As filed with the Securities and Exchange Commission on August 15, 1997
1933 Act File No. 33-30085
1940 Act File No. 811-5866
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 14 [x]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 17 [x]
The Wright EquiFund Equity Trust
(Exact Name of Registrant as Specified in Charter)
24 Federal Street, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
617-482-8260
(Registrant's Telephone Number)
Alan R. Dynner
24 Federal Street, Boston, Massachusetts 02110
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ]Immediately upon filing pursuant to paragraph (b)
[ ]On May 1, 1997 pursuant to paragraph (b)
[ ]60 days after filing pursuant to paragraph (a)(1)
[ ]On(date) pursuant to paragraph (a)(1)
[x]75 days after filing pursuant to paragraph (a)(2)
[ ]On(date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ]This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on February
25, 1997 filed its "Notice" as required by that Rule for the fiscal year ended
December 31, 1996. Registrant continues its election to register an indefinite
number of shares of beneficial interest pursuant to Rule 24f-2.
<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheet required by Rule 481(a) under Securities Act of 1933.
Part A -- The Prospectus of
Wright EquiFund - Country Strategy
Part B -- Statement of Additional Information of
Wright EquiFund - Country Strategy
Part C -- Other Information
Signatures
Exhibit Index Required by Rule 483(a) under the Securities Act of 1933
Exhibits
<PAGE>
The Wright EquiFund Equity Trust
<TABLE>
<CAPTION>
Cross Reference Sheet
<S> <C> <C>
Item No. Statement of
FORM N-1A--Part A Prospectus Caption Additional Information Caption
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1..................... Front Cover Page
2..................... An Introduction to the Fund,
Shareholder and Fund Expenses
3..................... Not Applicable
4..................... An Introduction to the Fund, The Fund's Investment
Objective and Policies, The National Equity Indices, The
Wright Asset Allocation Model, Policies that Apply to the
Fund, Other Investment Policies, Special Investment
Considerations-Risks, Other Information, Appendix
5..................... The Investment Adviser, The Administrator,
Distribution Expenses, Back Cover
5(a).................. Not Applicable
6..................... Other Information, Distributions by the
Fund, Taxes
7..................... How to Buy Shares, How the Fund
Values its Shares, How Shareholder
Accounts are Maintained, How to
Exchange Shares, Tax-Sheltered
Retirement Plans
8..................... How to Redeem or Sell Shares
9..................... Not Applicable
Form N-1A -- Part B
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10.................... Front Cover Page and Back Cover
11.................... Table of Contents
12.................... General Information and History
13.................... Investment Objective and Policies,
Investment Restrictions
14.................... Officers and Trustees
15.................... Control Persons and Principal Holders
of Shares
16.................... Investment Advisory and Administra-
tive Services, Custodian, Independent
Certified Public Accountants, Back
Cover
17.................... Brokerage Allocation
18.................... Fund Shares and Other Securities
19.................... How to Buy Shares, How to Redeem Purchase, Exchange, Redemption,
or Sell Shares, How the Fund Values and Pricing of Shares
its Shares
20.................... Taxes Taxes
21.................... Principal Underwriter
22.................... Performance Information
23.................... Financial Statements
</TABLE>
<PAGE>
The Wright
EquiFund
Equity Trust
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Description of art work on front cover of the Prospectus
EquiFund logo in center of page with a globe underneath it, all of which is
set on a blue background.
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Wright EquiFund -
Country Strategy
Prospectus
October 29, 1997
<PAGE>
PROSPECTUS
THE WRIGHT EQUIFUND EQUITY TRUST
- -------------------------------------------------------------------------------
Wright EquiFund - Country Strategy
- -------------------------------------------------------------------------------
The investment objective of Wright EquiFund - Country Strategy (the "Fund")
is enhanced total investment return (consisting of price appreciation plus
income). The Fund seeks to achieve its objective by investing in a broadly based
portfolio of equity and equity-related securities selected from among the
publicly traded companies listed in the National Equity Indices that Wright has
developed for each foreign country in which Wright funds invest. Only securities
for which adequate public information is available and which could be considered
acceptable for investment by a prudent person comprise the National Equity
Indices. The Fund is not intended as a complete investment program but as a
supplemental investment for users of the Wright International Asset Allocation
Model.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference.
A Statement of Additional Information dated October 29, 1997 containing
more detailed information about the Fund 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. or
from the Investment Adviser's web site (http://www.wisi.com). In addition, the
Securities and Exchange Commission maintains a Web site (http://www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference and other information regarding the Fund.
Write To: The Wright EquiFund Equity Trust
Wright Investors' Service Distributors, Inc.,
1000 Lafayette Blvd., Bridgeport, CT 06604
e-mail: [email protected]
or Call: (800) 888-9471
SHARES OF THE FUND 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 FUND INVOLVE INVESTMENT RISKS,
INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME OR ALL OF THE
PRINCIPAL INVESTMENT.
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.
Prospectus Dated October 29, 1997
<PAGE>
Table of Contents
-------------------
Page
An Introduction to the Fund............... 2
Shareholder and Fund Expenses............. 6
Intended Use of the Fund.................. 7
The Fund's Investment Objective
and Policies........................... 7
The National Equity Indices............... 7
The Wright International Asset
Allocation Model....................... 9
Other Investment Policies................. 9
Special Investment Considerations - Risks. 10
The Investment Adviser.................... 12
The Administrator......................... 16
Distribution Expenses..................... 16
How the Funds Value its Shares............ 17
How to Buy Shares......................... 18
How Shareholder Accounts are Maintained... 20
Distributions and Dividends by the Funds.. 21
Taxes..................................... 21
How to Exchange Shares.................... 23
How to Redeem or Sell Shares.............. 24
Performance Information................... 26
Other Information......................... 27
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An Introduction to the Fund
The information summarized below is qualified in its entirety by the more
detailed information set forth below in this Prospectus.
The Trust........................ The Wright EquiFund Equity Trust (the
"Trust") is an open-end non-diversified management investment company, known as
a mutual fund, registered as an investment company under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Trust consists of 20 series, one
of which is described in this Prospectus (each, a "Wright EquiFund" and
collectively, the "Wright EquiFunds"). The remaining 19 series are being offered
under separate prospectuses. Each Wright EquiFund represents a separate and
distinct series of the Trust's shares of beneficial interest.
Investment Objective............. The Fund's investment objective is
enhanced total investment return (price appreciation plus income). The Fund
seeks to achieve its objective by investing in a portfolio of equity and
equity-related securities selected by the Investment Adviser from among the
publicly traded companies listed in the National Equity Indices (excluding the
United States). There is no guarantee that the Fund will achieve its objective.
<PAGE>
Country Selection................ The Fund intends to invest in equity and
equity-related securities of a broad range of issuers located in any of the
countries, other than the United States, included in the National Equity
Indices. At times the Fund may be invested in issuers located in as few as one
country and as many as five countries.
The Investment Adviser selects the countries for the Fund's portfolio based
on the requirements of The Wright Asset Allocation Model (the "Model") which is
designed to meet the needs of institutional investors wishing exposure to
investments in specific foreign countries. The Fund is expected to hold
securities of countries required by the model but not available through other
Wright Funds. Compliance by the Fund with the Model's requirements could result
in 100% turnover of the Fund portfolio.
The Investment Adviser and Administrator........... The Fund has engaged
Wright Investors' Service, Inc., 1000 Administrator Lafayette Boulevard,
Bridgeport, CT ("Wright" or the "Investment Adviser") as investment adviser to
carry out the Fund's investment program. The Fund also has retained Eaton Vance
Management ("Eaton Vance" or the "Administrator"), 24 Federal Street, Boston, MA
02110 as administrator to manage the Fund's business affairs.
The Distributor.................. Wright Investors' Service Distributors,
Inc. ("WISDI" or the "Principal Underwriter") is the Distributor of the Fund's
shares and receives a distribution fee equal on an annual basis to 0.25% of the
Fund's average daily net assets.
Who May Purchase Fund Shares..... The Fund was established for those
institutional investors seeking exposure to specific foreign countries based on
the recommendations of the Model.
How to Purchase Fund Shares...... There is no sales charge on the purchase
of Fund shares. Shares of the Fund may be purchased at the net asset value per
share next determined after receipt and acceptance of the purchase order. The
minimum initial investment in the Fund is $1,000. This minimum investment
requirement may be waived for tax-sheltered
<PAGE>
retirement plans and automatic investment program accounts and may be
reduced to $500 for shares purchased through certain intermediaries. Shares may
also be purchased through an exchange of securities. See "How to Buy Shares."
Distribution Option.............. 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 the net asset value per share as
of the reinvestment date. Dividend and capital gains distributions, if any,
usually are made annually in December, but these annual distributions may be
substantially reduced or eliminated by the Fund's possible use of equalization
accounting in any year in which the Fund experiences substantial redemptions as
a result of its investment strategy. See "Taxes."
Redemptions...................... Shares may be redeemed directly from the
Fund at the net asset value per share next determined after receipt of the
redemption request in good order. A telephone redemption privilege is available.
See "How to Redeem or Sell Shares."
Exchange Privilege............... Shares of the Fund 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. A telephone
exchange privilege is available as described under "How to Exchange Shares."
Net Asset Value.................. The net asset value per share of the Fund
is calculated on each day the New York Stock Exchange is open for trading. Call
(800) 888-9471 for the previous day's net asset value.
Taxation......................... The Fund intends to qualify and elect to
be treated as a regulated investment company for federal income tax purposes
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). Fund shareholders may receive significant capital gains distributions
when the Model changes its country allocation determination and the Fund adjusts
its portfolio to reflect the new allocation. Share redemptions may also result
in tax liability for the shareholder. See "Special Investment Considerations --
Risks" and "Taxes".
<PAGE>
Shareholder Communications....... Each shareholder will receive annual and
semi-annual 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.
Special Risk Considerations...... Because the Investment Adviser uses the
Model to select countries, the Fund's portfolio may change substantially when
the Model determines that a different country allocation is required. If the
Model no longer requires the Fund to include securities of one or more countries
in its portfolio, those securities will be sold by the Fund without regard to
the tax consequences to Fund shareholders. Also, if the Model requires only
countries for which other Wright EquiFunds are available, the Fund may sell
substantially all of its securities and the investor may need to redeem
substantially all of its shares in order to implement the appropriate
reallocation of shareholder investments to those other Wright EquiFunds. Such an
exchange of shares will have tax consequences for Fund shareholders. Also,
international investments pose additional risks including currency exchange rate
fluctuation, currency revaluation and political risks. See "Special Investment
Considerations--Risks."
<PAGE>
Shareholder and Fund Expenses
Shareholder Transaction Expenses (as a percentage of the maximum offering price)
- -------------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases none
Maximum Sales Charge Imposed on Reinvestment of Dividends none
Deferred Sales Charge none
Redemption Fees none
Exchange Fees none
Annualized Fund Operating Expenses (as a percentage of average daily net assets)
- -------------------------------------------------------------------------------
Investment Advisory Fees 0.75%
Rule 12b-1 Distribution Expenses 0.25%
Other Expenses (including administration fee of 0.10%) 1.00%
---------
Total Operating Expenses 2.00%
======
Example
An investor would pay the following expenses on a $1,000 investment,
assuming (a) 5% annual return and (b) redemption at the end of each period:
1 Year $35
3 Years $63
- ------------------------------------------------------------------------------
The table and Example summarize the expenses of the Fund and are designed
to help investors understand the costs and expenses they will bear, directly or
indirectly, by investing in the Fund. Other Expenses are estimated for the
current fiscal year. In the event Other Expenses exceed the estimated 1.00%, the
Distribution Fee or Investment Advisory Fee or both will be reduced so that
Total Operating Expenses do not exceed 2.00%. If total reduction of the
Distribution Fee and Investment Advisory Fee is not sufficient to reduce
expenses to the 2.00% level, expenses exceeding the 2.00% level will be
allocated to the Investment Adviser so that the shareholder will not experience
expenses over the 2.00% level. This policy is expected to continue at least
until December 31, 1998.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual annual
return will vary. For further information regarding the expenses of the Fund see
"The Investment Adviser," "The Administrator," "Distribution Expenses" and "How
to Redeem or Sell Shares."
<PAGE>
Intended Use of the Fund
The Fund is not intended to be a complete investment program. The Fund is
intended for use as part of an investment program that utilizes the Model as a
guide in creating an investment portfolio. Thus, the Fund is used only to
complete the allocation of an investor's resources over the countries specified
by the Model. The Fund will only hold equity securities from countries specified
by the Model which are not available through other series of the Trust. Please
review the sections "The Wright International Asset Allocation Model" and
"Special Investment Considerations - Risks" below.
The Fund's Investment Objective and Policies
The Fund's investment objective is enhanced total investment return (price
appreciation plus income). The Fund seeks to achieve its objective by investing
in a portfolio of equity and equity-related securities selected by the
Investment Adviser from among the publicly traded companies listed in the
National Equity Indices that Wright has developed. Only securities for which
adequate public information is available and which could be considered
acceptable for investment by a prudent person will comprise a National Equity
Index. The Fund invests in a broad range of issuers located in any of the
countries, other than the United States, included in the National Equity Indices
for which no other EquiFund is available. At times the Fund may be invested in
issuers located in as few as one country and as many as five countries. The
Investment Adviser selects countries for the Fund's portfolio based on the
requirements of the Model.
The Fund will, under normal market conditions, invest substantially all,
but at least 80%, of its total assets in equity and equity-related securities,
including common stocks, preferred stocks, rights, warrants and securities
convertible into stock. Pending investment of cash proceeds from new sales of
Fund shares, to meet ordinary daily cash needs or for temporary defensive
purposes, the Fund may hold cash or invest substantially all of its assets in
short-term debt securities.
Except for the fundamental investment restrictions listed in the Statement
of Additional Information, the investment objective and policies of the Fund are
not fundamental and may be changed by the Trustees of the Trust without a vote
of the Fund's shareholders. If any changes were made, the Fund might have an
investment objective different from that which an investor considered
appropriate when the investor became a shareholder in the Fund. There is no
assurance that the Fund will achieve its investment objective.
The National Equity Indices
Wright, with the assistance of major financial institutions as described
below, has developed the National Equity Indices (the "Indices"). Each of the
Indices (an "Index") is designed to include
<PAGE>
substantially all the publicly traded companies in the nation or nations in
which the Fund is permitted to invest which meet the prudent investor standard.
The prudent investor standard requires that care, skill and caution be used in
selecting securities for investment. This prudent investor standard is the
foundation for the investment criteria employed in creating the Indices, as
explained below.
Wright has developed Indices which track the equity markets in the
following countries: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, Netherlands, Norway,
Singapore, Spain, Sweden, Switzerland, United Kingdom and the United States.
Wright has also developed regional and world equity indices which track the
performance of equity securities on a broader scale. The performance of each
Index is included in various publications of Wright Investors' Service,
including the monthly International Investment Advice and Analysis.
Wright has developed disciplined objective criteria for the prudent
investor standard to insure that the required care, skill and caution are used
in selecting securities for each of the Indices. Wright generally considers for
inclusion in an Index only those companies which have at least:
1. Five years of audited operating information;
2. An established minimum in both book value and market value; and
3. A three-year record of pricing in a public market.
In addition, only companies that meet the following criteria will be
included in an Index:
1. A significant portion of the shares of the company is believed
to be publicly owned;
2. The company has had positive earnings for the last fiscal or
calendar year, or for the last twelve months, or cumulatively for
the last three years; and
3. The company is not a closed-end investment company, a real estate
investment trust or a non-bank securities broker/dealer.
In selecting securities for the Indices and for inclusion in the Fund's
portfolio, Wright utilizes its Worldscope(R) international database. This
database provides more than 1,500 items of information on more than 15,000
companies worldwide. Wright may utilize the services of major financial
institutions that are located in the nations in which the Fund may invest and
are qualified to supply Wright with research products and services. These
services include reports on particular industries and companies, economic
surveys and analyses of the investment environment and trends in a particular
nation, recommendations as to whether specific securities should be included in
an Index and other appropriate assistance in the performance of Wright's
decision-making responsibilities.
The Indices are adjusted quarterly and as otherwise necessary to reflect
significant events. Changes in the composition of an Index will be made by
determining whether existing companies included in the Index continue to meet
the criteria of the Index and whether other companies meet
<PAGE>
these criteria and should replace or be added to the companies already
comprising that Index. The Indices give equal weight to each security included
therein, and are intended to include substantially all the publicly traded
companies that meet the requirements of the prudent investor standard in the
respective nations. Use of the equal weighting method of constructing an Index
will often result in a greater representation of smaller capitalization
companies than would occur if the Index were weighted on the basis of relative
market capitalization in the nation or nations in which their securities are
primarily traded. Such smaller capitalization companies may have shorter
operating histories, less diversification of assets and smaller dividend
payments than larger capitalization companies. On the other hand, such smaller
capitalization companies may be younger or less mature companies still
experiencing significant growth. Additional explanation of the objective
criteria used in the process of selecting companies for inclusion in an Index is
included in the Statement of Additional Information.
The securities included in an Index will be (i) admitted to official
listing on a stock exchange in any Member State of the European Economic
Community, (ii) admitted to official listing on a recognized stock exchange in
any other country in Western Europe, Asia, Oceania, the American continents,
including Bermuda, and Africa, (iii) traded on another regulated market in any
such Member State of the European Economic Community or such other country
referred to above, provided such market operates regularly and is recognized and
open to the public, or (iv) recently issued, provided the terms of the issue
provide that application be made for admission to official listing on any of the
stock exchanges or other regulated markets referred to above, and provided such
listing is secured within a year following the date of issuance. Although the
Fund may acquire for its portfolio only those securities that are included in
the relevant Index at the time of purchase, it is not expected that the Fund's
portfolio will necessarily resemble the Index either in the number of securities
included or in the amount invested in each security.
The Wright International Asset Allocation Model
Wright has developed the Model which it uses to determine appropriate
country allocation for an international investment portfolio. Using the Model,
Wright and other institutional investors are able to select a single country or
regional Wright EquiFund for an investment portfolio. When the Model specifies
countries for which there is no Wright EquiFund available, the Fund will
purchase equity securities of issuers located in such country or countries
listed on the National Equity Index. Thus, the Fund enables completion of the
investment portfolio specified by the Model.
Other Investment Policies
The Trust, on behalf of the Fund, has adopted certain fundamental
investment restrictions which are enumerated in detail in the Statement of
Additional Information and which may be changed only by the vote of a majority
of the Fund's outstanding voting securities. Among these restrictions, the Fund
may not borrow money except from a bank, and then only up to 1/3 of the current
<PAGE>
market value of its total assets (including the amount borrowed). The Fund has
no current intention of borrowing for leverage or speculative purposes.
The Fund is non-diversified which means that it may invest more than 5% of
its total assets in the securities of a single foreign issuer. Investing a
significant amount of the Fund's assets in the securities of a small number of
foreign issuers will cause the Fund's net asset value to be more sensitive to
events affecting those issuers. The Portfolio will not concentrate (invest 25%
or more of its total assets) in the securities of issuers in any one industry
but may at times concentrate in the securities of issuers in any one country.
Special Investment Considerations -- Risks
No Consideration of Minimizing Taxes. The Fund is designed to work in
conjunction with other series of the Trust to enable investors to construct an
investment portfolio that follows the Model. The Fund will only hold equity
securities of issuers located in countries specified by the Model that are not
available through the other Wright EquiFunds. If the Model changes and no longer
requires the Fund to include one or more countries whose securities are held by
the Fund, those securities will be sold by the Fund, without regard to whether
short-term or long-term gains or losses may be realized. This could result in
100% turnover of the Fund's portfolio. Any resulting net realized capital gains,
to the extent not treated as distributed to redeeming shareholders through the
use of equalization accounting (see "Taxes"), will be distributed in taxable
distributions a substantial portion of which could be attributable to net
short-term capital gains realized by the Fund and therefore taxable to
shareholders as ordinary income. Also, if the Model changes to include only
countries for which other Wright EquiFunds are available, substantially all of
the Fund's shares may be redeemed in order to implement the appropriate
reallocation of investments to those other Wright EquiFunds. Redemptions will be
taxable transactions that may result in tax liability for investors who are
subject to tax. Because the Fund is designed specifically to complete the asset
allocation specified by the Model, neither the Fund's investment decisions
regarding purchases or sales of portfolio securities nor the redemption of Fund
shares effected by an adviser will take an investor's tax liability or other tax
consequences into account.
Repurchase Agreements. The Fund may enter into repurchase agreements in order to
earn income on temporarily uninvested cash. 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. The Fund may
enter into repurchase agreements only with large, well-capitalized domestic or
foreign 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
<PAGE>
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. There is no percentage limit on the amount of the Fund's
investments in repurchase agreements, except for the requirement that, under
normal market conditions, at least 80% of the Fund's total assets will be
invested in equity securities.
Foreign Investments. Investment in securities of foreign companies and
governments may involve certain risk considerations in addition to those arising
when investing in domestic securities. These considerations include the
possibility of currency exchange rate fluctuations and revaluation of
currencies, the existence of less publicly available information about foreign
issuers, different accounting, auditing and financial reporting standards, less
stringent securities regulation, non-negotiable brokerage commissions, different
tax provisions, political or social instability, war or expropriation. Moreover,
foreign stock and bond markets generally are not as developed and efficient as
those in the United States and, therefore, the volume and liquidity in those
markets may be less, and the volatility of prices may be greater, than in U.S.
markets. Settlement of transactions in foreign markets may be delayed beyond
what is customary in U.S. markets. These considerations generally are of greater
concern in developing countries.
The Fund may invest in foreign securities in the form of American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
International Depositary Receipts ("IDRs") or other similar securities
convertible into securities of foreign issuers. ADRs are receipts typically
issued by a United States bank or trust company evidencing ownership of the
underlying foreign securities. EDRs and IDRs are receipts typically issued by a
European bank or trust company evidencing ownership of the underlying foreign
securities.
Foreign Currency Transactions. The Fund may buy and sell foreign currencies. The
value in U.S. dollars of investments quoted or denominated in foreign currencies
will be affected by changes in currency exchange rates. As one way of managing
currency exchange rate risk, a Fund may enter into forward foreign currency
exchange contracts, which are agreements to purchase or sell foreign currencies
at a specified price and date. The Fund will usually enter into these contracts
to fix the value of a security it has agreed to buy or sell (transaction hedge).
The Fund also may, but does not expect to, use these contracts to hedge the
value of a security it already owns, particularly if it expects a decline in the
value of the currency in which the foreign security is quoted or denominated
(position hedge). The underlying currency value of the Fund's forward contracts
will be limited to the value of securities to be bought and sold in that
currency plus the value of the Fund's portfolio securities quoted or denominated
in such currency. There is no other percentage limitation on the Fund's holdings
of foreign currencies or forward contracts, except for the requirement that,
under normal market conditions, at least 80% of the Fund's net assets will be
invested in equity securities. Contracts to sell foreign currency could limit
any potential gain which might be realized by the Fund if the value of the
hedged currency increases. Although the Fund will attempt to benefit from using
forward contracts, the success of a hedging strategy will depend on the
Investment Adviser's ability to predict accurately the future exchange rate
between foreign currencies. The ability to predict the direction of currency
exchange rates involves skills different from those used in selecting
securities.
<PAGE>
Lending Portfolio Securities. The Fund may seek to increase its total return by
lending portfolio securities to broker-dealers or other institutional borrowers.
Such loans are required to be secured continuously by collateral in cash or
liquid assets. During the existence of a loan, the Fund will continue to receive
the equivalent of the interest or dividends paid by the issuer on the securities
loaned and will also receive a fee or all or a portion of the interest, if any,
on investment of the collateral. However, the Fund may at the same time pay a
transaction fee to such borrowers and administrative expenses, such as finders
fees to third parties. The Fund may invest the proceeds it receives from a
securities loan in the types of securities in which it may invest. As with other
extensions of credit there are risks of delay in recovery or even loss of rights
in the securities loaned if the borrower of the securities fails financially.
However, the loans will be made only to organizations deemed by the Investment
Adviser to be of good standing and when, in the judgment of the Investment
Adviser, the consideration which can be earned from securities loans of this
type justifies the attendant risk. The financial condition of the borrower will
be monitored by the Investment Adviser on an ongoing basis and collateral values
will be continuously maintained at no less than 100% by "marking to market"
daily. If the Investment Adviser decides to make securities loans, it is
intended that the value of the securities loaned would not exceed 30% of the
Fund's total assets.
Temporary Defensive Investments. During periods of unusual market or economic
conditions, when Wright believes that investing for temporary defensive purposes
is appropriate, all or any portion of the Fund's assets may be held in cash
(including, subject to the Code's requirements applicable to regulated
investment companies, the foreign currency of the nation or nations in which the
Fund invests) or invested in short-term obligations, including but not limited
to obligations issued or guaranteed by the U.S. or any foreign government or any
of their respective agencies or instrumentalities; obligations of public
international agencies; commercial paper which at the date of investment is
rated A-1 by Standard & Poor's Ratings Group ("S&P") or P-1 by Moody's Investors
Service, Inc. ("Moody's"), or, if not rated by such rating organizations, is
deemed by the Investment Adviser 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 S&P or Aa or better by Moody's or, if unrated, which
are deemed by the Investment Adviser to be of comparable quality; and
certificates of deposit, bankers' acceptances and time deposits of domestic or
foreign banks which are determined to be of high quality by the Investment
Adviser. Temporary investments may be denominated either in U.S. dollars or in
the currencies of the nations in which the Fund is investing.
The Investment Adviser
The Fund has engaged Wright, a wholly-owned subsidiary of The Winthrop
Corporation ("Winthrop"), to act as its investment adviser pursuant to an
Investment Advisory Contract. Wright, acting under the general supervision of
the Trust's Trustees, furnishes the Fund with investment advice and management
services. The address of both Winthrop and Wright is 1000 Lafayette Boulevard,
Bridgeport, Connecticut. The Trustees of the Trust are responsible for the
general oversight of the conduct of the Fund's business.
<PAGE>
Wright is a leading independent international investment management and
advisory firm which, together with its parent, Winthrop, has more than 30 years'
experience. Its staff of over 150 people includes a highly respected team of 65
economists, investment experts and research analysts. In addition to the Fund,
Wright manages assets for bank trust departments, corporations, unions,
municipalities, eleemosynary institutions, professional associations,
institutional investors, fiduciary organizations, family trusts and individuals.
Wright is also the investment adviser to The Wright Managed Equity Trust, The
Wright Managed Income Trust, The Wright Managed Blue Chip Series Trust, The
Wright Blue Chip Master Portfolio Trust and Catholic Values Investment Trust
(the "Wright Funds"). Wright, along with Disclosure International, Inc.,
operates one of the world's largest and most complete databases of financial
information on over 15,000 domestic and international corporations. The estate
of John Winthrop Wright is the controlling shareholder of Winthrop. As of May 1,
1997, Wright managed approximately $4 billion of assets.
An Investment Committee of experienced analysts exercises disciplined
direction and control over all investment selections, policies and procedures
for the Fund. 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:
Peter M. Donovan, CFA, President and Chief Executive Officer of Wright. Mr.
Donovan received a BA Economics, Goddard College and joined Wright from Jones,
Kreeger & Co., Washington, DC in 1966. Mr. Donovan is the president of The
Wright Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed
Blue Chip Series Trust, The Wright EquiFund Equity Trust, The Wright Blue Chip
Master Portfolio Trust and Catholic Values Investment Trust. He is also a
director of Aetna Master Fund. He is a member of the New York Society of
Security Analysts and the Hartford Society of Financial Analysts.
Judith R. Corchard, Chairman of the Investment Committee, Executive Vice
President - Investment Management of Wright. Ms. Corchard attended the
University of Connecticut and joined Wright in 1960. She is a member of the New
York Society of Security Analysts and the Hartford Society of Financial
Analysts.
Jatin J. Mehta, CFA, Chief Investment Officer - U.S. Equities of Wright.
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
World Bank agency in India for financial assistance to private industry. 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. 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
<PAGE>
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 also 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. Mr. Flament received a BS Mathematics, Fairfield University;
MA Mathematics, University of Massachusetts and an MBA Finance, University of
Bridgeport and joined Wright in 1972. He is a member of the New York Society of
Security Analysts and the Hartford Society of Financial Analysts.
James P. Fields, CFA, Vice President and Investment Officer of Wright. Mr.
Fields received a BS Accounting, Fairfield University and an MBA Finance from
Pace University. He joined Wright in 1982 and is also a member of the New York
Society of Security Analysts.
Amit S. Khandwala, Vice President - International Investments of Wright.
Mr. Khandwala received a BS (Economics, Accounting, International Business and
Computers) from University of Bombay, India, and an MBA (Investments, Corporate
Finance, International Finance & International Marketing) from the University of
Hartford. Mr. Khandwala has taught in the Executive MBA Program at the
University of Hartford Business School and his research on ADRs has been
published in The Journal of Portfolio Management. He was involved in
establishing the Stamford Society of Securities Analysts and is a member of the
New York Society of Security Analysts and the Hartford Society of Financial
Analysts. He joined Wright in 1986.
Charles T. Simko, Jr., Vice President - Investment Research of Wright. Mr.
Simko received a BS in Mathematics from Fairfield University. He joined Wright
in 1985.
Under the Fund's Investment Advisory Contract, the Fund is required to pay
Wright a monthly advisory fee calculated at the annual rates (as a percentage of
average daily net assets) set forth in the following table.
ANNUAL % ADVISORY FEE RATES
Under $500 Million $500 Million to $1 Billion Over $1 Billion
-------------------------------------------------------------------------
0.75% 0.73% 0.68%
In addition to compensating Wright for its advisory services to the Fund,
the advisory fee is intended to partially compensate Wright for the maintenance
of the Indices which form the basis for the selection of securities for the
Fund. Wright incurs significant expenses in maintaining the Indices, including:
the cost of employing persons to research companies that are candidates for
inclusion in or removal from an Index and to enter data into Wright's
computerized international database;
<PAGE>
compensation to institutions in each country for research provided to
Wright; expenses associated with travel to the countries for which Wright
maintains Indices; and the costs of subscribing to numerous publications and
making extensive use of long-distance telecommunications facilities. The need to
compensate Wright for incurring these expenses in maintaining the Indices
distinguishes the Wright Funds from traditional index funds with portfolios that
track independently published indices available at little or no cost to the
funds' managers.
Shareholders of the Fund who are also advisory clients of Wright may have
agreed to pay Wright a fee for such advisory services. Wright does not intend to
exclude from the calculation of the investment advisory fees payable to Wright
by such advisory clients the portion of the advisory fee payable by the 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 the 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 the Fund office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund. Other than those expenses
expressly stated to be payable by Wright under its Investment Advisory Contract,
the Fund is responsible for all expenses relating to its operations including,
but not limited to, Wright's advisory fee; Eaton Vance's administration fee;
fees pursuant to the Fund's Rule 12b-1 distribution plan; taxes, if any;
custodian, legal and auditing fees; fees and expenses of Trustees who are not
members of, affiliated with or interested persons of Wright, Winthrop or Eaton
Vance; insurance premiums; trade association dues; expenses of obtaining
quotations for calculating the value of the Fund's net assets; printing and
other expenses which are not expressly designated as expenses of Wright or Eaton
Vance.
Wright places the portfolio security transactions for the Fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments. Wright seeks to execute the Fund's 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 Wright Funds as a
factor in the selection of broker-dealer firms to execute such transactions.
Portfolio changes may be made by Wright without regard to the length of time a
security has been held. However, it is not the intention of the Fund to engage
in trading for short-term profits. The frequency of the Fund's portfolio
transactions or turnover rate is expected to be higher than other mutual funds
with a similar investment objective because the Fund meets the requirements of
the Model for asset allocation across a varying range of foreign countries. A
high rate of portfolio turnover (100% or more) involves a correspondingly
greater amount of brokerage commissions and other costs which must be borne
directly by the Fund and thus indirectly by its shareholders. It may also result
in the realization of larger amounts of net short-term capital gains,
distributions from which are taxable to shareholders as ordinary income and may,
under certain circumstances, make it more difficult for the Fund to qualify as a
regulated investment company under the Code.
The Administrator
The Fund engages Eaton Vance as its administrator under an Administration
Agreement. Under the Administration Agreement, Eaton Vance is responsible for
managing the business affairs of the Fund, subject to the supervision of the
Trustees of the Trust. Eaton Vance's services include recordkeeping, preparing
and filing of documents required to comply with federal and state securities
laws, supervising the activities of the Fund's custodian and transfer agent,
providing assistance in connection with the Trustees and shareholders meetings
and other administrative services necessary to conduct the Fund's business.
Eaton Vance will not provide any investment management or advisory services to
the Fund. For its services under the Administration Agreement, the Fund is
required to pay Eaton Vance a monthly administration fee calculated at the
annual rates (as a percentage of average daily net assets) set forth in the
following table.
ANNUAL % ADMINISTRATION FEE RATES
Under Over
$100 Million $100 Million
-----------------------------------------------------
0.10% 0.06%
Eaton Vance, its affiliates and its predecessor companies have been engaged
primarily in managing assets of individuals and institutional clients since 1924
and managing, administering and marketing mutual funds since 1931. Total assets
under management exceed $17 billion. Eaton Vance is a wholly-owned subsidiary of
Eaton Vance Corp. ("EVC"), a publicly-held holding company.
Distribution Expenses
In addition to the fees and expenses payable by the Fund in accordance with
its Investment Advisory Contract and Administration Agreement, the Fund pays for
certain expenses pursuant to a Distribution Plan (the "Plan") designed to meet
the requirements of Rule 12b-1 under the 1940 Act and the Conduct Rules of the
National Association of Securities Dealers, Inc. (the "NASD").
The Trust has entered into a distribution contract with WISDI, a wholly
owned subsidiary of Winthrop. Under this contract and the Plan, it is currently
intended that the Fund will pay to WISDI for distribution services and personal
and account maintenance services in connection with the Fund's shares, an annual
fee equal to .25% of the Fund's average daily net assets. Appropriate
adjustments to payments made pursuant to the Plan shall be made whenever
necessary to assure that no payment is made by the Fund which exceeds the
applicable maximum cap imposed on asset-based, front-end and deferred sales
charges by Rule 2830 of the NASD.
<PAGE>
Pursuant to the Plan, the Trust, on behalf of the Fund, is authorized to
compensate WISDI for (1) distribution services and (2) personal and account
maintenance services performed and expenses incurred by WISDI in connection with
the Fund's shares. The amount of such compensation, including compensation for
personal and account maintenance services, paid during any one year may not
exceed .25% of the average daily net assets of the Fund. Such compensation shall
be calculated and accrued daily and paid quarterly.
Distribution services and expenses for which WISDI may be compensated
pursuant to this Plan include, without limitation: compensation to and expenses
incurred by investment dealers, banks or other institutions ("Authorized
Dealers") and the officers, employees and sales representatives of Authorized
Dealers and of WISDI; allocable overhead, travel and telephone expenses; the
printing of prospectuses and reports for other than existing shareholders; the
preparation and distribution of sales literature and advertising; and all other
expenses (other than personal and account maintenance services as defined below)
incurred in connection with activities primarily intended to result in the sale
of the Fund's shares.
Personal and account maintenance services include, but are not limited to,
payments made to or on account of WISDI, Authorized Dealers and their respective
officers, employees and sales representatives who respond to inquiries of, and
furnish assistance to, shareholders concerning their ownership of Fund shares
and their accounts or who provide similar services not otherwise provided by or
on behalf of the Fund.
How the Fund Values its Shares
The Trust values the shares of the Fund once on each day the New York Stock
Exchange ("NYSE") is open as of the close of regular trading on the NYSE
(normally 4:00 p.m., New York time). The net asset value is determined in the
manner authorized by the Trustees of the Trust by the Fund's custodian (as agent
for the Fund) with the assistance of Wright for securities that involve
valuation problems. Such determination is accomplished by dividing the number of
outstanding shares of the Fund into its net worth (the excess of its assets over
its liabilities).
Portfolio securities traded on more than one United States national
securities exchange or foreign securities exchange are valued by the Fund's
custodian at the last sale price on the business day as of which such value is
being determined at the close of the exchange representing the principal market
for such securities, unless those prices are deemed by Wright not to be
representative of current market values. Securities which cannot be valued at
such prices will be valued by Wright at fair value in accordance with procedures
adopted by the Trustees. Foreign currencies, options on foreign currencies and
forward foreign currency contracts will be valued at their last sales price as
determined by published quotations or as supplied by banks that deal in such
instruments. The value of all assets and liabilities expressed in foreign
currencies will be converted into a U.S. dollar value at the mean between the
buying and selling rates of such currencies against U.S. dollars last quoted by
<PAGE>
any major bank. If such quotations are not available, the rate of exchange will
be determined in good faith by or under procedures established by the Trustees.
Securities traded over-the-counter, unlisted securities and listed securities
for which closing sale prices are not available are valued at the mean between
latest bid and asked prices or, if such bid and asked prices are not available,
at prices supplied by a pricing agent selected by Wright, unless such prices are
deemed by Wright not to be representative of market values at the close of
business of the NYSE. Securities for which market quotations are unavailable,
restricted securities, securities for which prices are deemed by Wright not to
be representative of market values and other assets will be appraised at their
fair value as determined in good faith according to guidelines established by
the Trustees of the Trust. Short-term obligations with remaining maturities of
sixty days or less are valued at amortized cost, which the Trustees have
determined approximates market value. Options traded on exchanges and
over-the-counter will be valued at the last current sales price on the market
where such option is principally traded. Over-the-counter and listed options for
which a last sale price is not available will be valued on the basis of
quotations supplied by dealers who regularly trade such options, or if such
quotations are not available or deemed by Wright not to be representative of
market values, at fair value.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of business
on each business day in New York (i.e., a day on which the NYSE is open for
trading). In addition, European or Far Eastern securities trading generally or
in a particular country or countries may not take place on all business days in
New York. Furthermore, trading takes place in Japanese markets on certain
Saturdays and in various foreign markets on days which are not business days in
New York and on which the Fund's net asset values are not calculated. Such
calculation does not take place contemporaneously with the determination of the
prices of the majority of the portfolio securities used in such calculation.
Events affecting the values of portfolio securities that occur between the time
their prices are determined and the close of the NYSE will not be reflected in
the Fund's calculation of net asset value unless Wright deems that the
particular event would materially affect net asset value, in which case an
adjustment will be made.
How to Buy Shares
Shares of the 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 investment is $1,000, although this minimum investment
requirement may be waived for investments in 401(k) tax-sheltered retirement
plans and Automatic Investment Program accounts and reduced to $500 with respect
to shares purchased by or for an investor making an investment through an
investment adviser, financial planner, broker, or other intermediary that
charges a fee for its services and has entered into an agreement with the Fund
or its Principal Underwriter. There is no minimum amount required for subsequent
purchases. The Fund reserves the right to reject any order for the purchase of
its shares or to limit or suspend, without prior notice, the offering of its
shares.
<PAGE>
Shares of the Fund may be purchased or redeemed through an Authorized
Dealer. 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 the Fund without imposition of any
charges by the Fund.
Purchase 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 Fund's Order Department at (800) 225-6265, ext. 7750,
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 First Data Investor Services Group (the "Transfer
Agent") at the following address:
Wright Managed Investment Funds
P.O. Box 5156
Westborough, MA 01581-9698
Subsequent Purchases - Additional investments may be made at any time
through the wire procedure described above. The Fund's Order Department must be
immediately advised by telephone at (800) 225-6265, ext. 7750 of each
transmission of funds by wire.
Purchase 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 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 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.
<PAGE>
Automatic Investment Program - for regular share accumulation: Cash
investments of $50 or more may be made through the shareholder's checking
account via automatic withdrawal each month or quarter. The $1,000 minimum
initial investment and small account redemption policy are waived for the
Automatic Investment Program.
Purchase through Exchange of Securities: Investors wishing to purchase
shares of the 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 the 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 that are otherwise acceptable to the Investment Adviser and the
Fund. The Trust only will accept securities in exchange for shares of the Fund
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 Fund reserve
the right to reject all or any part of the securities offered in exchange for
shares of the 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 such 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 Trust, using the procedures for valuing portfolio
securities as described under "How the Fund Values its Shares" on page 17.
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 the NYSE or foreign stock exchange is so open. In any event, all
valuations are determined in good faith by or at the direction of the Trustees
of the Trust. 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 generally a taxable transaction for federal and
state income tax purposes.
How Shareholder Accounts are Maintained
Upon the initial purchase of the 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. The
Trust has the right, upon 60 days' notice to shareholders, to involuntarily
redeem shares, at the net asset value in accounts which do not meet the minimum
account requirement. 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. Confirmation statements indicating total shares of the Fund
owned in the account or each sub-account will be mailed to investors quarterly
<PAGE>
and at the time of each purchase (other than reinvestment of dividends or
distributions) or redemption. The issuance of shares will be recorded on the
books of the Fund. The Trust does not issue share certificates.
Distributions and Dividends by the Fund
The Trust intends to pay dividends from the net investment income of the
Fund at least annually. Any realized net capital gains from the sale of
securities in the Fund's portfolio or other transactions (reduced by any
available capital loss carryforwards from prior years) also will generally be
distributed at least annually. Shareholders may reinvest dividends and capital
gains distributions, if any, in additional shares of the Fund at the net asset
value as of the ex-dividend date. Unless shareholders otherwise instruct, all
distributions and dividends automatically will be invested in additional shares
of the Fund. Alternatively, shareholders may reinvest capital gains
distributions and direct that dividends be paid in cash, or direct that both
dividends and capital gains distributions be paid in cash. The amount of the
Fund's distributions may be affected by its use of equalization accounting, if
applicable, as described below in "Taxes."
Taxes
The Fund is a separate taxable entity under the Code and intends to qualify
and elect to be treated and to continue to qualify as a regulated investment
company for federal income tax purposes. In order to so qualify, the Fund must
meet certain requirements with respect to sources of income, diversification of
assets, and distributions to shareholders. As a regulated investment company,
the Fund will 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.
The Fund will not be subject to income, corporate excise or franchise taxation
in Massachusetts in any year in which it qualifies as a regulated investment
company under the Code.
For federal income tax purposes, distributions from the Fund's net
investment income, any excess of its net short-term capital gain over its net
long-term capital loss and certain net realized foreign currency gains are
taxable to shareholders as ordinary income, whether received in cash or
reinvested in additional shares. It is not expected that any portion of the
Fund's distributions will qualify for the corporate dividends-received
deduction. Distributions from any excess of the Fund's net long-term capital
gain over its net short-term capital loss that the Fund designates as "capital
gain dividends" are taxable as long-term capital gain whether received in cash
or reinvested in additional shares, regardless of how long the shareholder has
held the Fund shares. As a result of tax legislation enacted on August 5, 1997,
long-term capital gains are taxable at different rates for individual
(noncorporate) investors (generally 28% or 20% maximum rates, but other rates
may also apply in particular cases) depending upon the holding period of the
asset that produced the gains,
<PAGE>
the investor's tax bracket, and other relevant factors. Distributions on
Fund shares shortly after their purchase, although they may be attributable to
taxable income and/or capital gains that had been realized but not distributed
at the time of purchase and therefore may be in effect a return of a portion of
the purchase price, are generally subject to federal income tax. Distributions
treated as ordinary income or long-term capital gains that are declared by the
Fund in October, November or December to shareholders of record as of a date in
such month and paid the following January will be treated for federal income tax
purposes as having been received by the shareholder on December 31 of the year
in which they are declared.
Redemptions (including exchanges) of Fund shares are taxable transactions
and may in particular cases be subject to wash sale or other special tax rules.
Sales of portfolio securities in accordance with the Fund's investment
strategy and the requirements of the Model may result in significant capital
gains or losses at the Fund level, and related shareholder redemptions may also
result in the realization of significant gains or losses at the shareholder
level. The Fund and Wright will not seek to avoid realization of taxable gains
or to realize losses at either the Fund or shareholder level or attempt to
minimize any shareholder's or all shareholders' tax liability. However, if the
Fund experiences substantial redemptions during a particular year and otherwise
qualifies to do so, the Fund may use equalization accounting for tax purposes.
Equalization accounting would allow the Fund to treat on its tax return the
portion of redemption proceeds that represents each redeeming shareholder's
share of the Fund's undistributed investment company taxable income and realized
net capital gain as if it were an actual distribution of such income and gain
for which the Fund would be entitled to a dividends-paid deduction. However, a
redeeming shareholder's treatment of the redemption would not be affected by the
Fund's use of equalization accounting, and the shareholder would consequently
treat the entire amount received from the Fund in a redemption (including an
exchange) as gross proceeds from the redemption of shares. The use of
equalization accounting would have the effect of reducing the amounts of income
and gains that the Fund would be required to distribute as dividends to
nonredeeming shareholders in order for the Fund to avoid federal income and
excise tax. Consequently, if equalization accounting is used for a particular
year, the Fund's actual dividends and distributions for that year may be
substantially reduced or even eliminated. The Fund cannot predict whether it
will experience substantial redemptions for any particular period and will take
all relevant factors into account in determining the amounts necessary or
appropriate to distribute each year, with the principal objective of avoiding
any federal income or excise tax liability for the Fund.
The Fund may be subject to foreign withholding or other foreign taxes with
respect to income (possibly including, in some cases, capital gains) that it
derives from investments in foreign securities and may make an election under
Section 853 of the Code that would allow shareholders to claim a credit or
deduction on their federal income tax returns for (and treat as additional
amounts distributed to them) their pro rata portion of qualified taxes paid by
the Fund to foreign countries. This election may be made only if more than 50%
of the assets of the Fund at the close of a taxable year consists of stock or
securities in foreign corporations. Availability of foreign tax credits or
<PAGE>
deductions for shareholders is subject to certain additional restrictions and
limitations at the Fund and shareholder levels.
Annually, shareholders of the Fund that are not exempt from information
reporting requirements will receive information on Form 1099 regarding the prior
calendar year's distributions and redemptions (including exchanges).
Shareholders should consult their own tax advisers with respect to the tax
status of distributions from the Fund or the redemption (including an exchange)
of Fund shares in their own states and localities. Under Section 3406 of the
Code, individuals and other non-exempt shareholders will be subject to backup
withholding at the rate of 31 % on taxable distributions made by the Fund and on
the proceeds of redemptions (including exchanges) of shares of the Fund if they
fail to provide to the Fund their correct taxpayer identification numbers and
certain certifications required by the Internal Revenue Service or if the
Internal Revenue Service or a broker notifies the Fund that the number furnished
by the shareholder is incorrect or that the shareholder is otherwise subject to
such withholding. If such withholding is applicable, such distributions and
proceeds will be reduced by the amount of tax required to be withheld.
Shareholders who are not United States persons should also consult their
tax advisers about the potential application of certain U.S. taxes, including a
U.S. withholding tax at the rate of 30% (or a lower treaty rate) on amounts
treated as ordinary income distributions to them and of foreign taxes to their
investment in the Fund.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of any other Wright
EquiFund, Standard Shares of the other funds in The Wright Managed Equity Trust
and The Wright Managed Income Trust and shares of Wright U.S. Treasury Money
Market Fund at net asset value at the time of the exchange.
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.
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.
First Data Investor Services Group 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 First
Data Investor Services Group. All shareholders are automatically eligible for
the telephone exchange privilege. To effect such exchanges, call First Data
Investor Services Group at (800) 555-0644 (this is a recorded line), Monday
through Friday, 9:00 a.m. to 4:00 p.m. (Eastern time).
<PAGE>
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.
See "How to Redeem or Sell Shares -- By Telephone" for a description of the
procedures the Fund employs to ensure that instructions communicated by
telephone are genuine. Neither the Trust, the Fund, the Principal Underwriter
nor First Data Investor Services Group will be responsible for the authenticity
of exchange instructions received by telephone, provided that reasonable
procedures to confirm that instructions communicated are genuine have been
followed. Telephone instructions will be tape recorded. In times of drastic
economic or market changes, a telephone exchange may be difficult to implement.
When calling to make a telephone exchange, shareholders should have their
account number and social security or other taxpayer identification numbers.
Generally, shareholders will be limited to four Telephone Exchange
round-trips during each year following the initial investment, and a Fund may
refuse requests for Telephone Exchanges in excess of four round-trips (a
round-trip being the exchange out of the Fund into another Wright Fund, and then
back to the Fund). The Trust believes that use of the Exchange Privilege by
investors utilizing market-timing strategies adversely affects the Fund.
Therefore, the Trust generally will not honor requests for exchanges, including
Telephone Exchanges, by shareholders who identify themselves or are identified
by the Trust as "market-timers." The Trust identifies as market-timers on its
account records those investors who repeatedly make exchanges within a short
period (even if less than four round-trips per year) while retaining Fund shares
for very short holding periods (often less than a month). The Trust does not
automatically redeem shares that are the subject of a rejected exchange request.
Such shares will only be redeemed if the Trust is specifically authorized to do
so by the shareholder.
Additional documentation may be required for exchange requests if shares
are registered in the name of a corporation, partnership or fiduciary. Any
exchange request may be rejected by the 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 60 days' prior notice of any
termination or material amendment of the exchange privilege. Contact the
Transfer Agent, First Data Investor Services Group, for additional information
concerning the Exchange Privilege.
A shareholder should read the prospectus of the other fund and consider the
differences in objectives and policies before making any exchange. Shareholders
should be aware that for federal and state income tax purposes, an exchange is a
taxable transaction.
How to Redeem or Sell Shares
Shares of the 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. If the shares to be redeemed
represent an investment made by check, the Fund will
<PAGE>
delay payment of the redemption proceeds until the check has been collected
which, depending upon the location of the issuing bank, could take up to 15
days. Although the Fund normally expects to make payment in cash for redeemed
shares, the Trust has reserved the right to pay the redemption price of shares
of the Fund, either totally or partially, by a distribution in kind of readily
marketable securities valued pursuant to the Fund's valuation procedures. If a
shareholder received a distribution in kind, the shareholder could incur
brokerage or other charges in converting the securities to cash. For federal and
state income tax purposes, a redemption of shares is a taxable transaction.
Through Authorized Dealers: Shareholders using Authorized Dealers may
redeem shares through such Dealers.
By Telephone: All shareholders are automatically eligible for the telephone
redemption privilege, unless the account application indicates otherwise.
Shareholders redeeming $50,000 or less may effect their redemption by calling
the Fund's Transfer Agent, First Data Investor Services Group, at (800) 555-0644
(9:00 a.m. to 4:00 p.m. Eastern time) if the redemption involves shares on
deposit with First Data Investor Services Group. Payment will be made by check
to the address of record. Telephone instructions will be tape recorded.
Shareholders redeeming more than $50,000 may effect a redemption by calling the
Fund's Order Department at (800) 225-6265, ext. 7750 from 8:30 a.m. to 4:00 p.m.
(Eastern time). In times when the volume of telephone redemptions is heavy,
additional phone lines automatically will be added by the Fund. However, in
times of drastic economic or market changes, a telephone redemption may be
difficult to implement. At such times, a shareholder may redeem shares by mail
or by faxing a redemption request to (617) 348-2932.
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 check to the address of record or, if an
appropriate election was made on the application form, by wire transfer to the
bank account or address designated. Payment is normally made 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 Fund at the time of
initially purchasing Fund shares. Neither the Trust, the Fund, the Principal
Underwriter nor First Data Investor Services Group 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.
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,
First Data Investor Services Group, Wright Managed Investment Funds, P.O. Box
5123, Westborough, Massachusetts 01581-5123. As in the case of telephone
requests, payments will normally be made within one business day after receipt
<PAGE>
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
NYSE'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 First Data Investor
Services Group. In addition, in some cases, good order may require 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 the Fund and to receive payment 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.
Due to the relatively high costs of maintaining small accounts, the Fund
reserves the right to redeem fully at net asset value any Fund account
(including accounts of clients of fiduciaries) which at any time, due to partial
redemptions or exchanges, amounts to less than $500 for the Fund. Prior to the
execution of any such redemption, the shareholder will be given 60 days' notice
to make an additional investment to meet the required $500 minimum. No account
will be redeemed if the cause of the low account balance was a reduction in the
net asset value of Fund shares.
Performance Information
From time to time the Fund may publish its yield and/or average annual
total return in advertisements and communications to shareholders. The current
yield for the 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 of
the Fund on the last day of the period. The results are compounded on a bond
equivalent (semi-annual) basis and then annualized. The Fund's average annual
total return is determined by computing the annual percentage change in value of
$ 1,000 invested at the public offering price (i.e., net asset value per share)
for specified periods ending with the most recent calendar quarter, assuming
reinvestment of all dividends and distributions at net asset value.
Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the 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. The reduction of fees or assumption of expenses by Wright, WISDI
or Eaton Vance will result in the Fund's higher performance.
<PAGE>
Other Information
The Trust is a business trust established under Massachusetts law pursuant
to a Declaration of Trust dated July 14, 1989, as amended and restated December
20, 1989.
The Trust's shares of beneficial interest have no par value and may be
issued in two or more series or "funds." The Trustees are empowered by the
Declaration of Trust and By-laws to change the name of any existing series and
to create additional series without obtaining shareholder approval. The Trust's
shares may be issued in an unlimited number by its Trustees. Each share of a
series represents an equal proportionate beneficial interest in that series and,
when issued and outstanding, the shares are fully paid and non-assessable by the
relevant series. There are no annual meetings of shareholders, but special
meetings may be held as required by law to elect Trustees and consider certain
other matters. 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 series 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 will be voted by individual series
except to the extent required by the 1940 Act. Shares have no preemptive or
conversion rights and are freely transferable. Upon liquidation of a series,
shareholders are entitled to share pro rata in the net assets of that series
available for distribution to shareholders, and in any general assets of the
Trust not allocated to a particular series by the Trustees.
As permitted by Massachusetts law, there normally will 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 Trust's By-laws provide that no person shall serve as a Trustee if
shareholders holding two thirds of the outstanding shares have removed such
person 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
promptly shall call a meeting of the shareholders for the purpose of voting upon
a question of removal of a Trustee when requested to do so by the record holders
of not less than 10% of the Trust's outstanding shares.
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
October 29, 1997
THE WRIGHT EQUIFUND EQUITY TRUST
Wright EquiFund - Country Strategy
24 Federal Street
Boston, Massachusetts 02110
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by the
current Prospectus of the Fund dated October 29, 1997, as supplemented from time
to time, which is incorporated herein by reference. A copy of the Prospectus may
be obtained without charge from Wright Investors' Service Distributors, Inc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604 (Telephone: (800)
888-9471).
<PAGE>
Table of Contents
- -----------------------------------------------------------------------------
Additional Information about the Trust.................. 3
Additional Investment Information....................... 3
Officers and Trustees................................... 9
Control Persons and Principal Holders of Shares......... 11
Investment Advisory and Administrative Services......... 11
Custodian............................................... 13
Independent Certified Public Accountants................ 13
Brokerage Allocation.................................... 13
Principal Underwriter................................... 15
Taxes................................................... 16
Financial Statements.................................... 17
<PAGE>
ADDITIONAL INFORMATION ABOUT THE TRUST
Unless otherwise defined herein, capitalized terms have the meaning given
to them in the Prospectus.
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 the
Wright EquiFund - Country Strategy Fund (the "Fund") are affected, a majority of
the Fund's outstanding shares. The Trust may be terminated (i) upon the sale of
the Trust's assets to another 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 of the Trust 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 Investment Adviser does not consider this risk to be material.
ADDITIONAL INVESTMENT INFORMATION
In selecting securities for the Indices and for inclusion in the portfolio
of the Fund, Wright utilizes its international database, which includes
WORLDSCOPE(R). WORLDSCOPE(R) provides more than 1,500 items of information on
more than 15,000 companies worldwide. Additional information about the
composition of the Indices may be obtained without charge from Wright Investors'
Service Distributors, Inc., 1000 Lafayette Boulevard, Bridgeport, CT 06604
(800-888-9471). Except for the United States, Wright utilizes the services of
major financial institutions that are located in the nations in which the Fund
is permitted to invest to supply Wright with research products and services
including reports on particular industries and companies, economic surveys and
analyses of the investment environment and trends in a particular nation,
recommendations as to whether specific securities should be included in an Index
and other assistance in the performance of its decision-making responsibilities.
Currently, Wright expects to utilize several major international banks in the
above-mentioned capacity. The Indices are adjusted as necessary to reflect
recent events. A detailed explanation of the objective criteria used in the
selection process is as follows.
To be selected for an Index, a company must have:
1. Five years of earnings data (17 quarters of 12-month earnings). To
be selected, a company's trailing 12-month earnings during the
last four quarters or during the last three reported years
cumulatively must be positive.
2. Five years of dividend information or positive verification
that a company did not declare a dividend (20 quarters of
quarterly dividend information).
<PAGE>
3. Three years of price information (12 quarters of quarterly
prices). To be selected, a company generally must have market
value (number of shares times price) equal to or greater than $20
million. Once a company is selected, its market value must be less
than $15 million for the company's securities to be removed from
the relevant Index.
4. Book value information for the past five years (20 quarters). To
be selected, book value must be equal to or greater than $20
million. Once a company is selected, its book value must be less
than $15 million for the company's securities to be removed from
the relevant Index.
5. Industry group information. Companies that are closed-end
investment companies, real estate investment trusts or non-bank
securities brokers or dealers will not be included.
Acquired companies may continue to be included in the relevant Index up to
their acquisition date.
Description of Investments
The Fund will, under normal market conditions, invest substantially all,
but at least 80%, of its total assets in equity and equity-related securities,
including common stocks, preferred stocks, rights, warrants and securities
convertible into stock. The Fund may invest up to 20% of its net assets in U.S.
Government securities, repurchase agreements, certificates of deposit, bankers'
acceptances, fixed time deposits, commercial paper, finance company paper, and
other short-term debt securities. Pending investment of cash proceeds from new
sales of Fund shares, to meet ordinary daily cash needs or for temporary
defensive purposes, the Fund may hold cash or invest substantially all of its
assets in short-term debt securities.
U.S. Government, Agency and Instrumentality Obligations - U.S. Government
obligations are issued by the U.S. 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 the purchase of debt securities of the U.S.
Treasury, a federal agency, a federal instrumentality or a federally-created
corporation or of other high quality short-term debt obligations. At the same
time the Fund purchases the security it resells such security to the vendor
which is a member bank of the Federal Reserve System, a recognized securities
dealer or any foreign bank whose creditworthiness has been determined by Wright
to be at least equal to that of issuers of commercial paper rated within the two
highest grades assigned by Moody's or S&P, and is obligated to redeliver the
security to the vendor on an agreed-upon date in the future. A repurchase
agreement with foreign banks may be available with respect to government
securities of the particular foreign jurisdiction. 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 the Fund to earn a return on cash which is only temporarily available. The
Fund's risk is the ability of the vendor to pay an agreed upon sum upon the
delivery date, which the Trust believes 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 the Fund being able to resell the
security.
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.
<PAGE>
Fixed Time Deposits - are bank obligations payable at a stated maturity
date and bearing interest at a fixed rate. Fixed time deposits may be withdrawn
on demand by the investor, but may be subject to early withdrawal penalties
which vary depending upon market conditions and the remaining maturity of the
obligation. There are no contractual restrictions on the right to transfer a
beneficial interest in a fixed time deposit to a third party, although there is
no market for such deposits.
Commercial Paper and Finance Company Paper - refers to promissory notes
issued by corporations in order to finance their short-term credit needs.
Restricted Securities - Securities that are not freely tradeable or which
are subject to restrictions on sale under the Securities Act of 1933 are
considered restricted. Such securities are illiquid and may be difficult to
properly value. The Fund's holdings of illiquid securities may not exceed 15% of
its net assets. Illiquid securities include securities legally restricted as to
resale. Securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 may, however, be treated as liquid by the Investment
Adviser pursuant to procedures adopted by the Trustees, which require
consideration of factors such as trading activity, availability of market
quotations and number of dealers willing to purchase the security. Moreover,
investments in Rule 144A securities may increase the level of fund illiquidity
to the extent qualified institutional buyers become uninterested in purchasing
such securities.
Convertible Securities - The Fund may from time to time invest up to 5% of
its total assets in debt securities and preferred stocks which are convertible
into, or carry the right to purchase, common stock or other equity securities.
The debt security or preferred stock may itself be convertible into or
exchangeable for equity securities, or the purchase right may be evidenced by
warrants attached to the security or acquired as part of a unit with the
security. Convertible securities may be purchased for their appreciation
potential when they yield more than the underlying securities at the time of
purchase or when they are considered to present less risk of principal loss than
the underlying securities. Generally speaking, the interest or dividend yield of
a convertible security is somewhat less than that of a non-convertible security
of similar quality issued by the same company.
Warrants and Rights - The Fund may purchase warrants and rights, but does
not intend to invest more than 5% of its net assets in warrants and rights
(other than those that have been acquired in units or attached to other
securities). Warrants and rights are options to purchase equity securities at a
specific price valid for a specific period of time. They do not represent
ownership of the securities, but only the right to buy them. The prices of
warrants and rights do not necessarily move parallel to the prices of the
underlying securities. Warrants and rights may become valueless if not sold or
exercised prior to their expiration.
Foreign Securities - The Fund may invest in foreign securities, and in
certificates of deposit, bankers' acceptances, fixed time deposits issued by
major foreign banks and foreign branches of United States banks, to any extent
deemed appropriate by Wright and consistent with the Fund's investment
objective. Investing in securities of foreign governments or securities issued
by companies whose principal business activities are outside the United States
may involve significant risks not associated with domestic investments. For
example, there is generally less publicly available information about foreign
companies, particularly those not subject to the disclosure and reporting
requirements of the U.S. securities laws. Foreign issuers are generally not
bound by uniform accounting, auditing and financial reporting requirements
comparable to those applicable to domestic issuers. Investments in foreign
securities also involve the risks of possible adverse changes in exchange
control regulations, expropriation or confiscatory taxation, limitation on
removal of funds or other assets of the Fund, political or financial instability
or diplomatic and other developments which could affect such investments.
Further, economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the U.S. To the extent investments
in foreign securities are denominated or quoted in currencies of foreign
countries, the Fund may be affected favorably or unfavorably by changes in
currency exchange rates and may incur costs in connection with conversion
between currencies.
<PAGE>
It is anticipated that in most cases the best available market for foreign
securities will be on exchanges or in over-the-counter markets located outside
the U.S. Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those in the U.S. Securities of some foreign
issuers may be less liquid and more volatile than securities of comparable U.S.
companies (this is particularly true of issuers located in developing
countries). In addition, foreign brokerage commissions are generally higher than
commissions on securities traded in the U.S. and may be non-negotiable. In
general, there is less overall governmental supervision and regulation of
securities exchanges, brokers and listed companies than in the U.S.
Foreign Currency Exchange Transactions - The Fund may engage in foreign
currency exchange transactions. Investments in securities of foreign governments
and companies whose principal business activities are located outside the United
States will frequently involve currencies of foreign countries. In addition,
assets of the Fund may temporarily be held in bank deposits in foreign
currencies during the completion of investment programs. Therefore, the value of
the Fund's assets, as measured in U.S. dollars, may be affected favorably or
unfavorably by changes in foreign currency exchange rates and exchange control
regulations. Although the Fund values its assets daily in U.S. dollars, the Fund
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market. The Fund will convert currency on a spot basis
from time to time and will incur costs in connection with such currency
conversion. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the "spread")
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer. The Fund does not intend to speculate in foreign
currency exchange rates.
As an alternative to spot transactions, the Fund may enter into contracts
to purchase or sell foreign currencies at a future date ("forward contracts"). A
forward contract involves an obligation to purchase or sell a specific currency
at a future date and price fixed by agreement between the parties at the time of
entering into the contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. Although a forward contract generally involves no deposit
requirement and no commissions are charged at any stage for trades, the Fund
will maintain segregated accounts in connection with such transactions. The Fund
intends to enter into such contracts only on net terms.
The Fund may enter into forward contracts under two circumstances. First,
when the Fund enters into a contract for the purchase or sale of a security
quoted or denominated in a foreign currency, it may desire to "lock in" the
price of the security. This is accomplished by entering into a forward contract
for the purchase or sale, for a fixed amount of U.S. dollars, of the foreign
currency involved in the underlying security transaction ("transaction
hedging"). Such forward contract transactions will enable the Fund to protect
itself against a possible loss resulting from an adverse change in the
relationship between the different currencies during the period between the date
the security is purchased or sold and the date of payment for the security.
Second, when Wright believes that the currency of a particular foreign
country may suffer a decline, the Fund may enter into a forward contract to sell
the amount of foreign currency approximating the value of some or all of the
securities held by the Fund that are quoted or denominated in such foreign
currency. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible. The future value of such
securities in foreign currencies will change as a consequence of fluctuations in
the market value of those securities between the date the forward contract is
entered into and the date it matures. The projection of currency exchange rates
and the implementation of a short-term hedging strategy are highly uncertain. As
an operating policy, the Fund does not intend to enter into forward contracts
for such hedging purposes on a regular or continuous basis. The Fund will also
not enter into such forward contracts or maintain a net exposure to such
contracts if the contracts would obligate the Fund to deliver an amount of
foreign currency in excess of the value of the Fund's securities or other assets
quoted or denominated in that currency.
<PAGE>
The Fund's custodian will place cash or liquid securities in a segregated
account. The amount of such segregated assets will be at least equal to the
value of the Fund's total assets committed to the consummation of forward
contracts involving the purchase of foreign currency. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the amount will equal the amount of the Fund's commitments with respect to such
contracts.
The Fund generally will not enter into a forward contract with a term of
greater than one year. At the maturity of a forward contract, the Fund may elect
to sell the portfolio security and make delivery of the foreign currency.
Alternatively, the Fund may retain the security and terminate its contractual
obligation to deliver the foreign currency by purchasing an identical offsetting
contract from the same currency trader.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a forward contract. Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the Fund intends to sell the
security and the market value of the security is less than the amount of foreign
currency that the Fund is obligated to deliver. Conversely, it may be necessary
to sell on the spot market some of the foreign currency received upon the sale
of the portfolio security if its market value exceeds the amount of foreign
currency that the Fund is obligated to deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or loss (as described below) to the
extent that there has been a change in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the foreign currency. Should forward contract prices
decline during the period between the date the Fund enters into a forward
contract for the sale of the foreign currency and the date it enters into an
offsetting contract for the purchase of the foreign currency, the Fund will
realize a gain to the extent that the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
contracts prices increase, the Fund will suffer a loss to the extent that the
price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
A Fund will not speculate in forward contracts and will limit its
transactions in such contracts to the transactions described above. Of course,
the Fund is not required to enter into such transactions with respect to its
portfolio securities quoted or denominated in a foreign currency and will not do
so unless deemed appropriate by Wright. This method of protecting the value of
the Fund's securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which the Fund can achieve at some future time.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, they also tend to limit any
potential gain which might be realized if the value of such currency increases.
The Fund's foreign currency and currency forward transactions may be
limited by the requirements of Subchapter M of the Code for qualification as a
regulated investment company.
Investment Restrictions
The Fund may establish an investment reserve in cash (including foreign
currency) or cash equivalent securities (high quality short-term fixed income
debt securities) whenever such reserve is deemed to be in the best interests of
the shareholders for any reason, including Wright's expectation of a decline in
the equity markets in which the Fund is permitted to invest. Under normal market
conditions, such reserves will be no more than approximately 20% of a Fund's net
assets. Accordingly, each Fund will have at least 80% of its net assets invested
in equity securities during normal market conditions. A greater reserve position
may, however, be established temporarily if Wright believes that this would be
advisable in view of what it considers to be extraordinary economic and stock
market conditions. See "Special Investment Considerations - Temporary Defensive
<PAGE>
Investments" in the Prospectus for a discussion of when the Fund may take a
temporary defensive position.
The following investment restrictions have been adopted by the Fund and may
be changed as to the Fund only by the vote of a majority of the Fund's
outstanding voting securities, which 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. If a
percentage restriction contained herein, other than that imposed by investment
restriction (1), 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 amount of net assets will not be considered a violation of any
of the following restrictions. As a matter of fundamental investment policy, the
Fund may not:
(1) Borrow money or issue senior securities, except as permitted by
the 1940 Act;
(2) Underwrite securities issued by other persons except to the extent
that the purchase of securities in accordance with the Fund's
investment objectives and policies directly from the issuer
thereof and the later disposition thereof may be deemed to be
underwriting;
(3) Purchase any securities which would cause 25% or more of the
market value of its 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 obligations issued or
guaranteed by the U.S.
Government or its agencies or instrumentalities;
(4) Purchase or sell real estate, except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities
of issuers that invest in real estate or interests therein, (iii)
invest in securities that are secured by real estate or interests
therein, (iv) purchase and sell mortgage-related securities and
(v) hold and sell real estate acquired by the Fund as a result of
the ownership of securities;
(5) Purchase or sell physical commodities or contracts for the
purchase or sale of physical commodities. Physical commodities do
not include futures contracts with respect to securities,
securities indices, currency or other financial instruments; or
(6) Make loans, except (i) through the loan of a portfolio security,
(ii) by entering into repurchase agreements and (iii) to the
extent that the purchase of debt instruments, if any, in
accordance with the Fund's investment objective and policies may
be deemed to be loans.
The following investment restrictions are nonfundamental policies of the
Fund which may be changed by the Trustees without shareholder approval. The Fund
has no current intention of borrowing for leverage purposes, making securities
loans or engaging in short sales against the box. The Fund has no current
intention of investing more than 5% of net assets in Rule l44A securities. Prior
to engaging in such activities, the Fund's Prospectus will be amended to
disclose the intention to do so. The Fund will not:
(a) Invest more than 15% of its net assets in illiquid investments,
including repurchase agreements maturing in more than seven days,
securities that are not readily marketable and restricted
securities (other than Section 4(2) commercial paper) not eligible
for resale pursuant to Rule 144A under the Securities Act of 1933;
(b) Purchase securities on margin or make short sales except sales
against the box;
(c) Purchase securities issued by another investment company, except
as permitted by the 1940 Act;
<PAGE>
(d) Purchase or enter into an agreement to purchase securities while
borrowings exceed 5% of its total assets.
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" (as defined in the 1940 Act) of the Trust, Wright, The Winthrop
Corporation ("Winthrop"), Eaton Vance, Eaton Vance's wholly-owned subsidiary,
Boston Management and Research ("BMR"), Eaton Vance's parent, Eaton Vance Corp.
("EVC") or of Eaton Vance's trustee, Eaton Vance, Inc. ("EV"), by virtue of
their affiliation with either the Fund, Wright, Winthrop, Eaton Vance, BMR, EVC,
or EV are indicated by an asterisk (*).
PETER M. DONOVAN (54), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, Jr. (70), Vice President, Secretary and Trustee*
Retired Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, EVC, BMR and EV and a Director of EVC and EV; Director
of Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
A.M. MOODY III (60), Vice President and Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
WINTHROP S. EMMET (86), Trustee
Retired New York City Attorney at Law; Trust Officer, First National City Bank,
New York, NY (1963-1971).
Address: Box 327, West Center Road, West Stockbridge, MA 01266
LELAND MILES (73), 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
LLOYD F. PIERCE (78), 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
RICHARD E. TABER (48), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr.Taber was appointed as a Trustee of the Trust on March 18,
1997.
Address: 117 Prospect Street, Stamford, CT 06901
<PAGE>
RAYMOND VAN HOUTTE (72), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca,
NY (January 1989-present); President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco. Inc., Evaporated
Metal Products and Ithaco, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JUDITH R. CORCHARD (58), Vice President
Executive Vice President, Senior Investment Officer, Chairman of the Investment
Committee and Director of and Winthrop.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
JAMES L. O'CONNOR (51), Treasurer
Vice President, 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 (61), Assistant Treasurer and Assistant Secretary
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
A. JOHN MURPHY (34), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV (March 1,
1994-present); employee of Eaton Vance (March 1993-present). 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 (39), Assistant Secretary
Vice President of Eaton Vance, BMR and EV (February 1993-present);
formerly, associate attorney at Dechert, Price & Rhoads 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
WILLIAM J. AUSTIN, JR. (45), 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
All of the Trustees and officers hold identical positions with The Wright
Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed Blue
Chip Series Trust (except Mr. Miles), and Catholic Values Investment Trust. The
fees and expenses of those Trustees (Messrs. Emmet, Miles, Pierce and Van
Houtte) who are not "interested persons" of the Trust and Mr. Brigham are paid
by the Fund and the 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 employees of Wright receive no
compensation from the Trust. The Trust does not have a retirement plan for its
Trustees. For estimated Trustee compensation from the Fund for the fiscal year
ended December 31, 1997 and for the total compensation expected to be paid to
the Trustees from the Wright Fund complex for the fiscal year ended December 31,
1997, see the following table.
<PAGE>
COMPENSATION TABLE
Registrant - The Wright EquiFund Equity Trust
<TABLE>
<CAPTION>
Aggregate Compensation Pension Estimated Total
From The Wright Benefits Annual Compensation
Trustees EquiFund Equity Trust (1) Accrued Benefits To Be Paid
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Day Brigham $1,750 None None $8,750
Winthrop S. Emmet $1,750 None None $8,750
Leland Miles $1,750 None None $8,750
Lloyd F. Pierce $1,750 None None $8,750
Richard E. Taber $1,750 None None $8,750
Raymond Van Houtte $1,750 None None $8,750
</TABLE>
(1) Total compensation to be paid is from The Wright EquiFund Equity Trust (20
Funds)and the other funds in the Wright Fund complex (16 Funds) for a total of
36 Funds.
Messrs. Emmet, Miles, Pierce 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, Wright or Winthrop. The Trust does not have
a designated audit committee, since the full board performs the functions of
such committee.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of July 31, 1997, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
October 29, 1997, Wright owned 100% of the outstanding shares of the Fund as the
only shareholder of the Fund on such date. Wright is a Connecticut corporation
and a wholly-owned subsidiary of Winthrop.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
The Fund has engaged Wright to act as its investment adviser pursuant to an
Investment Advisory Contract. Wright, acting under the general supervision of
the Trust's Trustees, furnishes the Fund with investment advice and management
services. The estate of John Winthrop Wright may be considered a controlling
person of Winthrop and Wright by reason of its ownership of 29% of the
outstanding shares of Winthrop. The Trustees of the Trust are responsible for
the general oversight of the conduct of the Fund's business.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the Fund, will furnish continuously
an investment program with respect to the Fund, will determine which securities
should be purchased, sold or exchanged. and will implement such determinations.
Wright will furnish to the Fund investment advice and management services,
office space, equipment and clerical personnel, and investment advisory,
statistical and research facilities. In addition, Wright has arranged for
certain members of the Wright organization to serve without salary as officers
or Trustees of the Trust. In return for these services, the Fund is obligated to
pay an advisory fee calculated at the rate of 0.75% of average daily net assets.
In addition, the Fund is obligated to pay additional Rule 12b-1 distribution
expenses equal to 0.25% of average daily net assets. Other fund operating
expenses are estimated to equal 1.00% of average daily net assets. In the event
that other operating expenses exceed the estimated 1.00%, the Rule 12b-1
expenses and investment advisory fee will be reduced so that total operating
expenses do not exceed 2.00%. If total reduction of the Rule 12b-1 expenses and
investment advisory fee is not sufficient to reduce expenses to the 2.00% level,
expenses exceeding the 2.00% level will be allocated to Wright so that the Fund
will not experience expenses over the 2.00% level. This policy is expected to
continue at least until December 31, 1998.
<PAGE>
It should be noted that, in addition to compensating Wright for its
advisory services to the Fund, the advisory fee is intended to partially
compensate Wright for the maintenance of the Indices which form the basis for
the selection of securities for the Fund. Other mutual funds and accounts
advised by Wright may use the Indices as may other entities not affiliated with
Wright.
The Trust has engaged Eaton Vance to act as the administrator for the Fund
pursuant to an Administration Agreement. In addition, Eaton Vance has arranged
for certain members of the Eaton Vance organization to serve without salary as
officers or Trustees of the Trust. For its services under the Administration
Agreement, Eaton Vance is entitled to receive a monthly administration fee from
the Fund at the annual rate set forth in the Fund's current Prospectus.
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, 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, Mr. Gardner is
vice chairman and Mr. Hawkes is president and chief executive officer of EVC,
Eaton Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance
and 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 on December 31, 1997, the Voting
Trustees of which are Messrs. Clay, Gardner, Hawkes, Rowland, and Thomas E.
Faust, Jr. 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 or officers and Directors of EVC and EV. As of February
28, 1997, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting trust
receipts, and Messrs. Rowland and Faust owned 15% and 13%, respectively, of such
voting trust receipts. Messrs. Austin, Murphy, O'Connor and Woodbury and Ms.
Sanders, who are officers of the Trust, are also members of the Eaton Vance, BMR
and EV organizations. Eaton Vance will receive the fees paid under the
Administration Agreement.
EVC owns all of the stock of Energex Energy Corporation, which is engaged
in oil and gas exploration and development. In addition, Eaton Vance owns all
the stock of Northeast Properties, Inc., which is engaged in real estate
investment. EVC owns all the stock of Fulcrum Management, Inc. and MinVen, Inc.,
which are engaged in precious metal mining venture investment and management.
EVC, Eaton Vance, BMR and EV may also enter into other businesses.
The Fund will be responsible for all expenses relating to its operations
and not designated as expenses of Wright under the Investment Advisory Contract
or of Eaton Vance under the Administration Agreement, including, without
limitation, the fees and expenses of its custodian and transfer agent, including
those incurred for determining the Fund's net asset value and keeping the Fund's
books; the cost of share certificates; membership dues 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 Fund will also bear its share of any
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 Investment Advisory Contract and the Administration Agreement of the
Fund will remain in effect until February 28, 1999. The Fund's Investment
Advisory Contract may be continued from year to year thereafter so long as such
continuance after February 28, 1999 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 shareholders of the Fund. The Investment
Advisory Contract and Administration Agreement may be terminated as to the Fund
at any time without penalty on sixty (60) days'
<PAGE>
written notice by the Board of Trustees or Directors of either party, or by
vote of the majority of the outstanding shares of the Fund, 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.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston,
Massachusetts, acts as custodian for the Fund. IBT has the custody of all cash
and securities of the Fund, maintains the Fund's general ledger and computes the
daily net asset value per share. In such capacity it attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the Fund's investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
Fund. IBT charges custody fees which are competitive within the industry. A
portion of the custody fee for each fund managed by Wright for which IBT serves
as custodian is based upon a schedule of percentages applied to the aggregate
assets of those funds, the fees so determined being then allocated among such
funds relative to their size. In addition, each fund pays to IBT a fee based on
the number of portfolio transactions, a fee based on the number of portfolio
holdings, and a fee for bookkeeping and valuation services. These fees are then
reduced by a credit for cash balances of the particular fund at IBT equal to 75%
of the average 91-day, U.S. Treasury Bill auction rate for the billing period
applied to the particular fund's average daily collected balances for the
period.
The Fund will employ foreign sub-custodians in accordance with Rule
17f-5 under the 1940 Act.
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 and
preparation of the Fund's federal and state tax returns.
BROKERAGE ALLOCATION
Purchases and sales of securities on a securities exchange are effected by
brokers, and the Fund pays a brokerage commission for this service. In
transactions on stock exchanges in the United States, these commissions are
negotiated, whereas on many foreign stock exchanges the commissions are fixed.
In the over-the-counter market, securities are normally traded on a "net" basis
with dealers acting as principal for their own accounts without a stated
commission, although the price of the securities usually includes a profit to
the dealer. In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
Wright places the portfolio security transactions for the Fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments and other clients. 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
<PAGE>
its best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the size
and type of the transaction, the nature and character of the markets for the
security, the confidentiality, speed and certainty of effective execution
required for the transaction, the reputation, experience and financial condition
of the broker-dealer and the value and quality of service rendered by the
broker-dealer in other transactions, and the reasonableness of the brokerage
commission or markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the Fund may give consideration to those firms which
supply brokerage and research services, quotations and statistical and other
information to Wright for their use in servicing their accounts. Such brokers
may include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to Wright in servicing advisory clients other than the Fund and the
other funds. The services and information furnished by a particular firm may not
necessarily be used in connection with the Fund or the fund which paid brokerage
commissions to such firm. The advisory fee paid by the Fund to Wright is not
reduced as a consequence of Wright's receipt of such services and information.
While such services and information are not expected to reduce Wright's normal
research activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if Wright
should attempt to develop comparable services and information through its own
staff.
Subject to the requirement that Wright shall use its best efforts to seek
to execute the Fund's portfolio security transactions at advantageous prices and
at reasonably competitive commission rates, Wright, as indicated above, is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom the Fund's portfolio orders may be placed the fact that such firm has
sold or is selling shares of the Fund or of other investment companies sponsored
by Wright. This policy is consistent with a rule of the National Association of
Securities Dealers, Inc., which rule provides that no firm which is a member of
the Association 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 Fund's Investment Advisory Contract, Wright has the authority to
pay commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met.
The Fund's Investment Advisory Contract expressly recognizes the practices
which are provided for in Section 28(e) of the Securities Exchange Act of 1934
by authorizing the selection of a broker or dealer which charges the Fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
If purchases or sales of securities of the Fund and one or more other
investment companies or clients supervised by Wright are considered at or about
the same time, transactions in such securities will be allocated among the
several investment companies and clients in a manner deemed equitable to all by
Wright, taking into account the respective sizes of the funds, and the amount of
securities to be purchased or sold. It is recognized that it is possible that in
some cases this procedure could have a detrimental effect on the price or volume
of the security so far as the Fund is concerned. However, in other cases it is
possible that the ability to participate in volume transactions and to negotiate
lower brokerage commissions will be beneficial to the Fund.
<PAGE>
PRINCIPAL UNDERWRITER
The Trust has adopted a Distribution Plan (the "Plan") on behalf of the
Fund in accordance with Rule 12b-l under the 1940 Act and the Rules of the NASD.
The Trust has entered into a distribution contract on behalf of the Fund
with its Principal Underwriter, Wright Investors' Service Distributors, Inc.
("WISDI"), a wholly-owned subsidiary of Winthrop, providing for WISDI to act as
a separate distributor of the Fund's shares.
Under this contract and the Plan, it is currently intended that the Fund
will pay to WISDI for distribution services and personal and account maintenance
services in connection with the Fund's shares an annual fee equal to 0.25% of
such Fund's average daily net assets. Appropriate adjustments to payments made
pursuant to the Plan shall be made whenever necessary to assure that no payment
is made by the Fund which exceeds the applicable maximum cap imposed on
asset-based, front-end and deferred sales charges by Rule 2830 of the NASD.
Pursuant to the Plan, the Trust, on behalf of the Fund, is authorized to
compensate WISDI for (1) distribution services and (2) personal and account
maintenance services performed and expenses incurred by WISDI in connection with
the Fund's shares. The amount of such compensation, including compensation for
personal and account maintenance services, paid during any one year shall not
exceed 0.25% of the average daily net assets of the Fund. Such compensation
shall be calculated and accrued daily and paid quarterly.
Distribution services and expenses for which WISDI may be compensated
pursuant to this Plan include, without limitation, compensation to and expenses
incurred by Authorized Dealers and the officers, employees and sales
representatives of Authorized Dealers and of WISDI; allocable overhead, travel
and telephone expenses; the printing of prospectuses and reports for other than
existing shareholders; the preparation and distribution of sales literature and
advertising; and all other expenses (other than personal and account maintenance
services as defined below) incurred in connection with activities primarily
intended to result in the sale of the Fund's shares.
Personal and account maintenance services include, but are not limited to,
payments made to or on account of WISDI, Authorized Dealers and their respective
officers, employees and sales representatives who respond to inquiries of, and
furnish assistance to, shareholders concerning their ownership of Fund shares
and their accounts or who provide similar services not otherwise provided by or
on behalf of the Fund.
The Plan is a compensation plan which provides for the payment of a
specified distribution fee without regard to the distribution expenses actually
incurred by WISDI. Accordingly, an amount equal to 1/365 of the annual
distribution fee will be accrued on each day as an expense of the Fund, which
will reduce its net investment income. If the Plan were terminated or not
continued by the Trustees and no successor plan were adopted, the Fund would
cease to make distribution payments to WISDI. WISDI would be unable to recover
the amount of any unreimbursed distribution expenditures made by WISDI. However,
WISDI does not intend to make distribution expenditures at a rate that
materially exceeds the rate of compensation received under the Plan.
Under the 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.
Under its terms, the Plan remains in effect from year to year, provided
such continuance is approved annually by a vote of the Trustees, including a
majority of the Trustees who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan. The
Plan may not be amended to increase materially the amount to be spent for the
services described therein as to the Fund
<PAGE>
without approval of a majority of the outstanding voting securities of the
Fund, and all material amendments of the Plan must also be approved by the
Trustees of the Trust in the manner described above. The Plan may be terminated
at any time as to the Fund without payment of any penalty by a 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 vote of a majority of the outstanding voting securities of the
Fund. So long as the Plan is in effect, the selection and nomination of Trustees
who are not interested persons of the Trust shall be committed to the discretion
of the Trustees who are not such interested persons. The Trustees of the Trust
have determined that in their judgment there is a reasonable likelihood that the
Plan will benefit the Fund and its shareholders.
TAXES
Among the requirements for qualification of the Fund as a regulated
investment company are the following: (1) at least 90% of the Fund's gross
income for the taxable year must be derived from interest, dividends, gains from
the sale or other disposition of stock or securities and certain other types of
income; (2) less than 30% of the Fund's gross income for its taxable year that
includes August 5, 1997 may be derived from gross gains from the sale or other
disposition of stock or securities or certain other investments held for less
than three months; and (3) at the close of each quarter of its taxable year, (a)
at least 50% of the value of the Fund's assets must be comprised of cash and
cash items (including receivables), U.S. Government securities, securities of
other regulated investment companies and other securities limited in respect of
any one issuer to not more than 5% of the value of the Fund's total (gross)
assets and not more than 10% of the voting securities of such issuer and (b) not
more than 25% of the value of its total (gross) assets may be invested in the
securities of any one issuer (other than U.S. Government securities and
securities of other regulated investment companies) or certain other issuers
controlled by the Fund. These requirements may limit the Fund's activities in
foreign currencies and foreign currency forward contracts to the extent gains
relating to such activities are considered not directly related to the Fund's
principal business of investing in securities or to the extent the sizes of such
positions are limited by these tax diversification requirements.
The Fund's use of the accounting practice known as equalization may affect
the amount, timing and character of distributions to shareholders, as more
particularly described in the section of the Fund's prospectus titled "TAXES".
Investment by the Fund in a stock of a "passive foreign investment company" may
cause the Fund to recognize income prior to the receipt of distributions from
such a company or to become subject to tax upon the receipt of certain excess
distributions from, or upon disposition of its stock of, such a company,
although an election may generally be available for taxable years beginning
after 1997 that would ameliorate these adverse tax consequences.
The Fund's transactions in foreign currencies, foreign currency-denominated
debt securities, foreign currency forward contracts, and receivables or payables
denominated in a foreign currency are subject to special tax rules under Section
988 of the Code which will generally cause gains and losses from these
transactions to be treated as ordinary income and losses. Certain positions held
by the Fund may be required to be "marked to market" (treated as if they were
closed out) on the last business day of each taxable year, and any constructive
sales of certain appreciated financial positions may also require the current
recognition of the gain in such positions. In addition, if certain of these
positions held by the Fund substantially diminish the Fund's risk of loss with
respect to securities or other positions in the Fund's portfolio, this
combination of positions may be treated as a straddle for tax purposes with the
possibility of deferral of losses and adjustments in the holding period of
securities or other positions held by the Fund.
In order to avoid federal excise tax, the Fund must distribute (or be
deemed to have distributed) by December 31 of each year at least 98% of its
ordinary income for such year, at least 98% of the excess of its realized
capital gains over its realized capital losses for the one-year period ending on
October 31 of such year, after reduction by any available capital loss
carryforwards, and 100% of any income and capital gains
<PAGE>
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.
Special tax rules apply to IRA and other retirement plan 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.
Redemptions (including exchanges) and other dispositions of Fund shares in
transactions that are treated as sales for tax purposes will generally result in
the recognition of taxable gain or loss by shareholders that are subject to tax.
Shareholders should consult their own tax advisers with reference to their
individual circumstances to determine whether any particular redemption,
exchange or other disposition of Fund shares is properly treated as a sale for
tax purposes, as this discussion assumes. Any loss realized upon the redemption,
exchange or other sale of shares of the Fund with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
distributions of long-term capital gains designated as capital gain dividends
with respect to such shares. All or a portion of a loss realized upon the
redemption, exchange or other sale of Fund shares may be disallowed under "wash
sale" rules to the extent shares of the Fund are purchased (including shares
acquired by means of reinvested dividends) within the period beginning 30 days
before and ending 30 days after the date of such redemption, exchange or other
sale.
Capital loss carryforwards from any taxable year will reduce the Fund's
taxable income arising from future net realized capital gains, if any, to the
extent they are permitted to be used under the Code and applicable Treasury
regulations prior to their expiration dates, and thus will reduce the amounts of
the future distributions to shareholders that would otherwise be necessary in
order to relieve the Fund of liability for federal income tax.
FINANCIAL STATEMENTS
The financial statements of the Fund will be audited by Deloitte & Touche
LLP, independent certified public accountants.
The Wright
EquiFund
Equity Trust
PROSPECTUS
October 29, 1997
Investment Adviser
Wright Investors' Service, Inc.
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
200 Clarendon Street
Boston, Massachusetts 02116
Transfer Agent
First Data Investor Services Group
Wright Managed Investment Funds
P.O. Box 5156
Westborough, Massachusetts 01581-9698
Auditors
Deloitte & Touche LLP
125 Summer Street
Boston Massachusetts 02110
24 Federal Street
Boston, Massachusetts 02110
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) The following financial statements are included in the Prospectus:
None
(2) The following financial statements are included in the Statement
of Additional Information:
None
(b) Exhibits:
(1) (a) Declaration of Trust dated July 14, 1989 as Amended and
Restated December 20, 1989 filed as Exhibit (1)(a) to
Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
(b) Amendment to the Declaration of Trust dated April 13, 1995
filed as Exhibit (1)(b) to Post-Effective Amendment No. 9
filed October 13, 1995 and incorporated herein by reference.
(c) Amended and Restated Establishment and Designation of Series
dated July 31, 1997 filed herewith.
(2) By-laws dated July 14, 1989 filed as Exhibit (2) to
Post-Effective Amendment No.9 filed October 13, 1995 and
incorporated herein by reference.
(3) Not Applicable
(4) Not Applicable
(5) (a) (1) Investment Advisory Contract between the Registrant
on behalf of Wright EquiFund--Hong Kong, Wright
EquiFund--Italy, Wright EquiFund--Netherlands, and Wright
EquiFund--Spain and Wright Investors' Service dated
August 25, 1994 filed as Exhibit(5)(a)(1) to
Post-Effective Amendment No. 9 filed October 13, 1995
and incorporated herein by reference.
(a) (2) Investment Advisory Contract between the Registrant on
behalf of Wright EquiFund--Australasia, Wright
EquiFund--Global, Wright EquiFund--International, Wright
EquiFund--Ireland, Wright EquiFund--Mexico and Wright
EquiFund--United States and Wright Investors' Service
dated April 1, 1994 filed as Exhibit (5)(a)(2) to
Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
<PAGE>
(a) (3) Investment Advisory Contract between the Registrant on
behalf of Wright EquiFund--Austria, Wright
EquiFund--Belgium/Luxembourg, Wright EquiFund--Canada,
Wright EquiFund--France, Wright EquiFund--Germany, Wright
EquiFund--Japan, Wright EquiFund--Nordic and Wright
EquiFund--Switzerland and Wright Investors' Service dated
January 20, 1994, filed as Exhibit (5)(a)(3) to
Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
(a) (4) Investment Advisory Contract between the Registrant on
behalf of Wright EquiFund--Britain and Wright Investors'
Service dated April 17, 1995 filed as Exhibit (5)(a)(4) to
Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
(a) (5) Investment Advisory Contract dated September 3, 1996
between the Registrant on behalf of Wright
EquiFund--Italian and Wright EquiFund--Spanish and Wright
Investors' Service, Inc. filed as Exhibit (5)(a)(5) to
Post-Effective Amendment No. 12 filed March 7, 1997 and
incorporated herein by reference.
(a) (6) Form of Investment Advisory Contract dated
1997 between the Registrant on behalf of Wright
EquiFund--Country Strategy and Wright Investors' Service,
Inc. filed herewith.
(b) Amended and Restated Administration Agreement between the
Registrant and Eaton Vance Management dated February 28, 1995
filed as Exhibit (5)(b) to Post-Effective Amendment No. 8
filed April 12, 1995 and incorporated herein by reference.
(c) Letter Agreement dated June 19, 1996 to the Amended and
Restated Administration Agreement filed as Exhibit (5)(c) to
Post-Effective Amendment No. 11 filed June 20, 1996 and
incorporated herein by reference.
(d) Form of Letter Agreement dated 1997 to the
Amended and Restated Administration Agreement filed herewith.
(6) Distribution Contract dated March 23, 1990 filed as Exhibit (6)
to Post-Effective Amendment No. 9 filed October 13, 1995
and incorporated herein by reference.
(7) Not Applicable
(8) (a) Custodian Agreement with Investors Bank & Trust Company
dated December 19, 1990 filed as Exhibit (8) to Post-Effective
Amendment No. 9 filed October 13, 1995 and incorporated herein
by reference.
(b) Amendment dated September 20, 1995 to Master Custodian
Agreement filed as Exhibit (8)(b) to Post-Effective Amendment
No. 10 filed February 29, 1996 and incorporated herein by
reference.
(9) Service Agreement dated February 1, 1996 between Wright Investors'
Service, Inc. and The Winthrop Corporation filed as Exhibit (9)
to Post-Effective Amendment No. 10 filed February 29, 1996 and
incorporated herein by reference.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
<PAGE>
(13) Agreement with Wright Investors' Service in consideration of
providing initial capital dated December 20, 1989 filed as Exhibit
(13) to Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
(14) Not Applicable
(15) (a) Amended Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 dated July 7, 1993 filed as
Exhibit (15)(a) to Post-Effective Amendment No. 9 filed
October 13, 1995 and incorporated herein by reference.
(b) Agreement Relating to Implementation of the Amended
Distribution Plan dated July 7, 1993 filed as Exhibit (15)(b)
to Post-Effective Amendment No. 9 filed October 13, 1995 and
incorporated herein by reference.
(16) Schedule of Computation of Performance Quotations to be filed by
amendment.
(17) Power of Attorney dated March 18, 1997 filed as Exhibit (17) to
Post-Effective Amendment No. 13 filed April 29, 1997 and
incorporated herein by reference.
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
Title of Class Number of Record Holders as of July 31, 1997
- -------------------------------------------------------------------------------
Shares of Beneficial Interest Wright EquiFund--Australasia........ -
Wright EquiFund--Austria............ -
Wright EquiFund--Belgium/Luxembourg. 121
Wright EquiFund--Britain............ 90
Wright EquiFund--Canada............. -
Wright EquiFund--Country Strategy... -
Wright EquiFund--France............. -
Wright EquiFund--Germany............ 119
Wright EquiFund--Hong Kong.......... 577
Wright EquiFund--Ireland............ -
Wright EquiFund--Italian............ 39
Wright EquiFund--Japan.............. 309
Wright EquiFund--Mexico............. 907
Wright EquiFund--Netherlands....... 934
Wright EquiFund--Nordic............. 361
Wright EquiFund--Spanish............ 1
Wright EquiFund--Switzerland........ 186
Wright EquiFund--United States...... -
Wright EquiFund--Global............. -
Wright EquiFund--International...... -
<PAGE>
Item 27. Indemnification
The Registrant's By-Laws filed as Exhibit No. 2 to Post-Effective Amendment No.
9 contain provisions limiting the liability, and providing for indemnification,
of the Trustees and officers under certain circumstances.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
Item 28. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the captions "Officers and
Trustees" and "Investment Advisory and Administrative Services" in the Statement
of Additional Information, which information is incorporated herein by
reference.
Item 29. Principal Underwriter
(a) Wright Investors' Service Distributors, Inc.(a wholly-owned
subsidiary of The Winthrop Corporation) acts as principal underwriter
for each of the investment companies named below.
The Wright Managed Equity Trust
The Wright Managed Income Trust
The Wright Managed Blue Chip Series Trust
The Wright EquiFund Equity Trust
Catholic Values Investment Trust
(b)
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Principal Underwriter with Registrant
- --------------------------------------------------------------------------------------------------------------------------------
A. M. Moody III* President Vice President and Trustee
Peter M. Donovan* Vice President and Treasurer President and Trustee
Vincent M. Simko* Vice President and Secretary None
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Address is 1000 Lafayette Boulevard, Bridgeport, Connecticut 06604
(c) Not Applicable.
Item 30. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02111,
and its transfer agent, First Data Investor Services Group, 4400 Computer Drive,
Westborough, MA 01581-5120, with the exception of certain corporate documents
and portfolio trading
<PAGE>
documents which are either in the possession and custody of the
Registrant's administrator, Eaton Vance Management, 24 Federal Street, Boston,
MA 02110 or of the investment adviser, Wright Investors' Service, Inc., 1000
Lafayette Boulevard, Bridgeport, CT 06604. Registrant is informed that all
applicable accounts, books and documents required to be maintained by registered
investment advisers are in the custody and possession of Registrant's
administrator, Eaton Vance Management, or of the investment adviser, Wright
Investors' Service, Inc.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Registrant undertakes to comply with Section 16(c) of the Investment
Company Act of 1940, as amended, which relates to the assistance to be
rendered to shareholders by the Trustees of the Registrant in calling a
meeting of shareholders for the purpose of voting upon the question of
the removal of a trustee.
(b) The Registrant undertakes to file a Post-Effective Amendment, using
financial statments which need not be certified, within four to six
months from the effective date of any prior post-effective amendment
which made effective the registration of shares of a series of the
Registrant and from the commencement of operations, unless such filing
on behalf of that series has already been made.
(c) The annual report also contains performance information and is
available to any recipient of the Prospectus upon request and without
charge by writing to the Wright Investors' Service Distributors, Inc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts on the 17th day of June, 1997.
THE WRIGHT EQUIFUND EQUITY TRUST
By: /s/ Peter M. Donovan
--------------------------------
Peter M. Donovan, President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the 17th day of June, 1997
SIGNATURE TITLE
- -------------------------------------------------------------------------------
/s/ Peter M. Donovan President, Principal
- --------------------- Officer & Trustee
Peter M. DonovanExecutive
James L. O'Connor* Treasurer, Principal
- ------------------- Financial and Accounting Officer
James L. O'Connor
H. Day Brigham, Jr.* Trustee
- ---------------------
H. Day Brigham, Jr.
Winthrop S. Emmet* Trustee
- -------------------
Winthrop S. Emmet
Leland Miles* Trustee
- --------------
Leland Miles
A. M. Moody III* Trustee
- ----------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- ----------------
Lloyd F. Pierce
Richard E. Taber* Trustee
- ----------------
Richard E. Taber
Raymond Van Houtte* Trustee
- -------------------
Raymond Van Houtte
*By /s/ Peter M. Donovan
- -------------------------
Peter M. Donovan
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to General Instructions E of form N-1A.
Page in
Sequential
Numbering
Exhibit No. Description System
(1)(c) Amended and Restated Establishment and Designation
of Series dated July 31, 1997.
(5)(a)(6) Form of Investment Advisory Contract
dated 1997.
(5)(d) Form of Letter Agreement to the Amended and Restated
Administration Agreement dated 1997.
Exhibit (1)(c)
THE WRIGHT EQUIFUND EQUITY TRUST
- ------------------------------------------------------------------------------
Amended and Restated
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
July 31, 1997
WHEREAS, pursuant to an Amended and Restated Establishment and
Designation of Series dated March 18, 1997, the Trustees of The Wright EquiFund
Equity Trust, a Massachusetts business trust (the "Trust"), redesignated the
shares of beneficial interest of the Trust into twenty separate series (or
Funds); and
WHEREAS, the Trustees now desire to change the name of one of its
existing series, i.e., Wright EquiFund-Hong Kong, to Wright EquiFund-Hong
Kong/China pursuant to Section 1A of Article VI of the Declaration of Trust.
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust acting pursuant
to Section 1A of Article VI of the Declaration of Trust, hereby redivide the
shares of beneficial interest of the Trust into twenty (20) separate series (or
Funds) of the Trust, each Fund to have the following special and relative
rights:
1. The Funds shall be designated as follows effective July 31, 1997:
Wright EquiFund-Australasia
Wright EquiFund-Austria
Wright EquiFund-Belgium/Luxembourg
Wright EquiFund-Britain
Wright EquiFund-Canada
Wright EquiFund-France
Wright EquiFund-Germany
Wright EquiFund-Global
Wright EquiFund-Country Strategy
Wright EquiFund-Hong Kong/China
Wright EquiFund-International
Wright EquiFund-Ireland
Wright EquiFund-Italian
Wright EquiFund-Japan
Wright EquiFund-Mexico
Wright EquiFund-Netherlands
Wright EquiFund-Nordic
Wright EquiFund-Spanish
Wright EquiFund-Switzerland
Wright EquiFund-United States
2. Each Fund shall be authorized to invest in cash, securities, instruments
and other property as from time to time described in the Trust's then currently
effective registration statement under the Securities Act of 1933 and the
Investment Company Act of 1940. Each share of beneficial interest of each Fund
("share") shall be redeemable, shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters on which shares of that
Fund shall be entitled to vote and shall represent a prorata
<PAGE>
beneficial interest in the assets allocated to that Fund, all as provided
in the Declaration of Trust. The proceeds of sales of shares of a Fund, together
with any income and gain thereon, less any diminution or expenses thereof, shall
irrevocably belong to that Fund, unless otherwise required by law. Each share of
a Fund shall be entitled to receive its pro rata share of net assets of that
Fund upon liquidation of that Fund.
3. Shareholders of each Fund shall vote separately as a class to the extent
provided in Rule 18f-2, as from time to time in effect, under the Investment
Company Act of 1940, as amended.
4. The assets and liabilities of the Trust shall be allocated among the
above referenced Funds as set forth in Section 1A of Article VI of the
Declaration of Trust, except as provided below.
(a) Costs incurred by each Fund in connection with its initial
organization and start-up, including Federal and state registration and
qualification fees and expenses of the initial offering of such Fund shares,
shall (if applicable) be borne by such Fund and deferred and amortized over the
five year period beginning on the date that such Fund commences operations.
(b) The liabilities, expenses, costs, charges or reserves of the
Trust (other than the management and investment advisory fees or the
organizational expenses paid by the Trust) which are not readily identifiable as
belonging to any particular Fund shall be allocated among the Funds on an
equitable basis as determined by the Trustees.
(c) The Trustees may from time to time in particular cases make
specific allocation of assets or liabilities among the Funds.
5. A majority of the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of any Fund now or hereafter created, or to otherwise
change the special and relative rights of any such Fund, and to terminate any
Fund or add additional Funds as provided in the Declaration of Trust.
/s/ Peter M. Donovan /s/ A.M. Moody, III
- --------------------- --------------------
Peter M. Donovan A. M. Moody, III
/s/ H. Day Brigham, Jr. /s/ Lloyd F. Pierce
- ----------------------- ----------------------
H. Day Brigham, Jr. Lloyd F. Pierce
/s/ Winthrop S. Emmet /s/ Richard E. Taber
- ---------------------- ----------------------
Winthrop S. Emmet Richard E. Taber
/s/ Leland Miles /s/ Raymond Van Houtte
---------------- ------------------------
Leland Miles Raymond Van Houtte
Exhibit (5)(a)(6)
THE WRIGHT EQUIFUND EQUITY TRUST
FORM OF
INVESTMENT ADVISORY CONTRACT
CONTRACT made this day of 1997, between THE WRIGHT
EQUIFUND EQUITY TRUST, a Massachusetts business trust (the "Trust"), on behalf
of WRIGHT EQUIFUND-COUNTRY STRATEGY, and any other series of the Trust which the
Adviser (as defined below) and the Trust shall agree from time to time to be
subject to this Agreement (collectively, the "Funds"), and Wright Investors'
Service, Inc., a Connecticut corporation (the "Adviser"):
1. Duties of the Adviser. The Trust, on behalf of the Fund, hereby
employs the Adviser to act as investment adviser for and to manage the
investment and reinvestment of the assets of the Fund and, except as otherwise
provided in an administration agreement, to administer its affairs, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Contract.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for the Fund and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Fund. As investment adviser to the Fund, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration statement of
the Trust under the Investment Company Act of 1940, all as from time to time
amended. The Adviser is authorized, in its discretion and without prior
consultation with the Trust, but subject to the Fund's investment objective,
policies and restrictions, to buy, sell, lend and otherwise trade in any stocks,
bonds, options and other securities and investment instruments on behalf of the
Fund, to purchase, write or sell options on securities, futures contracts or
indices on behalf of the Fund, to enter into commodities contracts on behalf of
the Fund, including contracts for the future delivery of securities or currency
and futures contracts on securities or other indices, and to execute any and all
agreements and instruments and
<PAGE>
to do any and all things incidental thereto in connection with the
management of the Fund. Should the Trustees of the Trust at any time, however,
make any specific determination as to investment policy for the Fund and notify
the Adviser in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the Fund,
all actions which it deems necessary or desirable to implement the investment
policies of the Trust and of the Fund.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, and to that end the Adviser is authorized as the agent
of the Fund to give instructions to the custodian of the Fund as to deliveries
of securities and payments of cash for the account of the Fund or the Trust. In
connection with the selection of such brokers or dealers and the placing of such
orders, the Adviser shall use its best efforts to seek to execute portfolio
security transactions at prices which are advantageous to the Fund and (when a
disclosed commission is being charged) at reasonably competitive commission
rates. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services and products (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to cause the Fund to pay any broker or dealer who provides such
brokerage and research service and products a commission for executing a
security transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services and products
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its affiliates
have with respect to accounts over which they exercise investment discretion.
Subject to the requirement set forth in the second sentence of this paragraph,
the Adviser is authorized to consider, as a factor in the selection of any
broker or dealer with whom purchase or sale orders may be placed, the fact that
such broker or dealer has sold or is selling shares of the Fund or the Trust or
of other investment companies sponsored by the Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust on behalf of the
Fund shall pay to the Adviser on the last day of each month a fee equal to a
percentage of the average daily net assets of the Fund of the Trust throughout
the month, computed in accordance with the Trust's Declaration of Trust and any
applicable votes of the Trustees of the Trust, as shown in the following table:
<PAGE>
ANNUAL ADVISORY FEE RATES
Under $500 Million
$500 to Over
Million $1 Billion $1 Billion
-------- ------------- -----------
0.75% 0.73% 0.68%
In case of initiation or termination of the Contract during any month
with respect to the Fund, the Fund's fee for that month shall be reduced
proportionately on the basis of the number of calendar days during which the
Contract is in effect and the fee shall be computed upon the average net assets
for the business days the Contract is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all its expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Trust shall include, without
implied limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust
and its shares under federal and state securities laws and of preparing and
printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
registration of the Trust and of the Trust's principal underwriter, if any, as a
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to shareholders and of meetings of shareholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds and securities, keeping of
books and accounts and determination of net asset value), (xiv) fees, expenses
and disbursements of transfer agents and registrars for all services to the
Trust, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xviii) all
payments to be made and expenses to be assumed by the Trust pursuant to any one
or more distribution plans adopted by the Trust pursuant to Rule 12b-1 under the
Investment Company Act of 1940, (xix) the administration fee payable to the
Trust's administrator and (xx) such nonrecurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
<PAGE>
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Adviser as
directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Wright" or "Wright Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser and approved by the Trustees of the Trust.
7. Duration and Termination of this Contract. This Contract shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
February 28, 1999 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1999 is
specifically approved at least annually (i) by the Trustees of the Trust or by
vote of a majority of the outstanding voting securities of the Fund and (ii) by
the vote of a majority of those Trustees of the Trust who are not interested
persons of the Adviser or (other than as a Trustee) the Trust cast in person at
a meeting called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract without the payment of any penalty,
by action of its Board of Directors or Trustees, as the case may be, and the
Trust may, at any time upon such written notice to the Adviser, terminate this
Contract as to any Fund by vote of a majority of the outstanding voting
securities of the Fund. This Contract shall terminate automatically in the event
of its assignment.
<PAGE>
8. Amendments of the Contract. This Contract may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Contract shall be effective as to that Fund until approved (i) by the vote of a
majority of those Trustees of the Trust who are not interested persons of the
Adviser or the Trust cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of the Fund.
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Article XIV, Section 2)
limiting the personal liability of shareholders of the Trust, and the Adviser
hereby agrees that it shall have recourse only to the Trust for payment of
claims or obligations as between the Trust and Adviser arising out of this
Contract and shall not seek satisfaction from the shareholders or any
shareholder of the Trust. No series of the Trust shall be liable hereunder for
the obligations of any other series of the Trust.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting of holders of more than 50 per centum of the outstanding
shares of the Fund are present or represented by proxy at the meeting, or (b)
more than 50 per centum of the outstanding shares of the Fund.
11. Use of the Name "Wright." The Adviser hereby consents to the use by
the Trust of the name "Wright" as part of the Trust's name and the name of the
Fund; provided, however, that such consent shall be conditioned upon the
employment of the Adviser or one of its affiliates as the investment adviser of
the Trust. The name "Wright" or any variation thereof may be used from time to
time in other connections and for other purposes by the Adviser and its
affiliates and other investment companies that have obtained consent to the use
of the name "Wright." The Adviser shall have the right to require the Trust to
cease using the name "Wright' as part of the Trust's name and the name of the
Fund if the Trust ceases, for any reasons, to employ the Adviser or one of its
affiliates as the Trust's investment adviser. Future names adopted by the Trust
for itself and its Funds, insofar as such names include identifying words
requiring the consent of the Adviser, shall be the property of the Adviser and
shall be subject to the same terms and conditions.
THE WRIGHT EQUIFUND EQUITY TRUST WRIGHT INVESTORS' SERVICE, INC.
on behalf of Wright EquiFund-Country
Strategy
By: By:
-------------------- ------------------------
Peter M. Donovan Judith R. Corchard
President Executive Vice President
Exhibit (5)(d)
, 1997
FORM OF LETTER AGREEMENT
The Wright EquiFund Equity Trust (the "Trust") hereby adopts and agrees to
become a party to the attached Amended and Restated Administration Agreement
between the Trust and Eaton Vance Management on behalf of the Wright
EquiFund-Country Strategy series of the Trust.
WRIGHT EQUIFUND EQUITY TRUST
BY:
--------------------
Peter M. Donovan
President
Accepted and agreed to:
EATON VANCE MANAGEMENT
BY:
---------------------------
Benjamin A. Rowland, Jr.
Vice President
