- ------------------------------------------------------------------------------
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, 1998
<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 participating insurance companies. Shares of the Trust are
offered exclusively to the separate accounts of such insurance companies. Two
managed investment portfolios of the Trust and their investment objectives are
described below:
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 Selected Blue Chip Portfolio
Portfolio of Investments............... 4
Financial Statements................... 6
Wright International Blue Chip Portfolio
Portfolio of Investments............... 7
Financial Statements................... 8
Notes to Financial Statements........... 14
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
LETTER TO SHAREHOLDERS
================================================================================
July 1998
Dear Shareholders:
The U.S. securities market extended its winning streak during the first
half of 1998. Stocks once again outdid expectations, with the S&P 500
registering its 13th and 14th straight quarterly advances and stock prices
hitting new highs in June.
The U.S. economy began its eighth year of expansion in April on a strong
footing, although some slowing was evident during the second quarter relative to
the robust first quarter. Considering the recessions being experienced in Asia,
this slowdown in the U.S. was not unexpected. Some Federal Reserve officials are
fearful of higher inflation ahead, but the majority opted to leave interest
rates unchanged during the first half of 1998 and interest rates dropped
slightly along the entire yield curve.
The second quarter of 1998 was not the unqualified success for U.S. stocks
that the prior quarter had been. While the major stock market indexes registered
small gains in the second quarter, the period was actually a mixed one for the
U.S. stock market. Generally speaking, bigger-cap stocks advanced modestly while
smaller issues were retreating. The variance in performance among stock groups
between big and small, growth and value - was as great as it has been in ten
years, with the market bias working to the detriment of stocks outside the
hallowed ground of the S&P 500.
The stock market's recent preference for big, S&P 500-type stocks has
pushed the market P/E multiple up by 50% in two years, creating some big risks
in these stocks. The presumed "safety" of the big-name stocks at the top of the
S&P 500 is more apparent than real, as their sky-high P/Es actually make them
one of the riskier sectors in the market today.
The fundamental backdrop for the U.S. securities markets remains generally
favorable, with the economic expansion slowing in the direction of the Federal
Reserve's 2.5%-3% growth target and inflation and interest rates dropping.
Corporate profits are beginning to lose momentum, a fact that could become
problematic for stocks in the near term. The longer-term outlook for
high-quality securities is positive, and diversification in quality stocks
outside the U.S. continues to make sense.
As always, it should be understood that past performance does not guarantee
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. The Management
Discussion on pages 2 and 3 talks about the various economic, political and
market factors affecting the investment performance of the Wright Equity and
Fixed-Income Funds during the first half of 1998 and prospects for the period
ahead.
Sincerely,
/S/ Peter M. Donovan
Peter M. Donovan, President
<PAGE>
MANAGEMENT DISCUSSION
================================================================================
THE U.S. BULL MARKET LOST SOME MOMENTUM DURING THE SECOND QUARTER OF 1998.
STOCKS EXHIBITED A SPLIT PERSONALITY DURING THE SECOND QUARTER, WITH PRICES UP
FOR BIG-CAP STOCKS AND LOWER FOR THE MID- AND SMALL-CAPS. STOCKS IN EUROPE
PERFORMED SLIGHTLY AHEAD OF U.S. EQUITIES DURING THE SECOND QUARTER, WHILE JAPAN
AND OTHER PACIFIC MARKETS WERE WEAK. ASIA'S FINANCIAL CRISIS IS TURNING OUT TO
BE WORSE THAN MANY THOUGHT EARLY IN THE YEAR, AND MOST ASIAN STOCK MARKETS AND
CURRENCIES HAVE GIVEN BACK THEIR FIRST-QUARTER RECOVERIES AND THEN SOME.
EARLY IN JULY, THE MAJOR U.S. STOCK MARKET AVERAGES HAVE MOVED TO NEW HIGHS.
THERE ARE A NUMBER OF POSITIVE FACTORS THAT CONTINUE TO SUPPORT U.S. EQUITIES.
ALTHOUGH THE ASIAN CRISIS IS CAUSING SOME SLOWDOWN IN ECONOMIC AND PROFIT
GROWTH, THE CHANCE OF A RECESSION IN THE U.S. IS LIMITED; INFLATION IS BENIGN
AND THE TREND IN INTEREST RATES IS DOWNWARD. DEMOGRAPHIC TRENDS AND A SURGE IN
MERGER ACTIVITY ARE PROVIDING STRONG CASH FLOWS INTO EQUITIES.
BUT THERE IS NO GETTING AROUND THE MARKET'S HISTORICALLY HIGH VALUATIONS. P/E
MULTIPLES ARE AT THE HIGHEST LEVELS IN POSTWAR HISTORY. IN TERMS OF YEAR-AHEAD
EARNINGS, THE 50 BIGGEST S&P 500 STOCKS HAD A MEDIAN P/E OF 25 AT MIDYEAR 1998
VERSUS 17 FOR THE OTHER 450; S&P GROWTH STOCKS HAD A MEDIAN P/E OF 23 VERSUS 16
FOR S&P VALUE STOCKS. THE DATA SUGGESTS THE DEVELOPMENT OF A TWO-TIER MARKET.
WRIGHT EXPECTS A CORRECTION IN TODAY'S HIGH P/E MULTIPLES THAT WILL HOLD DOWN
INVESTMENT RETURNS IN THE NEAR TERM. WITH MANY QUALITY ISSUES LAGGING THE S&P
THIS YEAR, THERE IS ROOM FOR SOME MARKET SECTORS TO POST BETTER-THAN-AVERAGE
RETURNS. WRIGHT EXPECTS EQUITY RETURNS TO STAY AHEAD OF INFLATION OVER
1998-2003.
WRIGHT SELECTED BLUE CHIP PORTFOLIO
The Wright Selected Blue Chip Portfolio(WSBCP) had a total return of 5.62%
during the first half of 1998, compared to 17.7% for the S&P 500. With big-cap
stocks in favor, the WSBCP's return shortfall in the first half of 1998 relative
to the S&P 500 was almost entirely due to the smaller cap size of its holdings.
More than 95% of the S&P 500's weight consists of companies with market
capitalization greater then $4 billion, with 64% larger than $25 billion. In
contrast, less than 30% of WSBCP funds are in stocks with market caps above $4
billion; the bulk of WSBCP holdings are in the range of $1 to $4 billion. In
particular, underweighting in large-cap drug stocks and electronics companies
have hurt the WSBCP this year; underweighting in energy and tobacco issues has
been a plus.
The high-quality stocks in the WSBCP possess superior financial strength and
profitability compared with the S&P 500; they also have better growth prospects.
At some time, probably in the not too distant future, investors will realize
that the S&P 500's excessive P/E multiple - 29 times current earnings at
mid-year - is not warranted by the fundamentals, and that more reasonably valued
issues, such as those in the WSBCP, which averaged a P/E multiple of 17 at June
30, stand to benefit.
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
The Wright International Blue Chip Portfolio (WIBCP) had a 12.17%
investment return compared to 13.6% for the FT/S&P World ex U.S. Composite.
The WIBCP's performance relative to the FT/S&P World ex U.S. index has recently
been negatively affected by weakness in its U.K. holdings in response to a
tighter monetary policy; by an underweighted position in German banks relative
to the benchmark; and by weakness in the Mexican peso. These factors offset the
benefits of a large position in Finland, the world's strongest market this year;
a solid performance by WIBCP's Canadian holdings; and underweighting in the weak
Japanese market.
With Asia's economic problems far from over, equities and currency markets in
this region are likely to be volatile for some time to come. In Europe, where
many markets are at record highs, signs of slowing economic growth may hold
stock price gains in coming months below recent rates. Nevertheless, overall
fundamentals, including low inflation, a downward trend in interest rates in
most countries and the efficiencies that will eventually result from economic
convergence, are positive for financial assets.
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO (WSBCP)
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
================================================================================
Shares Value
------------------------
Investments -- 96.0%
APPAREL -- 2.2%
VF Corp..................... 1,600 $ 82,400
-----------
AUTOMOTIVE -- 8.6%
Chrysler Corporation......... 1,800 $ 101,475
Dana Corporation............. 800 42,800
Eaton Corporation............ 900 69,975
Modine Mfg. Co............... 2,000 69,250
Superior Industries Int'l. Inc 1,200 33,825
-----------
$ 317,325
-----------
CHEMICALS -- 6.3%
Cooper Tire & Rubber Co...... 2,600 $ 53,625
Morton International Inc..... 1,300 32,500
PPG Industries, Incorporated. 900 62,606
Rohm & Haas Company.......... 800 83,150
-----------
$ 231,881
-----------
CONSTRUCTION -- 15.1%
Caterpillar Inc.............. 1,000 $ 52,875
Fleetwood Enterprises, Inc... 1,900 76,000
Jacobs Engineering Group*.... 1,200 38,550
Medusa Corp.................. 1,500 94,125
Oakwood Homes Corp........... 1,200 36,000
Texas Industries Inc......... 1,400 74,200
Toll Brothers*............... 3,000 86,063
Vulcan Materials Co.......... 900 96,018
-----------
$ 553,831
-----------
DIVERSIFIED -- 3.3%
Crane Co..................... 1,800 $ 87,413
Lancaster Colony Corp........ 900 34,087
-----------
$ 121,500
-----------
ELECTRONICS -- 5.4%
Compaq Computer.............. 1,900 $ 53,913
International Business Machines 300 34,444
Raytheon Company............. 900 53,213
Sun Microsystems, Inc.*...... 1,300 56,468
-----------
$ 198,038
-----------
FINANCIAL -- 11.5%
Ambac Financial Group, Inc... 1,300 $ 76,050
BB&T Corporation............. 1,700 114,963
Edwards (A.G.), Inc.......... 2,850 121,659
Southtrust Corp.............. 2,550 110,925
-----------
$ 423,597
-----------
FOOD -- 2.4%
Dean Foods Company........... 800 $ 43,950
Universal Foods Corp......... 2,000 44,375
-----------
$ 88,325
-----------
MACHINERY & EQUIPMENT -- 4.6%
Cummins Engine Co............ 700 $ 35,875
Deere & Co................... 1,000 52,875
Ingersoll Rand Co............ 1,800 79,313
-----------
$ 168,063
-----------
METAL PRODUCERS -- 2.1%
Carpenter Technology......... 1,500 $ 75,375
-----------
METAL PRODUCTS MANUFACTURERS -- 6.8%
Kaydon Corp.................. 2,400 $ 84,750
Mueller Industries*.......... 1,200 44,550
Snap-on Inc.................. 1,500 54,375
Trinity Industries........... 1,600 66,400
-----------
$ 250,075
-----------
<PAGE>
OIL, GAS & COAL -- 0.9%
Nabors Inds., Inc.*.......... 1,700 $ 33,681
-----------
PAPER -- 1.0%
Wausau-Mosinee Paper Corp.... 1,600 $ 36,600
-----------
PRINTING & PUBLISHING -- 4.2%
American Greetings Corp...... 1,700 $ 86,594
Banta Corporation............ 2,200 67,925
-----------
$ 154,519
-----------
RECREATION -- 2.9%
Brunswick Corporation........ 2,000 $ 49,500
Ryan's Family Steak Houses*.. 5,700 58,425
-----------
$ 107,925
-----------
RETAILERS -- 2.8%
Lands' End, Inc.............. 1,800 $ 56,925
Ross Stores Inc.............. 1,100 47,300
-----------
$ 104,225
-----------
TRANSPORTATION - 8.3%
ASA Holdings, Inc............ 2,400 $ 119,100
Comair Holdings, Inc......... 2,550 78,731
U.S. Freightways Corp........ 1,000 32,844
Werner Enterprises Inc....... 3,875 73,867
-----------
$ 304,542
-----------
UTILITIES -- 3.9%
Duke Power Company........... 1,100 $ 65,175
Nipsco Industries............ 2,800 78,400
-----------
$ 143,575
-----------
MISCELLANEOUS -- 3.7%
Arrow Electronics, Inc*...... 1,600 $ 34,800
Kelly Services............... 1,000 35,375
Sierra Health Services, Inc*. 2,550 64,228
-----------
$ 134,403
-----------
TOTAL INVESTMENTS -- 96.0%
(identified cost, $2,605,198) $ 3,529,880
OTHER ASSETS
LESS LIABILITIES -- 4.0% 145,615
-----------
NET ASSETS -- 100.0% $ 3,675,495
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1998 (Unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $2,605,198
Unrealized appreciation............ 924,682
---------
Total value (Note 1A)............ $3,529,880
Cash................................. $ 140,458
Dividends receivable................. 2,871
Receivable from Investment Adviser... 8,000
Deferred organizational costs (Note 1E) 918
---------
Total Assets....................... $3,682,127
---------
LIABILITIES:
Accrued expenses..................... $ 6,632
---------
Total Liabilities.................. $ 6,632
---------
NET ASSETS.............................. $3,675,495
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $2,553,827
Accumulated net realized gain on investment
transactions......................... 152,101
Unrealized appreciation of investments.. 924,682
Accumulated undistributed net investment
income............................... 44,885
---------
Net assets applicable to
outstanding shares.................. $3,675,495
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 242,026
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $15.19
==========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 24,835
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 11,747
Administrator fee (Note 3)........... 904
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrator........... 1,897
Custodian fee (Note 1D).............. 7,549
Audit................................ 11,100
Legal................................ 6,194
Printing............................. 1,558
Amortization of organization expense
(Note 1E).......................... 867
Miscellaneous........................ 628
---------
Total expenses................... $ 42,444
---------
Deduct --
Preliminary reduction of Investment Adviser
fee (Note 3)....................... $ 11,747
Preliminary allocation of expenses to the
Investment Adviser (Note 3)........ 8,000
Reduction of Custodian fee (Note 1D). 2,053
---------
Total deducted................... $ 21,800
---------
Net expenses..................... $ 20,644
---------
Net investment income.......... $ 4,191
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment
transactions........................ $ 151,545
Change in unrealized appreciation
of investments...................... 36,649
---------
Net realized and unrealized gain..... $ 188,194
---------
Net increase in net assets from
operations......................... $ 192,385
==========
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, 1998 December 31, 1997
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income........................................ $ 4,191 $ 21,518
Net realized gain on investment transactions................. 151,545 307,898
Change in unrealized appreciation of investments............. 36,649 521,436
---------- ----------
Net increase in net assets from operations................. $ 192,385 $ 850,852
Distributions to shareholders from net realized gain on
investment transactions (Note 2)............................. (307,343) (427,615)
Undistributed net investment income included in price of shares
sold and redeemed (Note 1F).................................. - 8,494
Net increase from Portfolio share transactions (exclusive of
amounts allocated to net investment income) (Note 4)......... 365,422 324,836
---------- ----------
Net increase in net assets................................. $ 250,464 $ 756,567
NET ASSETS:
At beginning of period......................................... 3,425,031 2,668,464
---------- ----------
At end of period............................................... $3,675,495 $3,425,031
========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS AT END OF PERIOD........................ $ 44,885 $ 40,694
========== ===========
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
FINANCIAL HIGHLIGHTS 1998(6)(7) 1997 1996 1995 1994(5)
- -----------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 15.650 $ 14.000 $ 11.410 $ 9.320 $ 10.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (loss) (1)............. $ (0.000)(+)$ 0.110 $ 0.170 $ 0.100 $ 0.092
Net realized and unrealized gain (loss)
on investments............................. 0.940 3.780 2.430 2.345 (0.712)
-------- -------- -------- -------- --------
Total income (loss) from investment
operations................................. $ 0.940 $ 3.890 $ 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.............................. (1.400) (2.240) - (0.285) -
-------- -------- -------- -------- --------
Total distributions......................... $ (1.400) $ (2.240) $ (0.010) $ (0.355) $ (0.060)
-------- -------- -------- -------- --------
Net asset value, end of period................. $ 15.190 $ 15.650 $ 14.000 $ 11.410 $ 9.320
======== ======== ======== ======== ========
Total Return(3)................................ 5.6% 32.1% 22.8% 26.3% (6.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 3,675 $ 3,425 $ 2,668 $ 2,239 $ 1,452
Ratio of net expenses to average net assets(1) 1.26%(2)(4) 1.30%(4) 1.27%(4) 1.60%(4) 1.15%(2)
Ratio of net investment income to average
net assets(1).............................. 0.23%(2) 0.70% 1.14% 0.96% 1.16%(2)
Portfolio Turnover Rate...................... 22% 40% 68% 64% 74%
<FN>
(1)During each of the periods presented, the Investment Adviser and/or the
Administrator reduced their fees. Had such actions not been undertaken, the
net investment income (loss) per share and the ratios would have been as
follows:
1998(6) 1997 1996 1995 1994(5)
-------- ------ ----- ------ --------
Net investment income (loss) per share......... $ (0.002) $ 0.030 $ 0.066 $ (0.017) $ (0.078)
======== ======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 2.35%(2) 1.81% 1.97% 2.72% 3.30%(2)
======== ======== ======== ======== ========
Net investment income (loss)................. (0.86%)(2) 0.19% 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, 1998 and the years ended December 31,
1997, 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 1.14%,
1.15%, 1.06% and 1.15%, respectively.
(5)For the period from January 6, 1994 (start of business) to December 31,
1994.
(6) For the six months ended June 30, 1998
(7) Certain per share amounts are based on average shares outstanding.
(+) Amount represents less than ($0.001) per share.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
================================================================================
Shares Value
-------------------------
EQUITY INVESTMENTS -- 95.5%
AUSTRALIA -- 3.1%
Australian Gas & Light Co.... 4,777 $ 29,974
Coles Myer Ltd............... 5,200 20,352
-----------
$ 50,326
-----------
CANADA -- 8.0%
Linamar Corporation.......... 1,500 $ 26,725
Loblaw Companies Ltd......... 1,300 30,941
Magna Int'l. Inc. Class A.... 501 34,344
Power Financial Corp......... 800 37,401
-----------
$ 129,411
-----------
CHILE -- 1.2%
Compania de Telecomunicacion. 1,000 $ 20,313
Compania de Telecom - Rights* 63 22
-----------
$ 20,335
-----------
DENMARK -- 3.5%
Icopal....................... 600 $ 28,803
Novo Nordisk A/S - B......... 200 27,581
-----------
$ 56,384
-----------
FINLAND -- 3.8%
Finnlines OY................. 400 $ 24,796
Orion A/S - B................ 1,190 36,038
-----------
$ 60,834
-----------
FRANCE -- 11.0%
Pernod-Ricard................ 400 $ 27,705
Pinault-Printemps Redoute SA. 45 37,639
SAGEM SA..................... 60 46,655
Synthelabo................... 150 25,291
Valeo........................ 400 40,863
-----------
$ 178,153
-----------
GERMANY -- 6.8%
BASF AG...................... 650 $ 30,888
Bayerische Motoren Werke A... 39 39,443
Dyckerhoff AG - Pfd.......... 100 39,069
-----------
$ 109,400
-----------
IRELAND -- 1.9%
Bank of Ireland.............. 518 $ 31,131
-----------
ITALY -- 3.1%
Benetton Group............... 12,000 $ 24,925
Eni SPA...................... 4,000 26,052
-----------
$ 50,977
-----------
JAPAN -- 3.7%
Bridgestone Corporation...... 1,000 $ 23,764
Honda Motor Co., Ltd......... 1,000 35,791
-----------
$ 59,555
-----------
MEXICO -- 3.4%
Cemex X.A. - CPO............. 6,700 $ 25,138
Telefonos de Mexico SA....... 13,000 30,756
-----------
$ 55,894
-----------
NETHERLANDS -- 15.3%
Akzo Dutch Ord............... 100 $ 22,228
CSM N.V. Cert................ 508 24,396
Getronics N.V................ 618 32,048
Hagemeyer N.V................ 813 35,167
Ing Groep N.V................ 400 26,190
Numico NV.................... 1,015 31,781
Unilever NV-CVA.............. 350 27,767
Verenigde Nederlandse........ 1,300 47,223
-----------
$ 246,800
-----------
<PAGE>
SOUTH AFRICA -- 1.0%
Sasol Beperk Limited......... 1,300 $ 7,499
Tiger Oats Limited........... 900 7,935
-----------
$ 15,434
-----------
SPAIN -- 8.8%
Banco Espirito Santo......... 795 $ 23,871
Banco Popular Espanola....... 400 34,075
Endesa S.A................... 2,000 43,250
Repsol S.A................... 750 41,177
-----------
$ 142,373
-----------
SWEDEN -- 1.2%
Atlas Copco AB............... 700 $ 19,068
-----------
SWITZERLAND -- 6.2%
Nestle-Sponsored............. 350 $ 37,450
Novartis AG-ADR.............. 450 37,440
Schweizerische Rueckverisch.. 10 25,308
-----------
$ 100,198
-----------
UNITED KINGDOM -- 13.5%
Kwik-Fit Holdings PLC........ 5,500 $ 45,053
Provident Financial PLC...... 1,640 25,745
Smiths Industries............ 2,400 33,727
Tesco PLC.................... 3,385 33,296
Weir Group PLC (The)......... 6,700 24,336
Wm. Morrison Supermarkets PLC 6,000 30,160
Wolseley .................... 4,154 25,180
-----------
$ 217,497
-----------
TOTAL INVESTMENTS - 95.5%
(identified cost, $1,232,924) $ 1,543,770
OTHER ASSETS
LESS LIABILITIES - 4.5% 72,905
-----------
NET ASSETS - 100.0% $ 1,616,675
===========
ADR - American Depositary Receipt * Non-income producing security.
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30,1998 (Unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $1,232,924
Unrealized appreciation........... 310,846
---------
Total value (Note 1A)............ $1,543,770
Cash................................. 58,183
Foreigh Cash......................... 3,598
Receivable for investments sold...... 25,288
Dividends receivable................. 2,178
Deferred organizational costs (Note 1E) 914
Receivable from Investment Adviser... 21,500
Receivable for foreign taxes withheld 599
---------
Total assets....................... $1,656,030
---------
LIABILITIES:
Accrued expenses..................... $ 10,582
Payable for investments purchased.... 28,773
---------
Total liabilities.................. $ 39,355
---------
NET ASSETS.............................. $1,616,675
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $1,235,166
Accumulated net realized gain on investment
and foreign currency transactions.... 62,618
Unrealized appreciation of investments and
translations of assets and liabilities in
foreign currencies................... 310,798
Accumulated undistributed net
investment income.................... 8,093
---------
Net assets applicable to
outstanding shares................. $ 1,616,675
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 127,477
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $12.68
==========
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 19,812
Less: Foreign taxes.................. (2,326)
---------
Total investment income............ $ 17,486
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 6,201
Administrator fee (Note 3)........... 455
Compensation of Trustees not
affiliated with the Investmen
Adviser or Administrator........... 1,864
Custodian fee (Note 1D).............. 11,771
Audit................................ 11,100
Legal................................ 6,194
Printing............................. 3,023
Amortization of organization expense
(Note 1E).......................... 867
Miscellaneous........................ 1,932
---------
Total expenses................... $ 43,407
---------
Deduct --
Preliminary reduction of Investment
Adviser fee (Note 3)............... $ 6,201
Preliminary reduction of Admininstrator fee
(Note 3)........................... 455
Preliminary allocation of expense to the
Investment Adviser (Note 3)....... 21,500
Reduction of Custodian fee (Note 1D). 857
---------
Total deducted................... $ 29,013
---------
Net expenses..................... $ 14,394
---------
Net investment income.......... $ 3,092
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment and
foreign currency transactions........ $ 60,238
Change in unrealized appreciation of
investments and translation of assets
and liabilities in foreign currency.. 110,021
---------
Net realized and unrealized gain..... $ 170,259
---------
Net increase in net assets from
operations......................... $ 173,351
==========
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, 1998 December 31, 1997
- --------------------------------------------------------------------------------------------------------------
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations --
<S> <C> <C>
Net investment income........................................ $ 3,092 $ 3,740
Net realized gain on investments and foreign currency
transactions............................................... 60,238 70,743
Change in unrealized appreciation of investments and translation
of assets and liabilities in foreign currency.............. 110,021 16,476
---------- ----------
Net increase in net assets from operations................. $ 173,351 $ 90,959
Distributions to shareholders from net realized gain
on investment transactions (Note 2).......................... (68,163) (81,308)
Net increase (decrease) from Portfolio share transactions (exclusive of
amounts allocated to net investment income) (Note 4)......... 100,799 (56,035)
---------- ----------
Net increase (decrease) in net assets...................... $ 205,987 $ (46,384)
NET ASSETS:
At beginning of period......................................... 1,410,688 1,457,072
---------- ----------
At end of period............................................... $1,616,675 $1,410,688
=========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME
INCLUDED IN NET ASSETS......................................... $ 8,093 $ 5,001
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------
FINANCIAL HIGHLIGHTS 1998(6) 1997 1996 1995 1994(5)
- ----------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 11.800 $ 11.810 $ 10.060 $ 9.140 $ 10.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income (loss)(1).............. $ 0.022 $ 0.032 $ (0.043) $ 0.003 $ 0.031
Net realized and unrealized gain (loss)...... 1.428 0.588 1.793 0.967 (0.886)
-------- -------- -------- -------- --------
Total income (loss) from investment
operations................................ $ 1.450 $ 0.620 $ 1.750 $ 0.970 $ (0.855)
-------- -------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income.................. $ -- $ -- $ -- $ (0.005) $ (0.005)
In excess of net investment income.......... -- -- -- (0.013) --
From net realized gains on investment
transactions............................. (0.570) (0.630) -- -- --
Tax distribution from paid-in capital....... -- -- -- (0.032) --
-------- -------- -------- -------- --------
Total distributions declared to
shareholders.............................. $(0.570) $ (0.630) $ -- $ (0.050) $ (0.005)
-------- -------- -------- -------- --------
Net asset value, end of period................. $12.680 $ 11.800 $ 11.810 $ 10.060 $ 9.140
======== ======== ======== ======== ========
Total Return(3)................................ 12.2% 5.7% 17.4% 10.6% (8.1%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 1,617 $ 1,411 $ 1,457 $ 1,365 $ 1,229
Ratio of net expenses to average net assets(1) 1.97%(2)(4) 2.00%(4) 2.31%(4) 2.28% (4) 1.80% (2)
Ratio of net investment income (loss) to
average net assets(1)...................... 0.40%(2) 0.25% (0.42)% 0.06% 0.19% (2)
Portfolio Turnover Rate...................... 30% 94% 44% 31% 0%
<FN>
(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:
1998(6) 1997 1996 1995 1994(5)
--------- ------ ------- -------- --------
Net investment loss per share................. $ (0.178) $ (0.262) $ (0.253) $ (0.920) $ (0.434)
======== ======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 5.60% (2) 4.30% 4.37% 4.18% 4.65% (2)
======== ======== ======== ======== ========
Net investment loss.......................... (3.23%)(2) (2.05%) (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, 1998 and the years ended December 31,
1997, 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 1.86%, 1.85%, 1.85% and 1.96%, respectively.
(5)For the period from January 6, 1994 (start of business) to December 31,
1994.
(6)For the six months ended June 30,1998.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
================================================================================
(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 two diversified separate
portfolios: 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 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 and for WIBCP investments for
which material events affecting the value of such securities occurred
after the closing of the exchange on which they are primarily traded
but prior to the valuation of the Fund 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.
<PAGE>
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, 1998 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.
J. Forward Foreign Currency Contracts - The International Portfolio may
enter into forward foreign currency exchange contracts for the
purchase or sale of a specific foreign currency at a fixed price on
a future date. Risks may arise upon entering these contracts from
the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar. The International Portfolio
will enter into forward contracts for hedging purposes in
connection with purchases and sales of securities denominated in
foreign currencies. The forward foreign currency exchange contracts
are adjusted by the daily forward exchange rate of the underlying
currency and any gains or losses are recorded for financial statement
purposes as unrealized until such time as the contracts have been
closed or offset.
<PAGE>
(2) DISTRIBUTIONS
Dividends from investment income of WSBCP and WIBCP are expected to be
declared annually. 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 over-distributions 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 The Winthrop Corporation (Winthrop) to act as
investment adviser to the Funds pursuant to the respective Investment Advisory
Contracts. Pursuant to a service agreement between Winthrop and its wholly-owned
subsidiary, Wright Investors' Service, Inc. (Wright), Wright furnishes each Fund
with investment management, investment advisory, and other services. 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, 1998, the effective annual rate for advisory and
administration charges for each Portfolio was as follows:
WSBCP WIBCP
Investment Advisory 0.65% 0.80%
Administration 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:
WSBCP WIBCP
Preliminary reduction of Investment
Adviser fees $11,747 $ 6,201
Preliminary allocation of expense
to the Investment Adviser 8,000 21,500
Preliminary reduction of Administrator fees - 455
Certain of the Trustees and officers of the Trust are directors/trustees
and/or officers of the above organizations.
<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, 1998 (unaudited) December 31, 1997
---------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Portfolio --
<S> <C> <C> <C> <C>
Sales.................................. 256,674 $3,895,499 19,861 $ 283,616
Issued to shareholders in payment
of distributions declared............ 19,366 307,344 34,653 419,299
Redemptions............................ (252,902) (3,837,421) (26,212) (378,079)
-------- ---------- -------- ----------
Net increase....................... 23,138 $ 365,422 28,302 $ 324,836
========= =========== ========= ===========
Wright International Blue Chip Portfolio --
Sales.................................. 144,321 $1,828,726 20,821 $ 237,904
Issued to shareholders in payment
of distributions declared............ 5,243 68,163 7,439 81,308
Redemptions............................ (141,623) (1,796,090) (32,123) (375,247)
-------- ---------- -------- ----------
Net increase (decrease)............ 7,941 $ 100,799 (3,863) $ (56,035)
========= =========== ========= ===========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations, for
the six months ended June 30, 1998, were as follows:
Wright Selected Wright International
Blue Chip Portfolio Blue Chip Portfolio
- -------------------------------------------------------------------------------
Purchases-- $ 790,504 $ 492,925
============ ============
Sales-- $ 805,141 $ 445,839
============ ============
<PAGE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 1998, as computed on a federal income tax basis,
are as follows:
Wright Selected Wright International
Blue Chip Portfolio Blue Chip Portfolio
- -------------------------------------------------------------------------------
Aggregate cost.............. $ 2,605,198 $ 1,232,924
============ ============
Gross unrealized appreciation $ 1,022,397 $ 369,048
Gross unrealized depreciation (97,715) (58,202)
------------ ------------
Net unrealized appreciation. $ 924,682 $ 310,846
============ ============
(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>
(8) LINE OF CREDIT
The Funds participate with other funds managed by Wright in a committed $20
million unsecured line of credit agreement with a bank. The Funds may
temporarily borrow from the line of credit to satisfy redemption requests or
settle investment transactions. Interest is charged to each Fund based on its
borrowings at an amount above the federal funds rate. In addition, a fee
computed at an annual rate of 0.10% on the average daily unused portion of the
$20 million line of credit, is allocated among the participating funds at the
end of each quarter. The Funds did not have significant borrowings or allocated
fees during the period ended June 30, 1998.
<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 and Trustee
Winthrop S. Emmet, 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
