- ------------------------------------------------------------------------------
Description of art work on front cover of report
Solid blue box with name of Trust in upper left hand corner of page.
- ------------------------------------------------------------------------------
SEMI-ANNUAL
REPORT
June 30, 1997
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
WRIGHT MANAGED BLUE CHIP SERIES TRUST IS A DIVERSIFIED, OPEN-END MANAGEMENT
INVESTMENT COMPANY, THAT IS DESIGNED TO BE THE FUNDING VEHICLE FOR INSURANCE
CONTRACTS OFFERED BY PFL LIFE INSURANCE COMPANY AND OTHER PARTICIPATING
INSURANCE COMPANIES. SHARES OF THE TRUST ARE OFFERED EXCLUSIVELY TO THE SEPARATE
ACCOUNTS OF SUCH INSURANCE COMPANIES. FOUR MANAGED INVESTMENT PORTFOLIOS OF THE
TRUST AND THEIR INVESTMENT OBJECTIVES ARE DESCRIBED BELOW:
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 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 invest-
ment 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.
TABLE OF CONTENTS
+------------------------------------------------------------------------------
Investment Objectives.......Inside Front Cover
Letter to Shareholders...................... 1
Management Discussion........................3
Wright Near Term Bond Portfolio
Portfolio of Investments.................. 5
Financial Statements...................... 6
Wright Total Return Bond Portfolio
Portfolio of Investments.................. 9
Financial Statements..................... 10
Wright Selected Blue Chip Portfolio
Portfolio of Investments................. 13
Financial Statements..................... 15
Wright International Blue Chip Portfolio
Portfolio of Investments................. 18
Financial Statements..................... 20
Notes to Financial Statements.............. 23
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
LETTER TO SHAREHOLDERS
================================================================================
July 1997
Dear Shareholders:
As it did in 1995 and 1996, the U.S. stock market surpassed most
expectations during the first half of 1997. After a mediocre first
three months, the second quarter of 1997 turned out to be the best
quarter for the Dow Jones Industrial Average (DJIA) in ten years,
bringing the DJIA's first-half price rise to 19%. Outside the U.S.,
stock prices also had healthy gains over the first half of 1997. The
catalyst for the global stock market strength in the first half of 1997
was a worldwide downtrend in interest rates, which largely reflected
more moderate economic growth in the U.S. and favorable inflation
readings virtually everywhere.
U.S. bond market values declined during the opening three months
of 1997, hurt in part by the Federal Reserve's 25 basis-point increase
in interest rates in March; but bond prices rebounded during the second
quarter, as investor fears of further tightening by the Federal Reserve
receded. The first quarter's inordinately strong demand, which the Fed
cited as the reason for its March 25 interest rate increase, has given
way to more moderate growth, easing concerns that inflation is about to
escalate. In fact, by all the evidence, global inflation rates headed
lower during the second quarter. Bond yields in the major markets
abroad declined to a 25-year low during the second quarter. In the
first week of July, the 30-year U.S. Treasury bond yield was back down
to 6.6%, below its year-end 1996 rate.
As the second half of 1997 begins, the U.S. economic environment
remains close to an optimal mix of growth and inflation. Nonetheless,
the stock market's outsized advance over the past 30 months leaves
little margin for error. Over the past 12 months, the S&P 500's P/E
multiple has expanded more than 10% (from 19 to 22, on a trailing
basis). Treasury bond yields would probably have to fall back below 6%
- which may not occur until economic slowing gets a lot more severe
than currently - to justify P/Es this high. Even then, history suggests
that there has to be a point at which valuations will win out over
momentum. Should the U.S. stock market fall victim to profit taking,
foreign equities would most likely do the same.
<PAGE>
Most important stock market peaks are associated with
deteriorating economic or corporate fundamentals. So long as the
outlook for corporate profits and interest rates remains positive, any
market correction over the coming months is unlikely to develop into an
outright bear market. In Wright's view, high-quality stocks and bonds
can be expected to provide investors with inflation-beating returns
over the balance of 1997 and 1998. Longer term, the outlook remains
favorable for high-quality stocks. Rising productivity and record
corporate profits, low inflation, the shrinking U.S. budget deficit and
greater fiscal discipline around the globe, and an aging population
increasingly inclined toward investment constitute a positive
environment for equity securities into the 21st century.
As always, it should be understood that past performance does
not predict future results and that investment return and principal
value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Investing
internationally entails additional risks, such as currency fluctuations
and potential political instability.
Sincerely,
/s/Peter M. Donovan
--------------------
Peter M. Donovan, President
<PAGE>
MANAGEMENT DISCUSSION
================================================================================
WRIGHT NEAR TERM BOND PORTFOLIO
At midyear 1997, the average maturity of the securities in the Wright Near Term
Bond Portfolio (WNTBP) was 6.3 years. Yields on Treasury securities in this
maturity range climbed about 20 basis points during the first half of 1997. So
far this year, this Portfolio has earned 2.1%, below the 2.5% first-half return
from three-month Treasury bills. Over the last 12 months, the WNTBP's 5.7%
return topped the 5.1% return from T-bills.
At June 30, the WNTBP was invested 52% in U.S. Treasury Securities, 43% in
government agency issues and the balance in short-term reserves. Its yield to
maturity remains in the range of 6.0%, which is where it started the year; at
June 30, duration was 1.6 years.
WRIGHT TOTAL RETURN BOND PORTFOLIO
During the second quarter of 1997, with yields on long-term Treasury securities
exceeding 7%, the Wright Total Return Bond Portfolio's average maturity was 12.1
years; the average duration of Portfolio holdings was 5.8 years. Yields on bonds
in the eight-year maturity range edged up a few basis points - to around 6.5% on
Treasury securities - during the first half of 1997.
During the first half of 1996, the Wright Total Return Bond Portfolio (WTRBP)
had a total return of 2.5%, as compared with a 3.2% return for the Lipper bond
fund average and 2.7% for the Lehman government/corporate composite. For the 12
months through June 30, 1997, the WTRBP returned 6.3%.
WRIGHT SELECTED BLUE CHIP PORTFOLIO
For the first half of 1997, the Wright Selected Blue Chip Portfolio (WSBCP) had
a 15.4% total return, ahead of the Lipper equity growth fund average return of
14.3%. Portfolio performance benefited from above-market industry positions in
construction, machinery, and transportation stocks, groups that performed well
during the first half of 1997. Detracting from WSBCP's first-half 1997 results
was the Portfolio's underweighting in the health care industry, one of the first
half's best performing groups. Small- and mid-cap issues generally lagged big,
Dow-type stocks during the second quarter, despite their more moderate
valuations. This continuing disparity between big- and small-cap stocks was
again a drag on the relative performance of the Wright Selected Blue Chip
Portfolio. For the 12 months ended June 30, 1997, WSBCP had a 26.7% total
return.
At midyear 1997, Selected Blue Chips were trading at a significant P/E discount
from the S&P 500's P/E multiple of 20. In the event a period of correction or
consolidation descends upon the U.S. stock market in the months ahead, the
WSBCP's discount P/E may limit the portfolio's downside exposure.
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
The Wright International Blue Chip Portfolio (WIBCP) earned a 6.7% total
investment return during 1997's first half, behind the return of the FT/S&P
World ex U.S. total return index of 11.3%. Canadian stocks, which constitute 10%
of the portfolio at June 30, generally performed well for the WIBCP in the first
half; the Portfolio also had good gains in Mexico, Switzerland and the
Netherlands. The Portfolio's significant underweighting in Japan relative to the
FT/S&P benchmark helped during the first quarter but hampered results in the
second quarter, when the Japanese stock market produced a better-than-10%
rebound in local currency terms plus a nearly 10% recovery in the yen against
the U.S. dollar. For the 12 months ended June 30, 1997, WIBCP earned a 15.4%
total investment return, ahead of the FT/S&P World ex U.S. 12-month return of
12.9%.
As measured by the FT/S&P country indexes, European markets produced total
returns averaging 14% in U.S. dollars during 1997's first half; Nordic markets
also rose 14%; Japan was up 9%; and the Pacific ex Japan region edged up 2%. The
U.S. stock market outperformed 23 of the 27 largest foreign markets during the
first half of 1997.
As 1997 has progressed, we have seen far more increases in forecasts of global
economic growth for 1997 and 1998 than reductions. At the same time, inflation
estimates have been almost universally lowered recently. Against this backdrop,
interest rates have moved lower almost everywhere. Prospects for Europe's
Monetary Union have not been helped by stubborn budget deficits in France and
Germany; Italy and Spain, on the other hand, have made progress toward meeting
EMU targets. The U.K. and Canada raised lending rates during the second quarter,
but for the most part interest rate trends are flat or to the downside. Japan's
economic recovery still lacks the support of domestic demand, and confidence
remains low. In the aggregate, after years of lagging in GDP, profits and stock
prices, foreign economies and markets have some catching up to do against the
U.S., in Wright's view.
<PAGE>
<TABLE>
<CAPTION>
WRIGHT NEAR TERM BOND PORTFOLIO (WNTBP)
PORTFOLIO OF INVESTMENTS
June 30, 1997 (Unaudited)
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield(1) Maturity(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 45,000 U.S. Treasury Note 5.625% 8/31/97 $100.000 $ 45,000 5.63% 5.52%
50,000 U.S. Treasury Note 6.000% 9/30/98 100.109 50,055 5.99% 5.90%
100,000 U.S. Treasury Note 5.875% 3/31/99 99.750 99,750 5.89% 6.02%
50,000 U.S. Treasury Note 5.875% 11/15/99 99.359 49,680 5.91% 6.17%
100,000 U.S. Treasury Note 5.625% 2/28/01 97.766 97,766 5.75% 6.31%
40,000 Federal Nat'l Mortgage Assoc. 7.000% 8/11/99 100.062 40,025 7.00% 6.94%
96,210 Federal Nat'l Mortgage Assoc 5.861% 1/01/27 101.125 97,293 5.80% 5.76%
50,000 Federal Farm Credit Banks 8.650% 10/01/99 104.844 52,422 8.25% 4.35%
50,000 Federal Home Loan Banks 7.780% 2/03/00 103.328 51,664 7.53% 5.19%
40,000 Student Loan Marketing Assoc. 7.500% 3/08/00 102.766 41,105 7.30% 5.42%
----------
Total Investments (identified cost, $623,501) -- 95.6% $624,760 6.24% 5.80%
====== ======
Other Assets, less Liabilities -- 4.4% 28,983
----------
Net Assets -- 100.0% $653,743
==========
Average Maturity -- 6.3 Years(1)
(1) Unaudited.
See notes to financial statements.
</TABLE>
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1997 (Unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $ 623,501
Unrealized appreciation............ 1,259
---------
Total value (Note 1A)............ $ 624,760
Cash................................. 8,925
Interest receivable.................. 10,514
Deferred organizational costs (Note 1E) 2,662
Receivable from Investment Adviser... 14,688
---------
Total Assets....................... $ 661,549
---------
LIABILITIES:
Trustees fees payable................ $ 563
Accrued expenses..................... 7,243
---------
Total Liabilities.................. $ 7,806
---------
NET ASSETS.............................. $ 653,743
=========
NET ASSETS CONSIST OF:
Paid-in capital......................... $ 666,712
Accumulated net realized loss on investment
transactions......................... (14,210)
Unrealized appreciation of investments.. 1,259
Distributions in excess of net
investment income.................... (18)
---------
Net assets applicable to outstanding
shares............................ $ 653,743
=========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 67,569
=========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $9.68
=========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Interest............................. $ 19,171
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 1,512
Administrator fee (Note 3)........... 168
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrator.......... 1,588
Custodian fee (Note 1D).............. 7,505
Audit................................ 7,750
Legal................................ 450
Printing............................. 583
Amortization of organization expense
(Note 1E).......................... 867
---------
Total expenses................... $ 20,423
---------
Deduct --
Reduction of Custodian fee (Note 1D). $ 1,031
Preliminary reduction of Investment
Adviser fee........................ 1,512
Preliminary reduction of
Administrator fee.................. 168
Preliminary allocation of expense to the
Investment Adviser (Note 3)........ 14,688
---------
Total deducted................... $ 17,399
---------
Net expenses..................... $ 3,024
---------
Net investment income.......... $ 16,147
---------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment
transactions....................... $ 265
Change in unrealized appreciation
of investments..................... (1,689)
---------
Net realized and unrealized loss..... $ (1,424)
---------
Net increase in net assets from
operations......................... $ 14,723
=========
See notes to financial statements
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 1997 December 31, 1996
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income........................................ $ 16,147 $ 17,735
Net realized gain on investment transactions................. 265 560
Change in unrealized appreciation of investments............. (1,689) (8,161)
---------- ----------
Net increase in net assets from operations................. $ 14,723 $ 10,134
Distributions to shareholders from net investment income (Note 2) (16,165) (17,735)
Net increase from Portfolio share transactions (exclusive of amounts
allocated to net investment income) (Note 4)................. 2,732 333,490
---------- ----------
Net increase in net assets................................. $ 1,290 $ 325,889
NET ASSETS:
At beginning of period......................................... 652,453 326,564
---------- ----------
At end of period............................................... $ 653,743 $ 652,453
=========== ===========
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME.................. $ (18) $ -
=========== ===========
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------
FINANCIAL HIGHLIGHTS 1997(6) 1996 1995 1994(5)
- ---------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.700 $ 9.880 $ 9.330 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)......... $ 0.238 $ 0.440 $ 0.448 $ 0.324
Net realized and unrealized gain (loss) (0.020) (0.180) 0.550 (0.670)
-------- -------- -------- --------
Total income (loss) from investment
operations................... $ 0.218 $ 0.260 $ 0.998 $ (0.346)
-------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income....... $ (0.238) $ (0.440) $ (0.448) $ (0.324)
-------- -------- -------- --------
Net asset value, end of period..... $ 9.680 $ 9.700 $ 9.880 $ 9.330
======== ======== ======== ========
Total Return(3).................... 2.2% 2.7% 10.9% (3.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 654 $ 652 $ 327 $ 451
Ratio of net expenses to average net
assets.......................... 1.21%(4)(2) 1.48%(4) 1.39%(4) 0.90%(2)
Ratio of net investment income to a
verage net assets............... 4.81%(2) 4.49% 4.61% 3.43%(2)
Portfolio Turnover Rate.......... 7% 61% 94% 52%
(1)During each of the periods presented, 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:
1997(6) 1996 1995 1994(5)
------- -------- --------- --------
Net investment loss per share... $ (0.005) $ (0.331) $ (0.438) $ (0.095)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses........................ 6.08% (2) 9.35% 10.51% 5.34% (2)
======== ======== ======== ========
Net investment loss............. (0.07%)(2) (3.38%) (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 six months ended June 30, 1997 and the years ended December 31,
1996 and 1995, custodian fees were reduced by credits resulting from cash
balances the Portfolio maintained with the custodian (Note 1D). 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%,
0.89% and 0.90%, respectively.
(5)For the period from January 6, 1994 (start of business) to December 31, 1994.
(6)For the six months ended June 30, 1997.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WRIGHT TOTAL RETURN BOND PORTFOLIO (WTRBP)
PORTFOLIO OF INVESTMENTS
June 30, 1997 (Unaudited)
==================================================================================================================
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield(1) Maturity(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 Federal Farm Credit Bank 5.270% 2/01/99 $ 98.828 $ 49,414 5.33% 6.78%
50,000 Federal Home Loan Banks 7.780% 2/03/00 103.328 51,664 7.53% 5.19%
50,000 Tennessee Valley Authority 6.125% 7/15/03 96.875 48,438 6.32% 6.76%
25,000 Bellsouth Telecommunication 7.000% 2/01/05 100.909 25,227 6.94% 6.84%
50,000 Federal Nat'l Mortgage Assoc.7.490% 3/02/05 104.547 52,274 7.16% 6.72%
135,000 U.S. Treasury Note 6.500% 8/15/05 99.719 134,621 6.52% 6.54%
30,000 Duke Power Co. 7.000% 9/01/05 99.019 29,706 7.07% 7.16%
110,000 U.S. Treasury 10 Year 5.875% 11/15/05 95.672 105,239 6.14% 6.55%
40,000 Campbell Soup Co. 6.900% 10/15/06 100.281 40,112 6.88% 6.86%
20,000 AT&T Corp. 7.750% 3/01/07 105.198 21,040 7.37% 7.00%
50,000 U.S. Treasury Bond 7.500% 11/15/16 106.859 53,430 7.02% 6.85%
173,503 GNMA Pool #442193 7.500% 12/15/26 100.281 173,990 7.48% 7.44%
----------
Total Investments (identified cost, $779,076) -- 96.6% $785,155 6.81% 6.77%
====== ======
Other Assets, less Liabilities -- 3.4% 27,253
----------
Net Assets -- 100.0% $812,408
==========
Average Maturity -- 12.1 Years(1)
(1) Unaudited.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $ 779,076
Unrealized appreciation............ 6,079
---------
Total value (Note 1A)............ $ 785,155
Cash................................. 4,314
Interest receivable.................. 13,562
Deferred organizational costs (Note 1E) 2,537
Receivable from Investment Adviser... 15,625
---------
Total Assets....................... $ 821,193
---------
LIABILITIES:
Trustees fees payable................ $ 563
Accrued expenses..................... 8,222
---------
Total Liabilities.................. $ 8,785
---------
NET ASSETS.............................. $ 812,408
=========
NET ASSETS CONSIST OF:
Paid-in capital......................... $ 821,744
Accumulated net realized loss on investment
transactions......................... (15,378)
Unrealized appreciation of investments.. 6,079
Distributions in excess of net
investment income.................... (37)
---------
Net assets applicable to
outstanding shares................. $ 812,408
=========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 86,182
=========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $9.43
=========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997(Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Interest............................. $ 25,679
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 1,779
Administrator fee (Note 3)........... 198
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrator........... 1,572
Custodian fee (Note 1D).............. 7,961
Audit services....................... 7,750
Legal................................ 450
Printing............................. 583
Amortization of organization expense
(Note 1E).......................... 867
---------
Total expenses................... $ 21,160
---------
Deduct --
Preliminary reduction of Investment
Adviser fee........................ $ 1,779
Preliminary reduction of Administrator fee 198
Preliminary allocation of expense to the
Investment Adviser (Note 3)........ 15,625
---------
Total deducted................... $ 17,602
---------
Net expenses..................... $ 3,558
---------
Net investment income.......... $ 22,121
---------
REALIZED AND UNREALIZED LOSS:
Net realized loss on investment
transactions........................ $ (13)
Change in unrealized appreciation of
investments ........................ (3,006)
---------
Net realized and unrealized loss...... $ (3,019)
---------
Net increase in net assets from
operations........................... $ 19,102
=========
See notes to financial statements
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 1997 December 31, 1996
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income........................................ $ 22,121 $ 31,137
Net realized loss on investment transactions................. (13) (831)
Change in unrealized appreciation of investments............. (3,006) (17,000)
---------- ----------
Net increase in net assets from operations................. $ 19,102 $ 13,306
---------- ----------
Distributions to shareholders --
From net investment income (Note 2).......................... $ (22,121) $ (31,137)
In excess of net investment income........................... (1) (36)
---------- ----------
Total distributions........................................ $ (22,122) $ (31,173)
---------- ----------
Net increase from Portfolio share transactions (Note 4)........ $ 25,936 $ 269,677
---------- ----------
Net increase in net assets................................. $ 22,916 $ 251,810
NET ASSETS:
At beginning of period......................................... 789,492 537,682
---------- ----------
At end of period............................................... $ 812,408 $ 789,492
========== ===========
DISTRIBUTIONS IN EXCESS
OF NET INVESTMENT INCOME.......................................... $ (37) $ (36)
========== ===========
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
FINANCIAL HIGHLIGHTS 1997(7) 1996 1995 1994 1993(2)(6)
- ------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.470 $ 9.830 $ 8.840 $ 9.930 $ 10.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)......... $ 0.262 $ 0.447 $ 0.469 $ 0.398 $ 0.019
Net realized and unrealized gain (loss)
on investments.................. (0.040) (0.360) 0.990 (1.090) (0.070)
-------- -------- -------- -------- --------
Total income (loss) from investment
operations..................... $ 0.222 $ 0.087 $ 1.459 $ (0.692) $ (0.051)
-------- -------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income....... $ (0.262) $ (0.447) $ (0.469) $ (0.398) $ (0.019)
-------- -------- -------- -------- --------
Net asset value, end of period..... $ 9.430 $ 9.470 $ 9.830 $ 8.840 $ 9.930
======== ======== ======== ======== ========
Total Return(3).................... 2.4% 1.0% 16.9% (7.1%) (0.5%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 812 $ 789 $ 538 $ 520 $ 167
Ratio of net expenses to average net
assets(1)....................... . 0.90%(4) 1.26%(5) 1.26%(5) 0.90% 0.70%(4)
Ratio of net investment income to
average net assets(1)........... 5.59%(4) 4.77% 5.09% 4.49% 2.50%(4)
Portfolio Turnover Rate.......... 0% 51% 186% 23% 0%
(1)During the six month period ended June 30, 1997 and the years ended December
31, 1996, 1995 and 1994, 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 income (loss) per share and the ratios would have been as follows:
1997(7) 1996 1995 1994
------------------------------------------------
Net investment income (loss) per share $ 0.058 $ 0.060 $ (0.187) $ (0.143)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses........................ 5.35%(4) 5.39% 8.38% 7.00%
======== ======== ======== ========
Net investment income (loss).... 1.14%(4) 0.64% (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 years ended December 31, 1996 and 1995, custodian fees were
reduced by credits resulting from cash balances the Portfolio maintained with
the custodian (Note 1D). 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 in each
period would have been reduced to 0.90%.
(6)For the period from December 7, 1993 (start of business) to December 31, 1993.
(7)For the six months ended June 30, 1997.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO (WSBCP)
PORTFOLIO OF INVESTMENTS
June 30, 1997 (Unaudited)
===============================================================================
Shares Value
-------- --------
Equity Interests -- 96.2%
APPAREL -- 2.2%
VF Corp...................... 800 $ 67,800
-----------
AUTOMOTIVE -- 9.1%
Autoliv Inc.................. 443 $ 17,332
Chrysler Corporation......... 1,800 59,063
Eaton Corporation............ 900 78,581
Echlin Inc................... 1,800 64,800
Modine Mfg. Co............... 2,000 59,500
-----------
$ 279,276
-----------
CHEMICALS -- 5.3%
Morton International Inc..... 1,300 $ 39,243
PPG Industries, Incorporated. 900 52,313
Rohm & Haas Company.......... 800 72,050
-----------
$ 163,606
-----------
CONSTRUCTION -- 9.5%
Caterpillar Inc.............. 500 $ 53,686
Fleetwood Enterprises, Inc... 1,900 56,644
Medusa....................... 1,500 57,563
Toll Brothers................ 3,000 55,125
Vulcan Materials Co.......... 900 70,650
-----------
$ 293,668
-----------
DIVERSIFIED -- 2.4%
Crane Co..................... 1,800 $ 75,263
-----------
DRUGS, COSMETICS & HEALTH CARE -- 2.1%
Bristol-Myers Squibb Co...... 800 $ 64,800
-----------
ELECTRONICS -- 7.2%
Compaq Computer.............. 700 $ 69,475
Raytheon Company............. 900 45,900
Seagate Technology, Inc...... 1,300 45,744
Sun Microsystems, Inc.*...... 1,600 59,550
-----------
$ 220,669
-----------
FINANCIAL -- 13.7%
BB&T Corporation............. 1,700 $ 76,500
A.G. Edwards, Inc............ 1,900 81,225
First Virginia Banks, Inc.... 1,200 72,375
Pacific Century Financial Corp 1,400 64,750
Quick and Reilly Group....... 2,350 54,638
Southtrust Corp.............. 1,700 70,337
-----------
$ 419,825
-----------
MACHINERY & EQUIPMENT -- 8.4%
Briggs & Stratton Corp....... 1,200 $ 60,000
Deere & Co................... 1,000 54,875
Ingersoll Rand Co............ 1,200 74,100
Pitney Bowes, Inc............ 1,000 69,500
-----------
$ 258,475
-----------
METAL PRODUCERS -- 2.2%
Carpenter Technology......... 1,500 $ 68,625
-----------
METAL PRODUCTS MANUFACTURERS -- 7.5%
Kaydon Corp.................. 1,200 $ 59,550
Snap-on Inc.................. 1,500 59,063
Trinity Industries........... 1,600 50,800
Watts Industries Inc. Class A 2,600 62,400
-----------
$ 231,813
-----------
<PAGE>
PRINTING & PUBLISHING -- 5.1%
American Greetings Corp...... 1,700 $ 63,113
Banta Corporation............ 2,200 59,675
Standard Register............ 1,100 33,687
-----------
$ 156,475
-----------
RECREATION -- 5.4%
International Dairy Queen*... 2,400 $ 57,600
Kingworld Productions Inc.... 1,700 59,500
Ryan's Family Steak Houses... 5,700 48,806
-----------
$ 165,906
-----------
RETAILERS -- 2.2%
Family Dollar Stores......... 2,500 $ 68,125
-----------
TRANSPORTATION - 4.2%
ASA Holdings, Inc............ 2,400 $ 68,700
Illinois Central Corp........ 1,700 59,394
-----------
$ 128,094
-----------
UTILITIES -- 6.5%
DQE Inc...................... 1,600 $ 45,200
Duke Power Company........... 1,100 52,731
Nipsco Industries............ 1,400 57,838
Wisconsin Energy............. 1,800 44,775
-----------
$ 200,544
-----------
MISCELLANEOUS -- 3.2%
Arrow Electronics, Inc....... 800 $ 42,500
Halter Marine Group Inc...... 0.8 19
Marshall Industries*......... 1,500 55,875
-----------
$ 98,394
-----------
TOTAL EQUITY INTERESTS -- 96.2%
(identified cost, $2,324,150) $ 2,961,358
OTHER ASSETS
LESS LIABILITIES -- 3.8% 118,222
-----------
NET ASSETS -- 100.0% $ 3,079,580
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $2,324,150
Unrealized appreciation............ 637,208
---------
Total value (Note 1A)............ $2,961,358
Cash................................. 114,105
Dividends receivable................. 3,994
Deferred organizational costs (Note 1E) 2,667
Receivable from Investment Adviser... 5,000
---------
Total Assets....................... $3,087,124
---------
LIABILITIES:
Trustees fees payable................ $ 563
Accrued expenses..................... 6,981
---------
Total Liabilities.................. $ 7,544
---------
NET ASSETS.............................. $3,079,580
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $2,255,474
Accumulated net realized gain on investment
transactions......................... 124,853
Unrealized appreciation of investments.. 637,208
Undistributed net investment income..... 62,045
---------
Net assets applicable to outstanding
shares ............................ $3,079,580
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 225,260
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $13.67
==========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997(Unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 30,198
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 9,117
Administrator fee (Note 3)........... 701
Compensation of Trustees not
affiliated with
the Investment Adviser or
Administrator...................... 1,572
Custodian fee (Note 1D).............. 9,133
Audit................................ 9,450
Legal................................ 450
Printing............................. 583
Amortization of organization expense
(Note 1E).......................... 867
Miscellaneous........................ 1,432
---------
Total expenses................... $ 33,305
---------
Deduct --
Preliminary reduction of Investment
Adviser fee........................ $ 9,117
Preliminary reduction of Administrator fee 701
Reduction of Custodian fee (Note 1D). 2,356
Preliminary allocation of expenses to the
Investment Adviser (Note 3)........ 5,000
---------
Total deducted................... $ 17,174
---------
Net expenses..................... $ 16,131
---------
Net investment income.......... $ 14,067
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment
transactions........................ $ 124,594
Change in unrealized appreciation of
investments ........................ 270,611
---------
Net realized and unrealized gain..... $ 395,205
---------
Net increase in net assets from
operations.......................... $ 409,272
==========
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 1997 December 31, 1996
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income........................................ $ 14,067 $ 29,861
Net realized gain on investment transactions................. 124,594 427,875
Change in unrealized appreciation of investments............. 270,611 92,485
---------- ----------
Net increase in net assets from operations................. $ 409,272 $ 550,221
Distributions to shareholders from net investment income (Note 2) - (2,069)
Distributions to shareholders from net realized gain on
investment transactions (Note 2)............................. (427,616) --
Undistributed net investment income included in price of shares
sold and redeemed (Note 1F).................................. 8,494 2,519
Net increase (decrease) from Portfolio share transactions (exclusive of
amounts allocated to net investment income) (Note 4)......... 420,966 (121,037)
---------- ----------
Net increase in net assets................................. $ 411,116 $ 429,634
NET ASSETS:
At beginning of period......................................... 2,668,464 2,238,830
---------- ----------
At end of period............................................... $ 3,079,580 $2,668,464
========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS......................................... $ 62,045 $ 39,484
========== ===========
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------
FINANCIAL HIGHLIGHTS 1997(7) 1996 1995 1994(6)
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 14.000 $ 11.410 $ 9.320 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)..................... $ 0.068 $ 0.170 $ 0.100 $ 0.092
Net realized and unrealized gain (loss) on investments 1.842 2.430 2.345 (0.712)
-------- -------- -------- --------
Total income (loss) from investment operations $ 1.910 $ 2.600 $ 2.445 $ (0.620)
-------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income................... $ -- $ (0.010) $ (0.070) $ (0.060)
From net realized gain on investment transactions (2.240) -- (0.285) --
-------- -------- -------- --------
Total distributions......................... $ (2.240) $ (0.010) $ (0.355) $ (0.060)
-------- -------- -------- --------
Net asset value, end of period................. $ 13.670 $ 14.000 $ 11.410 $ 9.320
======== ======== ======== ========
Total Return(3)................................ 13.0% 22.8% 26.3% (6.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 3,080 $ 2,668 $ 2,239 $ 1,452
Ratio of net expenses to average net assets(1) 1.32%(4)(2) 1.27%(4) 1.60%(4) 1.15 (2)
Ratio of net investment income to average net assets(1) 1.00%(2) 1.14% 0.96% 1.16%(2)
Portfolio Turnover Rate...................... 20% 68% 64% 74%
Average commision rate paid (5).............. $ 0.0683 $ 0.0784 -- --
(1)During each of the periods presented, 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 income (loss) per share and the ratios would
have been as follows:
1997(7) 1996 1995 1994(6)
--------- --------- --------- ---------
Net investment income (loss) per share......... $ 0.002 $ 0.066 $ (0.017) $ (0.078)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 2.37%(2) 1.97% 2.72% 3.30% (2)
======== ======== ======== ========
Net investment income (loss)................. (0.05%)(2) 0.44% (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 payable date. 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.
(4)During the six months ended June 30, 1997 and the years ended December 31,
1996 and 1995, custodian fees were reduced by credits resulting from cash
balances the Portfolio maintained with the custodian (Note 1D). 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%,
1.06% and 1.15%, respectively.
(5)Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
(6) For the period from January 6, 1994 (start of business) to December 31, 1994.
(7) For the six months ended June 30, 1997.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
PORTFOLIO OF INVESTMENTS
June 30, 1997 (Unaudited)
===============================================================================
Shares Value
-------- ------
EQUITY INTERESTS -- 96.6%
AUSTRALIA -- 3.9%
Australian Gas & Light Co.... 4,700 $ 27,695
Futuris Corporation Ltd...... 21,330 34,322
-----------
$ 62,017
-----------
BELGIUM -- 1.6%
Delhaize Le PS............... 500 $ 26,275
-----------
CANADA -- 10.3%
British Columbia Telecom Inc. 1,400 $ 32,880
Linamar Corporation.......... 900 39,339
Loblaw Companies Ltd......... 2,300 31,677
Magna Int'l. Inc. Class A.... 500 30,082
Thomson Corporation.......... 1,400 32,271
-----------
$ 166,249
-----------
CHILE -- 1.8%
Embotelladora Andina SA...... 700 $ 14,613
Embotelladora Andina Series.. 700 15,006
-----------
$ 29,619
-----------
DENMARK -- 5.4%
Carlsberg AS - B............. 500 $ 27,567
Icopal....................... 120 26,980
Novo Nordisk A/S - B......... 300 32,719
-----------
$ 87,266
-----------
FINLAND-- 1.9%
Orion A/S - B................ 850 $ 32,009
-----------
FRANCE -- 4.0%
Pernod-Ricard................ 500 $ 25,789
Synthelabo................... 300 39,067
-----------
$ 64,856
-----------
GERMANY -- 2.6%
Bayerische Motoren Werke A... 50 $ 41,381
-----------
HONG KONG -- 5.4%
Hang Lung Devel. Co. (ADR)... 2,700 $ 24,743
Hang Seng Bank............... 3,000 42,790
Swire Pacific Limited (ADR).. 2,100 18,907
-----------
$ 86,440
-----------
IRELAND -- 1.7%
Greencore PLC................ 5,567 $ 27,638
-----------
JAPAN -- 5.6%
Chudenko Corp................ 1,100 $ 29,479
Kurita Water Industries Ltd.. 100 2,663
Santen Pharmaceutical Co., Ltd 210 4,198
Yamanouchi Pharmaceutical ... 2,000 53,773
-----------
$ 90,113
-----------
MALAYSIA -- 3.8%
Hong Leong Industries Berhad. 9,000 $ 28,526
Perlis Plantations Berhad (ADR) 10,900 31,956
-----------
$ 60,482
-----------
MEXICO -- 3.3%
Grupo Industrial Maseca-B.... 23,000 $ 25,169
Kimberly Clark de Mexico SA.. 1,400 27,720
-----------
$ 52,889
-----------
<PAGE>
NETHERLANDS -- 13.2%
CSM N.V. Cert................ 500 $ 25,078
Getronics N.V................ 1,246 40,265
Hagemeyer N.V................ 803 41,503
Koninklijke Ahold N.V........ 531 45,168
Nutricia Verenidge Bedrijven. 200 31,602
Verenigde Nederlandse........ 1,300 28,758
-----------
$ 212,374
-----------
SINGAPORE -- 1.5%
Singapore Press Holdings LT . 1,200 $ 24,173
-----------
SOUTH AFRICA -- 4.1%
Sasol Beperk Limited......... 2,600 $ 34,101
Tiger Oats Limited........... 1,800 31,743
-----------
$ 65,844
-----------
SPAIN -- 6.9%
Banco Popular Espanola....... 150 $ 36,743
Empresa Nacional de Elec (ADR) 500 $ 42,531
Repsol S.A................... 750 31,705
-----------
$ 110,979
-----------
SWEDEN -- 3.5%
AGA AB B Free................ 2,000 $ 26,637
Astra AB B Free Shares....... 1,706 30,111
-----------
$ 56,748
-----------
SWITZERLAND -- 5.2%
Nestle-Sponsored............. 550 $ 36,330
Novartis AG-ADR.............. 600 48,030
-----------
$ 84,360
-----------
UNITED KINGDOM -- 10.9%
Christian Salvesen PLC ...... 5,020 $ 23,501
Powerscreen Int'l............ 3,000 32,787
Scapa Group PLC.............. 10,000 35,319
Smiths Industries............ 2,400 30,708
Tesco PLC.................... 5,100 31,437
Wolseley .................... 2,854 22,526
-----------
$ 176,278
-----------
TOTAL EQUITY INTERESTS -- 96.6%
(identified cost, $1,314,734) $ 1,557,990
OTHER ASSETS
LESS LIABILITIES -- 3.4% 54,140
-----------
NET ASSETS -- 100.0% $ 1,612,130
===========
* Non-income-producing security.
ADR - American Depository Receipt
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1997 (Unaudited)
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $1,314,734
Unrealized appreciation........... 243,256
---------
Total value (Note 1A)............ $1,557,990
Cash................................. 39,400
Foreign cash......................... 32,416
Dividends receivable................. 4,275
Deferred organizational costs (Note 1E) 2,662
Receivable from Investment Adviser... 14,510
---------
Total assets....................... $1,651,253
---------
LIABILITIES:
Payable for Fund shares reacquired... $ 31,157
Trustees fees payable................ 563
Accrued expenses..................... 7,403
---------
Total liabilities.................. $ 39,123
---------
NET ASSETS.............................. $1,612,130
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $1,322,842
Accumulated net realized gain on investment
and foreign currency transactions.... 36,163
Unrealized appreciation of investments and
translations of assets and liabilities in
foreign currencies................... 243,234
Undistributed net investment income..... 9,891
---------
Net assets applicable to outstanding
shares............................. $1,612,130
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 135,349
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $11.91
==========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997(Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 23,835
Less: Foreign taxes.................. (2,206)
---------
Total investment income............ $ 21,629
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 5,964
Administrator fee (Note 3)........... 373
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator 1,572
Custodian fee (Note 1D).............. 16,886
Audit................................ 9,450
Legal................................ 450
Printing............................. 583
Amortization of organization expense
(Note 1E).......................... 867
---------
Total expenses................... $ 36,145
---------
Deduct --
Preliminary reduction of Investment
Adviser fee........................ $ 5,964
Preliminary reduction of
Admininstrator fee................. 373
Reduction of Custodian fee (Note 1D). 1,507
Preliminary allocation of expense to the
Investment Adviser (Note 3)....... 14,510
---------
Total deducted................... $ 22,354
---------
Net expenses..................... $ 13,791
---------
Net investment income.......... $ 7,838
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment and
foreign currency transactions........ $ 37,089
Change in unrealized appreciation of investments
and translation of assets and liabilities
in foreign currency.................. 58,933
---------
Net realized and unrealized gain..... $ 96,022
---------
Net increase in net assets from
operations........................ $ 103,860
==========
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
STATEMENTS OF CHANGES IN NET ASSETS June 30, 1997 December 31, 1996
- -------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income (loss)................................. $ 7,838 $ (5,346)
Net realized gain on investments and foreign currency transactions 37,089 89,355
Change in unrealized appreciation of investments and translation
of assets and liabilities in foreign currency.............. 58,933 126,226
---------- ----------
Net increase in net assets from operations................. $ 103,860 $ 210,235
Distributions to shareholders from net realized gain
on investment transactions (Note 2).......................... $ (81,307) --
Undistributed net investment loss included in price
of shares sold and redeemed (Note 1F)........................ -- (240)
Net increase (decrease) from Portfolio share transactions (exclusive of
amounts allocated to net investment income) (Note 4)......... 132,505 (117,794)
---------- ----------
Net increase in net assets................................. $ 155,058 $ 92,201
NET ASSETS:
At beginning of period......................................... 1,457,072 1,364,871
---------- ----------
At end of period............................................... $1,612,130 $1,457,072
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS......................................... $ 9,891 $ 2,053
=========== ===========
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------
FINANCIAL HIGHLIGHTS 1997(7) 1996 1995 1994(6)
- ----------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 11.810 $ 10.060 $ 9.140 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income (loss)(1).............. $ 0.056 $ (0.043) $ 0.003 $ 0.031
Net realized and unrealized gain (loss)...... 0.674 1.793 0.967 (0.886)
-------- -------- -------- --------
Total income (loss) from investment operations $ 0.730 $ 1.750 $ 0.970 $ (0.855)
-------- -------- -------- --------
Less distributions to shareholders:
From net investment income.................. $ -- $ -- $ (0.005) $ (0.005)
From net realized gains on investment transactions (0.630) -- -- --
In excess of net investment income.......... -- -- (0.013) --
Tax distribution from paid-in capital....... -- -- (0.032) --
-------- -------- -------- --------
Total distributions declared to shareholders $ (0.630) $ -- $ (0.050) $ (0.005)
-------- -------- -------- --------
Net asset value, end of period................. $ 11.910 $ 11.810 $ 10.060 $ 9.140
======== ======== ======== ========
Total Return(3)................................ 6.3% 17.4% 10.6% (8.1%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 1,612 $ 1,457 $ 1,365 $ 1,229
Ratio of net expenses to average net assets(1) 2.05%(4)(2) 2.31%(4) 2.28%(4) 1.80% (2)
Ratio of net investment income (loss) to average net
assets(1)................................... 1.05%(2) (0.42)% 0.06% 0.19% (2)
Portfolio Turnover Rate...................... 54% 44% 31% 0%
Average commission rate paid (5)............. $ 0.0342 $ 0.0773 -- --
(1)During each of the periods presented, 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:
1997 1996 1995 1994(6)
------ ----- ------ -------
Net investment loss per share................. $ (0.098) $ (0.253) $ (0.920) $ (0.434)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 4.85%(2) 4.37% 4.18% 4.65% (2)
======== ======== ======== ========
Net investment loss.......................... (1.75%)(2) (2.47%) (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 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 six months ended June 30, 1997 and the years ended December 31,
1996 and 1995, custodian fees were reduced by credits resulting from cash
balances the Portfolio maintained with the custodian (Note 1D). 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 in each period would have been
reduced to 1.85%, 1.85% and 1.96%, respectively.
(5)Average commission rate paid is computed by dividing the total dollar amount
of commissions paid during the fiscal year by the total number of shares
purchased and sold during the fiscal year for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for security
trades on which commissions are charged.
(6) For the period from January 6, 1994 (start of business) to December 31, 1994.
(7) For the six months ended June 30, 1997.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
===============================================================================
(1) SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Blue Chip Series Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended, as an open-end, management
investment company. The Trust presently consists of four diversified separate
portfolios: Wright Near Term Bond Portfolio (WNTBP), Wright Total Return Bond
Portfolio (WTRBP), Wright Selected Blue Chip Portfolio (WSBCP), and Wright
International Blue Chip Portfolio (WIBCP) (the "Portfolios"). The shares of the
Portfolios are sold only to variable accounts established by PFL Life Insurance
Company and other participating insurance companies. The following is a summary
of significant accounting policies consistently followed by the Trust in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
A. Investment Valuations - Securities, other than fixed-income
investments, listed on securities exchanges or in the NASDAQ National
Market, are valued at closing sale prices. Unlisted or listed
securities for which closing sale prices are not available are valued
at the last reported bid price. Fixed income investments (other than
short-term obligations) including listed investments, and investments
for which price quotations are available, will normally be valued on
the basis of market valuations furnished by a pricing service.
Investments for which valuations are not readily available will be
appraised at their fair value as determined in good faith by or at the
direction of the Trustees. Short-term obligations maturing in sixty
days or less are valued at amortized cost, which approximates value.
B. Foreign Currency Translation - Investment security valuations, other
assets, and liabilities initially expressed in foreign currencies are
translated each business day into U.S. dollars based upon current
exchange rates. Purchases and sales of foreign investment securities
and income and expenses are translated into U.S. dollars based upon
currency exchange rates prevailing on the respective dates of such
transactions. The Trust does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices
of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
C. Taxes - The Trust's policy is to comply with the provisions of the
Internal Revenue Code (the Code) available to regulated investment companies and
distribute to shareholders each year all of its taxable income, including any
net realized gain on investments. Accordingly, no provision for federal income
tax is necessary. Withholding taxes on foreign dividends have been provided for
in accordance with the Trust's understanding of the applicable country's tax
rules and rates. At December 31, 1996, the Trust, for federal income tax
purposes, had a capital loss carryover of $14,459 for WNTBP and $15,365 for
WTRBP, which will reduce taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Code, and thus will reduce
the amount of the distribution to shareholders which would otherwise be
<PAGE>
necessary to relieve the respective Portfolio of any liability for federal
income or excise tax. Pursuant to the Code, such capital loss carryovers will
expire as follows:
12/31 WNTBP WTRBP
- ------------------------------------------------------------------------------
2002 $ 5,296 $ 641
2003 9,163 13,858
2004 -- 866
- -----------------------------------------------------------------------------
D. Expense Reduction - The Portfolios have entered into an arrangement
with its custodian agent whereby interest earned on uninvested cash
balances are used to offset custodian fees. All significant reductions
are reported as a reduction of expenses in the Statement of Operations.
E. Deferred Organization Expenses - Costs incurred by the Portfolios in
connection with their organization are being amortized on a straight
line basis over five years from the date the Portfolio commenced
operations.
F. Equalization - The WSBCP and WIBCP Portfolios follow the accounting
practice known as equalization by which a portion of the proceeds from
sales and costs of redemptions of Portfolio shares, equivalent on a
per-share basis to the amount of undistributed net investment income on
the date of the transaction, is credited or charged to undistributed
net investment income. As a result, undistributed net investment income
per share is unaffected by sales or redemptions of Portfolio shares.
G. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
H. Interim Financial Information - The interim financial statements
relating to June 30, 1997 and for the period then ended have not been
audited by independent certified public accountants, but in the opinion
of the Trust's management, reflect all adjustments, consisting of
normal recurring adjustments, necessary for the fair presentation of
the financial statements.
I. Other - Investment transactions are accounted for on a trade date
basis. Interest income is determined on the basis of interest accrued
and discount earned, adjusted for amortization of premium or accretion
of discount on long-term debt securities when required for federal
income tax purposes. Dividend income and distributions to shareholders
are recorded on the ex-dividend date. However, if the ex-dividend date
has passed, certain dividends from foreign securities are recorded as
the Portfolios are informed of the ex-dividend date.
<PAGE>
(2) DISTRIBUTIONS
Dividends from investment income of WSBCP and WIBCP are expected to be
declared annually. Dividends from investment income of WNTBP and WTRBP will be
declared daily and paid monthly. However, the Trustees may decide to declare
dividends at other intervals. All net realized long- or short-term capital gains
of each Portfolio, if any, will be declared and distributed at least annually.
All distributions will be distributed in the form of additional full and
fractional shares of the Portfolios and not in cash. Differences in the
recognition or classification of income between the financial statements and tax
earnings and profits, which result in temporary overdistributions for financial
statement purposes, are classified as distributions in excess of net investment
income or accumulated net realized gains. Distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Permanent differences between book and tax accounting treatments may
result in reclassifications among various components of net assets.
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service ("Wright") to perform
investment management, investment advisory, and other services ("Investment
Adviser"). For its services, Wright is compensated based upon a percentage of
average monthly net assets which rate is adjusted as average monthly net assets
exceed certain levels. The Trust also has engaged Eaton Vance Management ("Eaton
Vance" or "Administrator") to act as administrator of the Trust. Under the
Administration Agreement, Eaton Vance is responsible for managing the business
affairs of the Trust and is compensated based upon a percentage of average
monthly net assets which rate is reduced as average monthly net assets exceed
certain levels. For the six months ended June 30, 1997, the effective annual
rate for advisory and administration charges for each Portfolio was as follows:
WNTBP WTRBP WSBCP WIBCP
- -------------------------------------------------------------------------------
Investment Advisory 0.45% 0.45% 0.65% 0.80%
Administration 0.05% 0.05% 0.05% 0.05%
To enhance the net income of the Portfolios, Wright and Eaton Vance reduced
their fees and Wright made an assumption of a portion of each Portfolio's
expenses as follows:
<TABLE>
<CAPTION>
WNTBP WTRBP WSBCP WIBCP
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reduction of Investment Adviser fees $ 1,512 $ 1,779 $ 9,117 $ 5,964
Allocation of expense to the Investment Adviser 14,688 15,625 5,000 14,510
Reduction of Administrator fees 168 198 701 373
Certain of the Trustees and officers of the Trust are directors/trustees
and/or officers of the above organizations.
</TABLE>
<PAGE>
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in Portfolio shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
-----------------------------------------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------
Wright Near Term Bond Portfolio --
<S> <C> <C> <C> <C>
Sales.................................. 11,424 $ 109,701 58,895 $ 573,302
Issued to shareholders in payment
of distributions declared............ 1,386 13,362 1,825 17,735
Redemptions............................ (12,479) (120,331) (26,542) (257,547)
-------- ---------- -------- ----------
Net increase....................... 331 $ 2,732 34,178 $ 333,490
========= =========== ========= ===========
Wright Total Return Bond Portfolio --
Sales.................................. 9,016 $ 84,340 54,345 $ 510,526
Issued to shareholders in payment
of distributions declared............ 1,957 18,297 3,309 31,173
Redemptions............................ (8,202) (76,701) (28,919) (272,022)
-------- ---------- -------- ----------
Net increase....................... 2,771 $ 25,936 28,735 $ 269,677
========= =========== ========= ===========
Wright Selected Blue Chip Portfolio --
Sales.................................. 9,435 $ 125,763 62,148 $ 764,506
Issued to shareholders in payment
of distributions declared............ 34,652 419,299 172 2,069
Redemptions............................ (9,413) (124,096) (68,010) (887,612)
-------- ---------- -------- ----------
Net increase (decrease)............ 34,674 $ 420,966 (5,690) $ (121,037)
========= =========== ========= ===========
<PAGE>
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
---------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------
Wright International Blue Chip Portfolio --
Sales.................................. 12,888 $ 145,082 45,060 $ 493,518
Issued to shareholders in payment
of distributions declared............ 7,439 81,307 -- --
Redemptions............................ (8,377) (93,884) (57,376) (611,312)
-------- ---------- -------- ----------
Net increase (decrease)............ 11,950 $ 132,505 (12,316) $ (117,794)
========= =========== ========= ===========
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales and maturities of investments, other than short-term
obligations, for the six months ended June 30, 1997, were as follows:
<TABLE>
<CAPTION>
Wright Wright Wright Wright
Near Term Total Return Selected International
Bond Portfolio Bond Portfolio Blue Chip Portfoli Blue Chip Portfolio
- ---------------------------------------------------------------------------------------------------------------
Purchases --
<S> <C> <C> <C> <C>
Non-U.S. Gov't Obligations.... $ - $ 39,689 $ 616,672 $ 831,992
============= ============= ============= =============
U.S. Gov't Obligations........ $ 49,469 $ - $ - $ -
============= ============= ============= =============
Sales --
Non-U.S. Gov't Obligations.... $ - $ - $ 524,818 $ 755,862
============= ============= ============= =============
U.S. Gov't Obligations........ $ 38,780 $ 1,496 $ - $ -
============= ============= ============= =============
</TABLE>
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 1997, as computed on a federal income tax basis,
are as follows:
<TABLE>
<CAPTION>
Wright Wright Wright Wright
Near Term Total Return Selected International
Bond Portfolio Bond Portfolio Blue Chip Portfolio Blue Chip Portfolio
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate Cost................... $ 623,501 $ 779,076 $ 2,324,150 $ 1,314,734
============= ============= ============= =============
Gross unrealized appreciation.... $ 3,328 $ 10,476 $ 677,960 $ 267,279
Gross unrealized depreciation.... (2,069) (4,397) (40,752) (24,023)
------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation).............. $ 1,259 $ 6,079 $ 637,208 $ 243,256
============= ============= ============= =============
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(7) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
The Wright International Blue Chip Portfolio invests in securities issued
by companies whose principal business activities are outside the United States
which may involve significant risks not present in 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 and
standards of practice comparable to those applicable to domestic issuers.
Investments in foreign securities also involve the risk of possible adverse
changes in investment or exchange control regulations, expropriation or
confiscatory taxation, limitation on the removal of funds or other assets of the
Trust, political or financial instability or diplomatic and other developments
which could affect such investments. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the United
States, and 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 general, there is less overall governmental
supervision and regulation of foreign securities markets, broker-dealers, and
issuers than in the United States.
Settlement of securities transactions in foreign countries may be delayed
and is generally less frequent than in the United States, which could affect the
liquidity of the Trust's assets. The Trust may be unable to sell securities
where the registration process is incomplete and may experience delays in
receipt of dividends.
<PAGE>
SEMI-ANNUAL REPORT
Officers and Trustees of the Funds
Peter M. Donovan, President and Trustee
H. Day Brigham, Jr., Vice President , Secretary and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President
Winthrop S. Emmet, Trustee
Michael F. Flament, Trustee
Leland Miles, Trustee
Lloyd F. Pierce, Trustee
Richard E. Taber, Trustee
Raymond Van Houtte, Trustee
James L. O'Connor, Treasurer
William J. Austin, Jr., Assistant Treasurer
Administrator
Eaton Vance Management
24 Federal Street
Boston, Massachusetts 02110
Investment Adviser
Wright Investors' Service
1000 Lafayette Boulevard
Bridgeport, Connecticut 06604
Custodian and Transfer Agent
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of a mutual fund unless
accompanied or preceded by a Fund's current prospectus. Shares of the
Trust are only available to the separate accounts of insurance
companies
