As filed with the Securities and Exchange Commission on February 25, 1999
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. 16 [x]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 19 [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)
[x] On April 30, 1999 pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (b)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
(Wright Logo)
The Wright EquiFund Equity Trust
PROSPECTUS
MAY 1, 1999
WRIGHT EQUIFUND - HONG KONG/CHINA
WRIGHT EQUIFUND - JAPAN
WRIGHT EQUIFUND - MEXICO
WRIGHT EQUIFUND - NETHERLANDS
As with all mutual funds, the Securities and Exchange Commission has not
determined whether the funds are a good investment or whether the information in
this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.
<PAGE>
Table of Contents
- ----------------------------------------------------------------------------
Page
The Wright EquiFund Equity Trust -- Overview ...................... 1
Information About the Funds
Wright EquiFund -- Hong Kong/China......................... 2
Wright EquiFund -- Japan................................... 4
Wright EquiFund -- Mexico.................................. 6
Wright EquiFund -- Netherlands............................. 8
Information About Your Account ...................................... 10
How the Funds Value Their Shares............................ 10
Purchasing Shares........................................... 10
Selling Shares.............................................. 11
Exchanging Shares........................................... 11
Dividends and Taxes .............................................. 12
Managing the Funds .................................................. 13
Financial Highlights ............................................. 15
Wright EquiFund -- Hong Kong/China......................... 00
Wright EquiFund -- Japan................................... 00
Wright EquiFund -- Mexico.................................. 00
Wright EquiFund -- Netherlands............................. 00
- --------------------------------------------------------------------------------
HOW TO USE THIS PROSPECTUS:
Reading this prospectus will help you decide if investing in the Wright funds is
right for you. Please keep this prospectus for future reference. Included in
this prospectus are descriptions telling you about each fund's:
(Graphic -- ship's wheel)
OBJECTIVE: what the fund seeks to achieve.
(Graphic -- compass)
Principal Investment Strategies: how the fund intends to achieve its investment
objective and the strategies used by Wright Investors' Service, the fund's
investment adviser.
(Graphic -- life preserver)
Principal Risks: the risks associated with the fund's primary investments.
Who May Want to Invest: decide if the fund is a suitable investment for you.
(Graphic -- assorted nautical flags)
Who May Want to Invest: decide if the fund is a suitable investment for you.
(Graphic -- ship's log)
Past Performance: the total return on your investment, including income from
dividends and interest, and the increase or decrease in price over various
time periods.
(Graphic -- two crossed anchors with a $ in the center)
Expenses: what overall costs you bear by investing in the fund.
<PAGE>
THE WRIGHT EQUIFUND EQUITY TRUST -- OVERVIEW
- -------------------------------------------------------------------------------
Each fund seeks to enhance total investment return (consisting of price
appreciation plus income) by investing in a broadly based portfolio of equity
securities selected from publicly traded companies in a National Equity Index.
Wright has developed a National Equity Index for each nation in which a fund
invests.
THE NATIONAL EQUITY INDICES
Each index includes all publicly traded companies in the nation that meet
the standards of a prudent investor. These standards require that care, skill
and caution be used in selecting securities for investment. A company must have
the following to be included:
o five years of audited operating information and a three year record of
pricing in a public market
o an established minimum in both book value and market value
o a significant portion of the company's shares are publicly owned
o the company had positive earnings for either the last fiscal,
calendar year or past 12 months, or cumulatively for the past three years
o the company is not a closed-end mutual fund, a real estate investment
trust or a non-bank securities broker/dealer.
In selecting securities for inclusion in an index, Wright uses its
Worldscope(R) international database. Wright may also use the services of major
financial institutions located in the nation of an index for assistance with
reports on particular industries and companies, economic surveys and analysis of
the investment environment and trends in a particular nation, and
recommendations as to whether securities should be included or excluded.
The indices are adjusted quarterly or as necessary to reflect any
significant events. Wright deletes a company when it no longer meets the
criteria for the index and adds other companies when they meet the criteria. The
indices give equal weight to each company. The use of equal weighting may result
in a greater representation of smaller capitalization companies. A detailed
explanation of the criteria used in selecting companies for inclusion in an
index is included in the statement of additional information.
WRIGHT INVESTORS SERVICE, THE FUNDS INVESTMENT ADVISER Wright is a leading
independent international investment management and advisory firm with more than
35 years experience. Wright manages about $4.5 billion dollars of assets in
portfolios of all sizes and styles, as well as a family of mutual funds. Wright
developed Worldscope(R), one of the world's largest and most complete databases
of financial information, which currently includes more than 19,000 companies in
49 nations.
Using a bottom-up fundamental approach, Wright systematically identifies
those companies in the Worldscope(R) database that meet minimum standards of
prudence and thus are suitable for investment by fiduciary investors. Companies
meeting these requirements are considered by Wright to be "investment grade."
All have established investment acceptance and active, liquid markets.
The investment process at Wright is directed and controlled by an
investment committee of eight experienced analysts. The committee makes all
decisions for the selection, purchase and sale of all securities.
- -----SIDE BAR TEXT-----
Bottom-Up Approach to Investing
This refers to the analysis of company information before considering the impact
of industry and economic trends. It differs from the "top-down" approach which
looks first at the economy, then the industry and last the company.
Fundamental Analysis
The analysis of company financial statements to forecast future price movements
using past records of assets, earnings, sales, products, management and markets.
It differs from technical analysis which relies on price and volume movements of
stocks and does not concern itself with financial statistics.
- -----END SIDE BAR TEXT-----
<PAGE>
WRIGHT EQUIFUND -- HONG KONG/CHINA
- -------------------------------------------------------------------------------
CUSIP: 982332736 Ticker Symbol: WEHKX
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks to enhance total investment return consisting of price
appreciation plus income. The fund's objective may be changed anytime by the
trustees without a shareholder vote.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in a broadly based portfolio of equity securities selected
by Wright from those companies listed on the National Equity Index for Hong Kong
and China. At least 65% of the fund's total assets are invested in companies
located in Hong Kong and China. For temporary defensive purposes, the fund may
hold cash or invest more than 20% of its net assets in short-term debt
securities. Although the fund would do this to reduce losses, defensive
investments may hurt the fund's efforts to achieve its objective.
Wright considers recent valuations and price/earnings momentum when
deciding which companies on the index present the best value in terms of current
price and forecasted earnings. Selected companies may not currently pay
dividends on their shares. Although the fund may acquire only those securities
that are included in the index, the fund's portfolio is not expected to resemble
the index either in the number of securities included or in the amount invested
in each security. A security is sold if it is deleted from the index.
(Graphic -- life preserver)
Principal Risks
The fund cannot eliminate risk or assure achievement of its objective. If
the following risks are realized you may lose money on your investment in the
fund.
The fund is subject to "management" and "market" risks. Management risk
means that Wright's strategy may not produce the expected results, causing
losses. Market risk means that the price of common stock may move down in
response to general market and economic conditions as well as the activities of
individual companies.
There are risks associated with investing in foreign countries including
currency risk (changes in foreign currency rates reducing the value of the
fund's assets), the collapse of the Hong Kong or Chinese economy, seizure,
expropriation or nationalization of a company's assets, and the impact of
political, social or diplomatic events.
The fund's share price may fluctuate more than the share price of funds
primarily invested in large companies. Small companies may pose greater risk due
to narrow product lines, limited financial resources, less depth in management
or a limited trading market for their stocks.
(Graphic --assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is not intended to be a complete investment program by itself but
may provide a diversification opportunity for investors seeking participation in
the economies of Hong Kong and China. The fund is intended for long-term
investors. To discourage short-term investors, there is a 1.0% redemption fee
for shares redeemed within six months of purchase. The fund may not be
appropriate if you are uncomfortable with the risks associated with investing in
foreign stocks.
(Graphic --ship's log)
PAST PERFORMANCE
The information on the next page shows the fund's performance for the
indicated periods. These returns include reinvestment of all dividends and
capital gain distributions, and reflect fund expenses. As with all mutual funds,
past performance does not guarantee future results.
<PAGE>
The bar chart illustrates the risks of investing in the fund by showing how
volatile the fund's performance has been for each full year since its inception.
<TABLE>
<CAPTION>
Total Return as of December 31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
90%
- ------------------------------------------------------------------------------------------------------------
80% 84.32%
- -----------------------------------------------------------------------------------------------------------
70%
- -----------------------------------------------------------------------------------------------------------
60%
- -----------------------------------------------------------------------------------------------------------
50%
- -----------------------------------------------------------------------------------------------------------
40%
- -----------------------------------------------------------------------------------------------------------
30% 34.34%
- -----------------------------------------------------------------------------------------------------------
20% 27.96%
- -----------------------------------------------------------------------------------------------------------
10% 16.23%
- -----------------------------------------------------------------------------------------------------------
0% 1.63%
- -----------------------------------------------------------------------------------------------------------
(10)% -18.65%
- -----------------------------------------------------------------------------------------------------------
(20)% -27.26%
- -----------------------------------------------------------------------------------------------------------
(30)% -37.03%
- -----------------------------------------------------------------------------------------------------------
(40)%
- -----------------------------------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998
Best quarter: 41.38% (4th quarter 1993) Worst quarter: -32.39% (4th quarter 1997)
</TABLE>
The fund's average annual return is compared with those of the FT/S&P Actuaries
- - Hong Kong Index and the Wright National Equity Index. While the fund does not
seek to match the returns of these unmanaged indices, they are good indicators
of the performance of the Hong Kong and Chinese stock markets. These indices,
unlike the fund, do not incur fees or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 5 Year (July 2, 1990)
- -------------------------------------------------------------------------------
EquiFund -- Hong Kong/China -18.65% -13.49% 1.71%
National Equity Index -25.05% -10.95% 7.18%
FT/S&P Actuaries - Hong Kong -9.08% -5.33% 14.51%
(Graphic -- two crossed anchors with a $ in the center)
EXPENSES
Annual Fund
Operating Expenses
(deducted directly from fund assets)
- -------------------------------------------------------------------------------
As a shareholder of the fund, Management fee 0.00%
you do not pay any sales Distribution (12b-1) fee 0.25%
charges or exchange fees Other expenses 0.00%
-------------------------------------------
Total Annual Fund 0.00%
Operating Expenses
- -------------------------------------------------------------------------------
There is a 1.0% redemption fee for redeeming shares within six months of
purchase.
The following example will help you compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period, and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for
comparison only. Based on these assumptions your costs at the end of each period
would be:
Example Costs
One Year Three Years Five Years Ten Years
- -------------------------------------------------------------------------------
$0.00 $0.00 $0.00 $0.00
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
<PAGE>
WRIGHT EQUIFUND -- JAPAN
- -------------------------------------------------------------------------------
CUSIP: 982332728 Ticker Symbol: WEJPX
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks to enhance total investment return consisting of price
appreciation plus income. The fund's objective may be changed anytime by the
trustees without a shareholder vote.
(Grapjis -- compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in a broadly based portfolio of equity securities selected
by Wright from those companies listed on the Japanese National Equity Index. At
least 65% of the fund's total assets are invested in companies located in Japan.
For temporary defensive purposes, the fund may hold cash or invest more than 20%
of its net assets in short-term debt securities. Although the fund would do this
to reduce losses, defensive investments may hurt the fund's efforts to achieve
its objective.
Wright considers recent valuations and price/earnings momentum when
deciding which companies on the index present the best value in terms of current
price and forecasted earnings. Selected companies may not currently pay
dividends on their shares. Although the fund may acquire only those securities
that are included in the index, the fund's portfolio is not expected to resemble
the index either in the number of securities included or in the amount invested
in each security. A security is sold if it is deleted from the index.
(Graphic -- life preserver)
Principal Risks
The fund cannot eliminate risk or assure achievement of its objective. If
the following risks are realized you may lose money on your investment in the
fund.
The fund is subject to "management" and "market" risks. Management risk
means that Wright's strategy may not produce the expected results, causing
losses. Market risk means that the price of common stock may move down in
response to general market and economic conditions as well as the activities of
individual companies.
There are risks associated with investing in foreign countries including
currency risk (changes in foreign currency rates reducing the value of the
fund's assets), the collapse of the Japanese economy, seizure, expropriation or
nationalization of a company's assets, and the impact of political, social or
diplomatic events.
The fund's share price may fluctuate more than the share price of funds
primarily invested in large companies. Small companies may pose greater risk due
to narrow product lines, limited financial resources, less depth in management
or a limited trading market for their stocks.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is not intended to be a complete investment program by itself but
may provide a diversification opportunity for investors seeking participation in
the Japanese economy. The fund is intended for long-term investors. To
discourage short-term investors, there is a 1.0% redemption fee for shares
redeemed within six months of purchase. The fund may not be appropriate if you
are uncomfortable with the risks associated with investing in foreign stocks.
<PAGE>
(Graphic -- ship's log)
PAST PERFORMANCE
The information below shows the fund's performance for the indicated
periods. These returns include reinvestment of all dividends and capital gain
distributions, and reflect fund expenses. As with all mutual funds, past
performance does not guarantee future results.
The bar chart illustrates the risks of investing in the fund by showing how
volatile the fund's performance has been for each full year since its inception.
Year-by-Year Total Return as of December 31
20%
- -------------------------------------------------------------------------------
10%
- -------------------------------------------------------------------------------
0% 5.41%
- -------------------------------------------------------------------------------
(10)% -9.10% -9.10%
- -------------------------------------------------------------------------------
(20)% -14.20%
- -------------------------------------------------------------------------------
1995 1996 1997 1998
Best quarter:20.17%(4th quarter 1998) Worst quarter:-18.18% (4th quarter 1997)
The fund's average annual return is compared with those of the Tokyo SE Index
and the Wright National Equity Index. While the fund does not seek to match the
returns of these unmanaged indices, they are good indicators of the performance
of the Japanese stock market. These indices, unlike the fund, do not incur fees
or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 3 Years (February 14, 1994)
- -------------------------------------------------------------------------------
EquiFund-- Japan 5.41% -6.36% -6.71%
National Equity Index 17.63% -19.24% -12.45%
FT/S&P Actuaries - Japan 6.53% -12.67% -8.07%
(Graphic -- two crossed anchors with a $ in the center)
EXPENSES
Annual Fund
Operating Expenses
(deducted directly from fund assets)
- -------------------------------------------------------------------------------
As a shareholder in the Management fee 0.00%
fund, you do not pay any Distribution (12b-1) fee 0.25%
sales charges or redemption Other expenses 0.00%
fees. --------------------------------------------------
Total Annual Fund 0.00%
Operating Expenses
- -------------------------------------------------------------------------------
There is a 1.0% redemption fee for redeeming shares within six months of
purchase.
The following example will help you compare the cost of investing in the
fund to the cost of investing in other mutual funds by showing what your costs
may be over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period, and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for
comparison only. Based on these assumptions your costs at the end of each period
would be:
Example Costs
One Year Three Years Five Years Ten Years
- -------------------------------------------------------------------------------
$0.00 $0.00 $0.00 $0.00
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
<PAGE>
WRIGHT EQUIFUND -- MEXICO
- -------------------------------------------------------------------------------
CUSIP: 98233284 Ticker Symbol: WEMEX
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks to enhance total investment return consisting of price
appreciation plus income. The fund's objective may be changed anytime by the
trustees without a shareholder vote. Principal Investment Strategies The fund
invests in a broadly based portfolio of equity securities selected by Wright
from those companies listed on the Mexican National Equity Index. At least 65%
of the fund's total assets are invested in companies located in Mexico. For
temporary defensive purposes, the fund may hold cash or invest more than 20% of
its net assets in short-term debt securities. Although the fund would do this to
reduce losses, defensive investments may hurt the fund's efforts to achieve its
objective.
Wright considers recent valuations and price/earnings momentum when
deciding which companies on the index present the best value in terms of current
price and forecasted earnings. Selected companies may not currently pay
dividends on their shares. Although the fund may acquire only those securities
that are included in the index, the fund's portfolio is not expected to resemble
the index either in the number of securities included or in the amount invested
in each security. A security is sold if it is deleted from the index.
(Graphic --life preserver)
PRINCIPAL RISKS
The fund cannot eliminate risk or assure achievement of its objective. If
the following risks are realized you may lose money on your investment in the
fund.
The fund is subject to "management" and "market" risks. Management risk
means that Wright's strategy may not produce the expected results, causing
losses. Market risk means that the price of common stock may move down in
response to general market and economic conditions as well as the activities of
individual companies.
There are risks associated with investing in foreign countries including
currency risk (changes in foreign currency rates reducing the value of the
fund's assets), the collapse of the Mexican economy, seizure, expropriation or
nationalization of a company's assets, and the impact of political, social or
diplomatic events. Mexico is considered by some to be an emerging market.
Emerging markets tend to be less liquid and regulated than the markets of
developed countries. Also, political instability and currency fluctuations may
be more extreme.
The fund's share price may fluctuate more than the share price of funds
primarily invested in large companies. Small companies may pose greater risk due
to narrow product lines, limited financial resources, less depth in management
or a limited trading market for their stocks.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is not intended to be a complete investment program by itself but
may provide a diversification opportunity for investors seeking participation in
the Mexican economy. The fund is intended for long-term investors. To discourage
short-term investors, there is a 1.0% redemption fee for shares redeemed within
six months of purchase. The fund may not be appropriate if you are uncomfortable
with the risks associated with investing in foreign stocks.
(Graphic -- ship's log)
PAST PERFORMANCE
The information on the next page shows the fund's performance for the
indicated periods. These returns include reinvestment of all dividends and
capital gain distributions, and reflect fund expenses. As with all mutual funds,
past performance does not guarantee future results.
<PAGE>
The bar chart illustrates the risks of investing in the fund by showing how
volatile the fund's performance has been for each full year since its inception.
Year-by-Year Total Return as of December 31
50%
- -------------------------------------------------------------------------------
40% 42.38%
- -------------------------------------------------------------------------------
30%
- -------------------------------------------------------------------------------
20% 27.49%
- -------------------------------------------------------------------------------
10%
- -------------------------------------------------------------------------------
0%
- -------------------------------------------------------------------------------
(10)%
- -------------------------------------------------------------------------------
(20)%
- -------------------------------------------------------------------------------
(30)% -33.37% -37.21%
- -------------------------------------------------------------------------------
(40)%
- -------------------------------------------------------------------------------
1995 1996 1997 1998
Best quarter:24.58%(2nd quarter 1995) Worst quarter: -43.47% (1st quarter 1995)
The fund's average annual return is compared with those of the Mexican Bolsa IPC
Index and the Wright National Equity Index. While the fund does not seek to
match the returns of these unmanaged indices, they are good indicators of the
performance of the Mexican stock market. These indices, unlike the fund, do not
incur fees or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 3 Years (August 2, 1994)
- -------------------------------------------------------------------------------
EquiFund-- Mexico -37.21% 4.46% -13.59%
National Equity Index -41.50% 6.07% -9.06%
Mexican Bolsa IPC Index -38.33% 3.44% -12.71%
(Graphic -- two crosses anchors with a $ in the center)
EXPENSES
Annual Fund
Operating Expenses
(deducted directly from fund assets)
- -------------------------------------------------------------------------------
As a shareholder in the Management fee 0.00%
fund, you do not pay any Distribution (12b-1) fee 0.25%
sales charges or exchange Other expenses 0.00%
fees. -------------------------------------------------
Total Annual Fund 0.00%
Operating Expenses
- -------------------------------------------------------------------------------
There is a 1.0% redemption fee for redeeming shares within six months of
purchase.
The following example will help you compare the cost of investing in the fund to
the cost of investing in other mutual funds by showing what your costs may be
over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period, and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for
comparison only. Based on these assumptions your costs at the end of each period
would be:
Example Costs
One Year Three Years Five Years Ten Years
- -------------------------------------------------------------------------------
$0.00 $0.00 $0.00 $0.00
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
<PAGE>
WRIGHT EQUIFUND -- NETHERLANDS
- --------------------------------------------------------------------------------
CUSIP: 982332801
Ticker Symbol: WENLX
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks to enhance total investment return consisting of price
appreciation plus income. The fund's objective may be changed anytime by the
trustees without a shareholder vote.
(Graphic -- compass)
Principal Investment Strategies
The fund invests in a broadly based portfolio of equity securities selected
by Wright from those companies listed on the National Equity Index for the
Netherlands. At least 65% of the fund's total assets are invested in companies
located in the Netherlands. For temporary defensive purposes, the fund may hold
cash or invest more than 20% of its net assets in short-term debt securities.
Although the fund would do this to reduce losses, defensive investments may hurt
the fund's efforts to achieve its objective.
Wright considers recent valuations and price/earnings momentum when
deciding which companies on the index present the best value in terms of current
price and forcasted earnings. Selected companies may not currently pay dividends
on their shares. Although the fund may acquire only those securities that are
included in the index, the fund's portfolio is not expected to resemble the
index either in the number of securities included or in the amount invested in
each security. A security is sold if it is deleted from the index.
(Graphic -- life preserver)
Principal Risks
The fund cannot eliminate risk or assure achievement of its objective. If
the following risks are realized you may lose money on your investment in the
fund.
The fund is subject to "management" and "market" risks. Management risk
means that Wright's strategy may not produce the expected results, causing
losses. Market risk means that the price of common stock may move down in
response to general market and economic conditions as well as the activities of
individual companies.
There are risks associated with investing in foreign countries including
currency risk (changes in foreign currency rates reducing the value of the
fund's assets), the collapse of the Dutch economy, seizure, expropriation or
nationalization of a company's assets, and the impact of political, social or
diplomatic events.
The Netherlands, along with other European countries, has adopted the Euro
as its common currency. Existing national currencies of these countries are
sub-currencies of the Euro until July 1, 2002, when the old currencies will
disappear entirely. The introduction of the Euro presents some possible risks,
which could adversely affect the value of securities held by the fund, as well
as possible adverse tax consequences. There could be unpredictable effects on
trade and commerce, resulting in increased volatility for all financial markets.
The fund's share price may fluctuate more than the share price of funds
primarily invested in large companies. Small companies may pose greater risk due
to narrow product lines, limited financial resources, less depth in management
or a limited trading market for their stocks.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is not intended to be a complete investment program by itself but
may provide a diversification opportunity for investors seeking participation in
the Dutch economy. The fund is intended for long-term investors. To discourage
short-term investors, there is a 1.0% redemption fee for shares redeemed within
six months of purchase. The fund may not be appropriate if you are uncomfortable
with the risks associated with investing in foreign stocks.
<PAGE>
(Graphic -- ship's log)
PAST PERFORMANCE
The information below shows the fund's performance for the indicated
periods. These returns include reinvestment of all dividends and capital gain
distributions, and reflect fund expenses. As with all mutual funds, past
performance does not guarantee future results.
The bar chart illustrates the risks of investing in the fund by showing how
volatile the fund's performance has been for each full year since its inception
<TABLE>
<CAPTION>
Total Return as of December 31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
40%
- --------------------------------------------------------------------------------------------------------
30% 36.25%
- --------------------------------------------------------------------------------------------------------
20% 24.46%
- --------------------------------------------------------------------------------------------------------
10% 19.52% 11.68% 18.84% 15.56%
- --------------------------------------------------------------------------------------------------------
0% 10.00%
- --------------------------------------------------------------------------------------------------------
(10)% -8.20%
- --------------------------------------------------------------------------------------------------------
(20)%
- --------------------------------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998
Best quarter:17.51% (4th quarter 1998) Worst quarter: -18.70% (3rd quarter 1996)
</TABLE>
The fund's average annual return is compared with those of the FT/S&P Actuaries
Index and the Wright National Equity Index. While the fund does not seek to
match the returns of these unmanaged indices, they are indicators of the
performance of the Dutch stock markets. These indices, unlike the fund, do not
incur fees or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 5 Years (July 2, 1990)
- -------------------------------------------------------------------------------
EquiFund-- Netherlands 24.46% 21.07% 12.35%
National Equity Index 12.97% 17.87% 13.86%
FT/S&P Actuaries Index 31.98% 25.15% 20.92%
(Graphic -- two crossed anchors with a $ in the center)
EXPENSES
Annual Fund
Operating Expenses
(deducted directly from fund assets)
- -------------------------------------------------------------------------------
As a shareholder in the Management fee 0.00%
fund, you do not pay any Distribution (12b-1) fee 0.25%
sales charges or exchange Other expenses 0.00%
fees. -----------------------------------------------------
Total Annual Fund 0.00%
Operating Expenses
- ------------------------------------------------------------------------------
There is a 1.0% redemption fee for redeeming shares within six months of
purchase.
The following example will help you compare the cost of investing in the
fund to the cost of investing in other mutual funds by showing what your costs
may be over time. It uses the same assumptions that other funds use in their
prospectuses: $10,000 initial investment, 5% total return for each year, fund
operating expenses remain the same for each period, and redemption after the end
of each period.
Your actual costs may be higher or lower, so use this example for
comparison only. Based on these assumptions your costs at the end of each period
would be:
Example Costs
One Year Three Years Five Years Ten Years
- -------------------------------------------------------------------------------
$0.00 $0.00 $0.00 $0.00
- -----SIDE BAR TEXT-----
Understanding Expenses
Annual fund operating expenses are paid by the fund. As a result, you pay for
them indirectly because they reduce the fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs, such as shareholder
recordkeeping and reports, custodian and pricing services, and registration
fees.
- -----END SIDE BAR TEXT-----
<PAGE>
INFORMATION ABOUT YOUR ACCOUNT
- --------------------------------------------------------------------------------
How the Funds Value Their Shares
The price at which you buy, sell or exchange fund shares is the net asset value
per share or NAV. This share price is determined by adding the value of a fund's
investments, cash and other assets, deducting liabilities, and then dividing
that amount by the total number of shares outstanding.
The NAV for each fund is calculated at the close of regular trading of the
New York Stock Exchange (normally 4:00 p.m. New York time) each day that the
Exchange is open. It is not calculated on days the Exchange is closed. The price
for a purchase, redemption or exchange of fund shares is the next NAV calculated
after your request is received.
When the funds calculate their share price, they value their portfolio
securities at the last current sales price on the market where the security is
normally traded, unless Wright deems that price is not representative of market
values. This could happen if an event after the close of the market seemed
likely to have a major impact on prices of securities traded on the market.
Securities that cannot be valued at closing prices will be valued by Wright at
fair value in accordance with procedures adopted by the trustees.
The value of all assets and liabilities expressed in foreign currencies is
converted into U.S. dollars at the most recent market rates quoted by one or
more major banks shortly before the close of the Exchange. Foreign securities
may trade during hours and on days that the Exchange is closed and the funds'
NAVs are not calculated. Although the funds' NAVs may be affected, you will not
be able to purchase or redeem shares on these days.
PURCHASING SHARES
Purchasing Shares for Cash
Shares of the funds may be purchased without a sales charge at NAV. The
minimum initial investment is $1,000 but this may be waived for automatic
investment program accounts and investments in 401(k) or similar tax-sheltered
retirement plans. The minimum initial investment will be reduced to $500 for
shares purchased through certain investment advisers, financial planners,
brokers or other intermediaries that charge a fee for their services. There is
no minimum for subsequent purchases. The funds have the right to reject any
purchase order, or limit or suspend the offering of their shares.
Authorized dealers, including investment dealers, banks or other
institutions, may impose investment minimums higher than those imposed by the
funds. They may also charge for their services. There are no charges if you
purchase your shares directly from the funds.
How to Buy Shares
o If you buy shares directly from the funds, please refer to your
Shareholder Manual for instructions on how to buy fund shares.
o If you buy shares through bank trust departments or other fiduciary
institutions, please consult your trust or investment officer.
o If you buy shares through a broker, please consult your broker for
purchase instructions.
o If you buy shares through an account with a registered investment adviser
or financial planner, please contact your investment adviser or planner
o If you buy shares through a retirement plan, please consult your plan
documents or speak with your plan administrator.
- -----SIDE BAR TEXT-----
Paying for Shares
You may buy shares by wire, check, Federal Reserve draft, or other negotiable
bank draft, payable in U.S. dollars and drawn on U.S banks. Third party checks
will not be accepted. A charge is imposed on any returned checks.
- -----END SIDE BAR TEXT-----
<PAGE>
Purchasing Shares Through Exchange of Securities
You may buy shares by delivering to the funds' custodian securities that meet
that fund's investment objective and policies, have easily determined market
prices and are otherwise acceptable. Exchanged securities must have a minimum
aggregate value of $5,000. Securities are valued as of the date they are
received by the funds. If you want to exchange securities for fund shares, you
should furnish a list with a full description of the securities that are
proposed to be delivered. See the Shareholder Manual for detailed instructions.
Selling Shares
You may redeem or sell shares of the funds on any business day.
No redemption request will be processed until your shares have been paid for in
full. If the shares to be redeemed were purchased by check, the redemption
payment will be delayed until the check has been collected. Telephone and
internet redemption procedures are described in the Shareholder Manual.
In times of drastic economic or market conditions, you may have difficulty
selling shares by telephone or over the internet. These redemption options may
be modified or terminated without notice to shareholders.
Redemption requests received in "proper form" before 4:00 p.m. New York
time will be processed at that day's NAV. "Proper form" means that the fund has
received your request, all shares are paid for, and all documentation along with
any required signature guarantee, are included. The fund normally pays
redemption proceeds by check within one business day to the address of record.
Payment will be by wire if you specified this option on your account
application.
To sell or redeem shares, please refer to your Shareholder Manual or
contact your trust officer, adviser or plan administrator for more information.
- -----SIDE BAR TEXT-----
Redemption Fee
If you redeem shares within six months of purchase you will pay a redemption fee
of 1.00%. This redemption fee may be waived on shares purchased through an
investment adviser, financial planner, broker or other intermediary that charges
a fee for its services and has made special arrangements with the funds or
Wright Investors' Service Distributors, Inc.
- -----END SIDE BAR TEXT-----
Redemptions In-Kind
Although the funds expect to pay redemptions in cash, they reserve the
right to redeem shares in-kind by giving the shareholder readily marketable
portfolio securities instead of cash. This is done to protect the interests of
remaining shareholders. If this occurs, you will incur transaction costs if you
sell the securities.
Involuntary Redemption
If your account falls below $500 a fund may
redeem your shares. You will receive notice 60 days before this happens. Your
account will not be redeemed if the balance is below the minimum due to
investment losses. No redemption fee will be imposed on involuntary redemptions.
EXCHANGING SHARES
Shares of the funds may be exchanged for shares of the same class of any
other fund described in this prospectus. You may also exchange shares for the
Standard Shares of The Wright Managed Blue Chip Investment Funds. The exchange
of shares results in the sale of the fund's shares and the purchase of another
fund's shares. An exchange results in a gain or loss and is therefore a taxable
event for you.
- -----SIDE BAR TEXT-----
Market-Timers
The funds believe that use of the exchange privilege by investors utilizing
market-timing strategies adversely affects other fund shareholders. Therefore,
the funds generally will not honor requests for exchanges by shareholders who
identify themselves or are identified as "market-timers." Market-timers are
identified as those investors who repeatedly make exchanges within a short
period. The funds do not automatically redeem shares that are subject to a
rejected exchange request.
- -----END SIDE BAR TEXT-----
<PAGE>
DIVIDENDS AND TAXES
- -------------------------------------------------------------------------------
Dividends and Distributions
Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in fund shares. The funds generally make two
different kinds of distributions:
o Capital gains from the sale of portfolio securities held by a fund.
The funds will distribute any net realized capital gains annually,
normally in December.
o Net investment income from interest or dividends received on securities
held by a fund. The funds will distribute their investment income annually.
Most of the funds' distributions are expected to be from capital gains.
TAX CONSEQUENCES
Buying, selling, holding or exchanging mutual fund shares may result in a gain
or a loss and is a taxable event. Distributions, whether received in cash or
additional fund shares are subject to federal income tax.
Transaction Tax Status
- -------------------------------------------------------------------------------
Income dividends Ordinary income
Short-term capital gains Ordinary income
Long-term capital gains Capital gains
The funds may be subject to foreign withholding taxes or other foreign taxes on
some of their foreign investments. This will reduce the yield or total return on
those investments. Your investment in the funds may have additional tax
consequences. Please consult your tax advisor on state, local or other
applicable tax laws.
- -----SIDE BAR TEXT-----
Tax Considerations
Unless your investment is in a tax-deferred account you may want to avoid:
o Investing in a fund near the end of its fiscal year. If the fund makes a
capital gains distribution you will receive some of your investment back as a
taxable distribution.
o Selling shares at a loss for tax purposes and then making an identical
investment within 30 days. This results in a "wash sale" and you will not be
allowed to claim a tax loss.
- -----END SIDE BAR TEXT-----
<PAGE>
MANAGING THE FUNDS
- -------------------------------------------------------------------------------
Wright Investors' Service manages the funds' investments. Wright is located at
1000 Lafayette Boulevard, Bridgeport, CT 06604.
Wright receives a monthly advisory fee for its services. The table below
lists the advisory fee rates paid for the fiscal year ended December 31, 1998:
Fee Paid
(as a % of average
Fund daily net assets)
- -------------------------------------------------------------------------------
Wright EquiFund-- Hong Kong/China 00%
Wright EquiFund-- Japan 00%
Wright EquiFund-- Mexico 00%
Wright EquiFund-- Netherlands 00%
Investment Committee
An investment committee of senior officers controls the investment
selections, policies and procedures of the funds. These officers are all
experienced analysts with different areas of expertise and over 195 years of
combined service with Wright. The investment committee consists of the following
members:
<TABLE>
<CAPTION>
Committee Member Title Joined Wright in
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter M. Donovan, CFA President and Chief Executive Officer 1966
Judith R. Corchard Chairman of the investment committee 1960
Executive Vice President - Investment Management
Jatin J. Mehta, CFA Chief Investment Officer - U.S. Equities 1969
Harivadan K. Kapadia, CFA Senior Vice President - Investment Analysis and Information 1969
Michael F. Flament, CFA Senior Vice President - Investment and Economic Analysis 1972
James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982
Amit S. Khandwala Senior Vice President - International Investments 1986
Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985
</TABLE>
Portfolio Turnover
The funds may sell a portfolio security regardless of how long the security
has been held. The funds do not intend to engage in trading for short-term
profits. However, portfolio turnover rates will vary. In the past turnover rates
have exceeded and in the future may exceed 100%. A turnover rate of 100% means
the securities owned by a fund were replaced once during the year. Higher
turnover rates may result in higher brokerage costs to the funds, and in higher
net taxable gains for you as an investor, and will reduce the funds' returns.
-----SIDE BAR TEXT-----
Administrator
Eaton Vance Management serves as the funds' administrator and is responsible for
managing their daily business affairs. Eaton Vance's services include operating
the funds' order room, recordkeeping, preparing and filing the documents
required to comply with federal and state securities laws, supervising the
activities of the funds' custodian and transfer agent, providing assistance in
connection with the trustees' and shareholders' meetings and other necessary
administrative services.
- -----END SIDE BAR TEXT-----
<PAGE>
Year 2000 Readiness
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information after the year 2000.
Wright is addressing this issue and is getting reasonable assurances from the
funds' other major service providers that they too are addressing these issues
to preserve the smooth functioning of the funds' trading, pricing, shareholder
account, custodial and other operations. Wright is also investigating the
vulnerability to year 2000 problems of companies in the funds' portfolios.
Improperly functioning computers may disrupt securities markets or result
in overall economic uncertainty. Individual companies may also be adversely
affected by the cost of fixing their computers, which could be substantial.
There is no guarantee that all problems will be avoided.
Distribution Fee
Each fund has adopted a 12b-1 plan permitting it to pay a fee to finance
the distribution of its shares. Wright Investors' Service Distributors, Inc.,
the principal underwriter and distributor of each fund, receives a distribution
fee under the plan of 0.25% of each fund's average daily net assets. Because
this fee is paid on an ongoing basis, it may cost you more than other types of
sales charges over time.
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The financial highlights will help you understand each fund's financial
performance for the periods indicated. Certain information reflects financial
results for a single fund share. Total return shows how much your investment in
the fund increased or decreased during each period, assuming you reinvested all
dividends and distributions. XXXXXXXX, independent certified public accountants,
audited this information. Their reports are included in the funds' annual
report, which is available upon request.
<PAGE>
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard, Bridgeport, CT 06604
INVESTMENT COMPANY ACT FILE NUMBERS:
- ------------------------------------------------------------------------------
The Wright EquiFund Equity Trust................................811-05866
Wright EquiFund -- Hong Kong/China
Wright EquiFund -- Japan
Wright EquiFund -- Mexico
Wright EquiFund -- Netherlands
FOR MORE INFORMATION
Additional information about the funds' investments is available in the
funds' semi-annual and annual reports to shareholders. The funds' annual report
contains a discussion of the market conditions and investment strategies that
affected the funds' performance over the past year.
You may want to read the statement of additional information (SAI) for more
information on the funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the SAI,
request other information or get answers to your questions about the funds by
writing or calling:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
(800) 888-9471
e-mail: [email protected]
Copies of documents and application forms can be viewed and downloaded from
Wright's website: www.wrightinvestors.com.
Text-only versions of fund documents can be viewed online or downloaded
from the SEC's web site at www.sec.gov. You can also obtain copies by visiting
the SEC's Public Reference Room in Washington DC. For information on the
operation of the Public Reference Room, call (800) SEC-0330. Copies of documents
may also be obtained by sending your request and the appropriate fee to the
SEC's Public Reference Section, Washington, DC 20549-6009.
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1999
THE WRIGHT EQUIFUND EQUITY TRUST
Wright EquiFund-Hong Kong/China Wright EquiFund-Mexico
Wright EquiFund-Japan Wright EquiFund-Netherlands
24 Federal Street
Boston, Massachusetts 02110
Table of Contents
Page
The Funds and Their Investment Objective and Policies...... 2
Additional Information about the Trust..................... 7
Officers and Trustees...................................... 10
Control Persons and Principal Holders of Shares............ 12
Investment Advisory and Administrative Services............ 13
Custodian.................................................. 14
Independent Certified Public Accountants................... 14
Brokerage Allocation....................................... 15
Principal Underwriter...................................... 16
How the Funds Value their Shares........................... 17
Performance Information.................................... 17
Taxes...................................................... 18
Financial Statements....................................... 19
Appendix A................................................. 20
This combined Statement of Additional Information is NOT a prospectus and is
authorized for distribution to prospective investors only if preceded or
accompanied by the current combined Prospectus of the funds dated May 1, 1999,
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>
THE FUNDS AND THEIR INVESTMENT OBJECIVES
Unless otherwise defined herein, capitalized terms have the meaning given
to them in the Prospectus.
THE FUNDS AND THEIR INVESTMENT OBJECTIVES AND POLICIES -- Each fund seeks
to enhance total investment return (consisting of price appreciation plus
income) by investing in a broadly based portfolio of equity securities selected
by the Investment Adviser from the publicly traded companies in the National
Equity Index for the nation or nations in which each fund is permitted to
invest. 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. Each fund will invest at least 65% of its
total assets in the securities of companies located in the country or countries
referred to in its name. A fund's selection of equity securities is limited to
those equity securities included in the National Equity Index (described below)
relating to such fund. Each fund will, under normal market conditions, invest at
least 80% of its net assets in equity securities, including common stocks,
preferred stocks, rights, warrants and securities convertible into stock. With
respect to Hong Kong/China, Japan, and Netherlands the policy stated in the
preceding sentence is fundamental and may be changed only by the vote of a
majority of a fund's outstanding voting securities.
Each fund may invest up to 20% of its net assets in 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. The reserve may consist of 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.
The fund may hold cash or invest more than 20% of its net assets in these
securities for temporary, defensive purposes.
Except as provided above and except for the fundamental investment
restrictions listed below, the investment objective and policies of each fund
are not fundamental and may be changed by the Trustees of the Trust without a
vote of the affected fund's shareholders. If any changes were made, the fund
might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder in
the fund. There is no assurance that the funds will achieve their respective
investment objectives. The market price of securities held by the funds that are
quoted or denominated in foreign currencies, when expressed in U.S. dollars,
will fluctuate in response to changes in exchange rates between the U.S. dollar
and the currencies in which the securities are quoted or denominated. The net
asset value of each fund's shares will also fluctuate as a result of changes in
the value of the securities that it owns.
THE NATIONAL EQUITY INDICES -- Wright, with the assistance of local
financial institutions as described below, has developed the National Equity
Indices (the "Indices"). Each Index is designed to be an index of substantially
all the publicly traded companies in the nation or nations in which each
respective fund is permitted to invest which meet the requirements of a prudent
investor. 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. The
Investment Adviser will select securities for investment from those included in
the corresponding Index.
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 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 which meet the
requirements of the prudent investor 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 that 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. A detailed explanation of the objective criteria used in the process of
selecting companies for inclusion in an Index is included herein.
The securities included in an Index will be (i) admitted to official
listing on a stock exchange in any Member State of the European Union, (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 Union 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.
<PAGE>
The performance of each National Equity Index is included in various
publications of Wright Investors' Service, including the monthly International
Investment Advice and Analysis.
In selecting securities for the Indices and for inclusion in the portfolios
of the funds, Wright utilizes its international database, which includes
WORLDSCOPE(R). WORLDSCOPE(R) provides more than 1,500 items of information on
more than 17,700 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
respective funds are permitted to invest to supply Wright with research products
and services including reports on particular industries and companies, economic
surveys and analysis 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).
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.
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 each fund's assets may be held in
cash (including, subject to the requirements of the Internal Revenue Code of
1986, as amended (the "Code") applicable to regulated investment companies, the
foreign currency of the nation or nations in which such 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 pursuant to procedures established by the Trustees to be
of comparable quality; short-term corporate obligations and other debt
instruments which at the date of investment are rated AA or better by S&P or Aa
or better by Moody's or, if unrated, which are deemed by the Investment Adviser
pursuant to procedures established by the Trustees 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 currency of the nation in which the fund primarily invests.
U.S. GOVERNMENT, AGENCY AND INSTRUMENTALITY SECURITIES -- U.S. Government
securities 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 -- Each fund may enter into repurchase agreements in
order to earn income on temporarily uninvested cash. Repurchase agreements
involve the purchase of U.S. Government securities or of other high quality
short-term debt
<PAGE>
obligations. At the same time a 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 a fund to earn a return on
cash which is only temporarily available. A fund's risk is the ability of the
vendor to pay an agreed upon sum upon the delivery date, 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 a fund being able to resell the security.
There is no percentage limit on the amount of any fund's investments in
repurchase agreements, except for the requirement that, under normal market
conditions, at least 80% of each fund's net assets will be invested in equity
securities.
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.
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. Each 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 -- Each 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 -- Wright EquiFund - Mexico may purchase warrants and
each fund may purchase rights. No fund intends to invest more than 5% of its net
assets in warrants and rights as the case may be (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 funds 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 a fund's investment objective.
Investing in securities of foreign governments or securities issued by companies
<PAGE>
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 a 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, a fund may be affected
favorably or unfavorably by changes in currency exchange rates and may incur
costs in connection with conversion between currencies.
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;
however, the funds, other than Mexico fund, do not anticipate investments in
securities of 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.
The above risks may be intensified for investments in emerging markets or
countries with limited or developing capital markets such as Mexico and
countries located in the Asia-Pacific region. Security prices in these markets
can be significantly more volatile than in more developed countries, reflecting
the greater uncertainties of investing in less established markets and
economies. Political, legal and economic structures in many of these emerging
market countries may be undergoing significant evolution and rapid development,
and they may lack the social, political, legal and economic stability
characteristic of more developed countries. Emerging market countries may have
failed in the past to recognize private property rights. They may have
relatively unstable governments, present the risk of nationalization of
businesses, restrictions on foreign ownership, or prohibitions on repatriation
of assets, and may have less protection of property rights than more developed
countries. Their economies may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and may
suffer from extreme and volatile debt burdens or inflation rates. Local
securities markets may trade a small number of securities and may be unable to
respond effectively to increases in trading volume, potentially making prompt
liquidation of substantial holdings difficult or impossible at times. A fund may
be required to establish special custodial or other arrangements before making
certain investments in those countries. Securities of issuers located in these
countries may have limited marketability and may be subject to more abrupt or
erratic price movements.
Each fund may, but does not expect to, 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 EXCHANGE TRANSACTIONS -- The funds 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 a fund may temporarily be held in bank deposits in foreign currencies
during the completion of investment programs. Therefore, the value of a 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 each 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. A 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 a fund at one rate, while offering a lesser rate of exchange
should the fund desire to resell that currency to the dealer. The funds do not
intend to speculate in foreign currency exchange rates.
As an alternative to spot transactions, a 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
<PAGE>
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, a fund will maintain segregated accounts in connection with such
transactions. The funds intend to enter into such contracts only on net terms.
A fund may enter into forward contracts under two circumstances. First,
when a 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 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, a fund may enter into a forward contract to sell
the amount of foreign currency approximating the value of some or all of the
securities 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 funds do not intend to enter into forward contracts for
such hedging purposes on a regular or continuous basis. A 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.
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 a 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.
A 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 a 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 a 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 those described above. Of course, a 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 a 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.
<PAGE>
There is no other percentage limitation on any 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. A fund's foreign currency transactions may be limited by the
requirements of Subchapter M of the Code for qualification as a regulated
investment company.
LENDING PORTFOLIO SECURITIES -- Each 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 continuously secured by collateral in
cash or liquid securities. During the existence of a loan, a 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. A 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.
ADDITIONAL INFORMATION ABOUT THE TRUST
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if the interests of a
particular Wright EquiFund are affected, a majority of such 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.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by each fund and
may be changed as to a fund only by the vote of a majority of the affected
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 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, each fund may not:
(The following fundamental investment restrictions apply only to Hong
Kong/China, Japan and Netherlands.)
(1) Borrow money other than from banks and then only up to 1/3 of the
current market value of its total assets (including the amount
borrowed) and only if such borrowing is incurred as a temporary measure
for extraordinary or emergency
<PAGE>
purposes or to facilitate the orderly
sale of portfolio securities to accommodate redemption requests; or
issue any securities other than its shares of beneficial interest
except as appropriate to evidence indebtedness which the fund is
permitted to incur. (Each fund anticipates paying interest on borrowed
money at rates comparable to its yield and no fund has any intention of
attempting to increase its net income by means of borrowing);
(2) Pledge, mortgage or hypothecate its assets to an extent greater than
1/3 of the total assets of the fund taken at market;
(3) Purchase the securities of any one issuer (other than obligations
issued or guaranteed by the U.S. Government or any of its agencies, or
securities of other regulated investment companies) if, as a result of
such purchase, more than 5% of that fund's total assets (taken at
current value) would be invested in the securities of such issuer or
securities of any one issuer held by that fund would exceed 10% of the
outstanding voting securities of such issuer at the end of any fiscal
quarter of the fund, provided that, with respect to 50% of the fund's
assets, the fund may invest up to 25% of its assets in the securities
of any one issuer;
(4) Purchase or retain securities of any issuer if 5% or more of the
issuer's securities are owned by those officers and Trustees of the
Trust or its investment adviser or administrator who own individually
more than 1/2 of 1% of the issuer's securities;
(5) Purchase securities on margin or make short sales except sales against
the box or purchase warrants;
(6) Buy or sell commodities, or commodity contracts (except that the fund
may purchase or sell currencies and put and call options on securities,
indices or currencies and enter into forward foreign currency exchange
contracts), unless acquired as a result of ownership of securities;
(7) Purchase any securities which would cause more than 25% 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;
(8) Underwrite securities issued by other persons except to the extent that
the purchase of securities in accordance with a fund's investment
objectives and policies directly from the issuer thereof and the later
disposition thereof may be deemed to be underwriting;
(9) 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;
(10) Purchase from or sell to any of the Trust's Trustees or officers, its
investment adviser, its administrator, its principal underwriter, if
any, or the officers or directors of said investment adviser,
administrator, or principal underwriter, portfolio securities of the
fund;
(11) Purchase or retain securities of other open-end investment companies,
except when such purchases are part of a merger, consolidation,
reorganization or assets acquisition;
(12) Acquire real estate but it may lease office space for its own use and
invest in (1) readily marketable interests of real estate or real
estate limited partnership interests, investment trusts or readily
marketable securities of issuers (other than real estate limited
partnerships) whose business involves the purchase of real estate; and
(2) securities secured by real estate or interests therein; or
(13) With respect to 75% of its total assets, (i) invest more than 5% of its
total assets in securities of any one issuer, excluding securities
issued or guaranteed by the United States government or by its agencies
and instrumentalities and options or (ii) purchase more than 10% of the
voting securities of any class of any issuer.
For the purpose of investment restrictions (1), (2) and (5), the
arrangements (including escrow, margin and collateral arrangements) made by any
such fund with respect to its transactions in currency options, options on
securities and forward foreign currency exchange contracts shall not be
considered to be (i) a borrowing of money or the issuance of securities
(including senior securities) by that fund, (ii) a pledge of its assets, (iii)
the purchase of a security on margin or (iv) a short sale or position.
<PAGE>
(The following fundamental investment restrictions apply only to Mexico.)
(1) Borrow money other than from banks and then only up to 1/3 of the
current market value of its total assets (including the amount
borrowed) and only if such borrowing is incurred as a temporary measure
for extraordinary or emergency purposes or to facilitate the orderly
sale of portfolio securities to accommodate redemption requests; or
issue any securities other than its shares of beneficial interest
except as appropriate to evidence indebtedness which the fund is
permitted to incur. (Each fund anticipates paying interest on borrowed
money at rates comparable to its yield and no fund has any intention of
attempting to increase its net income by means of borrowing);
(2) Pledge, mortgage or hypothecate its assets to an extent greater than
1/3 of the total assets of the fund taken at market;
(3) Buy or sell commodities, or commodity contracts (except that the fund
may purchase or sell currencies and put and call options on securities,
indices or currencies and enter into forward foreign currency exchange
contracts), unless acquired as a result of ownership of securities;
(4) Purchase any securities which would cause more than 25% 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;
(5) Underwrite securities issued by other persons except to the extent that
the purchase of securities in accordance with a fund's investment
objectives and policies directly from the issuer thereof and the later
disposition thereof may be deemed to be underwriting;
(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;
(7) Purchase or sell real estate, except that a 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 a fund as a result of the ownership of
securities; or
(8) With respect to 75% of its total assets, (i) invest more than 5% of its
total assets in securities of any one issuer, excluding securities
issued or guaranteed by the U.S. Government or by its agencies and
instrumentalities and options thereon or (ii) purchase more than 10% of
the voting securities of any class of any issuer.
For the purpose of fundamental investment restrictions (1) and (2) above
and nonfundamental investment restriction (h) below, the arrangements (including
escrow, margin and collateral arrangements) made by a fund with respect to its
transactions in currency options, options on securities and forward foreign
currency exchange contracts shall not be considered to be (i) a borrowing of
money or the issuance of securities (including senior securities) by that fund,
(ii) a pledge of its assets, (iii) the purchase of a security on margin or (iv)
a short sale or position.
The following are nonfundamental policies of each fund which may be changed
by the Trustees without shareholder approval. The funds have no current
intention of borrowing for leverage purposes, making securities loans or
engaging in short sales. The funds have no current intention of investing more
than 5% of net assets in Rule 144A securities. No fund will:
(a) Purchase oil, gas or other mineral leases or purchase partnership
interests in oil, gas or other mineral exploration or development
programs;
(b) Invest more than 5% of its total assets in the securities of issuers
which, together with their predecessors, have a record of less than
three years' continuous operation;
(c) Purchase securities issued by any other investment company, except by
purchase in the open market where no commission or profit to sponsor or
dealer results from such purchase, other than the customary broker's
commission, or except where such purchase, although not made on the
open market, is part of a plan of merger or consolidation. Subject to
the preceding sentence, a fund may invest in other investment companies
to the full extent allowed by the 1940 Act. Under
<PAGE>
the 1940 Act, a fund may not acquire more than 3% of the outstanding
voting securities of another investment company, invest more than
5% of its assets in any single investment company or invest more
than 10% of its assets in other investment companies as a group;
(d) Enter into an agreement to purchase securities while its borrowings
exceed 5% of its total assets;
(e) Invest (1) 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
not eligible for resale pursuant to Rule 144A under the Securities Act
of 1933 (the "1933 Act"); (2) more than 10% of its net assets in
restricted securities, excluding securities eligible for resale
pursuant to Rule 144A or foreign securities which are offered or sold
outside the United States in accordance with Regulation S under the
1933 Act; or (3) more than 15% of its net assets in restricted
securities (including those eligible for resale under Rule 144A);
(f) Invest more than 10% of its total assets in shares of real estate
investment trusts that are not readily marketable or invest in real
estate limited partnerships;
(In addition, the following nonfundamental investment restrictions apply only to
Mexico.)
(g) Purchase or retain securities of any issuer if 5% or more of the
issuer's securities are owned by those officers and Trustees of the
Trust or its investment adviser or administrator who own individually
more than 1/2 of 1% of the issuer's securities;
(h) Purchase securities on margin or make short sales except short sales
against the box or purchase warrants; or
(i) Purchase from or sell to any of its Trustees or officers, its
investment adviser, its administrator, its principal underwriter, if
any, or the officers or directors of said investment adviser,
administrator, and principal underwriter, portfolio securities of the
fund.
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 funds, Wright, Winthrop, Eaton Vance, BMR, EVC, or
EV, are indicated by an asterisk (*).
PETER M. DONOVAN (55), 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. (71), 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
JUDITH R. CORCHARD (59), Vice President and Trustee*
Executive Vice President, Senior Investment Officer, Chairman of the Investment
Committee and Director of Wright and Winthrop. Ms. Corchard was appointed a
Trustee of the Trust on December 10, 1997.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
A.M. MOODY III (61), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
<PAGE>
DORCAS R. HARDY (52), Trustee
President, Dorcas R. Hardy & Associates, an international and domestic
public policy and management firm since 1989. Chairman and Chief Executive
Officer of Work Recovery, Inc., Tucson, AZ, an advanced rehabilitation
technology firm, 1996 to 1998. Ms. Hardy was elected a Trustee on December 9,
1998.
Address: 11407 Stonewall Jackson Drive, Spotsylvania, VA 22553
LELAND MILES (74), Trustee
President Emeritus, University of Bridgeport (1987-present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company.
Address: 332 North Cedar Road, Fairfield, CT 06430
LLOYD F. PIERCE (79), Trustee
Retired Vice Chairman (prior to 1984-President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE.
Address: 140 Snow Goose Court, Daytona Beach, FL 32119
RICHARD E. TABER (49), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed as a Trustee of the Trust o
March 18, 1997.
Address: 117 Prospect Street, Stamford, CT 06901
RAYMOND VAN HOUTTE (73), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca,
NY (since January 1989); President and Chief Executive Officer, The Tompkins
County Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaporated
Metal Products and Ithaco, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JAMES L. O'CONNOR (53), 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 (62), 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 (35), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Murphy was elected Assistant
Secretary of the Trust on June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993. 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. (46), 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, Catholic Values Investment Trust and The Wright Blue Chip
Master Portfolio Trust. The fees and expenses of those Trustees (Messrs. Miles,
Pierce, Taber, and Van Houtte and Ms. Hardy) who are not "interested persons" of
the Trust and of Mr. Brigham are paid by the funds and the other series of the
Trust. They also receive additional payments from other investment companies for
which Wright provides investment advisory services. The Trustees who are
<PAGE>
employees of Wright receive no compensation from the Trust. The Trust does not
have a retirement plan for its Trustees. For Trustee compensation from the Trust
for the fiscal year ended December 31, 1998 and for the total compensation paid
to the Trustees from the Wright Fund complex for the fiscal year ended December
31, 1998, see the following table.
COMPENSATION TABLE
Registrant - The Wright EquiFund Equity Trust
<TABLE>
<CAPTION>
Aggregate Compensation Pension Benefits Total
From The Wright Benefits Annual Compensation
Trustees EquiFund Equity Trust Accrued BenefitPaid(1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Day Brigham, Jr. $ None None $
Winthrop S. Emmet (2) None None
Dorcas Hardy None None
Leland Miles None None
Lloyd F. Pierce None None
Richard E. Taber None None
Raymond Van Houtte None None
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Total compensation paid is from The Wright EquiFund Equity Trust (4 funds) and the other funds in the Wright
Fund complex for a total of 25 funds as of December 31, 1998.
(2) Mr. Emmet resigned as a trustee during the fiscal year ended December 31,
1998.
</FN>
</TABLE>
Messrs. Miles, Pierce and Van Houtte and Ms. Hardy 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.
The Trust's board of trustees has established an Independent Trustees'
Committee consisting of all of the Independent Trustees who are Messrs. Miles,
Pierce (Chairman), Taber and Van Houtte and Ms. Hardy. The responsibilities of
the Independent Trustees' Committee include those of an audit committee for the
financial governance of the Trust, a nominating committee for additional or
replacement trustees of the Trust and a contract review committee for
consideration of renewals or changes in the investment advisory agreements,
distribution agreements and distribution plans and other agreements as
appropriate.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of ____________, 1999, the Trustees and officers of the Trust, as a
group, owned in the aggregate less than 1% of the outstanding shares of any fund
that was then offering its shares to the public.
As of the same date, the following shareholders were record holders of the
following percentages of the outstanding shares of the funds that were then
offering shares to the public:
PERCENT OF OUTSTANDING SHARES OWNED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NAME AND ADDRESS Hong Kong/China Japan Mexico Netherlands
- ------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
The funds have engaged Wright to act as their investment adviser pursuant
to an Investment Advisory Contract. Wright furnishes the funds with investment
advice and management services. The School for Ethical Education, 1000 Lafayette
Boulevard, Bridgeport, CT 06604, may be considered a controlling person of
Wright's parent, Winthrop, and Wright by reason of its ownership of more than
25% of the outstanding shares of Winthrop.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the funds, will furnish
continuously an investment program with respect to the funds, will determine
which securities should be purchased, sold or exchanged, and will implement such
determinations. Wright will furnish to the funds investment advice and
management services, office space, equipment and clerical personnel, and
investment advisory, statistical and research facilities. In addition, Wright
has arranged for certain members of the Eaton Vance and Wright organizations to
serve without salary as officers or Trustees of the Trust. In return for these
services, each fund is obligated to pay a monthly advisory fee calculated at the
rates set forth in the funds' current Prospectus.
It should be noted that, in addition to compensating Wright for its
advisory services to the funds, 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 funds. Other mutual funds and accounts
advised by Wright may use the Indices as may other entities not affiliated with
Wright.
The following table sets forth the net assets of each fund at December 31,
1998 and the advisory fee earned from each such fund during the fiscal years
ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Aggregate Fee Earned for Fee Earned for Fee Earned for
Net Assets at Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
FUNDS 12/31/98 12/31/98 12/31/97 Ended 12/31/96
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hong Kong/China $ $ $ 97,167 $ 210,176
Japan 79,721 144,668
Mexico 229,596 231,258
Netherlands 92,173 52,195
</TABLE>
The Trust has engaged Eaton Vance to act as the administrator for each fund
pursuant to an Administration Agreement. For its services under the
Administration Agreement, Eaton Vance is entitled to receive a monthly
administration fee from each fund at the annual rates set forth in the funds'
current Prospectus. The following table sets forth the administration fees
earned (and applicable reductions) from each fund for the fiscal years ended
December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Fee Earned for Fee Earned for Fee Earned for
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
FUNDS 12/31/98 12/31/97 Ended 12/31/96
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong/China $ $ 12,954 $ 28,023
Japan 10,629 19,289
Mexico 30,613 30,835
Netherlands 12,289 6,959
</TABLE>
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are 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, John
M. Nelson, Vincent M. O'Reilly and Ralph Z. Sorenson. Mr. Hawkes is chairman,
president and chief executive officer and Mr. Gardner is vice chairman 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, the Voting Trustees of which are Messrs.
Gardner, Hawkes and Rowland and Alan R. Dynner, Thomas E. Faust, Jr., William M.
Steul and Wharton P. Whitaker. 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
<PAGE>
officers or officers and Directors of EVC and EV. As of , 1999, Messrs. Gardner
and Hawkes each owned __% of such voting trust receipts, Messrs. Rowland and
Faust owned __% and __%, respectively, and Messrs. Dynner, Steul and Whitaker
owned __% 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.
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.
Each 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 each fund's net asset value and keeping each
fund's books; the cost of share certificates; membership dues in investment
company organizations; brokerage commissions and fees; fees and expenses of
registering its shares; expenses of reports to shareholders, proxy statements
and other expenses of shareholders' meetings; insurance premiums; printing and
mailing expenses; interest, taxes and corporate fees; legal and accounting
expenses; expenses of Trustees not affiliated with Eaton Vance or Wright;
distribution expenses incurred pursuant to the Trust's distribution plan; and
investment advisory and administration fees. Each fund will also bear expenses
incurred in connection with litigation in which the Trust is a party and the
legal obligation the Trust may have to indemnify its officers and Trustees with
respect thereto.
The Investment Advisory Contract of all the funds and the Administration
Agreement of all the funds will remain in effect until February 28, 2000. The
funds' Investment Advisory Contract may be continued with respect to each fund
from year to year thereafter so long as such continuance after February 28,
2000, as the case may be, 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 that fund. The Investment Advisory
Contract and Administration Agreement may be terminated as to a fund at any time
without penalty on sixty (60) days' written notice by the Board of Trustees or
Directors of either party, or by vote of the majority of the outstanding shares
of that fund, and each agreement will terminate automatically in the event of
its assignment. Each agreement provides that, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties to the Trust under such agreement on the part of Eaton
Vance or Wright. Eaton Vance or Wright will not be liable to the Trust for any
loss incurred.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston, MA
02116, acts as custodian for the funds. IBT has the custody of all cash and
securities of the funds, maintains the funds' general ledgers and computes the
daily net asset value per share. In such capacity it attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the funds' investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
funds.
The funds will employ foreign sub-custodians in accordance with Rule 17f-5
under the 1940 Act.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
[_________________________________________________], 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
funds' federal and state tax returns.
<PAGE>
BROKERAGE ALLOCATION
Purchases and sales of securities on a securities exchange are effected by
brokers, and the funds pay 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 each fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments 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 its best judgment in
evaluating the terms of a transaction, and will give consideration to various
relevant factors, including without limitation the size and type of the
transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the value and quality of service rendered by the broker-dealer
in other transactions, and the reasonableness of the brokerage commission or
markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the funds may give consideration to those firms
which supply brokerage and research services, quotations and statistical and
other information to Wright for their use in servicing their accounts. 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
which paid the brokerage commissions and the other funds. The services and
information furnished by a particular firm may not necessarily be used in
connection with the funds or the fund which paid brokerage commissions to such
firm. The advisory fee paid by the funds to Wright is not reduced as a
consequence of Wright's receipt of such services and information. While such
services and information are not expected to reduce Wright's normal research
activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if 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 each fund's portfolio security transactions at advantageous prices
and at reasonably competitive commission rates, Wright, as indicated above, is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom a fund's portfolio orders may be placed the fact that such firm has
sold or is selling shares of the funds or of other investment companies
sponsored by Wright. This policy is consistent with a rule of the National
Association of Securities Dealers, Inc., which rule provides that no firm which
is a member of the Association shall favor or disfavor the distribution of
shares of any particular investment company or group of investment companies on
the basis of brokerage commissions received or expected by such firm from any
source.
Under the funds' 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 funds' Investment Advisory Contract expressly recognize the practices
which are provided for in Section 28(e) of the Securities Exchange Act of 1934
by authorizing the selection of a broker or dealer which charges a fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
If purchases or sales of securities of the funds 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 funds are 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 funds.
<PAGE>
During the fiscal years ended December 31, 1998, 1997 and 1996, the funds
paid the following amounts on brokerage commissions:
<TABLE>
<CAPTION>
1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong/China $ $ 94,968 $ 151,639
Japan 164,620 135,292
Mexico 204,815 88,719
Netherlands 32,190 62,798
</TABLE>
PRINCIPAL UNDERWRITER
The Trust has adopted a Distribution Plan (the "Plan") as described in the
Prospectus on behalf of the funds in accordance with Rule 12b-1 under the 1940
Act and the Rules of the NASD.
The Trust has entered into a distribution contract on behalf of the funds
with WISDI, providing for WISDI to act as a separate distributor of each fund's
shares.
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.
The Plan was approved by the Trustees on June 16, 1993. Under its terms,
the Plan remains in effect from year to year, provided such continuance is
approved annually by a vote of its Trustees, including a majority of the
Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan. The Plan may not be
amended to increase materially the amount to be spent for the services described
therein as to a fund without approval of a majority of the outstanding voting
securities of that fund and all material amendments of the Plan must also be
approved by the Trustees of the Trust in the manner described above. The Plan
may be terminated at any time as to a 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 that 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 funds and their
shareholders.
The following table shows the fee payable to WISDI under the Plans and the
amount of such fee actually paid by each fund for the fiscal year ended December
31, 1998.
<TABLE>
<CAPTION>
Distribution Distribution Expenses Distribution Distribution Expenses
Expenses Reduced by the Expenses Paid as a % of Average
Allowable Principal Underwriter Paid By Fund Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hong Kong/China $ $ $ %
Japan
Mexico
Netherlands
</TABLE>
For the fiscal year ended December 31, 1998, it is estimated that WISDI
spent approximately the following amounts on behalf of the funds:
Wright Investors' Service Distributors, Inc.
Financial Summaries for the Year 1998
<TABLE>
<CAPTION>
Printing & Commissions Adminis-
Mailing Travel & & Service tration
FUNDS Promotional Prospectuses Entertainment Fees and Other Total
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hong Kong/China $ $ $ $ $ $
Japan
Mexico
Netherlands
</TABLE>
HOW THE FUNDS VALUE THEIR SHARES
The Trust values the shares of each 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 funds' custodian (as agent
for the funds) with the assistance of Wright for securities that involve
valuation problems. Such determination is accomplished by dividing the number of
outstanding shares of each 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 funds'
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 to be not
representative of 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 U.S. dollar value at the mean between the
buying and selling rates of such currencies against U.S. dollars last quoted by
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 of 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 funds' 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 a
fund's calculation of net asset value unless Wright deems that the particular
event would materially affect net asset value, in which case the securities will
be valued at their fair value according to procedures decided upon by the
Trustees.
PERFORMANCE INFORMATION
The average annual total return of each fund is determined for a specified
period by calculating the actual dollar amount of investment return on a $1,000
investment in the fund made at the maximum public offering price (net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period.
The average annual total return will be calculated using the following
formula:
n
P (1 + T) = ERV
where: P = A hypothetical initial payment of $1,000
T = Average annual total return
n = Number of years
ERV = Ending redeemable value of a hypothetical $1,000 payment at
the end of the period.
<PAGE>
Each fund's yield is computed by dividing its net investment income per
share earned during a recent thirty-day period by the product of the average
daily number of shares outstanding and entitled to receive dividends during the
period and the maximum offering price (net asset value) per share on the last
day of the period. The results are compounded on a bond equivalent (semi-annual)
basis and then they are annualized. Net investment income per share is equal to
the fund's dividends and interest earned during the period, reduced by accrued
expenses for the period.
The yield earned by each fund will be calculated using the following
formula:
6
YIELD = 2 [ ( a-b + 1) - 1 ]
---
cd
where: a = Dividends and interest earned during the period
b = Expenses accrued for the period (after reductions)
c = The average daily number of shares outstanding during the period
that were entitled to receive dividends
d = The maximum offering price (net asset value) per share on the last
day of the period.
A fund's yield or total return may be compared to the Consumer Price Index
and various domestic or foreign securities indices. A fund's yield or total
return and comparisons with these indices may be used in advertisements and in
information furnished to present or prospective shareholders.
From time to time, evaluations of a fund's performance made by independent
sources may be used in advertisements and in information furnished to present or
prospective shareholders. These may include rankings prepared by Lipper
Analytical Services, Inc., an independent service which monitors the performance
of mutual funds. The Lipper performance analysis reflects the reinvestment of
dividends and capital gain distributions but does not take sales charges into
consideration and is prepared without regard to tax consequences.
The following table shows the average annual total return for the one year,
three year, five year and life of fund (as applicable) for the periods ended
December 31, 1998:
<TABLE>
<CAPTION>
FUNDS One Year Three Years Five Years Inception of Fund Date of Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hong Kong/China % % % % 6/28/90
Japan 2/14/94
Mexico 8/02/94
Netherlands 6/28/90
</TABLE>
TAXES
Among the requirements for qualification of each 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 and (2) 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 a 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.
Each fund's use of the accounting practice known as equalization may affect
the amount, timing and character of distributions to shareholders. Investment by
a 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 some of these adverse tax consequences.
<PAGE>
A 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 a 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, each 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 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 a 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 maybe disallowed under "wash
sale" rules to the extent shares of the same fund are purchased within the
period beginning 30 days before and ending 30 days after the date of such
redemption, exchange or other sale.
Capital loss carryforwards will reduce the applicable 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 that fund of liability for federal income tax.
As of December 31, 1998, the funds, for federal income tax purposes, had
capital loss carryovers expiring as follows:
Dec. Hong Kong/China Mexico Japan Netherlands
- -------------------------------------------------------------------------------
2002
2003
2004
2005
FINANCIAL STATEMENTS
The audited financial statements of, and the independent auditors' report
for the funds, appear in the funds' most recent annual report to shareholders,
and are incorporated by reference into this Statement of Additional Information.
A copy of the annual report is attached to this Statement of Additional
Information.
Registrant incorporated by reference the audited financial information for
the funds for the fiscal year ended December 31, 1998 as previously filed
electronically with the Securities and Exchange Commission (Accession
Number___________________).
<PAGE>
APPENDIX A
[Country Summaries]
<PAGE>
PART C
Other Information
Item 23. Exhibits
(a) (1) 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.
(2) 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.
(3) Amended and Restated Establishment and Designation of Series
dated December 9, 1998 filed herewith.
(b) 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.
(c) Not Applicable
(d) (1) Investment Advisory Contract between the Registrant and
Wright Investors' Service, Inc. dated September 23, 1998 filed
herewith as Exhibit (d)(1).
(2) Amended and Restated Administration Agreement between the
Registrant and Eaton Vance Management dated February 1, 1998
filed as Exhibit (5)(b) to Post-Effective Amendment No. 15
filed April 30, 1998 and incorporated herein by reference.
(e) 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.
(f) Not Applicable
(g) (1) 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.
(2) 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.
(3) Amendment dated September 24, 1997 to Master Custodian
Agreement filed herewith as Exhibit
(g)(3).
(h) Not Applicable
(i) Opinion of Counsel dated April 7, 1998 filed as Exhibit 10 to
Post-Effective Amendment No. 5 and incorporated herein by
reference.
(j) Not Applicable
(k) Not Applicable
<PAGE>
(l) 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.
(m) (1) 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.
(2) 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.
(n) To be filed by Amendment.
(o) Not Applicable
(p) (1) Power of Attorney dated March 26, 1998 filed as Exhibit
17(a) to Post-Effective Amendment No. 15 filed April 29, 1998
and incorporated herein by reference.
(2) Power of Attorney dated December 9, 1998 filed herewith as
Exhibit (p)(2).
Item 24. Persons Controlled by or under Common Control with Registrant
Not Applicable
Item 25. 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 26. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the captions "Officers and
Trustees" and "Investment Advisory and Administrative Services" in the
Statements of Additional Information, which information is incorporated herein
by reference.
Item 27. Principal Underwriter
(a) Wright Investors' Service Distributors, Inc.(a wholly-owned subsidiary
of The Winthrop Corporation) acts as principal underwriter for each of
the investment companies named below.
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
<PAGE>
<TABLE>
<CAPTION>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address with Principal Underwriter with Registrant
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A. M. Moody III* President Vice President and Trustee
Peter M. Donovan* Vice President and Treasurer President and Trustee
Vincent M. Simko* Vice President and Secretary None
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* Address is 1000 Lafayette Boulevard, Bridgeport, Connecticut 06604
(c) Not Applicable.
Item 28. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the registrant's
custodian, Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA
02116, and its transfer agent, First Data Investor Services Group, 4400 Computer
Drive, Westborough, MA 01581-5120, with the exception of certain corporate
documents and portfolio trading documents which are either in the possession and
custody of the Registrant's administrator, Eaton Vance Management, 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 29. Management Services
Not Applicable
Item 30. 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 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 has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bridgeport, and the State of
Connecticut on the _____ day of February, 1999.
The Wright EquiFund Equity Trust
By: 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 ____ day of February, 1999.
SIGNATURE TITLE
- ------------------------------------------------------------------------------
Peter M. Donovan* President, Principal
- ------------------- Executive Officer & Trustee
Peter M. Donovan
James L. O'Connor* Treasurer, Principal
- ------------------- Financial and Accounting Officer
James L. O'Connor
H. Day Brigham, Jr.* Trustee
- ---------------------
H. Day Brigham, Jr.
Judith R. Corchard* Trustee
- ---------------------
Judith R. Corchard
Dorcas R. Hardy* Trustee
- ---------------------
Dorcas R. Hardy
Leland Miles* Trustee
- ---------------------
Leland Miles
A. M. Moody III Trustee
- ---------------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- ---------------------
Lloyd F. Pierce
Richard E. Taber* Trustee
- ---------------------
Richard E. Taber
Raymond Van Houtte* Trustee
- ---------------------
Raymond Van Houtte
*By /s/ A. M. Moody III
- ------------------------
A. M. Moody III
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to Rule 483 of Regulation C.
Exhibit No. Description
(a)(3) Amended and Restated Establishment and Designation of Series
dated December 9, 1998.
(d)(1) Investment Advisory Contract dated September 23, 1998
with Wright Investors' Service, Inc.
(g)(3) Amendment dated September 24, 1997 to Master Custodian Agreement.
(p) (2 ) Power of Attorney dated December 9, 1998.
THE WRIGHT EQUIFUND EQUITY TRUST
Amended and Restated
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
December 9, 1998
WHEREAS, pursuant to an Amended and Restated Establishment and Designation
of Series dated March 25, 1998, the Trustees of The Wright EquiFund Equity
Trust, a Massachusetts business trust (the "Trust"), redesignated the shares of
beneficial interest of the Trust into seven separate series (or Funds); and
WHEREAS, the Trustees now desire to terminate and liquidate, effective
December 18, 1998, two (2) of its existing series, i.e. Wright EquiFund-Nordic
and Wright EquiFund-Belgium Luxembourg, 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 the following 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 December 18, 1998:
Wright EquiFund-Country Strategy
Wright EquiFund-Hong Kong/China
Wright EquiFund-Japan
Wright EquiFund-Mexico
Wright EquiFund-Netherlands
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 pro rata 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.
<PAGE>
-2-
(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/ H. Day Brigham, Jr. /s/ A.M. Moody, III
- -------------------------- ---------------------------
H. Day Brigham, Jr. A.M. Moody, III
/s/ Judith R. Corchard /s/ Lloyd F. Pierce
- -------------------------- ---------------------------
Judith R. Corchard Lloyd F. Pierce
/s/ Peter M. Donovan /s/ Richard E. Taber
- -------------------------- ---------------------------
Peter M. Donovan Richard E. Taber
/s/ Dorcas R. Hardy
- -------------------------- ---------------------------
Dorcas R. Hardy Raymond Van Houtte
/s/ Leland Miles
- --------------------------
Leland Miles
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 23rd day of September 1998, between each of THE
WRIGHT MANAGED EQUITY TRUST, THE WRIGHT MANAGED INCOME TRUST, THE WRIGHT
EQUIFUND EQUITY TRUST, CATHOLIC VALUES INVESTMENT TRUST and THE WRIGHT MANAGED
BLUE CHIP SERIES TRUST, each a Massachusetts business trust (the "Trusts"), on
behalf of each series of the Trusts which the Adviser (defined below) and the
Trusts shall agree from time to time are subject to this Contract, as set forth
on Schedule A (collectively, the "Funds" and individually, the "Fund"), and
WRIGHT INVESTORS' SERVICE, INC., a Connecticut corporation (the "Adviser"):
1. DUTIES OF THE ADVISER. Each Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Funds and, except as otherwise provided in an administration
agreement, to administer the Trust's 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
each Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each 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 Funds
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are employees 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 any Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide each Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its funds. As investment adviser to the Funds, 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 each
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Trust's Declaration of Trust, By-Laws and registration
statement under the Securities Act of 1933 and 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 each
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 Funds, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Funds, to
enter into commodities contracts on behalf of the Funds, 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 to do any and all things incidental thereto in connection with
the management of the Funds. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Funds
and notify the Adviser thereof 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 Funds, all actions which it deems necessary or desirable
to implement the investment policies of the Trust and of each Fund.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of a 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 a 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 Funds and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
selecting brokers or dealers qualified to
<PAGE>
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.
The Adviser is expressly authorized to cause the Funds to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which exceeds 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 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 applicable
Fund or 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, each Trust on behalf of each Fund
shall pay to the Adviser on the last day of each month a fee equal (annually) to
the percentage or percentages specified in Schedule B of the average daily net
assets of such Fund throughout the month, computed in accordance with the
Trust's Declaration of Trust, registration statement and any applicable votes of
the Trustees of the Trust.
If the Contract is initiated or terminated during any month with respect
to any Fund, each 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, agree not to impose all or a part of
the above compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. Each Trust will pay all of its expenses
other than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Trust shall include, without 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, 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 those purposes
and for distributing them 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 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, (xvii) compensation of and any expenses
of Trustees of the Trust, (xviii) the administration fee payable to the Trust's
administrator, (xix) the charges and expenses of the independent auditors, (xx)
the charges and expenses of legal counsel to the Trust and the Trustees, (xxi)
distribution fees, if any, paid by a Fund in accordance with Rule 12b-1 under
the 1940 Act, and (xxii) 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.
4. OTHER INTERESTS. It is understood that Trustees, officers and shareholders of
each Trust are or may
<PAGE>
be or become interested in the Adviser or any of its affiliates as
directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser or any of its affiliates are
or may be or become similarly interested in the Trust, and that the Adviser or
any of its affiliates 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 or any of its affiliates 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 or any of its affiliates 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 any of its 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
each 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 any 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 any Trust's
portfolio security transactions, and upon those terms and conditions as may be
agreed upon between the Adviser and the sub-investment adviser; provided,
however, that any subadvisory agreement shall be subject to approval by the
Trustees and by shareholders, if shareholder approval is then required by the
1940 Act, as now in effect or as hereafter amended, subject, however, to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation, order or interpretive position.
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 as to each Fund up to and
including February 28, 2000 and shall continue in full force and effect as to
each Fund indefinitely thereafter, but only so long as such continuance after
February 28, 2000 is specifically approved at least annually (i) by the vote of
a majority of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of that Fund and (ii) by the vote of a majority of
those Trustees of the Trust who are not interested persons of the Adviser or the
Trust, in accordance with the requirements of 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, order or interpretive position.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Fund, without the payment
of any penalty, by action of its Board of Directors or Trustees, as the case may
be, and a 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 that Fund. This Contract shall terminate automatically in
the event of its assignment.
8. AMENDMENTS OF THE CONTRACT. This Contract may be amended as to any Fund by a
writing signed by both parties hereto, provided that no material 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 affected Trust who are not interested
persons of the Adviser or the Trust and (ii) by vote of a majority of the
outstanding voting securities of that Fund in accordance with the requirements
of 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
<PAGE>
Securities and Exchange Commission by any rule, regulation, order or
interpretive position.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the provision in
the Declaration of Trust of each Trust limiting the personal liability of
shareholders of the Trust, and the Adviser hereby agrees that it shall have
recourse only to the applicable 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 Trust or
Fund shall be liable for the obligations of any other Trust or Fund hereunder.
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 that Fund" shall mean the vote of the lesser of
(a) 67 per cent or more of the shares of the particular Fund present or
represented by proxy at a meeting of shareholders of the Fund if the holders of
more than 50 per cent of the outstanding shares of the particular Fund are
present or represented by proxy at the meeting, or (b) more than 50 per cent of
the outstanding interests of the particular Fund, or such other vote as may be
required from time to time by the Investment Company Act of 1940.
11. USE OF THE NAME "WRIGHT". The Adviser hereby consents to the use by each
Trust of the name "Wright" as part of the Trust's name and the name of each Fund
should the Trust desire to adopt such name in the future; 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 use the name "Wright." The Adviser shall have the
right to require a Trust to cease using the name "Wright" as part of the Trust's
name and the name of its Funds 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 a 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 MANAGED EQUITY TRUST WRIGHT INVESTORS' SERVICE, INC.
By: _________________________________ By:_______________________________
Authorized Officer Authorized Officer
THE WRIGHT MANAGED INCOME TRUST
By: __________________________________
Authorized Officer
THE WRIGHT EQUIFUND EQUITY TRUST
By: ___________________________________
Authorized Officer
CATHOLIC VALUES INVESTMENT TRUST
By: ___________________________________
Authorized Officer
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: _____________________________________
Authorized Officer
<PAGE>
SCHEDULE A
TRUSTS AND FUNDS
The Wright Managed Equity Trust
Wright Selected Blue Chip Equities Fund
Wright Junior Blue Chip Equities Fund
Wright Major Blue Chip Equities Fund
Wright International Blue Chip Equities Fund
The Wright Managed Income Trust
Wright U.S. Treasury Fund
Wright U.S. Government Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg
Wright EquiFund -- Hong Kong/China
Wright EquiFund -- Japan
Wright EquiFund -- Mexico
Wright EquiFund -- Netherlands
Wright EquiFund -- Nordic
Catholic Values Investment Trust
Catholic Values Investment Trust Equity Fund
The Wright Blue Chip Series Trust
Wright International Blue Chip Portfolio
Wright Selected Blue Chip Portfolio
<PAGE>
SCHEDULE B
ANNUAL ADVISORY FEE RATES
---------------------------
<TABLE>
<CAPTION>
ANNUAL % ADVISORY FEE RATES
-----------------------------
Under $100 Mil. $250 Mil. $500 Mil. Over
$100 Mil. to to to $1 Bil.
$250 Mil. $500 Mil. $1 Bil.
- ---------------------------------------------------------------------------------------------
The Wright Managed Equity Trust
<S> <C> <C> <C> <C> <C>
Wright Selected Blue Chip Equities
Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Junior Blue Chip Equities Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Major Blue Chip Equities Fund 0.45% 0.59% 0.57% 0.53% 0.48%
Wright International Blue Chip Equities
Fund 0.75% 0.79% 0.77% 0.73% 0.68%
The Wright Managed Income Trust
Wright U.S. Treasury Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Government Near Term Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Total Return Bond Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Current Income Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Treasury Money Market
Fund 0.35% 0.32% 0.32% 0.30% 0.30%
</TABLE>
ANNUAL % ADVISORY FEE RATES
-------------------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- --------------------------------------------------------------------------------
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg 0.75% 0.73% 0.68%
Wright EquiFund -- Hong Kong/China 0.75% 0.73% 0.68%
Wright EquiFund -- Japan 0.75% 0.73% 0.68%
Wright EquiFund -- Mexico 0.75% 0.73% 0.68%
Wright EquiFund -- Netherlands 0.75% 0.73% 0.68%
Wright EquiFund -- Nordic 0.75% 0.73% 0.68%
Catholic Values Investment Trust
Catholic Values Investment Trust
Equity Fund 0.75% 0.73% 0.68%
ANNUAL % ADVISORY FEE RATES
--------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- -------------------------------------------------------------------------------
The Wright Managed Blue Chip Series Trust
Wright Selected Blue Chip Portfolio 0.65% 0.60% 0.55%
Wright International Blue Chip Portfolio 0.80% 0.75% 0.70%
September 24,1997
The Wright Managed Investment Funds
Wright Investors' Service, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
Re: Master Custodian Agreement by and among the Wright Managed Investment Funds
and Investors Bank & Trust Company (the "Bank").
Gentlemen:
This letter agreement is intended to amend the existing Master Custodian
Agreement with the following information:
Notwithstanding anything in the Master Custodian Agreement,
each Wright Managed Investment Fund agrees that it has granted, and the
Bank shall have, a continuing lien and security to the extent of any
overdraft or indebtedness by any Fund, in and to any property at any
time held by it for the Fund's benefit or in which the Fund has an
interest and which is then in the Bank's possession or control (or in
the possession or control of any third party acting in the Bank's
behalf). However, the Bank shall notify the Fund's investment adviser
of the Bank's intention to seize Fund property in accordance with this
paragraph and follow any instructions of the investment adviser as to
which property should be seized.
This letter agreement is intended to include all the Wright Managed Investment
Funds currently parties to the Master Custodian Agreement, as well as any such
funds that become a party to the Master Custodian Agreement in the future. This
letter agreement shall constitute an amendment to the Master Custodian Agreement
and, as such, a binding agreement among the Wright Managed Investment Funds and
the Bank, in accordance with its terms.
Sincerely.
INVESTORS BANK & TRUST COMPANY
By /s/ Robert D. Mancuso
----------------------------
Name: Robert D. Mancuso
Title: Senior Vice President
<PAGE>
The foregoing is hereby accepted and agreed.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
THE WRIGHT EQUIFUND EQUITY TRUST
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
CATHOLIC VALUES INVESTMENT TRUST
THE WRIGHT ASSET ALLOCATION TRUST
By /s/ James L. O'Connor
-------------------------------
Name: James L. O'Connor
Title: Treasurer
POWER OF ATTORNEY
I, the undersigned Trustee of The Wright EquiFund Equity Trust, a
Massachusetts business trust, do hereby constitute and appoint H. Day Brigham,
Jr., Peter M. Donovan, Alan R. Dynner and A.M. Moody, III, or any of them, to be
true, sufficient and lawful attorneys, or attorney for me, to sign for me, in my
name in the capacities indicated below, any and all amendments (including
post-effective amendments) to the Registration Statement on Form N-1A filed by
The Wright EquiFund Equity Trust with the Securities and Exchange Commission in
respect of shares of beneficial interest and other documents and papers relating
thereto.
IN WITNESS WHEREOF I have hereunto set my hand on the date set opposite my
signature.
NAME CAPACITY DATE
---- -------- ----
/s/ Dorcas R. Hardy Trustee December 9, 1998
- ----------------------
Dorcas R. Hardy
HALE AND DORR LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o fax 617-526-5000
Pamela J. Wilson
617-526-6371
[email protected]
February 25, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Office of Filings, Information & Consumer Services
Re: Form N-1A Filing for the Wright EquiFund Equity Trust
(the "trust")
Post-Effective Amendment No. 16 (1933 Act File No. 33-30085)
Amendment No. 19 (1940 Act File No. 811-5866) (the
"amendment") on behalf of its series (the "funds"):
Wright EquiFund-Hong Kong/China
Wright EquiFund-Japan
Wright EquiFund-Mexico
Wright EquiFund-Netherlands
Ladies and Gentlemen:
On behalf of the above-referenced trust, transmitted herewith pursuant to
(1) the Securities Act of 1993, as amended and Rules 472 and 485(a)(1)
thereunder, (2) the Investment Company Act of 1940, as amended, and the rules
promulgated pursuant to Section 8(b) thereunder, (3) the General Instructions to
Form N-1A, and (4) Rules 101 and 102 under Regulation S-T, is the amendment,
including the funds' consolidated prospectus and statement of additional
information ("SAI") and exhibits. The amendment contains conformed signature
pages, and the manually signed originals of these pages are maintained at the
office of the trust.
The amendment is filed pursuant to Rule 485(a) because it has been
revised to conform to the 1998 amendments to Form N-1A. Because the funds'
prospectus has been revised in its entirety, it is not marked. The SAI has been
marked to show changes from the SAI contained in post-effective amendment no. 15
transmitted electronically to the Securities and Exchange Commission (the
"Commission") on April 30, 1998 (Accession No. 0000715165-98-000020).
The amendment will become effective April 30, 1999. The trust will file
a post-effective amendment pursuant to Rule 485(b), which will also go effective
on April 30, 1999, for the purpose of providing updated financial information
for the fund.
As a consolidated prospectus for multiple funds, the prospectus
presented special organization and layout problems that would not affect a
single fund prospectus. To solve these problems, the prospectus disclosure
follows a slightly different sequence from the order of disclosure specified in
Items 1, 2 and 3 of amended Form N-1A.
Amended Form N-1A requires the risk/return summary provided in Items 2
and 3 to immediately follow the cover page and table of contents of a mutual
fund prospectus. The disclosure in a prospectus's risk/return summary generally
must appear in the order specified in Items 2 and 3 and may not include
additional disclosure not described in these items.
The table of contents in the funds' prospectus is on the inside cover
page. Immediately below the table of contents is a section entitled "How to Use
this Prospectus" that provides a brief explanation of each of the icons and
related disclosure appearing in each fund's risk/return summary. We believe that
this information serves the same purpose as the table of contents--to help
investors navigate and understand the organization of the prospectus. It leads
readers and does not impede their progress into the funds' risk/return
summaries. The next item is the standard legend for funds sold through banks,
which would normally appear later in the risk/return summaries. The legend is
located here because putting the legend up front avoids the need to repeat it in
the risk/return summary of each individual fund.
It takes two pages per fund to cover all the fund-specific items
required to be in each fund's risk/return summary. The two page fund spread
format facilitates comparison among the funds offered in the prospectus and with
competing funds because it is possible to see all fund-specific disclosure for
each fund at the same time. Because page 1 is opposite the table of contents on
the inside cover, page 1 cannot be used for a two page fund spread. However, it
is an ideal location for, and reduces the need to repeat, items in the
risk/return summary that apply to all the funds.
Disclosure about the funds' adviser is not expressly permitted in, and
is not ordinarily supposed to precede, a risk/return summary. However, if this
disclosure cannot be presented on page 1, it must be moved either to the front
cover or to the back half of the prospectus. It is not desirable either to
clutter the cover with adviser information or to make investors wait until page
10 to find out about the adviser they are hiring when they buy fund shares. To
avoid distracting attention from the risk/return summary disclosure in the
subsequent two page fund spreads, we kept the adviser disclosure on page 1 very
brief.
The fund's adviser uses national equity indices derived from a
proprietary data base in selecting investments for all of the funds. Disclosing
this part of Wright's investment strategy on page 1 provides a context for
understanding the additional investment strategy disclosure (and avoids
repetition of the same information) in each individual fund's two page
risk/return summary. Page 1 of the funds' prospectus also discloses other
information about the adviser's investment process that is common to all of the
funds, including explanations of fundamental analysis, bottom-up investing and
the adviser's investment committee. This overview disclosure helps to provide a
context for and to avoid repetition in the risk/return summaries of the
individual funds.
Instruction C.3(c)(ii) to Form N-1A provides that multiple fund
prospectuses may depart from the sequencing requirements of Items 2 and 3 "as
necessary to present the required information clearly and effectively (although
the order of information required by each Item must remain the same)." The
instruction gives examples of acceptable layouts and says that "other
presentations would also be acceptable if they are consistent with the Form's
intent to disclose the information required by Items 2 and 3 in a standard order
at the beginning of the prospectus." Instruction C.1.(d) to Form N-1A states
that the Commission should administer the form's prospectus disclosure
requirements "in a way that will allow variances in disclosure or presentation
if appropriate for the circumstances involved while remaining consistent with
the objectives of Form N-1A."
We believe that our method of organizing the funds' prospectus produces
clearer, more inviting and less repetitive disclosure than if the prospectus
followed the exact sequence of disclosure in Items 2 and 3 of Form N-1A. The
organization of the prospectus enhances, rather than impedes, comparisons with
other funds and makes it easier to find fund-specific information. Accordingly,
the trust respectfully requests that the staff of the Commission allow such
variances in presentation as are necessary for the funds to use the proposed
form of prospectus.
If you have any questions concerning the foregoing or the enclosed,
please contact the undersigned at (617) 526-6371 or Elaine Hartnett at (617)
526-6531.
Very truly yours,
Pamela J. Wilson
PJW:laf
Enclosures
