AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1996
1933 Act File No. 33-61314
1940 Act File No. 811-7654
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 |X|
POST-EFFECTIVE AMENDMENT NO. 3 |X|
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 4 |X|
The Wright Managed Blue Chip Series 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)
H. Day Brigham, Jr.
24 Federal Street, Boston, Massachusetts 02110
-----------------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective on May 1, 1996 pursuant to
paragraph (b) of Rule 485.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on February
16, 1996 filed its "Notice" as required by that Rule for the fiscal year ended
December 31, 1995.
<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheet required by Rule 481(a) under Securities Act of 1933.
Part A -- The Prospectus
Part B -- The Statement of Additional Information
Part C -- Other Information
Signatures
Exhibit Index required by Rule 483(a) under the Securities Act of 1933
Exhibits
<PAGE>
The Wright Managed Blue Chip Series Trust
Cross Reference Sheet Showing Location in Prospectus
and Statement of Additional Information
of Information Required by Items of the Registration Form
<TABLE>
<S> <C>
FORM N-1A LOCATION IN PROSPECTUS OR
ITEM NUMBER AND CAPTION STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------------------------------------------------------
1. Cover Page............................................... Prospectus - Cover Page
2. Synopsis................................................. Prospectus - Shareholder and Portfolio Expenses
3. Condensed Financial Information.......................... Financial Highlights
4. General Description of Registrant........................ Prospectus - Investment Objectgives and Policies; Management of
the Trust; Organization and Capitalization of the Trust
5. Management of the Trust.................................. Prospectus - Management of the Trust
5a. Management's Discussion of Fund Performance.............. Not Applicable
6. Capital Stock and Other Securties........................ Prospectus - Investment Objectives and Policies; Net Asset Value
7. Purchase of Securities Being Offered..................... Prospectus - Net Asset Value; Dividends, Distributions and Taxes;
Purchase and Redemption of Shares
8. Redemption or Repurchase................................. Prospectus - Purchase and Redemption of Shares
9. Pending Legal Proceedings................................ Not Applicable
10. Cover Page............................................... Statement of Additional Information - Cover Page
11. Table of Contents........................................ Statement of Additional Information - Cover Page
12. General Information and History.......................... Statement of Additional Information - Cover Page; General
Information
13. Investment Objectives and Policies....................... Statement of Additional Information - Additional Description of
Investments; Investment Restrictions
14. Management of the Trust.................................. Statement of Additional Information - Management of the Trust
15. Control Persons and Principal Holders of Securities...... Statement of Additional Information - Management of the Trust
16. Investment Advisory and Other Services................... Statement of Additional Information - Management of the Trust
17. Brokerage Allocation and Other Practices................. Statement of Additional Information - Portfolio Transactions
18. Capital Stock and Other Securities....................... Statement of Additional Information - General Information; Net
Asset Value
19. Purchase Redemption and Pricing of Securities Being...... Statement of Additional Information - Net Asset Value
Offered
20. Tax Status............................................... Statement of Additional Information - Taxes
21. Underwriters............................................. Not Applicable
22. Calculation of Performance Data.......................... Statement of Additional Information - Performance Information
23. Financial Statements..................................... Financial Statements
</TABLE>
<PAGE>
PART A
Information Required in a Prospectus
Prospectus
- -----------
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
24 Federal Street, Boston, MA 02110
The Wright Managed Blue Chip Series Trust (the "Trust") is a diversified,
open-end management investment company that is designed to be the funding
vehicle for various insurance contracts to be offered by PFL Life Insurance
Company and other participating insurance companies. Shares of the Trust will be
offered exclusively to the separate accounts of such insurance companies. Six
managed investment portfolios of the Trust (the "Portfolios") and their
investment objectives are described below. Investments in the Portfolios are not
guaranteed or insured by the U.S. Government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency. Shares of
the Portfolios are not obligations or deposits of, or guaranteed or endorsed by,
any bank or other insured depository institution. There is no assurance that the
Wright Managed Money Market Portfolio will be able to maintain a stable net
asset value of $1.00 per share. Shares of the Portfolios involve investment
risks, including fluctuations in value and the possible loss of some or all of
the principal investment.
Wright Managed Money Market Portfolio (WMMP)* seeks high current income, to
the extent consistent with the preservation of capital and maintenance of
liquidity, by investing in high-quality money market instruments. The Portfolio
seeks to maintain a stable net asset value of $1.00 per share.
Wright Near Term Bond Portfolio (WNTBP) seeks high total return, to the
extent consistent with reasonable safety, by investing primarily in debt
securities directly issued or guaranteed by the U.S. Government. The Portfolio
expects to maintain an average weighted portfolio maturity of five years or
less.
Wright Government Obligations Portfolio (WGOP)* seeks high total return, to
the extent consistent with reasonable safety, by investing primarily in debt
securities directly issued or guaranteed by the U.S. Government. The Portfolio's
average weighted maturity is expected to range from 10 to 25 years.
Wright Total Return Bond Portfolio (WTRBP) seeks high total return,
consisting of current income and capital appreciation, by investing primarily in
obligations issued or guaranteed by the U.S. Government and its agencies or
instrumentalities and in high-grade corporate debt securities of any maturity.
Wright Selected Blue Chip Portfolio (WSBCP) seeks long-term capital
appreciation and, as a secondary objective, reasonable current income by
investing primarily in equity securities of well-established U.S. companies that
meet the investment adviser's quality standards.
Wright International Blue Chip Portfolio (WIBCP) seeks long-term capital
appreciation by investing primarily in equity securities of well-established,
non-U.S. companies that meet the investment adviser's quality standards.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Prospectus sets forth the information about the Trust and the
Portfolios that a prospective investor should know before investing. Please read
the Prospectus and retain it for future reference. Additional information
contained in a Statement of Additional Information dated May 1, 1996 has been
filed with the Securities and Exchange Commission and is available upon request
without charge from Wright Investors' Service Distributors, Inc., 1000 Lafayette
Boulevard, Bridgeport, Connecticut 06604 (Telephone: 800-888-9471). The
Statement of Additional Information is incorporated by reference into this
Prospectus.
The date of this Prospectus is May 1, 1996.
*As of the date of this Prospectus, this Portfolio has not commenced operations.
<PAGE>
The Wright Managed Blue Chip Series Trust
24 Federal Street
Boston, MA 02110
==============================================================================
Investment Adviser
Wright Investors' Service, Inc.
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
Administrator
Eaton Vance Management
24 Federal Street
Boston, Massachusetts 02110
Custodian and Transfer Agent
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
PAGE
SHAREHOLDER AND PORTFOLIO EXPENSES....... 3
FINANCIAL HIGHLIGHTS..................... 5
THE TRUST................................ 9
INVESTMENT OBJECTIVES AND POLICIES....... 10
Wright Managed Money Market Portfolio (WMMP) 10
Wright Near Term Bond Portfolio (WNTBP). 10
Wright Government Obligations Portfolio (WGOP) 11
Wright Total Return Bond Portfolio (WTRBP) 11
Wright Selected Blue Chip Portfolio (WSBCP) 11
Wright International Blue Chip Portfolio (WIBCP)12
OTHER INVESTMENT POLICIES................ 14
SPECIAL INVESTMENT CONSIDERATIONS........ 14
MANAGEMENT OF THE TRUST.................. 17
The Investment Adviser.................. 17
The Administrator....................... 19
NET ASSET VALUE.......................... 20
DIVIDENDS, DISTRIBUTIONS
AND TAXES............................... 21
PURCHASE AND REDEMPTION
OF SHARES............................... 22
PERFORMANCE INFORMATION.................. 23
ORGANIZATION AND
CAPITALIZATION OF THE TRUST............. 23
ADDITIONAL INFORMATION................... 24
Custodian and Transfer Agent............ 24
Independent Auditors.................... 24
- ------------------------------------------------------------------------------
No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized. This Prospectus does not constitute an offering of any securities
other than the registered securities to which it relates or an offer to any
person in any state or jurisdiction of the United States or any country where
such offer would be unlawful.
<PAGE>
Shareholder and Portfolio Expenses
The following table of fees and expenses is provided to assist investors in
understanding the various costs and expenses which may be borne directly or
indirectly by an investment in each Portfolio of the Trust. The percentages
shown below representing total operating expenses are based on actual expenses
for the fiscal year ended December 31, 1995 for the Wright Selected Blue Chip,
Near Term Bond, Total Return Bond, and International Blue Chip Portfolios. For
Wright Money Market and Wright Government Obligations Portfolios, the
percentages shown below are based on estimated expenses for the fiscal year
ended December 31, 1995 adjusted to reflect voluntary expense limitations of
0.45% and 0.90%, respectively, of average net assets.
<TABLE>
<CAPTION>
Wright Wright Wright Wright Wright Wright
Money Near Term Government Selected Total Return International
Market Bond Obligations Blue Chip Bond Blue Chip
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
(WMMP) (WNTBP) (WGOP) (WSBCP) (WTRBP) (WIBCP)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses None None None None None None
Annualized Fund Operating Expenses
(as a percentage of average daily net assets)
Investment Adviser Fee
(after fee reduction)(1) 0.35% 0.00% 0.45% 0.00% 0.00% 0.00%
Other Expenses
(after expense reduction, including
administration fee of .05%)(2) 0.10% 1.39% 0.45% 1.60% 1.26% 2.28%
------ ------ ------ ------ ------ ------
Total Operating Expenses
(after reductions)(3) 0.45% 1.39% 0.90% 1.60% 1.26% 2.28%
- ---------------------------------------------------------------------------------------------------------
<FN>
(1) After reduction by Investment Adviser. If no reductions were made,
investment advisory fees would have been as follows: WSBCP - 0.65%; WNTBP -
0.45%; WTRBP - 0.45%; and WIBCP - 0.80% of each Portfolio's average daily
net assets.
(2) After reduction by Administrator. If no reductions were made, administration
fees would have been 0.05% of each Portfolio's average daily net assets. The
Investment Adviser was allocated a portion of the expenses of each
Portfolio. If such allocations were not made, Other Expenses net of
administration fees would have amounted to the following percentage of
average daily net assets: WSBCP - 2.02%; WNTBP - 10.01%; WTRBP - 7.88%; and
WIBCP - 3.33%.
(3) If no fee reductions or expense allocations were made, the Total Operating
Expenses would have been the following percentage of average daily net
assets: WSBCP - 2.72%; WNTBP - 10.51%; WTRBP - 8.38%; and WIBCP - 4.18%. In
addition, during the year ended December 31, 1995, custodian fees were
reduced by credits resulting from cash blances maintained with Investors
Bank & Trust Company. If these credits were reflected in the above table,
the Total Operating Expenses shown above would have been: WSBCP -1.15%;
WNTBP - 0.90%; WTRBP- 0.90%; and WIBCP - 1.85%.
</FN>
</TABLE>
<PAGE>
Example of Portfolio Expenses
The following is an illustration of the total transaction and operating
expenses that an investor in each Portfolio would bear over different periods of
time, assuming an investment of $1,000, a 5% annual return on the investment and
redemption at the end of each period.
<TABLE>
Wright Wright Wright Wright Wright Wright
Money Near Term Government Selected Total Return International
Market Bond Obligations Blue Chip Bond Blue Chip
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year $ 5 $ 14 $ 9 $ 16 $ 13 $ 23
3 Years $14 $ 44 $29 $ 50 $ 40 $ 71
3 Years -- $ 76 -- $ 87 $ 69 $122
3 Years -- $167 -- $190 $152 $262
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary.
<PAGE>
Financial Highlights
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Deloitte & Touche LLP,
independent certified public accountants, as experts in accounting and auditing,
which report is contained in the Portfolios' Statement of Additional
Information. Further information regarding the performance of a Portfolio is
contained in its annual report to shareholders which may be obtained without
charge by contacting Wright Investors' Service Distributors, Inc. at (800)
888-9471.
<TABLE>
WRIGHT For the Period
TOTAL RETURN Year Ended December 31, from 12/7/93 (start of
BOND PORTFOLIO 1995 1994 business) to 12/31/93(2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year $ 8.840 $ 9.930 $ 10.000
--------- --------- ---------
Income from Investment Operations:
Net investment income(1) $ 0.469 $ 0.398 $ 0.019
Net realized and unrealized gain (loss)
on investments 0.990 (1.090) (0.070)
--------- --------- ---------
Total income (loss) from investment $ 1.459 $ (0.692) $ (0.051)
operations
--------- --------- ---------
Less Distributions to Shareholders:
From net investment income $ (0.469) $ (0.398) $ (0.019)
--------- --------- ---------
Net asset value, end of year $ 9.830 $ 8.840 $ 9.930
========= ========= =========
Total Return(3) 16.9% (7.1%) (0.5%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 538 $ 520 $ 167
Ratio of net expenses to average net assets 1.26%(5) 0.90% 0.70%(4)
Ratio of net investment income to average
net assets 5.09% 4.49% 2.50%(4)
Portfolio Turnover Rate 186% 23% 0%
<FN>
(1) During the two years ended December 31, 1995, the Investment Adviser and the
Administrator reduced their fees, and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share $ (0.187) $ (0.143)
=========== ===========
Ratios (As a percentage of average net assets):
Expenses 8.38% 7.00%
=========== ===========
Net investment loss (2.03%) (1.61%)
=========== ===========
(2) Calculations based on average shares outstanding methodology.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) Annualized.
(5) During the year ended December 31, 1995, custodian fees were reduced by
credits resulting from cash balances the Trust maintained with the
custodian. The computation of net expenses to average daily net assets
reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 0.90%.
</FN>
</TABLE>
<PAGE>
<TABLE>
For the Period
WRIGHT Year Ended from January 6, 1994
NEAR TERM December 31, (start of business) to
BOND PORTFOLIO 1995 December 31, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of year............... $ 9.330 $ 10.000
-------- --------
Income from Investment Operations:
Net investment income(1)...................... $ 0.448 $ 0.324
Net realized and unrealized gain ( loss)
on investments.............................. 0.550 (0.670)
-------- --------
Total income (loss) from investment operations $ 0.998 $ (0.346)
-------- --------
Less Distributions to Shareholders:
From net investment income.................... $ (0.448) $ (0.324)
--------- --------
Net asset value, end of year..................... $ 9.880 $ 9.330
======== ========
Total Return(3).................................. 10.9% (3.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)......... $ 327 $ 451
Ratio of net expenses to average net assets... 1.39%(4) 0.90%(2)
Ratio of net investment income to average net assets 4.61% 3.43%(2)
Portfolio Turnover Rate....................... 94% 52%
<FN>
(1) During each of the periods presented, the Investment Adviser and
Administrator reduced their fees,and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share................ $ (0.438) $ (0.095)
======== ========
Ratios (As a percentage of average net assets):
Expenses.................................... 10.51% 5.34%(2)
======== ========
Net investment loss......................... (4.51%) (1.01%)(2)
======== ========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the payable date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the year ended December 31, 1995, custodian fees were reduced by
credits resulting from cash balances the Trust maintained with the
custodian. The computation of net expenses to average daily net assets
reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 0.90%.
</FN>
</TABLE>
<PAGE>
<TABLE>
For the Period
WRIGHT Year Ended from January 6, 1994
SELECTED BLUE December 31, (start of business) to
CHIP PORTFOLIO 1995 December 31, 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of year............... $ 9.320 $ 10.000
-------- --------
Income from Investment Operations:
Net investment income(1)...................... $ 0.100 $ 0.092
Net realized and unrealized gain (loss)
on investments.............................. 2.345 (0.712)
-------- --------
Total income (loss) from investment operations $ 2.445 $ (0.620)
-------- --------
Less Distributions to Shareholders:
From net investment income.................... $ (0.070) $ (0.060)
From net realized gain on investment transactions (0.285) --
-------- --------
Total distributions declared to shareholders $ (0.355) $ (0.060)
-------- --------
Net asset value, end of year..................... $ 11.410 $ 9.320
======== ========
Total Return(3).................................. 26.3% (6.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)......... $ 2,239 $ 1,452
Ratio of net expenses to average net assets... 1.60%(4) 1.15%(2)
Ratio of net investment income to average
net assets.................................. 0.96% 1.16%(2)
Portfolio Turnover Rate....................... 64% 74%
<FN>
(1) During each of the periods presented, the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share................ $ (0.017) $ (0.078)
======== ========
Ratios (As a percentage of average net assets):
Expenses.................................... 2.72% 3.30%(2)
======== ========
Net investment loss......................... (0.16%) (0.99%)(2)
======== ========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the record date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the year ended December 31, 1995, custodian fees were reduced by
credits resulting from cash balances the Trust maintained with the
custodian. The computation of net expenses to average daily net assets
reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 1.15%.
</FN>
</TABLE>
<PAGE>
<TABLE>
For the Period
WRIGHT Year Ended from January 6, 1994
INTERNATIONAL December 31, (start of business) to
BLUE CHIP PORTFOLIO 1995 December 31, 1994
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of year............... $ 9.140 $ 10.000
-------- --------
Income from Investment Operations:
Net investment income(1)...................... $ 0.003 $ 0.031
Net realized and unrealized gain (loss)
on investments.............................. 0.967 (0.886)
-------- --------
Total income (loss) from investment operations $ 0.970 $ (0.855)
-------- --------
Less Distributions to Shareholders:
From net investment income.................... $ (0.005) $ (0.005)
In excess of net investment income(5)......... (0.013) --
Tax distribution from paid-in capital......... (0.032) --
-------- --------
Total distributions declared to shareholders $ (0.050) $ (0.005)
-------- --------
Net asset value, end of year..................... $ 10.060 $ 9.140
======== ========
Total Return(3).................................. 10.6% (8.1%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)......... $ 1,365 $ 1,229
Ratio of net expenses to average net assets... 2.28%(4) 1.80%(2)
Ratio of net investment income to average
net assets.................................. 0.06% 1.19%(2)
Portfolio Turnover Rate....................... 31% 0%
<FN>
(1) During each of the periods presented, the Investment Adviser and
Administrator reduced their fees,and the Investment Adviser was allocated a
portion of the Portfolio's operating expenses. Had such actions not been
undertaken, the net investment loss per share and the ratios would have been
as follows:
Net investment loss per share................ $ (0.920) $ (0.434)
======== ========
Ratios (As a percentage of average net assets):
Expenses.................................... 4.18% 4.65%(2)
======== ========
Net investment loss......................... (1.85%) (2.66%)(2)
======== ========
(2) Annualized.
(3) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the record date. The total investment
return does not reflect expenses that apply to the separate account or
related policies. If these charges had been included, the total return would
be reduced.
(4) During the year ended December 31, 1995, custodian fees were reduced by
credits resulting from cash balances the Trust maintained with the
custodian. The computation of net expenses to average daily net assets
reported above is computed without consideration of such credits, in
accordance with reporting regulations in effect beginning in 1995. If these
credits were considered, the ratio of expenses to average net assets would
have been reduced to 1.85%.
(5) The Portfolio has followed the Statement of Position (SOP) 93-2:
Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distribution by Investment Companies.
The SOP requires that differences in the recognition or classification of
income between the financial statements and tax earnings and profits that
result in temporary over-distributions for financial statement purposes, are
classified as distributions in excess of net investment income or
accumulated net realized gains.
</FN>
</TABLE>
<PAGE>
THE TRUST
The Wright Managed Blue Chip Series Trust (the "Trust") is an open-end
management investment company. The Trust consists of six separate portfolios
(each a "Portfolio"), each of which represents a separate pool of assets and has
different investment objectives and policies. Each Portfolio is a diversified
Portfolio. Additional portfolios may be established in the future.
The Trust is designed to be the funding vehicle for variable insurance
contracts (the "Contracts") to be offered by PFL Life Insurance Company ("PFL")
and other participating insurance companies. Shares of each Portfolio will be
offered exclusively to the separate accounts (the "Accounts") of PFL and other
participating insurance companies. References to PFL also include such other
participating insurance companies. The terms and conditions of the Contracts and
any limitations upon the Portfolios in which the Accounts may invest are set
forth in a separate prospectus. The Trust reserves the right to limit in the
future the types of Accounts that may invest in any Portfolio.
PFL is the record holder and the owner of each share of beneficial interest
in each Portfolio of the Trust. Within the limitations set forth in the
appropriate Contract, Contractholders may direct through PFL the allocation of
amounts available for investment under their Contracts among the Trust's
Portfolios. Instructions for any such allocation, or the purchase or redemption
of the shares of any Portfolio, must be made by PFL as the record holder of the
Trust's shares. The rights of PFL as the record holder and the owner of shares
of a Portfolio are different from the rights of a Contractholder. The term
"shareholder" in this Prospectus refers to PFL and not to the Contractholder.
Wright Investors' Service, Inc. ("Wright") acts as investment adviser to
each Portfolio. Eaton Vance Management ("Eaton Vance")acts as administrator to
the Trust.
None of the Portfolios alone constitutes a complete investment program.
======================================
The Prospectuses of the Portfolios are combined in this Prospectus. Each
Portfolio offers only its own shares, yet it is possible that a Portfolio might
become liable for a misstatement in the Prospectus of another Portfolio. The
Trustees have considered this in approving the use of a combined Prospectus.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Portfolio are described
below. Such investment objectives and the policies are not fundamental policies
and may be changed by the Trustees without the approval of shareholders. If any
changes were made, a Portfolio might have investment objectives different from
the objectives which a Contractholder considered appropriate at the time of
selecting the Portfolio as the underlying investment for the Contract. There can
be no assurance that any of the Portfolios will be able to achieve its
investment objectives.
Wright Managed Money Market Portfolio
The investment objective of Wright Managed Money Market Portfolio (the
"Money Market Portfolio") is high current income, to the extent consistent with
the preservation of capital and maintenance of liquidity. The Money Market
Portfolio pursues its objective by investing in a diversified portfolio of
high-quality money market securities, including U.S. Treasury bills, notes and
bonds; obligations of U.S. Government agencies and instrumentalities; bank
obligations, including certificates of deposit, time deposits and bankers'
acceptances; commercial paper; and corporate obligations with remaining
maturities of 13 months or less.
The Money Market Portfolio will seek to maintain a net asset value of $1.00
per share, but there can be no assurance that the Money Market Portfolio will be
able to achieve this goal. The Money Market Portfolio's portfolio securities are
valued using the amortized cost method as permitted by a rule of the Securities
and Exchange Commission. The rule requires, among other things, that all
portfolio securities meet certain quality and diversification criteria and have
a maximum remaining maturity at time of purchase of 13 months or less. The Money
Market Port-folio must also maintain a dollar-weighted average portfolio
maturity of not more than 90 days.
The Money Market Portfolio will purchase only commercial paper rated A-1 by
Standard & Poor's Ratings Group ("S&P"), P-1 by Moody's Investors Service, Inc.
("Moody's"), F-1 by Fitch Investors Service, Inc., or Duff-1 by Duff & Phelps
Credit Rating Company or, if not rated, of comparable quality as determined by
the investment adviser. Corporate obligations in which the Money Market
Portfolio may invest wll be rated in one of the two highest rating categories by
one or more of such rating organizations. The Money Market Portfolio's
investments must also satisfy certain investment criteria (the "Wright Quality
Rating Standards") established by the investment adviser. See "Wright Quality
Rating Standards" in the Appendix to the Statement of Additional Information.
For a description of the ratings discussed above, see the Appendix to the
"Statement of Additional Information."
Wright Near Term Bond Portfolio
The investment objective of Wright Near Term Bond Portfolio ("WNTBP") is
high total return, to the extent consistent with reasonable safety. WNTBP seeks
to achieve this objective by investing at least 80% of its net assets, under
normal market conditions, in securities issued by the U.S. Government or issued
by its agencies and instrumentalities and guaranteed by the U.S. Gov-
<PAGE>
ernment and in repurchase agreements with respect to such securities. It is
expected that WNTBP's portfolio will have an average weighted maturity of five
years or less. WNTBP is designed to appeal to an investor seeking a level of
income that is higher and less variable than that available from short-term U.S.
Government obligations and limited fluctuation of capital compared to
investments in long-term U.S. Government obligations.
Wright Government Obligations Portfolio
The investment objective of Wright Government Obligations Portfolio
("WGOP") is high total return, to the extent consistent with reasonable safety.
WGOP seeks to achieve this objective by investing at least 80% of its net
assets, under normal market conditions, in securities issued or guaranteed by
the U.S. Government or issued by its agencies and instrumentalities and
guaranteed by the U.S. Government and in repurchase agreements with respect to
such securities. It is expected that WGOP's portfolio will have an average
weighted maturity ranging from 10 to 25 years. However, the average weighted
maturity of WGOP's portfolio maybe shorter or greater than such range if
determined to be in the best interest of WGOP by the investment adviser. WGOP
does not invest in mortgage-related securities.
Wright Total Return Bond Portfolio
The investment objective of Wright Total Return Bond Portfolio ("WTRBP") is
high total return, consisting of current income and capital appreciation. WTRBP
seeks to achieve this objective by investing at least 80% of its net assets,
under normal market conditions, in obligations issued or guaranteed by the U.S.
Government and its agencies or instrumentalities and in high-grade corporate
debt securities. The average weighted maturity of WTRBP's portfolio may vary
depending upon the investment adviser's judgment as to the then current phase of
the interest rate cycle. WTRBP invests in obligations of the U.S. Government,
its agencies and instrumentalities, certificates of deposit of federally insured
banks and corporate obligations rated, at the time of purchase, "A" or better by
S&P or Moody's or if not rated, determined to be of comparable quality by the
investment adviser. Such investments also meet Wright Quality Rating Standards.
Wright Selected Blue Chip Portfolio
The investment objective of Wright Selected Blue Chip Portfolio ("WSBCP")
is long-term capital appreciation and, as a secondary objective, reasonable
current income. Under normal market conditions, WSBCP invests at least 80% of
its net assets in selected equity securities, including common stocks, preferred
stocks and convertible securities. Securities selected for WSBCP are drawn from
an investment list prepared by the investment adviser and known as The Approved
Wright Investment List (the "AWIL").
Approved Wright Investment List. The investment adviser maintains a
proprietary database on approximately 3,000 U.S. companies. The investment
adviser reviews such companies to iden-
<PAGE>
tify those which, on the basis of at least five years of audited financial
statements, meet the minimum standards of prudence (e.g. the value of its assets
and shareholders' equity exceeds certain minimum standards and the company's
operations have been profitable during the last three years) and thus are
suitable for consideration by fiduciary investors. Companies which meet these
requirements may be large or small, have their securities traded on exchanges or
in the over-the-counter market, and include companies not currently paying
dividends on their shares.
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of these standards are eligible for selection by the Wright Investment Committee
for inclusion in the AWIL. See the Appendix to the Statement of Additional
Information for a more detailed description of the investment adviser's
standards for investment quality and the AWIL. All companies on the AWIL are, in
the opinion of the investment adviser, soundly financed "True Blue Chips" with
established records of earnings, profitability and equity growth and active,
liquid markets for their publicly held equity securities. The AWIL normally
includes approximately 350 companies.
The equity securities in which WSBCP invests are limited to those companies
on the AWIL whose current operations reflect characteristics which have been
identified by the investment adviser as being likely to provide comparatively
superior total investment return over the intermediate term. WSBCP purchases
securities which meet WSBCP's investment criteria and increases the amount of
current investments in companies the market values of which are below their
target values. Portfolio securities are generally considered for sale if the
value of such securities exceeds 2 1/2 times their normal weighting in the
portfolio, or if such securities are no longer included in the AWIL or no longer
meet WSBCP's investment criteria.
Wright International Blue Chip Portfolio
The investment objective of Wright International Blue Chip Portfolio
("WIBCP") is long-term capital appreciation. Under normal market conditions,
WIBCP invests at least 80% of its net assets in equity securities, including
common stocks, preferred stocks and convertible securities. Securities selected
for WIBCP are limited to those included on an investment list prepared by the
investment adviser and known as the International Approved Wright Investment
List (the "International AWIL").
The International Approved Wright Investment List. The investment adviser
maintains a proprietary database on approximately 8,000 non-U.S. companies from
over 36 countries. The investment adviser reviews such companies to identify
those which, on the basis of at least five years of audited financial
statements, meet the minimum standards of prudence (e.g. the value of a
company's assets and shareholders' equity exceeds certain minimum standards and
the company's operations have been profitable during the last three years) and
thus are suitable for consideration by fiduciary investors. Companies which meet
these requirements may be large or small, have their securities traded on
exchanges or in the over-the-counter market, and include companies not currently
paying dividends.
<PAGE>
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of these standards are eligible for selection for inclusion in the International
AWIL. See the Appendix to the Statement of Additional Information for a more
detailed description of the investment adviser's standards for investment
quality and the International AWIL. All companies on the International AWIL are,
in the opinion of the investment adviser, soundly financed "True Blue Chips"
with established records of earnings, profitability and equity growth and
active, liquid markets for their publicly held equity securities.
WIBCP intends to maintain investments in a minimum of three foreign
countries. WIBCP purchases securities which meet WIBCP's investment criteria and
increases the amount of current investments in companies the market values of
which are below their target values. Portfolio securities are generally
considered for sale if they are no longer included in the International AWIL or
no longer meet WIBCP's investment criteria. WIBCP may purchase equity securities
traded on foreign securities exchanges, or it may purchase American Depositary
Receipts (ADRs) traded in the United States. Purchases of shares of WIBCP are
suitable for investors wishing to diversify their portfolios by investing in
non-U.S. companies or for investors who simply wish to participate in non-U.S.
investments. Although the net asset value of WIBCP's shares will be stated in
U.S. dollars, fluctuations in foreign currency exchange rates may affect the
value of an investment in WIBCP.
WIBCP is intended to provide investors with the opportunity to invest in a
portfolio of securities of non-U.S. companies located throughout the world. In
making the allocation of assets among the various countries and geographic
regions, the investment adviser ordinarily considers such factors as prospects
for relative economic growth between foreign countries; expected levels of
inflation and interest rates; government policies influencing business
conditions; the range of individual investment opportunities available to
international investors; and other pertinent financial, tax, social, political
and national factors -- all in relation to the prevailing prices of the
securities in each country or region.
Foreign Investment Risk. All or a substantial portion of WIBCP's assets
will be invested in securities of foreign companies. Investing in securities of
foreign companies may involve certain considerations in addition to those
arising when investing in domestic securities. These considerations include the
possibility of currency exchange rate fluctuations and revaluation of
currencies, the existence of less publicly available information about issuers,
different accounting, auditing and financial reporting standards, less stringent
securities regulation, non-negotiable brokerage commissions, different tax
provisions, political or social instability, war or expropriation. Moreover,
foreign stock and bond markets generally are not as developed and efficient as
those in the United States and, therefore, the volume and liquidity in those
markets may be less, and the volatility of prices may be greater, than in U.S.
markets. Settlement of transactions on foreign markets may be delayed beyond
what is customary in U.S. markets. These considerations generally are of greater
concern in developing countries.
Because investment in foreign issuers will usually involve currencies of
foreign countries, and because WIBCP may be exposed to currency fluctuations
independent of its securities expo-
<PAGE>
sure, the value of the assets of the WIBCP as measured in U.S. dollars will
be affected by changes in foreign currency exchange rates.
OTHER INVESTMENT POLICIES
The Trust has adopted on behalf of each Portfolio certain fundamental
investment restrictions which are enumerated in detail in the Statement of
Additional Information and which may be changed only by the vote of a majority
of the affected Portfolio's outstanding voting securities, as defined in the
Investment Company Act of 1940. Among other restrictions, each Portfolio may not
borrow money in excess of 1/3 of the current market value of such Portfolio's
net assets (excluding the amount borrowed), and only for certain temporary or
emergency purposes, invest more than 5% of such Portfolio's total assets taken
at current market value in the securities of any one issuer, purchase more than
10% of the voting securities of any one issuer or invest 25% or more of the
Portfolio's total assets in the securities of issuers in the same industry.
There is, however, no limitation in respect to investments in obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities.
SPECIAL INVESTMENT CONSIDERATIONS
Repurchase Agreements. Each Portfolio may enter into repurchase agreements
in order to earn income on temporarily uninvested cash. A repurchase agreement
is an agreement under which the seller of a security agrees to repurchase and
the relevant Portfolio agrees to resell, such security at a specified time and
price. A Portfolio may enter into repurchase agreements only with large,
well-capitalized banks or government securities dealers that meet specified
credit standards. In addition, such repurchase agreements will provide that the
value of the collateral underlying the repurchase agreement will always be at
least equal to the repurchase price, including any accrued interest earned under
the repurchase agreement. In the event of a default or bankruptcy by a seller
under a repurchase agreement, the Portfolio will seek to liquidate such
collateral. However, the exercise of the right to liquidate such collateral
could involve certain costs, delays and restrictions and is not ultimately
assured. To the extent that proceeds from any sale upon a default of the
obligation to repurchase are less than the repurchase price, the Portfolio could
suffer a loss.
Forward Foreign Currency Exchange Contracts. WIBCP may enter into contracts
to purchase foreign currencies to protect against an anticipated rise in the
U.S. dollar price of securities it intends to purchase. WIBCP may enter into
contracts to sell foreign currencies to protect against the decline in value of
portfolio securities denominated or quoted in a foreign currency, or a decline
in the value of anticipated dividends from such securities, due to a decline in
the value of foreign currencies against the U.S. dollar. Contracts to sell
foreign currency could limit any potential gain which might be realized by WIBCP
if the value of the hedged currency increased. Forward contracts are subject to
the risk that the counterparty to such contract will default on its obligations.
<PAGE>
Each Portfolio's transactions in foreign currency exchange contracts may be
limited by the requirements of the Internal Revenue Code for qualification as a
regulated investment company.
Lending Portfolio Securities. Each Portfolio may seek to increase its total
return by lending portfolio securities to broker-dealers or other institutional
borrowers. Under present regulatory policies of the Securities and Exchange
Commission, such loans are required to be continuously secured by collateral in
cash, cash-equivalents and U.S. Government securities held by the Portfolio's
custodian and maintained on a current basis at an amount at least equal to the
market value of the securities loaned, which will be marked to market daily.
During the existence of a loan, the Portfolio 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 on
investment of the collateral, if any. However, the Portfolio may at the same
time pay a transaction fee to such borrowers and administrative expenses, such
as finders fees to third parties. 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. Such loans are required to be secured continuously by collateral in cash,
cash equivalents and U.S. Government securities with a value at least equal to
the market value of the securities loaned. If the investment adviser decides to
make securities loans on behalf of a Portfolio, it is intended that the value of
the securities loaned would not exceed 30% of such Portfolio's total assets.
Defensive Investments. During periods of unusual market conditions, when
the investment adviser believes that investing for temporary defensive purposes
is appropriate, all or a portion of the assets of any Portfolio may be held in
cash or invested in short-term obligations, including but not limited to
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collateralized by such securities); commercial paper which at the
date of investment is rated A-1 by S&P or P-1 by Moody's, or, if not rated, is
determined by the investment adviser to be of comparable quality; short-term
corporate obligations and other debt instruments which at the date of investment
are rated AA or better by S&P or Aa or better by Moody's or, if unrated, are
determined by the investment adviser to be of comparable quality; and
certificates of deposit, bankers' acceptances and time deposits of domestic and
foreign banks the debt obligations of which satisfy the foregoing rating
criteria. Each Portfolio may invest in instruments and obligations of banks that
have other relationships with the Trust, Wright or Eaton Vance. No preference
will be shown towards investing in banks which have such relationships.
Forward Commitments And When-Issued Securities. Each Portfolio may purchase
when-issued securities and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. A Portfolio
entering into such a transaction is required to maintain in a segregated account
with such Portfolio's custodian until the settlement date cash or high-grade
liquid debt obligations in an amount sufficient to meet the purchase price.
Alternatively, the Portfolio may enter into offsetting contracts for the forward
sale of other securities that
<PAGE>
it owns. Securities purchased or sold on a when-issued or forward
commitment basis involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date or if the value of the security
to be sold increases prior to the settlement date. Although a Portfolio would
generally purchase securities on a when-issued or forward commitment basis with
the intention of acquiring securities for its portfolio, the Portfolio may
dispose of a when-issued security or forward commitment prior to settlement if
the investment adviser deems it appropriate to do so.
Mortgage-Related Securities. WTRBP may invest in mortgage-related
securities, including collateralized mortgage obligations ("CMOs") and other
derivative mortgage-related securities. These securities will either be issued
by the U.S. Government or one of its agencies or instrumentalities or, if
privately issued, supported by mortgage collateral that is insured, guaranteed
or otherwise backed by the U.S. Government or its agencies or instrumentalities.
The Portfolio does not invest in the residual classes of CMOs, stripped
mortgage-related securities, leveraged floating rate instruments or indexed
securities.
Mortgage-related securities represent participation interests in pools of
adjustable and fixed mortgage loans. Unlike conventional debt obligations,
mortgage-related securities provide monthly payments derived from the monthly
interest and principal payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans. The mortgage loans underlying
mortgage-related securities are generally subject to a greater rate of principal
prepayments in a declining interest rate environment and to a lesser rate of
principal prepayments in an increasing interest rate environment. Under certain
interest and prepayment rate scenarios, the Portfolio may fail to recover the
full amount of its investment in mortgage-related securities purchased at a
premium, notwithstanding any direct or indirect governmental or agency
guarantee. The Portfolio may realize a gain on mortgage-related securities
purchased at a discount. Since faster than expected prepayments must usually be
invested in lower yielding securities, mortgage-related securities are less
effective than conventional bonds in "locking in" a specified interest rate.
Conversely, in a rising interest rate environment, a declining prepayment rate
will extend the average life of many mortgage-related securities. Extending the
average life of a mortgage-related security increases the risk of depreciation
due to future increases in market interest rates.
The Portfolio's investments in mortgage-related securities may include
conventional mortgage passthrough securities and certain classes of multiple
class CMOs. Senior CMO classes will typically have priority over residual CMO
classes as to the receipt of principal and/or interest payments on the
underlying mortgages. The CMO classes in which the Portfolio may invest include
sequential and parallel pay CMOs, including planned amortization class ("PAC")
and target amortization class ("TAC") securities.
Different types of mortgage-related securities are subject to different
combinations of prepayment, extension, interest rate and/or other market risks.
Conventional mortgage passthrough securities and sequential pay CMOs are subject
to all of these risks, but are typically not leveraged. PACs, TACs and other
senior classes of sequential and parallel pay CMOs involve less exposure to
prepayment, extension and interest rate risk than other mortgage-related
securities, provided that prepayment rates remain within expected prepayment
ranges or "collars."
<PAGE>
MANAGEMENT OF THE TRUST
The Board of Trustees, in addition to reviewing the actions of the
investment adviser and administrator, decides upon general matters of policy for
each Portfolio. The investment adviser and administrator conduct and supervise
the daily operations of the Portfolios.
The Investment Adviser
The Trust has engaged The Winthrop Corporation ("Winthrop") pursuant to an
Investment Advisory Contract. Pursuant to a service agreement effective February
1, 1996 between Winthrop and its wholly-owned subsidiary, Wright Investors'
Service, Inc. ("Wright"), Wright, acting under the general supervision of the
Trust's Trustees, furnishes each Portfolio with investment advice and management
services. Winthrop supervises Wright's performance of this function and retains
its contractual obligations under its Investment Advisory Contract with each
Portfolio. The address of both Winthrop and Wright is 1000 Lafayette Boulevard,
Bridgeport, Connecticut.
Wright is a leading independent international investment management and
advisory firm, which together with its parent, Winthrop, has more than 30 years'
experience. Its staff of over 150 people includes a highly respected team of 65
economists, investment experts and research analysts. Wright manages assets for
bank trust departments, corporations, unions, municipalities, eleemosynary
institutions, professional associations, institutional investors, fiduciary
organizations, family trusts and individuals. Wright operates one of the world's
largest and most complete databases of financial information on 13,000 domestic
and international corporations. At the end of 1995, Wright managed approximately
$4 billion of assets.
An Investment Committee of senior officers, all of whom are experienced
analysts, exercises disciplined direction and control over all investment
selections, policies and procedures for each Portfolio of the Trust. The
Committee, following highly disciplined buy-and-sell rules, makes all decisions
for the selection, purchase and sale of all securities. The members of the
Committee are as follows:
Peter M. Donovan, CFA, President and Chief Executive Officer of Wright. Mr.
Donovan received a BA Economics, Goddard College and joined Wright from Jones,
Kreeger & Co., Washington, DC in 1966. Mr. Donovan is the president of The
Wright Managed Income Trust, The Wright Managed Equity Trust, The Wright Managed
Blue Chip Series Trust, and The Wright EquiFund Equity Trust. He is also
director of EquiFund - Wright National Equity Fund, a Luxembourg SICAV. He is a
member of the New York Society of Security Analysts and the Hartford Society of
Financial Analysts.
Judith R. Corchard, Chairman of the Investment Committee, Executive Vice
President-Investment Management of Wright. Ms. Corchard attended the
University of Connecticut and joined Wright in 1960. She is a member of the
New York Society of Security Analysts and the Hartford Society of Financial
Analysts.
<PAGE>
Jatin J. Mehta, CFA, Executive Counselor and Director of Education of
Wright. Mr. Mehta received a BS Civil Engineering, University of Bombay, India
and an MBA from the University of Bridgeport. Before joining Wright in 1969, Mr.
Mehta was an executive of the Industrial Credit Investment Corporation of India,
a World Bank agency in India for financial assistance to private industry. He is
a Trustee of The Wright Managed Blue Chip Series Trust. He is a member of the
New York Society of Security Analysts and the Hartford Society of Financial
Analysts.
Harivadan K. Kapadia, CFA, Senior Vice President - Investment Analysis and
Information of Wright. Mr. Kapadia received a BA (hon.) Economics and Statistics
and MA Economics, University of Baroda, India and an MBA from the University of
Bridgeport. Before joining Wright in 1969, Mr. Kapadia was Assistant Lecturer at
the College of Engineering and Technology in Surat, India and Lecturer, B.J. at
the College of Commerce & Economics, VVNagar, India. He has published the
textbooks: "Elements of Statistics," "Statistics," "Descriptive Economics," and
"Elements of Economics." He was appointed Adjunct Professor at the Graduate
School of Business, Fairfield University in 1981. He is a member of the New York
Society of Security Analysts and the Hartford Society of Financial Analysts.
Michael F. Flament, CFA, Senior Vice President - Investment and Economic
Analysis of Wright. Mr. Flament received a BS Mathematics, Fairfield University;
MA Mathematics, University of Massachusetts and an MBA Finance, University of
Bridgeport. He is a member of the New York Society of Security Analysts and the
Hartford Society of Financial Analysts.
James P. Fields, CFA, Vice President and Investment Officer of Wright. Mr.
Fields received a B.S. Accounting, Fairfield University and an MBA Finance from
Pace University. He joined Wright in 1982 and is also a member of the New York
Society of Security Analysts.
Under the Portfolio's Investment Advisory Contract, each Portfolio is
required to pay Winthrop a monthly advisory fee calculated at the annual rates
(as a percentage of average daily net assets) set forth in the following table.
Effective February 1, 1996, Winthrop will cause the Portfolios to pay to Wright
the entire amount of the advisory fee payable by each Portfolio under the
Investment Advisory Contract with Winthrop:
<TABLE>
ANNUAL % ADVISORY FEE RATES
- --------------------------------------------------------------------------------------------------
Under $500 Million Over
PORTFOLIOS $500 Million to $1 Billion $1 Billion
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Managed Money Market Portfolio (WMMP) 0.25% 0.20% 0.20%
Wright Near Term Bond Portfolio (WNTBP) 0.45% 0.40% 0.35%
Wright Government Obligations Portfolio (WGOP) 0.45% 0.40% 0.35%
Wright Total Return Bond Portfolio (WTRBP) 0.45% 0.40% 0.35%
Wright Selected Blue Chip Portfolio (WSBCP) 0.65% 0.60% 0.55%
Wright International Blue Chip Portfolio (WIBCP) 0.80% 0.75% 0.70%
- --------------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth the net assets of each Portfolio and the
advisory fee rate paid for the fiscal year ended December 31, 1995. As at
December 31, 1995, the Wright Managed
<PAGE>
Money Market Portfolio and Wright Government Obligations Portfolio had not
commenced operations.
<TABLE>
Net Assets Fee Rate Paid
as of for the Fiscal Year
PORTFOLIOS 12/31/95 Ended 12/31/95
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Near Term Bond Portfolio (WNTBP) $326,564 0.45%(1)
Wright Total Return Bond Portfolio (WTRBP) $537,682 0.45%(2)
Wright Selected Blue Chip Portfolio (WSBCP) $2,238,830 0.65%(3)
Wright International Blue Chip Portfolio (WIBCP) $1,364,871 0.80%(4)
- ----------------------------------------------------------------------------------------------------
<FN>
(1) To enhance the net income of WNTBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $29,915 of
expenses related to the operation of such Portfolio.
(2) To enhance the net income of WTRBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $29,886 of
expenses related to the operation of such Portfolio.
(3) To enhance the net income of WSBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $7,494 of
expenses related to the operation of such Portfolio.
(4) To enhance the net income of WIBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $12,813 of
expenses related to the operation of such Portfolio.
</FN>
</TABLE>
Pursuant to the Investment Advisory Contract, Wright also furnishes office
space and all necessary office facilities, equipment and personnel for servicing
the investments of each Portfolio. Each Portfolio is responsible for the payment
of all expenses relating to its operations other than those expressly stated to
be payable by Wright under its Investment Advisory Contract.
Wright places the security transactions for each Portfolio, which in some
cases may be effected in block transactions which include other accounts managed
by Wright. Wright provides similar services directly for bank trust departments.
Wright seeks to execute the portfolio security transactions on the most
favorable terms and in the most effective manner possible. Subject to the
foregoing, Wright may consider sales of shares of a Portfolio or of other
investment companies for which it acts as investment adviser as a factor in the
selection of broker-dealer firms to execute such transactions.
Wright is also the Investment Adviser to the Funds in The Wright Managed
Equity Trust, The Wright Managed Income Trust and The Wright EquiFund Equity
Trust (the "Wright Funds").
The Administrator
The Trust engages Eaton Vance as its administrator under an Administration
Agreement. Under the Administration Agreement, Eaton Vance is responsible for
managing the legal and business affairs of each Portfolio, subject to the
supervision of the Trustees. Eaton Vance's services include recordkeeping,
preparation and filing of documents required to comply with federal and state
securities laws, supervising the activities of the custodian and transfer agent,
providing assis-
<PAGE>
tance in connection with the Trustees' and shareholders' meetings
and other administrative services necessary to conduct each Portfolio's
business. Eaton Vance will not provide any investment management or advisory
services to the Portfolios. For its services under the Administration Agreement,
Eaton Vance receives monthly administration fees from each Portfolio at the
annual rates (as a percentage of average daily net assets of such Portfolio) as
follows:
ANNUAL % -- ADMINISTRATION FEE RATES
Under $100 Million to $250 Million to Over
$100 Million $250 Million $500 Million $500 Million
------------------------------------------------------------------------------
0.05% 0.04% 0.03% 0.02%
For the fiscal year ended December 31, 1995, Eaton Vance made a reduction
of its full administration fees for each operating Portfolio.
Eaton Vance, its affiliates and its predecessor companies have been
primarily engaged in managing assets of individuals and institutional clients
since 1924 and managing, administering and marketing mutual funds since 1931.
Total assets under management are over $16 billion. Eaton Vance is a
wholly-owned subsidiary of Eaton Vance Corp. ("EVC"), a publicly held holding
company.
Other Management Issues
The Trust will be responsible for all of its expenses not assumed by Wright
under its Investment Advisory Contract or by Eaton Vance under its
Administration Agreement, including, without limitation, the fees and expenses
of its custodian and transfer agent, including those incurred for determining
each Portfolio's net asset value and keeping each Portfolio'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; and investment advisory and
administration fees. The Trust will also bear expenses incurred in connection
with litigation in which the Trust is a party and the legal obligation the Trust
may have to indemnify its officers and Trustees with respect thereto.
NET ASSET VALUE
The net asset value per share of each Portfolio is determined at the close
of regular trading on the New York Stock Exchange (the "Exchange") (normally
4:00 P.M., New York time) on each day that the Exchange is open for trading. The
determination of net asset value per share is made by subtracting from the value
of the assets of a Portfolio the amount of its liabilities, and dividing the
remainder by the number of outstanding shares of a Portfolio. The New York Stock
Exchange
<PAGE>
is closed on the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
The assets of the Portfolios are valued on the basis of their market values
or, in the absence of a market value with respect to any portfolio securities,
at the value determined by or under the direction of the Trustees, including the
employment of an independent pricing services.
The Money Market Portfolio uses the amortized cost method to determine the
value of portfolio securities. The amortized cost method of valuation involves
valuing a security at its cost at the time of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium. The assets of
other Portfolios are valued on the basis of their market values or, in the
absence of a market value with respect to any portfolio securities, at the value
determined by or under the direction of the Trustees, including the employment
of an independent pricing service.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Each Portfolio is treated as a separate entity for federal income tax
purposes under the Internal Revenue Code of 1986, as amended (the "Code"). Each
Portfolio has qualified and elected or intends to qualify and elect to be
treated as a "regulated investment company" for federal income tax purposes
under the Code and intends to continue to qualify as such. In order to so
qualify, each Portfolio must meet certain requirements with respect to the
sources of its income, the diversification of its assets, and the distribution
of its income to shareholders. By so qualifying, a Portfolio will not be subject
to federal income taxes to the extent that its net investment income and net
realized capital gains are distributed to shareholders in accordance with
applicable timing requirements.
It is the intention of each Portfolio to distribute substantially all its
net investment income. Dividends from investment income of WSBCP and WIBCP are
expected to be declared annually. Dividends from investment income of the Money
Market Portfolio, WNTBP, WGOP, and WTRBP will be declared daily and paid
monthly. However, the Trustees may decide to declare dividends at other
intervals. Dividends will be distributed in the form of additional full and
fractional shares of the Portfolio and not in cash, but shareholders may redeem
such shares for cash, as described below.
All net realized long- or short-term capital gains of each Portfolio after
reduction by capital losses, including any available capital loss carryforwards,
if any, will be declared and distributed at least annually either during or
after the close of the Portfolio's taxable year and will be reinvested in
additional full and fractional shares of the Portfolio. A Portfolio may be
subject to foreign withholding or other foreign taxes, with respect to income
(possibly including, in some cases, capital gains) derived from securities of
foreign issuers. U.S. income tax treaties with certain countries may eliminate
or reduce the rates of these taxes. The Trust intends to provide the
documentation necessary to achieve the lower treaty rate of withholding whenever
applicable or to seek a refund of amounts withheld in excess of the treaty rate.
<PAGE>
For a discussion of the tax treatment of Contractholders with respect to
their Contracts, including the tax treatment of investment earnings of and
withdrawals from the segregated accounts underlying such Contracts, reference
should be made to the prospectus for the Contracts accompanying this Prospectus.
PURCHASE AND REDEMPTION OF SHARES
The shares of each Portfolio are not offered to the public but may be
purchased only by PFL or another participating insurance company for its
Accounts allocable to Contracts. Within the limitations set forth in the
appropriate Contract, Contractholders may direct PFL to purchase or redeem
shares of any Portfolio. Instructions for any such purchase or redemption of the
shares of any Portfolio must be made by PFL and Contractholders should not
direct instructions or inquiries to the Trust. The terms and conditions of the
Contracts and any limitations upon the Portfolios in which the Accounts may
invest are set forth in a separate prospectus.
Subject to the foregoing, each Portfolio sells its shares to PFL or another
participating insurance company without a sales charge at the net asset value
per share of such Portfolio next determined after the purchase order is
received. Each Portfolio reserves the right to reject any order for the purchase
of its shares or to limit or suspend, without notice, the offering of its
shares.
Shares of the Portfolios may be redeemed on any day on which the Trust is
open for business. Each Portfolio redeems its shares at the net asset value per
share of such Portfolio next determined after the redemption request is received
from PFL or another participating insurance company. Proceeds of any redemption
are delivered to PFL or another participating insurance company within seven
days after receipt of the redemption request. The right to redeem shares of a
Portfolio and to receive payment therefor may be suspended at times (a) when the
securities markets are closed, other than customary weekend and holiday
closings, (b) when trading is restricted for any reason, (c) when an emergency
exists as a result of which disposal by such Portfolio of securities owned by it
is not reasonably practicable or it is not reasonably practicable for such
Portfolio fairly to determine the value of its net assets, or (d) when the
Securities and Exchange Commission by order permits a suspension of the right of
redemption or a postponement of the date of payment or redemption.
Although the Portfolios normally intend to redeem shares in cash, each
Portfolio reserves the right to redeem securities in kind if deemed advisable by
the Trustees. The value of any portfolio securities distributed upon redemption
will be determined in the manner as described under "Net Asset Value." However,
a Portfolio will redeem shares in cash to the extent that the amount of a
Portfolio's shares to be redeemed for the benefit of any Contractholder within a
90-day period does not exceed the lesser of $250,000 or 1% of the aggregate net
asset value of the Portfolio at the beginning of such period. If portfolio
securities are distributed in lieu of cash, the shareholder will normally incur
transaction costs upon the disposition of any such securities.
<PAGE>
PERFORMANCE INFORMATION
From time to time, the Trust may advertise the "yield" and/or "total
return" of the Portfolios and may compare the performance of the Portfolios with
that of other mutual funds with similar investment objectives as listed in
rankings prepared by Lipper Analytical Services, Inc., or similar independent
services monitoring mutual fund performance, and with appropriate securities or
other relevant indices. The yield of each Portfolio (except the Money Market
Portfolio) is computed by dividing its net investment income per share earned
during a recent 30-day period by the maximum offering price (i.e. net asset
value) per share on the last day of the period and annualizing the resulting
figure. The "total return" of a Portfolio refers to the average annual
compounded rate of return over the stated period that would equate an initial
investment in that Portfolio at the beginning of the period to its ending
redeemable value, assuming reinvestment of all dividend and distributions and
deduction of all recurring charges. The Money Market Portfolio's "yield" refers
to the income generated by an investment in the Portfolio over a seven-day
period (which period will be stated in the advertisement). This income is then
"annualized." That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
Portfolio is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. The methods used to calculate "total return" and "yield" are
described further in the "Statement of Additional Information."
The performance of each Portfolio will vary from time to time in response
to fluctuations in market conditions, interest rates, the composition of the
Portfolio's investments and expenses. Consequently, a Portfolio's performance
figures should not be considered representative of the performance of the
Portfolio for any future period. If the expenses of a Portfolio are reduced by
Wright or Eaton Vance, the Portfolio's performance would be higher.
ORGANIZATION AND CAPITALIZATION OF THE TRUST
The Trust was established in April 1993 as a business trust under
Massachusetts law. The Trust's shares of beneficial interest have no par value.
Shares of the Trust may be issued in series or Portfolios. The Trust currently
has six Portfolios. Each Portfolio's shares may be issued in an unlimited number
by the Trustees. Each share of a Portfolio represents an equal proportionate
beneficial interest in that Portfolio and, when issued and outstanding, the
shares are fully paid and non-assessable by the Trust. Shareholders are entitled
to one vote for each full share held. Fractional shares may be voted in
proportion to the amount of the net asset value of a Portfolio which they
represent. Voting rights are not cumulative, which means that the holders of
more than 50% of the shares voting for the election of Trustees can elect 100%
of the Trustees. Shares have no preemptive or conversion rights and are freely
transferable. Upon liquidation of a Portfolio, shareholders are entitled to
share pro rata in the net assets of such Portfolio.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees
<PAGE>
holding office have been elected by shareholders. In such an event, the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the shareholders in accordance with the Trust's by-laws, the Trustees will
continue to hold office and may appoint successor Trustees.
The Trust's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The by-laws further provide
that under certain circumstances the shareholders may call a meeting to remove a
Trustee and that the Trust is required to provide assistance in communicating
with shareholders about such a meeting.
The rights, if any, of Contractholders to vote the shares of a Portfolio
are governed by the relevant Contract. For information on such voting rights,
see the prospectus describing the Contracts.
ADDITIONAL INFORMATION
Custodian and Transfer Agent
Investors Bank & Trust Company, located at 89 South Street, Boston,
Massachusetts 02111, acts as the Trust's custodian and transfer agent.
Independent Auditors
Deloitte & Touche LLP, located at 125 Summer Street, Boston, Massachusetts
02110, serves as the Trust's independent auditors.
<PAGE>
PART B
===============================================================================
Information Required in a Statement of Additional Information
Statement of Additional Information
The Wright Managed Blue Chip Series Trust
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus dated May 1, 1996, as supplemented from
time to time, which is incorporated herein by reference, for Wright Managed
Money Market Portfolio*, Wright Near Term Bond Portfolio, Wright Government
Obligations Portfolio*, Wright Total Return Bond Portfolio, Wright Selected Blue
Chip Portfolio, and Wright International Blue Chip Portfolio, each a series of
The Wright Managed Blue Chip Series Trust (the "Trust"). The Prospectus may be
obtained from Wright Investors' Service Distributors, Inc., 1000 Lafayette
Boulevard, Bridgeport, Connecticut 06604 (Telephone: 800-888-9471). Unless
otherwise defined herein, capitalized terms have the meanings given to them in
the Prospectus.
Table of Contents
PAGE
- ----------------------------------------------------
GENERAL INFORMATION....................... 2
ADDITIONAL DESCRIPTION OF INVESTMENTS..... 3
INVESTMENT RESTRICTIONS................... 8
PERFORMANCE INFORMATION................... 9
Total Return........................... 9
Yield.................................. 10
PORTFOLIO TRANSACTIONS.................... 12
MANAGEMENT OF THE TRUST................... 13
Officers and Trustees.................. 13
The Investment Adviser................. 16
The Administrator...................... 17
Custodian.............................. 19
Independent Certified Public
Accountants ........................... 19
Legal Matters.......................... 19
NET ASSET VALUE........................... 20
TAXES..................................... 21
Federal Income Taxes................... 21
FINANCIAL STATEMENTS...................... 24
APPENDIX.................................. 26
No person has been authorized to give any information or to make any
representation not contained in this Statement of Additional Information or in
the Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized. This Statement of Additional
Information does not constitute an offering of any securities other than the
registered securities to which it relates or an offer to any person in any state
or other jurisdiction of the United States or any country where such offer would
be unlawful.
The date of this Statement of Additional Information is May 1, 1996.
* As of the date of this Statement of Additional Information, this Portfolio
has not commenced operation.
<PAGE>
GENERAL INFORMATION
The Trust did not have the initial capitalization required by Section 14(a)
of the Investment Company Act of 1940 (the "1940 Act") in reliance upon Rule
14a-2 under the 1940 Act and PFL Life acting as a "promoter" of 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 only the interests
of a particular Portfolio are affected, a majority of such Portfolio's
outstanding shares. The Trustees are authorized to make amendments to the
Declaration of Trust that do not have a material adverse effect on the interests
of shareholders. The Trust may be terminated (i) upon the sale of the Trust's
assets to another investment company, if approved by the holders of two-thirds
of the outstanding shares of the Trust, except that if the Trustees recommend
such sale of assets, the approval by the vote of a majority of the Trust's
outstanding shares will be sufficient, or (ii) upon liquidation and distribution
of the assets of the Trust, if approved by a majority of its Trustees or by the
vote of a majority of the Trust's outstanding shares. If not so terminated, the
Trust may continue indefinitely.
The Trust's Declaration of Trust further provides that the 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 Trust has been advised by counsel that the risk of any
shareholder incurring any liability for the obligations of a Trust is extremely
remote.
The investment objectives and policies of each of the Portfolios are
described in the Prospectus. The following is a description of certain of the
Trust's investment policies and the portfolio securities in which certain
Portfolios may invest.
<PAGE>
ADDITIONAL DESCRIPTION OF INVESTMENTS
U.S. Government, Agency and Instrumentality Obligations -- U.S. Government
obligations are issued by the Treasury and include bills, certificates of
indebtedness, notes, and bonds. Agencies and instrumentalities of the U.S.
Government are established under the authority of an act of Congress and
include, but are not limited to, the Government National Mortgage Association
("GNMA"), 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. Except for
U.S. Government obligations, the securities issued or guaranteed by U.S.
agencies and instrumentalities may or may not be backed by the full faith and
credit of the United States. If the obligation is not backed by the full faith
and credit of the United States, the Portfolio must look principally to the
agency or instrumentally issuing or guaranteeing the obligation for its
repayment and may not be able to assert a claim against the United States itself
in the event that the agency or instrumentality does not meet its obligations.
The U.S. Government does not guarantee the yield or value of any Portfolio's
investments or shares.
Mortgage-Related Securities -- GNMA Certificates are mortgage-backed
securities representing part ownership of a pool of mortgage loans. These loans
- -- issued by lenders such as mortgage bankers, commercial banks and savings and
loan associations -- are either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A "pool" or group of such mortgages
is assembled and, after being approved by GNMA, is offered to investors through
securities dealers. Once such pool is approved by GNMA, the timely payment of
interest and principal on the Certificates representing interests in such pool
is guaranteed by the full faith and credit of the U.S. Government. As
mortgage-backed securities, GNMA Certificates differ from bonds in that the
principal is paid back by the borrower over the term of the loan rather than
returned in a lump sum at maturity. GNMA Certificates are called "pass-through"
securities because a pro-rata share of both regular interest and principal
payments, as well as unscheduled early prepayments, on the underlying mortgage
pool is passed through monthly to the holder of the Certificate. As indicated
below, since the unscheduled prepayment rate of the underlying mortgage pool
covered by a "pass-through" security cannot be predicted with accuracy, the
average life of a particular issue of GNMA Certificates cannot be accurately
predicted.
The Federal Home Loan Mortgage Corporation ("FHLMC"), a corporate
instrumentality of the U.S. Government created by Congress for the purpose of
increasing the availability of mortgage credit for residential housing, issues
participation certificates ("PCs") representing undivided interests in FHLMC's
mortgage portfolio. While FHLMC guarantees the timely payment of interest and
ultimate collection of the principal of its PCs, its PCs are not backed by the
full faith and credit of the U.S. Government. FHLMC PCs differ from GNMA
Certificates in that the mortgages underlying the PCs are mostly "conventional"
mortgages rather than mortgages insured or guaranteed by a federal agency or
instrumentality. However, in several other respects, such as the monthly
pass-through of interest and principal (including unscheduled prepayments) and
the unpredictability of future unscheduled prepayments on the underlying
mortgage pools, FHLMC PCs are similar to GNMA Certificates.
<PAGE>
The Federal National Mortgage Association ("FNMA"), a federally chartered
corporation owned entirely by private stockholders, purchases both conventional
and federally insured or guaranteed residential mortgages from various entities,
including savings and loan associations, savings banks, credit unions and
mortgage bankers, and packages pools of such mortgages in the form of
pass-through securities generally called FNMA Mortgage-Backed Certificates,
which are guaranteed as to timely payment of principal and interest by FNMA but
are not backed by the full faith and credit of the U.S. Government. Like GNMA
Certificates and FHLMC PCs, these pass-through securities are subject to the
unpredictability of unscheduled prepayments on the underlying mortgage pools.
The mortgage-related securities in which the Portfolios may invest include
GNMA, FHLMC and FNMA securities representing interests in pools of 30 year, 15
year, adjustable rate, variable rate, graduated rate and other types of
mortgages. While it is not possible to accurately predict the life of a
particular issue of a mortgage-backed "pass-through" security held by a
Portfolio, the actual life of any such security is likely to be substantially
less than the original average maturity of the mortgage pool underlying the
security. This is because unscheduled early prepayments of principal on the
security owned by the Portfolio will result from the prepayment, refinancing or
foreclosure of the underlying mortgage loans in the mortgage pool. The
prepayment assumptions for pools of 30 and 15-year mortgages are generally
considered to be 12 years and seven years, respectively, but may be considerably
shorter during periods of declining interest rates. Mortgagors may speed up the
rate at which they prepay their mortgages when interest rates decline
sufficiently to encourage refinancing. A Portfolio, when the monthly payments
(which may include unscheduled prepayments) on such a security are passed
through to it, may be able to reinvest such payments only at a lower rate of
interest. Because of the regular scheduled payments of principal and the early
unscheduled prepayments of principal, the mortgage-backed "pass-through"
security is less effective than other types of obligations as a means of
"locking-in" attractive long-term interest rates. As a result, this type of
security may have less potential for capital appreciation during periods of
declining interest rates than other U.S. Government securities of comparable
maturities, although many issues of mortgage-backed "pass-through" securities
may have a comparable risk of decline in market value during periods of rising
interest rates. If such a security has been purchased by a Portfolio at a
premium above its par value, both a scheduled payment of principal and an
unscheduled prepayment of principal, which would be made at par, will accelerate
the realization of a loss equal to that portion of the premium applicable to the
payment or prepayment and will reduce the Portfolio's total return. If such a
security has been purchased by a Portfolio at a discount from its par value,
both a scheduled payment of principal and an unscheduled prepayment of principal
will increase current and total returns and will accelerate the recognition of
income.
Collateralized Mortgage Obligations ("CMOs") are debt securities issued by
FHLMC and by financial institutions and other mortgage lenders which are
generally fully collateralized by a pool of mortgages held under an indenture.
CMOs are issued with a number of classes or series which have different
maturities and are retired in sequence and are the general obligations of the
issuers thereof. CMOs are designed to be retired as the underlying mortgage
loans in the mortgage pool are repaid. In the event of sufficient early
prepayments on such mortgages, the class or series of CMO first to mature
generally will be retired prior to its maturity. Thus the early retirement of a
particular class or series of a CMO held by a Portfolio would affect the
Portfolio's
<PAGE>
current and total returns in the manner indicated above. Currently, the
investment adviser will consider privately issued CMOs or other mortgage-backed
securities as possible investments for a Portfolio only when the mortgage
collateral is insured, guaranteed or otherwise backed by the U.S. Government or
one or more of its agencies or instrumentalities (e.g., insured by the Federal
Housing Administration or Farmers Home Administration or guaranteed by the
Administrator of Veterans Affairs or consisting in whole or in part of U.S.
Government securities). WGOP may not invest in mortgage-related securities.
Corporate Obligations -- As described in the Prospectus, each Portfolio may
invest, subject to certain limitations, in corporate debt obligations. Such
obligations must be rated in the two highest rating categories by a nationally
recognized statistical rating organization for money market instruments in any
portfolio, "A" by Moody's and S&P, in the case of WTRBP, and "AA" by Moody's or
"Aa" by S&P, in the case of WNTBP, WIBCP and WSBCP.
Foreign Securities -- WIBCP may invest in foreign securities. Investing in
securities issued by companies whose principal business activities are outside
the United States may involve significant risks not associated with domestic
investments. For example, there is generally less publicly available information
about foreign companies, particularly those not subject to the disclosure and
reporting requirements of the U.S. securities laws. Foreign issuers are
generally not bound by uniform accounting, auditing and financial reporting
requirements comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in exchange
control regulations, expropriation or confiscatory taxation, limitation on
removal of funds or other assets of WIBCP, 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.
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 (particularly those located in developing countries) may be less liquid
and more volatile than securities of comparable U.S. companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of securities exchanges,
brokers and listed companies than in the U.S.
Foreign Currency Exchange Transactions -- WIBCP may engage in foreign
currency exchange transactions. Investments in securities of foreign companies
whose principal business activities are located outside of the United States
will frequently involve currencies of foreign countries. In addition, assets of
WIBCP may temporarily be held in bank deposits in foreign currencies during the
completion of investment programs. Therefore, the value of WIBCP'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 WIBCP
values its assets daily in U.S. dollars, it does not intend to convert its
holdings of foreign currencies into U.S. dollars on a daily basis. WIBCP 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. WIBCP will
con-
<PAGE>
vert 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 WIBCP at one rate, while offering a lesser rate of exchange should WIBCP
desire to resell that currency to the dealer. WIBCP does not intend to speculate
in foreign currency exchange rates.
As an alternative to spot transactions, WIBCP may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") or
purchase currency call or put options. A forward contract involves an obligation
to purchase or sell a specific currency at a future date and price fixed by
agreement between the parties at the time of entering into the contract. These
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. Although a forward
contract generally involves no deposit requirement and no commissions are
charged at any stage for trades, WIBCP will use segregated accounts for forward
purchase transactions. WIBCP intends to enter into such contracts only on net
terms. The purchase of a put or call option is an alternative to the purchase or
sale of forward contracts and will be used if the option premiums are less then
those in the forward contract market.
WIBCP may enter into forward contracts or purchase currency options only
under two circumstances. First, when WIBCP enters into a contract for the
purchase or sale of a security dominated in a foreign currency, it may desire to
"lock in" the U.S. dollar price of the security. This is accomplished by
entering into a forward contract for the purchase or sale, for a fixed amount of
U.S. dollars, of the amount of foreign currency involved in the underlying
security transaction ("transaction hedging"). Such forward contract transactions
will enable WIBCP to protect itself against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date the security is purchased or
sold and the date of payment for the security.
Second, when the investment adviser believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, WIBCP may enter into a forward contract to sell, for a fixed amount of
U.S. dollars, the amount of foreign currency approximating the value of some or
all of the securities 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.
WIBCP's custodian will place cash or liquid, high-grade debt securities in
a segregated account. The amount of such segregated assets will be at least
equal to the value of WIBCP's total assets committed to the consummation of
forward contracts involving the purchase of forward 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 WIBCP's commitments with respect to such
contracts.
<PAGE>
At the maturity of a forward contract, WIBCP may elect to sell the
portfolio security and make delivery of the foreign currency. Alternatively,
WIBCP 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 WIBCP to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if WIBCP intends to sell the security
and the market value of the security is less than the amount of foreign currency
that WIBCP 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 WIBCP is obligated to deliver.
If WIBCP retains the portfolio security and engages in an offsetting
transaction, WIBCP will incur a gain or a loss (as described below) to the
extent that there has been a change in forward contract prices. If WIBCP 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 WIBCP 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, WIBCP 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 contract prices increase,
WIBCP 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.
WIBCP will not speculate in forward contracts and will limit its dealings
in such contracts to the transactions described above. Of course, WIBCP is not
required to enter into such transactions with respect to portfolio securities
quoted or denominated in a foreign currency and will not do so unless deemed
appropriate by its investment adviser. This method of protecting the value of
WIBCP'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 WIBCP 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.
Lending Portfolio Securities -- Cash equivalents include certificates of
deposit, commercial paper and other short-term money market instruments. A
Portfolio would have the right to call a loan and obtain the securities loaned
at any time on up to five business days' notice. A Portfolio would not have the
right to vote any securities having voting rights during the existence of a
loan, but would call the loan in anticipation of an important vote to be taken
among holders of the securities or the giving or withholding of their consent on
a material matter affecting the investment.
Borrowings -- Each Portfolio may borrow money in an amount equal to 1/3 of
its net assets for temporary or emergency purposes or for the clearance of
transactions. A Portfolio will not purchase additional securities while such
borrowings exceed 5% of such Portfolio's total assets.
<PAGE>
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust on
behalf of each Portfolio and may be changed only by the vote of a majority of a
Portfolio's outstanding voting securities, as defined in the 1940 Act.
Accordingly, each Portfolio may not:
(1) Borrow money in excess of 1/3 of the current market value of the net
assets of such Portfolio (excluding the amount borrowed) and then only
if such borrowing is incurred as a temporary measure for extraordinary
or emergency purposes or to facilitate the orderly sale of portfolio
securities to accommodate redemption requests; or issue any securities
other than its shares of beneficial interest except as appropriate to
evidence indebtedness which such Portfolio is permitted to incur;
(2) Pledge, mortgage or hypothecate its assets, except to secure permitted
borrowings. For purposes of this restriction, collateral arrangements
with respect to options, futures contracts and options on futures
contracts shall not be deemed to be a mortgage, pledge or
hypothecation);
(3) Invest more than 5% of its total assets taken at current market value
in the securities of any one issuer or purchase more than 10% of the
voting securities of any one issuer;
(4) Purchase or retain securities of any issuer if 5% of the issuer's
securities are owned by those officers and Trustees of the Trust or its
investment adviser who own individually more than 1/2 of 1% of the
issuer's securities;
(5) Purchase securities on margin or make short sales, except that such
Portfolio may make sales against the box;
(6) Buy or sell real estate, commodities, or commodity contracts unless
acquired as a result of ownership of securities; except that the
Portfolio may purchase and sell futures contracts on securities,
indices, currency and other financial instruments and options on
futures contracts;
(7) Purchase any securities which would cause more than 25% of the market
value of such Portfolio's total assets at the time of such purchase to
be invested in the securities of issuers having their principal
business activities in the same industry, provided that there is no
limitation in respect to investments in obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
(8) Underwrite securities issued by other persons except insofar as the
Trust may technically be deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security;
(9) Make loans, except (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 for the Portfolio in accordance with the
Portfolio's investment objective and policies may be deemed to be
loans;
(10) Purchase from or sell to any of its Trustees and officers, its
administrator, investment adviser, or principal underwriter, if any, or
the officers and directors of said administrator, investment adviser or
principal underwriter, portfolio securities; or
<PAGE>
(11) Issue senior securities, except as permitted under (1).
In addition to the foregoing fundamental investment restrictions, each
Portfolio has adopted the following nonfundamental policies which reflect the
intentions of the Trustees under current circumstances. Unlike the fundamental
investment restrictions, these policies may be changed at any time by the
Trustees without shareholder approval. Each Portfolio will not: purchase oil,
gas or other mineral leases or purchase partnership interests in oil, gas or
other mineral exploration or development programs; purchase warrants of any
issuer if, as a result, more than 2% of the value of its total assets would be
invested in warrants which are not listed on the New York or American Stock
Exchanges and more than 5% of the value of its total assets would be invested in
warrants, such warrants in each case to be valued at the lesser of cost or
market, but assigning no value to warrants acquired by such Portfolio in units
or attached to securities; or enter into repurchase agreements maturing in more
than seven days or invest in illiquid or restricted securities if, as a result,
more than 15% of the Portfolio's net assets (10% of net assets in the case of
the Money Market Portfolio) would be invested in such repurchase agreements and
securities.
If a percentage restriction contained in the Portfolio's investment
restrictions or policies is adhered to at the time of investment, a later
increase or decrease in the percentage resulting from a change in the value of
portfolio securities or the Portfolio's net assets will not be considered a
violation of such restrictions.
PERFORMANCE INFORMATION
Each Portfolio may from time to time report its yield and total return in
advertisements, reports to shareholders and other sales material. Total return
and yield will be computed as described below.
Total Return
The average annual total return of each Portfolio is determined for a
particular period by calculating the actual dollar amount of investment return
on a $1,000 investment in the Portfolio made at the maximum public offering
price (i.e. net asset value) at the beginning of the period, and then
calculating the annual compounded rate of return which would produce that
amount. Total return for a period of one year is equal to the actual return of
the Portfolio 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 formula can be expressed as follows:
1
Ending Value --
------------- n
Average Annual Total Return = [( Starting Value) - 1] x 100
where Starting Value equals $1,000 and n = number of years.
<PAGE>
In addition, each Portfolio may provide total return information for other
designated periods, such as for the most recent six months or most recent 12
months. This total return information is computed as described above except that
no annualization is made.
The average annual total return of each Portfolio for the one-year period
ended December 31, 1995 and from inception to December 31, 1995 are shown in the
table below:
<TABLE>
One Year Inception To Inception
Ended 12/31/95 12/31/95 Date
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Near Term Bond Portfolio 10.88% 3.47% 1/6/94
Wright Selected Blue Chip Portfolio 26.25% 8.89% 1/6/94
Wright Total Return Portfolio 16.87% 3.79% 12/7/93
Wright International Blue Chip Portfolio 10.60% 0.33% 1/6/94
- --------------------------------------------------------------------------------------------------
<FN>
1 During the periods ended December 31, 1995, the operating expenses of the
Portfolios were reduced either by a reduction of the investment adviser fee,
the administrator fee, and the allocation of expenses to the Adviser, or a
combination of these. Had such actions not been undertaken, the Portfolios
would have had lower returns.
2 The total investment return does not reflect expenses that apply to the
separate account or policies. If these charges had been included, the
total return would be reduced.
</FN>
</TABLE>
Yield
The yield of each Portfolio is computed by dividing its net investment
income per share earned during a recent 30-day period by the maximum offering
price (i.e. net asset value) per share on the last day of the period and
annualizing the resulting figure. Net investment income per share is equal to
the dividends and interest earned on a Portfolio's assets during the period,
with the resulting number being divided by the average daily number of shares
outstanding and entitled to receive dividends during the period.
The formula is as follows:
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 accumulation units outstanding during the
period.
d = the maximum offering price per accumulation unit on the last day of
the period.
NOTE: "a" is calculated for stocks by dividing the stated dividend rate for
each security held during the period by 360. "a" is estimated for debt
securities other than mortgage certificates by
<PAGE>
dividing the year-end market value times the yield to maturity by 360. "a"
for mortgage securities, such as GNMAs, is the actual income earned. Neither
discount nor premium has been amortized.
For the 30-day period ended December 31, 1995, the yield of each of the
following Portfolios was:
30-Day Period Ended
December 31, 1995
- -------------------------------------------------------------------------------
Wright Near Term Bond Portfolio 3.88%
Wright Selected Blue Chip Portfolio 0.71%
Wright Total Return Bond Portfolio 3.50%
- -------------------------------------------------------------------------------
The "yield" and "effective yield" of the Money Market Portfolio is
calculated in the following manner:
A. Yield -- the net annualized yield based on a specific 7-calendar
days calculated at simple interest rates. Yield is calculated by
determining the net change, exclusive of capital changes, in the
value of a hypothetical preexisting account having a balance of
one share at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from shareholders'
accounts, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period
return. The yield is annualized by multiplying the base period
return by 365/7.
The yield figure is stated to the nearest hundredth of one
percent.
B. Effective Yield -- the net annualized yield for a specified
7-calendar days assuming a reinvestment of the yield or
compounding. Effective yield is calculated by the same method as
yield except the yield figure is compounded by adding 1, raising
the sum to a power equal to 365 divided by 7, and subtracting one
from the result, according to the following formula: Effective
Yield = [(Base Period Return +1)365/7]-1.
Total return, yield and effective yield are based on historical earnings
and are not intended to indicate future performance. Total return and yield will
vary based on changes in market conditions and the level of expenses.
A Portfolio's yield or total return may be compared to the Consumer Price
Index and various domestic securities indices. A Portfolio'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 Portfolio's performance made by
independent sources may be used in advertisements and in information furnished
to present or prospective shareholders. These include the rankings prepared by
Lipper Analytical Services, Inc., an independent
<PAGE>
service which monitors the performance of mutual funds. The Lipper
performance analysis includes the reinvestment of dividends and capital gain
distributions, but does not take sales charges into consideration and is
prepared without regard to tax consequences.
PORTFOLIO TRANSACTIONS
The investment adviser places the security transactions for each Portfolio,
which in some cases may be effected in block transactions which include other
accounts managed by the investment adviser. The investment adviser provides
similar services directly for bank trust departments and other investment
companies. In some instances, allocation of the securities to be purchased or
sold, and the expenses in connection with such transaction, is made in a manner
the investment adviser considers to be most equitable and consistent with its
fiduciary obligations to the Trust and such other clients. Such allocation may
adversely affect the size of the position obtainable by a Portfolio.
The investment adviser seeks to execute portfolio security transactions on
the most favorable terms and in the most effective manner possible. In seeking
best execution, the investment adviser 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 Portfolios may give consideration to those firms
which supply brokerage and research services, quotations and statistical and
other information to the investment adviser for use in servicing their accounts
or firms which purchase its investment services. 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 the investment adviser in servicing all or less than all of its
accounts and the services and information furnished by a particular firm may not
necessarily be used in connection with the account which paid brokerage
commissions to such firm. The advisory fee paid by the Portfolios to the
investment adviser is not reduced as a consequence of its receipt of such
services and information. While such services and information are not expected
to reduce the investment adviser's normal research activities and expenses, the
investment adviser would, through use of such services and information, avoid
the additional expenses which would be incurred if it attempted to develop
comparable services and information through its own staff.
<PAGE>
Under the Investment Advisory Contract, the investment adviser 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 Investment Advisory Contract expressly
authorizes the selection of a broker or dealer which charges a Portfolio 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.
Subject to the requirement that the investment adviser shall use its best
efforts to seek to execute each Portfolio's security transactions at
advantageous prices and at reasonably competitive commission rates, the
investment adviser, as indicated above, is authorized to consider as a factor in
the selection of any broker-dealer firm with whom a Portfolio's orders may be
placed the fact that such firm has sold or is selling shares of the Portfolio or
of other investment companies sponsored by the investment adviser.
During the fiscal years ended December 31, 1995, 1994 and 1993, the
Portfolios that were offering their shares during such periods paid the
following amounts on brokerage commissions:
1995 1994 1993
- ------------------------------------------------------------------------------
WNTB(1) 0 0 --
WSBCP(1) $3,551 $4,952 --
WTRBP(2) 0 0 0
WIBCP(1) $2,768 $2,812 --
- ------------------------------------------------------------------------------
(1) Start of business, January 6, 1994.
(2) Start of business, December 7, 1993.
MANAGEMENT OF THE TRUST
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"), or Eaton Vance's parent company, Eaton
Vance Corp. ("EVC"), or Eaton Vance's Trustee, Eaton Vance, Inc. ("EV"), by
virtue of their affiliation with the Trust, Wright, Winthrop, Eaton Vance, EVC
or EV, are indicated by an asterisk (*).
<PAGE>
PETER M. DONOVAN (53), 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. (69), Vice President, Secretary and Trustee*
Vice President of Eaton Vance, EVC and EV and Director, EV and EVC
Director, Trustee and officer of various investment companies managed by Eaton
Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
WINTHROP S. EMMET (85), Trustee
Retired New York City Attorney at Law
Trust Officer, First National City Bank, New York, NY (1963-1971)
Address: Box 327, West Center Road, West Stockbridge, MA 01266
JATIN J. MEHTA, CFA (56), Trustee*
Executive Counselor and Director of Education of Wright and Winthrop
Executive of the Industrial Credit Investment Corporation of India, a World Bank
agency in India for financial assistance to private industry. Member of the New
York Society of Security Analysts and the Hartford Society of Financial
Analysts.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
A.M. MOODY III (59), Vice President & Trustee*
Senior Vice President, Wright and Winthrop
President, Wright Investors' Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (77), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport, CT
Member, Board of Trustees, People's Bank, Bridgeport, CT Board of Directors,
Southern Connecticut Gas Company Chairman, Board of Directors, COSINE Address:
125 Gull Circle North, Daytona Beach, FL 32119
GEORGE R. PREFER (61), Trustee
Retired President and Chief Executive Officer, Muller Data Corp., New York,
NY (President 1983-1986 and 1989-1990); President and Chief Executive Officer,
InvestData Corporation, A Mellon Financial Services Company (1986-1989)
Address: 7738 Silver Bell Drive, Sarasota, FL 34241
RAYMOND VAN HOUTTE (71), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca, NY
(since January 1989);
President and Chief Executive Officer, The Tompkins County Trust Company
(1973-1988);
President, New York State Bankers Association (1987-1988); Director, McGraw
Housing Company, Inc., Deanco, Inc., Evaporated Metal Products and Tompkins
County Area Development, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
<PAGE>
JUDITH R. CORCHARD (57), Vice President
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director Wright and Winthrop.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
JAMES L. O'CONNOR (51), Treasurer
Vice President of Eaton Vance and EV.
Officer of various investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (60), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance and EV.
Officer of various investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
A. JOHN MURPHY (33), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993) and Registration Specialist, Fidelity Management &
Research Co. (1986-1991).
Officer of various investment companies managed by Eaton Vance or BMR.
Mr. Murphy was elected Assistant Secretary of the Trust on June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (38), Assistant Secretary
Vice President of Eaton Vance since February 1993; formerly, associate attorney
at Dechert, Price & Rhoads and Gaston & Snow. Officer of various investment
companies managed by Eaton Vance or BMR.
Mr. Woodbury was elected Assistant Secretary of the Trust on June 21, 1995.
WILLIAM J. AUSTIN, JR. (44), Assistant Treasurer
Assistant Vice President of Eaton Vance and EV.
Officer of various investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
All of the Trustees and officers (except Mr. Mehta) hold identical
positions with The Wright Managed Equity Trust, The Wright Managed Income Trust
and The Wright EquiFund Equity Trust. The Trustees (Messrs. Emmet, Pierce,
Prefer and Van Houtte) who are not affiliated persons of the Trust are paid by
the Portfolios. They also received additional payments from other invesmtent
companies for which Wright provides investment advisory services. The Trustees
who are interested persons of the Trust receive no compensation from the Trust.
The Trust does not have a retirement plan for its Trustees. For Trustee
compensation for the fiscal year ended December 31, 1995, see the following
table.
<PAGE>
COMPENSATION TABLE - FISCAL YEAR ENDED DECEMBER 31, 1995
Registrant - The Wright Managed Blue Chip Series Trust
Registered Investment Companies - 6
Aggregate Compensation Pension Estimated Total
From The Wright Managed Benefits Annual Compensation
Trustees Blue Chip Series Trust Accrued Benefits Paid(1)
- -------------------------------------------------------------------------------
Winthrop S. Emmet $1,250 None None $5,000
Leland Miles $1,000 None None $5,000
Lloyd F. Pierce $1,250 None None $5,000
George R. Prefer $1,250 None None $5,000
Raymond Van Houtte $1,250 None None $5,000
- -------------------------------------------------------------------------------
(1) Total compensation paid is from the The Wright Managed Blue Chip Series
Trust (6 Portfolios) and the other boards in the Wright Fund complex
(27 Funds) for a total of 33 Funds.
Messrs. Emmet, Pierce, Prefer and Van Houtte are members of the Special
Nominating Committee of the Trustees. 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 Investment Adviser
The Trust has engaged The Winthrop Corporation ("Winthrop"), to act as its
investment adviser pursuant to an Investment Advisory Contract. Pursuant to a
service agreement effective February 1, 1996 between Winthrop and its
wholly-owned subsidiary, Wright Investors' Service, Inc. ("Wright"), Wright,
acting under the general supervision of the Trust's Trustees, furnishes each
Portfolio with investment advice and management services. Winthrop supervises
Wright's performance of this function and retains its contractual obligations
under its Investment Advisory Contract with each Portfolio. The estate of John
Winthrop Wright may be considered a conrolling person of Winthrop and Wright by
reason of its ownership of more than a majority of the outstanding shares of
Winthrop. The address of both Winthrop and Wright is 1000 Lafayette Boulevard,
Bridgeport, Connecticut. The Trustees of the Trust are responsible for the
general oversight of the conduct of each Portfolio's business. An affiliate of
the investment adviser receives an annual service fee of .50% of the annuity
purchase value from PFL for acting as principal underwriter of the Contracts.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the Portfolios, will furnish
continuously an investment program with respect to the Portfolios, will
determine which securities should be purchased, sold or exchanged, and will
implement such determinations. Wright will furnish to the Portfolios 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 Portfolio is obligated to pay a monthly advisory
fee calculated at the rates set forth in the Portfolio's current Prospectus.
<PAGE>
The following table sets forth the net assets of each Portfolio that was
offering its shares as at December 31, 1995, and the advisory fee earned during
the fiscal years ended December 31, 1995, 1994 and 1993. As of December 31,
1995, the Wright Money Market Portfolio and the Wright Government Obligations
Portfolio had not commenced operations.
<TABLE>
Aggregate Fee Earned Fee Earned Fee Earned
Net for the Fiscal for the Fiscal for the Fiscal
Assets Year Ended Year Ended Year Ended
PORTFOLIOS 12/31/95 12/31/95 12/31/94 12/31/93
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wright Near Term Bond Portfolio (WNTBP)** $326,564 $ 1,563(5) $1,921(1) --
Wright Total Return Bond Portfolio (WTRBP)* $537,682 $ 2,034(6) $1,861(2) $41
Wright Selected Blue Chip Portfolio (WSBCP)** $2,238,830 $11,367(7) $5,488(3) --
Wright International Blue Chip Portfolio (WIBCP)** $1,364,871 $ 9,690(8) $5,535(4) --
- ----------------------------------------------------------------------------------------------------------
<FN>
* Start of business, December 7, 1993. **Start of business, January 6, 1994.
(1) To enhance the net income of WNTBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $16,824 of
expenses related to the operation of such Portfolio.
(2) To enhance the net income of WTRBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $23,275 of
expenses related to the operation of such Portfolio.
(3) To enhance the net income of WSBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $12,240 of
expenses related to the operation of such Portfolio.
(4) To enhance the net income of WIBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $13,935 of
expenses related to the operation of such Portfolio.
(5) To enhance the net income of WNTBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $29,915 of
expenses related to the operation of such Portfolio.
(6) To enhance the net income of WTRBP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $29,886 of
expenses related to the operation of such Portfolio.
(7) To enhance the net income of WSBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $7,494 of
expenses related to the operation of such Portfolio.
(8) To enhance the net income of WIBCP, Wright made a reduction of its advisory
fee in the full amount of such fee and Wright was allocated $12,813 of
expenses related to the operation of such Portfolio.
</FN>
</TABLE>
The Administrator
The Trust has engaged Eaton Vance to act as the administrator for each
Portfolio pursuant to an Administration Agreement dated August 10, 1993.
For its services under the Administration Agreement, Eaton Vance receives
monthly administration fees based on the net assets of each Portfolio at the
annual rates set forth in the Portfolio's current Prospectus.
The following table sets forth the administration fees that would have been
earned, absent a fee reduction, from each Portfolio for the fiscal years ended
December 31, 1995, 1994 and 1993. As of December 31, 1995, the Wright Managed
Money Market Portfolio and Wright Government Obligations Portfolio had not
commenced operations.
<PAGE>
<TABLE>
Administration Fees Paid
for the Fiscal Year Ended December 31
---------------------------------------
PORTFOLIOS 1995(1) 1994(1) 1993
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Near Term Bond Portfolio (WNTBP)** $174 $214 --
Wright Total Return Bond Portfolio (WTRBP)* $226 $207 $5
Wright Selected Blue Chip Portfolio (WSBCP)** $874 $422 --
Wright International Blue Chip Portfolio (WIBCP)** $606 $346 --
- -----------------------------------------------------------------------------------------------
<FN>
* Start of business, December 7, 1993.
** Start of business, January 6, 1994.
(1) Eaton Vance made a reduction of the administration fee in the full amount
for each Portfolio.
</FN>
</TABLE>
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the Trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner,
James B. Hawkes, and Benjamin A. Rowland, Jr. The Directors of EVC consist of
the same persons and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is
chairman, and Mr. Gardner is president and chief executive officer of EVC, Eaton
Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance and
of EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust which expires December 31, 1996, the Voting
Trustees of which are Messrs. Brigham, Clay, Gardner, Hawkes, and Rowland. The
Voting Trustees have unrestricted voting rights for the election of Directors of
EVC. All of the outstanding voting trust receipts issued under said Voting Trust
are owned by certain of the officers of Eaton Vance and BMR who are also
officers and Directors of EVC and EV. As of March 31, 1996, Messrs. Clay,
Gardner and Hawkes each owned 24% of such voting trust receipts. Messrs. Rowland
and Brigham owned 15% and 13%, respectively, of such voting trust receipts. Mr.
Brigham is an officer and Trustee of the Trust, and a member of the Eaton Vance,
EV, BMR and EVC organizations. Messrs. Austin, Murphy, O'Connor and Woodbury and
Ms. Sanders are officers of the Trust, and are also members of the Eaton Vance,
BMR and EV organizations. Eaton Vance will receive the fees paid under the
Administration Agreement.
EVC owns all of the stock of Energex Energy Corporation which is engaged in
oil and gas exploration and development. In addition, Eaton Vance owns all the
stock of Northeast Properties, Inc., which is engaged in real estate investment.
EVC owns all of the stock of Fulcrum Management, Inc. and MinVen, Inc., which
are engaged in precious metal mining venture investment and management. EVC, EV,
Eaton Vance and BMR may also enter into other businesses.
The Trust's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 1997. The Trust's Investment Advisory
Contract may be continued with respect to a Portfolio from year to year
thereafter so long as such continuance after February 28,
<PAGE>
1997 is approved at least annually (i) by the vote of a majority of the
Trustees who are not "interested persons" of the Trust, Eaton Vance or Wright
cast in person at a meeting specifically called for the purpose of voting on
such approval and (ii) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding shares of that Portfolio. The Trust's Administration
Agreement may be continued from year to year after February 28, 1997 so long as
such continuance is approved annually by the vote of a majority of the Trustees.
Each agreement may be terminated as to a Portfolio 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
Portfolio, and each agreement will terminate automatically in the event of its
assignment. Each agreement provides that, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or duties
to the Trust under such agreement on the part of Eaton Vance or Wright, Eaton
Vance or Wright will not be liable to the Trust for any loss incurred.
Custodian
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston, Massachusetts,
acts as custodian for each of the Portfolios. IBT, directly or through
subcustodians, has the custody of all cash and securities of the Portfolios,
maintains the Portfolios' general ledgers and computes daily the net asset value
per share of each Portfolio. In such capacity it attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the Portfolios' investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
Portfolios. A portion of the custody fee for each Portfolio is based upon the
Trust's aggregate assets, the fees so determined being then allocated among the
Portfolios relative to their size. These fees are then reduced by a credit for a
Portfolio's cash balances at IBT equal to 75% of the 91-day, U.S. Treasury Bill
auction rate applied to such Portfolio's average daily collected balances for
the week. In addition, each Portfolio pays a fee based on the number of
portfolio transactions and a fee for bookkeeping and valuation services.
Independent Certified Public Accountants
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts are the Trust's
independent certified public accountants, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the Securities and Exchange Commission.
Legal Matters
Certain legal matters are passed on for the Trust by Hale and Dorr, 60
State Street, Boston, Massachusetts 02109.
<PAGE>
NET ASSET VALUE
Portfolio securities for which the primary market is on a domestic or
foreign exchange or which are traded over-the-counter and quoted on the NASDAQ
System will be valued at the last sale price on the day of valuation or, if
there was no sale that day, at the last reported bid price, using prices as of
the close of trading. Portfolio securities not quoted on the NASDAQ System that
are actively traded in the over-the-counter market, including listed securities
for which the primary market is believed to be the over-the-counter market, will
be valued at the most recently quoted bid price provided by the principal market
makers.
With respect to WIBCP, foreign securities traded outside the United States
are generally valued as of the time their trading is completed, which is usually
different from the close of the New York Stock Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the New York Stock Exchange that will not be reflected in the
computation of WIBCP's net asset value. If events materially affecting the value
of such securities occur during such period, these securities will be valued at
their fair value according to procedures decided upon in good faith by the
Trustees. All securities and other assets of WIBCP initially quoted or
denominated in foreign currencies will be converted to U.S. dollar values at the
mean of the bid and offer prices of such currencies against U.S. dollars last
quoted on a valuation date by any recognized dealer.
In the case of any securities which are not actively traded, reliable
market quotations may not be considered to be readily available. These
investments are stated at fair value as determined under the direction of the
Trustees. Such fair value is expected to be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
If any securities held by a Portfolio are restricted as to resale, their
fair value will be determined following procedures approved by the Trustees. The
Trustees periodically review such procedures. The fair value of such securities
is generally determined to be the amount which the Portfolio could reasonably
expect to realize from an orderly disposition of such securities over a
reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Portfolio in connection with such disposition). In addition,
specific factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation), the size of the
holding, the prices of any recent transactions or offers with respect to such
securities and any available analysts' reports regarding the issuer.
Notwithstanding the foregoing, short-term debt securities with maturities
of 60 days or less will be valued at amortized cost.
<PAGE>
The Money Market Portfolio uses the amortized cost method to value its
securities, which is intended to permit the Money Market Portfolio generally to
maintain a constant net asset value of $1.00 per share. The Money Market
Portfolio is permitted to use the amortized cost method of valuation for its
portfolio securities pursuant to regulations of the Securities and Exchange
Commission. This method may result in periods during which value, as determined
by amortized cost, is higher or lower than the price the Money Market Portfolio
would receive if it sold the instrument. The net asset value per share would be
subject to fluctuation upon any significant changes in the value of the Money
Market Portfolio's securities. The value of debt securities, such as those in
the Money Market Portfolio, usually reflects yields generally available on
securities of similar yield, quality and duration. When such yields decline, the
value of a portfolio holding such securities can be expected to decline.
Although the Money Market Portfolio seeks to maintain the net asset value per
share of the Money Market Portfolio at $1.00, there can be no assurance that net
asset value will not vary.
The Trustees of the Trust have established procedures reasonably designed,
taking into account current market conditions and the Money Market Portfolio's
investment objective, to stabilize the net asset value per share for purposes of
sales and redemptions at $1.00. These procedures include the determination, at
such intervals as the Trustees deem appropriate, of the extent, if any, to which
the net asset value per share calculated by using available market quotations
deviates from $1.00 per share. In the event such deviation exceeds one half of
one percent, the Trustees are required to promptly consider what action, if any,
should be initiated.
TAXES
Federal Income Taxes
In order to qualify as a regulated investment company as described in the
Prospectus, a Portfolio must, among other things, (1) derive at least 90% of its
gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or foreign currencies, or other income (including but not limited
to gains from options and forward contracts) derived with respect to its
business of investing in such stocks or securities; (2) derive less than 30% of
its gross income in each taxable year from the sale or other disposition of
stocks or securities and certain other investments held less than three months;
and (3) diversify its holdings in compliance with the diversification
requirements of Subchapter M of the Code so that, at the end of each quarter of
the Portfolio's taxable year, (a) at least 50% of the market value of the
Portfolio's total assets is represented by cash, U.S. Government securities and
other securities limited in respect of any one issuer to not more than 5% of the
value of the Portfolio's total (gross) assets and to 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 is invested in securities of any one issuer (other than
U.S. Government securities) or certain other issuers controlled by the
Portfolio.
<PAGE>
As a regulated investment company, a Portfolio will not be subject to
federal income tax on net investment income and net capital gains (short- and
long-term), if any, that it distributes to its shareholders if at least 90% of
its investment company taxable income (i.e., all of its net taxable income other
than the excess, if any, of net long-term capital gain over net short-term
capital loss ("net capital gain"), for the taxable year is distributed in
accordance with applicable timing requirements, but will be subject to tax at
regular corporate rates on any investment company taxable income or net capital
gain that is not so distributed. In general, dividends will be treated as paid
when actually distributed, except that dividends declared in October, November
or December and made payable to shareholders of record in such a month will be
treated as having been paid by the Portfolio (and received by shareholders) on
December 31, if the dividend is paid in the following January. Each Portfolio
intends to satisfy the distribution requirement in each taxable year.
Each Portfolio will not be subject to federal excise tax or the related
distribution requirements for any taxable year in which all of its shares are
held by segregated asset accounts of life insurance companies held in connection
with variable contracts or are attributable to certain "seed money" in
accordance with Section 4982(f) of the Code.
Investment by a Portfolio in the stock of a "passive foreign investment
company" may cause the Portfolio 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 in some cases be available that would
ameliorate some of these adverse tax consequences.
Each Portfolio intends to comply with the diversification requirements
imposed by Section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on a Portfolio by the Investment Company Act and Subchapter M of the Code, place
certain limitations on the assets of each separate account and, because Section
817(h) and those regulations treat the assets of the Portfolio as assets of the
related separate account, the assets of a Portfolio, that may be represented by
any one, two, three and four investments. Specifically, the regulations provide
that, except as permitted by the "safe harbor" described below, as of the end of
each calendar quarter or within 30 days thereafter no more than 55% of the total
assets of a Portfolio may be represented by any one investment, no more than 70%
by any two investments, no more than 80% by any three investments and no more
than 90% by any four investments. For this purpose, all securities of the same
issuer are considered a single investment, and each U.S. Government agency and
instrumentality is considered a separate issuer. Section 817(h) provides, as a
safe harbor, that a separate account will be treated as being adequately
diversified if the diversification requirements under Subchapter M are satisfied
and no more than 55% of the value of the account's total assets are cash and
cash items (including receivables), U.S. Government securities and securities of
other regulated investment companies. Failure by a Portfolio to both quality as
a regulated investment company and satisfy the Section 817(h) requirements would
generally result in treatment of the variable contract holders other than as
described in the applicable variable contract prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current and all
prior taxable years. Any such failure may also result in adverse tax
consequences for the insurance company issuing the contracts.
<PAGE>
The Trust may therefore find it necessary to take action to seek to ensure
that a Contract continues to qualify as a Contract under federal tax laws,
although the insurance company that maintains each segregated asset account is
responsible for ensuring that the assets held in that account satisfy the
diversification requirements of Section 817(h) of the Code and the applicable
regulations and the Trust itself can control only the assets held within the
Portfolios. The Trust, for example, may be required to alter the investment
objectives of a Portfolio or substitute the shares of one Portfolio for those of
another. No such change of investment objectives or substitution of securities
will take place without notice to the shareholders of the affected Portfolio.
The Portfolios are not subject to Massachusetts corporate excise or
franchise tax. Provided that a Portfolio qualifies as a regulated investment
company under the Code, it will also not be required to pay any Massachusetts
income tax.
<PAGE>
FINANCIAL STATEMENTS
=============================================================================
Registrant incorporates by reference the audited financial information for
the Trustcontained in the Trust's shareholder report for the fiscal year ended
December 31, 1995 as previously filed electronically with the Securities and
Exchange Commission (Accession Number 0000901382-96-000003)
<PAGE>
APPENDIX
==============================================================================
Wright Quality Ratings
Wright Quality Ratings provide a means by which Wright evaluates certain
fundamental criteria for the measurement of the quality of an issuer's
securities.
Each rating is based on 32 individual measures of quality which can be
grouped into four components: (1) Investment Acceptance, (2) Financial Strength,
(3) Profitability and Stability, and (4) Growth. The total rating is three
letters and a numeral. The three letters measure (1) Investment Acceptance, (2)
Financial Strength, and (3) Profitability and Stability. Each letter reflects a
composite measurement of eight individual standards which are summarized as A:
Outstanding, B: Excellent, C: Good, D: Fair, L: Limited, and N: Not Rated. The
numeral rating reflects Growth and is a composite of eight individual standards
ranging from 0 to 20.
Equity Securities
Investment Acceptance reflects the acceptability of a security by and its
marketability among investors, and the liquidity of the market for such
securities.
Financial Strength represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
Profitability and Stability measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
Growth measures the growth per common share of the corporation's equity
capital, earnings, and dividends, rather than the corporation's overall growth
of revenues and income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
<PAGE>
Debt Securities
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are particularly relevant to fixed income and reserve investments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 and P-1 Commercial Paper Ratings
by Standard & Poor's and Moody's
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on
debt and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
<PAGE>
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained from other sources it considers reliable. The
ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information.
Bond Ratings
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and Standard & Poor's. Moody's uses a nine-symbol system with Aaa being
the highest rating and C the lowest. Standard & Poor's uses a 10-symbol system
that ranges from AAA to D. Bonds within the top four categories of Moody's (Aaa,
Aa, A, and Baa) and of Standard & Poor's (AAA, AA, A, and BBB) are considered to
be of investment-grade quality. Only the top three grades are acceptable for the
taxable Income Funds and only the top two grades are acceptable for the tax-free
Income Funds. Note that both Standard & Poor's and Moody's currently give their
highest rating to issuers insured by the American Municipal Bond Assurance
Corporation (AMBAC) or by the Municipal Bond Investors Assurance Corporation
(MBIA).
Bonds rated A by Standard & Poor's have a strong capacity to pay principal
and interest, although they are somewhat more susceptible to the adverse effects
of change in circumstances and economic conditions than debt in higher-rated
categories. The rating of AA is accorded to issues where the capacity to pay
principal and interest is very strong and they differ from AAA issues only in
small degree. The AAA rating indicates an extremely strong capacity to pay
principal and interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
<PAGE>
PART C
-------------------
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
Financial Highlights for Wright Total Return Bond Portfolio for
the two years ended December 31, 1995 and for the period from the
start of business, December 7, 1993 to December 31, 1993.
Financial Highlights for Wright Near Term Bond Portfolio, Wright
Selected Blue Chip Portfolio and Wright International Blue Chip
Portfolio for the year ended December 31, 1995 and for the period
from the start of business, January 6, 1994 to December 31, 1994.
Included in Part B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORT FOR THE FUNDS DATED
DECEMBER 31,1995, FILED ELECTRONICALLY PURSUANT TO SECTION
30(b)(2) OF THE INVESTMENT COMPANY ACT OF 1940 (Accession No.
0000901382-96-000003).
For Wright Total Return Bond Portfolio:
Portfolio of Investments as of December 31, 1995
Statement of Assets and Liabilities as of December 31, 1995
Statement of Operations for the year ended December 31, 1995
Statement of Changes in Net Assets for each of the two years
ended December 31, 1995
Notes to Financial Statements
Independent Auditors' Report
For Wright Near Term Bond Portfolio, Wright Selected Blue Chip
Portfolio and Wright International Blue Chip Portfolio:
Portfolio of Investments as of December 31, 1995
Statement of Assets and Liabilities as of December 31, 1995
Statement of Operations for the year ended December 31, 1995
Statement of Changes in Net Assets for the year ended
December 31, 1995 and for the period from the start of
business, January 6, 1994, to December 31, 1994
Notes to Financial Statements
Independent Auditors' Report
(b) Exhibits:
(1) Declaration of Trust filed as Exhibit (1) to the Original
Registration Statement and incorporated herein by reference.
(2) By-laws filed as Exhibit (2) to the Original Registration
Statement and incorporated herein by reference.
(3) Not Applicable
(4) Not Applicable
(5) (a) Investment Advisory Contract dated August 10, 1993 between
the Registrant and Wright Investors' Service filed
herewith as Exhibit (5)(a).
(b) Administration Agreement between the Registrant and Eaton
Vance Management filed as Exhibit (9) to Post-Effective
Amendment No. 1 on April 8, 1994 and incorporated herein by
reference.
<PAGE>
(6) Not Applicable
(7) Not Applicable
(8) (a) Custodian Agreement dated August 10, 1993 with Investors Bank
& Trust Company filed herewith as Exhibit (8)(a). (b) Amendment
dated September 20, 1995 to Master Custodian Agreement filed
herewith as Exhibit (8)(b).
(9) Service Agreement dated February 1, 1996 between Wright Investors'
Service, Inc. and The Winthrop Corporation filed herewith as
Exhibit (9).
(10) Opinion of Hale and Dorr filed as Exhibit (10) to Pre-Effective
Amendment No. 1 on July 16, 1993 and incorporated herein by
reference
(11) Consent of Independent Public Accountants filed herewith as
Exhibit (11).
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) The Performance Information of the Registrant is Incorporated by
Reference from Part B, the Statement of Additional Information.
(17) Power of Attorney filed as Exhibit (17) to Pre-Effective
Amendment No.1 on July 16, 1993 and incorporated herein by
reference.
Item 25. Persons Controlled By or Under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
Title of Class Number of Record Holders as of March 31, 1996
- -------------------------------------------------------------------------------
Shares of Beneficial Interest
Wright Managed Money Market Portfolio (WMMP) --
Wright Near Term Bond Portfolio (WNTBP) 1
Wright Government Obligations Portfolio (GOP) --
Wright Total Return Bond Portfolio (WTRBP) 1
Wright Selected Blue Chip Portfolio (WSBCP) 1
Wright International Blue Chip Portfolio (WIBCP) 1
- -------------------------------------------------------------------------------
Item 27. Indemnification
Except for the Declaration of Trust dated April 15, 1993 establishing the
Registrant as a Trust under Massachusetts law, there is no contract, arrangement
or statute under which any director, officer, underwriter or affiliated person
of the Registrant is insured or indemnified. The Declaration of Trust provides
that no Trustee or officer will be indemnified against any liability of which
the Registrant would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such person's
duties.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the caption "Management of
the Trust" in the Statement of Additional Information, which information is
incorporated herein by reference.
Item 29. Principal Underwriter
Not Applicable.
Item 30. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02111,
and its transfer agent, First Data Investor Services Group, One Exchange Place,
Boston, MA 02104, 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, 1000
Lafayette Boulevard, Bridgeport, CT 06604. Registrant is informed that all
applicable accounts, books and documents required to be maintained by registered
investment advisers are in the custody and possession of Registrant's
administrator, Eaton Vance Management, or of the investment adviser, Wright
Investors' Service, Inc.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) The Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six
months from the commencement of operations of Wright Government
Obligations Portfolio and Wright Money Market Portfolio.
(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 Wight Investors' Service Distributors, nc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth
of Massachusetts on the 24th day of April, 1996.
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: Peter M. Donovan*
--------------------------------
Peter M. Donovan, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
its Registration Statement has been signed below by the following persons in the
capacities and on the 24th day of April, 1996.
SIGNATURE TITLE
- ------------------------------------------------------------------------------
Peter M. Donovan* President
- -------------------
Peter M. Donovan (Principal Executive Officer & Trustee)
James L. O'Connor* Treasurer and Principal
- -------------------
James L. O'Connor Financial and Accounting Officer
/s/ H. Day Brigham, Jr. Trustee
- ----------------------
H. Day Brigham, Jr.
Winthrop S. Emmet* Trustee
- ----------------------
Winthrop S. Emmet
Jatin J. Mehta* Trustee
- ----------------------
Jatin J. Mehta
A. M. Moody III* Trustee
- ----------------------
A.M. Moody III
Lloyd F. Pierce* Trustee
- ----------------------
Lloyd F. Pierce
George R. Prefer* Trustee
- ----------------------
George R. Prefer
Raymond Van Houtte* Trustee
- ----------------------
Raymond Van Houtte
* By: /s/ H. Day Brigham, Jr.
- -----------------------------
H. Day Brigham, Jr.
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to General Instructions E of Form N-1A.
Page in
Sequential
Numbering
Exhibit No. Description System
- --------------------------------------------------------------------------------
(5)(a) Investment Advisory Contract dated August 10, 1993 between the
Registrant and Wright Investors' Service, Inc.
(8)(a) Custodian Agreement dated August 10, 1993 with Investors Bank
& Trust Company
(8)(b) Amendment dated September 20, 1995 to Master Custodian
Agreement
(9) Service Agreement dated Febrary 1, 1996 between Wright
Investors' Service, Inc. and The Winthrop Corporation
(11) Consent of Independent Certified Public Accountants
- --------------------------------------------------------------------------------
Exhibit (5)(a)
INVESTMENT ADVISORY AGREEMENT
CONTRACT made this 10th day of August, 1993, between WRIGHT MANAGED
BLUE CHIP SERIES TRUST, a Massachusetts business trust (the "Trust"), and The
Winthrop Corporation, a Connecticut corporation doing business as WRIGHT
INVESTORS' SERVICE (the "Adviser"):
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and, except as otherwise provided in an administration
agreement, to administer its affairs, subject to the supervision of the Trustees
of the Trust, for the period and on the terms set forth in this Contract. The
Adviser will perform these duties with respect to any and all series of shares
("Funds") which may be established by the Trustees pursuant to the Trust's
Declaration of Trust. Funds may be terminated and additional Funds established
from time to time by action of the Trustees of the Trust.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for 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 members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractors and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of 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 Declaration of Trust, By-Laws and registration statement of
the Trust under the Investment Company Act of 1940, all as from time to time
amended. The Adviser is authorized, in its discretion and without prior
consultation with the Trust, but subject to 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 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
<PAGE>
is being charged) at reasonably competitive commission rates. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services and
products (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) to the Adviser and the Adviser is expressly authorized to cause the
Funds to pay any broker or dealer who provides such brokerage and research
service and products a commission for executing a security transaction which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good faith
that such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities
which the Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. Subject to the requirement set forth in the
second sentence of this paragraph, the Adviser is authorized to consider, as a
factor in the selection of any broker or dealer with whom purchase or sale
orders may be placed, the fact that such broker or dealer has sold or is selling
shares of the Fund or the Trust or of other investment companies sponsored by
the Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust on behalf of each
Fund shall pay to the Adviser on the last day of each month a fee equal to the
percentage or percentage specified in Annex A 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.
In case of initiation or termination of the Contract 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, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all its expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Trust shall include, without
implied limitation, (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust
and its shares under federal and state securities laws and of preparing and
printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
registration of the Trust and of the Trust's principal underwriter, if any, as
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to shareholders and of meetings of shareholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds and securities, keeping of
books and accounts and determination of net asset value), (xiv) fees, expenses
and disbursements of transfer agents and registrars for all services to the
Trust, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xviii) the
administration fee payable to the Trust's administrator, and (xix) such
nonrecurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Trust to indemnify
its Trustees and officers with respect thereto.
<PAGE>
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Adviser as
directors, officers, employees, stockholders or otherwise and that directors,
officers employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Wright" or "Wright Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser provided, however, that any such subadvisory agreement shall be subject
to such approval by the Trustees and shareholders of the Trust as shall be
required under the Investment Company Act of 1940.
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 to and
including February 28, 1995 and shall continue in full force and effect
indefinitely thereafter, but only so long as such continuance after February 28,
1995 is specifically approved at least annually (i) by the Trustees of the Trust
or by vote of a majority of the outstanding voting securities of 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 cast in person at a meeting
called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract 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 the Trust may, at any time upon such written notice to the Adviser,
terminate this Contract as to any Fund by vote of a majority of the outstanding
voting securities of 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 amendment to
this Contract shall be effective as to that Fund until approved (i) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
the Adviser or the Trust cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of that Fund.
<PAGE>
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Trust, and the Adviser hereby agrees that it
shall have recourse only to the Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the shareholders or any shareholder of the Trust. No Fund
shall be liable for the obligations of any other 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 centum or more of the shares of the particular Fund present or
represented by proxy at the meeting if the holders of more than 50 per centum of
the outstanding shares of the particular Fund are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the outstanding shares
of the particular Fund.
11. Use of the Name "Wright". The Adviser hereby consents to the use by
the Trust of the name "Wright" as part of the Trust's name and the name of each
Fund; provided, however, that such consent shall be conditioned upon the
employment of the Adviser or one of its affiliates as the investment adviser of
the Trust. The name "Wright" or any variation thereof may be used from time to
time in other connections and for other purposes by the Adviser and its
affiliates and other investment companies that have obtained consent to use the
name "Wright". The Adviser shall have the right to require the Trust to cease
using the name "Wright" as part of the Trust's name and the name of each Fund if
the Trust ceases, for any reasons, to employ the Adviser or one of its
affiliates as the Trust's investment adviser. Future names adopted by the Trust
for itself and its Funds, insofar as such names include identifying words
requiring the consent of the Adviser, shall be the property of the Adviser and
shall be subject to the same terms and conditions.
THE WRIGHT MANAGED BLUE THE WINTHROP CORPORATION
CHIP SERIES TRUST D/B/A/ WRIGHT INVESTORS'
SERVICE
By:/s/ Peter M. Donovan By:/s/ Judith Corchard
- ------------------------ ----------------------
<PAGE>
ANNEX
ANNUAL ADVISORY FEE RATES
Under $500 Million Over
to
FUND Million $1 Billion $1 Billion
- ------------------------------------------------------------------------------
Wright Managed Money Market
Portfolio (WMMP) 0.25% 0.20% 0.20%
Wright Government Obligations
Portfolio (WGOP) 0.45% 0.40% 0.35%
Wright Near Term Bond
Portfolio (WNTBP) 0.45% 0.40% 0.35%
Wright Total Return Bond
Portfolio (WTRBP) 0.45% 0.40% 0.35%
Wright Selected Blue Chip
Portfolio (WIBCP) 0.65% 0.60% 0.55%
Wright International Blue Chip
Portfolio (WIBCP) 0.80% 0.75% 0.70%
Exhibit (8)(a)
August 10,1993
The Wright Managed Blue Chip Series Trust hereby adopts and agrees to become a
party to the attached Master Custodian Agreement between the Wright Managed
Investment Funds and Investors Bank & Trust Company.
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
BY/s/ Peter M. Donovan
---------------------
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
BY: /s/ J.M.Keenan
----------------------
Title: Vice President
MASTER CUSTODIAN AGREEMENT
between
WRIGHT MANAGED INVESTMENT FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions................................................1-2
2. Employment of Custodian and Property to be held by it...... 3
3. Duties of the Custodian with Respect to
Property of the Fund....................................... 3
A. Safekeeping and Holding of Property.................... 3
B. Delivery of Securities.................................3-6
C. Registration of Securities............................. 6
D. Bank Accounts.......................................... 6
E. Payments for Shares of the Fund........................ 7
F. Investment and Availability of Federal Funds........... 7
G. Collections............................................7-8
H. Payment of Fund Moneys.................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased........................9-10
J. Payments for Repurchases of Redemptions
of Shares of the Fund.................................. 10
K. Appointment of Agents by the Custodian................. 10
L. Deposit of Fund Portfolio Securities in Securities Systems.10-12
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper............................12-14
N. Segregated Account..................................... 14
O. Ownership Certificates for Tax Purposes................ 14
P. Proxies................................................ 14
Q. Communications Relating to Fund Portfolio Securities... 15
<PAGE>
R. Exercise of Rights; Tender Offers..................... 15
S. Depository Receipts...................................5-16
T. Interest Bearing Call or Time Deposits................ 16
U. Options, Futures Contracts and Foreign Currency Transactions.16-17
V. Actions Permitted Without Express Authority..........17-18
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value................... 18
5. Records and Miscellaneous Duties..........................8-19
6. Opinion of Fund`s Independent Public Accountants.......... 19
7. Compensation and Expenses of Bank......................... 19
8. Responsibility of Bank...................................19-20
9. Persons Having Access to Assets of the Fund.............. 20
10. Effective Period,Termination and Amendment; Successor Custodian..20-21
11. Interpretive and Additional Provisions................... 21
12. Notices.................................................. 21
13. Massachusetts Law to Apply............................... 21
14. Adoption of the Agreement by the Fund.................... 22
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by
Wright Investors' Service which has adopted this Agreement in the manner
provided herein and Investors Bank & Trust Company (hereinafter called "Bank",
"Custodian" and "Agent"), a trust company established under the laws of
Massachusetts with a principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing
general partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository but
only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
-1-
<PAGE>
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but only
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Wright Investors'
Service to the Custodian through the Wright trading system shall be deemed to be
proper instructions; the Fund shall cause all such instructions to be confirmed
in writing. Different persons may be authorized to give instructions for
different purposes. A certified copy of a vote of the Board may be received and
accepted by the Custodian as conclusive evidence of the authority of any such
person to act and may be considered as in full force and effect until receipt of
written notice to the contrary. Such instructions may be general or specific in
terms and, where appropriate, may be standing instructions. Unless the vote
delegating authority to any person or persons to give a particular class of
instructions specifically requires that the approval of any person, persons or
committee shall first have been obtained before the Custodian may act on
instructions of that class, the Custodian shall be under no obligation to
question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the Custodian
reasonably believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. The Fund authorizes the Custodian
to tape record any and all telephonic or other oral instructions given to the
Custodian. Upon receipt of a certificate signed by two officers of the Fund as
to the authorization by the President and the Treasurer of the Fund accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Fund, "proper instructions" may also include
communications effected directly between electromechanical or electronic devices
provided that the President and Treasurer of the Fund and the Custodian are
satisfied that such procedures afford adequate safeguards for the Fund's assets.
In performing its duties generally, and more particularly in connection with the
purchase, sale and exchange of securities made by or for the Fund, the Custodian
may take cognizance of the provisions of the governing documents and
registration statement of the Fund as the same may from time to time be in
effect (and votes, resolutions or proceedings of the shareholders or the Board),
but, nevertheless, except as otherwise expressly provided herein, the Custodian
may assume unless and until notified in writing to the contrary that so-called
proper instructions received by it are not in conflict with or in any way
contrary to any provisions of such governing documents and registration
statement, or votes, resolutions or proceedings of the shareholders or the
Board.
-2-
<PAGE>
2. Employment of Custodian and Property to be Held by It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
A. Safekeeping and Holding of Property. The Custodian shall keep
safely all property of the Fund and on behalf of the Fund
shall from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate
on its books and records for the account of the Fund all
property of the Fund,including all securities, participation
interests and other assets of the Fund (1) physically held
by the Custodian, (2) held by any subcustodian referred to
in Section 2 hereof or by any agent referred to in Paragraph
K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved
Clearing Agency or in the Federal Book-Entry System or in an
Approved Foreign Securities Depository, each of which from
time to time is referred to herein as a "Securities System",
and (4) held by the Custodian or by any subcustodian
referred to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.
B. Delivery of Securities.The Custodian shall release and deliver
securities or participation interests owned by the Fund held
(or deemed to be held) by the Custodian or maintained in a
Securities System account or in an Approved Book-Entry System
for Commercial Paper account only upon receipt of proper
instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
-3-
<PAGE>
1) Upon sale of such securities or participation
interests for the account of the Fund, but
only against receipt of payment therefor; if
delivery is made in Boston or New York City,
payment therefor shall be made in accordance
with generally accepted clearing house
procedures or by use of Federal Reserve Wire
System procedures; if delivery is made
elsewhere payment therefor shall be in
accordance with the then current "street
delivery" custom or in accordance with such
procedures agreed to in writing from time to
time by the parties hereto; if the sale is
effected through a Securities System,
delivery and payment therefor shall be made
in accordance with the provisions of
Paragraph L hereof; if the sale of commercial
paper is to be effected through an Approved
Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made
in accordance with the provisions of
Paragraph M hereof; if the securities are to
be sold outside the United States, delivery
may be made in accordance with procedures
agreed to in writing from time to time by the
parties hereto; for the purposes of this
subparagraph, the term "sale" shall include
the disposition of a portfolio security (i)
upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to
make a successful bid with respect to a
portfolio security, the continued holding of
which is contingent upon the making of such a
bid;
2) Upon the receipt of payment in connection
with any repurchase agreement or reverse
repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with
tender or other similar offers for portfolio
securities of the Fund;
4) To the issuer thereof or its agent when such
securities or participation interests are
called, redeemed, retired or otherwise
become payable; provided that, in any such
case, the cash or other consideration is to
be delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for
transfer into the name of the Fund or into
the name of any nominee of the Custodian or
into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or
into the name or nominee name of any
subcustodian employed pursuant to Section 2
hereof; or for exchange for a different
number of bonds, certificates or other
evidence representing the same aggregate face
amount or number of units; provided that,
in any such case, the new securities or
participation interests are to be delivered
to the Custodian or any subcustodian employed
pursuant to Section 2 hereof;
-4-
<PAGE>
6) To the broker selling the same for
examination in accordance with the "street
delivery" custom; provided that the
Custodian shall adopt such procedures as the
Fund from time to time shall approve to
ensure their prompt return to the Custodian
by the broker in the event the broker elects
not to accept them;
7) For exchange or conversion pursuant to any
plan of merger, consolidation,
recapitalization, reorganization or
readjustment of the securities of the Issuer
of such securities, or pursuant to provisions
for conversion of such securities, or
pursuant to any deposit agreement; provided
that, in any such case, the new securities
and cash, if any, are to be delivered to the
Custodian or any subcustodian employed
pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar
securities, the surrender thereof in
connection with the exercise of such
warrants, rights or similar securities, or
the surrender of interim receipts or
temporary securities for definitive
securities; provided that, in any such case,
the new securities and cash, if any, are to
be delivered to the Custodian or any
subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of
securities made by the Fund (such loans to be
made pursuant to the terms of the Fund's
current registration statement), but only
against receipt of adequate collateral as
agreed upon from time to time by the
Custodian and the Fund, which may be in the
form of cash or obligations issued by the
United States government, its agencies or
instrumentalities; except that in connection
with any securities loans for which
collateral is to be credited to the
Custodian's account in the book-entry system
authorized by the U.S.Department of Treasury,
the Custodian will not be held liable or
responsible for the delivery of securities
loaned by the Fund prior to the receipt of
such collateral;
10) For delivery as security in connection with
any borrowings by the Fund requiring a pledge
or hypothecation of assets by the Fund (if
then permitted under circumstances described
in the current registration statement of the
Fund), provided, that the securities shall be
released only upon payment to the Custodian
of the monies borrowed, except that in cases
where additional collateral is required to
secure a borrowing already made, further
securities may be released for that purpose;
upon receipt of proper instructions, the
Custodian may pay any such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
11) When required for delivery in connection with
any redemption or repurchase of Shares of the
Fund in accordance with the provisions of
Paragraph J hereof;
-5-
<PAGE>
12) For delivery in accordance with the
provisions of any agreement between the
Custodian(or a subcustodian employed pursuant
to Section 2 hereof) and a broker-dealer
registered under the Securities Exchange Act
of 1934 and, if necessary, the Fund, relating
to compliance with the rules of The Options
Clearing Corporation or of any registered
national securities exchange, or of any
similar organization or organizations,
regarding deposit or escrow or other
arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the
provisions of any agreement among the Fund,
the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance
with the rules of the Commodity Futures
Trading Commission and/or of any contract
market or commodities exchange or similar
organization,regarding futures margin account
deposits or payments in connection with
futures transactions by the Fund;
14) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board specifying the securities to be
delivered, setting forth the purpose for
which such delivery is to be made, declaring
such purpose to be proper corporate purpose,
and naming the person or persons to whom
delivery of such securities shall be made.
C. Registration of Securities. Securities held by the Custodian
(other than bearer securities) for the account of the Fund
shall be registered in the name of the Fund or in the name
of any nominee of the Fund or of any nominee of the Custodian,
or in the name or nominee name of any agent appointed pursuant
to Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the
name or nominee name of The Depository Trust Company or
Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for
Commercial Paper; provided, that securities are held in an
account of the Custodian or of such agent or of such
subcustodian containing only assets of the Fund or only assets
held by the Custodian or such agent or such subcustodian as
a custodian or subcustodian or in a fiduciary capacity for
customers. All certificates for securities accepted by the
Custodian or any such agent or subcustodian on behalf of the
Fund shall be in "street" or other good delivery form or
shall be returned to the selling broker or dealer who shall
be advised of the reason thereof.
D. Bank Accounts.The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only
to draft or order by the Custodian acting in pursuant to the
terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Fund other than cash
maintained by the Fund in a bank account established and used
in accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Fund may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust
companies as the Custodian may in its discretion deem
necessary or desirable; provided, however, that
-6-
<PAGE>
every such bank or trust company shall be qualified to act as
a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved in
writing by two officers of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and
shall be subject to withdrawal only by the Custodian in that
capacity.
E. Payment for Shares of the Fund. The Custodian shall make
appropriate arrangements with the Transfer Agent and the
principal underwriter of the Fund to enable the Custodian to
make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares
as may be issued or sold from time to time by the Fund, in
accordance with the governing documents and offering
prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
F. Investment and Availability of Federal Funds. Upon agreement
between the Fund and the Custodian, the Custodian shall, upon
the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such securities and instruments as
may be set forth in such instructions on the
same day as received all federal funds
received after a time agreed upon between
the Custodian and the Fund; and
2) make federal funds available to the Fund as
of specified times agreed upon from time to
time by the Fund and the Custodian in the
amount of checks received in payment for
Shares of the Fund which are deposited into
the Fund's account.
G. Collections. The Custodian shall promptly collect all income
and other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall
promptly collect all income and other payments with respect to
bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or agent thereof and
shall credit such income, as collected, to the Fund's
custodian account. The Custodian shall do all things necessary
and proper in connection with such prompt collections and,
without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other
income items requiring presentations;
2) Present for payment all securities which may
mature or be called, redeemed, retired or
otherwise become payable;
3) Endorse and deposit for collection, in the
name of the Fund, checks, drafts or other
negotiable instruments;
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<PAGE>
4) Credit income from securities maintained in
a Securities System or in an Approved
Book-Entry System for Commercial Paper at
the time funds become available to the
Custodian; in the case of securities
maintained in The Depository Trust Company
funds shall be deemed available to the Fund
not later than the opening of business on
the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably
practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does
not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in
writing, enclosing copies of any demand letter, any written
response thereto, and memoranda of all oral responses thereto
and to telephonic demands, and await instructions from the
Fund; the Custodian shall in no case have any liability for
any nonpayment of such income provided the Custodian meets the
standard of care set forth in Section 8 hereof. The Custodian
shall not be obligated to take legal action for collection
unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal
with the same pursuant to proper instructions relative
thereto.
H. Payment of Fund Moneys. Upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of the Fund
in the following cases only:
1) Upon the purchase of securities,participation
interests, options,futures contracts, forward
contracts and options on futures contracts
purchased for the account of the Fund but
only (a) against the receipt of
(i) such securities registered as provided
in Paragraph C hereof or in proper form
for transfer or
(ii) detailed instructions signed by an
officer of the Fund regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase
by the Fund of the options, futures
contracts, forward contracts or options on
futures contracts
by the Custodian (or by a subcustodian
employed pursuant to Section 2 hereof or by
a clearing corporation of a national
securities exchange of which the Custodian
is a member or by any bank, banking
institution or trust company doing business
in the United States or abroad which is
qualified under the Investment Company Act
of 1940 to act as a custodian and which has
been designated by the Custodian as its
agent for this purpose or by the agent
specifically designated in such instructions
as representing the purchasers of a new
issue of privately placed securities); (b)
in the case of a purchase effected through a
Securities System, upon receipt of the
securities by the Securities System
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<PAGE>
in accordance with the conditions set forth
in Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected
through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper
by the Custodian or subcustodian in
accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of
repurchase agreements entered into between
the Fund and another bank or a
broker-dealer, against receipt by the
Custodian of the securities underlying the
repurchase agreement either in certificate
form or through an entry crediting the
Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of
Boston with such securities along with
written evidence of the agreement by the
bank or broker-dealer to repurchase such
securities from the Fund; or (e) with
respect to securities purchased outside of
the United States, in accordance with
written procedures agreed to from time to
time in writing by the parties hereto;
2) When required in connection with the
conversion, exchange or surrender of
securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or
repurchase of Shares of the Fund in
accordance with the provisions of Paragraph
J hereof;
4) For the payment of any expense or liability
incurred by the Fund, including but not
limited to the following payments for the
account of the Fund: advisory fees,
distribution plan payments, interest, taxes,
management compensation and expenses,
accounting, transfer agent and legal fees,
and other operating expenses of the Fund
whether or not such expenses are to be in
whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends or other
distributions to holders of Shares declared
or authorized by the Board; and
6) For any other proper corporate purpose, but
only upon receipt of, in addition to proper
instructions, a certified copy of a vote of
the Board, specifying the amount of such
payment, setting forth the purpose for which
such payment is to be made, declaring such
purpose to be a proper corporate purpose,
and naming the person or persons to whom
such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase
of securities for the account of the Fund is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions signed by two
officers of the Fund to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the
same extent as if the securities had been received by the
Custodian; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of (i) the
securities in certificate form subject to such repurchase
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<PAGE>
agreement or (ii) written evidence that the securities subject
to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston
or (iii) the safekeeping receipt, provided that such
securities have in fact been so transfered by book-entry and
the written repurchase agreement is received by the Custodian
in due course; and except that if the securities are to be
purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to
time by the parties hereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund.
From such funds as may be available for the purpose, but
subject to any applicable votes of the Board and the current
redemption and repurchase procedures of the Fund, the
Custodian shall, upon receipt of written instructions from the
Fund or from the Fund's transfer agent or from the principal
underwriter, make funds and/or portfolio securities available
for payment to holders of Shares who have caused their Shares
to be redeemed or repurchased by the Fund or for the Fund`s
account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon
which special checks may be drawn by shareholders of the Fund
holding Shares for which certificates have not been issued.
Such checking account and such special checks shall be subject
to such rules and regulations as the Custodian and the Fund
may from time to time adopt. The Custodian or the Fund may
suspend or terminate use of such checking account or such
special checks (either generally or for one or more
shareholders) at any time. The Custodian and the Fund shall
notify the other immediately of any such suspension or
termination.
K. Appointment of Agents by the Custodian. The Custodian may at
any time or times in its discretion appoint (and may at any
time remove) any other bank or trust company (provided such
bank or trust company is itself qualified under the Investment
Company Act of 1940 to act as a custodian or is itself an
eligible foreign custodian within the meaning of Rule 17f-5
under said Act) as the agent of the Custodian to carry out
such of the duties and functions of the Custodian described in
this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent
shall not relieve the Custodian of any of its responsibilities
or liabilities hereunder, and as between the Fund and the
Custodian the Custodian shall be fully responsible for the
acts and omissions of any such agent. For the purposes of this
Agreement, any property of the Fund held by any such agent
shall be deemed to be held by the Custodian hereunder.
L. Deposit of Fund Portfolio Securities in Securities Systems.The
Custodian may deposit and/or maintain securities owned by the
Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
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<PAGE>
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2 keep
securities of the Fund in a Securities System provided that
such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the
Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund, and the Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings
maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased
in book-entry form for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
such securities have been transferred to the Account, and (ii)
the making of any entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account
of the Fund only upon (i) receipt of notice or advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all notices or
advices from the Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be promptly
provided to the Fund at its request. The Custodian shall
promptly send to the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice
or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to the Securities System's accounting
system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities
System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities
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<PAGE>
deposited in any Securities System. The Custodian's books and
records relating to the Fund's participation in each
Securities System will at all times during regular business
hours be open to the inspection of the Fund's authorized
officers, employees or agents.
(e) The Custodian shall not act under this Paragraph
L in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Securities System; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has
annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of the
Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the
Securities System or any other person; at the election of the
Fund, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Fund has not been made whole for any such loss or
damage.
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper. Upon receipt of proper
instructions with respect to each issue of direct issue
commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by
the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the
following provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry System
for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of
an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such
paper is maintained in a non-proprietary account ("Account")
of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include
any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to
commercial paper of the Fund which is maintained in an
Approved Book-Entry System for Commercial Paper shall identify
by book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the
Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping
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<PAGE>
system capable of accurately and currently stating the Fund's
holdings of commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper
purchased in book-entry form for the account of the Fund only
upon contemporaneous (i) receipt of notice or advice from the
issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such purchase, payment and
transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund
only upon contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and payment
for the account of the Fund. Copies of all notices, advices
and confirmations of transfers of commercial paper for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to each System's accounting system, system
of internal accounting controls or procedures for safeguarding
commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication
relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in any
Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph
M in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the Custodian
shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for
Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such System
as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved
Book-Entry System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund or in
the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper
by book-entry.
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<PAGE>
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of any
Approved Book-Entry System for Commercial Paper by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it
may have against the System, the issuer of the commercial
paper or any other person; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the System, the
issuer of the commercial paper or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for
any such loss or damage.
N. Segregated Account. The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant
to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and any
registered broker-dealer (or any futures commission merchant),
relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange
(or of the Commodity Futures Trading Commission or of any
contract market or commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or
written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper
purposes, but only, in the case of clause (iv), upon receipt
of, in addition to proper instructions, a certificate signed
by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.
O. Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt
of income or other payments with respect to securities of the
Fund held by it and in connection with transfers of
securities.
P. Proxies. The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly delivered to the
Fund all forms of proxies and all notices of meetings and any
other notices or announcements or other written information
affecting or relating to the securities, and upon receipt of
proper instructions shall execute and deliver or cause its
nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute
any proxy to vote thereon or give any consent or take any
other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
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<PAGE>
Q. Communications Relating to Fund Portfolio Securities. The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call
and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons
relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange offers,
the Custodian shall deliver promptly to the Fund all written
information received by the Custodian from issuers and other
persons relating to the securities and participation interests
whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer.
R. Exercise of Rights; Tender Offers. In the case of tender
offers, similar offers to purchase or exercise rights
(including, without limitation, pendency of calls and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and
participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for
promptly notifying the Fund of all such offers in accordance
with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall
have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of
proper instructions, the Custodian shall timely deliver to the
issuer or trustee thereof, or to the agent of either,warrants,
puts, calls, rights or similar securities for the purpose of
being exercised or sold upon proper receipt therefor and upon
receipt of assurances satisfactory to the Custodian that the
new securities and cash, if any, acquired by such action are
to be delivered to the Custodian or any subcustodian employed
pursuant to Section 2 hereof. Upon receipt of proper
instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the
Custodian that the consideration to be paid or delivered or
the tendered securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership, and shall thereafter promptly
notify the Fund in writing of such action.
S. Depository Receipts. The Custodian shall, upon receipt of
proper instructions, surrender or cause to be surrendered
foreign securities to the depository used by an issuer of
American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs") for
such securities, against a written receipt therefor adequately
describing such securities and written evidence satisfactory
to the Custodian that the depository has acknowledged receipt
of instructions to issue with respect to such securities ADRs
in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section
2 hereof, for delivery to the Custodian or such subcustodian
at such place as the Custodian or such subcustodian may from
time to time designate. The Custodian shall, upon receipt of
proper instructions, surrender ADRs to the issuer thereof
against a written receipt therefor adequately
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<PAGE>
describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository
to deliver the securities underlying such ADRs to the
Custodian or to a subcustodian employed pursuant to Section 2
hereof.
T. Interest Bearing Call or Time Deposits. The Custodian shall,
upon receipt of proper instructions, place interest bearing
fixed term and call deposits with the banking department of
such banking institution (other than the Custodian) and in
such amounts as the Fund may designate. Deposits may be
denominated in U.S. Dollars or other currencies. The Custodian
shall include in its records with respect to the assets of the
Fund appropriate notation as to the amount and currency of
each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to
the Custodian by the banking institution. Such deposits shall
be deemed portfolio securities of the applicable Fund for the
purposes of this Agreement, and the Custodian shall be
responsible for the collection of income from such accounts
and the transmission of cash to and from such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of
proper instructions and in accordance with the
provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, the
Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered
national securities exchange or similar organization
or organizations, receive and retain confirmations or
other documents, if any, evidencing the purchase or
writing of an option on a security or securities
index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account
for each Fund separately, either physically or by
book-entry in a Securities System, securities subject
to a covered call option written by the Fund; and
release and/or transfer such securities or other
assets only in accordance with a notice or other
communication evidencing the expiration, termination
or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or
options exchange on which such covered option is
traded or such other organization as may be
responsible for handling such options transactions.
The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in
each Fund's segregated account in compliance with
applicable margin maintenance requirements.
2. Futures Contracts. The Custodian shall, upon
receipt of proper instructions, receive and retain
confirmations and other documents, if any, evidencing
the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and
maintain in a segregated account, for the benefit of
any futures commission merchant, assets designated by
the Fund as initial, maintenance or variation
"margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its
obligations under any futures contracts purchased or
sold or any options on futures contracts written by
Fund, in accordance with the provisions of any
agreement or agreements among
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<PAGE>
the Fund, the Custodian and such futures commission
merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization regarding such margin deposits or
payments; and release and/or transfer assets in such
margin accounts only in accordance with any such
agreements or rules. The Custodian and the futures
commission merchant shall be responsible for the
sufficiency of assets held in the segregated account
in compliance with the applicable margin maintenance
and mark-to-market payment requirements.
3. Foreign Exchange Transactions.The Custodian shall,
pursuant to proper instructions, enter into or cause
a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be
portfolio securities of the Fund; and accordingly,
the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's
responsibility in respect of other portfolio
securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of
cash from the currency broker or banking or financial
institution with which the contract or option is
made, the maintenance of proper records with respect
to the transaction and the maintenance of any
segregated account required in connection with the
transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or
banking or financial institutions with which the Fund
deals or for their failure to comply with the terms
of any contract or option. Without limiting the
foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available
to the Custodian for the purpose, the Custodian may
(if determined necessary by the Custodian to
consummate a particular transaction on behalf and for
the account of the Fund) make free outgoing payments
of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign
exchange contract or confirmation that the
countervalue currency completing the foreign exchange
contact has been delivered or received. The Custodian
shall not be responsible for any costs and interest
charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of
third parties to deliver foreign exchange; provided
that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to
the Fund in accordance with, the provisions of
Section 8.
V. Actions Permitted Without Express Authority.
The Custodian may
in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor
expenses of handling securities or other
similar items relating to its duties under
this Agreement, provided, that all such
payments shall be accounted for by the
Custodian to the Treasurer of the Fund;
-17-
<PAGE>
2) surrender securities in temporary form for
securities in definitive form;
3) endorse for collection, in the name of the
Fund, checks, drafts and other negotiable
instruments; and
4) in general, attend to all nondiscretionary
details in connection with the sale,
exchange, substitution, purchase, transfer
and other dealings with the securities and
property of the Fund except as otherwise
directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue
sky"authorities and to others, audits of accounts, and other ministerial matters
of like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with
-18-
<PAGE>
appropriate information as to securities in transit or in the process of
purchase or sale and with such other information as said auditors may from time
to time request. The Custodian shall also maintain records of all receipts,
deliveries and locations of such securities, together with a current inventory
thereof, and shall conduct periodic verifications (including sampling counts at
the Custodian) of certificates representing bonds and other securities for which
it is responsible under this Agreement in such manner as the Custodian shall
determine from time to time to be advisable in order to verify the accuracy of
such inventory. The Bank shall not disclose or use any books or records it has
prepared or maintained by reason of this Agreement in any manner except as
expressly authorized herein or directed by the Fund, and the Bank shall keep
confidential any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost,
-19-
<PAGE>
expense, liability or claim resulting from, or caused by, the direction of or
authorization by the Fund to maintain custody of any securities or cash of the
Fund in a foreign county including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, acts of war, civil war or
terrorism, insurrection, revolution, military or usurped powers, nuclear
fission, fusion or radiation, earthquake, storm or other disturbance of nature
or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund
vote to have the securities, funds and other properties held hereunder delivered
and paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits,
-20-
<PAGE>
as shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110,
shall be deemed to have been properly delivered or given hereunder to the
respective addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
-21-
<PAGE>
14. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-22-
Exhibit (8)(b)
AMENDMENT TO
MASTER CUSTODIAN AGREEMENT
BETWEEN
WRIGHT MANAGED INVESTMENT FUNDS
AND
INVESTORS BANK & TRUST COMPANY
This Amendment, dated as of September 20, 1995, is made to the MASTER
CUSTODIAN AGREEMENT (the "Agreement") between each investment company advised by
Wright Investors' Service which has adopted the Agreement (the "Funds") and
Investors Bank & Trust Company (the "Custodian") pursuant to Section 10 of the
Agreement.
The Funds and the Custodian agree that Section 10 of the Agreement shall,
as of September 20, 1995, be amended to read as follows:
Unless otherwise defined herein, terms which are defined in the Agreement
and used herein are so used as so defined.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; provided, that the Fund may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the Funds
determines that the performance of the Custodian has been unsatisfactory or
adverse to the interests of shareholders of any Fund or Funds or that the terms
of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.
<PAGE>
The Board of the Fund shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
Except as expressly provided herein, the Agreement shall remain unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
THE WRIGHT EQUIFUND EQUITY TRUST
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By:/s/ James L. O'Connor
---------------------
Treasurer
INVESTORS BANK & TRUST COMPANY
By:/s/ Michael F. Rogers
----------------------
Exhibit (9)
THE WINTHROP CORPORATION
1000 LAFAYETTE BOULEVARD
BRIDGEPORT, CT 06604
February 1, 1996
Wright Investors' Service, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
Re: Service Agreement
Ladies and Gentlemen:
The Winthrop Corporation ("Winthrop") is the investment adviser to each
of the investment companies and series listed below (the "Funds") under
Investment Advisory Contracts between Winthrop and the Funds (the "Investment
Advisory Contracts").
NAME OF DATE OF INVESTMENT
TRUST AND FUND ADVISORY CONTRACT
---------------- -------------------
THE WRIGHT MANAGED INCOME TRUST
- --------------------------------------
Wright U.S. Treasury Money Market Fund April 1, 1991
Wright U.S. Treasury Fund December 21, 1987
Wright U.S. Treasury Near Term Fund December 21, 1987
Wright Total Return Bond Fund December 21, 1987
Wright Insured Tax Free Bond Fund December 21, 1987
Wright Current Income Fund December 21, 1987
THE WRIGHT MANAGED EQUITY TRUST
- --------------------------------------
Wright Quality Core Equities Fund December 21, 1987
Wright Selected Blue Chip Equities Fund December 21, 1987
Wright Junior Blue Chip Equities Fund December 21, 1987
<PAGE>
NAME OF DATE OF INVESTMENT
TRUST AND FUND ADVISORY CONTRACT
--------------- -------------------
Wright International Blue Chip Equities Fund December 21, 1987
THE WRIGHT EQUIFUND EQUITY TRUST
- -------------------------------------
Wright EquiFund-Australasia April 1, 1994
Wright EquiFund-Austria January 20, 1994
Wright EquiFund-Belgium/Luxembourg January 20, 1994
Wright EquiFund-Britain April 17, 1995
Wright EquiFund-Canada January 20, 1994
Wright EquiFund-France January 20, 1994
Wright EquiFund-Germany January 20, 1994
Wright EquiFund-Hong Kong August 25, 1994
Wright EquiFund-Ireland April 1, 1994
Wright EquiFund-Italy August 25, 1994
Wright EquiFund-Japan January 20, 1994
Wright EquiFund-Mexico April 1, 1994
Wright EquiFund-Netherlands August 25, 1994
Wright EquiFund-Nordic January 20, 1994
Wright EquiFund-Spain August 25, 1994
Wright EquiFund-Switzerland January 20, 1994
Wright EquiFund-United States April 1, 1994
Wright EquiFund-Global April 1, 1994
Wright EquiFund-International April 1, 1994
The Wright Managed
Blue Chip Series Trust
- -----------------------------
Wright Managed Money Market Portfolio August 10, 1993
Wright Government Obligations Portfolio August 10, 1993
Wright Near Term Bond Portfolio August 10, 1993
Wright Total Return Bond Portfolio August 10, 1993
Wright Selected Blue Chip Portfolio August 10, 1993
Wright International Blue Chip Portfolio August 10, 1993
<PAGE>
Subject to the approval of the Boards of Trustees of the Funds, Winthrop has
selected Wright Investors' Service, Inc., a wholly-owned subsidiary of Winthrop,
to provide portfolio management services for each Fund. You agree that you are
willing to provide such services for each Fund and, accordingly, Winthrop and
you agree as follows:
1. Portfolio Management Duties of Wright. Winthrop hereby employs
Wright to provide continuing and suitable portfolio management services to each
Fund and to manage the investment and reinvestment of the assets of each Fund,
subject to the supervision of Winthrop and the Trustees of each Fund, for the
period and on the terms set forth in this Agreement.
Wright hereby accepts such employment, and undertakes to afford to each
Fund the advice and assistance of Wright'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 each Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and to pay the salaries and fees of all officers and Trustees of each Fund who
are members of Wright's organization and all personnel of Wright performing
services relating to research and investment activities. Wright 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 Fund in any way or otherwise be deemed an agent of any Fund.
Wright shall provide each Fund with such portfolio management services
and supervision as Winthrop may from time to time consider necessary for the
proper supervision of such Fund's investments. Wright 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
Fund's Declaration of Trust, By-Laws and registration statement under the
Investment Company Act of 1940, all as from time to time amended. Should the
Trustees of any Fund at any time, however, make any specific determination as to
investment policy for the Fund and notify Wright thereof in writing, Wright
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.
Wright shall take, on behalf of each Fund, all actions which it deems necessary
or desirable to implement the investment policies of the Fund.
<PAGE>
Wright shall place all orders for the purchase or sale of portfolio
securities for the account of each Fund with brokers or dealers or banks or
firms or other persons selected by Wright, and to that end Wright is authorized
as the agent of Winthrop and each Fund to give instructions to the custodian of
the Fund as to deliveries of securities and payment of cash for the account of
the Fund. In connection with the selection of such brokers or dealers or banks
or firms or other persons and the placing of such orders, Wright shall use its
best efforts to seek to execute security transactions at prices which are
advantageous to each Fund and (when a disclosed commission is being charged) at
reasonably competitive commission rates. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to Wright or
Winthrop and Wright is expressly authorized to pay any broker or dealer who
provides such brokerage and research services a commission for executing a
security transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Wright
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 Wright 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, Wright 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 any Fund.
Wright shall not be responsible for providing certain administrative
services to any Fund under this Agreement. Eaton Vance Management, in its
capacity as Administrator of each Fund, shall be responsible for providing such
services to the Fund under the Fund's separate Administration Agreement with the
Administrator.
2. Compensation. For all services to be rendered and expenses paid or
assumed by you as herein provided, Winthrop will cause each Fund to pay you
monthly in arrears on the last business day of each month the entire amount of
the advisory fee that Winthrop is entitled to receive from such Fund.
<PAGE>
3. Allocation of Charges and Expenses. It is understood that each Fund
will pay all its expenses other than those expressly stated to be payable by
Wright hereunder, which expenses payable by each Fund shall include, without
implied limitation, (i) expenses of maintaining each Fund and continuing its
existence, (ii) registration for each Fund under the Invest- ment Company Act of
1940, (iii) commissions, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments, (iv) auditing,
accounting and legal expenses, (v) taxes and interest, (vi) governmental fees,
(vii) expenses of issue, sale and redemption of Fund shares, (viii) expenses of
registering and qualifying each Fund and its shares under federal and state
securities laws and of preparing and printing prospectuses for such purposes and
for distributing the same to shareholders and investors, and fees and expenses
of registering and maintaining registrations of each Fund and of its 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 each Fund (including without limitation safekeeping of
funds, securities and other investments, keeping of books, accounts and records,
and determination of net asset values), (xiv) fees, expenses and disbursements
of transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to each Fund, (xv) expenses for servicing the
accounts of shareholders, (xvi) any direct charges to shareholders approved by
the Trustees of a Fund, (xvii) all payments to be made and expenses to be
assumed by a Fund pursuant to any one or more distribution plans adopted by the
Fund pursuant to Rule 12b-1 under the Investment Company Act of 1940, (xviii)
compensation and expenses of Trustees of each Fund who are not members of
Wright's organization, (xvix) the administration fees payable by each Fund to
its Administrator, and (xx) such non-recurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of each Fund to indemnify its Trustees, officers and shareholders
with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of each Fund are or may be or become interested in Wright as
directors, officers, employees, shareholders or otherwise and that directors,
officers, employees and shareholders of Wright are or may be or become
similarly interested in the Fund, and that Wright may be or become interested
in the Fund as a shareholder or otherwise. It is also
<PAGE>
understood that directors, officers, employees and shareholders of Wright may be
or become interested (as directors, trustees, officers, employees, shareholders
or otherwise) in other companies or entities (including, without limitation,
other investment companies) which Wright or Winthrop may organize, sponsor or
acquire, or with which Wright or Winthrop may merge or consolidate, and that
Wright or 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 Wright. The services of Wright to
Winthrop and each Fund are not deemed to be exclusive, Wright 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 Wright, Wright shall
not be subject to liability to Winthrop, any Fund or any shareholder 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 acquisition, holding or disposition
of any security or other investment.
6. Duration and Termination of this Agreement. This Agreement shall
become effective on February 1, 1996 and, unless terminated as herein provided,
shall remain in full force and effect through and including February 28, 1997
and shall continue in full force and effect as to each Fund indefinitely
thereafter, but only so long as such continuance after February 28, 1997 is
specifically approved at least annually (i) by the Board of Trustees of such
Fund or by vote of a majority of the outstanding voting securities of the Fund
and (ii) by the vote of a majority of those Trustees of such Fund who are not
interested persons of Winthrop, Wright or the Fund cast in person at a meeting
called for the purpose of voting on such approval.
Any Fund or either party hereto may, at any time on sixty (60) days'
prior written notice to the other, terminate this Agreement as to that Fund
without the payment of any penalty, by action of the Trustees of such Fund or
the directors of Winthrop or Wright, as the case may be, and each Fund may, at
any time upon such written notice to Winthrop or Wright, terminate this
Agreement as to that Fund by vote of a majority of the outstanding voting
securities of such Fund. This Agreement shall terminate automatically as to any
Fund in the event of its assignment or the assignment or termination of that
Fund's Investment Advisory Contract.
<PAGE>
7. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective as to any Fund until approved (i) by the vote of a
majority of those Trustees of that Fund who are not interested persons of
Winthrop, Wright or such Fund cast in person at a meeting called for the purpose
of voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of such Fund.
8. Limitation of Liability. Wright expressly acknowledges the provision
in the Declaration of Trust of each Fund limiting the personal liability of the
Trustees and officers of the Fund, and Wright hereby agrees that it shall not
have recourse to or seek satisfaction from any Trustee, officer or shareholder
of the Fund for payment of claims or obligations as between the Fund and Wright.
No Fund shall be liable for the obligations of any other Fund.
9. 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" shall mean the vote, at a meeting of a Fund's
shareholders, of the lesser of (a) 67 per centum or more of the shares of such
Fund present or represented by proxy at the meeting if the shareholders of more
than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund. The terms "shareholders" and "shares" when used
herein shall have the respective meaning specified in the Declaration of Trust
of each Fund.
10. Responsibility of Winthrop. Notwithstanding this Agreement,
Winthrop shall remain ultimately responsible for all of its obligations under
the Investment Advisory Contracts.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed
<PAGE>
an original, but all of which together shall constitute one and the same
instrument.
Very truly yours,
THE WINTHROP CORPORATION
By:/s/Peter M. Donovan
----------------------
The foregoing Agreement is hereby agreed to as of the date hereof.
WRIGHT INVESTORS' SERVICE, INC.
By:/s/Judith Corchard
-------------------
EXHIBIT 11
Independent Auditors' Consent
We consent to the use in this Post-Effective Amendment No. 3 to the
Registration Statement (1933 Act File No. 33-61314) of The Wright Managed Blue
Chip Series Trust of our report dated February 2, 1996 which is incorporated by
reference in the Statement of Additional Information and to the references to us
under the heading "Financial Highlights" appearing in the Prospectus which is
part of such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 24, 1996
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 1
[NAME] WRIGHT TOTAL RETURN BOND PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 441,117
[INVESTMENTS-AT-VALUE] 467,202
[RECEIVABLES] 36,324
[ASSETS-OTHER] 5,153
[OTHER-ITEMS-ASSETS] 35,280
[TOTAL-ASSETS] 543,959
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 6,277
[TOTAL-LIABILITIES] 6,277
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 526,131
[SHARES-COMMON-STOCK] 54,676
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (14,534)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 26,085
[NET-ASSETS] 537,682
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 27,053
[OTHER-INCOME] 0
[EXPENSES-NET] 4,061
[NET-INVESTMENT-INCOME] 22,992
[REALIZED-GAINS-CURRENT] (13,757)
[APPREC-INCREASE-CURRENT] 65,400
[NET-CHANGE-FROM-OPS] 74,635
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 22,992
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 18,926
[NUMBER-OF-SHARES-REDEEMED] 25,529
[SHARES-REINVESTED] 2,433
[NET-CHANGE-IN-ASSETS] 17,299
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 2,034
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 37,862
[AVERAGE-NET-ASSETS] 453,316
[PER-SHARE-NAV-BEGIN] 8.84
[PER-SHARE-NII] 0.469
[PER-SHARE-GAIN-APPREC] 0.990
[PER-SHARE-DIVIDEND] (0.469)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.83
[EXPENSE-RATIO] 1.26
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 2
[NAME] WRIGHT NEAR TERM BOND PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 277,042
[INVESTMENTS-AT-VALUE] 288,151
[RECEIVABLES] 35,944
[ASSETS-OTHER] 5,282
[OTHER-ITEMS-ASSETS] 3,318
[TOTAL-ASSETS] 332,695
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 6,131
[TOTAL-LIABILITIES] 6,131
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 330,490
[SHARES-COMMON-STOCK] 33,060
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (15,035)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 11,109
[NET-ASSETS] 326,564
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 19,133
[OTHER-INCOME] 0
[EXPENSES-NET] 3,130
[NET-INVESTMENT-INCOME] 16,003
[REALIZED-GAINS-CURRENT] (9,163)
[APPREC-INCREASE-CURRENT] 29,353
[NET-CHANGE-FROM-OPS] 36,193
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 16,003
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 14,521
[NUMBER-OF-SHARES-REDEEMED] 31,513
[SHARES-REINVESTED] 1,644
[NET-CHANGE-IN-ASSETS] (124,924)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,563
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 36,494
[AVERAGE-NET-ASSETS] 355,202
[PER-SHARE-NAV-BEGIN] 9.33
[PER-SHARE-NII] 0.448
[PER-SHARE-GAIN-APPREC] 0.550
[PER-SHARE-DIVIDEND] (0.448)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.88
[EXPENSE-RATIO] 1.39
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 3
[NAME] WRIGHT SELECTED BLUE CHIP PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 1,673,532
[INVESTMENTS-AT-VALUE] 1,947,644
[RECEIVABLES] 11,012
[ASSETS-OTHER] 5,287
[OTHER-ITEMS-ASSETS] 282,483
[TOTAL-ASSETS] 2,246,426
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 7,596
[TOTAL-LIABILITIES] 7,596
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1,955,545
[SHARES-COMMON-STOCK] 196,276
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 9,173
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 274,112
[NET-ASSETS] 2,238,830
[DIVIDEND-INCOME] 36,987
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 20,125
[NET-INVESTMENT-INCOME] 16,862
[REALIZED-GAINS-CURRENT] 79,060
[APPREC-INCREASE-CURRENT] 300,016
[NET-CHANGE-FROM-OPS] 395,938
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 13,333
[DISTRIBUTIONS-OF-GAINS] 54,284
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 74,735
[NUMBER-OF-SHARES-REDEEMED] 40,303
[SHARES-REINVESTED] 5,957
[NET-CHANGE-IN-ASSETS] 786,365
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 11,367
[INTEREST-EXPENSE] 56
[GROSS-EXPENSE] 47,656
[AVERAGE-NET-ASSETS] 1,763,166
[PER-SHARE-NAV-BEGIN] 9.32
[PER-SHARE-NII] 0.100
[PER-SHARE-GAIN-APPREC] 2.345
[PER-SHARE-DIVIDEND] (0.070)
[PER-SHARE-DISTRIBUTIONS] (0.285)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.41
[EXPENSE-RATIO] 1.60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000901382
[NAME] WRIGHT MANAGED BLUE CHIP SERIES TRUST
[SERIES]
[NUMBER] 4
[NAME] WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 1,121,967
[INVESTMENTS-AT-VALUE] 1,180,077
[RECEIVABLES] 12,891
[ASSETS-OTHER] 5,282
[OTHER-ITEMS-ASSETS] 194,138
[TOTAL-ASSETS] 1,392,388
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 27,517
[TOTAL-LIABILITIES] 27,517
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 1,308,135
[SHARES-COMMON-STOCK] 135,175
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 2,317
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (3,656)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 58,075
[NET-ASSETS] 1,364,871
[DIVIDEND-INCOME] 26,086
[INTEREST-INCOME] 0
[OTHER-INCOME] (2,893)
[EXPENSES-NET] 22,438
[NET-INVESTMENT-INCOME] 755
[REALIZED-GAINS-CURRENT] (3,923)
[APPREC-INCREASE-CURRENT] 130,826
[NET-CHANGE-FROM-OPS] 127,658
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 2,477
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 4,280
[NUMBER-OF-SHARES-SOLD] 46,535
[NUMBER-OF-SHARES-REDEEMED] 46,025
[SHARES-REINVESTED] 678
[NET-CHANGE-IN-ASSETS] 135,925
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 9,690
[INTEREST-EXPENSE] 50
[GROSS-EXPENSE] 50,690
[AVERAGE-NET-ASSETS] 1,220,862
[PER-SHARE-NAV-BEGIN] 9.14
[PER-SHARE-NII] 0.003
[PER-SHARE-GAIN-APPREC] 0.967
[PER-SHARE-DIVIDEND] (0.018)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] (0.032)
[PER-SHARE-NAV-END] 10.06
[EXPENSE-RATIO] 2.28
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
