000% 7/15/04 99.477 6,724 8.04% 8.02%
3,616 GNMA POOL # 004433 9.000% 11/15/04 102.000 3,688 8.82% 8.74%
9,153 GNMA POOL # 005466 8.500% 3/15/05 100.500 9,199 8.46% 8.41%
1,256 GNMA POOL # 005561 8.500% 4/15/05 100.500 1,262 8.46% 8.41%
4,761 GNMA POOL # 005687 7.250% 2/15/05 97.923 4,662 7.40% 7.43%
6,823 GNMA POOL # 005910 7.250% 2/15/05 97.923 6,681 7.40% 7.43%
27,998 GNMA POOL # 007003 8.000% 7/15/05 99.477 27,851 8.04% 8.02%
4,014 GNMA POOL # 007319 6.500% 10/15/04 91.728 3,682 7.09% 7.31%
9,643 GNMA POOL # 009106 8.250% 5/15/06 99.587 9,603 8.28% 8.26%
12,364 GNMA POOL # 009889 7.250% 2/15/06 97.598 12,067 7.43% 7.46%
3,437 GNMA POOL # 011191 7.250% 4/15/06 97.598 3,354 7.43% 7.46%
7,630 GNMA POOL # 012526 8.000% 11/15/06 99.168 7,567 8.07% 8.05%
139,378 GNMA POOL # 151443 10.000% 3/15/16 105.670 147,280 9.46% 9.32%
298,335 GNMA POOL # 151882 8.500% 9/15/19 98.712 294,493 8.61% 8.60%
52,509 GNMA POOL # 153564 10.000% 4/15/16 105.670 55,487 9.46% 9.32%
207,885 GNMA POOL # 172558 9.500% 8/15/16 103.789 215,762 9.15% 9.04%
211,750 GNMA POOL # 176992 8.000% 11/15/16 97.196 205,813 8.23% 8.26%
151,418 GNMA POOL # 177308 9.000% 9/15/16 101.224 153,271 8.89% 8.82%
67,577 GNMA POOL # 177784 8.000% 10/15/16 96.956 65,520 8.25% 8.29%
83,150 GNMA POOL # 179863 9.000% 11/15/01 101.687 84,553 8.85% 8.76%
94,002 GNMA POOL # 180033 9.500% 9/15/16 103.789 97,564 9.15% 9.04%
76,601 GNMA POOL # 186520 8.000% 2/15/17 96.956 74,269 8.25% 8.29%
33,255 GNMA POOL # 188060 9.500% 10/15/16 103.604 34,454 9.17% 9.06%
199,059 GNMA POOL # 188865 8.500% 1/15/17 99.132 197,331 8.57% 8.56%
719,293 GNMA POOL # 189141 7.500% 2/15/23 92.781 667,367 8.08% 8.24%
179,738 GNMA POOL # 190671 8.500% 1/15/17 99.382 178,627 8.55% 8.53%
9,685 GNMA POOL # 190959 8.500% 2/15/17 99.132 9,601 8.57% 8.56%
508,619 GNMA POOL # 191095 8.500% 6/15/21 98.250 499,719 8.65% 8.65%
259,389 GNMA POOL # 192357 8.000% 4/15/17 96.956 251,493 8.25% 8.30%
828,462 GNMA POOL # 194057 8.500% 4/15/17 99.132 821,271 8.58% 8.56%
134,323 GNMA POOL # 194287 9.500% 3/15/17 103.959 139,641 9.14% 9.02%
1,119,262 GNMA POOL # 194926 8.500% 2/15/17 99.132 1,109,547 8.57% 8.56%
</TABLE>
See notes to fianacial statements
<PAGE>
<TABLE>
WRIGHT CURRENT INCOME FUND (WCIF) - CONTINUED
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 329,182 GNMA POOL # 196062 8.000% 3/15/17 $ 96.713 $ 318,362 8.27% 8.32%
23,355 GNMA POOL # 196063 8.500% 3/15/17 99.132 23,152 8.57% 8.56%
281,790 GNMA POOL # 197654 8.500% 9/15/21 98.250 276,858 8.65% 8.65%
251,741 GNMA POOL # 199537 8.000% 3/15/17 96.956 244,078 8.25% 8.29%
232,158 GNMA POOL # 203078 8.000% 12/15/16 96.956 225,092 8.25% 8.29%
393,395 GNMA POOL # 203369 8.000% 12/15/16 96.956 381,420 8.25% 8.29%
66,994 GNMA POOL # 205372 8.000% 3/15/17 96.956 64,955 8.25% 8.29%
313,923 GNMA POOL # 205522 8.000% 4/15/17 96.956 304,367 8.25% 8.29%
198,543 GNMA POOL # 205524 8.000% 5/15/17 96.956 192,499 8.25% 8.30%
16,349 GNMA POOL # 206740 10.000% 10/15/17 105.218 17,202 9.50% 7.74%
159,165 GNMA POOL # 206762 9.000% 4/15/21 100.875 160,558 9.28% 9.30%
124,720 GNMA POOL # 207019 8.000% 3/15/17 96.956 120,924 8.25% 8.29%
40,580 GNMA POOL # 208076 8.000% 4/15/17 97.433 39,538 8.21% 8.24%
74,431 GNMA POOL # 210520 10.500% 8/15/17 106.812 79,501 9.83% 9.67%
40,169 GNMA POOL # 210618 9.500% 4/15/17 104.111 41,820 9.13% 9.00%
224,723 GNMA POOL # 211013 9.000% 1/15/20 100.963 226,887 8.91% 8.85%
258,424 GNMA POOL # 211231 8.500% 5/15/17 99.132 256,180 8.57% 8.55%
417,220 GNMA POOL # 211279 8.000% 4/15/17 96.956 404,520 8.25% 8.29%
516,935 GNMA POOL # 211678 8.000% 5/15/17 96.713 499,944 8.27% 8.32%
159,645 GNMA POOL # 212601 8.500% 6/15/17 99.132 158,259 8.57% 8.56%
226,937 GNMA POOL # 213444 8.000% 6/15/17 96.713 219,478 8.27% 8.32%
255,123 GNMA POOL # 216461 8.000% 5/15/17 96.956 247,357 8.25% 8.29%
56,775 GNMA POOL # 218420 8.500% 11/15/21 98.250 55,781 8.65% 8.65%
317,755 GNMA POOL # 219335 8.000% 5/15/17 96.956 308,082 8.25% 8.29%
306,387 GNMA POOL # 220703 8.000% 5/15/17 96.956 297,060 8.25% 8.29%
36,215 GNMA POOL # 220917 8.500% 4/15/17 99.132 35,900 8.58% 8.56%
735,410 GNMA POOL # 222112 8.000% 1/15/22 95.593 703,000 8.37% 8.44%
77,008 GNMA POOL # 223126 10.000% 8/15/17 105.218 81,026 9.50% 9.37%
168,120 GNMA POOL # 223133 9.500% 7/15/17 103.406 173,846 9.19% 9.08%
64,223 GNMA POOL # 223348 10.000% 8/15/18 105.218 67,574 9.50% 9.37%
37,733 GNMA POOL # 223588 10.000% 12/15/18 105.218 39,702 9.51% 9.37%
30,956 GNMA POOL # 224078 10.000% 7/15/18 105.218 32,572 9.50% 9.36%
139,324 GNMA POOL # 228308 10.000% 1/15/19 105.093 146,420 9.52% 9.38%
119,776 GNMA POOL # 228483 9.500% 9/15/19 103.204 123,614 9.21% 9.10%
95,481 GNMA POOL # 230223 9.500% 4/15/18 103.604 98,922 9.17% 9.06%
95,049 GNMA POOL # 235000 10.000% 1/15/18 105.218 100,009 9.50% 9.37%
70,964 GNMA POOL # 245580 9.500% 7/15/18 103.262 73,279 9.20% 9.09%
98,896 GNMA POOL # 247473 10.000% 9/15/18 105.218 104,056 9.50% 9.37%
215,190 GNMA POOL # 247681 9.000% 11/15/19 100.963 217,262 8.91% 8.85%
67,594 GNMA POOL # 247872 10.000% 9/15/18 105.093 71,037 9.52% 9.38%
41,160 GNMA POOL # 250412 8.000% 3/15/18 96.713 39,807 8.27% 8.32%
106,806 GNMA POOL # 251241 9.500% 6/15/18 103.406 110,444 9.19% 9.08%
139,772 GNMA POOL # 258911 9.500% 9/15/18 103.262 144,332 9.20% 9.09%
88,579 GNMA POOL # 260999 9.500% 9/15/18 103.262 91,468 9.20% 9.09%
121,972 GNMA POOL # 263439 10.000% 2/15/19 105.093 128,184 9.51% 9.38%
85,154 GNMA POOL # 263773 8.000% 8/15/18 96.713 82,355 8.27% 8.32%
174,826 GNMA POOL # 265267 9.500% 8/15/20 103.204 180,427 9.21% 9.10%
</TABLE>
See notes to fianacial statements
<PAGE>
<TABLE>
WRIGHT CURRENT INCOME FUND (WCIF) - CONTINUED
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 77,862 GNMA POOL # 266983 10.000% 2/15/19 $105.093 $ 81,828 9.52% 9.38%
68,287 GNMA POOL # 273690 9.500% 8/15/19 103.204 70,475 9.21% 9.10%
121,637 GNMA POOL # 274489 9.500% 12/15/19 103.204 125,534 9.21% 9.10%
38,806 GNMA POOL # 275456 9.500% 8/15/19 103.204 40,049 9.21% 9.10%
146,785 GNMA POOL # 275538 9.500% 1/15/20 103.204 151,488 9.21% 9.10%
123,339 GNMA POOL # 277205 9.000% 12/15/19 100.963 124,527 8.91% 8.85%
90,029 GNMA POOL # 285467 9.500% 7/15/20 103.204 92,913 9.21% 9.10%
170,332 GNMA POOL # 285744 9.000% 5/15/20 101.142 172,277 8.90% 8.83%
189,178 GNMA POOL # 286556 9.000% 3/15/20 100.963 191,000 8.91% 8.85%
272,099 GNMA POOL # 287345 8.500% 6/15/20 98.712 268,594 8.61% 8.60%
5,857 GNMA POOL # 287999 9.000% 9/15/20 100.875 5,909 8.92% 8.86%
392,597 GNMA POOL # 289092 9.000% 4/15/20 100.963 396,377 8.91% 8.85%
19,526 GNMA POOL # 289949 8.500% 7/15/21 98.250 19,184 8.65% 8.65%
42,794 GNMA POOL # 290700 9.000% 8/15/20 100.875 43,169 8.92% 8.86%
86,366 GNMA POOL # 291119 9.500% 7/15/20 103.204 89,133 9.21% 9.10%
94,579 GNMA POOL # 291933 9.500% 7/15/20 103.156 97,564 9.21% 9.10%
58,859 GNMA POOL # 293666 8.500% 6/15/21 98.250 57,829 8.65% 8.65%
6,149 GNMA POOL # 294209 9.000% 7/15/21 100.875 6,203 8.92% 8.86%
91,883 GNMA POOL # 294577 9.500% 11/15/20 103.156 94,783 9.21% 9.11%
894,586 GNMA POOL # 296150 8.500% 8/15/21 98.250 878,931 8.65% 8.65%
16,390 GNMA POOL # 297345 8.500% 8/15/20 98.250 16,103 8.65% 8.65%
506,442 GNMA POOL # 300698 9.000% 6/15/21 101.055 511,785 8.91% 8.84%
41,767 GNMA POOL # 301017 8.500% 6/15/21 98.250 41,036 8.65% 8.65%
296,190 GNMA POOL # 301050 8.500% 7/15/21 98.250 291,007 8.65% 8.65%
142,997 GNMA POOL # 301257 9.000% 7/15/21 100.875 144,248 8.92% 8.86%
170,233 GNMA POOL # 301366 8.500% 6/15/21 98.250 167,254 8.65% 8.65%
153,522 GNMA POOL # 301785 8.500% 5/15/21 98.250 150,835 8.65% 8.65%
166,689 GNMA POOL # 302713 9.000% 2/15/21 100.875 168,147 8.92% 8.86%
18,937 GNMA POOL # 302723 8.500% 5/15/21 98.250 18,606 8.65% 8.65%
149,422 GNMA POOL # 302781 8.500% 6/15/21 98.250 146,807 8.65% 8.65%
201,538 GNMA POOL # 302933 8.500% 6/15/21 98.250 198,012 8.65% 8.65%
309,266 GNMA POOL # 302935 8.500% 6/15/21 98.250 303,854 8.65% 8.65%
198,663 GNMA POOL # 304512 8.500% 5/15/21 98.712 196,104 8.61% 8.60%
397,576 GNMA POOL # 305091 9.000% 7/15/21 100.875 401,055 8.92% 8.86%
299,280 GNMA POOL # 305130 8.000% 11/15/22 95.593 286,090 8.37% 8.44%
676,792 GNMA POOL # 305186 8.500% 6/15/21 98.250 664,948 8.65% 8.65%
100,368 GNMA POOL # 305585 8.500% 4/15/21 98.250 98,612 8.65% 8.65%
27,145 GNMA POOL # 306669 8.000% 7/15/21 95.593 25,949 8.37% 8.44%
193,095 GNMA POOL # 306673 8.500% 8/15/21 98.250 189,716 8.65% 8.65%
233,956 GNMA POOL # 306692 8.500% 9/15/21 98.250 229,862 8.65% 8.65%
270,232 GNMA POOL # 306693 8.500% 9/15/21 98.250 265,503 8.65% 8.65%
222,682 GNMA POOL # 307547 8.500% 6/15/21 98.250 218,785 8.65% 8.65%
150,147 GNMA POOL # 307553 8.500% 6/15/21 98.250 147,519 8.65% 8.65%
255,576 GNMA POOL # 308792 9.000% 7/15/21 100.875 257,812 8.65% 8.65%
81,254 GNMA POOL # 310526 8.500% 7/15/21 98.250 79,832 8.65% 8.65%
87,874 GNMA POOL # 310530 8.500% 7/15/21 98.250 86,337 8.65% 8.65%
164,333 GNMA POOL # 311087 8.500% 7/15/21 98.250 161,457 8.61% 8.65%
</TABLE>
See notes to fianacial statements
<PAGE>
<TABLE>
WRIGHT CURRENT INCOME FUND (WCIF) - CONTINUED
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 84,910 GNMA POOL # 311646 8.500% 11/15/21 $ 98.250 $ 83,424 8.65% 8.65%
175,202 GNMA POOL # 312602 8.500% 2/15/22 98.250 172,136 8.65% 8.65%
28,734 GNMA POOL # 314222 8.500% 4/15/22 98.250 28,232 8.65% 8.65%
406,964 GNMA POOL # 314581 9.500% 10/15/21 103.156 419,807 9.21% 9.11%
607,001 GNMA POOL # 314912 8.500% 5/15/22 98.250 596,378 8.65% 8.65%
641,413 GNMA POOL # 315187 8.000% 6/15/22 95.593 613,146 8.37% 8.44%
225,885 GNMA POOL # 315359 8.500% 11/15/21 98.250 221,932 8.65% 8.65%
601,763 GNMA POOL # 315388 8.000% 2/15/22 95.593 575,243 8.37% 8.44%
663,567 GNMA POOL # 315754 8.000% 1/15/22 95.593 634,323 8.37% 8.44%
1,435,257 GNMA POOL # 316240 8.000% 1/15/22 95.593 1,372,005 8.37% 8.44%
462,775 GNMA POOL # 316615 8.500% 11/15/21 98.250 454,677 8.65% 8.65%
206,774 GNMA POOL # 316776 8.000% 11/15/21 95.593 197,661 8.37% 8.44%
329,279 GNMA POOL # 317069 8.500% 12/15/21 98.250 323,516 8.65% 8.65%
587,024 GNMA POOL # 317351 8.000% 5/15/22 95.593 561,154 8.37% 8.44%
583,138 GNMA POOL # 317358 8.000% 5/15/22 95.593 557,440 8.37% 8.44%
278,361 GNMA POOL # 318315 8.000% 6/15/22 95.593 266,094 8.37% 8.44%
519,612 GNMA POOL # 318776 8.000% 2/15/22 95.593 496,713 8.37% 8.44%
16,784 GNMA POOL # 318793 8.500% 2/15/22 98.250 16,490 8.65% 8.65%
76,322 GNMA POOL # 319046 8.500% 11/15/21 98.712 75,339 8.61% 8.60%
643,284 GNMA POOL # 319441 8.500% 4/15/22 98.250 632,026 8.65% 8.65%
241,015 GNMA POOL # 320747 8.500% 2/15/22 98.250 236,798 8.65% 8.65%
345,740 GNMA POOL # 321234 8.500% 4/15/22 98.250 339,689 8.65% 8.65%
384,944 GNMA POOL # 321806 8.000% 5/15/22 95.593 367,980 8.37% 8.44%
744,958 GNMA POOL # 321807 8.000% 5/15/22 95.593 712,128 8.37% 8.44%
535,544 GNMA POOL # 321976 8.500% 1/15/22 98.250 526,172 8.65% 8.65%
688,282 GNMA POOL # 323124 8.000% 6/15/22 95.593 657,949 8.37% 8.44%
900,354 GNMA POOL # 323226 8.000% 6/15/22 95.593 860,675 8.37% 8.44%
57,695 GNMA POOL # 323425 8.000% 6/15/22 95.593 55,152 8.37% 8.44%
762,098 GNMA POOL # 323929 8.000% 2/15/22 95.593 728,513 8.37% 8.44%
662,138 GNMA POOL # 325165 8.000% 6/15/22 95.593 632,958 8.37% 8.44%
558,128 GNMA POOL # 325651 8.000% 6/15/22 95.593 533,532 8.37% 8.44%
866,553 GNMA POOL # 327244 7.500% 8/15/22 92.781 803,997 8.08% 8.24%
270,582 GNMA POOL # 328807 8.000% 7/15/22 95.593 258,657 8.37% 8.44%
959,086 GNMA POOL # 329540 7.500% 8/15/22 92.781 889,850 8.08% 8.24%
127,455 GNMA POOL # 329700 8.000% 9/15/22 95.593 121,838 8.37% 8.44%
439,529 GNMA POOL # 329716 8.000% 10/15/22 95.593 420,159 8.37% 8.44%
1,384,092 GNMA POOL # 329982 7.500% 2/15/23 92.781 1,284,175 8.08% 8.24%
347,913 GNMA POOL # 330616 8.000% 10/15/22 95.593 332,580 8.37% 8.44%
726,378 GNMA POOL # 331361 8.000% 11/15/22 95.593 694,367 8.37% 8.44%
477,189 GNMA POOL # 334122 8.000% 10/15/22 95.593 456,160 8.37% 8.44%
1,556,418 GNMA POOL # 335746 8.000% 10/15/22 95.593 1,487,827 8.37% 8.44%
645,567 GNMA POOL # 335950 8.000% 10/15/22 95.593 617,116 8.37% 8.44%
427,588 GNMA POOL # 336394 7.500% 10/20/22 92.156 394,048 8.14% 8.31%
412,209 GNMA POOL # 338859 8.000% 11/15/22 95.593 394,043 8.37% 8.44%
2,826,157 GNMA POOL # 348103 7.000% 6/15/23 89.750 2,536,476 7.80% 8.06%
993,003 GNMA POOL # 348213 6.500% 8/15/23 86.656 860,497 7.50% 7.89%
1,578,903 GNMA POOL # 350372 7.000% 4/15/23 89.750 1,417,066 7.80% 8.06%
</TABLE>
See notes to fianacial statements
<PAGE>
<TABLE>
WRIGHT CURRENT INCOME FUND (WCIF) - CONTINUED
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
<CAPTION>
==============================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield[1] Maturity[1]
------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 897,656 GNMA POOL # 350651 7.500% 6/15/23 $ 92.781 $ 832,854 8.08% 8.24%
1,732,399 GNMA POOL # 350659 7.500% 6/15/23 92.781 1,607,337 8.00% 8.13%
2,014,097 GNMA POOL # 350938 6.500% 8/15/23 86.656 1,745,336 7.50% 7.89%
931,102 GNMA POOL # 358931 7.000% 12/15/23 89.750 835,664 7.80% 8.06%
956,152 GNMA POOL # 362125 7.000% 10/15/23 89.750 858,146 7.80% 8.06%
967,084 GNMA POOL # 362174 6.500% 1/15/24 86.656 838,037 7.50% 7.89%
961,269 GNMA POOL # 362628 7.000% 8/15/23 89.750 862,739 7.80% 8.06%
1,004,098 GNMA POOL # 363429 7.000% 8/15/23 89.750 901,178 7.80% 8.06%
940,748 GNMA POOL # 367414 6.000% 11/15/23 83.406 784,640 7.19% 7.73%
969,866 GNMA POOL # 367674 6.500% 8/15/23 86.656 840,447 7.50% 7.89%
2,961,490 GNMA POOL # 367806 6.500% 9/15/23 86.656 2,566,308 7.50% 7.89%
2,618,161 GNMA POOL # 368238 7.000% 12/15/23 89.750 2,349,800 7.80% 8.06%
2,950,158 GNMA POOL # 368502 7.000% 2/15/24 89.750 2,647,767 7.80% 8.06%
2,009,542 GNMA POOL # 370773 6.000% 11/15/23 83.406 1,676,079 7.19% 7.74%
936,970 GNMA POOL # 371557 7.000% 12/15/23 89.750 840,931 7.80% 8.06%
2,913,410 GNMA POOL # 372050 6.500% 2/15/24 86.656 2,524,644 7.50% 7.89%
951,065 GNMA POOL # 375106 6.500% 1/15/24 86.656 824,155 7.50% 7.89%
------------
Total Investments (identified cost $90,853,201)-- 99.9% $84,063,824 8.53% 8.56%
======= =======
Other Assets, less Liabilities-- 0.1% 113,780
------------
Net Assets-- 100.0% $84,177,604
============
<FN>
[1] Unaudited.
</FN>
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
WRIGHT CURRENT INCOME FUND
================================================================================
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments --
Identified cost........................ $ 90,853,201
Unrealized depreciation................ (6,789,377)
-------------
Total value (Note 1A)................ $ 84,063,824
Receivable or fund shares sold........... 988
Interest receivable...................... 574,118
Receivable for investments sold.......... 4,961
-------------
Total Assets........................... $ 84,643,891
-------------
LIABILITIES:
Payable for fund shares reacquired....... $ 200,329
Loans payable............................ 146,386
Payable to dividend disbursing agent..... 103,785
Trustees' fees payable................... 208
Custodian fee payable.................... 13,289
Accrued expenses and other liabilities... 2,290
-------------
Total Liabilities...................... $ 466,287
-------------
NET ASSETS.................................. $ 84,177,604
=============
NET ASSETS CONSIST OF:
Proceeds from sales of shares (including shares
issued to shareholders in payment of distributions
declared), less cost of shares redeemed.. $ 91,666,387
Accumulated net realized loss on investment
transactions (computed on the basis of
identified cost)......................... (698,168)
Unrealized depreciation of investments (computed
on the basis of identified cost)......... (6,789,377)
Distributions in excess of net investment income (1,238)
-------------
Net assets applicable to outstanding shares $ 84,177,604
=============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.............................. 8,670,470
=============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................... $ 9.71
=============
</TABLE>
<TABLE>
<CAPTION>
================================================================================
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
--------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest Income (Note 1B)................ $ 7,643,220
-------------
Expenses --
Investment adviser fee (Note 3)........ $ 403,012
Administrator fee (Note 3)............. 97,754
Compensation of trustees not affiliated with
the Investment adviser or administrator 1,268
Distribution expenses (Note 4)......... 200,298
Custodian fee (Note 3)................. 62,477
Audit services......................... 21,006
Transfer and dividend disbursing agent fees 16,339
Registration costs..................... 9,632
Interest on loans...................... 5,988
Printing............................... 1,590
Legal services......................... 1,432
Miscellaneous.......................... 4,534
-------------
Total expenses....................... $ 825,330
-------------
Net investment income.............. $ 6,817,890
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investment transactions
(identified cost basis)................ $ (682,417)
Change in unrealized appreciation
of investments......................... (10,057,612)
-------------
Net realized and unrealized loss
on investments..................... $(10,740,029)
-------------
Net decrease in net assets
from operations.................... $ (3,922,139)
=============
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT CURRENT INCOME FUND
<TABLE>
============================================================================================================================
<CAPTION>
Year Ended
December 31,
------------------------------------
STATEMENT OF CHANGES IN NET ASSETS 1994 1993
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income.................................................. $ 6,817,890 $ 7,282,634
Net realized loss on investment
transactions......................................................... (682,417) (8,621)
Change in unrealized appreciation
of investments....................................................... (10,057,612) (396,265)
--------------- ---------------
Increase (decrease) in net assets from operations................. $ (3,922,139) $ 6,877,748
--------------- ---------------
Distributions to shareholders --
From net investment income............................................. $ (6,817,890) $ (7,282,634)
In excess of net investment income..................................... (1,238) --
--------------- ---------------
Total distributions............................................... $ (6,819,128) $ (7,282,634)
--------------- ---------------
Net increase (decrease) from Fund share transactions (Note 5).............. $ (20,238,740) $ 15,886,787
--------------- ---------------
Net increase (decrease) in net assets............................. $ (30,980,007) $ 15,481,901
NET ASSETS:
At beginning of period..................................................... 115,157,611 99,675,710
--------------- ---------------
At end of period........................................................... $ 84,177,604 $ 115,157,611
=============== ===============
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
INCLUDED IN NET ASSETS.......................................................... $ (1,238) $ --
=============== ===============
</TABLE>
See notes to financial statements
<PAGE>
THE WRIGHT MANAGED INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
================================================================================
(1) SIGNIFICANT ACCOUNTING POLICIES
The Trust, issuer of Wright Government Obligations Fund (WGOF) series,
Wright Near Term Bond Fund (WNTB) series, Wright Total Return Bond Fund (WTRB)
series, Wright Insured Tax Free Bond Fund (WTFB) series, and Wright Current
Income Fund (WCIF) series, is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end, management investment company. The
following is a summary of significant accounting policies consistently followed
by the Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
A. Investment Valuations - Investments of the various funds for which market
quotations are readily available are valued at current market value as
furnished by a pricing service. Investments for which valuations are not
readily available will be appraised at their fair value as determined in
good faith by or at the direction of the Trustees. Short-term obligations
maturing in sixty days or less are valued at amortized cost, which
approximates value.
B. Income - Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of premium or discount on
long-term debt securities when required for federal income tax purposes.
C. Federal Taxes - The Trust'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,
1994, the Trust, for federal income tax purposes, had capital loss
carryovers of $963,970 (WGOF), $23,344,003 (WNTB), $698,168 (WCIF) and
$1,884,088 (WTRB) 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 respective Fund of any
liability for federal income or excise tax. Pursuant to the Code, such
capital loss carryovers will expire as follows:
<TABLE>
12/31 WGOF WNTB WCIF WTRB
------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 $-- $2,038,311 $ -- $ --
1996 -- 2,300,814 -- --
1997 -- 1,319,208 -- --
1998 963,970 3,324,484 -- --
1999 -- 4,467,443 -- --
2000 -- 2,957,673 7,132 --
2001 -- -- 8,619 --
2002 -- 6,936,070 682,417 1,884,088
</TABLE>
Distributions paid by WTFB from net investment income on tax-exempt
municipal securities are not included by shareholders as gross income for
federal income tax purposes because WTFB intends to meet certain
requirements of the Code applicable to regulated investment companies which
will enable WTFB to pay exempt distributions. The portion of interest, if
any, earned on private activity bonds issued after August 7, 1986, may be
considered a tax preference item to shareholders.
D. Other - Investment transactions are accounted for on the date the
investments are purchased or sold.
(2) DISTRIBUTIONS
Each Fund's policy is to determine net income once daily, as of the close
of the New York Stock Exchange and the net income so determined is declared as a
dividend to shareholders of record at the
<PAGE>
THE WRIGHT MANAGED INCOME TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
time of such determination. Distributions of realized capital gains are made
at least annually. Shareholders may reinvest capital gain distributions in
additional shares of the same Fund at the net asset value as of the ex-dividend
date. Dividends and distributions may be reinvested in additional shares of the
same Fund at the net asset value as of the payable date.
The Trust requires that differences in the recognition or classification of
income between the financial statements and tax earnings and profits which
result in temporary overdistributions for financial statement purposes, are
classified as distributions in excess of net investment income or accumulated
net realized gains.
During the year ended December 31, 1994, $53,186 was reclassified from
undistributed net investment income to accumulated undistributed net realized
loss on investment transactions on WTRB's financial statements, and $11,789 was
reclassified from undistributed net investment income to paid-in capital on
WNTB's financial statements. Also during the year ended December 31, 1994,
$3,283 was reclassified from accumulated net realized gain on investment
transactions, of which $2,256 was reclassified to undistributed net investment
income and $1,027 to paid-in capital on WTFB's financial statements. These
reclassifications are due to differences between book and tax accounting. Net
investment income, net realized gains (losses) and net assets were not affected
by these reclassifications.
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service (Wright) 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, 1994, the effective annual rate was 0.40% for
WGOF, WTFB and WCIF, and 0.43% for WTRB and 0.44% for WNTB. To enhance the net
income of the Funds, Wright reduced its investment adviser fee by $29,956 for
the benefit of WTFB. The Trust also has engaged Eaton Vance Management (Eaton
Vance) to act as administrator of the Trust. Under the Administration Agreement,
Eaton Vance is responsible for managing the business affairs of the Trust and is
compensated based upon a percentage of average daily net assets which rate is
reduced as average daily net assets exceed certain levels. For the year ended
December 31, 1994, the effective annual rate was 0.10% for WGOF, WTFB and WCIF,
0.07% for WTRB, and 0.06% for WNTB. Except as to Trustees of the Trust who are
not affiliated with Eaton Vance or Wright, Trustees and officers received
remuneration for their services to the Trust out of fees paid to Eaton Vance and
Wright. The custodian fee was paid to Investors Bank & Trust Company (IBT), an
affiliate of Eaton Vance, for its services as custodian of the Trust. Pursuant
to the custodian agreement, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Trust maintains with
IBT. Certain of the Trustees and officers of the Trust are directors/trustees
and/or officers of the above organizations. See Note 4.
(4) 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 each of the
Funds will pay the principal underwriter, Wright Investors' Service
Distributors, Inc., a subsidiary of Wright Investors' Service, at an annual rate
of 2/10 of 1% of the average daily net assets of each Fund for activities
primarily intended to result in the sale of each Fund's shares. For the year
ended December 31, 1994, the Principal Underwriter made a reduction of its fee
to WGOF and WTFB by $35,005 and $28,863, respectively.
<PAGE>
THE WRIGHT MANAGED INCOME TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
(5) 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>
Year Ended December 31,
---------------------------------------------------------------
1994 1993
---------------------------------------------------------------
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WRIGHT GOVERNMENT OBLIGATIONS FUND --
Sales.................................................... 162,879 $ 2,104,165 406,098 $ 5,797,345
Issued to shareholders in payment
of distributions declared.............................. 62,116 805,054 89,252 1,264,888
Redemptions.............................................. (943,611) (12,465,253) (668,923) (9,503,900)
------------ ------------- ------------ -------------
Net decrease......................................... (718,616) $ (9,556,034) (173,573) $ (2,441,667)
============ ============= ============ =============
WRIGHT NEAR TERM BOND FUND --
Sales.................................................... 4,457,277 $ 46,681,687 12,619,527 $137,686,335
Issued to shareholders in payment of
distributions declared................................. 1,093,362 11,252,377 1,363,631 14,890,616
Redemptions..............................................(19,306,382) (199,439,187) (13,645,055) (148,538,330)
------------ ------------- ------------ -------------
Net increase (decrease)..............................(13,755,743) $(141,505,123) 338,103 $ 4,038,621
============ ============= ============ =============
WRIGHT TOTAL RETURN BOND FUND --
Sales.................................................... 3,088,029 $ 38,238,580 6,066,589 $ 79,995,327
Issued to shareholders in payment
of distributions declared.............................. 800,418 9,609,765 1,186,404 15,598,436
Redemptions..............................................(11,284,858) (138,048,649) (4,556,719) (59,859,364)
------------ ------------- ------------ -------------
Net increase (decrease).............................. (7,396,411) $(90,200,306) 2,696,274 $ 35,734,399
============ ============= ============ =============
WRIGHT INSURED TAX-FREE BOND FUND --
Sales.................................................... 307,219 $ 3,650,011 758,015 $ 9,015,959
Issued to shareholders in payment
of distributions declared ............................. 52,115 597,038 48,390 579,590
Redemptions.............................................. (889,361) (10,300,948) (470,567) (5,618,421)
------------ ------------- ------------ -------------
Net increase (decrease).............................. (530,027) $ (6,053,899) 335,838 $ 3,977,128
============ ============= ============ =============
WRIGHT CURRENT INCOME FUND --
Sales.................................................... 1,447,569 $ 14,915,507 3,132,793 $ 34,134,753
Issued to shareholders in payment
of distributions declared.............................. 530,312 5,337,338 522,778 5,696,105
Redemptions.............................................. (4,014,808) (40,491,585) (2,197,161) (23,944,071)
------------ ------------- ------------ -------------
Net increase (decrease).............................. (2,036,927) $(20,238,740) 1,458,410 $ 15,886,787
============ ============= ============ =============
</TABLE>
<PAGE>
(6) INVESTMENT TRANSACTIONS
The Trust invests primarily in debt securities. The ability of the issuers
of the debt securities held by the Trust to meet their obligations may be
affected by economic developments in a specific industry or municipality.
Purchases and sales and maturities of investments, other than short-term
obligations, were as follows:
<TABLE>
Year Ended December 31, 1994
----------------------------------------------------------------------------------------------
WRIGHT GOVERNMENT WRIGHT NEAR WRIGHT TOTAL WRIGHT INSURED WRIGHT CURRENT
OBLIGATIONS FUND TERM BOND FUND RETURN BOND FUND TAX-FREE BOND FUND INCOME FUND
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases --
Non-U.S. Gov't Obligations.. $ -- $ -- $ 8,888,950 $ 606,957 $ --
============= ============= ============= ============= =============
U.S. Gov't Obligations...... $ 147,398 $ 94,700,562 $ 51,572,472 $ -- $ 9,980,433
============= ============= ============= ============= =============
Sales --
Non-U.S. Gov't Obligations.. $ -- $ -- $ 21,519,259 $ 5,688,681 $ --
============= ============= ============= ============= =============
U.S. Gov't Obligations...... $ 9,764,266 $ 232,141,302 $ 126,079,912 $ -- $ 24,900,482
============= ============= ============= ============= =============
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(7) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in value of the
investments owned at December 31, 1994, as computed on a federal income tax
basis, are as follows:
<TABLE>
WRIGHT GOVERNMENT WRIGHT NEAR WRIGHT TOTAL WRIGHT INSURED WRIGHT CURRENT
OBLIGATIONS FUND TERM BOND FUND RETURN BOND FUND TAX-FREE BOND FUND INCOME FUND
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aggregate cost................... $ 16,272,905 $ 216,713,961 $ 151,610,155 $ 11,284,130 $ 90,853,201
============= ============= ============= ============= =============
Gross unrealized appreciation.... $ 184,736 $ 917,796 $ 606,983 $ 204,481 $ 211,472
Gross unrealized depreciation.... 322,366 6,741,791 10,440,681 313,321 7,000,849
------------- ------------- ------------- ------------- -------------
Net unrealized depreciation. $ 137,630 $ 5,823,995 $ 9,833,698 $ 108,840 $ 6,789,377
============= ============= ============= ============= =============
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
THE WRIGHT MANAGED INCOME TRUST
NOTES TO FINANCIAL STATEMENTS - CONTINUED
================================================================================
(8) FINANCIAL INSTRUMENTS
The Funds may trade in financial instruments with off-balance sheet risk in
the normal course of its investing activities to assist in managing exposure to
various market risks. These financial instruments include written options and
futures contracts and may involve, to a varying degree, elements of risk in
excess of the amounts recognized for financial statement purposes. None of the
Funds held such instruments at December 31, 1994.
(9) LINE OF CREDIT
The Trust participates with other funds managed by Wright in a line of
credit with a bank which allows the funds to borrow up to $20,000,000
collectively. The line of credit consists of a $5,000,000 committed facility and
a $15,000,000 uncommitted facility. Interest is charged to each fund based on
its borrowings, at a rate equal to the bank's base rate. In addition, the funds
pay a facility fee computed at a rate of 1/4 of 1% on the unused portion of the
$5,000,000 facility. The Wright Insured Tax-Free Bond and Current Income Funds
had outstanding loans of $650,436 and $146,386, respectively, at December
31,1994.
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
To the Trustees and Shareholders of
The Wright Managed Income Trust:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Wright Government Obligations Fund, Wright
Near Term Bond Fund, Wright Total Return Bond Fund, Wright Insured Tax-Free Bond
Fund, and Wright Current Income Fund of The Wright Managed Income Trust as of
December 31, 1994, the related statements of operations for the year then ended,
the statements of changes in net assets for the years ended December 31, 1994
and 1993, and the financial highlights for each of the years in the five-year
period ended December 31, 1994. These financial statements and financial
highlights are the responsibility of the Trust'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 at
December 31, 1994, 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 each of the
respective Funds constituting The Wright Managed Income Trust as of December 31,
1994, the results of their operations, the changes in their net assets, and
their financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 1995
APPENDIX
---------------------------
DESCRIPTION OF INVESTMENTS
U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY OBLIGATIONS -- U.S. Government
obligations are issued by the Treasury and include bills, certificates of
indebtedness, notes, and bonds. Agencies and instrumentalities of the U.S.
Government are established under the authority of an act of Congress and
include, but are not limited to, the Government National Mortgage Association,
the Tennessee Valley Authority, the Bank for Cooperatives, the Farmers Home
Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association.
REPURCHASE AGREEMENTS -- involve purchase of debt securities of the U.S.
Treasury or a Federal agency, Federal instrumentality or Federally created
corporation. At the same time a Fund purchases the security, it resells it to
the vendor (a member bank of the Federal Reserve System or recognized securities
dealer), and is obligated to redeliver the security to the vendor on an
agreed-upon date in the future. The resale price is in excess of the purchase
price and reflects an agreed-upon market rate unrelated to the coupon rate on
the purchased security. Such transactions afford an opportunity for a Fund to
earn a return on cash which is only temporarily available. A Fund's risk is the
ability of the vendor to pay an agreed-upon sum upon the delivery date, and the
Trust believes the risk is limited to the difference between the market value of
the security and the repurchase price provided for in the repurchase agreement.
However, bankruptcy or insolvency proceedings affecting the vendor of the
security which is subject to the repurchase agreement, prior to the repurchase,
may result in a delay in a Fund being able to resell the security.
In all cases when entering into repurchase agreements with other than
FDIC-insured depository institutions, the Funds will take physical possession of
the underlying collateral security, or will receive written confirmation of the
purchase of the collateral security and a custodial or safekeeping receipt from
a third party under a written bailment for hire contract, or will be the
recorded owner of the collateral security through the Federal Reserve Book-Entry
System.
CERTIFICATES OF DEPOSIT -- are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
BANKERS' ACCEPTANCES -- are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
COMMERCIAL PAPER -- refers to promissory notes issued by corporations in
order to finance their short-term credit needs.
FINANCE COMPANY PAPER -- refers to promissory notes issued by finance
companies in order to finance their short- term credit needs.
CORPORATE OBLIGATIONS -- include bonds and notes issued by corporations in
order to finance longer-term credit needs.
MUNICIPAL SECURITIES -- Municipal securities are issued by or on behalf of
states, territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities, and the District of Columbia, to
obtain funds for various public purposes. The interest on these obligations is
exempt from regular Federal income tax in the hands of most investors. The two
principal classifications of municipal securities are "notes" and "bonds".
Municipal notes are generally used to provide for short-term
<PAGE>
capital needs and generally have maturities of one year or less. Municipal
notes include:
Tax Anticipation Notes
Revenue Anticipation Notes
Bond Anticipation Notes
Construction Loan Notes
TAX ANTICIPATION NOTES (TANS) are sold to finance working capital needs of
municipalities. They are generally repayable from specific tax revenues expected
to be received at a future date. TANs are usually general obligations of the
issuer. A weakness in an issuer's capacity to raise taxes due to, among other
things, a decline in its tax base or a rise in delinquencies, could adversely
affect the issuer's ability to meet its obligations on outstanding TANs.
REVENUE ANTICIPATION NOTES (RANS) are issued in expectation of receipt of
future revenues from a designated source, such as Federal revenues available
under the Federal Revenue Sharing Program that will be used to repay the notes.
Like TANs, they also constitute general obligations of the issuer. A decline in
the receipt of projected revenues could adversely affect an issuer's ability to
meet its obligations on outstanding RANs. In addition, the possibility that the
revenues would, when received, be used to meet other obligations could affect
the ability of the issuer to pay the principal and interest on RANs.
BOND ANTICIPATION NOTES (BANS) are usually general obligations of state and
local government issuers which are sold to provide interim financing for
projects that will eventually be funded through the sale of long-term debt
obligations or bonds. The ability of an issuer to meet its obligations on its
BANs is dependent on the issuer's access to the long-term municipal bond market
and the likelihood that the proceeds of such bond sales will be used to pay the
principal and interest of the BANs.
CONSTRUCTION LOAN NOTES (CLNS) are sold to provide construction financing.
After the projects are successfully completed and accepted, many projects
receive permanent financing through the Federal Housing Administration under
FNMA or GNMA.
TAX-EXEMPT COMMERCIAL PAPER (MUNICIPAL PAPER) represents very short-term
unsecured (except possibly by a bank line of credit), negotiable, promissory
notes, issued by states, municipalities, and their agencies. Maturities of
municipal paper generally will be shorter than the maturities of BANs, RANs, or
TANs.
While the above represents the major portion of the short-term tax-exempt
note market, there are a number of other types of notes issued for different
purposes and secured differently than those described above. WTFB may invest in
such other types of notes to the extent permitted under the investment objective
and policies and investment restrictions for WTFB.
Longer term capital needs are usually met by issuing municipal bonds. The
two principal classifications of these are "general obligation" and "revenue"
bonds.
Issuers of general obligation bonds include states, counties, cities, towns
and regional districts. The proceeds of these obligations are used to fund a
wide range of public projects including the construction or improvement of
schools, highways and roads, water and sewer systems and a variety of other
public purposes. The basic security of general obligation bonds is the issuer's
pledge of its faith, credit, and taxing power for the payment of principal and
interest. The taxes that can be levied for the payment of debt service may be
limited or unlimited as to rate or amount or special assessments.
The principal security for a revenue bond is generally the net revenues
derived from a particular facility
<PAGE>
or group of facilities or, in some cases, from the proceeds of a special
excise or other specific revenue source. Revenue bonds have been issued to fund
a wide variety of capital projects including: electric, gas, water, sewer and
solid waste disposal systems; highways, bridges and tunnels; port, airport and
parking facilities; transportation systems; housing facilities; colleges and
universities and hospitals. Although the principal security behind these bonds
varies widely, many provide additional security in the form of a debt service
reserve fund whose monies may be used to make principal and interest payments on
the issuer's obligations. Housing finance authorities have a wide range of
security including partially or fully insured, rent subsidized and/or
collateralized mortgages, and/or the net revenues from housing or other public
projects. In addition to a debt service reserve fund, some authorities provide
further security in the form of a state's ability (without legal obligation) to
make up deficiencies in the debt service reserve fund. Lease rental revenue
bonds issued by a state or local authority for capital projects are normally
secured by annual lease rental payments from the state or locality to the
authority sufficient to cover debt service on the authority's obligations.
Industrial development and pollution control bonds, although nominally
issued by municipal authorities, are in most cases revenue bonds and are
generally not secured by the taxing power of the municipality but are usually
secured by the revenues of the authority derived from payments by the industrial
user or users. For this reason, the Trust would not consider such an issue as
suitable for investment for WTFB unless the industrial user or users meet the
credit and quality standards of Wright, the investment adviser (See Wright
Investors' Service Quality Ratings below).
There is, in addition, a variety of hybrid and special types of municipal
obligations from those described above. Some municipal bonds are additionally
secured by insurance, bank credit agreements, or escrow accounts.
The Trust expects that it will not invest more than 25% of the total assets
of WTFB in municipal obligations whose issuers are located in the same state or
more than 25% of the total assets in municipal bonds the security of which is
derived from any one of the following categories: hospitals and health
facilities; turnpikes and toll roads; ports and airports; or colleges and
universities. The Trust may, however, invest more than 25% of the total assets
of WTFB in municipal bonds of one or more issuers of bonds and notes of the
following types: public housing authorities; state and local housing finance
authorities; municipal utilities systems, provided that they are secured or
backed by the U.S. Treasury or other U.S. Government agencies and by any agency,
insurance company, bank or other financial organization acceptable to the
Trust's Trustees. There could be economic, business or political developments,
which might affect all municipal bonds of a similar type. However, the Trust
believes that the most important consideration affecting risk is the quality of
municipal bonds and/or the credit worthiness any guarantor thereof.
Obligations of issuers of municipal securities, including municipal
securities issued by them, are subject to the provisions of bankruptcy,
insolvency, and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Reform Act of 1978, and laws, if any, which may be
enacted by Congress or state legislatures or by referenda extending the time for
payment of principal or interest, or both, or imposing other constraints upon
enforcement of such obligations or upon municipalities to levy taxes. There is
also the possibility that, as a result of litigation or other conditions, the
power or ability of any one or more issuers to pay, when due, principal of and
interest on its or their municipal securities may be materially affected.
<PAGE>
"WHEN ISSUED" SECURITIES -- U.S. Government obligations and Municipal
Securities are frequently offered on a "when-issued" basis. When so offered, the
price, which is generally expressed in terms of yield to maturity, is fixed at
the time the commitment to purchase is made, but delivery and payment for the
when-issued securities may take place at a later date. Normally, the settlement
date occurs 15 to 90 days after the date of the transaction. The payment
obligation and the interest rate that will be received on the securities are
fixed at the time a Fund enters into the purchase commitment. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. To the extent that assets of a Fund are
held in cash pending the settlement of a purchase of securities, the Fund would
earn no income; however, it is the intention that the Funds will be fully
invested to the extent practicable and subject to the policies stated above.
While when-issued securities may be sold prior to the settlement date, it is
intended that such securities will be purchased for a Fund with the purpose of
actually acquiring them unless a sale appears to be desirable for investment
reasons. At the time a commitment to purchase securities on a when-issued basis
is made for a Fund, the transaction will be recorded and the value of the
security reflected in determining the Fund's net asset value. The Trust will
establish a segregated account in which a Fund that purchases securities on a
when-issued basis will maintain cash and high-grade liquid debt securities equal
in value to commitments for when-issued securities. If the value of the
securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will at least equal the amount of a Fund's when-issued commitments.
Such segregated securities either will mature or, if necessary, be sold on or
before the settlement date. Securities purchased on a when-issued basis and the
securities held by a Fund are subject to changes in value based upon the
public's perception of the credit worthiness of the issuer and changes in the
level of interest rates (which will generally result in both changing in value
in the same way, i.e., both experiencing appreciation when interest rates
decline and depreciation when interest rates rise). Therefore, to the extent
that a Fund remains substantially fully invested at the same time that it has
purchased securities on a when-issued basis, there will be greater fluctuations
in the market value of the Fund's net assets than if cash were solely set aside
to pay for when-issued securities.
WRIGHT QUALITY RATINGS
Wright Quality Ratings provide the means by which the fundamental criteria for
the measurement of quality of an issuer's securities can be objectively
evaluated.
Each rating is based on 32 individual measures of quality grouped into four
components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability
and Stability, and (4) Growth. The total rating is three letters and a numeral.
The three letters measure (1) Investment Acceptance, (2) Financial Strength, and
(3) Profitability and Stability. Each letter reflects a composite measurement of
eight individual standards which are summarized as A: Outstanding, B: Excellent,
C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects
Growth and is a composite of eight individual standards ranging from 0 to 20.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
<PAGE>
DEBT SECURITIES
Wright ratings for commercial paper, corporate bonds and bank certificates of
deposit consist of the two central positions of the four position alphanumeric
corporate equity rating. The two central positions represent those factors which
are most applicable to fixed income and reserve investments. The first,
Financial Strength, represents the amount, the adequacy and the liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratios of (a)
invested equity capital, and (b) long-term debt, total of corporate capital, the
adequacy of net working capital, fixed charges coverage ratio and other
appropriate criteria. The second letter represents Profitability and Stability
and measures the record of a corporation's management in terms of: (a) the rate
and consistency of the net return on shareholders' equity capital investment at
corporate book value, and (b) the profits and losses of the corporation during
generally adverse economic periods, and its ability to withstand adverse
financial developments.
The first letter rating of the Wright four-part alpha-numeric corporate
rating is not included in the ratings of fixed-income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 AND P-1 COMMERCIAL PAPER RATINGS
BY STANDARD & POOR'S AND MOODY'S
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained from other sources it considers reliable. The
ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
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BOND RATINGS
In addition to Wright quality ratings, bonds or bond insurers may be expected to
have credit risk ratings assigned by the two major rating companies, Moody's and
Standard & Poor's. Moody's uses a nine-symbol system with Aaa being the highest
rating and C the lowest. Standard & Poor's uses a 10-symbol system that ranges
from AAA to D. Bonds within the top four categories of Moody's (Aaa, Aa, A, and
Baa) and of Standard & Poor's (AAA, AA, A, and BBB) are considered to be of
investment-grade quality. Only the top three grades are acceptable for the
taxable Income Funds and only the top two grades are acceptable for the tax-free
Income Funds. Note that both Standard & Poor's and Moody's currently give their
highest rating to issuers insured by the American Municipal Bond Assurance
Corporation (AMBAC) or by the Municipal Bond Investors Assurance Corporation
(MBIA).
Bonds rated A by Standard & Poor's have a strong capacity to pay principal
and interest, although they are somewhat more susceptible to the adverse effects
of change in circumstances and economic conditions than debt in higher-rated
categories. The rating of AA is accorded to issues where the capacity to pay
principal and interest is very strong and they differ from AAA issues only in
small degree. The AAA rating indicates an extremely strong capacity to pay
principal and interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
NOTE RATINGS
In addition to Wright quality ratings, municipal notes and other short-term
loans may be assigned ratings by Moody's or Standard & Poor's.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group.
Standard & Poor's top ratings for municipal notes issued after July 29,
1984 are SP-1 and SP-2. The designation SP-1 indicates a very strong capacity to
pay principal and interest. A "+" is added for those issues determined to
possess overwhelming safety characteristics. An "SP-2" designation indicates a
satisfactory capacity to pay principal and interest.
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