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Description of art work on front cover of report
Solid blue box with name of Trust in upper left hand corner of page.
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ANNUAL
REPORT
December 31, 1997
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
January 1998
Dear Shareholders:
The U.S. securities markets enjoyed another strong year during 1997. Among
the major markets of the world, only Italian and Swiss stocks and British bonds
performed better than their U.S. counterparts this past year. Europe approached
its 1999 monetary union with a broad advance in stocks during 1997; European
bond markets performed well, but not well enough to offset currency depreciation
averaging around 10%. In the Pacific, as the Asian economic "miracle" began to
look more like "mirage," stock markets and currencies tumbled lower.
Due in part to the Asian crisis, the U.S. bond market outperformed stocks
over the final five months of 1997. The strength in bonds derived in part from
the volatility in global stock markets and, more fundamentally, from the steady
progression of good news on inflation. The core U.S. rate of consumer price
inflation fell to a 30-year low during 1997, and deflation winds out of Asia
were gathering even more ferocity as the year ended. The price of gold fell to a
12-year low in the fourth quarter, oil prices were down by a third from their
1997 high, and commodities price indexes moved broadly lower. In an environment
of 2% inflation and 550-point single-session drops in the DJIA, investors have
come to see the virtues of 6% bonds. For all of 1997, U.S. Treasury bonds
returned between 9% and 10%, while Japanese and major European bonds would have
done almost as well except for the strong dollar.
World economic growth was at its strongest since 1989, but that was mainly
due to the robust U.S. expansion. The economies of Europe generally showed
improvement, although unemployment remained high. The Japanese economy faltered
in 1997 and headed into the new year limping badly. Asia's financial crisis is
likely to exact a heavy toll on the region's economy in 1998; to some extent,
the slowdown will spread to Western trading partners as well. Another likely
Asian export in 1998: deflationary pressures on prices for a broadening range of
goods and services. With the financial crisis in Asia about to infect the real
economies of Asia and then progressively the economies of the West, the Wright
economic model for the U.S. now incorporates about one-half percentage point
less real GDP growth - 2 1/2% instead of 3% - for the coming year; Europe
figures to slow by somewhat less than the U.S., while Latin America may slow a
bit more. Depending on how weak the Asian economies become, a further scaling
back of growth targets may be required.
As compared to the unusually strong markets of 1995-97, the investment
environment figures to be a lot more conservative during 1998. As the year
begins, the S&P 500 is priced at 21 times estimated 1998 earnings, which seems
generous in view of the many uncertainties represented by the Asian market
crisis. The longer-term outlook for quality stocks - and bonds - is judged to be
favorable, given the demographics and the low inflation/high productivity trends
heading into the early 21st century.
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.
Sincerely,
/s/ Peter M. Donovan
Peter M. Donovan, President
<PAGE>
MANAGEMENT DISCUSSION
WRIGHT NEAR TERM BOND PORTFOLIO
For 1997, the Wright Near Term Bond Portfolio (WNTBP) posted a total
investment return of 5.1%, equal to the 5.1% earned on 90-day Treasury bills for
the year. Despite an increase in short-term interest rates by the Federal
Reserve during the first quarter, yields on Treasury securities in the
one-to-three year maturity range declined roughly 20 basis points over the
course of 1997.
At 12/31/97, the Portfolio was invested 39% in U.S. Treasury securities,
42% in agency issues, 15% in mortgage-backed securities and the balance in other
short-term assets. Weighted average time to maturity of holdings was about 19
months. The WNTBP ended 1997 with a yield to maturity averaging 5.7%.
WRIGHT TOTAL RETURN BOND PORTFOLIO
Yields on long-term bonds declined by more than 50 basis points over the
course of 1997, with ten-year Treasury securities dropping 68 basis points to
5.75% at year-end 1997. The Federal Reserve raised its target for short-term
interest rates by 25 basis points during March, but the financial crisis in Asia
and a reduction in global inflation rates combined to boost bond prices
significantly over the final nine months of the year. At 12/31/98, the weighted
average maturity of securities in the Wright Total Return Bond Portfolio was
around six years.
During 1997, the Wright Total Return Bond Portfolio had a total return of
8.5%, as compared with a 9.8% return for the Lehman government/corporate
composite. At the end of 1997, Portfolio holdings were distributed as follows:
32.7% U.S. Treasury securities; 18.8% mortgage-backed securities; 18.6%
corporate bonds (A-rated or better); 17.0% government agency securities; and
13.0% in cash and cash-equivalent assets.
WRIGHT SELECTED BLUE CHIP PORTFOLIO
The Wright Selected Blue Chip Portfolio (WSBCP) had a 32.1% total return
during 1997, well ahead of the Lipper equity growth fund average return of 25.1%
but slightly behind the S&P 500's total return of 33.3%. Portfolio performance
benefited from above-market industry positions in construction, machinery, and
financial stocks, groups that generally performed well during 1997. Detracting
from WSBCP's 1997 results was the Portfolio's underweighting in the health care
industry, one of the first half's best-performing groups. Low exposure in
energy-related equities aided Portfolio results. The Portfolio ended 1997 with
its largest positions in the financial (19%), construction (11%), and machinery
(8%) industries.
At year-end 1997, WSBCP stock holdings were trading at a P/E multiple of
around 16 (based on projected 1998 earnings), a healthy discount from the S&P
500's P/E multiple of 21.5. Although the stocks in the WSBCP will not be immune
to weakness in the broad market this coming year, their discount pricing and
respectable prospects for earnings growth should allow them to weather any
market downturn in relatively good shape.
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
The Wright International Blue Chip Portfolio (WIBCP) earned a 5.7% total
investment return during 1997, ahead of 0.8% total return for the FT/S&P World
ex U.S. index. During 1997, Portfolio positions were increased in Canada (to 9%
of total at 12/31/97), Netherlands (12%), Spain (8%) Switzerland (6%) and the
United Kingdom (18%); positions were reduced in Australia (to 2%), Japan (6%)
and Hong Kong (1%).
At 12/31/97, the Portfolio's regional break down was as follows: Europe 57%
(vs 56% for the FT/S&P World ex U.S. Composite); non-U.S. Americas 14% (6%);
Nordic 10% (5%); Japan 6% (25%); non-Japan Asia 1% (6%) and other 10% (1%). The
Portfolio's significant underweighting in Japan relative to the FT/S&P benchmark
contributed to the Portfolio's relatively strong performance during 1997. Stocks
in Europe, Canada, and Mexico generally performed well last year; Asian markets
were uniformly weak, detracting from results. Widespread currency depreciation
relative to a strong dollar also materially reduced returns in dollar terms.
The full scope of Asia's crisis and the extent that it is exported to the
West are important issues for the markets as 1998 begins. At this point, it does
not appear that the U.S. and European economies will be thrown into recession by
Asia's problems. But growth will no doubt be slower in the West than otherwise
would have been the case, a prospect that may not be fully discounted in the
price levels of a number of equity markets. The opposite may be true in Asia:
dramatic economic slowdowns are in store for 1998; to the extent that Asia's
problems correct some of the region's excesses and strengthen its financial
foundations, the beaten-down markets of the area may present buying
opportunities in the not too distant future.
<PAGE>
WRIGHT MANAGED BLUE CHIP SERIES TRUST
WRIGHT NEAR TERM BOND PORTFOLIO
Growth of $10,000 invested 1/31/94* through 12/31/97
Annual Total Return
Lst 1 Yr Since Incept*
Wright Near Term Bond Portfolio +5.3% +3.7%
Lehman Gov't/Corp Index +9.8% +6.5%
Morningstar Gov't (1-5 Yrs) Funds +6.4% +4.4%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT NEAR TERM
BOND PORTFOLIO on 1/31/94 would have grown to $11,550 by December 31, 1997.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Near Term Lehman Gov't/Corp Morningstar Gov't
Bond Portfolio Index (1-5 Yrs) Funds
01/31/94 $10,000 $10,000 $10,000
12/31/94 $9,623 $9,506 $9,694
12/31/95 $10,672 $11,335 $10,799
12/31/96 $10,969 $11,664 $11,146
12/31/97 $11,550 $12,802 $11,857
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WRIGHT MANAGED BLUE CHIP SERIES TRUST
WRIGHT TOTAL RETURN BOND PORTFOLIO
Growth of $10,000 invested 12/31/93* through 12/31/97
Annual Total Return
Lst 1 Yr Since Incept*
Wright Total Return Bond Portfolio +8.7% +4.5%
Lehman Gov't/Corp Index +9.8% +6.8%
Lipper Fixed Income Funds +8.7% +6.1%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT TOTAL
RETURN BOND PORTFOLIO on 12/31/93 would have grown to $11,929 by December 31,
1997
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Total Return Lehman Gov't/Corp Lipper Fixed
Bond Portfolio Index Income Funds
12/31/93 $10,000 $10,000 $10,000
12/31/94 $9,290 $9,649 $9,672
12/31/95 $10,858 $11,506 $11,144
12/31/96 $10,973 $11,840 $11,667
12/31/97 $11,929 $12,995 $12,676
- --------------------------------------------------------------------------------
WRIGHT MANAGED BLUE CHIP SERIES TRUST
WRIGHT SELECTED BLUE CHIP PORTFOLIO
Growth of $10,000 invested 1/31/94* through 12/31/97
Annual Total Return
Lst 1 Yr Since Incept*
Wright Selected Blue Chip Portfolio +32.1% +18.2%
Lipper Growth Funds +25.1% +17.3%
NYSE +32.9% +21.0%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT SELECTED
BLUE CHIP PORTFOLIO on 1/31/94 would have grown to $19,230 by December 31, 1997.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Selected Lipper Equity NYSE
Blue Chip Portfolio Growth Funds Index
01/31/94 $10,000 $10,000 $10,000
12/31/94 $9,391 $9,571 $9,666
12/31/95 $11,856 $12,518 $13,037
12/31/96 $14,559 $14,925 $15,894
12/31/97 $19,230 $18,666 $21,122
- --------------------------------------------------------------------------------
WRIGHT MANAGED BLUE CHIP SERIES TRUST
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
Growth of $10,000 invested 1/31/94* through 12/31/97
Annual Total Return
Lst 1 Yr Since Incept*
Wright Int'l Blue Chip Portfolio +5.7% +5.9%
FT World Ex U.S. Index +0.8% +4.4%
The cumulative total return of a U.S. $10,000 investment in the WRIGHT
INTERNATIONAL BLUE CHIP PORTFOLIO on 1/31/94 would have grown to $12,500 by
December 31, 1997.
The following plotting points are used for comparison in the total investment
return mountain chart.
Date Wright Int'l FT World Ex U.S.
Blue Chip Portfolio Index
01/31/94 $10,000 $10,000
12/31/94 $9,154 $9,993
12/31/95 $10,076 $11,037
12/31/96 $11,828 $11,755
12/31/97 $12,500 $11,849
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NOTES: *: For comparison with other averages, the investment results are shown
from the first month-end since the Fund's inception. The investment results of
Wright Managed Blue Chip Series Trust, Lipper's average of 944 Equity Growth
Funds and 1816 Fixed Income Funds and Morningstar's average of 97 Government
General Funds with average maturities of one to five years are net of all fees
and expenses charged to the Funds. No fees or expenses have been deducted from
the other averages. The Total Investment Return is the % return of an initial
$10,000 investment made at the beginning of the period to the ending redeemable
value assuming all dividends and distributions are reinvested. Past performance
is not predictive of future performance.
<PAGE>
MANAGEMENT DISCUSSION GOES HERE
WRIGHT NEAR TERM BOND PORTFOLIO (WNTBP)
PORTFOLIO OF INVESTMENTS
December 31, 1997
================================================================================
<TABLE>
<CAPTION>
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>
$ 30,000 U.S. Treasury Note 6.000% 09/30/98 $100.281 $ 30,083 5.98% 5.60%
40,000 U.S. Treasury Note 5.875% 03/31/99 100.266 40,106 5.86% 5.64%
40,000 U.S. Treasury Note 5.875% 07/31/99 100.281 40,112 5.86% 5.68%
45,000 U.S. Treasury Note 5.875% 11/15/99 100.359 45,162 5.85% 5.67%
40,000 U.S. Treasury Note 6.000% 08/15/00 100.719 40,288 5.96% 5.70%
40,000 U.S. Treasury Note 5.625% 02/28/01 99.734 39,894 5.64% 5.72%
50,000 Federal Home Loan Banks 5.530% 06/04/98 99.953 49,977 5.53% 5.62%
50,000 Federal Home Loan Banks 7.780% 02/03/00 103.828 51,914 7.49% 5.81%
94,192 Federal Nat'l Mort.Assoc. 5.861% 01/01/27 101.672 95,767 5.76% 5.74%
50,000 Fed Farm Credit Bks 8.650% 10/01/99 104.594 52,297 8.27% 5.84%
40,000 Sallie-Mae 7.500% 03/08/00 103.406 41,362 7.25% 5.81%
50,000 Tennessee Valley Authority 5.125% 03/04/98 99.891 49,946 5.13% 5.65%
----------
TOTAL INVESTMENTS (identified cost, $573,266) -- 96.1% $576,908
OTHER ASSETS, LESS LIABILITIES -- 3.9% 23,453
----------
NET ASSETS -- 100.0% $600,361
==========
Average Maturity -- 1.5 Years(1)(2)
(1) Unaudited.
(2) Excludes Federal Nat'l Mortgage Assoc.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $ 573,266
Unrealized appreciation............ 3,642
---------
Total value (Note 1A)............ $ 576,908
Cash................................. 3,650
Interest receivable.................. 9,181
Deferred organizational costs (Note 1E) 1,781
Receivable from Investment Adviser... 12,513
---------
Total Assets....................... $ 604,033
---------
LIABILITIES:
Payable for Fund shares reacquired... $ 540
Trustees fees payable ............... 450
Accrued expenses..................... 2,682
---------
Total Liabilities.................. $ 3,672
---------
NET ASSETS.............................. $ 600,361
=========
NET ASSETS CONSIST OF:
Paid-in capital......................... $ 609,314
Accumulated net realized loss on investment
transactions......................... (12,624)
Unrealized appreciation of investments.. 3,642
Accumulated undistributed net investment
income............................... 29
---------
Net assets applicable to
outstanding shares................. $ 600,361
=========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 61,710
=========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $9.73
=========
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Interest............................. $ 38,185
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 2,987
Administrator fee (Note 3)........... 331
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrator............ 2,371
Custodian fee (Note 1D).............. 17,417
Audit................................ 8,362
Legal............................... 1,807
Printing............................. 584
Amortization of organization expense
(Note 1E).......................... 1,748
Miscellaneous........................ 658
---------
Total expenses................... $ 36,265
---------
Deduct --
Reduction of Custodian fee (Note 1D). $ 1,465
Reduction of Investment Adviser fee.. 2,987
Reduction of Administrator fee....... 331
Allocation of expense to the
Investment Adviser (Note 3)........ 25,513
---------
Total deducted................... $ 30,296
---------
Net expenses..................... $ 5,969
---------
Net investment income.......... $ 32,216
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment
transactions........................... $ 1,760
Change in unrealized appreciation
of investments......................... 694
---------
Net realized and unrealized gain..... $ 2,454
---------
Net increase in net assets from
operations........................... 34,670
=========
See notes to financial statements
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
================================================================================
Year Ended December 31,
-----------------------------------
STATEMENTS OF CHANGES 1997 1996
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income................ $ 32,216 $ 17,735
Net realized gain on investment
transactions....................... 1,760 560
Change in unrealized appreciation
(depreciation) of investments....... 694 (8,161)
---------- ----------
Net increase in net assets from
operations........................ $ 34,670 $ 10,134
Distributions to shareholders fro
net investment income (Note 2)........ (32,175) (17,735)
Net increase (decrease) from
Portfolio share transactions (Note 4).. (54,587) 333,490
---------- ----------
Net increase (decrease) i
net assets....................... $ (52,092) $ 325,889
NET ASSETS:
At beginning of year.................... 652,453 326,564
---------- ----------
At end of year......................... $ 600,361 $ 652,453
=========== ===========
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME........................ $ 29 $ -
=========== ===========
See notes to financial statements
<PAGE>
WRIGHT NEAR TERM BOND PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
FINANCIAL HIGHLIGHTS 1997 1996 1995 1994(5)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year. $ 9.700 $ 9.880 $ 9.330 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)......... $ 0.471 $ 0.440 $ 0.448 $ 0.324
Net realized and unrealized gain (loss) 0.029 (0.180) 0.550 (0.670)
-------- -------- -------- --------
Total income (loss) from investment
operations................... $ 0.500 $ 0.260 $ 0.998 $ (0.346)
-------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income........ $ (0.470) $ (0.440) $ (0.448) $ (0.324)
-------- -------- -------- --------
Net asset value, end of year....... $ 9.730 $ 9.700 $ 9.880 $ 9.330
======== ======== ======== ========
Total Return(3).................... 5.1% 2.7% 10.9% (3.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 600 $ 652 $ 327 $ 451
Ratio of net expenses to average net
assets(1) ...................... 1.12%(4) 1.48%(4) 1.39%(4) 0.90%(2)
Ratio of net investment income to
average net assets(1) .......... 4.84% 4.49% 4.61% 3.43%(2)
Portfolio Turnover Rate.......... 38% 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 income (loss) per share and the ratios would
have been as follows:
1997 1996 1995 1994(5)
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) per share $ 0.050 $ (0.331) $ (0.438) $ (0.095)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses........................ 5.45% 9.35% 10.51% 5.34% (2)
======== ======== ======== ========
Net investment income (loss).... 0.51% (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 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 0.90%, 0.89% and 0.90%, respectively.
(5)For the period from January 6, 1994 (start of business) to December 31, 1994.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO (WTRBP)
PORTFOLIO OF INVESTMENTS
December 31, 1997
===============================================================================
<TABLE>
<CAPTION>
Face Coupon Maturity Market Current Yield To
Amount Description Rate Date Price Value Yield(1)Maturity(1)
- -----------------------------------------------------------------------------------------------------------------
CORPORATE BONDS
INDUSTRIALS - 4.5%
<S> <C> <C> <C> <C> <C> <C> <C>
$ 40,000 Campbell Soup Co. 6.900% 10/15/06 $104.028 $ 41,611 6.63% 6.29%
----------
UTILITIES - 14.0%
$ 20,000 AT&T Corp. 7.750% 03/01/07 $109.640 $ 21,928 7.07% 6.34%
25,000 Bellsouth Telecommunication7.000% 02/01/05 104.554 26,139 6.70% 6.20%
30,000 Duke Power Co. 7.000% 09/01/05 103.142 30,943 6.79% 6.47%
50,000 Tennessee Valley Authority 6.125% 07/15/03 99.406 49,703 6.16% 6.25%
----------
$128,713
U.S. GOVERNMENT AGENCIES - 35.7%
$ 50,000 Federal Farm Credit Bank 5.270% 02/01/99 $ 99.406 $ 49,702 5.30% 5.84%
50,000 Federal Home Loan Banks 7.780% 02/03/00 103.828 51,914 7.49% 5.81%
50,000 Federal National Mtg Assn. 7.490% 03/02/05 108.297 54,149 6.92% 6.05%
167,855 GNMA 442193 7.500% 12/15/26 102.437 171,945 7.32% 7.30%
----------
$327,710
U.S. TREASURIES - 32.8%
$ 50,000 U.S. Treasury Bond 7.500% 11/15/16 $116.719 $ 58,360 6.43% 6.01%
125,000 U.S. Treasury Note 6.500% 08/15/05 104.344 130,430 6.23% 5.79%
110,000 U.S. Treasury Note 5.875% 11/15/05 100.531 110,584 5.84% 5.79%
----------
$299,374
----------
TOTAL INVESTMENTS (identified cost, $763,531) -- 87.0% $797,408
OTHER ASSETS, LESS LIABILITIES -- 13.0% 119,266
----------
NET ASSETS -- 100.0% $916,674
==========
Average Maturity -- 6.5 Years(1)(2)
(1) Unaudited.
(2) Excludes GNMA 442193
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
- -------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $ 763,531
Unrealized appreciation............ 33,877
---------
Total value (Note 1A)............ $ 797,408
Cash................................. 95,398
Interest receivable.................. 13,321
Deferred organizational costs (Note 1E) 1,656
Receivable from Investment Adviser... 12,825
---------
Total Assets....................... $ 920,608
---------
LIABILITIES:
Payable for Fund shares reacquired... $ 807
Trustees fees payable................ 450
Accrued expenses..................... 2,677
---------
Total Liabilities.................. $ 3,934
---------
NET ASSETS.............................. $ 916,674
=========
NET ASSETS CONSIST OF:
Paid-in capital......................... $ 897,820
Accumulated net realized loss on investment
transactions......................... (15,164)
Unrealized appreciation of investments.. 33,877
Accumulated undistributed net investment
income............................... 141
---------
Net assets applicable to
outstanding shares................. $ 916,674
=========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 94,029
=========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $9.75
=========
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Interest............................. $ 52,124
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 3,681
Administrator fee (Note 3)........... 409
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrator............ 2,381
Custodian fee (Note 1D).............. 17,714
Audit services....................... 8,362
Legal................................ 2,182
Printing............................. 586
Amortization of organization expense
(Note 1E).......................... 1,748
Miscellaneous........................ 1,287
---------
Total expenses................... $ 38,350
---------
Deduct --
Reduction of Custodian fee........... $ 1,115
Reduction of Investment Adviser fee.. 3,681
Reduction of Administrator fee....... 409
Allocation of expense to the
Investment Adviser (Note 3)........ 25,826
---------
Total deducted................... $ 31,031
---------
Net expenses..................... $ 7,319
---------
Net investment income.......... $ 44,805
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment
transactions........................... $ 141
Change in unrealized appreciation
of investments......................... 24,792
---------
Net realized and unrealized gain..... $ 24,933
---------
Net increase in net assets
from operations..................... $ 69,738
=========
See notes to financial statements
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
===============================================================================
Year Ended December 31,
-----------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 1997 1996
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income................ $ 44,805 $ 31,137
Net realized gain (loss) on
investment transactions............. 141 (831)
Change in unrealized appreciation
(depreciation) of investments........ 24,792 (17,000)
---------- ----------
Net increase in net assets
from operations................... $ 69,738 $ 13,306
---------- ----------
Distributions to shareholders --
From net investment income (Note 2).. $ (44,748) $ (31,137)
In excess of net investment income... -- (36)
---------- ----------
Total distributions................ $ (44,748) $ (31,173)
---------- ----------
Net increase from Portfolio share
transactions (Note 4).................. $ 102,192 $ 269,677
---------- ----------
Net increase in net assets.......... $ 127,182 $ 251,810
NET ASSETS:
At beginning of year.................... 789,492 537,682
---------- ----------
At end of year.......................... $ 916,674 $ 789,492
========== ===========
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN
EXCESS OF) NET INVESTMENT INCOME............ $ 141 $ (36)
========== ===========
See notes to financial statements
<PAGE>
WRIGHT TOTAL RETURN BOND PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
FINANCIAL HIGHLIGHTS 1997 1996 1995 1994 1993(2)(6)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year. $ 9.470 $ 9.830 $ 8.840 $ 9.930 $ 10.000
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)......... $ 0.518 $ 0.447 $ 0.469 $ 0.398 $ 0.019
Net realized and unrealized gain (loss)
on investments.................. 0.280 (0.360) 0.990 (1.090) (0.070)
-------- -------- -------- -------- --------
Total income (loss) from investment
operations..................... $ 0.798 $ 0.087 $ 1.459 $ (0.692) $ (0.051)
-------- -------- -------- -------- --------
Less Distributions to Shareholders:
From net investment income....... $ (0.128) $ (0.447) $ (0.469) $ (0.398) $ (0.019)
-------- -------- -------- -------- --------
Net asset value, end of year....... $ 9.750 $ 9.470 $ 9.830 $ 8.840 $ 9.930
======== ======== ======== ======== ========
Total Return(3).................... 8.5% 1.0% 16.9% (7.1%) (0.5%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $ 917 $ 789 $ 538 $ 520 $ 167
Ratio of net expenses to average net
assets(1)....................... 1.03%(5) 1.26%(5) 1.26%(5) 0.90% 0.70%(4)
Ratio of net investment income to
average net assets(1)........... 5.46% 4.77% 5.09% 4.49% 2.50%(4)
Portfolio Turnover Rate.......... 1% 51% 186% 23% 0%
(1)During the years ended December 31, 1997, 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 1996 1995 1994
----------------------------------------------
Net investment income (loss) per share $ 0.173 $ 0.060 $ (0.187) $ (0.143)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses........................ 4.67% 5.39% 8.38% 7.00%
======== ======== ======== ========
Net investment income (loss).... 1.82% 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, 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 0.89%, 0.90% and 0.90%, respectively.
(6)For the period from December 7, 1993 (start of business) to December 31,
1993.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO (WSBCP)
PORTFOLIO OF INVESTMENTS
December 31, 1997
================================================================================
Shares Value
- --------------------------------------------------------------------------------
Investments -- 98.0%
APPAREL -- 2.2%
VF Corp..................... 1,600 $ 73,500
-----------
AUTOMOTIVE -- 6.2%
Chrysler Corporation......... 1,800 $ 63,338
Eaton Corporation............ 900 80,325
Modine Mfg. Co............... 2,000 68,250
-----------
$ 211,913
-----------
CHEMICALS -- 6.9%
Cooper Tire & Rubber Co...... 2,600 $ 63,374
Morton International Inc..... 1,300 44,688
PPG Industries, Incorporated. 900 51,413
Rohm & Haas Company.......... 800 76,600
-----------
$ 236,075
-----------
CONSTRUCTION -- 10.6%
Caterpillar Inc.............. 1,000 $ 48,562
Fleetwood Enterprises, Inc... 1,900 80,631
Medusa....................... 1,500 62,719
Toll Brothers*............... 3,000 80,250
Vulcan Materials Co.......... 900 91,913
-----------
$ 364,075
-----------
DIVERSIFIED -- 2.3%
Crane Co..................... 1,800 $ 78,074
-----------
ELECTRONICS -- 5.7%
Compaq Computer.............. 950 $ 53,615
Raytheon Company............. 900 45,450
Stratus Computer, Inc*....... 1,200 45,375
Sun Microsystems, Inc.*...... 1,300 51,838
-----------
$ 196,278
-----------
FINANCIAL -- 19.3%
Ambac Financial Group, Inc... 1,500 $ 69,000
BB&T Corporation............. 1,700 108,905
Edwards (A.G.), Inc.......... 2,850 113,288
First Virginia Banks, Inc.... 1,800 93,038
Pacific Century Financial Corp 2,800 69,300
Quick & Reilly Group......... 2,350 101,050
Southtrust Corp.............. 1,700 107,844
-----------
$ 662,425
-----------
MACHINERY & EQUIPMENT -- 8.0%
Deere & Co................... 1,000 $ 58,312
Flowserve Corporation........ 1,900 53,081
Ingersoll Rand Co............ 1,800 72,900
Pitney Bowes, Inc............ 1,000 89,938
-----------
$ 274,231
-----------
METAL PRODUCERS -- 2.1%
Carpenter Technology......... 1,500 $ 72,093
-----------
METAL PRODUCTS MANUFACTURERS -- 6.3%
Kaydon Corp.................. 2,400 $ 78,300
Snap-on Inc.................. 1,500 65,438
Trinity Industries........... 1,600 71,400
-----------
$ 215,138
-----------
PRINTING & PUBLISHING -- 4.4%
American Greetings Corp...... 1,700 $ 66,513
Banta Corporation............ 2,200 59,400
Standard Register............ 700 24,325
-----------
$ 150,238
-----------
<PAGE>
RECREATION -- 6.1%
Brunswick Corporation........ 2,000 $ 60,625
Kingworld Productions Inc.... 1,700 98,175
Ryan's Family Steak Houses*.. 5,700 48,806
-----------
$ 207,606
-----------
RETAILERS -- 1.8%
Lands' End, Inc*............. 1,800 $ 63,113
-----------
TRANSPORTATION - 5.5%
ASA Holdings, Inc............ 2,400 $ 68,250
Comair Holdings, Inc......... 2,550 61,519
Illinois Central Corp........ 1,700 57,906
-----------
$ 187,675
-----------
UTILITIES -- 6.1%
Century Telephone Enterprises 1,600 $ 79,700
Duke Power Company........... 1,100 60,912
Nipsco Industries............ 1,400 69,213
-----------
$ 209,825
-----------
MISCELLANEOUS -- 4.5%
Arrow Electronics, Inc*...... 1,600 $ 51,900
Marshall Industries*......... 1,500 45,000
Sierra Health Services, Inc*. 1,700 57,163
-----------
$ 154,063
-----------
TOTAL INVESTMENTS -- 98.0%
(identified cost, $2,468,289) $ 3,356,322
OTHER ASSETS
LESS LIABILITIES -- 2.0% 68,709
-----------
NET ASSETS -- 100.0% $ 3,425,031
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $2,468,289
Unrealized appreciation............ 888,033
---------
Total value (Note 1A)............ $3,356,322
Cash................................. 74,776
Dividends receivable................. 3,519
Deferred organizational costs (Note 1E) 1,785
---------
Total Assets....................... $ 3,436,402
---------
LIABILITIES:
Payable for Fund shares reacquired... $ 3,040
Investment Adviser fee payable....... 4,203
Administrator fee payable............ 1,288
Trustees fees payable................ 450
Accrued expenses..................... 2,390
---------
Total Liabilities.................. $ 11,371
---------
NET ASSETS.............................. $3,425,031
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $2,188,405
Accumulated net realized gain on investment
transactions......................... 307,899
Unrealized appreciation of investments.. 888,033
Accumulated undistributed net investment
income............................... 40,694
---------
Net assets applicable to
outstanding shares...................$3,425,031
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 218,888
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $15.65
==========
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 56,638
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 19,920
Administrator fee (Note 3)........... 1,532
Compensation of Trustees not
affiliated with the Investment
Adviser or Administrato............. 2,371
Custodian fee (Note 1D).............. 17,029
Audit................................ 10,062
Legal................................ 2,182
Printing............................. 586
Amortization of organization expense
(Note 1E).......................... 1,748
Miscellaneous........................ 8
---------
Total expenses................... $ 55,438
---------
Deduct --
Reduction of Investment Adviser fee.. $ 15,717
Reduction of Custodian fee (Note 1D). 4,601
---------
Total deducted................... $ 20,318
---------
Net expenses..................... $ 35,120
---------
Net investment income.......... $ 21,518
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment
transactions.......................... $ 307,898
Change in unrealized appreciation
of investments........................ 521,436
---------
Net realized and unrealized gain.... $ 829,334
---------
Net increase in net assets from
operations......................... $ 850,852
==========
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
================================================================================
Year Ended December 31,
-----------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 1997 1996
- --------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
From operations --
Net investment income............... 21,518 $ 29,861
Net realized gain on investment
transactions....................... 307,898 427,875
Change in unrealized appreciation
of investments..................... 521,436 92,485
---------- ----------
Net increase in net assets
from operations................$ 850,852 $ 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).............. (427,615) --
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).... 324,836 (121,037)
---------- ----------
Net increase in net assets...... $ 756,567 $ 429,634
NET ASSETS:
At beginning of year................ 2,668,464 2,238,830
---------- ----------
At end of year...................... $3,425,031 $2,668,464
========== ===========
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME..................... $ 40,694 $ 39,484
========== ===========
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
===============================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
FINANCIAL HIGHLIGHTS 1997 1996 1995 1994(6)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year............. $ 14.000 $ 11.410 $ 9.320 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income(1)..................... $ 0.110 $ 0.170 $ 0.100 $ 0.092
Net realized and unrealized gain (loss) on investments 3.780 2.430 2.345 (0.712)
-------- -------- -------- --------
Total income (loss) from investment operations $ 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 (2.240) -- (0.285) --
-------- -------- -------- --------
Total distributions......................... $ (2.240) $ (0.010) $ (0.355) $ (0.060)
-------- -------- -------- --------
Net asset value, end of year................... $ 15.650 $ 14.000 $ 11.410 $ 9.320
======== ======== ======== ========
Total Return(3)................................ 32.1% 22.8% 26.3% (6.2%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 3,425 $ 2,668 $ 2,239 $ 1,452
Ratio of net expenses to average net assets(1) 1.30%(4) 1.27%(4) 1.60%(4) 1.15%(2)
Ratio of net investment income to average net assets(1) 0.70% 1.14% 0.96% 1.16%(2)
Portfolio Turnover Rate...................... 40% 68% 64% 74%
Average commision rate paid (5).............. $ 0.0610 $ 0.0784 -- --
(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:
1997 1996 1995 1994(6)
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) per share......... $ 0.030 $ 0.066 $ (0.017) $ (0.078)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 1.81% 1.97% 2.72% 3.30% (2)
======== ======== ======== ========
Net investment income (loss)................. 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 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 1.15%, 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.
See notes to financial statements
</TABLE>
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
PORTFOLIO OF INVESTMENTS
December 31, 1997
===============================================================================
Shares Value
- -------------------------------------------------------------------------------
INVESTMENTS -- 94.0%
AUSTRALIA -- 2.2%
Australian Gas & Light Co.... 4,700 $ 32,761
-----------
CANADA -- 9.2%
Linamar Corporation.......... 500 $ 29,000
Loblaw Companies Ltd......... 2,300 41,627
Magna Int'l. Inc. Class A.... 500 31,306
Power Financial Corp......... 800 27,953
-----------
$ 129,886
-----------
DENMARK -- 4.9%
Icopal....................... 120 $ 25,754
Novo Nordisk A/S - B......... 300 42,923
-----------
$ 68,677
-----------
FINLAND-- 3.8%
Orion A/S - B................ 1,190 $ 30,610
Metra OY..................... 1,000 23,500
-----------
$ 54,110
-----------
FRANCE -- 6.3%
Pinault-Printemps Redoute SA. 45 $ 24,034
SAGEM SA..................... 60 26,746
Synthelabo................... 300 37,525
-----------
$ 88,305
-----------
GERMANY -- 4.5%
Bayerische Motoren Werke A... 50 $ 37,403
Dyckerhoff AG................ 100 26,418
-----------
$ 63,821
-----------
HONG KONG -- 1.4%
HSBC Holdings PLC (HK $)..... 800 $ 19,721
-----------
IRELAND -- 1.9%
Greencore PLC................ 5,610 $ 26,607
-----------
JAPAN -- 6.3%
Bridgestone Corporation...... 1,000 $ 21,674
Honda Motor Co., Ltd......... 1,000 36,685
Shohkoh Fund & Co., Ltd...... 100 30,482
-----------
$ 88,841
-----------
MEXICO -- 4.3%
Grupo Industrial Maseca-B.... 23,000 $ 23,610
Telefonos de Mexico SA....... 13,000 36,410
-----------
$ 60,020
-----------
NETHERLANDS -- 12.3%
CSM N.V. Cert................ 500 $ 22,206
Getronics N.V................ 616 19,637
Hagemeyer N.V................ 806 33,688
Koninklijke Ahold N.V........ 1,204 31,455
Nutricia Verenidge Bedrijven. 1,008 30,591
Verenigde Nederlandse........ 1,300 36,692
-----------
$ 174,269
-----------
SOUTH AFRICA -- 3.7%
Sasol Beperk Limited......... 2,600 $ 27,248
Tiger Oats Limited........... 1,800 24,855
-----------
$ 52,103
-----------
SPAIN -- 7.8%
Banco Popular Espanola....... 600 $ 41,941
Endesa S.A................... 2,000 36,375
Repsol S.A................... 750 31,998
-----------
$ 110,314
-----------
<PAGE>
SWEDEN -- 1.5%
Atlas Copco AB............... 700 $ 20,910
-----------
SWITZERLAND -- 5.8%
Nestle-Sponsored............. 350 $ 26,264
Novartis AG-ADR.............. 450 36,560
Schweizerische Rueckverisch.. 10 18,685
-----------
$ 81,509
-----------
UNITED KINGDOM -- 18.1%
Kwik-Fit Holdings PLC........ 5,500 $ 31,948
Powerscreen Int'l............ 3,000 30,289
Provident Financial PLC...... 1,700 22,475
Scapa Group PLC.............. 10,000 38,504
Smiths Industries............ 2,400 33,633
Tesco PLC.................... 5,137 42,021
Wm. Morrison Supermarkets PLC 6,000 22,805
Wolseley .................... 4,154 33,219
-----------
$ 254,894
-----------
TOTAL INVESTMENTS -- 94.0%
(identified cost, $1,125,897) $ 1,326,748
OTHER ASSETS
LESS LIABILITIES -- 6.0% 83,940
-----------
NET ASSETS -- 100.0% $ 1,410,688
===========
ADR - American Depository Receipt
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
ASSETS:
Investments --
Identified cost.................... $1,125,897
Unrealized appreciation........... 200,851
---------
Total value (Note 1A)............ $ 1,326,748
Cash................................. 74,836
Receivable for investments sold...... 25,709
Dividends receivable................. 2,659
Deferred organizational costs (Note 1E) 1,781
Receivable from Investment Adviser... 9,630
Receivable for foreign taxes withheld 587
---------
Total assets....................... $1,441,950
---------
LIABILITIES:
Due to bank.......................... $ 474
Payable for Fund shares reacquired... 1,268
Trustees' fees payable............... 450
Accrued expenses..................... 3,890
Payable for investments purchased.... 25,180
---------
Total liabilities.................. $ 31,262
---------
NET ASSETS.............................. $1,410,688
==========
NET ASSETS CONSIST OF:
Paid-in capital......................... $1,134,367
Accumulated net realized gain on investment
and foreign currency transactions.... 70,543
Unrealized appreciation of investments and
translations of assets and liabilities in
foreign currencies................... 200,777
Accumulated undistributed net
investment income.................... 5,001
---------
Net assets applicable to
outstanding shares................. $ 1,410,688
==========
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 119,536
==========
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST............... $11.80
==========
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Income --
Dividends............................ $ 34,620
Less: Foreign taxes.................. (3,263)
---------
Total investment income............ $ 31,357
---------
Expenses --
Investment Adviser fee (Note 3)...... $ 11,960
Administrator fee (Note 3)........... 747
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator 2,371
Custodian fee (Note 1D).............. 33,098
Audit................................ 10,062
Legal................................ 2,182
Printing............................. 586
Amortization of organization expense
(Note 1E).......................... 1,748
Miscellaneous........................ 1,521
---------
Total expenses................... $ 64,275
---------
Deduct --
Reduction of Investment Adviser fee.. $ 11,960
Reduction of Admininstrator fee...... 747
Reduction of Custodian fee (Note 1D). 2,321
Allocation of expense to the
Investment Adviser (Note 3)....... 21,630
---------
Total deducted................... $ 36,658
---------
Net expenses..................... $ 27,617
---------
Net investment income.......... $ 3,740
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment and
foreign currency transactions........ $ 70,743
Change in unrealized appreciation of investments
and translation of assets and liabilities
in foreign currency.................. 16,476
---------
Net realized and unrealized gain..... $ 87,219
---------
Net increase in net assets from
operations.......................... $ 90,959
==========
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
================================================================================
Year Ended December 31,
-----------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 1997 1996
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income (loss)....... $ 3,740 $ (5,346)
Net realized gain on investments
and foreign currency transactions. 70,743 89,355
Change in unrealized appreciatio
of investments and translation of
assets and liabilities in
foreign currency.................. 16,476 126,226
---------- ----------
Net increase in net assets
from operations.................. $ 90,959 $ 210,235
Distributions to shareholders from
net realized gain on investment
transactions (Note 2)............... (81,308) --
Undistributed net investment loss
included in price of shares sold
and redeemed (Note 1F).............. -- (240)
Net decrease from Portfolio share
transactions (exclusive of amounts
allocated to net investment
income) (Note 4).................... (56,035) (117,794)
---------- ----------
Net increase (decrease) in
net assets...................... $ (46,384) $ 92,201
NET ASSETS:
At beginning of year................. 1,457,072 1,364,871
---------- ----------
At end of year....................... $1,410,688 $1,457,072
=========== ===========
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME...................... $ 5,001 $ 2,053
=========== ===========
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
================================================================================
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
FINANCIAL HIGHLIGHTS 1997 1996 1995 1994(6)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year............. $ 11.810 $ 10.060 $ 9.140 $ 10.000
-------- -------- -------- --------
Income from Investment Operations:
Net investment income (loss)(1).............. $ 0.032 $ (0.043) $ 0.003 $ 0.031
Net realized and unrealized gain (loss)...... 0.588 1.793 0.967 (0.886)
-------- -------- -------- --------
Total income (loss) from investment operations $ 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 (0.630) -- -- --
Tax distribution from paid-in capital....... -- -- (0.032) --
-------- -------- -------- --------
Total distributions declared to shareholders $ (0.630) $ -- $ (0.050) $ (0.005)
-------- -------- -------- --------
Net asset value, end of year................... $ 11.800 $ 11.810 $ 10.060 $ 9.140
======== ======== ======== ========
Total Return(3)................................ 5.7% 17.4% 10.6% (8.1%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted)........ $ 1,411 $ 1,457 $ 1,365 $ 1,229
Ratio of net expenses to average net assets(1) 2.00%(4) 2.31%(4) 2.28% (4) 1.80% (2)
Ratio of net investment income (loss) to average net
assets(1)................................... 0.25% (0.42)% 0.06% 0.19% (2)
Portfolio Turnover Rate...................... 94% 44% 31% 0%
Average commission rate paid (5)............. $ 0.0361 $ 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 income (loss) per share........ $ (0.262) $ (0.253) $ (0.920) $ (0.434)
======== ======== ======== ========
Ratios (As a percentage of average net assets):
Expenses..................................... 4.30% 4.37% 4.18% 4.65% (2)
======== ======== ======== ========
Net investment income (loss)................. (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 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 1.85%, 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.
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 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. At December 31, 1997, the Trust, for federal income tax
purposes, had a capital loss carryover of $12,614 for WNTBP and $15,163 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
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:
<PAGE>
12/31 WNTBP WTRBP
- -------------------------------------------------------------------------------
2002 $ 3,451 $ 439
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. 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.
I. 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. 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.
During the year ended December 31, 1997, the following amounts were
reclassified due to differences between book and tax accounting created
primarily by the deferral of certain losses for tax purposes and character
reclassifications between net investment income and net realized capital gains.
Accumulated Undistributed Net Undistributed
Realized Gain (Loss) on Investment Net Investment
Paid In Capital and Foreign Currency Transactions Income (Loss)
- --------------------------------------------------------------------------------
WNTBP $ (79) $ 91 $ (12)
WTRBP (180) 60 120
WSBCP 29,061 (259) (28,802)
WIBCP 65 727 (792)
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged TheWinthrop 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 year ended December 31, 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%
- --------------------------------------------------------------------------------
<PAGE>
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:
WNTBP WTRBP WSBCP WIBCP
- -------------------------------------------------------------------------------
Reduction of Investment
Adviser fees $ 2,987 $ 3,681 $15,717 $11,960
Allocation of expense to
the Investment Adviser 25,513 25,826 - 21,630
Reduction of Administrator
fees 331 409 - 747
Certain of the Trustees and officers of the Trust are directors/trustees
and/or officers of the above organizations.
(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>
Year Ended Year Ended
December 31, 1997 December 31, 1996
-----------------------------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
Wright Near Term Bond Portfolio --
<S> <C> <C> <C> <C>
Sales.................................. 26,326 $ 254,327 58,895 $ 573,302
Issued to shareholders in payment
of distributions declared............ 3,323 32,182 1,825 17,735
Redemptions............................ (35,177) (341,096) (26,542) (257,547)
-------- ---------- -------- ----------
Net increase (decrease)............ (5,528) $ (54,587) 34,178 $ 333,490
========= =========== ========= ===========
Wright Total Return Bond Portfolio --
Sales................................. 19,777 $ 188,388 54,345 $ 510,526
Issued to shareholders in payment
of distributions declared............ 4,706 44,759 3,309 31,173
Redemptions............................ (13,865) (130,955) (28,919) (272,022)
-------- ---------- -------- ----------
Net increase....................... 10,618 $ 102,192 28,735 $ 269,677
========= =========== ========= ===========
Wright Selected Blue Chip Portfolio --
Sales.................................. 19,861 $ 283,616 62,148 $ 764,506
Issued to shareholders in payment
of distributions declared............ 34,653 419,299 172 2,069
Redemptions............................ (26,212) (378,079) (68,010) (887,612)
-------- ---------- -------- ----------
Net increase (decrease)............ 28,302 $ 324,836 (5,690) $ (121,037)
========= =========== ========= ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
-------------------------------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
Wright International Blue Chip Portfolio --
<S> <C> <C> <C> <C>
Sales.................................. 20,821 $ 237,904 45,060 $ 493,518
Issued to shareholders in payment
of distributions declared............ 7,439 81,308 -- --
Redemptions............................ (32,123) (375,247) (57,376) (611,312)
-------- ---------- -------- ----------
Net decrease....................... (3,863) $ (56,035) (12,316) $ (117,794)
========= =========== ========= ===========
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales and maturities of investments, other than short-term
obligations, for the year ended December 31, 1997, were as follows:
<TABLE>
<CAPTION>
Wright Wright Wright Wright
Near Term Total Return Selected International
Bond Portfolio Bond Portfolio Blue Chip Portfolio Blue Chip Portfolio
- -----------------------------------------------------------------------------------------------------------------
Purchases --
<S> <C> <C> <C> <C>
Non-U.S. Gov't Obligations.... $ - $ 39,689 $ 1,210,929 $ 1,317,088
============== ============== ============== ==============
U.S. Gov't Obligations........ $ 229,254 $ - $ - $ -
============== ============== ============== ==============
Sales --
Non-U.S. Gov't Obligations.... $ - $ - $ 1,158,242 $ 1,464,171
============== ============== ============== ==============
U.S. Gov't Obligations........ $ 242,220 $ 10,050 $ - $ -
============== ============== ============== ==============
</TABLE>
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation (depreciation) in value of the
investments owned at December 31, 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................... $ 573,276 $ 763,531 $ 2,468,289 $ 1,132,913
============= ============= ============= =============
Gross unrealized appreciation.... $ 4,421 $ 33,877 $ 942,881 $ 236,603
Gross unrealized depreciation.... (789) - (54,848) (42,768)
------------ ------------ ------------ ------------
Net unrealized appreciation... $ 3,632 $ 33,877 $ 888,033 $ 193,835
============= ============= ============= =============
</TABLE>
<PAGE>
(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.
(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 December 31, 1997.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of
The Wright Managed Blue Chip Series Trust:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of The Wright Managed Blue Chip Series Trust (the
"Trust") (comprising, respectively, the Wright Near Term Bond Portfolio, Wright
Total Return Bond Portfolio, Wright Selected Blue Chip Portfolio and Wright
International Blue Chip Portfolio series) as of December 31, 1997, the related
statements of operations for the year then ended, the statements of changes in
net assets for the years ended December 31, 1997 and 1996, and the financial
highlights for each of the years in the five-year period ended December 31,
1997. These financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
December 31, 1997, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the above respective
Portfolios constituting The Wright Managed Blue Chip Series Trust as of December
31, 1997, the results of their operations, the changes in their net assets, and
their financial highlights for the respective stated periods in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 30, 1998
<PAGE>
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
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
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
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
