THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
SEMI-ANNUAL REPORT
June 30, 2000
o Wright Selected Blue Chip Portfolio
o Wright International Blue Chip Portfolio
<PAGE>
THE WRIGHT MANAGED BLUE CHIP SERIES TRUST
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Wright Managed Blue Chip Series Trust is a diversified, open-end management
investment company, that is designed to be the funding vehicle for insurance
contracts offered by participating insurance companies. Shares of the Trust are
offered exclusively to the separate accounts of such insurance companies. Two
managed investment portfolios of the Trust, whose investment objectives are
described below, are included in this report.
Wright Selected Blue Chip Portfolio (WSBCP) seeks long-term capital appreciation
and, as a secondary objective, reasonable, current income by investing primarily
in equity securities of well-established U.S. companies that meet the investment
adviser's quality standards.
Wright International Blue Chip Portfolio (WIBCP) seeks long-term capital
appreciation by investing primarily in equity securities of well-established,
non-U.S. companies that meet the investment adviser's quality standards.
TABLE OF CONTENTS
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Page
Investment Objectives ..................................inside front cover
Letter to Shareholders ..........................................1
Management Discussion ...........................................2
Wright Selected Blue Chip Portfolio
Portfolio of Investments..................................4
Financial Statements......................................8
Wright International Blue Chip Portfolio
Portfolio of Investments..................................9
Financial Statements.....................................13
Notes to Financial Statements.....................................14
<PAGE>
LETTER TO SHAREHOLDERS
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July 2000
Dear Shareholders:
The first half of 2000 has been a raucous period for investors, with some of the
most volatile trading in history, particularly in April. With May and June,
market volatility receded to half of April's level and for stocks outside of
technology, trading volatility has more or less returned to normal. Despite all
the sound and fury of the first half of 2000, the major stock market averages
start the third quarter little changed from end-of-1999 levels.
During April and most of May, investors waited anxiously for signs that the U.S.
economy was cooling. In the absence of those signs, fears of extended Federal
Reserve monetary tightening sent bond yields higher and share prices lower.
During June, with government reports turning up evidence that economic activity
was slowing, the bond market recovered and investor concerns shifted to the
outlook for corporate profits. In the opening days of July, a spate of companies
- including some prominent computer software companies - issued warnings that
earnings would fall short of Wall Street estimates.
At Wright, our analysts believe that the U.S. economy is in the process of
downshifting toward the 3 1/2% growth targeted by the Fed. We see little change
in the competitive environment and limited pricing power that most firms face.
Still, occasional profit shortfalls for specific stocks notwithstanding, we
continue to forecast a healthy increase in aggregate corporate profits this year
and next and believe that the risk of significant further interest rate hikes is
limited, two elements of the favorable investment backdrop.
The correction of some of the market's speculative excesses - in share prices of
Internet and other growth stocks, for example - has proceeded apace in the
second quarter and early July. Money flows into stock mutual funds have fallen
significantly since February's peak, another indication that the big,
non-discriminating expectations that investors had for stock returns have come
back to earth. While Alan Greenspan may not yet be satisfied that the last trace
of "irrational exuberance" has been routed from the U.S. stock market, we see
evidence of more rational market valuations and projections, a healthy
development for long-term investors. The Federal Reserve may raise interest
rates another time or two in this cycle, but we're increasingly confident that
the lion's share of Fed tightening is behind us.
Sincerely,
/s/ Peter M. Donovan
---------------------
Peter M. Donovan, President
<PAGE>
MANAGEMENT DISCUSSION
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The year 2000 has seen record stock market volatility, although the second
quarter ended in a more stable trend. For Nasdaq, April was the most volatile
month in history, with an average daily change (without regard to sign) of 4.3%,
six times the norm. This moderated to 2.9% in May and 2.2% in June, still above
normal. Fluctuations in non-tech stocks were more muted, but for tech and
non-tech stocks alike, profit disappointments continued to bring severe
retribution.
Tech stocks fell into a bear market in the second quarter; non-tech stocks were
in a correction. From peak to trough, Nasdaq dropped 37%, the S&P 500 11%.
Before the quarter ended, Nasdaq had rallied to a point 21% off its peak, while
the S&P 500 was down 5%. For the entire quarter, the S&P 500 lost 2.7% in total
return terms, the Nasdaq more than 13%. Although S&P 500 tech stocks were hit
hard with a 9.0% loss, the worst performing S&P 500 sector was basic materials,
down about 15%; communications services had a 14% loss. Leading the S&P 500 was
health care, up 23% for the period, well ahead of the next best group, consumer
staples, which returned 6%. As measured by the FTSE indexes, non-U.S. stocks in
total underperformed the U.S. in the second quarter. Europe (-2.3% in dollars)
and non-Japan Asia (-2.1%) declined less, but Japan (-7.6%) was weaker. For the
first six months of 2000, global stock prices were down nominally.
Wright believes the fundamentals support the development of a more positive
equity market. The U.S. economy looks on track to slow to a more sustainable
growth rate in the second half of the year, which should limit the extent of
further Fed tightening since core inflation remains moderate. Moreover,
constructive economic environments appear to be falling into place around the
globe; even Japan seems to be making progress. In the U.S., second-quarter
profits are starting to come in, and early on there are more positive than
negative surprises. Wall Street is looking for only a moderate slowdown in
profit growth in the second half of 2000.
But stocks may not yet be ready to move up in a straight line. For one thing,
despite the market's retreat this year, valuations remain high, with the S&P 500
still valued in excess of 20 times year-ahead earnings and the Nasdaq's trailing
P/E multiple over 100 at mid-year. WIS also believes that it will take more
confirmation of economic cooling - but not so much cooling that profit prospects
suffer - before investors will be comfortable with the notion that Fed
tightening has nearly run its course. Once that happens, stock market prospects
will brighten considerably.
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO
Although unusual volatility and dramatic shifts in sentiment made portfolio
positioning problematic, the Wright Selected Blue Chip Portfolio (WSBCP) did
relatively well in the second quarter of 2000, falling by only 0.8%. The
Standard & Poor's 400 index, the Midcap benchmark, declined 3.3% in the second
quarter. The Russell 2000 index, another measure of midcap stocks, declined by
3.8% for the quarter. Thus, the Wright Selected Blue Chip Equities Portfolio
outperformed the S&P 400 Index by 2.5 percentage points and the Russell 2000 by
3.0 percentage points for the quarter, with somewhat more muted movements than
either index.
Major contributors to the portfolio's outperformance in the second quarter
include the Healthcare sector, the Energy sector, and the Consumer Staples area.
For the first six months of calendar 2000, WSBCP had a decline of 2.45%,
behind the returns of the S&P 400 (+9.0%) and the Russell 2000 (+3.1%).
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO
After outperforming in 1999, foreign markets overall lagged the U.S. stock
market in dollar terms in the first two quarters of 2000. The Wright
International Blue Chip Portfolio (WIBC), which beat its benchmark last year and
in this year's first quarter, lagged in the second quarter with a loss of 7.2%,
behind the FTSE World ex U.S. index (-3.5%) and the Morningstar average of
international equity funds (-4.5%). For the first half of 2000, WIBCP lost 6.6%,
behind the FTSE World ex U.S. index (-4.3%) and the Morningstar average (-4.2%).
In contrast to the first quarter, when technology was strong, in the second
quarter the global retreat in technology stocks hurt the WIBCP, which was
overweight in that sector. A poor showing by the Portfolio's holdings in Japan,
where the overall market was weak, also hurt WIBCP's second-quarter results.
Compared to the FTSE world ex U.S. index, WIBCP benefited from having no
holdings in Greece, one of the world's weakest markets. Strong stock selection
in Brazil, which is seeing an improving economy, and Sweden also worked to the
Portfolio's benefit. WIBCP is starting the third quarter of 2000 with a somewhat
reduced weighing in technology compared to three months earlier. In terms of
country allocation, holdings in Europe have been increased, and positions in
Taiwan and Thailand have been added.
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO (WSBCP)
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Portfolio of Investments - June 30, 2000 (unaudited)
Shares Value
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Equity Investments - 96.4%
APPAREL - 2.5%
Jones Apparel Group Inc.......... 900 $ 21,150
Liz Claiborne.................... 800 28,200
-----------
$ 49,350
-----------
COMPUTERS & PERIPHERALS - 9.0%
Gateway Inc...................... 1,600 $ 90,800
International Business Machines.. 100 10,956
Sun Microsystems, Inc............ 800 72,750
-----------
$ 174,506
-----------
DRUGS, COSMETICS & HEALTHCARE - 14.1%
Alberto Culver Co. Class A....... 1,800 $ 47,250
Biogen, Inc...................... 400 25,800
Forest Laboratories Inc.......... 600 60,600
Minimed Inc...................... 200 23,600
Stryker Corp..................... 800 35,000
Watson Pharmaceutical, Inc....... 1,500 80,625
-----------
$ 272,875
-----------
ELECTRICAL EQUIPMENT - 1.9%
Vishay Intertechnology Inc....... 975 $ 36,989
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ELECTRONIC EQUIPMENT & INSTRUMENTATION - 9.5%
American Power Conversion Corp... 1,200 $ 48,975
Samina Corp...................... 700 59,850
Solectron Corp................... 1,800 75,375
-----------
$ 184,200
-----------
FINANCIAL - 9.1%
AFLAC Corp....................... 550 $ 25,265
BB&T Corporation................. 1,800 42,975
Commerce Bancshares Inc.......... 550 16,363
Compass Bancshares............... 800 13,650
Edwards (A.G.), Inc.............. 1,550 60,450
Wilmington Trust Corp............ 400 17,100
-----------
$ 175,803
-----------
MACHINERY & EQUIPMENT - 0.9%
Deere & Co....................... 500 $ 18,500
-----------
METAL PRODUCTS MANUFACTURERS - 2.4%
Illinois Tool Works Inc.......... 800 $ 45,600
-----------
OIL, GAS & COAL - 8.4%
Devon Energy Corp................ 1,300 $ 73,044
Ensco Int'l Inc.................. 1,900 68,044
Noble Drilling Corp.............. 500 20,593
-----------
$ 161,681
-----------
PRINTING & PUBLISHING - 1.0%
New York Times Co................ 500 $ 19,750
-----------
RECREATION - 2.9%................
Brinker International Inc*....... 1,400 $ 40,950
Harley-Davidson.................. 400 15,400
-----------
$ 56,350
-----------
RETAILERS - 4.4%
Bed Bath & Beyond Inc............ 550 $ 19,938
Ross Stores Inc.................. 1,600 27,300
Tiffany & Co..................... 300 20,250
Wal-Mart Stores Inc.............. 300 17,287
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$ 84,775
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SEMICONDUCTOR EQUIPMENT & PRODUCTS -- 12.6%
Altera Corp...................... 400 $ 40,775
Analog Devices................... 900 68,400
Dallas Semiconductor Corp........ 2,000 81,500
Qlogic Corp...................... 800 52,850
-----------
$ 243,525
-----------
<PAGE>
SOFTWARE & SERVICES -- 5.0%
Adobe Systems Inc................ 500 $ 65,000
Autodesk Inc..................... 900 31,219
-----------
$ 96,219
-----------
UTILITIES - 7.2%
Alltel Corp...................... 400 $ 24,775
Duke Energy Corp................. 1,100 62,013
Dynegy Inc....................... 600 40,988
TECO Energy, Inc................. 600 12,037
-----------
$ 139,813
-----------
MISCELLANEOUS - 5.5%
Acxiom Corp...................... 700 $ 19,075
Avery-Dennison Corp.............. 400 26,850
Cardinal Health Inc.............. 300 22,200
CDW Computer Centers Inc......... 300 18,750
Interpublic Group Inc............ 450 19,350
-----------
$ 106,225
-----------
total investments - 96.4%
(identified cost, $1,515,853).... $ 1,866,161
OTHER ASSETS
LESS LIABILITIES - 3.6%.......... 69,987
-----------
NET ASSETS - 100.0%.............. $ 1,936,148
============
* Non-income-producing security.
See notes to financial statements
<PAGE>
Wright Selected Blue Chip Portfolio (WSBCP)
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STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
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ASSETS:
Investments--
Identified cost...................... $ 1,515,853
Unrealized appreciation.............. 350,308
------------
Total value (Note 1A).............. $ 1,866,161
Cash................................... 43,628
Dividends receivable................... 1,198
Receivable from investment adviser..... 11,200
Receivable for investments sold........ 115,632
------------
Total Assets......................... $ 2,037,819
------------
LIABILITIES:
Payable for investments purchased...... $ 100,710
Accrued expenses....................... 961
------------
Total Liabilities.................... $ 101,671
------------
NET ASSETS................................ $ 1,936,148
==============
NET ASSETS CONSIST OF:
Paid-in capital........................... $ 1,324,849
Accumulated net realized gain on investment
transactions........................... 242,471
Unrealized appreciation of investments.... 350,308
Accumulated undistributed net investment
income................................. 18,520
------------
Net assets applicable to outstanding shares$ 1,936,148
==============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 152,256
==============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $12.72
==============
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 (unaudited)
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INVESTMENT INCOME:
Income--
Dividends.............................. $ 12,083
------------
Expenses--
Investment Adviser fee (Note 3)........ $ 6,799
Administrator fee (Note 3)............. 526
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator 3,964
Custodian and transfer agent fees (Note 1D) 7,021
Audit.................................. 11,528
Legal.................................. 1,413
Printing............................... 823
Interest expense....................... 137
Miscellaneous.......................... 1,855
------------
Total expenses..................... $ 34,066
------------
Deduct--
Preliminary reduction of Investment Adviser
fee (Note 3)......................... $ 6,799
Preliminary allocation of expenses to the
Investment Adviser (Note 3).......... 11,200
Reduction of Custodian fee
(Note 1D)............................ 3,196
------------
Total deductions................... $ 21,195
------------
Net expenses....................... $ 12,871
------------
Net investment loss............. $ (788)
------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions
(identified cost basis)................ $ 238,203
Change in unrealized appreciation of
investment............................ (290,947)
------------
Net realized and unrealized loss....... $ (52,744)
------------
Net decrease in net assets from
operations............................ $ (53,532)
==============
See notes to financial statements
<PAGE>
WRIGHT SELECTED BLUE CHIP PORTFOLIO (WSBCP)
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<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
STATEMENTS OF CHANGES IN NET ASSETS 2000 1999
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
<S> <C> <C>
Net investment income (loss)............................................... $ (788) $ 8,449
Net realized gain on investment transactions............................... 238,203 239,141
Change in unrealized appreciation (depreciation) of investments............ (290,947) 83,739
---------- ----------
Net increase (decrease) in net assets from operations.................... $ (53,532) $ 331,329
Distributions to shareholders from net realized gain on
investment transactions (Note 2)........................................... (234,825) (216,028)
Distributions to shareholders from net investment income (Note 2)............ (8,204) (10,601)
Net decrease from Portfolio share transactions (Note 4)...................... (44,329) (1,308,816)
---------- ----------
Net decrease in net assets............................................... $ (340,890) $ (1,204,116)
NET ASSETS:
At beginning of period....................................................... 2,277,038 3,481,154
---------- ----------
At end of period............................................................. $ 1,936,148 $ 2,277,038
=========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT
INCOME....................................................................... $ 18,520 $ 27,512
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Portfolio (WSBCP) 20004 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.610 $ 14.000 $ 15.650 $ 14.000 $ 11.410 $ 9.320
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)(1) $ (0.002) $ 0.110 $ 0.020 $ 0.110 $ 0.170 $ 0.100
Net realized and unrealized gain (loss) (0.318) 1.633 (0.270) 3.780 2.430 2.345
--------- --------- --------- --------- --------- ---------
Total income (loss) from investment
operations $ (0.320) $ 1.743 $ (0.250) $ 3.890 $ 2.600 $ 2.445
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income $ (0.053) $ (0.053) $ - $ - $ (0.010) $ (0.070)
Distributions from capital gains (1.517) (1.080) (1.400) (2.240) - (0.285)
--------- --------- --------- --------- --------- ---------
Total distributions $ (1.570) $ (1.133) $ (1.400) $ (2.240) $ (0.010) $ (0.355)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 12.720 $ 14.610 $ 14.000 $ 15.650 $ 14.000 $ 11.410
=========== =========== =========== =========== =========== ===========
Total return(2) (2.45%) 13.97% (2.65%) 32.08% 22.80% 26.25%
Ratios/Supplemental Data(1):
Net assets, end of period (000 omitted) $ 1,936 $ 2,277 $ 3,481 $ 3,425 $ 2,668 $ 2,239
Ratio of total expenses to average net assets 1.54%(5) 1.25% 1.27% 1.30% 1.27% 1.60%
Ratio of expenses after custodian fee reduction
to average net assets3 1.23%(5) 1.15% 1.15% 1.15% 1.06% 1.15%
Ratio of net income (loss) to average
net assets (0.08%)(5) 0.33% 0.30% 0.70% 1.14% 0.96%
Portfolio turnover rate 63% 45% 49% 40% 68% 64%
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<FN>
(1)During each of the periods presented, the investment adviser and/or the
administrator voluntarily reduced their fees and the investment adviser was
allocated a portion of the portfolio's operating expenses. Had such actions
not been undertaken, the net investment income (loss) per share and the
ratios would have been as follows:
2000(4) 1999 1998 1997 1996 1995
------------------------------------------------------- -------------------------------------------------------------------
Net investment income (loss) per share $ (0.045) $ (0.310) $ (0.036) $ 0.030 $ 0.066 $ (0.017)
=========== =========== =========== =========== =========== =========
Ratios (as a percentage of average net assets):
Expenses 3.26%(5) 2.51% 2.11% 1.81% 1.97% 2.72%
=========== =========== =========== =========== =========== =========
Expenses after custodian fee reduction(3) 2.95%(5) 2.41% 1.99% 1.66% 1.76% 2.27%
=========== =========== =========== =========== =========== =========
Net investment income (loss) (1.80%)(5) (0.93%) (0.54%) 0.19% 0.44% (0.16%)
=========== =========== =========== =========== =========== =========
----------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the reinvestment date. The total
investment return does not reflect expenses that apply to the separate
account or policies. If these charges had been included, the total return
would be reduced.
(3)Custodian fees were reduced by credits resulting from cash balances the
portfolio maintained with the custodian (Note 1D). The computation of net
expenses to average daily net assets reported above is computed without
consideration of such credits.
(4)For the six months ended June 30, 2000 (unaudited).
(5)Annualized.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
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Portfolio of Investments - June 30, 2000 (Unaudited)
Shares Value
-------------------------------------------------------------------------------
EQUITY INVESTMENTS - 91.9%
CANADA - 3.8%
Nortel Networks Corp. (Common)... 457 $ 31,190
-----------
FRANCE - 19.6%
Alcatel.......................... 375 $ 24,673
Altran Technologies SA........... 50 9,821
Axa Company FRF60................ 150 23,703
France Telecom SA................ 100 14,021
Rexel............................ 60 4,626
S-T Microelectronics NV.......... 315 19,911
Technip SA....................... 80 9,707
Total Fina ELF................... 150 23,071
TV Francaise..................... 250 17,478
Vivendi ......................... 150 13,281
-----------
$ 160,292
-----------
GERMANY - 9.6%
Allianz AG Holding............... 50 $ 18,179
Deutsche Bank AG................. 100 8,251
Epcos............................ 60 5,983
Lufthansa AG..................... 180 4,199
Marschollek Lauten............... 25 10,487
Muenchener Rueckversicherungs.... 75 23,703
Siemans Registered............... 50 7,528
-----------
$ 78,330
-----------
HONG KONG - 3.9%
China Telecom.................... 2,000 $ 17,638
Hutchison Whampoa................ 1,100 13,828
-----------
$ 31,466
-----------
IRELAND - 1.7%
Elan Corp PLC.................... 300 $ 14,035
-----------
ITALY - 2.5%
Telecom Italia Mobile............ 2,000 $ 20,456
-----------
JAPAN - 7.6%
Bellsystem24 Inc................. 50 $ 24,556
Promise Co., Ltd................. 200 15,829
Ricoh Corp., Ltd................. 1,000 21,203
-----------
$ 61,588
-----------
MEXICO - 1.4%
Telefonos de Mexico.............. 4,000 $ 11,422
-----------
NETHERLANDS - 7.5%
ASM Lithography Holding NV....... 525 $ 23,166
ING Groep NV..................... 418 28,343
Philips Electronics NV........... 200 9,462
-----------
$ 60,971
-----------
NORWAY - 1.1%
Petroleum Geo-Services........... 500 $ 8,531
-----------
SINGAPORE - 2.2%
Datacraft Asia Limited........... 2,000 $ 17,600
-----------
SOUTH KOREA - 1.0%
Korea Telecom Corp-SP ADR........ 175 $ 8,466
-----------
SPAIN - 5.2%
Banco Bilbao Vizcaya Argentaria SA 1,000 $ 14,988
Repsol SA........................ 900 17,971
Telefonica SA*................... 436 9,395
-----------
$ 42,354
-----------
SWEDEN - 4.2%
Tel. AB LM Ericsson.............. 800 $ 15,898
Forsakr. AB Skandia.............. 700 18,574
-----------
$ 34,472
-----------
SWITZERLAND - 4.0%
Nestle........................... 4 $ 8,021
Zuerich Allied AG................ 50 24,750
-----------
$ 32,771
-----------
TAIWAN - 1.0%
Taiwan Semiconductors-SP ADR..... 200 $ 7,750
-----------
THAILAND - 0.9%
Advanced Info Services........... 800 $ 7,482
-----------
<PAGE>
UNITED KINGDOM - 14.7%
Amvesco PLC...................... 1,200 $ 19,264
British Telecommunication PLC.... 700 9,054
Cable & Wireless................. 650 11,016
CMG PLC.......................... 600 8,505
FKI Babcock...................... 2,500 8,898
Invensys PLC..................... 2,500 9,390
Sema Group PLC................... 400 5,695
Spirent PLC...................... 2,700 18,176
Vodafone Airtouch PLC............ 7,427 30,032
-----------
$ 120,030
-----------
TOTAL INVESTMENTS - 91.9%
(identified cost, $661,337)...... $ 749,206
OTHER ASSETS
LESS LIABILITIES - 8.1%.......... 65,951
-----------
NET ASSETS - 100.0%.............. $ 815,157
===========
* Non-income producing security.
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
-------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
-------------------------------------------------------------------------------
ASSETS:
Investments--
Identified cost...................... $ 661,337
Unrealized appreciation............. 87,869
------------
Total value (Note 1A).............. $ 749,206
Cash................................... 31,640
Dividends receivable................... 427
Receivable from Investment Adviser..... 27,520
Receivable for foreign taxes withheld.. 666
Receivable for investments sold........ 24,138
------------
Total assets......................... $ 833,597
------------
LIABILITIES:
Foreign cash overdraft, at value
(identified cost $4,521)............. $ 4,527
Payable for investments purchased...... 8,362
Payable for open forward foreign currency
exchange contracts (Notes 1H & 9)..... 232
Accrued expenses....................... 5,319
------------
Total liabilities.................... $ 18,440
------------
NET ASSETS................................ $ 815,157
=============
NET ASSETS CONSIST OF:
Paid-in capital........................... $ 643,605
Accumulated net realized gain on investment
and foreign currency transactions...... 75,349
Unrealized appreciation of investments and
translations of assets and liabilities in
foreign currencies..................... 87,745
Accumulated undistributed net investment income 8,458
------------
Net assets applicable to
outstanding shares $ 815,157
=============
SHARES OF BENEFICIAL INTEREST
OUTSTANDING............................ 71,394
=============
NET ASSET VALUE, OFFERING PRICE,
AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST................. $11.42
=============
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 (unaudited)
-------------------------------------------------------------------------------
INVESTMENT INCOME:
Income--
Dividends.............................. $ 15,257
Less: Foreign taxes.................... (709)
------------
Total investment income.............. $ 14,548
------------
Expenses--
Investment Adviser fee (Note 3)........ $ 3,644
Administrator fee (Note 3)............. 229
Compensation of Trustees not affiliated with
the Investment Adviser or Administrator 3,964
Custodian and transfer agent fees (Note 1D) 16,003
Audit.................................. 11,528
Legal.................................. 1,413
Printing............................... 823
Miscellaneous.......................... 4,010
------------
Total expenses..................... $ 41,614
------------
Deduct--
Preliminary reduction of Investment
Adviser fee (Note 3)................. $ 3,644
Preliminary reduction of Administrator fee
(Note 3)............................. 229
Preliminary allocation of expense to the
Investment Adviser (Note 3)......... 27,520
Reduction of Custodian fee (Note 1D)... 1,808
------------
Total deductions................... $ 33,201
------------
Net expenses....................... $ 8,413
------------
Net investment income........... $ 6,135
------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment and foreign
currency transactions (identified
cost basis) $ 77,304
Change in unrealized depreciation of investments
and translation of assets and liabilities
in foreign currency.................... (148,153)
------------
Net realized and unrealized loss....... $ (70,849)
------------
Net decrease in net assets from operations $ (64,714)
==============
See notes to financial statements
<PAGE>
WRIGHT INTERNATIONAL BLUE CHIP PORTFOLIO (WIBCP)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
STATEMENTS OF CHANGES IN NET ASSETS 2000 1999
---------------------------------------------------------------------------------------------------------------------------------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
From operations -
<S> <C> <C>
Net investment income (loss)............................................... $ 6,135 $ (2,872)
Net realized gain on investments and foreign currency
transactions............................................................. 77,304 123,795
Change in unrealized appreciation (depreciation) of investments and translation
of assets and liabilities in foreign currency............................ (148,153) 91,852
---------- ----------
Net increase (decrease) in net assets from operations.................... $ (64,714) $ 212,775
Distributions to shareholders from net realized gain
on investment transactions (Note 2)........................................ (121,824) (151,303)
Net increase (decrease) from Portfolio share transactions (Note 4)........... 81,353 (416,999)
---------- ----------
Net decrease in net assets............................................... $ (105,185) $ (355,527)
NET ASSETS:
At beginning of period....................................................... 920,342 1,275,869
---------- ----------
At end of period............................................................. $ 815,157 $ 920,342
=========== ===========
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME................................. $ 8,458 $ 2,323
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------------------------------------------------------------
Wright International Blue Chip Portfolio (WIBCP) 2000(4) 1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.820 $ 12.260 $ 11.800 $ 11.810 $ 10.060 $ 9.140
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)(1) $ 0.084 $ (0.088) $ (0.023) $ 0.032 $ (0.043) $ 0.003
Net realized and unrealized gain (loss) (0.849) 3.381 1.053 0.588 1.793 0.967
--------- --------- --------- --------- --------- ---------
Total income (loss) from investment
operations $ (0.765) $ 3.293 $ 1.030 $ 0.620 $ 1.750 $ 0.970
--------- --------- --------- --------- --------- ---------
Less distributions:
Dividends from investment income $ - $ - $ - $ - $ - $ (0.005)
Return of capital - - - - - (0.013)(+)
Distributions from capital gains (1.635) (1.733) (0.570) (0.630) - -
Tax distribution from paid-in capital - - - - - (0.032)
--------- --------- --------- --------- --------- ---------
Total distributions $ (1.635) $ (1.733) $ (0.570) $ (0.630) $ - $ (0.050)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 11.420 $ 13.820 $ 12.260 $ 11.800 $ 11.810 $ 10.060
=========== =========== =========== =========== =========== ===========
Total return(2) (6.57%) 32.12% 8.45% 5.67% 17.40% 10.07%
Ratios/Supplemental Data(1):
Net assets, end of period (000 omitted) $ 815 $ 920 $ 1,276 $ 1,411 $ 1,457 $ 1,365
Ratio of total expenses to average
net assets(1) 2.24%(5) 1.98% 2.00% 2.00% 2.31% 2.28%
Ratio of expenses after custodian fee reduction
to average net assets(3) 1.84%(5) 1.85% 1.85% 1.85% 1.85% 1.85%
Ratio of net income (loss) to average net assets 1.35%(5) (0.31%) (0.21%) 0.25% (0.42%) 0.06%
Portfolio turnover rate 83% 79% 61% 94% 44% 31%
--------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)During each of the periods presented, the investment adviser and the
administrator voluntarily reduced their fees, and the investment adviser was
allocated a portion of the portfolio's operating expenses. Had such actions
not been undertaken, the net investment loss per share and the ratios would
have been as follows:
2000(4) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------
Net investment loss per share $ (0.345) $ (1.669) $ (0.369) $ (0.262) $ (0.253) $ (0.920)
=========== =========== =========== =========== =========== ===========
Ratios (as a percentage of average net assets):
Expenses 9.14%(5) 7.55% 5.16% 4.30% 4.37% 4.18%
=========== =========== =========== =========== =========== ===========
Expenses after custodian fee reduction(3) 8.74%(5) 7.42% 5.01% 4.15% 3.91% 3.75%
=========== =========== =========== =========== =========== ===========
Net investment loss (5.55%)(5) (5.88%) (3.37%) (2.05%) (2.47%) (1.85%)
=========== =========== =========== =========== =========== ===========
---------------------------------------------------------------------------------------------------------------------------------
(2)Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to be
invested at the net asset value on the reinvestment date. The total
investment return does not reflect expenses that apply to the separate
account or related policies. If these charges had been included, the total
return would be reduced.
(3)Custodian fees were reduced by credits resulting from cash balances the
portfolio maintained with the custodian (Note 1D). The computation of net
expenses to average daily net assets reported above is computed without
consideration of such credits.
(4)For the six months ended June 30, 2000 (unaudited).
(5)Annualized.
(+)Represents a distribution in excess of net investment income.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
Notes to Financial Statements (unaudited)
-------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
The Wright Managed Blue Chip Series Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended, as an open-end, management
investment company. The Trust presently consists of two diversified separate
portfolios: Wright Selected Blue Chip Portfolio (WSBCP), and Wright
International Blue Chip Portfolio (WIBCP) (the "Portfolios"). The shares of the
Portfolios are sold only to variable accounts established by participating
insurance companies. The following is a summary of significant accounting
policies consistently followed by the Trust in the preparation of its financial
statements. The policies are in conformity with accounting principles generally
accepted in the United States of America.
A. Investment Valuations - Securities listed on securities exchanges or in the
NASDAQ National Market, are valued at closing sale prices. Unlisted or
listed securities for which closing sale prices are not available are
valued at the last reported bid price. Investments for which valuations are
not readily available and for WIBCP investments for which material events
affecting the value of such securities occurred after the closing of the
exchange on which they are primarily traded but prior to the valuation of
the Fund will be appraised at their fair value as determined in good faith
by or at the direction of the Trustees. Short-term obligations maturing in
sixty days or less are valued at amortized cost, which approximates market
value.
B. Foreign Currency Translation - Investment security valuations, other
assets, and liabilities initially expressed in foreign currencies are
translated each business day into U.S. dollars based upon current exchange
rates. Purchases and sales of foreign investment securities and income and
expenses are translated into U.S. dollars based upon currency exchange
rates prevailing on the respective dates of such transactions. The Trust
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
C. Taxes - The Trust's policy is to comply with the provisions of the Internal
Revenue Code (the Code) available to regulated investment companies and
distribute to shareholders each year all of its taxable income, including
any net realized gain on investments. Accordingly, no provision for federal
income tax is necessary. Withholding taxes on foreign dividends have been
provided for in accordance with the Trust's understanding of the applicable
country's tax rules and rates.
D. Expense Reduction - The Portfolios have entered into an arrangement with
its custodian agent whereby interest earned on uninvested cash balances is
used to offset custodian fees. All significant reductions are reported as a
reduction of expenses in the Statement of Operations.
E. Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
F. Other - Investment transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. However, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as the Portfolios are
informed of the ex-dividend date.
G. Interim Financial Information - The interim financial statements relating
to June 30, 2000 and for the period then ended have not been audited by
independent certified public accountants, but in the opinion of the Trust's
management, reflect all adjustments, consisting of normal recurring
adjustments, necessary for the fair presentation of the financial
statements.
<PAGE>
H. Forward Foreign Currency Contracts - WIBCP may enter into forward foreign
currency exchange contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date. Risks may arise upon entering
these contracts from the potential inability of counterparties to meet the
terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. WIBCP will enter into forward
contracts for hedging purposes in connection with purchases and sales of
securities denominated in foreign currencies. The forward foreign currency
exchange contracts are adjusted by the daily forward exchange rate of the
underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until such time as the contracts have been
closed or offset.
(2) DISTRIBUTIONS
Dividends from investment income of WSBCP and WIBCP are expected to be
declared annually. However, the Trustees may decide to declare dividends at
other intervals. All net realized long or short-term capital gains of each
Portfolio, if any, will be declared and distributed at least annually. All
distributions will be distributed in the form of additional full and fractional
shares of the Portfolios and not in cash. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits, which result in temporary over-distributions for financial statement
purposes, are classified as distributions in excess of net investment income or
accumulated net realized gains. Distributions in excess of tax basis earnings
and profits are reported in the financial statements as a return of capital.
Permanent differences between book and tax accounting treatments may result in
reclassifications among various components of net assets.
(3) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has engaged Wright Investors' Service, Inc. (Wright) to act as
investment adviser to the Portfolios pursuant to the respective Investment
Advisory Contracts. Wright furnishes each Portfolio with investment management,
investment advisory, and other services. For its services, Wright is compensated
based upon a percentage of average monthly net assets which rate is adjusted as
average monthly net assets exceed certain levels. The Trust also has engaged
Eaton Vance Management (Eaton Vance or Administrator) to act as administrator of
the Trust. Under the Administration Agreement, Eaton Vance is responsible for
managing the business affairs of the Trust and is compensated based upon a
percentage of average monthly net assets which rate is reduced as average
monthly net assets exceed certain levels. For the six months ended June 30,
2000, the effective annual rate for advisory and administration charges for each
Portfolio was as follows:
WSBCP WIBCP
Investment Advisory 0.65% 0.80%
Administration 0.05% 0.05%
To enhance the net income of the Portfolios, Wright and Eaton Vance reduced
their fees and Wright made an assumption of a portion of each Portfolio's
expenses as follows:
WSBCP WIBCP
Preliminary reduction of Investment Adviser fees $ 6,799 $ 3,644
Preliminary allocation of expense to the
Investment Adviser 11,200 27,520
Preliminary reduction of Administrator fees - 229
Certain of the Trustees and officers of the Trust are directors/trustees
and/or officers of the above organizations.
<PAGE>
(4) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in Portfolio shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
-----------------------------------------------------------
Shares Amount Shares Amount
--------------------------------------------------------------------------------------------------------
Wright Selected Blue Chip Portfolio -
<S> <C> <C> <C> <C>
Sales.................................. 25,746 $ 348,791 19,555 $ 263,698
Issued to shareholders in payment
of distributions declared............ 18,651 243,029 17,563 216,028
Redemptions............................ (48,622) $ (636,149) (129,880) (1,788,542)
-------- ---------- -------- ----------
Net decrease....................... (3,595) $ (44,329) (92,762) $(1,308,816)
========= ============ ========= ============
Wright International Blue Chip Portfolio -
Sales.................................. 15,894 $ 223,880 10,098 $ 116,181
Issued to shareholders in payment
of distributions declared............ 9,730 121,824 15,026 151,303
Redemptions............................ (20,801) (264,351) (62,582) (684,483)
-------- ---------- -------- ----------
Net increase (decrease)............ 4,823 $ 81,353 (37,458) $ (416,999)
========= ============ ========= ============
</TABLE>
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations, for
the six months ended June 30, 2000, were as follows:
Wright Selected Wright International
Blue Chip Portfolio Blue Chip Portfolio
-------------------------------------------------------------------------------
Purchases - $ 1,250,066 $ 660,112
============ ============
Sales - $ 1,507,919 $ 685,285
============ ============
(6) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and gross and net unrealized appreciation (depreciation) of the
investment securities owned at June 30, 2000, as computed on a federal income
tax basis, are as follows:
Wright Select Wright International
Blue Chip Portfolio Blue Chip Portfolio
-------------------------------------------------------------------------------
Aggregate cost................. $ 1,515,853 $ 661,337
============ ============
Gross unrealized appreciation.. $ 430,942 $ 133,190
Gross unrealized depreciation.. (80,634) (45,321)
---------- ----------
Net unrealized appreciation... $ 350,308 $ 87,869
============ ============
<PAGE>
(7) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
The Wright International Blue Chip Portfolio invests in securities issued
by companies whose principal business activities are outside the United States
which may involve significant risks not present in domestic investments. For
example, there is generally less publicly available information about foreign
companies, particularly those not subject to the disclosure and reporting
requirements of the U.S. securities laws. Foreign issuers are generally not
bound by uniform accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to domestic issuers.
Investments in foreign securities also involve the risk of possible adverse
changes in investment or exchange control regulations, expropriation or
confiscatory taxation, limitation on the removal of funds or other assets of the
Trust, political or financial instability or diplomatic and other developments
which could affect such investments. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the United
States, and securities of some foreign issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. In general, there is less overall governmental
supervision and regulation of foreign securities markets, broker-dealers, and
issuers than in the United States.
Settlement of securities transactions in foreign countries may be delayed
and is generally less frequent than in the United States, which could affect the
liquidity of the Trust's assets. The Trust may be unable to sell securities
where the registration process is incomplete and may experience delays in
receipt of dividends.
(8) LINE OF CREDIT
The Portfolios participate with other funds managed by Wright in a
committed $20 million unsecured line of credit agreement with a bank. The
Portfolios may temporarily borrow from the line of credit to satisfy redemption
requests or settle investment transactions. Interest is charged to each
Portfolio based on its borrowings at an amount above the federal funds rate. In
addition, a fee computed at an annual rate of 0.10% on the average daily unused
portion of the $20 million line of credit, is allocated among the participating
portfolios at the end of each quarter. The Portfolios did not have significant
borrowings or allocated fees during the six months ended June 30, 2000.
(9) FINANCIAL INSTRUMENTS
WIBCP regularly trades financial instruments with off-balance sheet risk in
the normal course of its investing activities in order to manage exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include forward foreign currency exchange contracts. The
notional or contractual amounts of these instruments represent the investment
WIBCP has in particular classes of financial instruments and does not
necessarily represent the amounts potentially subject to risk. The measurement
of the risks associated with these instruments is meaningful only when all
related and offsetting transactions are considered.
As of June 30, 2000, WIBCP had the following forward foreign currency
exchange contracts open:
<TABLE>
<CAPTION>
Net Unrealized
Settlement Contracts In Exchange For Contracts Appreciation
Date Currency to Deliver (in U. S. Dollars) at Value (Depreciation)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SALES
07/05/00 EURO 20,295 $19,209 $19,441 $ (232)
=======
</TABLE>
At June 30, 2000, WIBCP had sufficient cash and/or securities to cover any
commitments under these contracts.
<PAGE>
WRIGHT INVESTORS' SERVICE DISTRIBUTORS, INC.
440 Wheelers Farms Road, Milford, CT 06460
SEMI-ANNUAL REPORT
OFFICERS AND TRUSTEES OF THE FUNDS
Peter M. Donovan, President and Trustee
H. Day Brigham, Jr., Vice President , Secretary and Trustee
A. M. Moody III, Vice President and Trustee
Judith R. Corchard, Vice President and Trustee
Dorcas R. Hardy, Trustee
Leland Miles, Trustee
Lloyd F. Pierce, Trustee
Richard E. Taber, Trustee
Raymond Van Houtte, Trustee
James L. O'Connor, Treasurer
William J. Austin, Jr., Assistant Treasurer
ADMINISTRATOR
Eaton Vance Management
255 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
Wright Investors' Service
440 Wheelers Farms Road
Milford, Connecticut 06460
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of a mutual fund unless accompanied or preceded by a
Fund's current prospectus. Shares of the Trust are only available to the
separate accounts of insurance companies
