As filed with the Securities and Exchange Commission on February 26 ,1999
1933 Act File No. 33-61314
1940 Act File No. 811-7654
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [x]
POST-EFFECTIVE AMENDMENT NO. 7 [x]
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 8 [x]
The Wright Managed Blue Chip Series Trust
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(Exact Name of Registrant as Specified in Charter)
24 Federal Street, Boston, Massachusetts 02110
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(Address of Principal Executive Offices)
617-482-8260
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(Registrant's Telephone Number)
Alan R. Dynner
24 Federal Street, Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[x] On April 30, 1999 pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (b
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
WRIGHT
INVESTORS' SERVICE
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
PROSPECTUS
May 1, 1999
Wright Selected Blue Chip Equities Portfolio
Wright International Blue Chip Equities Portfolio
As with all mutual funds, the Securities and Exchange Commission has not
determined whether the funds are a good investment or whether the information in
this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.
<PAGE>
Table of Contents
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Page
The Wright Managed Blue Chip Series Trust: Overview............... 3
Information About the Funds
Wright Selected Blue Chip Equities Portfolio.............. 5
Wright International Blue Chip Equities Portfolio......... 6
Determining Share Price (NAV)...................................... 9
Purchase and Redemption of Shares.................................. 9
Dividends and Taxes................................................ 10
Managing the Funds................................................. 11
Financial Highlights
Wright Selected Blue Chip Equities Portfolio.............. 00
Wright International Blue Chip Equities Portfolio......... 00
How to Use this Prospectus:
Reading this prospectus will help you decide if investing in the Wright funds is
right for you. Please keep this prospectus for future reference. Included in
this prospectus are descriptions telling you about each fund's:
(Graphic -- ship's wheel)
OBJECTIVE: what the fund seeks to achieve.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGY: how the fund intends to achieve its objective
and the strategies used by Wright Investors' Service, the funds' investment
adviser.
(Graphic -- life preserver)
PRINCIPAL RISKS: the risks associated with the fund's primary investments.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST: decide if the fund is a suitable investment for you.
(Graphic -- ship's log)
PAST PERFORMANCE:the total return on your investment, including income from
dividends and interest, and the increase or decrease in price over various
periods.
<PAGE>
THE WRIGHT MANAGED BLUE CHIP INVESTMENT SERIES: OVERVIEW
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This prospectus offers funds that are available for purchase only by insurance
company separate accounts that fund certain variable annuity and variable life
insurance contracts. You should read this prospectus together with the
prospectus for those contracts.
WRIGHT INVESTORS' SERVICE, INC. AND THE APPROVED WRIGHT INVESTMENT LIST (AWIL)
Wright is a leading independent international investment management and advisory
firm with more than 35 years experience. Wright manages about $4.5 billion of
assets in portfolios of all sizes and styles as well as a family of mutual
funds. The company developed WorldscopeR, one of the world's largest and most
complete databases of financial information, which currently includes more than
19,000 corporations in 49 nations.
Using a bottom-up fundamental approach, Wright systematically identifies those
companies in the WorldscopeR database that meet minimum standards of prudence
and thus are suitable for consideration by fiduciary investors. These companies
are then subjected to extensive analysis and evaluation to identify those which
meet Wright's fundamental standards of investment quality. These standards focus
on liquidity, financial strength, stability of profits and growth.
Only those companies meeting or exceeding these standards are eligible for
selection by the Wright Investment Committee for inclusion on an AWIL. There are
separate AWILs for U.S. companies, non-U.S. companies and small companies.
Slightly different standards may apply to each list. For example, smaller
companies may have a lower market capital requirement but a higher standard of
profitability and growth. All the companies on the Lists are soundly financed
"Blue Chips" with established records of earnings profitability and equity
growth. All have established investment acceptance and active, liquid markets.
Securities are selected from the various approved Lists to meet the objectives
and strategies of each fund.
The investment process at Wright is directed and controlled by an investment
committee of eight experienced analysts. The committee makes all decisions for
the selection, purchase and sale of securities.
- -----SIDE BAR TEXT-----
Fundamental Analysis
The analysis of company financial statements to forecast future price
movements using past records of assets, earnings, sales, products, management
and markets. It differs from technical analysis which relies on price and volume
movements of stocks and does not concern itself with financial statistics.
"Bottom-Up" Approach to Investing
The analysis of company information before considering the impact of
industry and economic trends. It differs from the "top-down" approach which
looks first at the economy, then the industry and lastly the company.
- -----END SIDE BAR TEXT-----
A WORD ABOUT RISK
Before you invest in any mutual fund, you should understand the risks involved.
Two basic risks are prevalent in mutual fund investing:
o market risk--when the price of a security falls, the value of the fund's
investments may fall and you could lose money on your investment
o management risk--the adviser's strategy may not produce the expected
results, causing losses.
There are other risks specific to particular types of funds. These are described
in this prospectus. The funds can not eliminate risk or assure achievement of
their objectives. You may lose money if the risks are realized when you sell
your shares.
<PAGE>
WRIGHT SELECTED BLUE CHIP EQUITIES PORTFOLIO
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CUSIP: 98235A504
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks to provide long-term capital appreciation and, secondarily,
current income.
(Graphic --compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in the equity securities of well-established quality companies
on an AWIL. The focus is on individual stock selection instead of trying to
predict which industries or sectors will perform best. Selections are limited to
those companies whose current operations reflect defined, quantified
characteristics which Wright believes are likely to provide comparatively
superior total investment return.
Wright considers recent valuations and price/earnings momentum when
deciding which companies present the best value in terms of current price, and
current and forecasted earnings. Selected companies may not currently pay
dividends on their shares. The fund's investments are equally weighted.
Capitalization (number of shares outstanding times the price of the shares) of
companies is not a consideration. Companies can be either large or small. At the
end of 1998, the fund's median market capitalization was that of a mid cap
portfolio. Professional investment personnel characterize the fund as a growth
fund with a value bias.
Typically, the fund sells an individual security when its value exceeds 2
times its normal value position in the portfolio, the security no longer meets
the standard of an AWIL, or it ceases to meet the investment criteria described
above.
(Graphic -- life preserver)
PRINCIPAL RISKS
In addition to normal market and management risks, fund performance will be
adversely affected if:
o Mid cap stocks fall out of favor with the market and returns trail
the overall stock market
o Selected companies remain undervalued.
When the market is unfavorable, the fund's assets may be held in cash or
invested in short-term obligations. Although the fund would do this to reduce
losses, defensive investments may hurt the fund's efforts to achieve its
investment objective.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
You may be interested in the fund if you are seeking an actively managed common
stock investment for total investment return consisting of price appreciation
plus income and intend to make a long-term investment commitment.
(Graphic -- ship's log)
PAST PERFORMANCE
The information on the next page shows the fund's performance for the life of
the fund through December 31, 1998. These returns include reinvestment of all
dividends and capital gain distributions, and reflect fund expenses. Performance
figures do not reflect expenses incurred from investing through an insurance
company variable contract. Please refer to the contract prospectus for more
information on expenses. As with all mutual funds, past performance does not
guarantee future results.
<PAGE>
The bar chart illustrates the risk of investing in the fund by showing how
volatile the fund's performance has been for each full calendar year for the
life of the fund.
Year-by-Year Total Return as of December 31
40%
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30% 32.08%
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20% 26.25% 22.80%
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10%
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0%
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(10)% -6.19% -2.65%
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(20)%
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1994 1995 1996 1997 1998
Best quarter:16.57% (4th quarter 1998) Worst quarter: -20.93% (3rd quarter 1998)
The fund's average annual return is compared with the Standard & Poor's 400 Mid
Cap Index (S&P 400). While the fund does not seek to match the returns of the
S&P 400, this index is a good indicator of mid cap stock market performance. The
S&P 400, unlike the fund, does not incur fees or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 5 Years 1/4/94
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Selected Blue Chip Portfolio -2.65% 13.37%
S&P Mid-Cap 400 19.09% n/a
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP EQUITIES PORTFOLIO
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CUSIP: 98235A603
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks long-term capital appreciation.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in the equity securities of well-established non-U.S.
companies. The fund only invests in securities on the International Approved
Wright Investment List (IAWIL). Wright focuses on individual stock selection
instead of trying to predict which country or industry will perform best.
Wright systematically reviews about 13,000 non-U.S. companies from 49
countries contained in Wright's Worldscope(R) database to identify those which
meet minimum standards for consideration for fiduciary investment. These
companies must have at least five years of audited records and show a record of
profitability over the last three years.
Wright selects well-established and profitable non-U.S. companies which
have their principal business activities in at least three different countries.
These companies can be of any size that qualifies for trading on the securities
market of the country where the company is located, other foreign exchanges or
for trading in the U.S. through American Depositary Receipts. Also, they may not
currently pay dividends on their shares. At the end of 1998, the fund was
over-weighted in the European countries and under-weighted in Japan and Pacific
rim countries.
Individual securities which no longer meet the standard for the IAWIL or
Wright's investment criteria are sold.
(Graphic -- life preserver)
PRINCIPAL RISKS
In addition to market and management risks, the fund is subject to
additional risks in connection with investing in foreign securities. These
include:
o currency risk (changes in foreign currency rates reducing the value of the
fund's assets)
o seizure, expropriation or nationalization of a company's assets
o less publicly available information
o the impact of political, social or diplomatic events.
The European countries have adopted the Euro as their common currency. Existing
national currencies of these countries are sub-currencies of the Euro until July
1, 2002, when the old currencies disappear entirely. The introduction of the
Euro presents some possible risks, which could adversely affect the value of
securities held by the fund, as well as possible adverse tax consequences. There
could be unpredictable effects on trade and commerce, resulting in increased
volatility for all financial markets.
When international security or currency markets are unfavorable, the fund's
assets may be held in cash or invested in short-term obligations. Although the
fund would do this to avoid losses, these measures may hurt the fund's efforts
to achieve its investment objective.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST
The fund is suitable for investors seeking a diversified
portfolio of quality non-U.S. equities offering ownership in some of the leading
companies throughout the world who are not adverse to the risks associated with
international investing. Also, as foreign stock prices may not move in concert
with U.S. market prices, the fund may be a useful way to diversify you
investments.
<PAGE>
(Graphic -- ship's log)
PAST PERFORMANCE
The information below shows the fund's performance for the life of the fund
through December 31, 1998. These returns include reinvestment of all dividends
and capital gain distributions, and reflect fund expenses. Performance figures
do not reflect expenses incurred from investing through an insurance company
variable contract. Please refer to the contract prospectus for more information
on expenses. As with all mutual funds, past performance does not guarantee
future results.
The bar chart shows how volatile the fund's performance has been by illustrating
the differences for each full calendar year for the life of the fund.
Year-by-Year Total Return as of December 31
30%
- -------------------------------------------------------------------------------
20%
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10% 10.07% 17.40%
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0% 5.67% 8.45%
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(10)% -8.55%
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(20)%
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1994 1995 1996 1997 1998
Best quarter:16.87% (4th quarter 1998) Worst quarter: -17.92% (3rd quarter 1998)
The fund's average annual return is compared with the FT/S&P Actuaries world ex
U.S. Index. While the fund does not seek to match the returns of the Index, it
is a good indicator of foreign stock market performance. The Index, unlike the
fund, does not incur fees or charges.
Average Annual Returns as of December 31, 1998
Since Inception
1 Year 5 Years 1/4/94
- -------------------------------------------------------------------------------
International Blue
Chip Portfolio 8.45% 6.27%
FT/S&P Actuaries
World ex U.S. Index 16.17% n/a
<PAGE>
INFORMATION ABOUT YOUR ACCOUNT
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DETERMINING SHARE PRICE (NAV)
The price at which you buy, sell or exchange fund shares is the net asset per
share price or NAV. This share price is determined by adding the value of the
fund's investments, cash and other assets, deducting liabilities, and then
dividing that amount by the total number of shares outstanding.
The NAV for each fund is calculated at the close of regular trading on the
New York Stock Exchange (normally 4:00 p.m. New York time) each day the Exchange
is open. It is not calculated on days the Exchange is closed. The price for a
purchase, redemption or exchange of fund shares is the next NAV calculated after
receipt of your request.
When the funds calculate their share price, they value their portfolio
securities at the last current sales price on the market where the security is
normally traded unless Wright deems that price to be not representative of
market values. This could happen if an event after the close of the market
seemed likely to have a major impact on the price of securities traded on the
market. Securities which cannot be valued at these closing prices are valued by
Wright at fair value in accordance with procedures adopted by the trustees.
The value of all assets and liabilities expressed in foreign currencies is
converted into U.S. dollars at the most recent market rates quoted by one or
more major banks shortly before the close of the Exchange. Foreign securities
trade during hours and on days that the Exchange is closed and the International
Blue Chip fund's NAV is not calculated. Although the fund's NAV may be affected,
you will not be able to purchase or redeem shares on these days.
PURCHASE AND REDEMPTION OF SHARES
Shares of the funds are available only through the purchase of variable annuity
or variable life insurance contracts issued by insurance companies through their
separate accounts. The variable insurance products may or may not make
investments in each fund described in this prospectus.
Each fund credits investments to an insurance company's separate account at
the NAV next determined after acceptance of the investment by the fund. Each
fund may suspend the offer of its shares and reserves the right to reject any
specific purchase order. A fund may refuse a purchase order if, in the adviser's
opinion, the order is of a size that would disrupt the management of a fund.
The redemption price of the shares of each fund will be the NAV determined
next after receipt by the fund of a redemption order from a separate account,
which may be more or less than the price paid for the shares. Each fund redeems
its shares on any business day. Redemptions are effected at the NAV per share
next determined after the fund receives and accepts the redemption request. Each
fund forwards redemption proceeds to the redeeming insurance company within
seven days after receipt of the redemption request. Under unusual circumstances,
a fund may suspend redemptions, as permitted by federal securities laws. Each
fund reserves the right to distribute portfolio securities to a redeeming
shareholder.
<PAGE>
DIVIDENDS AND TAXES
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DIVIDENDS AND TAXES
Each fund intends to qualify and be taxed as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code"), as
amended. In order to qualify to be taxed as a regulated investment company, each
fund must meet certain income and diversification tests and distribution
requirements. As a regulated investment company meeting these requirements, a
fund will not be subject to federal income tax on its net investment income and
net capital gains that it distributes to its shareholders. All income and
capital gain distributions are automatically reinvested in additional shares of
the fund at NAV and are includable in gross income of the separate accounts
holding such shares. Each fund expects most distributions to be from capital
gains. See the accompanying contract prospectus for information regarding the
federal income tax treatment of distributions to the separate accounts and to
holders of the contracts.
<PAGE>
MANAGING THE FUNDS
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Wright Investors' Service, Inc., manages the funds' investments. Wright is
located at 1000 Lafayette Boulevard, Bridgeport, CT 06604.
Wright receives a monthly advisory fee for its services. The table below
lists the advisory fee rates paid for the fiscal year ended December 31, 1998:
Fee Paid
Fund (as a % of average daily net assets)
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Selected Blue Chip Portfolio 0.00%
International Blue Chip Portfolio 0.00%
INVESTMENT COMMITTEE
An investment committee of senior officers controls the investment selections,
policies and procedures of the funds. These officers are experienced analysts
with different areas of expertise, and have over 195 years of combined service
with Wright. The investment committee consists of the following members:
<TABLE>
<CAPTION>
Committee Member Title Joined Wright in
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter M. Donovan, CFA President and Chief Executive Officer 1966
Judith R. Corchard Chairman of the investment committee 1960
Executive Vice President - Investment Management
Jatin J. Mehta, CFA Chief Investment Officer - U.S. Equities 1969
Harivadan K. Kapadia, CFA Senior Vice President - Investment Analysis and Information 1969
Michael F. Flament, CFA Senior Vice President - Investment and Economic Analysis 1972
James P. Fields, CFA Senior Vice President - Fixed Income Investments 1982
Amit S. Khandwala Senior Vice President - International Investments 1986
Charles T. Simko, Jr., CFA Senior Vice President - Investment Research 1985
</TABLE>
ADMINISTRATOR
Eaton Vance Management serves as the funds' administrator and is
responsible for managing their daily business affairs. Eaton Vance's services
include operations of the funds' order room, recordkeeping, preparation and
filing of documents required to comply with federal and state securities laws,
supervising the activities of the funds' custodian and transfer agent, providing
assistance in connection with the trustees' and shareholders' meetings and other
necessary administrative services.
YEAR 2000 READINESS
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. Wright is addressing this issue and is getting reasonable assurances
from the funds' other major service providers that they too are addressing these
issues to preserve smooth functioning of the funds' trading, pricing,
shareholder account, custodial and other operations. These computer problems
could also adversely affect the funds' investments. Improperly functioning
computers may disrupt securities markets or result in overall economic
uncertainty. Individual companies may also be adversely affected by the cost of
fixing their computers, which could be substantial. There is no guarantee that
all problems will be avoided.
The interests of different variable insurance products investing in a fund
could conflict due to differences of tax treatment and other considerations. The
funds currently do not foresee any disadvantages to investors arising from the
fact that each fund may offer its shares to different insurance company separate
accounts that serve as the investment medium for their variable annuity and
variable life products. Nevertheless, the trustees intend to monitor events to
identify any material irreconcilable conflicts which may arise, and to determine
what action, if any, should be taken in response to these conflicts. If a
conflict were to occur, one or more insurance companies' separate accounts might
be required to withdraw their investments in a fund and shares of another fund
may be substituted. In addition, the sale of shares may be suspended or
terminated if required by law or regulatory authority or is in the best
interests of the funds' shareholders.
<PAGE>
FINANCIAL HIGHLIGHTS
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These financial highlights will help you understand each fund's financial
performance for the periods indicated. Certain information reflects financial
results for a single fund share. Total return shows how much your investment in
the fund increased or decreased during each period, assuming you reinvested all
dividends and distributions. XXXXXXX, independent certified public accountants,
audited this information. Their reports are included in the funds' annual
report, which is available upon request.
<PAGE>
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard, Bridgeport, CT 06604
INVESTMENT COMPANY ACT FILE NUMBER:
- -----------------------------------------------------------------------------
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST...........................811-07654
Wright Selected Blue Chip Equities Portfolio
Wright International Blue Chip Equities Portfolio
FOR MORE INFORMATION
Additional information about the funds' investments is available in the funds'
semi-annual and annual reports to shareholders. The funds' annual report
contains a discussion of the market conditions and investment strategies that
affected the funds' performance over the past year.
You may want to read the statement of additional information (SAI) for more
information on the funds and the securities they invest in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the SAI,
request other information or get answers to your questions about the funds by
writing or calling:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
(800) 888-9471
E-mail: [email protected]
Copies of documents and application forms can be viewed and downloaded from
Wright's website: www.wrightinvestors.com.
Text-only versions of fund documents can be viewed online or downloaded
from the SEC's web site at www.sec.gov. You can also obtain copies by visiting
the SEC's Public Reference Room in Washington DC. For information on the
operation of the Public Reference Room, call (800) SEC-0330. Copies of documents
may also be obtained by sending your request and the appropriate fee to the
SEC's Public Reference Section, Washington, DC 20549-6009.
<PAGE>
WRIGHT
INVESTORS' SERVICE
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
PROSPECTUS
May 1, 1999
Catholic Values Equity Investment Portfolio
As with all mutual funds, the Securities and Exchange Commission has not
determined whether the fund is a good investment or whether the information in
this prospectus is accurate or complete. Anyone who tells you otherwise is
committing a crime.
<PAGE>
TABLE OF CONTENTS
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The Wright Managed Blue Chip Series Trust: Overview ............ 3
Catholic Values Equity Investment Portfolio
Information About the Fund
Objective.................................................__
Principal Investment Strategies...........................__
Principal Risks...........................................__
Who May Want to Invest....................................__
Past Performance..........................................__
Information About Your Account
Determining Share Price (NAV).............................__
Purchasing Shares.........................................__
Selling Shares............................................__
Dividends and Taxes ...............................................__
Managing the Fund .................................................__
Financial Highlights ..............................................__
- -------------------------------------------------------------------------------
How to Use this Prospectus:
Reading this prospectus will help you decide if investing in the fund is right
for you. Please keep this prospectus for future reference. Included in this
prospectus are descriptions telling you about the fund's:
(Graphic -- ship's wheel)
OBJECTIVE: what the fund seeks to achieve.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES: how the fund intends to achieve its objective
and the strategies used by Wright Investors'Service, the fund's investment
adviser.
(Graphic -- life preserver)
PRINCIPAL RISKS: the risks associated with the fund's primary investments.
(Graphic -- assorted nautical flags)
WHO MAY WANT TO INVEST: decide if the fund is a suitable investment for you.
(Graphic -- ship's log)
PAST PERFORMANCE: the total return on your investment, including income from
dividends and interest, and the increase or decrease in price over various
time periods.
<PAGE>
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST: OVERVIEW
- -------------------------------------------------------------------------------
Catholic Values Equity Investment Portfolio offers an investment opportunity
that combines the fundamental security selection process with a review by a
Catholic Advisory Board. This process insures companies that offer products,
services or engage in activities that are contrary to the core values of the
Roman Catholic Church are not included. The fund is available for purchase only
by insurance company separate accounts that fund certain variable annuity and
variable life insurance contracts. You should read this prospectus together with
the prospectus for those contracts.
THE CATHOLIC ADVISORY BOARD
Using a bottom up fundamental approach, Wright Investors' Service selects
companies from its WorldscopeR database to be considered for inclusion in the
fund's portfolio. These companies are high-quality, well-established and
profitable companies. The fund's proposed portfolio and any subsequent additions
are reviewed by the Catholic Advisory Board ensuring that the companies offer
products and services and undertake activities that are consistent with the core
teachings of the Catholic Church.
The Catholic Advisory Board is comprised of independent lay members familiar
with the basic tenets and core teachings of the Roman Catholic Church. The
members of the Catholic Advisory Board are:
Thomas P. Melady, Chairman, Former U.S. Ambassador to the Holy See,
Uganda and Burundi, President Emeritus of Sacred Heart University
Margaret M. Heckler, Former U.S. Representative from Massachusetts
10th district, former Secretary of Health and Human Services, forme
Ambassador to Ireland
Bowie K. Kuhn, former Commissioner of Baseball
Timothy J. May, Senior Partner, Patton Boggs, LLP
Thomas S. Monaghan, Former President, CEO and Chairman of Domino's
Pizza, Inc.
William A. Wilson, Former (and first) U.S. Ambassador to the Holy See
Although he is not in any way connected with the fund, His Eminence John
Cardinal O'Connor is the Ecclesiastical Advisor to the Catholic Advisory Board.
Each member of the Board is involved in various Catholic organizations and
activities while in contact with numerous Catholic institutions and clergy. The
Catholic Advisory Board identifies companies whose products, services and/or
activities are substantially consistent with the core Catholic Church teachings,
based on the best publicly available information obtained by Wright and
information received from shareholders and other interested sources. They are
guided by the magisterium of the Catholic Church and seek the counsel and advice
of ecclesiastics in determining which companies meet the fund's religious
criteria.
<PAGE>
THE SECURITY SELECTION PROCESS - THE APPROVED WRIGHT INVESTMENT LIST (AWIL)
Wright is a leading independent international investment management and advisory
firm with more than 35 years experience. Wright manages about $4.5 billion of
assets in portfolios of all sizes and styles as well as a family of mutual
funds. The company developed WorldscopeR, one of the world's largest and most
complete databases of financial information, which currently includes more than
19,000 corporations in 49 nations.
Wright systematically identifies those companies in the WorldscopeR database
that meet minimum standards of prudence and thus are suitable for consideration
by fiduciary investors. Wright considers companies meeting these requirements to
be "investment grade." These companies are then subject to extensive analysis
and evaluation to identify those which meet Wright's fundamental standards of
investment quality.
These standards measure the investment acceptance, financial strength,
profitability, stability and growth of a company. Companies meeting or exceeding
these standards are eligible for inclusion on an AWIL.
There are separate AWILs for U.S. companies, non-U.S. companies and small
companies. All the companies on the AWILs are soundly financed "Blue Chips" with
established records of earnings profitability and equity growth. All have
established investment acceptance and active, liquid markets.
-----SIDE BAR TEXT-----
A Word About Risk
Before you invest in any mutual fund, you should understand the risks involved.
There are two basic risks prevalent in mutual funds investing in common stocks,
such as the fund. They are:
o market risk -- When the price of stock falls, the value of the
fund's investments may fall and you could lose money on your
investment.
o management risk -- Wright's strategy may not produce the expected
results, causing losses.
- -----END SIDE BAR TEXT-----
<PAGE>
CATHOLIC VALUES EQUITY INVESTMENT PORTFOLIO
(Graphic -- ship's wheel)
OBJECTIVE
The fund seeks long-term growth of capital and reasonable current income from
investments consistent with the core values of the Catholic Church. Reasonable
income means the income that can be achieved, consistent with the fund's
objective of long-term growth of capital.
(Graphic -- compass)
PRINCIPAL INVESTMENT STRATEGIES
The fund invests in the equity securities of well-established companies. These
securities are included on the quality oriented Approved Wright Investment Lists
(AWILs). Up to 30% of the fund's investments may be in foreign securities or
American Depositary Receipts.
Considered a bottom-up fundamental analyst, Wright evaluates a company's recent
valuation and price/earnings momentum to determine which companies present the
best value in terms of current price, and current and forecasted earnings.
Wright has extensive economic research capabilities and an enviable economic
forecast record. Wright selects securities it believes are likely to provide
comparatively superior investment return over the intermediate term. The
investment process at Wright is directed and controlled by an Investment
Committee of eight experienced analysts. The Committee's selection suggestions
are reviewed by the Catholic Advisory Board.
Typically, the fund sells an individual security when it no longer meets the
standard for inclusion on the AWILs, or the security ceases to meet the Catholic
Advisory Board's investment criteria. For temporary defensive purposes, the fund
may hold cash or invest more than 20% of its net assets in short-term debt
securities. Although the fund would do this to reduce losses, defensive
investments may hurt the fund's efforts to achieve its objective.
-----SIDE BAR TEXT-----
"Bottom-up" Approach to Investing
This refers to the analysis of company information before considering the
impact of industry and economic trends. It differs from the "top-down" approach
which looks first at the economy, then the industry and lastly the company.
Fundamental Analysis
The analysis of company financial statements to forecast future price
movements using past records of assets, earnings, sales, products, management
and markets. It differs from technical analysis which relies on price and volume
movements of stocks and does not concern itself with financial statistics.
- -----END SIDE BAR TEXT-----
(Graphic -- life preserver)
PRINCIPAL RISKS
The Catholic Advisory Board has sole discretion in determining which companies
meet the fund's religious criteria. When a company violates core Catholic
teachings, Wright is asked to remove it from the portfolio. This policy may
cause the disposition of a security at a time when it may be disadvantageous
from an investment viewpoint to do so.
In addition to market and management risk, there are risks associated with
investing in foreign countries. These include currency risk (the fluctuations in
the foreign exchange rates impact the value of the fund's assets), seizures,
expropriation or nationalization of a company's assets, and the impact of
political, social or diplomatic events.
As the fund only considers securities that meet its investment and religious
criteria, the fund's return may be lower than if the fund considered only
investment criteria when selecting investments. However, Wright does not expect
this restriction will have a material adverse effect on performance. The fund
cannot eliminate risk or assure achievement of its objective. If the risks above
are realized you may lose money on your investment in the fund.
(Graphic -- assorted nautical flags)
Who May Want To Invest
The fund is designed for individuals, dioceses, parishes, other institutions and
organizations seeking a long-term growth fund that does not invest in products,
services and activities that violate the core values and teachings of the Roman
Catholic Church.
<PAGE>
INFORMATION ABOUT YOUR ACCOUNT
- -------------------------------------------------------------------------------
DETERMINING SHARE PRICE (NAV)
The price at which you buy, sell or exchange fund shares is the net asset per
share price or NAV. This share price is determined by adding the value of the
fund's investments, cash and other assets, deducting liabilities, and then
dividing that amount by the total number of shares outstanding.
The NAV for the fund is calculated at the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. New York time) each day the Exchange is
open. It is not calculated on days the Exchange is closed. The price for a
purchase, redemption or exchange of fund shares is the next NAV calculated after
receipt of your request.
When the fund calculates its share price, it values its portfolio securities at
the last current sales price on the market where the security is normally traded
unless Wright deems that price to be not representative of market values. This
could happen if an event after the close of the market seemed likely to have a
major impact on the price of securities traded on the market. Securities which
cannot be valued at these closing prices are valued by Wright at fair value in
accordance with procedures adopted by the trustees.
The value of all assets and liabilities expressed in foreign currencies is
converted into U.S. dollars at the most recent market rates quoted by one or
more major banks shortly before the close of the Exchange. Foreign securities
trade during hours and on days that the Exchange is closed and the fund's NAV is
not calculated. Although the fund's NAV may be affected, you will not be able to
purchase or redeem shares on these days.
PURCHASE AND REDEMPTION OF SHARES
Shares of the fund are available only through the purchase of variable annuity
or variable life insurance contracts issued by insurance companies through their
separate accounts. The fund credits investments to an insurance company's
separate account at the NAV next determined after acceptance of the investment
by the fund. The fund may suspend the offer of its shares and reserves the right
to reject any specific purchase order. The fund may refuse a purchase order if,
in Wright's opinion, the order is of a size that would disrupt the management of
the fund.
The redemption price of the shares of the fund will be the NAV determined next
after receipt by the fund of a redemption order from a separate account, which
may be more or less than the price paid for the shares. The fund redeems its
shares on any business day. Redemptions are effected at the NAV per share next
determined after the fund receives and accepts the redemption request. The fund
forwards redemption proceeds to the redeeming insurance company within seven
days after receipt of the redemption request. Under unusual circumstances, the
fund may suspend redemptions as permitted by Federal securities laws. The fund
reserves the right to distribute portfolio securities to a redeeming
shareholder.
<PAGE>
DIVIDENDS AND TAXES
- -------------------------------------------------------------------------------
DIVIDENDS AND TAXES
The fund intends to qualify and be taxed as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986 (the "Code"), as
amended. In order to qualify to be taxed as a regulated investment company, the
fund must meet certain income and diversification tests and distribution
requirements. As a regulated investment company meeting these requirements, the
fund will not be subject to federal income tax on its net investment income and
net capital gains that it distributes to its shareholders. All income and
capital gain distributions are automatically reinvested in additional shares of
the fund at NAV and are includable in gross income of the separate accounts
holding such shares. The fund expects most distributions to be from capital
gains. See the accompanying contract prospectus for information regarding the
federal income tax treatment of distributions to the separate accounts and to
holders of the contracts.
<PAGE>
MANAGING THE FUND
- -------------------------------------------------------------------------------
Wright Investors' Service, Inc. manages the fund's investments. Wright is
located at 1000 Lafayette Boulevard, Bridgeport, CT 06604.
Wright receives a monthly advisory fee for its services at the rate of xx% of
the fund's average daily net assets.
INVESTMENT COMMITTEE
An investment committee of senior officers controls the investment selections,
policies and procedures of the fund. These officers are experienced analysts
with different areas of expertise, and have over 195 years of combined service
with Wright. The investment committee consists of the following members:
<TABLE>
<CAPTION>
Committee Member Title Joined Wright in
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Peter M. Donovan, CFA President and Chief Executive Officer 1966
Judith R. Corchard Chairman of the investment committee
Executive Vice President Investment Management 1960
Jatin J. Mehta, CFA Chief Investment Officer U.S. Equities 1969
Harivadan K. Kapadia, CFA Senior Vice President Investment Analysis and Information 1969
Michael F. Flament, CFA Senior Vice President Investment and Economic Analysis 1972
James P Fields, CFA Senior Vice President Fixed Income Investments 1982
Amit S. Khandwala Senior Vice President International Investments 1986
Charles T. Simko, Jr., CFA Senior Vice President Investment Research 1985
</TABLE>
ADMINISTRATOR
Eaton Vance Management serves as the fund's administrator and is responsible for
managing its daily business affairs. Eaton Vance's services include operations
of the fund's order room, recordkeeping, preparation and filing of documents
required to comply with federal and state securities laws, supervising the
activities of the fund's custodian and transfer agent, providing assistance in
connection with the trustees' and shareholders' meetings and other necessary
administrative services.
YEAR 2000 READINESS
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. Wright is addressing this issue and is getting reasonable assurances
from the fund's other major service providers that they too are addressing these
issues to preserve smooth functioning of the fund's trading, pricing,
shareholder account, custodial and other operations. These computer problems
could also adversely affect the fund's investments. Improperly functioning
computers may disrupt securities markets or result in overall economic
uncertainty. Individual companies may also be adversely affected by the cost of
fixing their computers, which could be substantial. There is no guarantee that
all problems will be avoided.
The interests of different variable insurance products investing in the fund
could conflict due to differences of tax treatment and other considerations. The
fund currently does not foresee any disadvantages to investors arising from the
fact that the fund may offer its shares to different insurance company separate
accounts that serve as the investment medium for their variable annuity and
variable life products. Nevertheless, the trustees intend to monitor events to
identify any material irreconcilable conflicts which may arise, and to determine
what action, if any, should be taken in response to these conflicts. If a
conflict were to occur, one or more insurance companies' separate accounts might
be required to withdraw their investments in the fund and shares of another fund
may be substituted. In addition, the sale of shares may be suspended or
terminated if required by law or regulatory authority or is in the best
interests of the fund's shareholders.
<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The financial highlights will help you understand the fund's financial
performance for the period indicated. Certain information reflects financial
results for a single fund share. Total return shows how much your investment in
the fund increased or decreased during the period, assuming you reinvested all
dividends and distributions. [ ], independent certified public accountants,
audited this information. Their reports are included in the fund's annual
report, which is available upon request.
<PAGE>
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard, Bridgeport, CT 06604
INVESTMENT COMPANY ACT FILE NUMBER:
- -------------------------------------------------------------------------------
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST:.........................811-07654
Catholic Values Equity Investment Portfolio
FOR MORE INFORMATION
Additional information about the fund's investments is available in the fund's
semi-annual and annual reports to shareholders. The fund's annual report
contains a discussion of the market conditions and investment strategies that
affected the fund's performance over the past year.
You may wish to read the Statement of Additional Information (SAI) for more
information on the fund and the securities it invests in. The SAI is
incorporated into this prospectus by reference, which means that it is
considered to be part of the prospectus.
You can get free copies of the semi-annual and annual reports and the SAI,
request other information or get answers to your questions about the fund by
writing or calling the fund at:
Wright Investors' Service Distributors, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
(800) 888-9471
E-mail: [email protected]
Text-only versions of fund documents can be viewed online or downloaded from the
SEC's web site at www.sec.gov. You can also obtain copies by visiting the SEC's
Public Reference Room in Washington DC. For information on the operation of the
Public Reference Room, call (800) SEC-0330. Copies of documents may also be
obtained by sending your request and the appropriate fee to the SEC's Public
Reference Section, Washington, DC 20549-6009.
<PAGE>
Statement of Additional Information
The Wright Managed Blue Chip Series Trust
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus dated May 1, 1999, as supplemented from
time to time, which is incorporated herein by reference, for Wright Selected
Blue Chip Portfolio and Wright International Blue Chip Portfolio, each a series
of The Wright Managed Blue Chip Series Trust (the "Trust"). The Prospectus may
be obtained from Wright Investors' Service Distributors, Inc., 1000 Lafayette
Boulevard, Bridgeport, Connecticut 06604 (Telephone: 800-888-9471). Unless
otherwise defined herein, capitalized terms have the meanings given to them in
the Prospectus.
Table of Contents
Page
THE FUNDS AND THEIR INVESTMENT OBJECTIVES AND POLICIES....... 2
GENERAL INFORMATION.......................................... 6
INVESTMENT RESTRICTIONS...................................... 6
PERFORMANCE INFORMATION...................................... 7
Total Return.......................................... 7
Yield................................................. 8
PORTFOLIO TRANSACTIONS....................................... 9
MANAGEMENT OF THE TRUST...................................... 10
Officers and Trustees................................. 10
The Investment Advisor................................ 11
The Administrator..................................... 11
Custodian............................................. 12
Independent Certified Public Accountant............... 12
Legal Matters......................................... 12
NET ASSET VALUE.............................................. 14
PURCHASE AND REDEMPTION OF SHARES............................ 14
TAXES 15
Federal Income Taxes.................................. 16
FINANCIAL STATEMENTS......................................... 16
APPENDIX..................................................... 17
No person has been authorized to give any information or to make any
representation not contained in this Statement of Additional Information or in
the Prospectus and, if given or made, such information or representation must
not be relied upon as having been authorized. This Statement of Additional
Information does not constitute an offering of any securities other than the
registered securities to which it relates or an offer to any person in any state
or other jurisdiction of the United States or any country where such offer would
be unlawful.
The date of this Statement of Additional Information is May 1, 1999.
<PAGE>
THE FUNDS AND THEIR INVESTMENT OBJECTIVES AND POLICIES
WRIGHT SELECTED BLUE CHIP PORTFOLIO
The investment objective of Wright Selected Blue Chip Portfolio ("WSBCP")
is to provide long-term capital appreciation and, secondarily, current income.
Under normal market conditions, WSBCP invests at least 80% of its net assets in
selected equity securities, including common stocks, preferred stocks and
convertible securities. Securities selected for WSBCP are drawn from an
investment list prepared by the investment adviser and known as The Approved
Wright Investment List (the "AWIL").
Approved Wright Investment List. The investment adviser maintains a
proprietary database on approximately 5,200 U.S. companies. The investment
adviser reviews such companies to identify those which, on the basis of at lest
five years of audited financial statements, meet the minimum standards of
prudence (e.g. the value of each company's assets and shareholders' equity
exceeds certain minimum standards and the company's operations have been
profitable during the last three years) and thus are suitable for consideration
by fiduciary investors. Companies which meet these requirements may be large or
small, have their securities traded on exchanges or in the over-the-counter
market, and include companies not currently paying dividends on their shares.
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of these standards are eligible for selection by the Wright Investment Committee
for inclusion in the AWIL. See the Appendix herein for a more detailed
description of the investment adviser's standards for investment quality and the
AWIL. All companies on the AWIL are, in the opinion of the investment adviser,
soundly financed "True Blue Chips" with established records of earnings,
profitability and equity growth and active, liquid markets for their publicly
held equity securities. The AWIL normally includes approximately 350 companies.
The equity securities in which WSBCP invests are limited to those companies
on the AWIL whose current operations reflect characteristics which have been
identified by the investment adviser as being likely to provide comparatively
superior total investment return over the intermediate term. WSBCP purchases
securities which meet WSBCP's investment criteria and increases the amount of
current investments in companies the market values of which are below their
target values. Portfolio securities are generally considered for sale if the
value of such securities exceeds 2 1/2 times their normal weighing in the
portfolio, or if such securities are no longer included in the AWIL or no longer
meet WSBCP's investment criteria.
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
The investment objective of Wright International Blue Chip Portfolio
("WIBCP") is long-term capital. Under normal market conditions, WIBCP invests at
least 80% of its net assets in equity securities, including common stocks,
preferred stocks and convertible securities. Securities selected for WIBCP are
limited to those included on an investment list prepared by the investment
adviser and known as the International Approved Wright Investment List (the
"International AWIL").
The International Approved Wright Investment List. The investment adviser
maintains a proprietary database on approximately 13,000 non-U.S. companies from
over 49 countries. The investment adviser reviews such companies to identify
those which, on the basis of at least five years of audited financial
statements, meet the minimum standards of prudence (e.g. the value of a
company's assets and shareholders' equity exceeds certain minimum standards and
the company's operations have been profitable during the last three years) and
thus are suitable for consideration by fiduciary investors. Companies which meet
these requirements may be large or small, have their securities traded on
exchanges or in the over-the-counter market, and include companies not currently
paying dividends.
These companies are then subjected to extensive analysis and evaluation in
order to identify those which meet the investment adviser's 32 fundamental
standards of investment quality. Only those companies which meet or exceed all
of those standards are eligible for selection for inclusion in the International
AWIL. See the Appendix herein for a more detailed description of the investment
adviser's standards for investment quality and the International AWIL. All
companies on the International AWIL are, in the opinion of the investment
adviser, soundly financed "True Blue Chips" with established records of
earnings, profitability and equity growth and active, liquid markets for their
publicly held equity securities.
WIBCP intends to maintain investments in a minimum of three foreign
countries. WIBCP purchases securities which meet WIBCP's investment criteria and
increases the amount of current investments in companies the market values of
which are below
<PAGE>
their target values. Portfolio securities are generally considered for sale
if they are no longer included in the International AWIL or no longer meet
WIBCP's investment criteria. WIBCP may purchase equity securities traded on
foreign securities exchanges, or it may purchase American Depositary Receipts
(ADRs) traded in the United States. Shares of WIBCP are suitable for investors
wishing to diversity their portfolios by investment in non-U.S. companies or for
investors who simply wish to participate in non-U.S. investments. Although the
net asset value of WIBCP's shares will be stated in U.S. dollars, fluctuations
in foreign currency exchange rates may affect the value of an investment in
WIBCP.
WIBCP is intended to provide investors with the opportunity to invest in a
portfolio of securities of non-U.S. companies located throughout the world. In
making the allocation of assets among the various countries and geographic
regions, the investment adviser ordinarily considers such factors as prospects
for relative economic growth between foreign countries; expected levels of
inflation and interest rates; government policies influencing business
conditions; the range of individual investment opportunities available to
international investors; and other pertinent financial, tax, social, political
and national factors -- all in relation to the prevailing prices of the
securities in each country or region.
U.S. Government, Agency and Instrumentality Securities -- U.S. Government
securities are issued by the Treasury and include bills, certificates of
indebtedness, notes, and bonds. Agencies and instrumentalities of the U.S.
Government are established under the authority of an act of Congress and
include, but are not limited to, the Government National Mortgage Association
("GNMA"), the Tennessee Valley Authority, the Bank for Cooperatives, the Farmers
Home Administration, Federal Home Loan Banks, Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association. Except for
U.S. Government obligations, the securities issued or guaranteed by U.S.
agencies and instrumentalities may or may not be backed by the full faith and
credit of the United States. If the obligation is not backed by the full faith
and credit of the United States, the fund must look principally to the agency or
instrumentally issuing or guaranteeing the obligation for its repayment and may
not be able to assert a claim against the United States itself in the event that
the agency or instrumentality does not meet its obligations. The U.S. Government
does not guarantee the yield or value of any fund's investments or shares.
Corporate Obligations -- As described in the Prospectus, each fund may
invest, subject to certain limitations, in corporate debt obligations. Rated
obligations must be rated in the two highest rating categories by a nationally
recognized statistical rating organization for money market instruments in any
portfolio, "AA" by Moody's or "Aa" by S&P. Unrated obligations must be
determined by the investment adviser to be of comparable quality.
Repurchase Agreements -- Each fund may enter into repurchase agreements in
order to earn income on temporarily uninvested cash. A repurchase agreement is
an agreement under which the seller of a security agrees to repurchase and the
relevant fund agrees to resell, such security at a specified time and price. A
fund may enter into repurchase agreements only with large, well-capitalized
banks or government securities dealers that meet specified credit standards. In
addition, such repurchase agreements will provide that the value of the
collateral underlying the repurchase agreement will always be at least equal to
the repurchase price, including any accrued interest earned under the repurchase
agreement. In the event of a default or bankruptcy by a seller under a
repurchase agreement, the fund will seek to liquidate such collateral. However,
the exercise of the right to liquidate such collateral could involve certain
costs, delays and restrictions and is not ultimately assured. To the extent that
proceeds from any sale upon a default of the obligation to repurchase are less
than the repurchase price, the fund could suffer a loss.
Foreign Securities -- WIBCP may invest in foreign securities. Investing in
securities issued by companies whose principal business activities are outside
the United States may involve significant risks not associated with domestic
investments. For example, there is generally less publicly available information
about foreign companies, particularly those not subject to the disclosure and
reporting requirements of the U.S. securities laws. Foreign issuers are
generally not bound by uniform accounting, auditing and financial reporting
requirements comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in exchange
control regulations, expropriation or confiscatory taxation, limitation on
removal of funds or other assets of WIBCP, political or financial instability or
diplomatic and other developments which could affect such investments. Further,
economies of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the U.S.
It is anticipated that in most cases, the best available market for foreign
securities will be on exchanges or in over-the-counter markets located outside
the U.S. Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those in the U.S. Securities of some foreign
issuers (particularly those located in developing countries) may be less liquid
and more volatile than securities of comparable U.S. companies. In addition,
foreign brokerage commissions are generally higher than commissions on
securities traded in the U.S. and may be non-negotiable. In general, there is
less overall governmental supervision and regulation of securities exchanges,
brokers and listed companies than in the U.S. These considerations generally are
of greater concern in developing countries.
<PAGE>
Because investment in foreign issuers will usually involve currencies of
foreign countries, and because WIBCP may be exposed to currency fluctuations
independent of its securities exposure, the value of the assets of the WIBCP as
measured in U.S. dollars will be affected by changes in foreign currency
exchange rates.
Foreign Currency Exchange Transactions -- WIBCP may engage in foreign
currency exchange transactions. Investments in securities of foreign companies
whose principal business activities are located outside of the United States
will frequently involve currencies of foreign countries. In addition, assets of
WIBCP may temporarily be held in bank deposits in foreign currencies during the
completion of investment programs. Therefore, the value of WIBCP's assets, as
measured in U.S. dollars, may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations. Although WIBCP
values its assets daily in U.S. dollars, it does not intend to convert its
holdings of foreign currencies into U.S. dollars on a daily basis. WIBCP may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market. WIBCP will
convert currency on a spot basis from time to time and will incur costs in
connection with such currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to WIBCP at one rate, while offering a lesser rate of exchange should WIBCP
desire to resell that currency to the dealer. WIBCP does not intend to speculate
in foreign currency exchange rates.
As an alternative to spot transactions, WIBCP may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") or
purchase currency call or put options. A forward contract involves an obligation
to purchase or sell a specific currency at a future date and price fixed by
agreement between the parties at the time of entering into the contract. These
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. Although a forward
contract generally involves no deposit requirement and no commissions are
charged at any stage for trades, WIBCP will use segregated accounts for forward
purchase transactions. WIBCP intends to enter into such contracts only on net
terms. The purchase of a put or call option is an alternative to the purchase or
sale of forward contracts and will be used if the option premiums are less then
those in the forward contract market.
WIBCP may enter into forward contracts or purchase currency options only
under two circumstances. First, when WIBCP enters into a contract for the
purchase or sale of a security denominated in a foreign currency, it may desire
to "lock in" the U.S. dollar price of the security. This is accomplished by
entering into a forward contract for the purchase or sale, for a fixed amount of
U.S. dollars, of the amount of foreign currency involved in the underlying
security transaction ("transaction hedging"). Such forward contract transactions
will enable WIBCP to protect itself against a possible loss resulting from an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date the security is purchased or
sold and the date of payment for the security.
Second, when the investment adviser believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, WIBCP may enter into a forward contract to sell, for a fixed amount of
U.S. dollars, the amount of foreign currency approximating the value of some or
all of the securities denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved will
not generally be possible. The future value of such securities in foreign
currencies will change as a consequence of fluctuations in the market value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of currency exchange rates and the
implementation of a short-term hedging strategy are highly uncertain.
WIBCP's custodian will place cash or liquid securities in a segregated
account. The amount of such segregated assets will be at least equal to the
value of WIBCP's total assets committed to the consummation of forward contracts
involving the purchase of forward currency. If the value of the securities
placed in the segregated account declines, additional cash or securities will be
placed in the account on a daily basis so that the value of the amount will
equal the amount of WIBCP's commitments with respect to such contracts.
At the maturity of a forward contract, WIBCP may elect to sell the
portfolio security and make delivery of the foreign currency. Alternatively,
WIBCP may retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an identical offsetting contract from
the same currency trader.
It is impossible to forecast with precision the market value of portfolio
securities at the expiration of a forward contract. Accordingly, it may be
necessary for WIBCP to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if WIBCP intends to sell the security
and the market value of the security is less than the amount of foreign currency
that WIBCP is obligated to deliver. Conversely, it may be necessary to sell on
the spot market some of the foreign currency received upon the sale of the
portfolio security if its market value exceeds the amount of foreign currency
that WIBCP is obligated to deliver.
<PAGE>
If WIBCP retains the portfolio security and engages in an offsetting
transaction, WIBCP will incur a gain or a loss (as described below) to the
extent that there has been a change in forward contract prices. If WIBCP engages
in an offsetting transaction, it may subsequently enter into a new forward
contract to sell the foreign currency. Should forward contract prices decline
during the period between the date WIBCP enters into a forward contract for the
sale of the foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, WIBCP will realize a gain to the
extent that the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward contract prices increase,
WIBCP will suffer a loss to the extent that the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.
WIBCP will not speculate in forward contracts and will limit its
transactions in such contracts to those described above. Of course, WIBCP is not
required to enter into such transactions with respect to portfolio securities
quoted or denominated in a foreign currency and will not do so unless deemed
appropriate by its investment adviser. This method of protecting the value of
WIBCP's securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which WIBCP can achieve at some future time.
Additionally, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, they also tend to limit any
potential gain which might be realized if the value of such currency increases.
Each fund's transactions in foreign currency exchange contracts may be
limited by the requirements of the Internal Revenue Code for qualification as a
regulated investment company.
Lending Portfolio Securities -- Each fund may seek to increase its total
return by lending portfolio securities to broker-dealers or other institutional
borrowers. Such loans are continuously secured by collateral in cash or liquid
securities held by the fund's custodian and maintained on a current basis at an
amount at least equal to the market value of the securities loaned, which will
be marked to market daily. During the existence of a loan, the fund will
continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive a fee, or all or a portion
of the interest on investment of the collateral, if any. However, the fund may
at the same time pay a transaction fee to such borrowers and administrative
expenses, such as finders fees to third parties. As with other extensions of
credit there are risks of delay in recovery or even loss of rights in the
securities loaned if the borrower of the securities fails financially. However,
the loans will be made only to organizations deemed by the investment adviser to
be of good standing and when, in the judgment of the investment adviser, the
consideration which can be earned from securities loans of this type justifies
the attendant risk. If the investment adviser decides to make securities loans
on behalf of a fund, it is intended that the value of the securities loaned
would not exceed 30% of such fund's total assets.
A fund would have the right to call a loan and obtain the securities loaned
at any time on up to five business days' notice. A fund would not have the right
to vote any securities having voting rights during the existence of a loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment.
Borrowings -- Each fund may borrow money in an amount equal to 1/3 of its
net assets for temporary or emergency purposes or for the clearance of
transactions. A fund will not purchase additional securities while such
borrowings exceed 5% of such fund's total assets.
Defensive Investments -- During periods of unusual market conditions, when
the investment adviser believes that investing for temporary defensive purposes
is appropriate, all or a portion of the assets of either fund may be held in
cash or invested in short-term obligations, including but not limited to
short-term obligations issued or guaranteed as to interest and principal by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreements collaterized by such securities); commercial paper which at the date
of investment is rated A-1 by S&P or P-1 by Moody's, or, if not rated, is
determined by the investment adviser pursuant to procedures established by the
Trustees to be of comparable quality; short-term corporate obligations and other
debt instruments which at the date of investment are rated AA or better by S&P
or Aa or better by Moody's or, if unrated, are determined by the investment
adviser pursuant to procedures established by the Trustees to be of comparable
quality; and certificates of deposit, bankers' acceptances and time deposits of
domestic and foreign banks the debt obligations of which satisfy the foregoing
rating criteria. Each fund may invest in instruments and obligations of banks
that have other relations with the Trust, Wright or Eaton Vance. No preference
will be shown towards investing in banks which have such relationships.
Forward Commitments and When-Issued Securities -- Each fund may purchase
when-issued securities and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. A fund entering
into such a transaction is required to maintain in a segregated account with
such fund's custodian until the settlement date cash or liquid
<PAGE>
securities in an amount sufficient to meet the purchase price.
Alternatively, the fund may enter into offsetting contracts for the forward sale
of other securities that it owns. Securities purchased or sold on a when-issued
or forward commitment basis involve a risk of loss if the value of the
securities to be purchased declines prior to the settlement date or if the value
of the security to be sold increases prior to the settlement date. Although a
fund would generally purchase securities on a when-issued or forward commitment
basis with the intention of acquiring securities for its portfolio, the fund may
dispose of a when-issued security or forward commitment prior to settlement if
the investment adviser deems it appropriate to do so.
GENERAL INFORMATION
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if only the interests
of a particular fund are affected, a majority of such fund's outstanding shares.
The Trustees are authorized to make amendments to the Declaration of Trust that
do not have a material adverse effect on the interests of shareholders. The
Trust may be terminated (i) upon the sale of the Trust's assets to another
investment company, if approved by the holders of two-thirds of the outstanding
shares of the Trust, except that if the Trustees recommend such sale of assets,
the approval by the vote of a majority of the Trust's outstanding shares will be
sufficient, or (ii) upon liquidation and distribution of the assets of the
Trust, if approved by a majority of its Trustees or by the vote of a majority of
the Trust's outstanding shares. If not so terminated, the Trust may continue
indefinitely.
The Trust's Declaration of Trust further provides that the Trustees will
not be liable for errors of judgment or mistakes of fact or law; however,
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Trust's Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The Trust has been advised by counsel that the risk of any
shareholder incurring any liability for the obligations of a Trust is extremely
remote. The Trust's investment adviser does not consider this risk to be
material.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust on
behalf of each fund and may be changed only by the vote of a majority of a
fund's outstanding voting securities, as defined in the 1940 Act. Accordingly,
each fund may not:
(1) Borrow money in excess of 1/3 of the current market value of the net
assets of such fund (excluding the amount borrowed) and then only if
such borrowing is incurred as a temporary measure for extraordinary or
emergency purposes or to facilitate the orderly sale of portfolio
securities to accommodate redemption requests; or issue any securities
other than its shares of beneficial interest except as appropriate to
evidence indebtedness which such fund is permitted to incur;
(2) Pledge, mortgage or hypothecate its assets, except to secure permitted
borrowings. For purposes of this restriction, collateral arrangements
with respect to options, futures contracts and options on futures
contracts shall not be deemed to be a mortgage, pledge or
hypothecation);
(3) Invest more than 5% of its total assets taken at current market value
in the securities of any one issuer or purchase more than 10% of the
voting securities of any one issuer;
(4) Purchase or retain securities of any issuer if 5% of the issuer's
securities are owned by those officers and Trustees of the Trust or its
investment adviser who own individually more than 1/2 of 1% of the
issuer's securities;
(5) Purchase securities on margin or make short sales, except that such
fund may make short sales against the box;
<PAGE>
(6) Buy or sell real estate, commodities, or commodity contracts unless
acquired as a result of ownership of securities; except that the fund
may purchase and sell futures contracts on securities, indices,
currency and other financial instruments and options on futures
contracts;
(7) Purchase any securities which would cause more than 25% of the market
value of such fund's total assets at the time of such purchase to be
invested in the securities of issuers having their principal business
activities in the same industry, provided that there is no limitation
in respect to investments in obligations issued or guaranteed by the
U.S. Government or its agencies or instrumentalities;
(8) Underwrite securities issued by other persons except insofar as the
Trust may technically be deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security;
(9) Make loans, except (i) through the loan of a portfolio security, (ii)
by entering into repurchase agreements and (iii) to the extent that the
purchase of debt instruments for the fund in accordance with the fund's
investment objective and policies may be deemed to be loans;
(10) Purchase from or sell to any of its Trustees and officers, its
administrator, investment adviser, or principal underwriter, if any, or
the officers and directors of said administrator, investment adviser or
principal underwriter, portfolio securities; or
(11) Issue senior securities, except as permitted under (1).
In addition to the foregoing fundamental investment restrictions, each fund
has adopted the following nonfundamental policies which reflect the intentions
of the Trustees under current circumstances. Unlike the fundamental investment
restrictions, these policies may be changed at any time by the Trustees without
shareholder approval. Each fund will not: purchase oil, gas or other mineral
leases or purchase partnership interests in oil, gas or other mineral
exploration or development programs; purchase warrants of any issuer if, as a
result, more than 2% of the value of its total assets would be invested in
warrants which are not listed on the New York or American Stock Exchanges and
more than 5% of the value of its total assets would be invested in warrants,
such warrants in each case to be valued at the lesser of cost or market, but
assigning no value to warrants acquired by such fund in units or attached to
securities; or enter into repurchase agreements maturing in more than seven days
or invest in illiquid or restricted securities if, as a result, more than 15% of
the fund's net assets would be invested in such repurchase agreements and
securities.
If a percentage restriction contained in the fund's investment restrictions
or policies is adhered to at the time of investment, a later increase or
decrease in the percentage resulting from a change in the value of portfolio
securities or the fund's net assets will not be considered a violation of such
restrictions.
PERFORMANCE INFORMATION
Each fund may from time to time report its yield and total return in
advertisements, reports to shareholders and other sales material. Total return
and yield will be computed as described below.
Total Return
The average annual total return of each fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period. The formula can be
expressed as follows:
Ending Value 1/n
Average Annual Total Return = [ ( Starting Value ) - 1 ] x 100
where Starting Value equals $1,000 and n = number of years.
<PAGE>
In addition, each fund may provide total return information for other
designated periods, such as for the most recent six months or most recent 12
months. This total return information is computed as described above except that
no annualization is made.
The average annual total return of each fund for the one-year period ended
December 31, 1998 and from inception to December 31, 1998 are shown in the table
below:
One Year Ended Inception to Inception
12/31/98 12/31/98 Date
- ------------------------------------------------------------------------------
Wright Selected Blue Chip Portfolio 1/6/94
Wright International Blue Chip Portfolio 1/6/94
- ------------------------------------------------------------------------------
During the periods ended December 31, 1998, the operating expenses of the funds
were reduced either by a reduction of the investment adviser fee, the
administrator fee, or the allocation of expenses to the investment adviser, or a
combination of these. Had such actions not been undertaken, the funds would have
had lower returns.
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.
Yield
The yield of each fund is computed by dividing its net investment income
per share earned during a recent 30-day period by the maximum offering price
(i.e. net asset value) per share on the last day of the period and annualizing
the resulting figure. Net investment income per share is equal to the dividends
and interest earned on a fund's assets during the period, with the resulting
number being divided by the average daily number of shares outstanding and
entitled to receive dividends during the period. The formula is as follows:
6
Yield = 2 [ ( a--b + 1) - 1 ]
---
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of accumulation units outstanding during the
period.
d = the maximum offering price per accumulation unit on the last
day of the period.
NOTE: "a" is calculated for stocks by dividing the stated dividend rate for
each security held during the period by 360. "a" is estimated for debt
securities other than mortgage certificates by dividing the year-end market
value times the yield to maturity by 360. "a" for mortgage securities, such as
GNMAs, is the actual income earned. Neither discount nor premium has been
amortized.
For the 30-day period ended December 31, 1998, the yield of WSBCP was
____%.
Total return, yield and effective yield are based on historical earnings
and are not intended to indicate future performance. Total return and yield will
vary based on changes in market conditions and the level of expenses.
A fund's yield or total return may be compared to the Consumer Price Index
and various domestic securities indices. A fund's yield or total return and
comparisons with these indices may be used in advertisements and in information
furnished to present or prospective shareholders.
From time to time, evaluations of a fund's performance made by independent
sources may be used in advertisements and in information furnished to present or
prospective shareholders. These include the rankings prepared by Lipper
Analytical Services, Inc., an independent service which monitors the performance
of mutual funds. The Lipper performance analysis includes the reinvestment of
dividends and capital gain distributions, but does not take sales charges into
consideration and is prepared without regard to tax consequences.
<PAGE>
PORTFOLIO TRANSACTIONS
The investment adviser places the security transactions for each fund,
which in some cases may be effected in block transactions which include other
accounts managed by the investment adviser. The investment adviser provides
similar services directly for bank trust departments and other investment
companies. In some instances, allocation of the securities to be purchased or
sold, and the expenses in connection with such transaction, is made in a manner
the investment adviser considers to be most equitable and consistent with its
fiduciary obligations to the Trust and such other clients. Such allocation may
adversely affect the size of the position obtainable by a fund.
The investment adviser seeks to execute fund security transactions on the
most favorable terms and in the most effective manner possible. In seeking best
execution, the investment adviser will use its best judgment in evaluating the
terms of a transaction, and will give consideration to various relevant factors,
including without limitation the size and type of the transaction, the nature
and character of the markets for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the reputation,
experience and financial condition of the broker-dealer and the value and
quality of service rendered by the broker-dealer in other transactions, and the
reasonableness of the brokerage commission or markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, the funds may give consideration to those firms
which supply brokerage and research services, quotations and statistical and
other information to the investment adviser for use in servicing their accounts
or firms which purchase its investment services. The term "brokerage and
research services" includes advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to the investment adviser in servicing all or less than all of its
accounts and the services and information furnished by a particular firm may not
necessarily be used in connection with the account which paid brokerage
commissions to such firm. The advisory fee paid by the funds to the investment
adviser is not reduced as a consequence of its receipt of such services and
information. While such services and information are not expected to reduce the
investment adviser's normal research activities and expenses, the investment
adviser would, through use of such services and information, avoid the
additional expenses which would be incurred if it attempted to develop
comparable services and information through its own staff.
Under the Investment Advisory Contract, the investment adviser has the
authority to pay commissions on portfolio transactions for brokerage and
research services exceeding that which other brokers or dealers might charge
provided certain conditions are met. The Investment Advisory Contract expressly
authorizes the selection of a broker or dealer which charges a fund a commission
which is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if it is determined in good faith
that such commission was reasonable in relation to the value of the brokerage
and research services which have been provided.
Subject to the requirement that the investment adviser shall use its best
efforts to seek to execute each fund's security transactions at advantageous
prices and at reasonably competitive commission rates, the investment adviser,
as indicated above, is authorized to consider as a factor in the selection of
any broker-dealer firm with whom a fund's orders may be placed the fact that
such firm has sold or is selling shares of the fund or of other investment
companies sponsored by the investment adviser.
During the fiscal years ended December 31, 1998, 1997 and 1996 , the funds
paid the following amounts on brokerage commissions:
1998 1997 1996
- -------------------------------------------------------------------------------
WSBCP $ $3,558 $6,192
WIBCP $ $8,692 $3,221
- -------------------------------------------------------------------------------
<PAGE>
MANAGEMENT OF THE TRUST
Officers and Trustees
The officers and Trustees of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those Trustees who are "interested
persons," as defined in the 1940 Act, of the Trust, Wright, The Winthrop
Corporation ("Winthrop"), Eaton Vance, Eaton Vance's wholly owned subsidiary,
Boston Management and Research ("BMR"), or Eaton Vance's parent company, Eaton
Vance Corp. ("EVC"), or Eaton Vance's Trustee, Eaton Vance, Inc. ("EV"), by
virtue of their affiliation with the Trust, Wright, Winthrop, Eaton Vance, EVC
or EV, are indicated by an asterisk (*).
PETER M. DONOVAN (55), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
H. DAY BRIGHAM, JR. (71), Vice President, Secretary and Trustee*
Retired Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, EVC, BMR and EV and Director, EVC and EV; Director of
Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
JUDITH R. CORCHARD (59), Vice President and Trustee*
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director Wright and Winthrop. Ms.
Corchard was appointed a Trustee of the Trust on December 10, 1997.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
DORCAS R. HARDY (52), Trustee
President, Dorcas R. Hardy & Associates, an international and domestic
public policy and management firm since 1989. Chairman and Chief Executive
Officer of Work Recovery, Inc., Tucson, AZ, an advanced rehabilitation
technology firm, 1996 to 1998. Ms. Hardy was elected a Trustee on December 9,
1998.
Address: 11407 Stonewall Jackson Drive, Spotsylvania, VA 22553
LELAND F. MILES (74), Trustee
President Emeritus, University of Bridgeport (1987-Present); President
University of Bridgeport (1974-1987); Director, United Illuminating Company. Mr.
Miles as appointed a Trustee of the Trust on June 17, 1997.
Address: 332 North Cedar Road, Fairfield, CT 06430
A.M. MOODY III (61), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (79), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE.
Address: 140 Snow Goose Court, Daytona Beach, FL 32119
RICHARD E. TABER (49), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed as a Trustee of the Trust on
March 18, 1997.
Address: 117 Prospect Street, Stamford, CT 06901
<PAGE>
RAYMOND VAN HOUTTE (73), Trustee
President Emeritus and Counselor of The Tompkins County Trust Co., Ithaca, NY
(since January 1989); President and Chief Executive Officer, The Tompkins County
Trust Company (1973-1988); President, New York State Bankers Association
(1987-1988); Director, McGraw Housing Company, Inc., Deanco, Inc., Evaporated
Metal Products and Tompkins County Area Development, Inc.
Address: One Strawberry Lane, Ithaca, NY 14850
JAMES L. O'CONNOR (53), Treasurer
Vice President of Eaton Vance and EV. Officer of various investment companies
managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (62), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance and EV. Officer of various investment companies
managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
A. JOHN MURPHY (35), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Murphy was elected Assistant
Secretary of the Trust on June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of Eaton Vance since February 1993. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Woodbury was elected
Assistant Secretary of the Trust on June 21, 1995.
Address: 24 Federal Street, Boston, MA 02110
WILLIAM J. AUSTIN, JR. (46), Assistant Treasurer
Assistant Vice President of Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
All of the Trustees and officers, except Michael F. Flament, hold identical
positions with The Wright Managed Income Trust, The Wright Managed Equity Trust,
The Wright Equifund Equity Trust, Catholic Values Investment Trust and The
Wright Blue Chip Master Portfolio Trust. The fees and expenses of those Trustees
(Messrs. Miles, Pierce, Taber and Van Houtte and Ms. Hardy) who are not
"interested persons" of the Trust and of Mr. Brigham are paid by the funds. They
also receive additional payments from other investment companies for which
Wright provides investment advisory services. The Trustees who are employees of
Wright receive no compensation from the Trust. The Trust does not have a
retirement plan for its Trustees. For Trustee compensation from the Trust for
the fiscal year ended December 31, 1998 and for the total compensation paid to
the Trustees from the Wright fund complex for the fiscal year ended December 31,
1998, see the following table.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Aggregate Compensation Pension Estimated Total
from The Wright Managed Benefits Annual Compensation
Trustees Blue Chip Series Trust Accrued Benefits Paid(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Day Brigham, Jr. $ None None $
Winthrop S. Emmet(2) None None
Dorcas Hardy None None
Leland Miles None None
Lloyd F. Pierce None None
Richard E. Taber None None
Raymond Van Houtte None None
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total compensation paid is from The Wright Managed Blue Chip Series Trust
(4 Portfolios) and the other funds in the Wright fund complex for a total
of 25 funds.
(2) Mr. Emmet resigned as a trustee during the fiscal year ended December 31,
1998.
<PAGE>
The Trust's board of trustees has established an Independent Trustees'
Committee consisting of all of the Independent Trustees who are Messrs. Miles,
Pierce (Chairman), Taber and Van Houtte and Ms. Hardy. The responsibilities of
the Independent Trustees' Committee include those of an audit committee for the
financial governance of the Trust, a nominating committee for additional or
replacement trustees of the Trust and a contract review committee for
consideration of renewals or changes in the investment advisory agreements,
distribution agreements and distribution plans and other agreements as
appropriate.
The Investment Adviser
The Trust has engaged Wright to act as the fund's investment adviser
pursuant to an Investment Advisory Contract. Wright furnishes each fund with
investment advice and management services. The Trustees of the Trust are
responsible for the general oversight of the conduct of each fund's business.
The School for Ethical Education, 1000 Lafayette Boulevard, Bridgeport, CT
06604, may be considered a controlling person of Wright's parent, Winthrop and
Wright by reason of its ownership of more than 25% of the outstanding shares of
Winthrop.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the funds, will furnish
continuously an investment program with respect to the funds, will determine
which securities should be purchased, sold or exchanged, and will implement such
determinations. Wright will furnish to the funds investment advice and
management services, office space, equipment and clerical personnel, and
investment advisory, statistical and research facilities. In addition, Wright
has arranged for certain members of the Eaton Vance and Wright organizations to
serve without salary as officers or Trustees of the Trust. In return for these
services, each fund is obligated to pay a monthly advisory fee calculated at the
rates set forth in the fund's current Prospectus.
The following table sets forth the net assets of each fund at December 31,
1998, and the advisory fee earned during the fiscal years ended December 31,
1998, 1997 and 1996.
<TABLE>
<CAPTION>
Net For the Fiscal For the Fiscal For the Fiscal
Assets Year Ended Year Ended Year Ended
PORTFOLIOS 12/31/98 12/31/98 12/31/97 12/31/96
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wright Selected Blue Chip Portfolio (WSBCP) (1) $ $ $19,920 $16,989
Wright International Blue Chip Portfolio (WIBCP) (2) $ $ $11,960 $10,298
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the fiscal year ended December 31, 1997, WSBCP made a reduction of its
advisory fee in the amount of $15,717. For the fiscal year ended December
31, 1996, WSBCP made a reduction of its advisory fee in the full amount of
such fee and Wright was allocated $0 of expenses related to the operation
of such fund.
(2) For the fiscal years ended December 31, 1997 and 1996, WIBCP made a
reduction of its advisory fee in the full amount of such fee and Wright was
allocated $21,630 and $15,486, respectively, of expenses related to the
operation of such fund.
The Administrator
The Trust has engaged Eaton Vance to act as the administrator for each
fund. For its services under the Administration Agreement, Eaton Vance receives
monthly administration fees based on the net assets of each fund at the annual
rates set forth in the fund's current Prospectus. The following table sets forth
the administration fees that would have been earned, absent a fee reduction,
from each fund for the fiscal years ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Administration Fees Paid
for the Fiscal Year Ended December 31
PORTFOLIOS 1998 1997 1996(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wright Selected Blue Chip Portfolio (WSBCP) $ $1,532 $1,307
Wright International Blue Chip Portfolio (WIBCP) $ $ 747(1) $ 644
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Eaton Vance made a reduction of the administration fee in the full amount.
<PAGE>
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are M. Dozier Gardner, James B. Hawkes and Benjamin A. Rowland,
Jr. The Directors of EVC consist of the same persons and John G. L. Cabot, John
M. Nelson, Vincent M. O'Reilly and Ralph Z. Sorenson. Mr. Hawkes is chairman,
president and chief executive officer and Mr. Gardner is vice chairman of EVC,
Eaton Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance
and EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust, the Voting Trustees of which are Messrs.
Gardner, Hawkes, Rowland, Alan R. Dynner , Thomas E. Faust, Jr., William M.
Steul and Wharton P. Whitaker. The Voting Trustees have unrestricted voting
rights for the election of Directors of EVC. All of the outstanding voting trust
receipts issued under said Voting Trust are owned by certain of the officers of
Eaton Vance and BMR who are also officers or officers and Directors of EVC and
EV. As of ________ __, 1999, Messrs. Gardner and Hawkes each owned ___% of such
voting trust receipts, Messrs. Rowland and Faust owned ___% and ___%,
respectively, and Messrs. Dynner and Whitaker each owned ___% of such voting
trust receipts. Messrs. Austin, Murphy, O'Connor and Woodbury and Ms. Sanders,
who are officers of the Trust, are also members of the Eaton Vance, BMR and EV
organizations. Eaton Vance will receive the fees paid under the Administration
Agreements.
In addition, Eaton Vance owns all the stock of Northeast Properties, Inc.,
which is engaged in real estate investment. EVC owns all of the stock of Fulcrum
Management, Inc. and MinVen, Inc., which are engaged in precious metal mining
venture investment and management. EVC also owns approximately 21% of the Class
A shares of Lloyd George Management (B.V.I.) Limited, a registered investment
adviser. EVC, EV, Eaton Vance and BMR may also enter into other businesses.
The Trust's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 2000. The Trust's Investment Advisory
Contract may be continued with respect to a fund from year to year thereafter so
long as such continuance after February 28, 2000 is approved at least annually
(i) by the vote of a majority of the Trustees who are not "interested persons"
of the Trust, Eaton Vance or Wright cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding shares of that
fund. The Trust's Administration Agreement may be continued from year to year
after February 28, 2000 so long as such continuance is approved annually by the
vote of a majority of the Trustees. Each agreement may be terminated as to a
fund at any time without penalty on sixty (60) days' written notice by the Board
of Trustees or Directors of either party, or by vote of the majority of the
outstanding shares of that fund, and each agreement will terminate automatically
in the event of its assignment. Each agreement provides that, in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties to the Trust under such agreement on the part of Eaton
Vance or Wright, Eaton Vance or Wright will not be liable to the Trust for any
loss incurred.
Custodian
Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston,
Massachusetts, acts as custodian for each of the funds. IBT, directly or through
subcustodians, has the custody of all cash and securities of the funds,
maintains the funds' general ledgers and computes daily the net asset value per
share of each fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the funds'
investments, receives and disburses all funds and performs various other
ministerial duties upon receipt of proper instructions from the funds.
Independent Certified Public Accountants
[ ] are the Trust's independent certified public accountants, providing
audit services, tax return preparation, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission.
Legal Matters
Certain legal matters are passed on for the Trust by Hale and Dorr LLP, 60
State Street, Boston, Massachusetts 02109.
<PAGE>
NET ASSET VALUE
Portfolio securities for which the primary market is on a domestic or
foreign exchange or which are traded over-the-counter and quoted on the NASDAQ
System will be valued at the last sale price on the day of valuation or, if
there was no sale that day, at the last reported bid price, using prices as of
the close of trading. Portfolio securities not quoted on the NASDAQ System that
are actively traded in the over-the-counter market, including listed securities
for which the primary market is believed to be the over-the-counter market, will
be valued at the most recently quoted bid price provided by the principal market
makers.
With respect to WIBCP, foreign securities traded outside the United States
are generally valued as of the time their trading is completed, which is usually
different from the close of the New York Stock Exchange. Occasionally, events
affecting the value of such securities may occur between such times and the
close of the New York Stock Exchange that will not be reflected in the
computation of WIBCP's net asset value. If events materially affecting the value
of such securities occur during such period, these securities will be valued at
their fair value according to procedures decided upon in good faith by the
Trustees. All securities and other assets of WIBCP initially quoted or
denominated in foreign currencies will be converted to U.S. dollar values at the
mean of the bid and offer prices of such currencies against U.S. dollars last
quoted on a valuation date by any recognized dealer.
In the case of any securities which are not actively traded, reliable
market quotations may not be considered to be readily available. These
investments are stated at fair value as determined under the direction of the
Trustees. Such fair value is expected to be determined by utilizing information
furnished by a pricing service which determines valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
If any securities held by a fund are restricted as to resale, their fair
value will be determined following procedures approved by the Trustees. The
Trustees periodically review such procedures. The fair value of such securities
is generally determined to be the amount which the fund could reasonably expect
to realize from an orderly disposition of such securities over a reasonable
period of time. The valuation procedures applied in any specific instance are
likely to vary from case to case. However, consideration is generally given to
the financial position of the issuer and other fundamental analytical data
relating to the investment and to the nature of the restrictions on disposition
of the securities (including any registration expenses that might be borne by
the fund in connection with such disposition). In addition, specific factors are
also generally considered, such as the cost of the investment, the market value
of any unrestricted securities of the same class (both at the time of purchase
and at the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer.
Notwithstanding the foregoing, short-term debt securities with maturities
of 60 days or less will be valued at amortized cost.
PURCHASE AND REDEMPTION OF SHARES
The shares of each fund are not offered to the public but may be purchased
only by participating insurance companies for their Accounts allocable to
Contracts. Within the limitations set forth in the appropriate Contract,
Contractholders may direct a participating insurance company to purchase or
redeem shares of any fund. Instructions for any such purchase or redemption of
the shares of any fund must be made by a participating insurance company and
Contractholders should not direct instructions or inquiries to the Trust. The
terms and conditions of the Contracts and any limitations upon the funds in
which the Accounts may invest are set forth in a separate prospectus.
Subject to the foregoing, each fund sells its shares to participating
insurance companies without a sales charge at the net asset value per share of
such fund next determined after the purchase order is received. Each fund
reserves the right to reject any order for the purchase of its shares or to
limit or suspend, without notice, the offering of its shares.
Shares of the funds may be redeemed on any day on which the Trust is open
for business. Each fund redeems its shares at the net asset value per share of
such fund next determined after the redemption request is received from a
participating insurance company. Proceeds of any redemption are delivered to the
participating insurance company within seven days after receipt of the
redemption request. The right to redeem shares of a fund and to receive payment
therefore may be suspended at times (a) when the securities markets are closed,
other than customary weekend and holiday closings, (b) when trading is
restricted for any reason, (c) when an emergency exists as a result of which
disposal by such fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for such fund fairly to determine the value of
its net assets, or (d) when the Securities and Exchange Commission by order
permits a suspension of the right of redemption or a postponement of the date of
payment or redemption.
<PAGE>
Although the funds normally intend to redeem shares in cash, each fund
reserves the right to redeem shares by distributing securities in kind if deemed
advisable by the Trustees. The value of any portfolio securities distributed
upon redemption will be determined in the manner as described under "Net Asset
Value." However, a fund will redeem shares in cash to the extent that the amount
of a fund's shares to be redeemed for the benefit of any Contractholder within a
90-day period does not exceed the lesser of $250,000 or 1% of the aggregate net
asset value of the fund at the beginning of such period. If portfolio securities
are distributed in lieu of cash, the shareholder will normally incur transaction
costs upon the disposition of any such securities.
TAXES
Federal Income Taxes
In order to qualify as a regulated investment company as described in the
Prospectus, a fund must, among other things, (1) derive at least 90% of its
gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or foreign currencies, or other income (including but not limited
to gains from options and forward contracts) derived with respect to its
business of investing in such stocks or securities and (2) diversify its
holdings in compliance with the diversification requirements of Subchapter M of
the Code so that, at the end of each quarter of the fund's taxable year, (a) at
least 50% of the market value of the fund's total assets is represented by cash,
U.S. Government securities and other securities limited in respect of any one
issuer to not more than 5% of the value of the fund's total (gross) assets and
to not more than 10% of the voting securities of such issuer, and (b) not more
than 25% of the value of its total (gross) assets is invested in securities of
any one issuer (other than U.S. Government securities) or certain other issuers
controlled by the fund.
As a regulated investment company, a fund will not be subject to federal
income tax on net investment income and net capital gains (short- and
long-term), if any, that it distributes to its shareholders if at least 90% of
its investment company taxable income (i.e., all of its net taxable income other
than the excess, if any, of net long-term capital gain over net short-term
capital loss ("net capital gain")), for the taxable year is distributed in
accordance with applicable timing requirements, but will be subject to tax at
regular corporate rates on any investment company taxable income or net capital
gain that is not so distributed. In general, dividends will be treated as paid
when actually distributed, except that dividends declared in October, November
or December and made payable to shareholders of record in such a month will be
treated as having been received by shareholders on December 31, if the dividend
is paid in the following January. Each fund intends to satisfy the distribution
requirement in each taxable year. A fund's distributions from investment company
taxable income and net capital gain are generally treated as ordinary income and
long-term capital gain, respectively, under the Code. Insurance companies should
consult their own tax advisers regarding the tax rules governing their treatment
upon receipt of these distributions and the proceeds of share redemptions
(including exchanges).
Each fund will not be subject to federal excise tax or the related
distribution requirements for any taxable year in which all of its shares are
held by segregated asset accounts of life insurance companies held in connection
with variable contracts or are attributable to certain "seed money" in
accordance with Section 4982(f) of the Code.
Investment by a fund in the stock of a "passive foreign investment company"
may cause the fund to recognize income prior to the receipt of distributions
from such a company or to become subject to tax upon the receipt of certain
excess distributions from, or upon disposition of its stock of, such a company,
although an election may generally be available that would ameliorate some of
these adverse tax consequences.
Each fund intends to comply with the diversification requirements imposed
by Section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on a fund by the 1940 Act and Subchapter M of the Code, place certain
limitations on the assets of each separate account and, because Section 817(h)
and those regulations treat the assets of the fund as assets of the related
separate account, the assets of a fund, that may be represented by any one, two,
three and four investments. Specifically, the regulations provide that, except
as permitted by the "safe harbor" described below, as of the end of each
calendar quarter or within 30 days thereafter no more than 55% of the total
assets of a fund may be represented by any one investment, no more than 70% by
any two investments, no more than 80% by any three investments and no more than
90% by any four investments. For this purpose, all securities of the same issuer
are considered a single investment, and each U.S. Government agency and
instrumentality is considered a separate issuer. Section 817(h) provides, as a
safe harbor, that a separate account will be treated as being adequately
diversified if the diversification requirements under Subchapter M are satisfied
and no more than 55% of the value of the account's total assets are cash and
cash items (including receivables), U.S. Government securities and securities of
other regulated investment companies. Failure by a fund to
<PAGE>
both qualify as a regulated investment company and satisfy the Section
817(h) requirements would generally result in treatment of the variable contract
holders other than as described in the applicable variable contract prospectus,
including inclusion in ordinary income of income accrued under the contracts for
the current and all prior taxable years. Any such failure may also result in
adverse tax consequences for the insurance company issuing the contracts.
The Trust may therefore find it necessary to take action to seek to ensure
that a Contract continues to qualify as a Contract under federal tax laws,
although the insurance company that maintains each segregated asset account is
responsible for ensuring that the assets held in that account satisfy the
diversification requirements of Section 817(h) of the Code and the applicable
regulations and the Trust itself can control only the assets held within the
funds. The Trust, for example, may be required to alter the investment
objectives of a fund or substitute the shares of one fund for those of another.
No such change of investment objectives or substitution of securities will take
place without notice to the shareholders of the affected fund.
The funds are not subject to Massachusetts corporate excise or franchise
tax. Provided that a fund qualifies as a regulated investment company under the
Code, it will also not be required to pay any Massachusetts income tax.
FINANCIAL HIGHLIGHTS
The audited financial statements of, and the independent auditors' report
for the funds and the Portfolios appear in the funds' most recent annual report
to shareholders and are incorporated by reference into this Statement of
Additional Information. A copy of the funds' annual report accompanies this
Statement of Additional Information.
Registrant incorporates by reference the audited financial information for
the funds and the Portfolios for the fiscal year ended December 31, 1998 as
previously filed electronically with the Securities and Exchange Commission
(Accession Number ____________).
<PAGE>
APPENDIX
- -------------------------------------------------------------------------------
Wright Quality Ratings
Wright Quality Ratings provide a means by which Wright evaluates certain
fundamental criteria for the measurement of the quality of an issuer's
securities.
Each rating is based on 32 individual measures of quality which can be
grouped into four components: (1) Investment Acceptance, (2) Financial Strength,
(3) Profitability and Stability, and (4) Growth. The total rating is three
letters and a numeral. The three letters measure (1) Investment Acceptance, (2)
Financial Strength, and (3) Profitability and Stability. Each letter reflects a
composite measurement of eight individual standards which are summarized as A:
Outstanding, B: Excellent, C: Good, D: Fair, L: Limited, and N: Not Rated. The
numeral rating reflects Growth and is a composite of eight individual standards
ranging from 0 to 20.
Equity Securities
Investment Acceptance reflects the acceptability of a security by and its
marketability among investors, and the liquidity of the market for such
securities.
Financial Strength represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
Profitability and Stability measures the record of a corporation's
management in terms of (1) the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
Growth measures the growth per common share of the corporation's equity
capital, earnings, and dividends, rather than the corporation's overall growth
of revenues and income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
Debt Securities
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are particularly relevant to fixed income and reserve investments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
A-1 and P-1 Commercial Paper Ratings by Standard & Poor's and Moody's
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that
<PAGE>
the degree of safety regarding timely payment is either overwhelming or
very strong. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign designation.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained from other sources it considers reliable. The
ratings may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information.
Bond Ratings
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and Standard & Poor's. Moody's uses a nine-symbol system with Aaa being
the highest rating and C the lowest. Standard & Poor's uses a 10-symbol system
that ranges from AAA to D. Bonds within the top four categories of Moody's (Aaa,
Aa, A, and Baa) and of Standard & Poor's (AAA, AA, A, and BBB) are considered to
be of investment-grade quality. Only the top three grades are acceptable for the
taxable Income funds and only the top two grades are acceptable for the tax-free
Income funds. Note that both Standard & Poor's and Moody's currently give their
highest rating to issuers insured by the American Municipal Bond Assurance
Corporation (AMBAC) or by the Municipal Bond Investors Assurance Corporation
(MBIA).
Bonds rated A by Standard & Poor's have a strong capacity to pay principal
and interest, although they are somewhat more susceptible to the adverse effects
of change in circumstances and economic conditions than debt in higher-rated
categories. The rating of AA is accorded to issues where the capacity to pay
principal and interest is very strong and they differ from AAA issues only in
small degree. The AAA rating indicates an extremely strong capacity to pay
principal and interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
<PAGE>
Statement of Additional Information
__, 1999
CATHOLIC VALUES EQUITY INVESTMENT PORTFOLIO
a series of
The Wright Managed Blue Chip Series Trust
24 Federal Street
Boston, Massachusetts 02110
Table of Contents
PAGE
The Fund's Investment Objective and Policies..........2
Additional Information about the Trust................6
Investment Restrictions...............................6
Trustees, Officers and the Catholic Advisory Board....7
Control Persons and Principal Holders of Shares......10
Investment Advisory and Administrative Services......10
Custodian............................................12
Independent Certified Public Accountants.............12
Brokerage Allocation.................................12
Pricing of Shares....................................12
Taxes................................................13
Calculation of Performance and Yield Quotations......14
Appendix.............................................16
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by the
current Prospectus of The Wright Managed Blue Chip Series Trust (the "Trust")
offering shares of the Catholic Values Equity Investment Portfolio (the "fund"),
dated September __, 1999, as supplemented from time to time, which is
incorporated herein by reference. This Statement of Additional Information
should be read in conjunction with the Prospectus. A copy of the Prospectus may
be obtained without charge from Wright Investors' Service Distributors, Inc.,
1000 Lafayette Boulevard, Bridgeport, Connecticut 06604 (Telephone:
888-974-9471).
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE AND POLICIES
The fund's objective is long-term growth of capital and reasonable current
income. Reasonable current income means that amount of income that can be
achieved, consistent with the Portfolio's goal of long-term growth of capital,
from a predominantly equity portfolio. Unless otherwise defined herein,
capitalized terms have the meaning given them in the Prospectus.
The fund will, through continuous supervision by Wright Investors' Service,
Inc. ("Wright" or the "Adviser") and the Catholic Advisory Board, pursue its
objective by investing in a broadly diversified portfolio consisting primarily
of equity securities of high-quality, well-established and profitable U.S. and
non-U.S. companies that offer products or services and undertake activities that
are consistent with the core teachings of the Catholic Church.
How Investments are Selected. Securities selected for the fund are drawn
from investment lists prepared by Wright and known as The Approved Wright
Investment List (the "AWIL") and The International Approved Wright Investment
List (the "International AWIL"). Securities drawn from these Investment Lists
will be reviewed for compliance with the core teachings of the Catholic Church
by the Catholic Advisory Board, which is appointed by the Board of Trustees of
the Trust (the "trustees") and is made up of prominent lay members of the
Catholic Church.
The Approved Wright Investment Lists (AWIL and International AWIL). Wright
systematically reviews about 5,200 U.S. companies and about 13,000 non-U.S.
companies in The Worldscope(R) database which it developed. This review first
identifies those companies which, on the basis of at least five years of audited
records, meet the minimum standards of prudence (e.g., the value of the
company's assets and shareholders' equity exceeds certain minimum standards and
its operations have been profitable during the last three years) and thus are
suitable for consideration by fiduciary investors. Companies meeting these
requirements (about 2,300 companies) are considered by Wright to be suitable for
prudent investment. They may be large or small, may have their securities traded
on exchange or over the counter and may include companies not currently paying
dividends on their shares.
These approximately 2,300 companies are then subjected to extensive
analysis and evaluation in order to identify those which meet Wright's 32
fundamental standards of Investment Quality. Only those companies which meet or
exceed all of these standards (a subset of the 2,300 companies considered
suitable for prudent investment) are eligible for selection by the Wright
Investment Committee for inclusion in the Investment Lists. See the Appendix
herein for a more detailed description of Wright Quality Ratings and the
Investment Lists.
All companies on the Investment Lists are, in the opinion of Wright,
soundly financed with established records of earnings profitability and equity
growth. All have established investment acceptance and active, liquid markets
for their publicly owned shares. The companies on the Investment Lists will be
referred to in this prospectus as "Blue Chips."
The Catholic Advisory Board. The Catholic Advisory Board assures that the
fund's investments are consistent with Catholic values. Each member of the Board
is involved in various Catholic organizations and activities and is in contact
with numerous Catholic institutions and Catholic clergy. Using the best publicly
available information obtained by Wright, the Catholic Advisory Board will
identify those companies recommended by Wright whose products, services and/or
activities are substantially consistent with core Catholic Church teachings. In
addition, information received from shareholders, secondary materials, and
general input from interested sources is consistently reviewed and evaluated.
The result is continuous dialogue, continuous information input, continuous
review, and thus continuous evaluation. It is believed that independent thinking
and independent information support a portfolio that adheres to Catholic
doctrine while balancing changes in the market place, changes in informational
input, and changes in value systems. Thus, the fund combines Catholic values
with investment values.
The Catholic Advisory Board will have sole discretion to determine which
companies meet the fund's religious criteria. Wright will be solely responsible
for evaluating the investment merits of the fund's holdings. When a company is
found not to be in compliance with core Catholic teachings, Wright is asked to
remove it from the fund's holdings. This policy may cause the fund to dispose of
a security at a time when it may be disadvantageous from an investment viewpoint
to do so.
Because the fund will consider for investment only securities which meet
the fund's investment and religious criteria, the return on securities chosen
may be lower than if the fund considered only investment criteria when selecting
investments. However, Wright does not expect there to be a material effect on
the performance.
Primary Investments. The fund will, under normal market conditions, invest
at least 80% of its net assets in equity securities of Blue Chip companies,
including common stocks, preferred stocks, warrants and securities convertible
into stock.
As a matter of nonfundamental policy, it is expected that the fund will
normally be fully invested in equity securities. However, the fund may invest up
to 20% of its net assets in the short-term debt securities described under
"Defensive and Certain Short-Term Investments." In addition, for temporary
defensive purposes the fund may hold cash or invest more than 20% of its net
assets in these short-term debt securities.
DESCRIPTION OF INVESTMENTS
U.S. Government, Agency and Instrumentality Securities - U.S. Government
securities in which the fund may invest are short-term obligations issued by the
Treasury and include bills, certificates of indebtedness, notes, and bonds.
Agencies and instrumentalities of the U.S. Government are established under the
authority of an act of Congress and include, but are not limited to, the
Government National Mortgage Association ("GNMA"), the Tennessee Valley
Authority, the Bank for Cooperatives, the Farmers Home Administration, Federal
Home Loan Banks, Federal Intermediate Credit Banks, Federal Land Banks, and the
Federal National Mortgage Association ("FNMA").
The fund has no current intention of investing in securities issued by GNMA
or FNMA or in any other mortgage-backed securities.
Foreign Investments -- The fund may invest up to 30% of its total assets in
equity securities of foreign companies that are on the International AWIL and
that are traded on a securities market of the country in which the company is
located or other foreign securities exchanges. In addition, the fund may
purchase securities in the form of American Depositary Receipts ("ADRs") or
similar securities representing interests in an underlying foreign security.
ADRs are not necessarily denominated in the same currency as the underlying
foreign securities. If an ADR is not sponsored by the issuer of the underlying
foreign security, the institution issuing the ADR may have reduced access to
information about the issuer.
Investments in foreign securities involve risks in addition to those
associated with investments in the securities of U.S. issuers. These risks
include less publicly available financial and other information about foreign
companies; less rigorous securities regulation; the potential imposition of
currency controls, foreign withholding and other taxes; and war, expropriation
or other adverse governmental actions. Foreign equity markets may be less liquid
than United States markets and may be subject to delays in the settlement of
portfolio transactions. Brokerage commissions and other transaction costs in
foreign markets tend to be higher than in the United States. The value of
foreign securities denominated in a foreign currency will vary in accordance
with changes in currency exchange rates, which can be volatile. In addition, the
prices of unsponsored ADRs may be more volatile than if they were sponsored by
the issuers of the underlying securities. These considerations generally are of
greater concern in developing countries.
Repurchase Agreements - The fund may invest in repurchase agreements, which
involve purchase of U.S. Government securities. At the same time the fund
purchases the security, it resells it to the vendor (a member bank of the
Federal Reserve System or recognized securities dealer that meets Wright credit
standards), and is obligated to redeliver the security to the vendor on an
agreed-upon date in the future. The resale price exceeds the purchase price and
reflects an agreed-upon market rate unrelated to the coupon rate on the
purchased security. Such transactions afford an opportunity for the fund to earn
a return on cash which is only temporarily available. The fund's risk is the
ability of the vendor to pay an agreed-upon sum upon the delivery date. The fund
believes this risk is limited to the difference between the market value of the
security and the repurchase price provided for in the repurchase agreement.
Repurchase agreements must be fully collateralized at all times. In the
event of a default or bankruptcy by a vendor under a repurchase agreement, the
fund will seek to liquidate such collateral. However, the exercise of the right
to liquidate such collateral could involve certain costs, delays and
restrictions and is not ultimately assured. To the extent that proceeds from any
sale upon a default of the obligations to repurchase are less than the
repurchase price, the fund could suffer a loss.
In all cases when entering into repurchase agreements with other than
FDIC-insured depository institutions, the fund will take physical possession of
the underlying collateral security, or will receive written confirmation of the
purchase of the collateral security and a custodial or safekeeping receipt from
a third party under a written bailment for hire contract, or will be the
recorded owner of the collateral security through the Federal Reserve Book-Entry
System.
Defensive and Certain Short-Term Investments - Under normal market
conditions up to 20% of the fund's net assets or, during periods of unusual
market conditions, when Wright believes that investing for temporary defensive
purposes in appropriate, all or any portion of the fund's assets may be held in
cash, money market instruments or other short-term obligations. These include
<PAGE>
short-term obligations issued or guaranteed as to interest and principle by the
U.S. Government or any agency or instrumentality thereof (including repurchase
agreement collateralized by such securities).
The fund may invest in the following U.S. dollar denominated, high quality
short-term obligations to the extent set forth above:
Certificates of Deposit - are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified rate of return,
and are normally negotiable.
Bankers' Acceptances - are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.
Commercial Paper - refers to promissory notes issued by corporations in
order to finance their short-term credit needs. Commercial paper acquired by the
fund must, at the date of investment, be rated A-1 by Standard & Poor's Ratings
Group ("S&P") or P-1 by Moody's Investors Service, Inc. ( "Moody's"), or, if not
rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
Finance Company Paper - refers to promissory notes issued by finance
companies in order to finance their short-term credit needs. Finance company
paper must have the same ratings as commercial paper at the time of purchase.
See "Commercial Paper" above.
Corporate Obligations - include bonds and notes issued by corporations and
other entities in order to finance short-term credit needs. Corporate
obligations and other debt instruments in which the fund may invest must, at the
date of investment, be rated AA or better by S&P or Aa or better by Moody's or,
if not rated by such rating organizations, be deemed by the trustees to be of
comparable quality.
The fund may invest in instruments and obligations of banks that have other
relationships with the fund, Wright or Eaton Vance. No preference will be shown
towards investing in banks which have such relationships.
The prices of fixed income securities vary inversely with interest rates.
Therefore, the value of the fund's investments in convertible securities and
short-term obligations will decline when interest rates are rising. The
investment objective and, unless otherwise indicated, policies of the fund may
be changed by the trustees without a vote of the fund's shareholders. The fund
is not a complete investment program and there is no assurance that the fund
will achieve its investment objective. The market price of securities held by
the fund and the net asset value of the fund's shares will fluctuate in response
to stock market developments and currency exchange rate fluctuations.
"When Issued" Securities - Securities are frequently offered on a
"when-issued" basis. When so offered, the price, which is generally expressed in
terms of yield to maturity, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued securities may take place at
a later date. Normally, the settlement date occurs 15 to 90 days after the date
of the transaction. The payment obligation and the interest rate that will be
received on the securities are fixed at the time the fund enters into the
purchase commitment. During the period between purchase and settlement, no
payment is made by the fund to the issuer and no interest accrues to the fund.
To the extent that assets of the fund are held in cash pending the settlement of
a purchase of securities, the fund would earn no income; however, the fund
intends to be fully invested to the extent practicable and subject to the
policies stated above. While when-issued securities may be sold prior to the
settlement date, it is intended that such securities will be purchased for the
fund with the purpose of actually acquiring them unless a sale appears to be
desirable for investment reasons.
At the time a commitment to purchase securities on a when-issued basis is
made for the fund, the transaction will be recorded and the value of the
security reflected in determining the fund's net asset value. The fund will
establish a segregated account in which the fund will maintain cash and liquid
securities equal in value to commitments for when-issued securities. If the
value of the securities placed in the separate account declines, additional cash
or securities will be placed in the account on a daily basis so that the value
of the account will at least equal the amount of the fund's when-issued
commitments. Such segregated securities either will mature or, if necessary, be
sold on or before the settlement date.
Securities purchased on a when-issued basis and the securities held by the
fund are subject to changes in value based upon the public's perception of the
creditworthiness of the issuer and changes in the level of interest rates.
(Thus, both positions will change in value in the same way, i.e., both
experiencing appreciation when interest rates decline and depreciation when
<PAGE>
interest rates rise.) Therefore, to the extent that the fund remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be greater fluctuations in the market value
of the fund's net assets than if only cash were set aside to pay for when-issued
securities.
The fund has no current intention of investing in when-issued securities.
Illiquid and Restricted Securities - The fund may purchase securities that
are not registered ( "restricted securities") under the Securities Act of 1933 (
"1933 Act"), including securities offered and sold to "qualified institutional
buyers" ("QIB's") under Rule 144A under the 1933 Act. However, the fund will not
invest more than 15% of its net assets in illiquid investments, which include
repurchase agreements maturing in more than seven days, securities that are not
readily marketable and restricted securities not eligible for resale to QIB's.
If the value of the fund's illiquid investments increased to more than 15% of
net assets, Wright would begin reducing these investments in an orderly manner
to the extent necessary to comply with the 15% limit. If the Board of Trustees
determines, based upon a continuing review of the trading markets for specific
Rule 144A securities, that they are liquid, then such securities may be
purchased without regard to the 15% limit. The trustees may adopt guidelines and
delegate to Wright the daily function of monitoring and determining the
liquidity of restricted securities. The trustees, however, will retain
sufficient oversight and be ultimately responsible for the determinations. The
trustees will carefully monitor the fund's investments in these securities,
focusing on such important factors, among others, as valuation, liquidity and
availability of information.
The fund may acquire other restricted securities including securities for
which market quotations are not readily available. These securities may be sold
only in privately negotiated transactions or in public offerings with respect to
which a registration statement is in effect under the 1933 Act. Where
registration is required, the fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the fund might obtain a less favorable price
than prevailed when it decided to sell. Restricted securities will be priced at
fair market value as determined in good faith by the Trust's trustees.
The fund does not currently intend to purchase restricted securities.
Borrowing: Lending Portfolio Securities - The fund may borrow for temporary
or emergency purposes in an amount up to one-third of the fund's total assets.
The fund may lend portfolio securities with a value up to 30% of its total
assets to enhance its income. The fund may pay reasonable fees in connection
with securities loans. Wright will evaluate the creditworthiness of prospective
institutional borrowers and monitor the adequacy of the collateral to reduce the
risk of default by borrowers. The fund may seek to increase income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Securities and Exchange Commission, such
loans are required to be secured continuously by collateral in cash or liquid
securities maintained on a current basis at an amount at least equal to the
market value of the securities loaned, which will be marked to market daily. The
fund would have the right to call a loan and obtain the securities loaned at any
time on up to five business days' notice. The fund would not have the right to
vote any securities having voting rights during the existence of a loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment.
The fund does not currently intend to engage in securities loans.
Warrants and Convertible Securities - The fund may invest up to 5% of its
net assets in warrants. Warrants acquired by the fund will entitle it to buy
common stock at a specified price and time. The fund may invest up to 5% of its
net assets in convertible securities. Convertible debt securities and
convertible preferred stock entitle the fund to acquire the issuer's stock by
exchange or purchase at a predetermined rate.
Warrants are subject to the same market risks as stocks, but may be more
volatile in price. The fund's investments in warrants will not entitle it to
receive dividends or exercise voting rights and will become worthless if the
warrants cannot be profitably exercised before their expiration dates.
Convertible securities are subject both to the credit and interest rate risks
associated with debt obligations and to the stock market risk associated with
equity securities. Convertible debt securities in which the fund may invest
must, at the date of investment, be rated AA or better by S&P or Aa or better by
Moody's or, if not rated by one of these rating organizations, be deemed by
Wright to be of comparable quality.
Interest Rate Risk - The market value of the U.S. Government securities,
short-term investments and convertible securities in which the fund may invest
varies inversely with changes in the prevailing levels of interest rates. For
example, if interest rates rise after one of the foregoing securities has been
purchased, the value of the security would decline.
<PAGE>
Short Sales - The fund may engage in short sales in order to profit from an
anticipated decline in the value of a security. The fund may also engage in
short sales to attempt to limit its exposure to a possible market decline in the
value of its portfolio securities through short sales of securities which Wright
believes possess volatility characteristics similar to those being hedged. To
effect such a transaction, the fund must borrow the security sold short to make
delivery to the buyer. The fund then is obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. Until
the security is replaced the fund is required to pay to the lender any accrued
interest or dividends and may be required to pay a premium. The fund may only
make short sales "against the box," meaning that the fund either owns the
securities sold short or, by virtue of its ownership of other securities, has
the right to obtain securities equivalent in kind and amount to the securities
sold and, if the right is conditional, the sale is made upon the same
conditions.
The fund has no current intention of engaging in short sales.
Financial Futures Contracts and Related Options - The fund does not
currently intend to purchase or sell financial futures contracts or related
options.
Diversification -- The fund is diversified and therefore may not, with
respect to 75% of its total assets, (1) invest more than 5% of its total assets
in the securities of any one issuer, other than U.S. Government securities, or
(2) acquire more than 10% of the outstanding voting securities of any one
issuer. The fund will not concentrate (invest 25% or more of its total assets)
in the securities of issuers in any one industry.
Portfolio Turnover Rate - The fund estimates that its portfolio turnover
rate will be approximately 22% per year.
ADDITIONAL INFORMATION ABOUT THE TRUST
The Trust's Declaration of Trust may be amended with the affirmative vote
of a majority of the outstanding shares of the Trust or, if only the interests
of the fund are affected, a majority of the fund's outstanding shares. The
trustees are authorized to make amendments to the Declaration of Trust that do
not have a material adverse effect on the interests of shareholders. The Trust
may be terminated (i) upon the sale of the Trust's assets to another investment
company, if approved by the holders of two-thirds of the outstanding shares of
the Trust, except that if the Trustees recommend such sale of assets, the
approval by the vote of a majority of the Trust's outstanding shares will be
sufficient, or (ii) upon liquidation and distribution of the assets of the
Trust, if approved by a majority of its Trustees or by the vote of a majority of
the Trust's outstanding shares. If not so terminated, the Trust may continue
indefinitely.
The Trust's Declaration of Trust further provides that the Trustees will
not be liable for errors of judgment or mistakes of fact or law; however,
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Trust's Declaration of Trust contains an express
disclaimer of shareholder liability in connection with the Trust property or the
acts, obligations or affairs of the Trust. The Declaration of Trust also
provides for indemnification out of the Trust property of any shareholder held
personally liable for the claims and liabilities to which a shareholder may
become subject by reason of being or having been a shareholder. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations. The Trust has been advised by counsel that the risk of any
shareholder incurring any liability for the obligations of a Trust is extremely
remote. Wright does not consider this risk to be material.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the fund and may
be changed only by the vote of a majority of the fund's outstanding voting
securities, which as used in this Statement of Additional Information means the
lesser of (a) 67% of the shares of the fund if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the fund. Accordingly, the fund may not:
<PAGE>
(1) With respect to 75% of the total assets of the fund, purchase the
securities of any issuer if such purchase at the time thereof would
cause more than 5% of its total assets (taken at market value) to be
invested in the securities of such issuer, or purchase securities of
any issuer if such purchase at the time thereof would cause more than
10% of the total voting securities of such issuer to be held by the
fund, except obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and except securities of other
investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940. In addition, the fund may not issue
bonds, debentures or senior equity securities, other than shares of
beneficial interest;
(3) Purchase securities on margin (but the fund may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities);
(4) Underwrite or participate in the marketing of securities of others;
(5) Make an investment in any one industry if such investment would cause
investments in such industry to equal or exceed 25% of the fund's total
assets, at market value at the time of such investment (other than
securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities);
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of companies
which invest or deal in real estate;
(7) Purchase or sell commodities or commodity contracts for the purchase or
sale of physical commodities, except that the fund may purchase and
sell financial futures contracts, options on financial futures
contracts and all types of currency contracts; or
(8) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments (b) entering into
repurchase agreements or (c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the fund, the
fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
fund.
The fund has adopted the following investment policy which may be changed
without approval by the fund's shareholders. As a matter of nonfundamental
policy, the fund will not invest more than 15% of net assets in illiquid
investments.
Except for the fund's investment policy with respect to borrowing money, if
a percentage restriction contained in the fund's investment policies is adhered
to at the time of investment, a later increase or decrease in the percentage
resulting from a change in the value of portfolio securities or the fund's net
assets will not be considered a violation of such restriction.
TRUSTEES, OFFICERS AND THE CATHOLIC ADVISORY BOARD
Trustees and Officers
The trustees and officers of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Those trustees who are "interested
persons" (as defined in the Investment Company Act of 1940 (the "1940 Act") of
the Trust, Wright, The Winthrop Corporation ("Winthrop"), Eaton Vance, Eaton
Vance's wholly owned subsidiary, Boston Management and Research ("BMR"), Eaton
Vance's parent company, Eaton Vance Corp. ("EVC"), or Eaton Vance's and BMR's
trustee, Eaton Vance, Inc. ("EV") by virtue of their affiliation with either the
Trust, Wright, Winthrop, Eaton Vance, BMR, EVC or EV, are indicated by an
asterisk (*).
PETER M. DONOVAN (55), President and Trustee*
President, Chief Executive Officer and Director of Wright and Winthrop; Vice
President, Treasurer and a Director of Wright Investors' Service Distributors,
Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
<PAGE>
H. DAY BRIGHAM, JR. (71), Vice President, Secretary and Trustee*
Retired, Vice President, Chairman of the Management Committee and Chief Legal
Officer of Eaton Vance, BMR, EVC and EV and Director of EV and EVC; Director of
Wright and Winthrop since February, 1997.
Address: 92 Reservoir Avenue, Chestnut Hill, MA 02167
JUDITH R. CORCHARD (59), Vice President and Trustee*
Executive Vice President, Investment Management: Senior Investment Officer;
Chairman of the Investment Committee and Director of Wright and Winthrop. Ms.
Corchard was appointed a Trustee of the Trust on December 10, 1997.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
DORCAS R HARDY (52), Trustee
resident, Dorcas R. Hardy & Associates, an international and domestic
public policy and management firm since 1989. Chairman and Chief Executive
Officer of Work Recovery, Inc., Tucson AZ. an advanced rehabilitation technology
firm, 1996 to 1998. Ms. Hardy was appointed as a Trustee on December 9, 1998.
Address: 11407 Stonewall Jackson Drive, Spotsylvania, VA 22553
LELAND F. MILES (74), Trustee
President Emeritus, University of Bridgeport (1987-present); President,
University of Bridgeport (1974-1987); Director, United Illuminating Company.
Address: 332 North Cedar Road, Fairfield, CT 06430
A.M. MOODY, III (61), Vice President & Trustee*
Senior Vice President, Wright and Winthrop; President, Wright Investors'
Service Distributors, Inc.
Address: 1000 Lafayette Boulevard, Bridgeport, CT 06604
LLOYD F. PIERCE (79), Trustee
Retired Vice Chairman (prior to 1984 - President), People's Bank, Bridgeport,
CT; Member, Board of Trustees, People's Bank, Bridgeport, CT; Board of
Directors, Southern Connecticut Gas Company; Chairman, Board of Directors,
COSINE (a software company).
Address: 140 Snow Goose Court, Daytona Beach, FL 32119
RICHARD E. TABER (49), Trustee
Chairman and Chief Executive Officer of First County Bank, Stamford, CT
(1989-present). Mr. Taber was appointed a Trustee of the Trust on
March 18, 1997.
Address: 117 Prospect Street, Stamford, CT 06904
RAYMOND VAN HOUTTE (73), Trustee
President Emeritus and Counselor of The Tompkins County Trust Company,
Ithaca, NY (since January 1989); President and Chief Executive Officer, The
Tompkins County Trust Company (1973-1988); President, New York State Bankers
Association (1987-1988); Trustee Emeritus Paleontological Institution (since
May, 1995).
Address: One Strawberry Lane, Ithaca, NY 14850
JAMES L. O'CONNOR (53), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
JANET E. SANDERS (62), Assistant Secretary and Assistant Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
WILLIAM J. AUSTIN, JR. (46), Assistant Treasurer
Assistant Vice President of Eaton Vance, BMR and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
<PAGE>
A. JOHN MURPHY (35), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993. Officer of
various investment companies managed by Eaton Vance or BMR.
Address: 24 Federal Street, Boston, MA 02110
All of the trustees and officers hold identical positions with The Wright
Managed Equity Trust, The Wright Managed Income Trust, The Wright Equifund
Equity Trust, The Wright Blue Chip Master Portfolio Trust and Catholic Values
Investment Trust. Each trustee who is not an employee of Wright, Winthrop, Eaton
Vance, its parents or subsidiaries, including Mr. Brigham, receives annual
compensation from the Trust. The trustees who are employees of Wright receive no
compensation from the Trust. Non-affiliated trustees, including Mr. Brigham,
also receive additional payments from other investment companies for which
Wright provides investment advisory services. The Trust does not have a
retirement plan for the trustees. The fund will not compensate the Trustees for
serving on the Board during the current fiscal year. See the "Compensation
Table" below.
The Board of Trustees has established an Independent Trustees' Committee
consisting of all of the Independent Trustees, who are Messrs. Miles, Pierce
(Chairman), Taber and Van Houtte and Ms. Hardy. The responsibilities of the
Independent Trustees" Committee include those of an audit committee for the
financial governance of the Trust, a nominating committee for additional or
replacement trustees of the Trust and a contract review committee for
consideration of renewals or changes in the investment advisory agreements,
distribution agreements and distribution plans and other agreements as
appropriate.
Catholic Advisory Board
The members of the Catholic Advisory Board and their principal occupations
during the past five years are set forth below. Each member of the Catholic
Advisory Board may be contacted at the following address: The Wright Managed
Blue Chip Series Trust, 24 Federal Street, Boston, Massachusetts 02110.
THOMAS P. MELADY (71), Chairman. Former U.S. Ambassador to
Burundi and to the Holy See, President Emeritus of Sacred
Heart University, author of 14 books and numerous articles.
MARGARET M. HECKLER (66), Eight term Congresswoman from the
Massachusetts 10th District, former Secretary of the
Department of Health and Human Services, former Ambassador to
Ireland.
BOWIE K. KUHN (71), former Commissioner of Baseball.
TIMOTHY J. MAY (65), Senior Partner, Patton Boggs, L.L.P.
THOMAS S. MONAGHAN (61), President, CEO and Chairman of the
Board of Domino's Pizza, Inc.
WILLIAM A. WILSON (83), former (and first) U.S. Ambassador to
the Holy See.
The members of the Catholic Advisory Board are paid by the fund. The Trust
does not have a retirement plan for the Catholic Advisory Board members. The
Catholic Advisory Board members serve the fund and Catholic Values Investment
Trust. The fund will not compensate Catholic Advisory Board members for serving
during the current fiscal year. See the following "Compensation Table."
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
Aggregate Pension or Estimated Total
Compensation from Retirement Annual Benefits Compensation
the Fund(1) Benefits Accrued Upon Retirement Paid(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Day Brigham, Jr. $ None None $
Winthrop S. Emmet(3) None None
Dorcas Hardy None None
Leland Miles None None
Lloyd F. Pierce None None
Richard E. Taber None None
Raymond Van Houtte None None
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the fund's fiscal year ended December 31, 1998.
(2) Total compensation paid is for the year ended December 31, 1998 and includes
service on the then-existing boards in the Wright fund complex (25 funds).
(3) Mr. Emmet retired as a trustee during the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
Aggregate Pension or Estimated Total
Catholic Advisory Board Compensation from Retirement Annual Benefits Compensation
Members the Fund(1) Benefits Accrued Upon Retirement Paid(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas P. Melady None None None $
Margaret M. Heckler None None None
Bowie K. Kuhn None None None
Timothy J. May None None None
Thomas S. Monaghan None None None
William A. Wilson None None None
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the fund's fiscal year ended December 31, 1998.
(2) Total compensation paid is for the year ended December 31, 1998 and
includes service on the fund's advisory board and Catholic Values Investment
Trust's advisory board.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of the date of this Statement of Additional Information, all of the
outstanding shares of the fund are owned by Wright.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
The fund has engaged Wright to act as the fund's investment adviser
pursuant to an Investment Advisory Contract (the "Investment Advisory
Contract"). Wright, acting under the general supervision of the trustees,
furnishes the fund with investment advice and management services, as described
below. The School for Ethical Education, 1000 Lafayette Boulevard, Bridgeport,
CT 06604, may be considered a controlling person of Wright's parent, Winthrop,
and Wright by reason of its ownership of more than 25% of the outstanding shares
of Winthrop.
Pursuant to the Investment Advisory Contract, Wright will carry out the
investment and reinvestment of the assets of the fund, will furnish continuously
an investment program with respect to the fund, will determine which securities
should be purchased, sold or exchanged in consultation with the Catholic
Advisory Board, and will implement such determinations. Wright will be solely
responsible for evaluating the investment merits of the fund's portfolio
investments. Wright will furnish to the fund investment advice and management
services, office space, equipment and clerical personnel, and investment
advisory, statistical and research facilities. In addition, Wright has arranged
for certain members of the Eaton Vance and Wright organizations to
<PAGE>
serve without salary as officers or trustees of the Trust. In return for
these services, the fund is obligated to pay a monthly advisory fee calculated
at the rates set forth in the fund's current Prospectus. During the fiscal year
ended December 31, 1998, the fund paid advisory fees of $______ to Wright.
The fund has engaged Eaton Vance to act as its administrator pursuant to an
Administration Agreement. For its services under the Administration Agreement,
Eaton Vance receives monthly administration fees at the annual rates of x.xx% of
the fund's average net assets.
For the fiscal year ended December 31, 1998, the fund paid an
administration fee equivalent to $________ to Eaton Vance.
Eaton Vance and EV are both wholly owned subsidiaries of EVC. BMR is a
wholly owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are M. Dozier Gardner, James B. Hawkes and Benjamin A. Rowland,
Jr. The Directors of EVC consist of the same persons and John G. L. Cabot, John
M. Nelson, Vincent M. O'Reilly and Ralph Z. Sorenson. Mr. Hawkes is chairman,
president and chief executive officer and Mr. Gardner is vice chairman of EVC,
Eaton Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance
and of EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust, the Voting Trustees of which are Messrs.
Gardner, Hawkes and Rowland, and Alan R. Dynner, Thomas E. Faust, Jr., William
M. Steul, and Wharton P. Whitaker. The Voting Trustees have unrestricted voting
rights for the election of Directors of EVC. All of the outstanding voting trust
receipts issued under said Voting Trust are owned by certain of the officers of
Eaton Vance and BMR who are also officers or officers and Directors of EVC and
EV. As of ________, 1999, Messrs. Gardner and Hawkes each owned __% of such
voting trust receipts, Messrs. Rowland and Faust owned __% and __%,
respectively, and Messrs. Dynner, Steul and Whitaker owned __% of such voting
trust receipts. Messrs. Austin, Murphy, O'Connor and Woodbury and Ms. Sanders
are officers of the Trust and are also members of the Eaton Vance, BMR and EV
organizations. Eaton Vance will receive the fees paid under the Administration
Agreement.
Eaton Vance owns all the stock of Northeast Properties, Inc., which is
engaged in real estate investment. EVC owns all of the stock of Fulcrum
Management, Inc. and MinVen, Inc., which are engaged in precious metal mining
venture investment and management. EVC, EV, Eaton Vance and BMR may also enter
into other businesses.
The fund will be responsible for all of its expenses not expressly stated
to be payable by Wright under its Investment Advisory Contract, including,
without limitation, the fees and expenses of its custodian and transfer agent,
including those incurred for determining the fund's net asset value and keeping
the fund's books; the cost of share certificates; membership dues to investment
company organizations; brokerage commissions and fees; fees and expenses of
registering its shares; expenses of reports to shareholders, proxy statements,
and other expenses of shareholders' meetings; insurance premiums; printing and
mailing expenses; interest, taxes and corporate fees; legal and accounting
expenses; expenses of trustees not affiliated with Eaton Vance or Wright; and
investment advisory and administration fees. The fund will also bear expenses
incurred in connection with litigation in which the fund is a party and the
legal obligation the fund may have to indemnify the officers and trustees of the
Trust with respect thereto.
The fund's Investment Advisory Contract and Administration Agreement will
remain in effect until February 28, 2000. The Investment Advisory Contract may
be continued from year to year thereafter so long as such continuance after
February 28, 2000 is approved at least annually (i) by the vote of a majority of
the trustees who are not "interested persons" of the Trust, Eaton Vance or
Wright cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the board of trustees or by vote of a majority of
the outstanding shares of the fund. The fund's Administration Agreement may be
continued from year to year after February 28, 2000 so long as such continuance
is approved annually by the vote of a majority of the trustees. Each agreement
may be terminated at any time without penalty on sixty (60) days written notice
by the board of trustees or directors of either party, or by vote of the
majority of the outstanding shares of the fund. Each agreement will terminate
automatically in the event of its assignment. Each agreement provides that, in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties to the fund under such agreement on the
part of Eaton Vance or Wright, neither Eaton Vance nor Wright, as the case may
be, will be liable to the fund for any loss incurred.
CUSTODIAN
IBT, 200 Clarendon Street, Boston, MA 02116, acts as custodian for the
fund. IBT has the custody of all cash and securities of the fund, maintains the
fund's general ledgers and computes the daily net asset value per share. In such
capacity it attends to
<PAGE>
details in connection with the sale, exchange, substitution, transfer or
other dealings with the fund's investments, receives and disburses all funds and
performs various other ministerial duties upon receipt of proper instructions
from the fund.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
[ ], is the Trust's independent certified public accountant, providing
audit services, tax return preparation, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission.
BROKERAGE ALLOCATION
Wright places the portfolio security transactions for the fund, which in
some cases may be effected in block transactions which include other accounts
managed by Wright. Wright provides similar services directly for bank trust
departments and other investment advisory accounts. Wright seeks to execute
portfolio security transactions on the most favorable terms and in the most
effective manner possible. In seeking best execution, Wright will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the size and type of
the transaction, the nature and character of the markets for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, experience and financial condition of the
broker-dealer and the value and quality of service rendered by the broker-dealer
in other transactions, and the reasonableness of the brokerage commission or
markup, if any.
It is expected that on frequent occasions there will be many broker-dealer
firms which will meet the foregoing criteria for a particular transaction. In
selecting among such firms, Wright may give consideration to those firms which
supply brokerage and research services, quotations and statistical and other
information to Wright for its use in servicing its advisory accounts. Wright may
include firms which purchase investment services from Wright. The term
"brokerage and research services" includes advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). Such services and information may be useful
and of value to Wright in servicing all or less than all of its accounts and the
services and information furnished by a particular firm may not necessarily be
used in connection with the account which paid brokerage commissions to such
firm. The advisory fee paid by the fund to Wright is not reduced as a
consequence of Wright's receipt of such services and information. While such
services and information are not expected to reduce Wright's normal research
activities and expenses, Wright would, through use of such services and
information, avoid the additional expenses which would be incurred if it should
attempt to develop comparable services and information through its own staff.
Under the fund's Investment Advisory Contract, Wright has the authority to
pay commissions on portfolio transactions for brokerage and research services
exceeding that which other brokers or dealers might charge provided certain
conditions are met. This authority will not be exercised, however, until the
Prospectus or this Statement of Additional Information has been supplemented or
amended to disclose the conditions under which Wright proposes to do so.
The Investment Advisory Contract expressly recognizes the practices which
are provided for in Section 28(e) of the Securities Exchange Act of 1934 by
authorizing the selection of a broker or dealer which charges the fund a
commission which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if it is determined in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services which have been provided.
PRICING OF SHARES
For a description of how the fund values its shares, see "Information About
Your Account -- Determining Share Price [NAV]" in the fund's current Prospectus.
The fund values securities with a remaining maturity of 60 days or less by the
amortized cost method. The amortized cost method involves initially valuing a
security at its cost (or its fair market value on the sixty-first day prior to
maturity) and thereafter assuming a constant amortization to maturity of any
discount or premium, without regard to unrealized appreciation or depreciation
in the market value of the security.
<PAGE>
The fund values foreign securities, if any, on the basis of quotations from
the primary market in which they are traded. Any assets or liabilities expressed
in terms of foreign currencies are translated into U.S. dollars by the custodian
based on London currency exchange quotations as of 5:00 p.m., London time (12:00
noon, New York time) on the date of any determination of the fund's net asset
value.
The fund will not price its securities on the following national holidays:
New Year's Day; Martin Luther King, Jr. Day; Presidents' Day; Good Friday;
Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and Christmas Day.
TAXES
In order to qualify as a regulated investment company as described in the
Prospectus, the fund must, among other things, (1) derive at least 90% of its
gross income in each taxable year from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stocks
or securities or foreign currencies, or other income (including but not limited
to gains from options and forward contracts) derived with respect to its
business of investing in such stocks or securities and (2) diversify its
holdings in compliance with the diversification requirements of Subchapter M of
the Code so that, at the end of each quarter of the fund's taxable year, (a) at
least 50% of the market value of the fund's total assets is represented by cash,
U.S. Government securities and other securities limited in respect of any one
issuer to not more than 5% of the value of the fund's total (gross) assets and
to not more than 10% of the voting securities of such issuer, and (b) not more
than 25% of the value of its total (gross) assets is invested in securities of
any one issuer (other than U.S. Government securities) or certain other issuers
controlled by the fund.
As a regulated investment company, the fund will not be subject to federal
income tax on net investment income and net capital gains (short and long-term),
if any, that it distributes to its shareholders if at least 90% of its
investment company taxable income (i.e., all of its net taxable income other
than the excess, if any, of net long-term capital gain over net short-term
capital loss ("net capital gain"), for the taxable year is distributed in
accordance with applicable timing requirements, but will be subject to tax at
regular corporate rates on any investment company taxable income or net capital
gain that is not so distributed. In general, dividends will be treated as paid
when actually distributed, except that dividends declared in October, November
or December and made payable to shareholders of record in such a month will be
treated as having been received by shareholders on December 31, if the dividend
is paid in the following January. The fund intends to satisfy the distribution
requirement in each taxable year. The fund's distributions from investment
company taxable income and net capital gain are generally treated as ordinary
income and long-term capital gain, respectively, under the Code. Insurance
companies should consult their own tax advisers regarding the tax rules
governing their treatment upon receipt of these distributions and the proceeds
of share redemptions (including exchanges).
The fund will not be subject to federal excise tax or the related
distribution requirements for any taxable year in which all of its shares are
held by segregated asset accounts of life insurance companies held in connection
with variable contracts or are attributable to certain "seed money" in
accordance with Section 4982(f) of the Code.
Investment by the fund in the stock of a "passive foreign investment
company" may cause the fund to recognize income prior to the receipt of
distributions from such a company or to become subject to tax upon the receipt
of certain excess distributions from, or upon disposition of its stock of, such
a company, although an election may generally be available that would ameliorate
some of these adverse tax consequences.
The fund intends to comply with the diversification requirements imposed by
Section 817(h) of the Code and the regulations thereunder. These requirements,
which are in addition to the diversification requirements imposed on the fund by
the 1940 Act and Subchapter M of the Code, place certain limitations on the
assets of each separate account and, because Section 817(h) and those
regulations treat the assets of the fund as assets of the related separate
account, the assets of the fund, that may be represented by any one, two, three
and four investments. Specifically, the regulations provide that, except as
permitted by the "safe harbor" described below, as of the end of each calendar
quarter or within 30 days thereafter no more than 55% of the total assets of the
fund may be represented by any one investment, no more than 70% by any two
investments, no more than 80% by any three investments and no more than 90% by
any four investments. For this purpose, all securities of the same issuer are
considered a single investment, and each U.S. Government agency and
instrumentality is considered a separate issuer. Section 817(h) provides, as a
safe harbor, that a separate account will be treated as being adequately
diversified if the diversification requirements under Subchapter M are satisfied
and no more than 55% of the value of the account's total assets are cash and
cash items (including receivables), U.S. Government securities and securities of
other regulated investment companies. Failure by the fund to both qualify as a
regulated investment company and satisfy the Section 817(h) requirements would
<PAGE>
generally result in treatment of the variable contract holders other than as
described in the applicable variable contract prospectus, including inclusion in
ordinary income of income accrued under the contracts for the current and all
prior taxable years. Any such failure may also result in adverse tax
consequences for the insurance company issuing the contracts.
The Trust may therefore find it necessary to take action to seek to ensure
that a Contract continues to qualify as a Contract under federal tax laws,
although the insurance company that maintains each segregated asset account is
responsible for ensuring that the assets held in that account satisfy the
diversification requirements of Section 817(h) of the Code and the applicable
regulations and the Trust itself can control only the assets held within the
fund. The Trust, for example, may be required to alter the investment objectives
of the fund or substitute the shares of one fund for those of another. No such
change of investment objectives or substitution of securities will take place
without notice to the shareholders of the affected fund. Failure by the fund to
qualify as a regulated investment company would also subject the fund to federal
and possibly state taxation of its income and gains, whether or not distributed
to shareholders, and distributions would generally be treated as ordinary income
to the extent of the fund's current or accumulated earnings and profits.
The fund is not subject to Massachusetts corporate excise or franchise tax.
Provided that the fund qualifies as a regulated investment company under the
Code, it will also not be required to pay any Massachusetts income tax.
CALCULATION OF PERFORMANCE AND YIELD QUOTATIONS
The average annual total return of the fund is determined for a particular
period by calculating the actual dollar amount of investment return on a $1,000
investment in the fund made at the maximum public offering price (i.e. net asset
value) at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year is equal to the actual return of the fund during that period.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period.
The yield of the fund is computed by dividing its net investment income per
share earned during a recent 30-day period by the maximum offering price (i.e.
net asset value) per share on the last day of the period and analyzing the
resulting figure. Net investment income per share is equal to the fund's
dividends and interest earned during the period, with the resulting number being
divided by the average daily number of shares outstanding and entitled to
receive dividends during the period.
The fund's yield is calculated according to the following formula:
6
Yield = 2 [(a-b + 1) - 1]
---
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (after reductions).
c = the average daily number of shares outstanding during the period.
d = the net asset value per share on the last day of the period.
Yield and effective yield will be based on historical earnings and are not
intended to indicate future performance. Yield and effective yield will vary
based on changes in market conditions and the level of expenses. The fund's
yield or total return may be compared to the Consumer Price Index and various
domestic securities indices. The fund's yield or total return and comparisons
with these indices may be used in advertisements and in information furnished to
present or prospective shareholders.
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. In addition, the performance of the fund may
be compared to alternative investment or savings vehicles and/or to indexes or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumers Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Smart Money, USA
Today, U.S. News and World Report, The Wall Street Journal and Worth may also be
cited (if the fund is listed
<PAGE>
in any such publication) or used for comparison, as well as performance
listings and rankings from various other sources including Bloomberg Financial
Markets, CDA/Wiesenberger, Donoghue's Mutual fund Almanac, Investment Company
Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper Analytical
Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker Investment
Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the fund. The performance of the
fund will not be presented in advertisements or sales literature without also
presenting the performance of the separate account.
<PAGE>
Appendix
- -------------------------------------------------------------------------------
Wright Quality Ratings
Wright Quality Ratings provide the means by which the fundamental criteria
for the measurement of quality of an issuer's securities can be objectively
evaluated.
Each rating is based on 32 individual measures of quality grouped into four
components: (1) Investment Acceptance, (2) Financial Strength, (3) Profitability
and Stability, and (4) Growth. The total rating is three letters and a numeral.
The three letters measure (1) Investment Acceptance, (2) Financial Strength, and
(3) Profitability and Stability. Each letter reflects a composite measurement of
eight individual standards which are summarized as A: Outstanding, B: Excellent,
C: Good, D: Fair, L: Limited, and N: Not Rated. The numeral rating reflects
Growth and is a composite of eight individual standards ranging from 0 to 20.
Equity Securities
Investment Acceptance reflects the acceptability of a security by and its
marketability among investors, and the adequacy of the floating supply of its
common shares for the investment of substantial funds.
Financial Strength represents the amount, adequacy and liquidity of the
corporation's resources in relation to current and potential requirements. Its
principal components are aggregate equity and total capital, the ratio of
invested equity capital to debt, the adequacy of net working capital, its fixed
charges coverage ratio and other appropriate criteria.
Profitability and Stability measures the record of a corporation's
management in terms of (1)the rate and consistency of the net return on
shareholders' equity capital investment at corporate book value, and (2) the
profits or losses of the corporation during generally adverse economic periods,
including its ability to withstand adverse financial developments.
Growth per common share of the corporation's equity capital, earnings, and
dividends - rather than the corporation's overall growth of dollar sales and
income.
These ratings are determined by specific quantitative formulae. A
distinguishing characteristic of these ratings is that The Wright Investment
Committee must review and accept each rating. The Committee may reduce a
computed rating of any company, but may not increase it.
Debt Securities
Wright ratings for commercial paper, corporate bonds and bank certificates
of deposit consist of the two central positions of the four position
alphanumeric corporate equity rating. The two central positions represent those
factors which are most applicable to fixed income and reserve investments. The
first, Financial Strength, represents the amount, the adequacy and the liquidity
of the corporation's resources in relation to current and potential
requirements. Its principal components are aggregate equity and total capital,
the ratios of (a) invested equity capital, and (b) long-term debt, total of
corporate capital, the adequacy of net working capital, fixed charges coverage
ratio and other appropriate criteria. The second letter represents Profitability
and Stability and measures the record of a corporation's management in terms of:
(a) the rate and consistency of the net return on shareholders' equity capital
investment at corporate book value, and (b) the profits and losses of the
corporation during generally adverse economic periods, and its ability to
withstand adverse financial developments.
The first letter rating of the Wright four-part alphanumeric corporate
rating is not included in the ratings of fixed-income securities since it
primarily reflects the adequacy of the floating supply of the company's common
shares for the investment of substantial funds. The numeric growth rating is not
included because this element is identified only with equity investments.
<PAGE>
A-1 and P-1 Commercial Paper Ratings by S&P and Moody's
An S&P Commercial Paper Rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
`A': Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety. The
`A-1' designation indicates that the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to S&P by the
issuer or obtained from other sources it considers reliable. The ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information.
Issuers (or related supporting institutions) rated P-1 by Moody's have a
superior capacity for repayment of short-term promissory obligations. P-1
repayment capacity will normally be evidenced by the following characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Bond Ratings
In addition to Wright quality ratings, bonds or bond insurers may be
expected to have credit risk ratings assigned by the two major rating companies,
Moody's and S&P. Moody's uses a nine-symbol system with Aaa being the highest
rating and C the lowest. S&P uses a 10-symbol system that ranges from AAA to D.
Bonds within the top four categories of Moody's (Aaa, Aa, A and Baa) and of S&P
(AAA, AA, A and BBB) are considered to be of investment-grade quality. Note that
both S&P and Moody's currently give their highest rating to issuers insured by
the American Municipal Bond Assurance Corporation (AMBAC) or by the Municipal
Bond Investors Assurance Corporation (MBIA).
Bonds rated A by S&P have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions than debt in higher-rated categories. The
rating of AA is accorded to issues where the capacity to pay principal and
interest is very strong and they differ from AAA issues only in small degree.
The AAA rating indicates an extremely strong capacity to pay principal and
interest.
Bonds rated A by Moody's are judged by Moody's to possess many favorable
investment attributes and are considered as upper medium grade obligations.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater degree or there may be other elements present which make the long-term
risks appear somewhat larger. Bonds rated Aaa by Moody's are judged to be of the
best quality. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issuers.
<PAGE>
Note Ratings
In addition to Wright quality ratings, municipal notes and other short-term
loans may be assigned ratings by Moody's or S&P.
Moody's ratings for municipal notes and other short-term loans are
designated Moody's Investment Grade (MIG). This distinction is in recognition of
the differences between short-term and long-term credit risk. Loans bearing the
designation MIG 1 are of the best quality, enjoying strong protection by
establishing cash flows of funds for their servicing or by established and
broad-based access to the market for refinancing, or both. Loans bearing the
designation MIG 2 are of high quality, with margins of protection ample although
not so large as in the preceding group.
S&P's top ratings for municipal notes issued after July 29, 1984 are SP-1
and SP-2. the designation SP-1 indicates a very strong capacity to pay principal
and interest. A "+" is added for those issues determined to possess overwhelming
safety characteristics. An "SP-2" designation indicates a satisfactory
capacity to pay principal and interest.
<PAGE>
PART C
Other Information
Item 23. Exhibits
(a) (1) Amended and Restated Declaration of Trust dated September
16, 1993 filed as Exhibit (1)(a) to Post-Effective Amendment
No. 4 filed April 30, 1997 and incorporated herein by
reference.
(2) Amended and Restated Establishment and Designation of Series
of Shares dated June 24, 1998, filed as Exhibit (a)(2)
herewith.
(b) (1) By-laws filed as Exhibit (2) to Post-Effective Amendment No.
4 filed April 30,1997 and incorporated herein by reference.
(2) Amendment to By-laws dated June 24, 1998, filed as Exhibit
(2)(b) to Post-Effective Amendment No. 6 filed on June
25, 1998 and incorporated herein by reference.
(c) Not Applicable
(d) (1 Investment Advisory Contract dated September 23, 1998
between the Registrant on behalf of Wright Selected Blue Chip
Portfolio and Wright International Blue Chip Portfolio and
Wright Investors' Service, Inc. filed herewith as Exhibit
(d)(1).
(2) Investment Advisory Contract dated September 8, 1998 between
the Registrant on behalf of Catholic Values Equity Investment
Portfolio and Wright Investors' Service, Inc., filed herewith
as Exhibit (d)(2).
(3) Amended and Restated Administration Agreement between the
Registrant and Eaton Vance Management dated February 1, 1998
filed as Exhibit (5)(b) to Post-Effective Amendment No. 5 on
April 29, 1998 and incorporated herein by reference.
(4) Revised Schedules A and B to the Amended and Restated
Administration Agreement between the Registrant and Eaton
Vance Management, filed herewith as Exhibit (d)(4).
(e) Not Applicable
(f) Not Applicable
(g) (1) Custodian Agreement dated August 10, 1993 with Investors
Bank & Trust Company filed as Exhibit (8)(a) to
Post-Effective Amendment No. 3 filed April 29, 1996 and
incorporated herein by reference.
(2) Amendment dated September 20, 1995 to Master Custodian
Agreement filed as Exhibit (8)(b) to Post-Effective Amendment
No. 3 filed April 29, 1996 and incorporated herein by
reference.
(3) Form of Letter Agreement to Master Custodian Agreement
filed as Exhibit (8)(c) to Post-Effective Amendment No. 6
filed on June 25, 1998 and incorporated herein by reference
(4) Amendment dated September 24, 1997 to Master Custodian
Agreement filed herewith as Exhibit (g)(4).
(h) Not Applicable
(i) Opinion of Hale and Dorr dated June 24, 1998 filed as Exhibit (10)
to Post-Effective Amendment No. 6 filed on June 25, 1998 and
incorporated herein by reference.
(j) Not Applicable
(k) Not Applicable
(l) Not Applicable
<PAGE>
(m) Not Applicable
(n) To be filed by Amendment.
(o) Not applicable.
(p) (1) Power of Attorney dated March 25, 1998 filed as Exhibit (17)
to Post-Effective Amendment No. 5 on April 29, 1998 and
incorporated herein by reference.
(2) Power of Attorney dated December 9, 1998 filed herewith as
Exhibit (p)(2).
Item 24. Persons Controlled By or Under Common Control with Registrant
Not Applicable
Item 25. Indemnification
Except for the Amended and Restated Declaration of Trust dated September 16,
1993 establishing the Registrant as a Trust under Massachusetts law, there is no
contract, arrangement or statute under which any director, officer, underwriter
or affiliated person of the Registrant is insured or indemnified. The
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability of which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
Item 26. Business and Other Connections of Investment Adviser
Reference is made to the information set forth under the caption "Management of
the Trust" in the Statement of Additional Information, which information is
incorporated herein by reference.
Item 27. Principal Underwriter
Not Applicable.
Item 28. Location of Accounts and Records
All applicable accounts, books and documents required to be maintained by the
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA
02116, and its transfer agent, First Data Investor Services Group, 4400 Computer
Drive, Westborough, MA 01581-5120, with the exception of certain corporate
documents and portfolio trading documents which are either in the possession and
custody of the Registrant's administrator, Eaton Vance Management, 24 Federal
Street, Boston, MA 02110 or of the investment adviser, Wright Investors'
Service, 1000 Lafayette Boulevard, Bridgeport, CT 06604. Registrant is informed
that all applicable accounts, books and documents required to be maintained by
registered investment advisers are in the custody and possession of Registrant's
administrator, Eaton Vance Management, or of the investment adviser, Wright
Investors' Service, Inc.
<PAGE>
Item 29. Management Services
Not Applicable
Item 30. Undertakings
The annual report also contains performance information and is available to any
recipient of the Prospectus upon request and without charge by writing to the
Wright Investors' Service Distributors, Inc., 1000 Lafayette Boulevard,
Bridgeport, Connecticut 06604.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bridgeport, and State of
Connecticut on the ____ day of February, 1999.
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: Peter M. Donovan*
-------------------------------
Peter M. Donovan, President
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Amendment to its Registration Statement has been
signed below by the following persons in the capacities and on the ____ day of
February, 1999.
SIGNATURE TITLE
- -------------------------------------------------------------------------------
Peter M. Donovan* President
- ------------------ (Principal Executive Officer & Trustee)
Peter M. Donovan
James L. O'Connor* Treasurer and Principal
- ------------------ Financial and Accounting Officer
James L. O'Connor
H. Day Brigham, Jr.* Trustee
- --------------------
H. Day Brigham, Jr.
Judith R. Corchard* Trustee
- --------------------
Judith R. Corchard
Dorcas R. Hardy* Trustee
- --------------------
Dorcas R. Hardy
Leland F. Miles* Trustee
- --------------------
Leland F. Miles
A. M. Moody III* Trustee
- --------------------
A. M. Moody III
Lloyd F. Pierce* Trustee
- --------------------
Lloyd F. Pierce
Richard E. Taber* Trustee
- --------------------
Richard E. Taber
Raymond Van Houtte* Trustee
- --------------------
Raymond Van Houtte
* By: /s/ A. M. Moody III
- --------------------------
A. M. Moody III
Attorney-in-Fact
<PAGE>
Exhibit Index
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to Rule 483 of Regulation C.
Exhibit No. Description
- -------------------------------------------------------------------------------
(a) (2) Amended and Restated Establishment and Designation of
Series of Shares dated June 24, 1998.
(d) (1) Investment Advisory Contract dated September 23, 1998
between the Registrant on behalf of Wright Selected Blue Chip
Portfolio and Wright International Blue Chip Portfolio.
(d) (2) Investment Advisory Contract dated September 8, 1998
between the Registrant on behalf of Catholic Values Equity
Investment Portfolio and Wright Investors' Service, Inc. filed
herewith as Exhibit (d)(2).
(d) (4) Revised Schedules A and B to Amended and Restated
Administration Agreement between the Registrant and Eaton
Vance Management.
(g) (4) Amendment dated September 24, 1997 to Master Custodian Agreement.
(p) (2) Power of Attorney dated December 9, 1998.
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
Amended and Restated
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
(effective July 8, 1998)
WHEREAS, pursuant to an Amended and Restated Establishment and Designation
of Series dated May 1, 1998, the Trustees of The Wright Managed Blue Chip Series
Trust, a Massachusetts business trust (the "Trust"), redesignated the shares of
beneficial interest of the Trust into four separate series (or Portfolios); and
WHEREAS, the Trustees now desire to terminate and liquidate two (2) of its
existing series, i.e. Wright Near Term Bond Portfolio and Wright Total Return
Bond Portfolio, and to add one series, i.e. Catholic Values Equity Investment
Portfolio, pursuant to Section 5.5. (viii) of Article V of the Declaration of
Trust;
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust acting pursuant
to Section 5.5. (viii) of Article V of the Declaration of Trust, hereby redivide
the shares of beneficial interest of the Trust into the following separate
series (or Portfolios) of the Trust, each Portfolio to have the following
special and relative rights:
1. The Portfolios shall be designated as follows effective July 8, 1998:
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
Catholic Values Equity Investment Portfolio
2. Each Portfolio shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statement under the Securities Act of 1933
and the Investment Company Act of 1940. Each share of beneficial interest of
each Portfolio ("share") shall be redeemable, shall be entitled to one vote (or
fraction thereof in respect of a fractional share) on matters on which shares of
that Portfolio shall be entitled to vote and shall represent a pro rata
beneficial interest in the assets allocated to that Portfolio, all as provided
in the Declaration of Trust. The proceeds of sales of shares of a Portfolio,
together with any income and gain thereon, less any diminution or expenses
thereof, shall irrevocably belong to that Portfolio, unless otherwise required
by law. Each share of a Portfolio shall be entitled to receive its pro rata
share of net assets of that Portfolio upon liquidation of that Portfolio.
3. Shareholders of each Portfolio shall vote separately as a class to the
extent provided in Rule 18f-2, as from time to time in effect, under the
Investment Company Act of 1940, as amended.
4. The assets and liabilities of the Trust shall be allocated among the
above referenced Portfolios as set forth in Section 5.5. of Article V of the
Declaration of Trust, except as provided below.
(a) Costs incurred by the Trust in connection with each Portfolio's initial
organization and start-up, including Federal and state registration and
qualification fees and expenses of the initial offering of such Portfolio
shares, shall (if applicable) be borne by such Portfolio.
<PAGE>
-2-
(b) The liabilities, expenses, costs, charges or reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Portfolio shall be allocated among the Portfolios on an equitable
basis as determined by the Trustees.
(c) The Trustees may from time to time in particular cases make specific
allocation of assets or liabilities among the Portfolios.
5. A majority of the Trustees (including any successor Trustees) shall have
the right at any time and from time to time to reallocate assets and expenses or
to change the designation of any Portfolio now or hereafter created, or to
otherwise change the special and relative rights of any such Portfolio, and to
terminate any Portfolio or add additional Portfolios as provided in the
Declaration of Trust.
/s/ Peter M. Donovan /s/ A.M. Moody, III
- ------------------------------- ---------------------------
Peter M. Donovan A.M. Moody, III
/s/ H. Day Brigham, Jr. /s/ Lloyd F. Pierce
- ------------------------------- ---------------------------
H. Day Brigham, Jr. Lloyd F. Pierce
/s/ Judith R. Corchard /s/ Richard E. Taber
- ------------------------------- ---------------------------
Judith R. Corchard Richard E. Taber
/s/ Winthrop S. Emmet /s/ Raymond Van Houtte
- ------------------------------- ---------------------------
Winthrop S. Emmet Raymond Van Houtte
/s/ Leland Miles
- ------------------------------
Leland Miles
June 24, 1998
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 23rd day of September 1998, between each of THE
WRIGHT MANAGED EQUITY TRUST, THE WRIGHT MANAGED INCOME TRUST, THE WRIGHT
EQUIFUND EQUITY TRUST, CATHOLIC VALUES INVESTMENT TRUST and THE WRIGHT MANAGED
BLUE CHIP SERIES TRUST, each a Massachusetts business trust (the "Trusts"), on
behalf of each series of the Trusts which the Adviser (defined below) and the
Trusts shall agree from time to time are subject to this Contract, as set forth
on Schedule A (collectively, the "Funds" and individually, the "Fund"), and
WRIGHT INVESTORS' SERVICE, INC., a Connecticut corporation (the "Adviser"):
1. DUTIES OF THE ADVISER. Each Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Funds and, except as otherwise provided in an administration
agreement, to administer the Trust's affairs, subject to the supervision of the
Trustees of the Trust, for the period and on the terms set forth in this
Contract.
The Adviser hereby accepts such employment, and undertakes to afford to
each Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Fund and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Funds
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are employees of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent any Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide each Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its funds. As investment adviser to the Funds, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of each
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Trust's Declaration of Trust, By-Laws and registration
statement under the Securities Act of 1933 and the Investment Company Act of
1940, all as from time to time amended. The Adviser is authorized, in its
discretion and without prior consultation with the Trust, but subject to each
Fund's investment objective, policies and restrictions, to buy, sell, lend and
otherwise trade in any stocks, bonds, options and other securities and
investment instruments on behalf of the Funds, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Funds, to
enter into commodities contracts on behalf of the Funds, including contracts for
the future delivery of securities or currency and futures contracts on
securities or other indices, and to execute any and all agreements and
instruments and to do any and all things incidental thereto in connection with
the management of the Funds. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Funds
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Funds, all actions which it deems necessary or desirable
to implement the investment policies of the Trust and of each Fund.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of a Fund with brokers or dealers selected by the
Adviser, and to that end the Adviser is authorized as the agent of the Fund to
give instructions to the custodian of the Fund as to deliveries of securities
and payments of cash for the account of a Fund or the Trust. In connection with
the selection of such brokers or dealers and the placing of such orders, the
Adviser shall use its best efforts to seek to execute portfolio security
transactions at prices which are advantageous to the Funds and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
selecting brokers or dealers qualified to
<PAGE>
execute a particular transaction, brokers or dealers may be selected who
also provide brokerage and research services and products (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser.
The Adviser is expressly authorized to cause the Funds to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which exceeds the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the selection
of any broker or dealer with whom purchase or sale orders may be placed, the
fact that such broker or dealer has sold or is selling shares of the applicable
Fund or Trust or of other investment companies sponsored by the Adviser.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, each Trust on behalf of each Fund
shall pay to the Adviser on the last day of each month a fee equal (annually) to
the percentage or percentages specified in Schedule B of the average daily net
assets of such Fund throughout the month, computed in accordance with the
Trust's Declaration of Trust, registration statement and any applicable votes of
the Trustees of the Trust.
If the Contract is initiated or terminated during any month with respect
to any Fund, each Fund's fee for that month shall be reduced proportionately on
the basis of the number of calendar days during which the Contract is in effect
and the fee shall be computed upon the average net assets for the business days
the Contract is so in effect for that month.
The Adviser may, from time to time, agree not to impose all or a part of
the above compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. Each Trust will pay all of its expenses
other than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Trust shall include, without limitation (i) expenses of
maintaining the Trust and continuing its existence, (ii) registration of the
Trust under the Investment Company Act of 1940, (iii) commissions, fees and
other expenses connected with the purchase or sale of securities, (iv) auditing,
accounting and legal expenses, (v) taxes and interest, (vi) governmental fees,
(vii) expenses of issue, repurchase and redemption of shares, (viii) expenses of
registering and qualifying the Trust and its shares under federal and state
securities laws and of preparing and printing prospectuses for those purposes
and for distributing them to shareholders and investors, and fees and expenses
of registering and maintaining registration of the Trust and of the Trust's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Trust (including without
limitation safekeeping of funds and securities, keeping of books and accounts
and determination of net asset value), (xiv) fees, expenses and disbursements of
transfer agents and registrars for all services to the Trust, (xv) expenses for
servicing shareholder accounts, (xvi) any direct charges to shareholders
approved by the Trustees of the Trust, (xvii) compensation of and any expenses
of Trustees of the Trust, (xviii) the administration fee payable to the Trust's
administrator, (xix) the charges and expenses of the independent auditors, (xx)
the charges and expenses of legal counsel to the Trust and the Trustees, (xxi)
distribution fees, if any, paid by a Fund in accordance with Rule 12b-1 under
the 1940 Act, and (xxii) such nonrecurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and shareholders of
each Trust are or may
<PAGE>
be or become interested in the Adviser or any of its affiliates as
directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser or any of its affiliates are
or may be or become similarly interested in the Trust, and that the Adviser or
any of its affiliates may be or become interested in the Trust as a shareholder
or otherwise. It is also understood that directors, officers, employees and
stockholders of the Adviser or any of its affiliates are or may be or become
interested (as directors, trustees, officers, employees, stockholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser or any of its affiliates may organize,
sponsor or acquire, or with which it may merge or consolidate, and which may
include the words "Wright" or "Wright Investors" or any combination thereof as
part of their names, and that the Adviser or any of its affiliates may enter
into advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
each Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to any Trust or to any shareholder of
the Trust for any act or omission in the course of or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of the
Adviser, including the selection of brokers or dealers to execute any Trust's
portfolio security transactions, and upon those terms and conditions as may be
agreed upon between the Adviser and the sub-investment adviser; provided,
however, that any subadvisory agreement shall be subject to approval by the
Trustees and by shareholders, if shareholder approval is then required by the
1940 Act, as now in effect or as hereafter amended, subject, however, to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation, order or interpretive position.
7. DURATION AND TERMINATION OF THIS CONTRACT. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect as to each Fund up to and
including February 28, 2000 and shall continue in full force and effect as to
each Fund indefinitely thereafter, but only so long as such continuance after
February 28, 2000 is specifically approved at least annually (i) by the vote of
a majority of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of that Fund and (ii) by the vote of a majority of
those Trustees of the Trust who are not interested persons of the Adviser or the
Trust, in accordance with the requirements of the Investment Company Act of 1940
as now in effect or as hereafter amended, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission by any rule,
regulation, order or interpretive position.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Fund, without the payment
of any penalty, by action of its Board of Directors or Trustees, as the case may
be, and a Trust may, at any time upon such written notice to the Adviser,
terminate this Contract as to any Fund by vote of a majority of the outstanding
voting securities of that Fund. This Contract shall terminate automatically in
the event of its assignment.
8. AMENDMENTS OF THE CONTRACT. This Contract may be amended as to any Fund by a
writing signed by both parties hereto, provided that no material amendment to
this Contract shall be effective as to that Fund until approved (i) by the vote
of a majority of those Trustees of the affected Trust who are not interested
persons of the Adviser or the Trust and (ii) by vote of a majority of the
outstanding voting securities of that Fund in accordance with the requirements
of the Investment Company Act of 1940, as now in effect or as hereafter amended,
subject, however, to such exemptions as may be granted by the
<PAGE>
Securities and Exchange Commission by any rule, regulation, order or
interpretive position.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the provision in
the Declaration of Trust of each Trust limiting the personal liability of
shareholders of the Trust, and the Adviser hereby agrees that it shall have
recourse only to the applicable Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the shareholders or any shareholder of the Trust. No Trust or
Fund shall be liable for the obligations of any other Trust or Fund hereunder.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons" when
used herein shall have the respective meanings specified in the Investment
Company Act of 1940, as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of that Fund" shall mean the vote of the lesser of
(a) 67 per cent or more of the shares of the particular Fund present or
represented by proxy at a meeting of shareholders of the Fund if the holders of
more than 50 per cent of the outstanding shares of the particular Fund are
present or represented by proxy at the meeting, or (b) more than 50 per cent of
the outstanding interests of the particular Fund, or such other vote as may be
required from time to time by the Investment Company Act of 1940.
11. USE OF THE NAME "WRIGHT". The Adviser hereby consents to the use by each
Trust of the name "Wright" as part of the Trust's name and the name of each Fund
should the Trust desire to adopt such name in the future; provided, however,
that such consent shall be conditioned upon the employment of the Adviser or one
of its affiliates as the investment adviser of the Trust. The name "Wright" or
any variation thereof may be used from time to time in other connections and for
other purposes by the Adviser and its affiliates and other investment companies
that have obtained consent to use the name "Wright." The Adviser shall have the
right to require a Trust to cease using the name "Wright" as part of the Trust's
name and the name of its Funds if the Trust ceases, for any reasons, to employ
the Adviser or one of its affiliates as the Trust's investment adviser. Future
names adopted by a Trust for itself and its Funds, insofar as such names include
identifying words requiring the consent of the Adviser, shall be the property of
the Adviser and shall be subject to the same terms and conditions.
THE WRIGHT MANAGED EQUITY TRUST WRIGHT INVESTORS' SERVICE, INC.
By: _________________________________ By:_______________________________
Authorized Officer Authorized Officer
THE WRIGHT MANAGED INCOME TRUST
By: __________________________________
Authorized Officer
THE WRIGHT EQUIFUND EQUITY TRUST
By: ___________________________________
Authorized Officer
CATHOLIC VALUES INVESTMENT TRUST
By: ___________________________________
Authorized Officer
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
By: _____________________________________
Authorized Officer
<PAGE>
SCHEDULE A
TRUSTS AND FUNDS
The Wright Managed Equity Trust
Wright Selected Blue Chip Equities Fund
Wright Junior Blue Chip Equities Fund
Wright Major Blue Chip Equities Fund
Wright International Blue Chip Equities Fund
The Wright Managed Income Trust
Wright U.S. Treasury Fund
Wright U.S. Government Near Term Fund
Wright Total Return Bond Fund
Wright Current Income Fund
Wright U.S. Treasury Money Market Fund
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg
Wright EquiFund -- Hong Kong/China
Wright EquiFund -- Japan
Wright EquiFund -- Mexico
Wright EquiFund -- Netherlands
Wright EquiFund -- Nordic
Catholic Values Investment Trust
Catholic Values Investment Trust Equity Fund
The Wright Blue Chip Series Trust
Wright International Blue Chip Portfolio
Wright Selected Blue Chip Portfolio
<PAGE>
SCHEDULE B
ANNUAL ADVISORY FEE RATES
---------------------------
<TABLE>
<CAPTION>
ANNUAL % ADVISORY FEE RATES
-----------------------------
Under $100 Mil. $250 Mil. $500 Mil. Over
$100 Mil. to to to $1 Bil.
$250 Mil. $500 Mil. $1 Bil.
- ---------------------------------------------------------------------------------------------
The Wright Managed Equity Trust
<S> <C> <C> <C> <C> <C>
Wright Selected Blue Chip Equities
Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Junior Blue Chip Equities Fund 0.55% 0.69% 0.67% 0.63% 0.58%
Wright Major Blue Chip Equities Fund 0.45% 0.59% 0.57% 0.53% 0.48%
Wright International Blue Chip Equities
Fund 0.75% 0.79% 0.77% 0.73% 0.68%
The Wright Managed Income Trust
Wright U.S. Treasury Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Government Near Term Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Total Return Bond Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright Current Income Fund 0.40% 0.46% 0.42% 0.38% 0.33%
Wright U.S. Treasury Money Market
Fund 0.35% 0.32% 0.32% 0.30% 0.30%
</TABLE>
ANNUAL % ADVISORY FEE RATES
-------------------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- --------------------------------------------------------------------------------
The Wright EquiFund Equity Trust
Wright EquiFund -- Belgium/Luxembourg 0.75% 0.73% 0.68%
Wright EquiFund -- Hong Kong/China 0.75% 0.73% 0.68%
Wright EquiFund -- Japan 0.75% 0.73% 0.68%
Wright EquiFund -- Mexico 0.75% 0.73% 0.68%
Wright EquiFund -- Netherlands 0.75% 0.73% 0.68%
Wright EquiFund -- Nordic 0.75% 0.73% 0.68%
Catholic Values Investment Trust
Catholic Values Investment Trust
Equity Fund 0.75% 0.73% 0.68%
ANNUAL % ADVISORY FEE RATES
--------------------------------
Under $500 Mil. Over
$500 Mil. to $1 Bil.
$1 Bil.
- -------------------------------------------------------------------------------
The Wright Managed Blue Chip Series Trust
Wright Selected Blue Chip Portfolio 0.65% 0.60% 0.55%
Wright International Blue Chip Portfolio 0.80% 0.75% 0.70%
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 8th day of September, 1998, between THE WRIGHT
MANAGED BLUE CHIP SERIES TRUST, a Massachusetts business trust (the "Trust"), on
behalf of CATHOLIC VALUES EQUITY INVESTMENT PORTFOLIO and other series of the
Trust which the Adviser (as defined below) and the Trust shall agree from time
to time are subject to this Contract, as set forth on Schedule A hereto
(collectively, the "Portfolios" and individually, the "Portfolio"), and WRIGHT
INVESTORS' SERVICE, INC., a Connecticut corporation (the "Adviser"):
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and, except as otherwise provided in an administration
agreement, to administer the Trust's affairs, subject to the supervision of the
Trust's Trustees, for the period and on the terms set forth in this Contract.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for each Portfolio and
to furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the
Portfolios and for administering the Trust's affairs and to pay the salaries and
fees of officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of its Portfolios. As investment adviser to the Portfolios, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of each Portfolio's assets shall be held uninvested, subject always to
the applicable restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company Act of 1940,
all as from time to time amended. The Adviser is authorized, in its discretion
and without prior consultation with the Trust, but subject to each Portfolio's
investment objective, policies and restrictions, to buy, sell, lend and
otherwise trade in any stocks, bonds, options and other securities and
investment instruments on behalf of the Portfolios, to purchase, write or sell
options on securities, futures contracts or indices on behalf of the Portfolios,
to enter into commodities contracts on behalf of the Portfolios, including
contracts for the future delivery of securities or currency and futures
contracts on securities or other indices, and to execute any and all agreements
and instruments and to do any and all things incidental thereto in connection
with the management of the Portfolios. Should the Trustees of the Trust at any
time, however, make any specific determination as to investment policy for the
Portfolios and notify the Adviser thereof in writing, the Adviser shall be bound
by such determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Portfolios, all actions which it deems necessary or
desirable to implement the investment policies of the Trust and of each
Portfolio.
<PAGE>
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of a Portfolio with brokers or dealers
selected by the Adviser, and to that end the Adviser is authorized as the agent
of the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of a Portfolio or
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute portfolio security transactions at prices which are advantageous to the
Portfolios and (when a disclosed commission is being charged) at reasonably
competitive commission rates. In selecting brokers or dealers qualified to
execute a particular transaction, brokers or dealers may be selected who also
provide brokerage and research services and products (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser. The
Adviser is expressly authorized to cause the Portfolios to pay any broker or
dealer who provides such brokerage and research service and products a
commission for executing a security transaction which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, the Adviser is authorized to consider, as a factor in the selection
of any broker or dealer with whom purchase or sale orders may be placed, the
fact that such broker or dealer has sold or is selling shares of the Portfolio
or the Trust or of other investment companies sponsored by the Adviser.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Trust on behalf of each
Portfolio shall pay to the Adviser on the last day of each month a fee equal
(annually) to the percentage or percentages specified in Schedule B of the
average daily net assets of such Portfolio throughout the month, computed in
accordance with the Trust's Declaration of Trust, registration statement and any
applicable votes of the Trustees.
In case of the initiation or termination of the Contract during any
month with respect to any Portfolio, each Portfolio's fee for that month shall
be reduced proportionately on the basis of the number of calendar days during
which the Contract is in effect and the fee shall be computed upon the average
net assets for the business days the Contract is so in effect for that month.
The Adviser may, from time to time, agree not to impose all or a part
of the above compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust
will pay all of its expenses other than those expressly stated to be payable by
the Adviser hereunder, which expenses payable by the Trust shall include,
without limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust
and its shares under federal and state securities laws and of preparing and
printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
<PAGE>
the registration of the Trust and of the Trust's principal underwriter, if any,
as broker-dealer or agent under state securities laws, (ix) expenses of reports
and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Trust (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value),
(xiv) fees, expenses and disbursements of transfer agents and registrars for all
services to the Trust, (xv) expenses for servicing shareholder accounts, (xvi)
any direct charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation of and any expenses of Trustees of the Trust, (xviii) the charges
and expenses of the independent auditors, (xix) the charges and expenses of
legal counsel to the Trust and the Trustees; (xx) distribution fees, if any,
paid by a Portfolio in accordance with Rule 12b-1 under the 1940 Act, (xxi) the
administration fee payable to the Trust's administrator, and (xxii) such
nonrecurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Trust to indemnify
its Trustees and officers with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Adviser as
directors, officers, employees, stockholders or otherwise and that directors,
officers, employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Wright" or "Wright Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser and approved by the Trustees.
7. Duration and Termination of this Contract. This Contract shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect as to each Portfolio to
and including February 28, 2000 and shall continue in full force and effect as
<PAGE>
to each Portfolio indefinitely thereafter, but only so long as such continuance
after February 28, 2000 is specifically approved at least annually (i) the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of that Portfolio and (ii) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or (other
than as a Trustee) the Trust, in accordance with the requirements of the
Investment Company Act of 1940 as now in effect or as hereafter amended,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission, by any rule, regulation, order or interpretive position.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Portfolio, without the
payment of any penalty, by action of its Board of Directors or Trustees, as the
case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Contract as to any Portfolio by vote of a majority of
the outstanding voting securities of that Portfolio. This Contract shall
terminate automatically in the event of its assignment.
8. Amendments of the Contract. This Contract may be amended as to any
Portfolio by a writing signed by both parties hereto, provided that no material
amendment to this Contract shall be effective as to that Portfolio until
approved (i) by the vote of a majority of those Trustees of the Trust who are
not interested persons of the Adviser or the Trust, and (ii) by vote of a
majority of the outstanding voting securities of that Portfolio in accordance
with the requirements of the Investment Company Act of 1940 as now in effect or
as hereafter amended, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission, by any rule, regulation, order or
interpretive position.
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Trust, and the Adviser hereby agrees that it
shall have recourse only to the Trust for payment of claims or obligations as
between the Trust and Adviser arising out of this Contract and shall not seek
satisfaction from the shareholders or any shareholder of the Trust. No Portfolio
shall be liable for the obligations of any other Portfolio hereunder.
10. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation, order or interpretive position. The term
"vote of a majority of the outstanding voting securities of that Portfolio"
shall mean the vote of the lesser of (a) 67 per centum or more of the shares of
the particular Portfolio present or represented by proxy at a meeting of
shareholders of the Portfolio if the holders of more than 50 per centum of the
outstanding shares of the particular Portfolio are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the outstanding shares
of the particular Portfolio.
11. Use of the Name "Wright". The Adviser hereby consents to the use by
the Trust of the name "Wright" as part of the Trust's name and the name of each
Portfolio should the Trust desire to adopt such name in the future; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Trust. The
name "Wright" or any variation thereof may be used from time to time in other
connections and for other purposes by the Adviser and its affiliates and other
<PAGE>
investment companies that have obtained consent to use the name "Wright". The
Adviser shall have the right to require the Trust to cease using the name
"Wright" as part of the Trust's name and the name of each Portfolio if the Trust
ceases, for any reasons, to employ the Adviser or one of its affiliates as the
Trust's investment adviser. Future names adopted by the Trust for itself and its
Portfolios, insofar as such names include identifying words requiring the
consent of the Adviser, shall be the property of the Adviser and shall be
subject to the same terms and conditions.
CATHOLIC VALUES EQUITY INVESTMENT PORTFOLIO WRIGHT INVESTORS' SERVICES, INC.
By: By:
Peter M. Donovan Judith R. Corchard
<PAGE>
SCHEDULE A
APPLICABLE SERIES
1. Catholic Values Equity Investment Portfolio
<PAGE>
SCHEDULE B
ANNUAL ADVISORY FEE RATES
Under $500 Million
$500 to Over
Portfolio Million $1 Billion $1 Billion
Catholic Values Equity
Investment Portfolio 0.75% 0.73% 0.68%
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
SCHEDULE A
----------
EFFECTIVE FEBRUARY 1, 1998
- --------------------------
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
EFFECTIVE SEPTEMBER 8, 1998
- ---------------------------
Catholic Values Equity Investment Portfolio
<PAGE>
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
SCHEDULE B
----------
FEE STRUCTURE
-------------
Under Over
$100 MILLION $100 MILLION
------------ ------------
EFFECTIVE FEBRUARY 1, 1998
- --------------------------
Wright Selected Blue Chip Portfolio 0.05% 0.04%
Wright International Blue Chip Portfolio 0.05% 0.04%
EFFECTIVE SEPTEMBER 8, 1998
- ---------------------------
Catholic Values Equity Investment Portfolio 0.07% 0.04%
September 24, 1997
The Wright Managed Investment Funds
Wright Investors' Service, Inc.
1000 Lafayette Boulevard
Bridgeport, CT 06604
Re: Master Custodian Agreement by and among the Wright Managed Investment Funds
and Investors Bank & Trust Company (the "Bank").
Gentlemen:
This letter agreement is intended to amend the existing Master Custodian
Agreement with the following information:
Notwithstanding anything in the Master Custodian Agreement,
each Wright Managed Investment Fund agrees that it has granted, and the
Bank shall have, a continuing lien and security to the extent of any
overdraft or indebtedness by any Fund, in and to any property at any
time held by it for the Fund's benefit or in which the Fund has an
interest and which is then in the Bank's possession or control (or in
the possession or control of any third party acting in the Bank's
behalf). However, the Bank shall notify the Fund's investment adviser
of the Bank's intention to seize Fund property in accordance with this
paragraph and follow any instructions of the investment adviser as to
which property should be seized.
This letter agreement is intended to include all the Wright Managed Investment
Funds currently parties to the Master Custodian Agreement, as well as any such
funds that become a party to the Master Custodian Agreement in the future. This
letter agreement shall constitute an amendment to the Master Custodian Agreement
and, as such, a binding agreement among the Wright Managed Investment Funds and
the Bank, in accordance with its terms.
Sincerely.
INVESTORS BANK & TRUST COMPANY
By /s/ Robert D. Mancuso
----------------------------
Name: Robert D. Mancuso
Title: Senior Vice President
<PAGE>
The foregoing is hereby accepted and agreed.
THE WRIGHT MANAGED EQUITY TRUST
THE WRIGHT MANAGED INCOME TRUST
THE WRIGHT EQUIFUND EQUITY TRUST
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
CATHOLIC VALUES INVESTMENT TRUST
THE WRIGHT ASSET ALLOCATION TRUST
By /s/ James L. O'Connor
-------------------------------
Name: James L. O'Connor
Title: Treasurer
POWER OF ATTORNEY
I, the undersigned Trustee of The Wright Managed Blue Chip Series Trust, a
Massachusetts business trust, do hereby constitute and appoint H. Day Brigham,
Jr., Peter M. Donovan, Alan R. Dynner and A.M. Moody, III, or any of them, to be
true, sufficient and lawful attorneys, or attorney for me, to sign for me, in my
name in the capacities indicated below, any and all amendments (including
post-effective amendments) to the Registration Statement on Form N-1A filed by
The Wright Managed Blue Chip Series Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand on the date set opposite my
signature.
NAME CAPACITY DATE
---- -------- ----
/s/ Dorcas R. Hardy Trustee December 9, 1998
- ----------------------
Dorcas R. Hardy
HALE AND DORR LLP
Counsellors at Law
60 State Street, Boston, Massachusetts 02109
617-526-6000 o fax 617-526-5000
Pamela J. Wilson
617-526-6371
[email protected]
February 26, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Attention: Office of Filings, Information & Consumer Services
Re: Form N-1A Filing for the Wright Managed Blue Chip Series Trust
(the "Registrant")
Post-Effective Amendment No. 7 (1933 Act File No. 33-61314)
Amendment No. 8 (1940 Act File No. 811-7654) (the
"Amendment") on behalf of its series (the "funds")
Wright Selected Blue Chip Portfolio
Wright International Blue Chip Portfolio
Catholic Values Equity Investment Portfolio
Ladies and Gentlemen:
On behalf of the above-referenced trust, transmitted herewith pursuant to
(1) the Securities Act of 1993, as amended and Rules 472 and 485(a)(1)
thereunder, (2) the Investment Company Act of 1940, as amended, and the rules
promulgated pursuant to Section 8(b) thereunder, (3) the General Instructions to
Form N-1A, and (4) Rules 101 and 102 under Regulation S-T, is the amendment,
including the funds' prospectuses and statements of additional information
("SAI") and exhibits. The amendment contains conformed signature pages, and the
manually signed originals of these pages are maintained at the office of the
trust.
The amendment is filed pursuant to Rule 485(a) because it has been
revised to conform to the 1998 amendments to Form N-1A. Because the funds'
prospectuses have been revised in their entirety, they are not marked. The SAIs
have been marked to show changes from the SAI contained in post-effective
amendment no. 5 transmitted electronically to the Securities and Exchange
Commission (the "Commission") on April 29, 1998 (Accession No.
0000715165-98-000017) for Wright Selected Blue Chip Portfolio and Wright
International Blue Chip Portfolio, (the "Blue Chip funds") and post-effective
amendment no. 6 transmitted electronically to the Commission on June 25, 1998
(Accession No. 0000715165-98-000023) for Catholic Values Equity Investment
Portfolio (the "Catholic Values fund").
The amendment will become effective April 30, 1999. The trust will file
a post-effective amendment pursuant to Rule 485(b), which will also go effective
on April 30, 1999, for the purpose of providing updated financial information
for the fund.
The funds are the funding vehicles for variable annuity contracts and
variable life insurance policies offered or to be offered by one or more
insurance companies. As a consolidated prospectus for two funds, the Blue Chip
funds' prospectus presented special organization and layout problems that would
not affect a single fund prospectus. To solve these problems, the prospectus
disclosure follows a slightly different sequence from the order of disclosure
specified in Items 1 and 2 of amended Form N-1A. The design and layout of this
prospectus and the Catholic Values fund's prospectus conform to those of the
prospectuses of the other mutual funds in the Wright complex. These other
prospectuses are being filed with the Commission on or about February 28, 1999
and will offer the shares of multiple Wright funds.
Amended Form N-1A requires the risk/return summary provided in Item 2
to immediately follow the cover page and table of contents of a mutual fund
prospectus. The disclosure in a prospectus's risk/return summary generally must
appear in the order specified in Item 2 and may not include additional
disclosure not described in these items. The Item 3 expense table need not be
included in the funds' prospectuses because the funds' shares are offered
exclusively to insurance company separate accounts.
The table of contents in each prospectus is on the inside cover page.
Immediately below the table of contents is a section entitled "How to Use this
Prospectus" that provides a brief explanation of each of the icons and related
disclosure appearing in each fund's risk/return summary. We believe that this
information serves the same purpose as the table of contents--to help investors
navigate and understand the organization of the prospectus. It leads readers and
does not impede their progress into the funds' risk/return summaries. The next
item is the standard legend for funds sold through banks, which would normally
appear later in the risk/return summaries. The legend is located here because,
in a multi-fund prospectus, putting the legend up front avoids the need to
repeat it in the risk/return summary of each individual fund.
On page 1 of the Catholic Values fund's prospectus, which is opposite
the table of contents, there appears disclosure about the fund's policy of
investing only in companies whose activities are consistent with the core values
of the Catholic Church. There is also information about the fund's Catholic
Advisory Board, which oversees compliance with these values. The fund's ethical
investing policy and advisory board are the factors which most distinguish it
from other mutual funds. These factors also have a strong bearing on who may
want to invest in the fund, which is permissible risk/return summary disclosure
under Item 2 of Form N-1A. Therefore, it is appropriate to give this disclosure
priority and locate it in the overview section on page 1 of the fund's
prospectus.
It takes two pages per fund to cover all the fund-specific items
required to be in each fund's risk/return summary. The two page fund spread
format facilitates comparison among the funds offered in the prospectuses and
with competing funds because it is possible to see all fund-specific disclosure
for each fund at the same time. Because page 1 is opposite the table of contents
on the inside cover, page 1 cannot be used for a two page fund spread. However,
it is an ideal location for, and reduces the need to repeat, items in the
risk/return summary that apply to multiple funds.
Disclosure about the funds' adviser is not expressly permitted in, and
is not ordinarily supposed to precede, a risk/return summary. However, in the
multi-fund prospectuses of the other Wright funds, if this disclosure cannot be
presented on page 1, it must be moved either to the front cover or to the back
half of the prospectus. It is not desirable either to clutter the cover with
adviser information or to make investors wait until page 20 (in the prospectus
for the Wright Managed Blue Chip Investment funds) to find out about the adviser
they are hiring when they buy fund shares. To avoid distracting attention from
the risk/return summary disclosure in the subsequent two page fund spreads, we
kept the adviser disclosure on page 1 very brief.
The fund's adviser uses a proprietary data base and Approved Wright
Investment Lists in selecting investments for all of the Wright equity funds,
including the Blue Chip funds and the Catholic Values fund. Disclosing this part
of Wright's investment strategy on page 1 provides a context for understanding
the additional investment strategy disclosure (and avoids repetition of the same
information) in each individual equity fund's two page risk/return summary.
In addition, page 1 of the Blue Chip funds' prospectus discloses other
information about the adviser's investment process that is common to both funds,
including explanations of fundamental analysis and bottom-up investing. In this
prospectus, the Catholic Values fund prospectus and other Wright fund
prospectuses, page 1 also describes the adviser's investment committee and two
important risks--market risk and management risk--that apply to all of the funds
in the prospectuses. This overview disclosure helps to provide a context for and
to avoid repetition in the risk/return summaries of the individual funds.
The prospectuses of the Catholic Values fund and the Blue Chip funds
offer only one or two funds. Nevertheless, we believe that investors will
benefit if the disclosure in the other Wright multi-fund prospectuses about the
investment adviser, its proprietary data base, its Approved Wright Investment
Lists, its equity investment style and the risks common to all the funds also
appear in the same location in the funds' prospectuses.
Instruction C.3(c)(ii) to Form N-1A provides that multiple fund
prospectuses may depart from the sequencing requirements of Items 2 and 3 "as
necessary to present the required information clearly and effectively (although
the order of information required by each Item must remain the same)." The
instruction gives examples of acceptable layouts and says that "other
presentations would also be acceptable if they are consistent with the Form's
intent to disclose the information required by Items 2 and 3 in a standard order
at the beginning of the prospectus." Instruction C.1.(d) to Form N-1A states
that the Commission should administer the form's prospectus disclosure
requirements "in a way that will allow variances in disclosure or presentation
if appropriate for the circumstances involved while remaining consistent with
the objectives of Form N-1A."
We believe that our method of organizing the funds' prospectuses
produces clearer, more inviting and less repetitive disclosure than if the
prospectuses followed the exact sequence of disclosure in Item 2 of Form N-1A.
The organization of the prospectuses enhances, rather than impedes, comparisons
with other funds and makes it easier to find fund-specific information.
Accordingly, the trust respectfully requests that the staff of the Commission
allow such variances in presentation as are necessary for the funds to use the
proposed forms of prospectuses.
If you have any questions concerning the foregoing or the enclosed,
please contact the undersigned at (617) 526-6371 or Elaine Hartnett at (617)
526-6531.
Very truly yours,
Pamela J. Wilson
PJW:laf
Enclosures