SEC Registration Nos.
333-43456 and 811-10045
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Pre-Effective Amendment No. 3 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 XX
Calvert Impact Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
Registrant's Telephone Number: (301) 951-4800
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
___Immediately upon filing ___on (date)
pursuant to paragraph (b) pursuant to paragraph (b)
___60 days after filing ___on (date)
pursuant to paragraph (a) pursuant to paragraph (a)
<PAGE>
PROSPECTUS
October 31, 2000
CALVERT LARGE CAP GROWTH FUND
About the Fund
2 Investment Objective, Strategy, Past Performance
5 Fees and Expenses
7 Investment Practices and Risks
10 Shareholder Advocacy and Social Responsibility
About Your Investment
11 About Calvert
11 Advisory Fees
12 How to Buy Shares
13 Choosing a Share Class
15 Calculation of CDSC/Waiver
16 Distribution and Service Fees
16 Account Application
17 Important - How Shares are Priced
17 When Your Account Will be Credited
18 Other Calvert Group Features
(Exchanges, Minimum Account Balance, etc.)
20 Dividends, Capital Gains and Taxes
22 How to Sell Shares
24 Exhibit A - Reduced Sales Charges (Class A)
26 Exhibit B- Service Fees and Other Arrangements with Dealers
These securities have not been approved or disapproved by the Securities and
Exchange Commission ("SEC") or any State Securities Commission, nor has the SEC
or any State Securities Commission passed on the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
Calvert Large Cap Growth Fund
Investment Objective
Calvert Large Cap Growth Fund seeks to exceed the stock market total return
(primarily through capital appreciation) at a level of total risk roughly equal
to that of the stock market over longer periods of time (three years or more).
The S&P 500 Index with dividends reinvested serves as a proxy for "stock market"
in this objective.
Principal Investment Strategies
The Fund invests in a diversified portfolio of common stocks of companies which
meet the Fund's investment and social criteria. While the Fund has the
flexibility to invest in companies of all sizes, typically 80% to 95% of the
Fund has been invested in large U.S. companies traded on the New York Stock
Exchange, the American Stock Exchange and NASDAQ. The Fund invests in both value
and growth companies. Value stocks are those priced cheaply relative to some
financial measures of worth. Growth stocks have faster increasing sales and
earnings.
A secondary portfolio strategy is the use of exchange-traded, "traditional"
stock index options and futures. These investments help to keep the long-term
average market risk of the Fund roughly equal to the market itself. At any one
point in time however, the Portfolio market exposure may be as high as 150% or
as low as 50% of the market. The Advisor and Subadvisor believe that the use of
these instruments is conservative; it does not try to leverage overall market
risk in the long term.
Socially Responsible Investment Criteria
Investments are selected on the basis of their ability to contribute to the dual
objectives of financial soundness and social criteria. The Fund has developed
social investment criteria, detailed below. These criteria represent standards
of behavior which few, if any, organizations totally satisfy. As a matter of
practice, evaluation of a particular organization in the context of these
criteria will involve subjective judgment by Calvert. All social criteria may be
changed by the Board of Directors without shareholder approval.
Environment: The Fund will not invest in companies that have poor environmental
records, including significant compliance and waste management problems. The
Fund seeks to invest in companies that have strong programs that focus on
reducing overall environmental impact. Further, the Fund will not invest in
companies significantly engaged in nuclear power.
Labor Relations: The Fund will not invest in companies that have a record of
employment discrimination, anti-union activities or provide unsafe workplaces.
The Fund seeks to invest in companies that have a good record of labor
relations, including strong diversity programs.
Product Safety: The Fund will not invest in companies that primarily engage in
tobacco, alcohol, firearms or gambling. The Fund seeks to invest in companies
that produce healthy and safe products and services.
Animal Welfare: The Fund will not invest in companies that abuse animals through
methods of factory farming. The Fund seeks to invest in consumer product
companies that demonstrate a reduction in the use of animal testing, if
applicable.
Military Weapons: The Fund will not invest in companies that are primarily
engaged in weapons contracting with the Department of Defense.
Community Relations: The Fund will not invest in companies that are not
responsive to communities where they operate. The Fund seeks to invest in
companies that are responsible citizens in these communities.
Human Rights: The Fund will not invest in companies that directly contribute to
human rights violations worldwide. The Fund seeks to invest in companies that
have adopted human rights standards in their overseas operations.
Indigenous Peoples Rights: The Fund will not invest in companies that are
significantly engaged in a pattern and practice of violating the rights of
indigenous people. The Fund seeks to invest in companies that are engaged in
positive portrayals of Native Americans and other indigenous peoples.
With respect to U.S. government securities, the Fund invests primarily in debt
obligations issued or guaranteed by agencies or instrumentalities of the U.S.
Government whose purposes further, or are compatible with, the Fund's social
criteria, such as obligations of the Student Loan Marketing Association, rather
than general obligations of the U.S. Government, such as Treasury securities.
Principal Risks
You could lose money on your investment in the Fund, or the Fund could
underperform, most likely for any of the following reasons:
- The stock market goes down
- The individual stocks in the Fund do not perform as well as expected
- The use of stock index futures and options could add to, rather than decrease
risk
An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table*
The following bar chart and table show the Fund's annual returns and its
long-term performance. The chart shows how the performance of the Fund's shares
has varied from year to year. The table compares the Fund's performance over
time to that of the Standard & Poor's 500 Index, a widely recognized, unmanaged
index of common stock prices. It also compares the Fund's performance to the
Lipper Large Cap Growth Index. The Fund's past performance does not necessarily
indicate how the Fund will perform in the future.
The return for the Fund's classes of shares offered by this prospectus will
differ from the returns shown in the bar chart, depending upon the expenses of
that class and any applicable sales charge. The bar chart does not reflect any
sales charge that you may be required to pay upon purchase or redemption of the
Fund's shares. Any sales charge will reduce your return. The average total
return table shows returns with the maximum sales charge deducted. No sales
charge has been applied to the index and average used for comparison in the
table.
* Pursuant to an Agreement and Plan of Reorganization, the Social Responsibility
Portfolio of Bridgeway Fund, Inc. was reorganized into the Calvert Large Cap
Growth Fund, commencing operations on October 31, 2000. Performance information
for the Calvert Large Cap Growth Fund includes performance of the Bridgeway
Social Responsibility Portfolio.
Year-by-Year Total Return
[INSERT BAR CHART HERE]
Best Quarter (of periods shown) Q4 '99 40.66%
Worst Quarter (of periods shown) Q3 '98 (9.98)%
Average Annual Total Returns (as of December 31, 1999)
(with maximum sales charge deducted)
1 year 5 year 10 year
Calvert Large Cap Growth Fund 49.36% 31.77% N/A
Lipper Large Cap Growth Index 34.82% 30.73% N/A
S&P 500 Index 21.03% 28.54% N/A
<PAGE>
Fees and Expenses
This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.
Classes
A B C I
Shareholder fees
Maximum sales charge
(load) imposed on purchases 4.75% None None None
Maximum deferred sales charge (load) None2 5%3 1%4 None
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses1
Management fees
1.15% 1.15% 1.15% 1.05%
Distribution and service (12b-1) fees 0.25% 1.00% 1.00% None
Other expenses 0.68% 1.22% 1.08% 0.56%
Total annual fund operating expenses 2.08% 3.37% 3.23% 1.61%
Fee waiver and/or expense reimbursement5 0.33% 0.62% 0.48% 0.46%
Net Expenses6 1.75% 2.75% 2.75% 1.15%
Example
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The example assumes that:
- You invest $10,000 ($1,000,000 in the Institutional Class) in the Fund for
the time periods indicated;
- Your investment has a 5% return each year; and
- The Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
Number of Years Investment is Held
1 Year 3 Years
Class A $644 $1,066
Class B (with redemption) $778 $1,379
Class B(no redemption) $278 $979
Class C (with redemption) $378 $950
Class C (no redemption) $278 $950
Class I $11,721 $46,304
<PAGE>
Explanation of Fees and Expenses Table
1 Expenses are based on estimates for the Fund's current fiscal year, unless
otherwise indicated. Management fees include the subadvisory fees paid by the
Fund to the Subadvisor. The subadvisory fees for the Fund are subject to a
performance adjustment, which could cause the fee to be as high as 0.70% or as
low as 0.20%, depending on the Fund's performance relative to the S&P 500
Index. Management fees also include an administrative fee paid
by the Fund to Calvert Administrative Services Company, an affiliate of the
Advisor.
2 Purchases of Class A shares for accounts with $1 million or more are not
subject to front-end sales charges, but may be subject to a 1% contingent
deferred sales charge on shares redeemed within one year of purchase. See "How
to Buy Shares - Class A."
3 A contingent deferred sales charge is imposed on the proceeds of Class B
shares redeemed within six years, subject to certain exceptions. The charge is a
percentage of net asset value at the time of purchase or redemption, whichever
is less, and declines from 5% in the first year that shares are held, to 4% in
the second and third year, 3% in the fourth year, 2% in the fifth year and 1% in
the sixth year. There is no charge on redemptions of Class B shares held for
more than six years. See "Calculation of Contingent Deferred Sales Charge."
4 A contingent deferred sales charge of 1% is imposed on the proceeds of
Class C shares redeemed within one year. The charge is a percentage of net asset
value at the time of purchase or redemption, whichever is less. See "Calculation
of Contingent Deferred Sales Charge."
5 The Advisor has agreed to limit annual fund operating expenses (net of any
expense offset arrangements and exclusive of any performance fee adjustment)
through November 1, 2001. The contractual expense cap is shown as "Net
Expenses," this is the maximum amount of operating expenses that may be charged
to the Fund through November 1, 2001. For the purposes of this expense limit,
operating expenses do not include interest expense, brokerage commissions,
extraordinary expenses, taxes and capital items. The Fund has an offset
arrangement with the custodian bank whereby the custodian and transfer agent
fees may be paid indirectly by credits on the Fund's uninvested cash balances.
These credits are used to reduce the Fund's expenses.
6 The contractual expense cap is 1.50% for Class A, 2.50% for Class B, 2.50%
for Class C and 0.90% for Class I, exclusive of any performance fee adjustment.
<PAGE>
Investment Practices and Risks
The most concise description of the Fund's risk profile is under the risk-return
summary. The Fund is also permitted to invest in certain other investments and
to use certain investment techniques that have higher risks associated with
them. On the following pages are brief descriptions of these other principal
investments and techniques, along with their risks.
For each of the investment practices listed, the Fund's limitations are shown as
a percentage of its assets and the principal types of risk involved. (See the
pages following for a description of the types of risks).
Active Trading Strategy/Turnover involves selling a security soon after
purchase. An active trading strategy causes a fund to have higher portfolio
turnover compared to other funds and higher transaction costs, such as
commissions and custodian and settlement fees, and may increase your tax
liability. Risks: Opportunity, Market and Transaction.
Temporary Defensive Positions. During adverse market, economic or political
conditions, the Fund may depart from its principal investment strategies by
increasing its investment in short-term interest-bearing securities. During
times of any temporary defensive positions, the Fund may not be able to achieve
its investment objective. Risks: Opportunity.
Conventional Securities
Stocks in General. The Fund is subject to stock market risk. Stock prices
overall may decline over short or even long periods. The Fund is also subject to
investment style risk, which is the chance that returns from
large-capitalization stocks will trail returns from other asset classes or the
overall stock market. Each type of stock tends to go through cycles of doing
better or worse than the stock market in general. Finally, individual stocks may
lose value for a variety of reasons, even when the overall stock market has
increased. Risks: Market.
Foreign Securities. Securities issued by companies located outside the U.S.
and/or traded primarily on a foreign exchange. The Fund does not expect to own
more than 10% of such securities. Risks: Market, Currency, Transaction,
Liquidity, Information and Political.
Small Cap Stocks. Investing in small companies involves greater risk than with
more established companies. Small cap stock prices are more volatile and the
companies often have limited product lines, markets, financial resources, and
management experience. Risks: Market, Liquidity and Information.
Investment grade bonds. Bonds rated BBB/Baa or higher or comparable unrated
bonds. Risks: Interest Rate, Market and Credit.
<PAGE>
Below-investment grade bonds. Bonds rated below BBB/Baa or comparable unrated
bonds are considered junk bonds. They are subject to greater credit risk than
investment grade bonds. The Fund does not expect to own more than 20% of such
securities, excluding any high social impact investments. Risks: Credit, Market,
Interest Rate, Liquidity and Information.
Unrated debt securities. Bonds that have not been rated by a recognized rating
agency; the Advisor has determined the credit quality based on its own research.
Risks: Credit, Market, Interest Rate, Liquidity and Information.
Illiquid securities. Securities which cannot be readily sold because there is no
active market. The Fund does not expect to own more than 15% of such securities.
Risks: Liquidity, Market and Transaction.
Options on securities and indices. Contracts giving the holder the right but not
the obligation to purchase or sell a security (or the cash value, in the case of
an option on an index) at a specified price within a specified time. In the case
of selling (writing) options, the Fund will write call options only if they
already own the security (if it is "covered"). The Fund does not expect to own
more than 5% (based on net premium payments) of such securities. Risks: Interest
Rate, Currency, Market, Leverage, Correlation, Liquidity, Credit and
Opportunity.
Futures contract. Agreement to buy or sell a specific amount of a commodity or
financial instrument at a particular price on a specific future date. The Fund
does not expect to own more than 5% of such securities. Risks: Interest Rate,
Currency, Market, Leverage, Correlation, Liquidity and Opportunity.
High Social Impact Investments
High Social Impact Investments is a program that permits up to 1% of the Fund's
assets to be targeted to directly support the growth of community-based
organizations for the purposes of promoting business creation, housing
development, and economic and social development of urban and rural communities.
These types of investments offer a rate of return below the then-prevailing
market rate, and are considered illiquid, unrated and may be deemed
below-investment grade. They also involve a greater risk of default or price
decline than investment grade securities. However, they have a significant
social return by making a difference in our communities. High Social Impact
Investments are valued under the direction and control of the Fund's Board.
Special Equities
The Fund has a Special Equities investment program that allows the Fund to
promote especially promising approaches to social goals through privately placed
investments. The investments are generally venture capital investments in small,
untried enterprises. The Special Equities Committee of the Fund identifies,
evaluates, and selects the Special Equities investments. Special Equities
involve a high degree of risk - they are subject to liquidity, information, and
if a debt investment, credit risk. Special Equities are valued under the
direction and control of the Fund's Board.
<PAGE>
The Fund has additional investment policies and restrictions (for example,
repurchase agreements, borrowing, pledging, and reverse repurchase agreements,
securities lending, when-issued securities and short sales.) These policies and
restrictions are discussed in the Statement of Additional Information ("SAI").
Types of Investment Risk
Correlation risk
This occurs when a Fund "hedges" - uses one investment to offset the Fund's
position in another. If the two investments do not behave in relation to one
another the way Fund managers expect them to, then unexpected or undesired
results may occur. For example, a hedge may eliminate or reduce gains as well as
offset losses.
Credit risk
The risk that the issuer of a security or the counterparty to an investment
contract may default or become unable to pay its obligations when due.
Currency risk
Currency risk occurs when a Fund buys, sells or holds a security denominated in
foreign currency. Foreign currencies "float" in value against the U.S. dollar.
Adverse changes in foreign currency values can cause investment losses when a
Fund's investments are converted to U.S. dollars.
Information risk
The risk that information about a security or issuer or the market might not be
available, complete, accurate or comparable.
Interest rate risk
The risk that changes in interest rates will adversely affect the value of an
investor's securities. When interest rates rise, the value of fixed-income
securities will generally fall. Conversely, a drop in interest rates will
generally cause an increase in the value of fixed-income securities. Longer-term
securities and zero coupon/"stripped" coupon securities ("strips") are subject
to greater interest rate risk.
Leverage risk
The risk that occurs in some securities or techniques which tend to magnify the
effect of small changes in an index or a market. This can result in a loss that
exceeds the amount actually invested.
Liquidity risk
The risk that occurs when investments cannot be readily sold. A Fund may have to
accept a less-than-desirable price to complete the sale of an illiquid security
or may not be able to sell it at all.
Management risk
The risk that a Fund's portfolio management practices might not work to achieve
their desired result.
<PAGE>
Market risk
The risk securities prices in a market, a sector or an industry will fluctuate,
and that such movements might reduce an investment's value.
Opportunity risk
The risk of missing out on an investment opportunity because the assets needed
to take advantage of it are committed to less advantageous investments or
strategies.
Political risk
The risk that may occur with foreign investments, and means that the value of an
investment may be adversely affected by nationalization, taxation, war,
government instability or other economic or political actions or factors.
Transaction risk
The risk that a Fund may be delayed or unable to settle a transaction or that
commissions and settlement expenses may be higher than usual.
Shareholder Advocacy and Social Responsibility
As the Fund's investment advisor, Calvert takes a proactive role to make a
tangible positive contribution to our society and that of future generations.
Calvert seeks to positively influence corporate behavior through its role as a
shareholder by pushing companies toward higher standards of social and
environmental responsibility. Calvert's activities may include but are not
limited to:
Dialogue with companies
Calvert regularly initiates dialogue with management as part of its social
research process. After the Fund has become a shareholder, Calvert often
continues its dialogue with management through phone calls, letters and
in-person meetings. Through its interaction, Calvert learns about management's
successes and challenges and press for improvement on issues of concern.
Proxy voting
As a shareholder in the various portfolio companies, the Fund is guaranteed an
opportunity each year to express its views on issues of corporate governance and
social responsibility at annual stockholder meetings. Calvert takes its voting
responsibility seriously and votes all proxies consistent with the financial and
social objectives of the Fund.
Shareholder resolutions
Calvert proposes resolutions on a variety of social issues. It files shareholder
resolutions when its dialogue with corporate management proves unsuccessful to
encourage a company to take action. In most cases, Calvert's efforts have led to
negotiated settlements with positive results for shareholders and companies
alike. For example, one of its shareholder resolutions resulted in the company's
first-ever disclosure of its equal employment policies, programs and workforce
demographics.
<PAGE>
About Calvert
Calvert Asset Management Company, Inc., 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814 ("Calvert"), is the Fund's investment advisor. Calvert
provides the Fund with investment supervision and management and office space;
furnishes executive and other personnel to the Fund; and pays the salaries and
fees of all Directors who are affiliated persons of the Advisor. It has been
managing mutual funds since 1976. Calvert is the investment advisor for over25
mutual fund portfolios, including the first and largest family of socially
screened funds. As of June 30, 2000, Calvert had over $6.6 billion in assets
under management.
Subadvisor and Portfolio Manager
Bridgeway Capital Management, Inc., 5615 Kirby Drive, Suite 518, Houston Texas
77005-2448, has managed the Fund (previously the Bridgeway Fund, Inc. Social
Responsibility Portfolio) since itsinception in 1994.
John Montgomery, founder and President of Bridgeway Capital Management, Inc., is
responsible for selecting the securities that the Fund purchases and sells. Mr.
Montgomery holds bachelor degrees from Swarthmore College in both engineering
and philosophy and graduate degrees from MIT and Harvard Business School. He
worked with computer modeling and quantitative methods as a research engineer at
MIT in the late 70's. Later, as a student at Harvard, he investigated methods to
apply modeling to portfolio management. John began applying these methods to his
own investments in 1985. He left the transportation industry at the end of 1991
to perform full time research on his investment models.
The Fund has obtained an exemptive order from the Securities and Exchange
Commission to permit the Fund, pursuant to approval by the Board of Directors,
to enter into and materially amend contracts with the Fund's Subadvisor without
shareholder approval. See "Investment Advisor and Subadvisor" in the SAI for
further details.
Advisory Fees
The Fund's advisory agreement provides for the Fund to pay the Advisor a fee of
0.25% of the Fund's average daily net assets. In addition, the Fund's
subadvisory agreement provides for the Fund to directly pay the Subadvisor a fee
of 0.45% of the Fund's average daily net assets. The Subadvisor may earn (or
have its base fee reduced by) a performance adjustment of plus or minus 0.25%,
based on the extent to which performance of the Fund exceeds or trails the
S&P 500 Index.
<PAGE>
HOW TO BUY SHARES
Getting Started - Before You Open an Account
You have a few decisions to make before you open an account in a mutual fund.
First, decide which fund(s) best suit your needs and your goals.
Second, decide what kind of account you want to open. Calvert offers individual,
joint, trust, Uniform Gifts/Transfers to Minor Accounts, Traditional, Education
and Roth IRAs, Qualified Profit-Sharing and Money Purchase Plans, SIMPLE IRAs,
SEP-IRAs, 403(b)(7) accounts, and several other types of accounts. Minimum
investments are lower for the retirement plans.
Then decide which class of shares is best for you.
You should make this decision carefully, based on:
- the amount you wish to invest;
- the length of time you plan to keep the investment; and
- the Class expenses.
The Fund offers four different Classes (Class A, B, C and I). This chart shows
the difference in the Classes and the general types of investors who may be
interested in each Class:
<PAGE>
Choosing a Share Class
Class A:
Front-End Sales Charge
For all investors, particularly those investing a substantial amount who plan to
hold the shares for a long period of time.
Sales charge on each purchase of 4.75% or less, depending on the amount you
invest.
Class A shares have an annual 12b-1 fee of 0.25%.
Class A shares have lower annual expenses due to a lower 12b-1 fee.
Purchases of Class A shares at NAV for accounts with $1 million or more will be
subject to a 1% deferred sales charge for 1 year.
Class B: Deferred Sales Charge for 6 years
For investors who plan to hold the shares at least 6 years. The expenses of this
class are higher than Class A, because of the 12b-1 fee.
No sales charge on each purchase, but if you sell your shares within 6 years,
you will pay a deferred sales charge of 5% or less on shares you sell.
Class B shares have an annual 12b-1 fee of 1%.
Your shares will automatically convert to Class A shares after 8 years, reducing
your future annual expenses.
If you are investing more than $250,000, you should consider investing in Class
A or C.
Class C: Deferred Sales Charge for 1 year
For investors who are investing for at least one year, but less than six years.
The expenses of this Class are higher than Class A, because of the 12b-1 fee.
No sales charge on each purchase, but if you sell shares within 1 year, then you
will pay a deferred sales charge of 1% at that time.
Class C shares have an annual 12b-1 fee of 1%.
Class C shares have higher annual expenses than Class A and there is no
automatic conversion to Class A.
If you are investing more than $1 million you should invest in Class I.
Class I:
No Sales
Charge
For investors who are investing $1 million or more.
No sales charge.
No annual 12b-1 fee.
Class I shares have low annual
expenses.
<PAGE>
Class A
If you choose Class A, you will pay a sales charge at the time of each purchase.
This table shows the charges both as a percentage of offering price and as a
percentage of the amount you invest. The term "offering price" means the NAV per
share plus the front-end sales charge. If you invest more, the percentage rate
of the sales charge will be lower. For example, if you invest more than $50,000,
or if your cumulative purchases or the value in your account is more than
$50,0001, then the sales charge is reduced to 3.75%.
Your investment in Sales Charge % % of Amt.
Class A shares of offering price Invested
Less than $50,000 4.75% 4.99%
$50,000 but not more than $100,000 3.75% 3.90%
$100,000 but not more than $250,000 2.75% 2.83%
$250,000 but not more than $500,000 1.75% 1.78%
$500,000 but not more than $1,000,000 1.00% 1.01%
$1,000,000 and over None2 None2
1 This is called "Rights of Accumulation." The sales charge is calculated by
taking into account not only the dollar amount of the new purchase of shares,
but also the higher of cost or current value of shares you have previously
purchased in Calvert Group Funds that impose sales charges. This automatically
applies to your account for each new purchase of Class A shares.
2 Purchases of Class A shares at NAV for accounts with $1,000,000 ($1
million) or more are subject to a one year CDSC of 1%. See the "Calculation of
Contingent Deferred Sales Charge and Waiver of Sales Charges."
The Class A front-end sales charge may be waived for certain purchases or
investors, such as participants in certain group retirement plans or other
qualified groups and clients of registered investment advisers. For details on
these and other purchases that may qualify for a reduced sales charge, see
Exhibit A.
Class B
If you choose Class B, there is no front-end sales charge like Class A, but if
you sell the shares within the first six years, you will have to pay a
"contingent deferred" sales charge ("CDSC"). Keep in mind that the longer you
hold the shares, the less you will have to pay in deferred sales charges.
Time Since Purchase CDSC %
1st year 5%
2nd year 4%
3rd year 4%
4th year 3%
5th year 2%
6th year 1%
After 6 years None
<PAGE>
Calculation of Contingent Deferred Sales Charge and Waiver of Sales Charges
The CDSC will not be charged on shares you received as dividends or from capital
gains distributions or on any capital appreciation (gain in the value) of shares
that are sold.
Shares that are not subject to the CDSC will be redeemed first, followed by
shares you have held the longest. The CDSC is calculated by determining the
share value at both the time of purchase and redemption and then multiplying
whichever value is less by the percentage that applies as shown above. If you
choose to sell only part of your shares, the capital appreciation for those
shares only is included in the calculation, rather than the capital appreciation
for the entire account.
The CDSC on Class B Shares will be waived in the following circumstances:
- Redemption upon the death or disability of the shareholder, plan
participant, or beneficiary.1
- Minimum required distributions from retirement plan accounts for
shareholders 70 1/2 and older.2
- The return of an excess contribution or deferral amounts, pursuant to
sections 408(d)(4) or (5), 401(k)(8), 402(g)(2), or 401(m)(6) of the Internal
Revenue Code.
- Involuntary redemptions of accounts under procedures set forth by the
Fund's Board of Directors.
- A single annual withdrawal under a systematic withdrawal plan of up to 10%
of the shareholder's account balance.3
1 "Disability" means a total disability as evidenced by a determination by
the federal Social Security Administration.
2 The maximum amount subject to this waiver is based only upon the
shareholder's Calvert Group retirement accounts.
3 This systematic withdrawal plan requires a minimum account balance of
$50,000 to be established.
Class C
If you choose Class C, there is no front-end sales charge like Class A, but if
you sell the shares within the first year, you will have to pay a 1% CDSC. Class
C may be a good choice for you if you plan to buy shares and hold them for at
least 1 year, but not more than five or six years.
Class I
If you choose Class I, there is no sales charge, nor a Distribution Plan. The
minimum initial investment is $1 million; the minimum subsequent investment is
$25,000. Class I shares require a minimum account balance of $1 million.
Purchases must be by bank wire.
Note for former Bridgeway Shareholders:
The minimum investment requirement for Class I shares is waived for shareholders
opening accounts pursuant to the Agreement and Plan of Reorganization of the
Bridgeway Social Responsibility Portfolio, with such reorganization occurring on
October 31, 2000. For these shareholders, additional accounts or exchanges will
not be honored in Class I. Any additional accounts must be established in Class
A, B or C. Additionally, no additional services or automated features can be
added to an existing account, they are only available in accounts established in
Class A, B or C.
<PAGE>
Distribution and Service Fees (For Class A, B and C only)
The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of
1940 that allows the Fund to pay distribution fees for the sale and distribution
of its shares. The distribution plan also pays service fees to persons (such as
your financial professional) for services provided to shareholders. Because
these fees are paid out of a Fund's assets on an ongoing basis, over time, these
fees will increase the cost of your investment and may cost you more than paying
other types of sales charges. Please see Exhibit B for more service fee
information.
The table below shows the maximum annual percentage payable under the
distribution plan. The fees are based on average daily net assets of the
particular Class.
Maximum Payable Under Plan
Class A Class B Class C
0.25% 1.00% 1.00%
NEXT STEP - ACCOUNT APPLICATION
Complete and sign an application for each new account. Please specify which
class you wish to purchase. For more information, contact your financial
professional or our sales department at 800-368-2748.
FOR CLASS A, B and C
Minimum to open an account Minimum additional investments
$2,000 $250
Please make your check payable to the Fund and mail it to the Fund's transfer
agent at:
New Accounts Subsequent investments
(include application): (include investment slip):
Calvert Group Calvert Group
P.O. Box 219544 P.O. Box 219739
Kansas City, MO 64121-9544 Kansas City, MO 64121-9739
By Registered, Calvert Group
Certified, or c/o NFDS
Overnight Mail 330 West 9th Street
Kansas City, MO 64105-1807
FOR CLASS I
Minimum to open an account Minimum additional investments
$1 million $25,000
Wire investments to: State Street Bank and Trust Company
Boston MA
ABA# 011000028
FBO: Calvert Large Cap Growth Fund
Wire Account #99037657
Your name and account number
<PAGE>
IMPORTANT - HOW SHARES ARE PRICED
The price of shares is based on the Fund's net asset value ("NAV"). NAV is
computed by adding the value of the Fund's holdings plus other assets,
subtracting liabilities, and then dividing the result by the number of shares
outstanding. The NAV of each class will be different, depending on the number of
shares outstanding for each class.
Portfolio securities and other assets are valued based on market quotations,
except that securities maturing within 60 days are valued at amortized cost. If
market quotations are not readily available, securities are valued by a method
that the Fund's Board of Directors believes accurately reflects fair value.
The NAV is calculated as of the close of each business day, which coincides with
the closing of the regular session of the New York Stock Exchange ("NYSE")
(normally 4 p.m. ET). The Fund is open for business each day the NYSE is open.
Please note that there are some federal holidays, however, such as Columbus Day
and Veterans' Day, when the NYSE is open and the Fund is open but purchases
cannot be received because the banks and post offices are closed.
The Fund may hold securities that are primarily listed on foreign exchanges that
trade on days when the NYSE is closed. The Fund does not price shares on days
when the NYSE is closed, even if foreign markets may be open. As a result, the
value of the Fund's shares may change on days when you will not be able to buy
or sell your shares.
WHEN YOUR ACCOUNT WILL BE CREDITED
Your purchase will be processed at the NAV next calculated after your order is
received by the transfer agent in Kansas City, MO (see addresses on preceding
page). All of your purchases must be made in U.S. dollars and indicate the Fund
and Class. No cash or third party checks will be accepted. No credit card or
credit loan checks will be accepted. The Fund reserves the right to suspend the
offering of shares for a period of time or to reject any specific purchase
order. As a convenience, check purchases received at Calvert's office in
Bethesda, Maryland will be sent by overnight delivery to the Transfer Agent and
will be credited the next business day upon receipt by the Transfer Agent. You
should note that the share price may change during this period. Any check
purchase received without an investment slip may cause delayed crediting. Any
purchase less than the $250 minimum for subsequent investments will be charged a
fee of $5 payable to the Fund. If your check does not clear your bank, your
purchase will be canceled and you will be charged a $25 fee plus any costs
incurred. All purchases will be confirmed and credited to your account in full
and fractional shares (rounded to the nearest 1/1000th of a share).
<PAGE>
OTHER CALVERT GROUP FEATURES
Calvert Information Network
For 24 hour performance and account information call 800-368-2745 or visit
www.calvert.com
Account Services
By signing up for services when you open your account, you avoid having to
obtain a signature guarantee. If you wish to add services at a later date, a
signature guarantee to verify your signature may be obtained from any bank,
trust company and savings and loan association, credit union, broker-dealer firm
or member of a domestic stock exchange. A notary public cannot provide a
signature guarantee.
Calvert Money Controller
Calvert Money Controller allows you to purchase or sell shares by electronic
funds transfer without the time delay of mailing a check or the added expense of
a wire. Use this service to transfer up to $300,000 electronically. Allow one or
two business days after you place your request for the transfer to take place.
Money transferred to purchase new shares may be subject to a hold of up to 10
business days before redemption requests will be honored. Transaction requests
must be received by 4 p.m. ET to receive that day's price. You may request this
service on your initial account application. Calvert Money Controller
transactions returned by your bank will incur a $25 charge.
Telephone Transactions
You may purchase, redeem, or exchange shares, wire funds and use Calvert Money
Controller by telephone if you have pre-authorized service instructions and
established bank instructions on your account, when opened or at a later date by
a signature guaranteed letter. You receive telephone privileges automatically
when you open your account unless you instruct us otherwise in writing. While
telephone redemption is easy and convenient, this account feature involves a
risk of loss from unauthorized or fraudulent transactions. Calvert will take
reasonable precautions to protect your account from fraud. You should do the
same by keeping your account information private and immediately reviewing any
confirmations or account statements that we send to you. Make sure to contact
Calvert immediately about any transaction you believe to be unauthorized.
Calvert reserves the right to refuse a telephone redemption if the caller is
unable to provide:
- The account number.
- The name and address exactly as registered on the account.
- The primary Social Security or employer identification number as
registered on the account.
Please note that Calvert will not be responsible for any account losses due to
telephone fraud, so long as we have taken reasonable steps to verify the
caller's identity. If you wish to remove the telephone redemption feature from
your account, please notify us in writing.
<PAGE>
Exchanges
Calvert Group offers a wide variety of investment options that includes common
stock funds, tax-exempt and corporate bond funds, and money market funds (call
your financial professional or Calvert representative for more information). We
make it easy for you to purchase shares in other Calvert funds if your
investment goals change. The exchange privilege offers flexibility by allowing
you to exchange shares on which you have already paid a sales charge from one
Calvert Group mutual fund to another at no additional sales charge.
Complete and sign an account application, taking care to register your new
account in the same name and taxpayer identification number as your existing
Calvert account(s). Exchange instructions may then be given by telephone if
telephone redemptions have been authorized and the shares are not in certificate
form.
Before you make an exchange, please note the following:
Each exchange represents the sale of shares of one Fund and the purchase of
shares of another. Therefore, you could realize a taxable gain or loss.
You may exchange shares acquired by reinvestment of dividends or distributions
into another Calvert Fund at no additional charge.
Shares may only be exchanged for shares of the same class of another Calvert
Fund.
No CDSC is imposed on exchanges of shares subject to a CDSC at the time of the
exchange. The applicable CDSC is imposed at the time the shares acquired by the
exchange are redeemed.
Bank Holidays
On any day Calvert Group is open but the Fund's custodian bank is closed (e.g.,
Columbus Day and Veteran's Day) exchange requests into or out of a money market
fund will be priced at the next-determined NAV, but will not receive any
dividend in the money market fund until the next day the Fund's custodian bank
is open.
The Fund and the distributor reserve the right at any time to reject or cancel
any part of any purchase or exchange order; modify any terms or conditions of
purchase of shares of the Fund; or withdraw all or any part of the offering made
by this prospectus. To protect the interests of investors, the Fund and the
distributor may reject any order considered market-timing activity.
The Fund reserves the right to terminate or modify the exchange privilege with
60 days' written notice.
Electronic Delivery of Prospectuses and Shareholder Reports
You may request to receive electronic delivery of prospectuses and annual and
semi annual reports.
<PAGE>
Combined General Mailings (Householding)
Multiple accounts with the same social security number will receive one mailing
per household of information such as prospectuses and semi-annual and annual
reports. You may request further grouping of accounts to receive fewer mailings.
Separate statements will be generated for each separate account and will be
mailed in one envelope for each combination above.
Special Services and Charges
The Fund pays for shareholder services but not for special services that are
required by a few shareholders, such as a request for a historical transcript of
an account. You may be required to pay a fee for these special services.
If you are purchasing shares through a program of services offered by a
broker/dealer or financial institution, you should read the program materials
together with this Prospectus. Certain features may be modified in these
programs. Investors may be charged a fee if they effect transactions in Fund
shares through a financial intermediary.
Minimum Account Balance
Please maintain a balance in each of your Fund accounts of at least $1,000 per
class. If the balance in your account falls below the minimum during a month, a
fee of $$1 per month may be charged to your account. If the balance in your
account falls below the minimum during a month, your account may be closed and
the proceeds mailed to the address of record. You will receive notice that your
account is below the minimum, and will be closed or charged if the balance is
not brought up to the required minimum amount within 30 days.
DIVIDENDS, CAPITAL GAINS AND TAXES
The Fund pays dividends from its net investment income annually. Net investment
income consists of interest income, net short-term capital gains, if any, and
dividends declared and paid on investments, less expenses. Distributions of net
short-term capital gains (treated as dividends for tax purposes) and net
long-term capital gains, if any, are normally paid once a year; however, the
Fund does not anticipate making any such distributions unless available capital
loss carryovers have been used or have expired. Dividend and distribution
payments will vary between classes.
Dividend Payment Options
Dividends and any distributions are automatically reinvested in the same Fund at
NAV (without sales charge), unless you elect to have amounts of $10 or more paid
in cash by check or by Calvert Money Controller (or by wire for Class I shares).
Dividends and distributions from any Calvert Group Fund may be automatically
invested in an identically registered account in the same share class of any
other Calvert Group Fund at NAV. If reinvested in the same account, new shares
will be purchased at NAV on the reinvestment date, which is generally 1 to 3
days prior to the payment date. You must notify the Fund in writing to change
your payment options. If you elect to have dividends and/or distributions paid
in cash, and the
<PAGE>
US Postal Service returns the check as undeliverable, it, as well as future
dividends and distributions, will be reinvested in additional shares. No
dividends will accrue on amounts represented by uncashed distribution or
redemption checks.
Buying a Dividend
At the time of purchase, the share price of each class may reflect undistributed
income, capital gains or unrealized appreciation of securities. Any income or
capital gains from these amounts which are later distributed to you are fully
taxable. On the record date for a distribution, share value is reduced by the
amount of the distribution. If you buy shares just before the record date
("buying a dividend") you will pay the full price for the shares and then
receive a portion of the price back as a taxable distribution.
Federal Taxes
In January, the Fund will mail you Form 1099-DIV indicating the federal tax
status of dividends and any capital gain distributions paid to you during the
past year. Generally, dividends and distributions are taxable in the year they
are paid. However, any dividends and distributions paid in January but declared
during the prior three months are taxable in the year declared. Dividends and
distributions are taxable to you regardless of whether they are taken in cash or
reinvested. Dividends, including short-term capital gains, are taxable as
ordinary income. Distributions from long-term capital gains are taxable as
long-term capital gains, regardless of how long you have owned shares.
You may realize a capital gain or loss when you sell or exchange shares. This
capital gain or loss will be short- or long-term, depending on how long you have
owned the shares which were sold. In January, the Fund will mail you Form 1099-B
indicating the total amount of all sales, including exchanges. You should keep
your annual year-end account statements to determine the cost (basis) of the
shares to report on your tax returns.
Other Tax Information
In addition to federal taxes, you may be subject to state or local taxes on your
investment, depending on the laws in your area. You will be notified to the
extent, if any, that dividends reflect interest received from US government
securities. Such dividends may be exempt from certain state income taxes.
Taxpayer Identification Number
If we do not have your correct Social Security or Taxpayer Identification Number
("TIN") and a signed certified application or Form W-9, Federal law requires us
to withhold 31% of your reportable dividends, and 31% of certain redemptions. In
addition, you may be subject to a fine by the Internal Revenue Service. You will
also be prohibited from opening another account by exchange. Calvert Group
reserves the right to reject any new account or any purchase order for failure
to supply a certified TIN.
<PAGE>
HOW TO SELL SHARES
You may redeem all or a portion of your shares on any day your Fund is open for
business, provided the amount requested is not on hold. When you purchase by
check or with Calvert Money Controller (electronic funds transfer), the purchase
may be on hold for up to 10 business days from the date of receipt. During the
hold period, redemption proceeds will not be sent until the Transfer Agent is
reasonably satisfied that the purchase payment has been collected. Your shares
will be redeemed at the NAV next calculated (less any applicable CDSC) after
your redemption request is received by the transfer agent in good order (see
below). The proceeds will normally be sent to you on the next business day, but
if making immediate payment could adversely affect your Fund, it may take up to
seven (7) days to make payment. Calvert Money Controller redemptions generally
will be credited to your bank account by the second business day after your
phone call. The Fund has the right to redeem shares in assets other than cash
for redemption amounts exceeding, in any 90-day period, $250,000 or 1% of the
net asset value of the affected Fund, whichever is less. When the NYSE is closed
(or when trading is restricted) for any reason other than its customary weekend
or holiday closings, or under any emergency circumstances as determined by the
Securities and Exchange Commission, redemptions may be suspended or payment
dates postponed. Please note that there are some federal holidays, however, such
as Columbus Day and Veterans' Day, when the NYSE is open and the Fund is open
but redemptions cannot be mailed or wired because the post offices and banks are
closed.
Request in "Good Order"
All redemption requests must be received by the transfer agent in "good order."
This means that your request must include:
- The Fund name and account number
- The amount of the transaction (in dollars or shares).
- Signatures of all owners exactly as registered on the account (for mail
requests).
- Signature guarantees (if required).*
- Any supporting legal documentation that may be required.
- Any outstanding certificates representing shares to be redeemed.
*For instance, a signature guarantee must be provided by all registered account
shareholders when redemption proceeds are sent to a different person or address.
A signature guarantee can be obtained from most commercial and savings banks,
credit unions, trust companies, or member firms of a U.S. stock exchange.
Transactions are processed at the next determined share price after the transfer
agent has received all required information.
<PAGE>
Follow these suggestions to ensure timely processing of your redemption request:
By Telephone
You may redeem shares from your account by telephone and have your money mailed
to your address of record or electronically transferred or wired to a bank you
have previously authorized. See "Other Calvert Group Features - Telephone
Transactions."
Written Requests
For Class A, B and C, mail to: Calvert Group,
P.O. Box 219544,
Kansas City, MO 64121-9544
For Class I, mail to: Calvert Institutional Marketing Group,
4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814
Your letter should include your account number and Fund and the number of shares
or the dollar amount you are redeeming. Please provide a daytime telephone
number, if possible, for us to call if we have questions. If the money is being
sent to a new bank, person, or address other than the address of record, your
letter must be signature guaranteed.
Systematic Check Redemptions
If you maintain an account with a balance of $10,000 or more, you may have up to
two (2) redemption checks for a fixed amount mailed to you at your address of
record on the 15th of the month, simply by sending a letter with all
information, including your account number, and the dollar amount ($100
minimum). If you would like a regular check mailed to another person or place,
your letter must be signature guaranteed. Unless they otherwise qualify for a
waiver, Class B or Class C shares redeemed by Systematic Check Redemption will
be subject to the Contingent Deferred Sales Charge.
Corporations and Associations
Your letter of instruction and corporate resolution should be signed by
person(s) authorized to act on the account, accompanied by signature
guarantee(s).
Trusts
Your letter of instruction should be signed by the Trustee(s) (as Trustee(s))
with a signature guarantee. (If the Trustee's name is not registered on your
account, please provide a copy of the trust document, certified within the last
60 days.)
Through your Dealer
Your dealer must receive your request before the close of regular trading on the
NYSE to receive that day's NAV. Your dealer will be responsible for furnishing
all necessary documentation to Calvert Group and may charge you for services
provided.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES (CLASS A ONLY)
You may qualify for a reduced sales charge through several purchase plans
available. You must notify the Fund at the time of purchase to take advantage of
the reduced sales charge.
Rights of Accumulation can be applied to several accounts
Class A sales charge breakpoints are automatically calculated for each account
based on the higher of cost or current value of shares previously purchased.
This privilege can be applied to a family group or other qualified group1 upon
request. Shares could then be purchased at the reduced sales charge which
applies to the entire group; that is, based on the higher of cost or current
value of shares previously purchased and currently held by all the members of
the group.
1 A "qualified group" is one which:
1. has been in existence for more than six months, and
2. has a purpose other than acquiring shares at a discount, and
3. satisfies uniform criteria which enable CDI and brokers offering shares to
realize economies of scale in distributing such shares.
A qualified group must have more than 10 members, must be available to arrange
for group meetings between representatives of CDI or brokers distributing
shares, must agree to include sales and other materials related to the Funds in
its publications and mailings to members at reduced or no cost to CDI or
brokers. A pension plan is not a qualified group for rights of accumulation.
Letter of Intent
If you (or your group, as described above) plan to purchase $50,000 or more of
Calvert Fund shares over the next 13 months, your sales charge may be reduced
through a "Letter of Intent." You pay the lower sales charge applicable to the
total amount you plan to invest over the 13-month period, excluding any money
market fund purchases, instead of the higher 4.75% sales charge. Part of your
shares will be held in escrow, so that if you do not invest the amount
indicated, you will have to pay the sales charge applicable to the smaller
investment actually made. For more information, see the SAI.
Retirement Plans Under Section 457, Section 403(b)(7), or Section 401(k)
There is no sales charge on shares purchased for the benefit of a retirement
plan under section 457 of the Internal Revenue Code of 1986, as amended
("Code"), or for a plan qualifying under section 403(b) or 401(k) of the Code
if, at the time of purchase, (i) Calvert Group has been notified in writing that
the 403(b) or 401(k) plan has at least 200 eligible employees and is not
sponsored by a K-12 school district, or (ii) the cost or current value of shares
a 401(k) plan has in Calvert Group Funds (except money market funds) is at least
$1 million.
Neither the Fund, nor Calvert Distributors, Inc. ("CDI"), nor any affiliate
thereof will reimburse a plan or participant for any sales charges paid prior to
receipt of such written communication and confirmation by Calvert Group. Plan
administra-
<PAGE>
tors should send requests for the waiver of sales charges based on the above
conditions to: Calvert Group Retirement Plans, 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814.
Other Circumstances
There is no sales charge on shares of any fund of the Calvert Group of Funds
sold to (i) current or retired Directors, Trustees, or Officers of the Calvert
Group of Funds, employees of Calvert Group, Ltd. and its affiliates, or their
family members; (ii) CSIF Advisory Council Members, directors, officers, and
employees of any subadvisor for the Calvert Group of Funds, employees of
broker/dealers distributing the Fund's shares and immediate family members of
the Council, subadvisor, or broker/dealer; (iii) Purchases made through a
Registered Investment Advisor; (iv) Trust departments of banks or savings
institutions for trust clients of such bank or institution, (v) Purchases
through a broker maintaining an omnibus account with the Fund, provided the
purchases are made by (a) investment advisors or financial planners placing
trades for their own accounts (or the accounts of their clients) and who charge
a management, consulting, or other fee for their services; or (b) clients of
such investment advisors or financial planners who place trades for their own
accounts if such accounts are linked to the master account of such investment
advisor or financial planner on the books and records of the broker or agent; or
(c) retirement and deferred compensation plans and trusts, including, but not
limited to, those defined in section 401(a) or section 403(b) of the I.R.C., and
"rabbi trusts."
Dividends and Capital Gain Distributions from other Calvert Group Funds
You may prearrange to have your dividends and capital gain distributions from
any Calvert Group Fund automatically invested in another account with no
additional sales charge.
Purchases made at NAV
If you make a purchase at NAV, you may exchange that amount to another Calvert
Group Fund at no additional sales charge.
Reinstatement Privilege
If you redeem shares and then within 60 days decide to reinvest in the same
Fund, you may do so at the net asset value next computed after the reinvestment
order is received, without a sales charge. You may use the reinstatement
privilege only once. The Fund reserves the right to modify or eliminate this
privilege.
<PAGE>
EXHIBIT B
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
Calvert Distributors, Inc., the Fund's underwriter, pays dealers a commission,
or reallowance (expressed as a percentage of the offering price for Class A, and
a percentage of the amount invested for Class B and C), when you purchase
shares. CDI also pays dealers an ongoing service fee while you own shares of
that Fund (expressed as an annual percentage rate of average daily net assets
held in Calvert accounts by that dealer). The table below shows the amount of
payment which differs depending on the Class.
Maximum Commission/Service Fees
Class A Class B* Class C**
4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
* Class B service fee begins to accrue in the 13th month.
** Class C pays dealers a service fee of 0.25% and additional compensation
of 0.75% for a total of 1.00%. Begins to accrue in the 13th month.
Occasionally, CDI may reallow to dealers the full front-end sales charge. CDI
may also pay additional concessions, including de minimis non-cash promotional
incentives, such as de minimis merchandise or educational trips, to brokers
employing registered representatives who have sold or are expected to sell a
minimum dollar amount of shares of the Fund and/or shares of other Funds
underwritten by CDI. CDI may make expense reimbursements for special training of
a broker's registered representatives, advertising or equipment, or to defray
the expenses of sales contests. Calvert, CDI, or their affiliates may pay, from
their own resources, certain broker-dealers and/or other persons, for the sale
and distribution of the securities or for services to the Fund. These amounts
may be significant. Payments may include additional compensation beyond the
regularly scheduled rates, and finder's fees. CDI pays dealers a finder's fee on
shares purchased at NAV in accounts with $1 million or more. The finder's fee is
1% of the NAV purchase amount on the first $2 million, 0.80% on $2 to $3
million, 0.50% on $3 to $50 million, 0.25% on $50 to $100 million, and 0.15%
over $1 million. If a finder's fee is paid, then the service fee begins in the
13th month after purchase. All payments will be in compliance with the rules of
the National Association of Securities Dealers, Inc.
<PAGE>
To Open an Account:
800-368-2748
Performance and Prices:
www.calvert.com
Service for Existing Accounts:
Shareholders 800-368-2745
Brokers 800-368-2746
TDD for Hearing-Impaired:
800-541-1524
Branch Office:
4550 Montgomery Avenue
Suite 1000N
Bethesda, MD 20814
Registered, Certified or
Overnight Mail:
Calvert Group
c/o NFDS
330 West 9th Street
Kansas City, MO 64105
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, MD 20814
<PAGE>
For investors who want more information about the Fund, the following documents
are available free upon request:
Annual/Semi-Annual Reports: Additional information about the Fund's investments
will be available in the Fund's Annual and Semi-Annual reports to shareholders.
In the Fund's annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's performance
during its last fiscal year.
Statement of Additional Information (SAI): The SAI for the Fund provides more
detailed information about the Fund and is incorporated into this prospectus by
reference.
You can get free copies of reports and the SAI, request other information and
discuss your questions about the Fund by contacting your financial professional,
or the Fund at:
Calvert Group
4550 Montgomery Avenue
Suite 1000N
Bethesda, MD 20814
Telephone: 1-800-368-2745
Calvert Group Web-Site
www.calvert.com
You can review information about the Fund at the Commission's Public Reference
Room in Washington, D.C. Information on the operation of the public reference
room may be obtained by calling the Commission at 1-800-SEC-0330. Reports and
other information about the Fund are available on the Commission's Internet site
at http://www.sec.gov. Copies of this information may also be obtained, upon
payment of a duplicating fee, by writing to the Public Reference Section of the
Commission, Washington, D.C. 20549-6009.
Investment Company Act File No.: 811-10045
<PAGE>
CALVERT IMPACT FUND, INC.
Calvert Large Cap Growth Fund
4550 Montgomery Avenue, Bethesda, Maryland 20814
Statement of Additional Information
October 31, 2000
New Account (800) 368-2748 Shareholder
Information: (301) 951-4820 Services: (800) 368-2745
Broker (800) 368-2746 TDD for the Hearing-
Services: (301) 951-4850 Impaired: (800) 541-1524
This Statement of Additional Information ("SAI") is not a prospectus.
Investors should read the SAI in conjunction with the Fund's Prospectus, dated
October 31, 2000. The prospectus may be obtained free of charge by writing the
Fund at the above address or calling the Fund, or by visiting our website at
www.calvert.com.
TABLE OF CONTENTS
Investment Policies and Risks __
Investment Restrictions __
Investment Selection Process __
Dividends, Distributions and Taxes __
Net Asset Value __
Calculation of Total Return __
Purchase and Redemption of Shares __
Advertising __
Directors and Officers __
Investment Advisor and Subadvisor __
Administrative Services Agent __
Method of Distribution __
Transfer and Shareholder Servicing Agents __
Portfolio Transactions __
Personal Securities Transactions __
Independent Accountant and Custodians __
Financial Statements __
General Information __
Appendix __
Schedule A __
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
FOREIGN SECURITIES
Investments in foreign securities may present risks not typically involved
in domestic investments. The Fund may purchase foreign securities directly, on
foreign markets, or those represented by American Depositary Receipts ("ADRs"),
or other receipts evidencing ownership of foreign securities, such as
International Depository Receipts and Global Depositary Receipts. ADRs are U.S.
dollar-denominated and traded in the U.S. on exchanges or over the counter. By
investing in ADRs rather than directly in foreign issuers' stock, the Fund may
possibly avoid some currency and some liquidity risks. The information available
for ADRs is subject to the more uniform and more exacting accounting, auditing
and financial reporting standards of the domestic market or exchange on which
they are traded.
Additional costs may be incurred in connection with international
investment since foreign brokerage commissions and the custodial costs
associated with maintaining foreign portfolio securities are generally higher
than in the United States. Fee expense may also be incurred on currency
exchanges when the Fund changes investments from one country to another or
converts foreign securities holdings into U.S. dollars.
United States Government policies have at times, in the past, through
imposition of interest equalization taxes and other restrictions, discouraged
certain investments abroad by United States investors. In addition, foreign
countries may impose withholding and taxes on dividends and interest.
Since investments in securities of issuers domiciled in foreign countries
usually involve currencies of the foreign countries, and since the Fund may
temporarily hold funds in foreign currencies during the completion of investment
programs, the value of the assets of the Fund as measured in United States
dollars may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. For example, if the value of
the foreign currency in which a security is denominated increases or declines in
relation to the value of the U.S. dollar, the value of the security in U.S.
dollars will increase or decline correspondingly. The Fund will conduct its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A forward foreign
currency contract involves an obligation to purchase or sell a specific currency
at a future date which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted directly between
currency traders (usually large, commercial banks) and their customers. A
forward foreign currency contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.
The Fund may enter into forward foreign currency contracts for two reasons.
First, the Fund may desire to preserve the United States dollar price of a
security when it enters into a contract for the purchase or sale of a security
denominated in a foreign currency. The Fund may be able to protect themselves
against possible losses resulting from changes in the relationship between the
United States dollar and foreign currencies during the period between the date
the security is purchased or sold and the date on which payment is made or
received by entering into a forward contract for the purchase or sale, for a
fixed amount of dollars, of the amount of the foreign currency involved in the
underlying security transactions.
Second, when the Advisor or Subadvisor believes that the currency of a
particular foreign country may suffer a substantial decline against the United
States dollar, the Fund enter into a forward foreign currency contract to sell,
for a fixed amount of dollars, the amount of foreign currency approximating the
value of some or all of the Fund's securities denominated in such foreign
currency. The precise matching of the forward foreign currency contract amounts
and the value of the Fund's securities involved will not generally be possible
since the future value of the securities will change as a consequence of market
movements between the date the forward contract is entered into and the date it
matures. The projection of short-term currency market movement is difficult, and
the successful execution of this short-term hedging strategy is uncertain.
Although forward foreign currency contracts tend to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time they tend
to limit any potential gain which might result should the value of such currency
increase. The Fund does not intend to enter into such forward contracts under
this circumstance on a regular or continuous basis.
SMALL CAP ISSUERS
The securities of small cap issuers may be less actively traded than the
securities of larger issuers, may trade in a more limited volume, and may change
in value more abruptly than securities of larger companies.
Information concerning these securities may not be readily available so
that the companies may be less actively followed by stock analysts. Small-cap
issuers do not usually participate in market rallies to the same extent as more
widely-known securities, and they tend to have a relatively higher percentage of
insider ownership.
Investing in smaller, new issuers generally involves greater risk than
investing in larger, established issuers. Companies in which the Fund is likely
to invest may have limited product lines, markets or financial resources and may
lack management depth. The securities in such companies may also have limited
marketability and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general.
TEMPORARY DEFENSIVE POSITIONS
For temporary defensive purposes, the Fund may invest in cash or cash
equivalents. Cash equivalents include instruments such as, but not limited to,
U.S. government and agency obligations, certificates of deposit, banker's
acceptances, time deposits commercial paper, short-term corporate debt
securities, and repurchase agreements. The Fund may invest in money market
instruments of banks, whether foreign or domestic, including obligations of U.S.
branches of foreign banks ("Yankee" instruments) and obligations of foreign
branches of U.S. banks ("Eurodollar" instruments). All such instruments must be
high-quality, US dollar-denominated obligations. Although not subject to foreign
currency risk since they are US dollar-denominated, investments in foreign money
market instruments may involve risks that are different than investments in
securities of U.S. issuers. See "Foreign Securities" above. The Fund's
investments in temporary defensive positions are generally not FDIC insured,
even though a bank may be the issuer.
REPURCHASE AGREEMENTS
The Fund may purchase debt securities subject to repurchase agreements,
which are arrangements under which the Fund buys a security, and the seller
simultaneously agrees to repurchase the security at a specified time and price
reflecting a market rate of interest. The Fund engages in repurchase agreements
in order to earn a higher rate of return than it could earn simply by investing
in the obligation which is the subject of the repurchase agreement. Repurchase
agreements are not, however, without risk. In the event of the bankruptcy of a
seller during the term of a repurchase agreement, a legal question exists as to
whether the Fund would be deemed the owner of the underlying security or would
be deemed only to have a security interest in and lien upon such security. The
Fund will only engage in repurchase agreements with recognized securities
dealers and banks determined to present minimal credit risk by the Advisor. In
addition, the Fund will only engage in repurchase agreements reasonably designed
to secure fully during the term of the agreement the seller's obligation to
repurchase the underlying security and will monitor the market value of the
underlying security during the term of the agreement. If the value of the
underlying security declines and is not at least equal to the repurchase price
due the Fund pursuant to the agreement, the Fund will require the seller to
pledge additional securities or cash to secure the seller's obligations pursuant
to the agreement. If the seller defaults on its obligation to repurchase and the
value of the underlying security declines, the Fund may incur a loss and may
incur expenses in selling the underlying security. Repurchase agreements are
always for periods of less than one year. The Fund may have a decreased return
in a repurchase agreement if the repurchase rate is less than the return the
Fund might have received if it bought the instrument directly, although any cash
position invested in a repurchase agreement will not be exposed to market and
interest rate risk that the direct investment would have had. Repurchase
agreements not terminable within seven days are considered illiquid.
REVERSE REPURCHASE AGREEMENTS
The Fund may also engage in reverse repurchase agreements. Under a reverse
repurchase agreement, the Fund sells portfolio securities to a bank or
securities dealer and agrees to repurchase those securities from such party at
an agreed upon date and price reflecting a market rate of interest. The Fund
invests the proceeds from each reverse repurchase agreement in obligations in
which it is authorized to invest. The Fund intends to enter into a reverse
repurchase agreement only when the interest income provided for in the
obligation in which the Fund invests the proceeds is expected to exceed the
amount the Fund will pay in interest to the other party to the agreement plus
all costs associated with the transactions. The Fund does not intend to borrow
for leverage purposes. The Fund will only be permitted to pledge assets to the
extent necessary to secure borrowings and reverse repurchase agreements.
During the time a reverse repurchase agreement is outstanding, the Fund
will maintain in a segregated custodial account an amount of cash, U.S.
Government securities or other liquid, high-quality debt securities equal in
value to the repurchase price. The Fund will mark to market the value of assets
held in the segregated account, and will place additional assets in the account
whenever the total value of the account falls below the amount required under
applicable regulations.
The Fund's use of reverse repurchase agreements involves the risk that the
other party to the agreements could become subject to bankruptcy or liquidation
proceedings during the period the agreements are outstanding. In such event, the
Fund may not be able to repurchase the securities it has sold to that other
party. Under those circumstances, if at the expiration of the agreement such
securities are of greater value than the proceeds obtained by the Fund under the
agreements, the Fund may have been better off had it not entered into the
agreement. However, the Fund will enter into reverse repurchase agreements only
with banks and dealers which the Advisor believes present minimal credit risks
under guidelines adopted by the Fund's Board of Directors. In addition, the Fund
bears the risk that the market value of the securities it sold may decline below
the agreed-upon repurchase price, in which case the dealer may request the Fund
to post additional collateral.
HIGH SOCIAL IMPACT AND SPECIAL EQUITIES INVESTMENTS
The Fund will not purchase debt securities other than High Social Impact
Investments (or money market instruments). The High Social Impact Investments
program targets a percentage of the Fund's assets to directly support the growth
of community-based organizations for the purposes of promoting business
creation, housing development and economic and social development of urban and
rural communities. These securities are unrated - they are expected to be the
equivalent of non-investment grade debt securities - that is, lower quality
debt securities (generally those rated BB or lower by S&P or Ba or lower by
Moody's, known as "junk bonds"). These securities have moderate to poor
protection of principal and interest payments and have speculative
characteristics. See Appendix for a description of the ratings.) The annual
return on High Social Impact Investments is between 0% and 4%. Thus, rather than
earning a higher rate, as would be expected, to compensate for higher the risk
(i.e., lower credit quality), they earn a rate of return that is lower than the
rate currently earned by high quality U.S. Treasury securities. There is no
secondary market for these securities.
The Fund expects to purchase all of its High Social Impact Investments in
notes issued by the Calvert Social Investment Foundation, a non-profit
organization, legally distinct from Calvert Group, organized as a charitable and
educational foundation for the purpose of increasing public awareness and
knowledge of the concept of socially responsible investing. The Foundation
prepares its own careful credit analysis to attempt to identify those community
development issuers whose financial condition is adequate to meet future
obligations or is expected to be adequate in the future. Through portfolio
diversification and credit analysis, investment risk can be reduced, although
there can be no assurance that losses will not occur. The Foundation maintains a
certain required level of capital upon which the Fund could rely if a note were
ever to default.
With respect to the Special Equities program, the Fund has not set a
specific investment restriction or limit although, as an illiquid security, the
Fund will only make such investments within the 15% limit on illiquid securities
(See, "Investment Restrictions" below), and in fact, expects any such
investments to be far below this limit.
NON-INVESTMENT GRADE DEBT SECURITIES
Non-investment grade debt securities are lower quality debt securities
(generally those rated BB or lower by S&P or Ba or lower by Moody's, known as
"junk bonds." These securities have moderate to poor protection of principal and
interest payments and have speculative characteristics. See Appendix for a
description of the ratings.) These securities involve greater risk of default or
price declines due to changes in the issuer's creditworthiness than
investment-grade debt securities. Because the market for lower-rated securities
may be thinner and less active than for higher-rated securities, there may be
market price volatility for these securities and limited liquidity in the resale
market. Market prices for these securities may decline significantly in periods
of general economic difficulty or rising interest rates. Unrated debt securities
may fall into the lower quality category. Unrated securities usually are not
attractive to as many buyers as rated securities are, which may make them less
marketable.
The quality limitation set forth in the Fund's investment policy is
determined immediately after the Fund's acquisition of a given security.
Accordingly, any later change in ratings will not be considered when determining
whether an investment complies with the Fund's investment policy.
When purchasing non-investment grade debt securities, rated or unrated, the
Advisor and/or Subadvisor prepares its own careful credit analysis to attempt to
identify those issuers whose financial condition is adequate to meet future
obligations or is expected to be adequate in the future. Through portfolio
diversification and credit analysis, investment risk can be reduced, although
there can be no assurance that losses will not occur.
DERIVATIVES
The Fund can use various techniques to increase or decrease its exposure to
changing security prices, interest rates, or other factors that affect security
values. These techniques may involve derivative transactions such as buying and
selling options and futures contracts and leveraged notes, entering into swap
agreements, and purchasing indexed securities. The Fund can use these practices
either as substitution or as protection against an adverse move in the Fund to
adjust the risk and return characteristics of the Fund. If the Advisor and/or
Subadvisor judges market conditions incorrectly or employs a strategy that does
not correlate well with a Fund's investments, or if the counterparty to the
transaction does not perform as promised, these techniques could result in a
loss. These techniques may increase the volatility of a Fund and may involve a
small investment of cash relative to the magnitude of the risk assumed.
Derivatives are often illiquid.
OPTIONS AND FUTURES CONTRACTS
The Fund may, in pursuit of its investment objective, purchase put and call
options and engage in the writing of covered call options and secured put
options on securities, and employ a variety of other investment techniques.
Specifically, the Fund may also engage in the purchase and sale of stock index
future contracts, foreign currency futures contracts, interest rate futures
contracts, and options on such futures, as described more fully below.
The Fund may engage in such transactions only to hedge the existing
positions. They will not engage in such transactions for the purposes of
speculation or leverage. Such investment policies and techniques may involve a
greater degree of risk than those inherent in more conservative investment
approaches.
The Fund may write "covered options" on securities in standard contracts
traded on national securities exchanges. The Fund may write such options in
order to receive the premiums from options that expire and to seek net gains
from closing purchase transactions with respect to such options.
Put and Call Options. The Fund may purchase put and call options, in standard
contracts traded on national securities exchanges. The Fund will purchase such
options only to hedge against changes in the value of securities the Fund holds
and not for the purposes of speculation or leverage. By buying a put, a Fund has
the right to sell the security at the exercise price, thus limiting its risk of
loss through a decline in the market value of the security until the put
expires. The amount of any appreciation in the value of the underlying security
will be partially offset by the amount of the premium paid for the put option
and any related transaction costs. Prior to its expiration, a put option may be
sold in a closing sale transaction and any profit or loss from the sale will
depend on whether the amount received is more or less than the premium paid for
the put option plus the related transaction costs.
The Fund may purchase call options on securities which they may intend to
purchase. Such transactions may be entered into in order to limit the risk of a
substantial increase in the market price of the security which the Fund intends
to purchase. Prior to its expiration, a call option may be sold in a closing
sale transaction. Any profit or loss from such a sale will depend on whether the
amount received is more or less than the premium paid for the call option plus
the related transaction costs.
Covered Options. The Fund may write only covered options on equity and debt
securities in standard contracts traded on national securities exchanges. This
means that, in the case of call options, so long as a Fund is obligated as the
writer of a call option, that Fund will own the underlying security subject to
the option and, in the case of put options, that Fund will, through its
custodian, deposit and maintain either cash or securities with a market value
equal to or greater than the exercise price of the option.
When a Fund writes a covered call option, the Fund gives the purchaser the
right to purchase the security at the call option price at any time during the
life of the option. As the writer of the option, the Fund receives a premium,
less a commission, and in exchange foregoes the opportunity to profit from any
increase in the market value of the security exceeding the call option price.
The premium serves to mitigate the effect of any depreciation in the market
value of the security. Writing covered call options can increase the income of
the Fund and thus reduce declines in the net asset value per share of the Fund
if securities covered by such options decline in value. Exercise of a call
option by the purchaser however will cause the Fund to forego future
appreciation of the securities covered by the option.
When a Fund writes a covered put option, it will gain a profit in the
amount of the premium, less a commission, so long as the price of the underlying
security remains above the exercise price. However, the Fund remains obligated
to purchase the underlying security from the buyer of the put option (usually in
the event the price of the security falls below the exercise price) at any time
during the option period. If the price of the underlying security falls below
the exercise price, the Fund may realize a loss in the amount of the difference
between the exercise price and the sale price of the security, less the premium
received.
The Fund may purchase securities which may be covered with call options
solely on the basis of considerations consistent with the investment objectives
and policies of the Fund. The Fund's turnover may increase through the exercise
of a call option; this will generally occur if the market value of a "covered"
security increases and the Fund has not entered into a closing purchase
transaction.
Risks Related to Options Transactions. There can be no assurance that either a
closing purchase or sale transaction can be effected when the Fund so desires.
The Fund can close out its positions in exchange-traded options only on an
exchange which provides a secondary market in such options. Although the Fund
intends to acquire and write only such exchange-traded options for which an
active secondary market appears to exist, there can be no assurance that such a
market will exist for any particular option contract at any particular time.
This might prevent the Fund from closing an options position, which could impair
the Fund's ability to hedge effectively. The inability to close out a call
position may have an adverse effect on liquidity because the Fund may be
required to hold the securities underlying the option until the option expires
or is exercised. Other principal factors affecting the market value of a put or
a call option include supply and demand, interest rates, the current market
price and price volatility of the underlying security and the time remaining
until the expiration date.
Futures Transactions.
The Fund may purchase and sell futures contracts, but only when, in the
judgment of the Advisor, such a position acts as a hedge against market changes
which would adversely affect the securities held by the Fund. These futures
contracts may include, but are not limited to, market index futures contracts
and futures contracts based on U.S. Government obligations.
A futures contract is an agreement between two parties to buy and sell a
security on a future date which has the effect of establishing the current price
for the security. Although futures contracts by their terms require actual
delivery and acceptance of securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery of
securities. Upon buying or selling a futures contract, the Fund deposits initial
margin with its custodian, and thereafter daily payments of maintenance margin
are made to and from the executing broker. Payments of maintenance margin
reflect changes in the value of the futures contract, with the Fund being
obligated to make such payments if its futures position becomes less valuable
and entitled to receive such payments if its positions become more valuable.
The Fund may only invest in futures contracts to hedge its existing
investment positions and not for income enhancement, speculation or leverage
purposes.
Futures contracts are designed by boards of trade which are designated
"contracts markets" by the Commodity Futures Trading Commission ("CFTC"). As
series of a registered investment company, the Fund is eligible for exclusion
from the CFTC's definition of "commodity pool operator," meaning that the Fund
may invest in futures contracts under specified conditions without registering
with the CFTC. Futures contracts trade on contracts markets in a manner that is
similar to the way a stock trades on a stock exchange and the boards of trade,
through their clearing corporations, guarantee performance of the contracts.
Options on Futures Contracts. The Fund may purchase and write put or call
options and sell call options on futures contracts in which a fund could
otherwise invest and which are traded on a U.S. exchange or board of trade. The
Fund may also enter into closing transactions with respect to such options to
terminate an existing position; that is, to sell a put option already owned and
to buy a call option to close a position where the Fund has already sold a
corresponding call option.
The Fund may only invest in options on futures contracts to hedge its
existing investment positions and not for income enhancement, speculation or
leverage purposes.
An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract-a long position
if the option is a call and a short position if the option is a put-at a
specified exercise price at any time during the period of the option. The Fund
will pay a premium for such options purchased or sold. In connection with such
options bought or sold, the Fund will make initial margin deposits and make or
receive maintenance margin payments which reflect changes in the market value of
such options. This arrangement is similar to the margin arrangements applicable
to futures contracts described above.
Put Options on Futures Contracts. The purchase of put options on futures
contracts is analogous to the sale of futures contracts and is used to protect
the Fund against the risk of declining prices. The Fund may purchase put options
and sell put options on futures contracts that are already owned by the Fund.
The Fund will only engage in the purchase of put options and the sale of covered
put options on market index futures for hedging purposes.
Call Options on Futures Contracts. The sale of call options on futures contracts
is analogous to the sale of futures contracts and is used to protect the Fund
against the risk of declining prices. The purchase of call options on futures
contracts is analogous to the purchase of a futures contract. The Fund may only
buy call options to close an existing position where the Fund has already sold a
corresponding call option, or for a cash hedge. The Fund will only engage in the
sale of call options and the purchase of call options to cover for hedging
purposes.
Writing Call Options on Futures Contracts. The writing of call options on
futures contracts constitutes a partial hedge against declining prices of the
securities deliverable upon exercise of the futures contract. If the futures
contract price at expiration is below the exercise price, the Fund will retain
the full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Fund's securities holdings.
Risks of Options and Futures Contracts. If the Fund has sold futures or takes
options positions to hedge its portfolio against decline in the market and the
market later advances, the Fund may suffer a loss on the futures contracts or
options which it would not have experienced if it had not hedged. Correlation is
also imperfect between movements in the prices of futures contracts and
movements in prices of the securities which are the subject of the hedge. Thus
the price of the futures contract or option may move more than or less than the
price of the securities being hedged. Where a Fund has sold futures or taken
options positions to hedge against decline in the market, the market may advance
and the value of the securities held in the Fund may decline. If this were to
occur, the Fund might lose money on the futures contracts or options and also
experience a decline in the value of its portfolio securities. However, although
this might occur for a brief period or to a slight degree, the value of a
diversified portfolio will tend to move in the direction of the market
generally.
The Fund can close out futures positions only on an exchange or board of
trade which provides a secondary market in such futures. Although the Fund
intends to purchase or sell only such futures for which an active secondary
market appears to exist, there can be no assurance that such a market will exist
for any particular futures contract at any particular time. This might prevent
the Fund from closing a futures position, which could require the Fund to make
daily cash payments with respect to its position in the event of adverse price
movements.
Options on futures transactions bear several risks apart from those
inherent in options transactions generally. The Fund's ability to close out its
options positions in futures contracts will depend upon whether an active
secondary market for such options develops and is in existence at the time the
Fund seeks to close its positions. There can be no assurance that such a market
will develop or exist. Therefore, the Fund might be required to exercise the
options to realize any profit.
INVESTMENT RESTRICTIONS
-----------------------
Fundamental Investment Restrictions
The Fund has adopted the following fundamental investment restrictions.
These restrictions cannot be changed without the approval of the holders of a
majority of the outstanding shares of the Fund.
(1) The Fund may not make any investment inconsistent with its
classification as a diversified investment company under the 1940 Act.
(2) The Fund may not concentrate its investments in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the US Government or its agencies or instrumentalities and
repurchase agreements secured thereby.)
(3) The Fund may not issue senior securities or borrow money, except from banks
for temporary or emergency purposes and then only in an amount up to 33 1/3% of
the value of the Fund's total assets and except by engaging in reverse
repurchase agreements. In order to secure any permitted borrowings and reverse
repurchase agreements under this section, the Fund may pledge, mortgage or
hypothecate its assets.
(4) The Fund may not underwrite the securities of other issuers, except as
allowed by law or to the extent that the purchase of obligations in accordance
with the Fund's investment objective and policies, either directly from the
issuer, or from an underwriter for an issuer, may be deemed an underwriting.
(5) The Fund may not invest directly in commodities or real estate, although the
Fund may invest in financial futures, and in securities which are secured by
real estate or real estate mortgages and securities of issuers which invest or
deal in commodities, commodity futures, real estate or real estate mortgages.
(6) The Fund may not make loans, other than through the purchase of money market
instruments and repurchase agreements or by the purchase of bonds, debentures or
other debt securities. The purchase of all or a portion of an issue of publicly
or privately distributed debt obligations in accordance with the Fund's
investment objective, policies and restrictions, shall not constitute the making
of a loan.
Under current law, a diversified investment company, with respect to 75% of its
assets, can invest no more than 5% of its assets in the securities of any one
issuer, and may not acquire more than 10% of the voting securities of any
issuer. Under current law, "concentrate" means the Fund cannot invest 25% or
more in the securities of issuers primarily engaged in any one industry. Under
current law the Fund may underwrite securities only in compliance with the
conditions of Sections 10(f) and 12(c) of the Investment Company Act and the
rules thereunder wherein the Fund may underwrite securities to the extent that
the Fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in selling a portfolio security.
Nonfundamental Investment Restrictions
The Fund has adopted the following nonfundamental investment restrictions.
A nonfundamental investment restriction can be changed by the Board at any time
without a shareholder vote.
(1) The Fund may not purchase securities on margin, except such short-term
credits as may be necessary for the clearance of transactions.
(2) The Fund may not make short sales of securities or maintain a short position
if such sales or positions exceed 20% of total assets under management.
(3) The Fund may not enter into a futures contract or an option on a futures
contract if the aggregate initial margins and premiums required to establish
these positions would exceed 5% of the Fund's net assets.
(4) The Fund may not invest in options or futures on individual commodities if
the aggregate initial margins and premiums required to establish such positions
exceed 2% of the Fund's net assets.
(5) The Fund may not invest in more than 5% of the value of its net assets in
warrants (included in that amount, but not to exceed 2% of the value of the
Fund's net assets, may be warrants which are not listed on the New York or
American Stock Exchange).
(6) The Fund may not purchase illiquid securities if more than 15% of the value
of the Fund's net assets would be invested in such securities.
(7) The Fund may not enter into reverse repurchase agreements if the aggregate
proceeds from outstanding reverse repurchase agreements, when added to other
outstanding borrowings permitted by the 1940 Act, would exceed 33 1/3% of the
Fund's total assets. The Fund does not intend to make any purchases of
securities if borrowing exceeds 15% of its total assets.
(8) The Fund may not purchase a put or call option on a security (including a
straddle or spread) if the value of that option premium, when aggregated with
the premiums on all other options on securities held by the Fund, would exceed
5% of the Fund's total assets.
(9) The Fund may not purchase the obligations of foreign issuers, if as a
result, foreign securities would exceed 10% of the value of the Fund's net
assets.
Any investment restriction which involves a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the applicable percentage occurs immediately after an acquisition of
securities or utilization of assets and results therefrom.
investment selection process
----------------------------
Investments in the Fund are selected on the basis of their ability to
contribute to the dual objective of the Fund, (i.e., those that satisfy the
Fund's investment and social criteria). The Fund has developed a number of
techniques for evaluating the performance of issuers in each of these areas. The
primary sources of information are reports published by the issuers themselves,
the reports of public agencies, and the reports of groups which monitor
performance in particular areas. These sources of information are sometimes
augmented with direct interviews or written questionnaires addressed to the
issuers. It should be recognized, however, that there are few generally accepted
measures by which achievement in these areas can be readily distinguished;
therefore, the development of suitable measurement techniques is largely within
the discretion and judgment of the Advisor.
Candidates for inclusion in any particular class of assets are then
examined according to the social criteria. Issuers are classified into three
categories of suitability under the social criteria. In the first category are
those issuers, which exhibit unusual positive accomplishment with respect to
some of the criteria and do not fail to meet minimum standards with respect to
the remaining criteria. To the greatest extent possible, investment selections
are made from this group. In the second category are those issuers, which meet
minimum standards with respect to all the criteria but do not exhibit
outstanding accomplishment with respect to any criterion. This category includes
issuers which may lack an affirmative record of accomplishment in these areas
but which are not known by the Advisor to violate any of the social criteria.
The third category under the social criteria consists of issuers who flagrantly
violate, or have violated, one or more of those values, for example, a company,
which repeatedly engages in unfair labor practices. The Fund will not knowingly
purchase the securities of issuers in this third category.
It should be noted that the Fund's social criteria tend to limit the
availability of investment opportunities more than is customary with other
investment companies. The Advisor, however, believe that within the first and
second categories there are sufficient investment opportunities to permit full
investment among issuers, which satisfy the Fund's social investment objective.
To the greatest extent possible, the Advisor applies the same social
criteria to the purchase of non-equity securities as it applies to equity
investments. With respect to government securities, the Fund invests primarily
in debt obligations issued or guaranteed by agencies or instrumentalities of the
Federal Government whose purposes further or are compatible with the Fund's
social criteria, such as obligations of the Bank for Cooperatives and the
Student Loan Marketing Association, rather than general obligations of the
Federal Government, such as Treasury securities. Bank certificates of deposit,
commercial paper, repurchase agreements, and corporate bonds are judged in the
same way as a prospective purchase of the bank's or issuing company's common
stock.
DIVIDENDS, DISTRIBUTIONS AND TAXES
----------------------------------
The Fund intends to qualify as regulated investment companies under
Subchapter M of the Internal Revenue Code. If for any reason the Fund should
fail to qualify, it would be taxed as a corporation at the Fund level and pay
taxes on its income and gains, rather than passing through its income and gains
to shareholders so that shareholders also would pay taxes on these same income
and gains.
Distributions of realized net capital gains, if any, are normally paid once
a year; however, the Fund does not intend to make any such distributions unless
available capital loss carryovers, if any, have been used or have expired.
Generally, dividends (including short-term capital gains) and distributions
are taxable to the shareholder in the year they are paid. However, any dividends
and distributions paid in January but declared during the prior three months are
taxable in the year declared.
The Fund is required to withhold 31% of any reportable dividends and
long-term capital gain distributions paid and 31% of each reportable redemption
transaction if: (a) the shareholder's social security number or other taxpayer
identification number ("TIN") is not provided or an obviously incorrect TIN is
provided; (b) the shareholder does not certify under penalties of perjury that
the TIN provided is the shareholder's correct TIN and that the shareholder is
not subject to backup withholding under section 3406(a)(1)(C) of the Internal
Revenue Code because of underreporting (however, failure to provide
certification as to the application of section 3406(a)(1)(C) will result only in
backup withholding on dividends, not on redemptions); or (c) the Fund is
notified by the Internal Revenue Service that the TIN provided by the
shareholder is incorrect or that there has been underreporting of interest or
dividends by the shareholder. Affected shareholders will receive statements at
least annually specifying the amount withheld.
In addition, the Fund is required to report to the Internal Revenue Service
the following information with respect to each redemption transaction occurring
in the Fund: (a) the shareholder's name, address, account number and taxpayer
identification number; (b) the total dollar value of the redemptions; and (c)
the Fund's identifying CUSIP number.
Certain shareholders are, however, exempt from the backup withholding and
broker reporting requirements. Exempt shareholders include: corporations;
financial institutions; tax-exempt organizations; individual retirement plans;
the U.S., a State, the District of Columbia, a U.S. possession, a foreign
government, an international organization, or any political subdivision, agency
or instrumentality of any of the foregoing; U.S. registered commodities or
securities dealers; real estate investment trusts; registered investment
companies; bank common trust funds; certain charitable trusts; foreign central
banks of issue. Non-resident aliens, certain foreign partnerships and foreign
corporations are generally not subject to either requirement but may instead be
subject to withholding under sections 1441 or 1442 of the Internal Revenue Code.
Shareholders claiming exemption from backup withholding and broker reporting
should call or write the Fund for further information.
Many states do not tax the portion of the Fund's dividends which is derived
from interest on U.S. Government obligations. State law varies considerably
concerning the tax status of dividends derived from U.S. Government obligations.
Accordingly, shareholders should consult their tax advisors about the tax status
of dividends and distributions from the Fund in their respective jurisdictions.
Dividends paid by the Fund may be eligible for the dividends received
deduction available to corporate taxpayers. Corporate taxpayers requiring this
information may contact Calvert.
net asset value
---------------
The public offering price of the shares of the Fund is the respective net
asset value per share (plus, for Class A shares, the applicable sales charge).
The net asset value fluctuates based on the respective value of the Fund's
investments. The net asset value per share for each class is determined every
business day at the close of the regular session of the New York Stock Exchange
(normally 4:00 p.m. Eastern time) and at such other times as may be necessary or
appropriate. The Fund does not determine net asset value on certain national
holidays or other days on which the New York Stock Exchange is closed: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The Fund's net
asset value per share is determined by dividing total net assets (the value of
its assets net of liabilities, including accrued expenses and fees) by the
number of shares outstanding for that class.
The assets of the Fund are valued as follows: (a) securities for which
market quotations are readily available are valued at the most recent closing
price, mean between bid and asked price, or yield equivalent as obtained from
one or more market makers for such securities; (b) securities maturing within 60
days may be valued at cost, plus or minus any amortized discount or premium,
unless the Board of Directors determines such method not to be appropriate under
the circumstances; and (c) all other securities and assets for which market
quotations are not readily available will be fairly valued by the Advisor in
good faith under the supervision of the Board of Directors.
Calculation of total return
---------------------------
Total Return and Other Quotations
The Fund may advertise "total return." Total return is calculated
separately for each class. Total return differs from yield in that yield figures
measure only the income component of the Fund's investments, while total return
includes not only the effect of income dividends but also any change in net
asset value, or principal amount, during the stated period. Total return is
computed by taking the total number of shares purchased by a hypothetical $1,000
investment after deducting any applicable sales charge, adding all additional
shares purchased within the period with reinvested dividends and distributions,
calculating the value of those shares at the end of the period, and dividing the
result by the initial $1,000 investment. For periods of more than one year, the
cumulative total return is then adjusted for the number of years, taking
compounding into account, to calculate average annual total return during that
period.
Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n = number
of years; and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period.
Total return is historical in nature and is not intended to indicate future
performance. All total return quotations reflect the deduction of the maximum
sales charge ("return with maximum load"), except quotations of return "without
maximum load," or "at NAV" (or "without CDSC") which do not deduct sales charge.
Thus, in the formula above, for return without maximum load, P = the entire
$1,000 hypothetical initial investment and does not reflect the deduction of any
sales charge; for return with maximum load, P = a hypothetical initial
investment of $1,000 less any sales charge actually imposed at the beginning of
the period for which the performance is being calculated. Class I shares do not
have a sales charge.
purchase and redemption of shares
---------------------------------
Share certificates will not be issued unless requested in writing by the
investor. If share certificates have been issued, then the certificate must be
delivered to the Fund's transfer agent with any redemption request. This could
result in delays. If the certificates have been lost, the shareholder will have
to pay to post an indemnity bond in case the original certificates are later
presented by another person. No certificates will be issued for fractional
shares.
The Fund has filed a notice of election under Rule 18f-1 with the
Commission. The notice states that the Fund may honor redemptions that, during
any 90-day period, exceed $250,000 or 1% of the nest assets value of the Fund,
whichever is less, by redemptions-in-kind (distributions of a pro rata share of
the portfolio securities, rather than cash.)
Fund shares shall be distributed through third party brokers. See the
prospectus for more details on purchases and redemptions.
advertising
-----------
The Fund or its affiliates may provide information such as, but not limited
to, the economy, investment climate, investment principles, sociological
conditions and political ambiance. Discussion may include hypothetical scenarios
or lists of relevant factors designed to aid the investor in determining whether
the Fund is compatible with the investor's goals. The Fund may list its holdings
or give examples of securities that may have been considered for inclusion in
the Fund, whether held or not.
The Fund or its affiliates may supply comparative performance data and
rankings from independent sources such as Donoghue's Money Fund Report, Bank
Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Wiesenberger Investment Companies Service, Mutual Fund
Values Morningstar Ratings, Mutual Fund Forecaster, Barron's, Nelson's, The Wall
Street Journal. The Fund may also cite to any source, whether in print or
on-line, such as Bloomberg, in order to acknowledge origin of information, and
may provide biographical information on, or quote, portfolio managers or Fund
officers. The Fund may compare itself or its portfolio holdings to other
investments, whether or not issued or regulated by the securities industry,
including, but not limited to, certificates of deposit and Treasury notes.
Calvert Group is the nation's leading family of socially responsible mutual
funds, both in terms of socially responsible mutual fund assets under
management, and number of socially responsible mutual fund portfolios offered
(source: Social Investment Forum, December 31, 1999). Calvert Group was also the
first to offer a family of socially responsible mutual fund portfolios.
DIRECTORS AND OFFICERS
----------------------
The Fund's Board of Directors supervises the Fund's activities and reviews
its contracts with companies that provide it with services. Business information
is provided below about the Fund's Directors and Officers.
PRINCIPAL
OCCUPATION(S) DURING
NAME, ADDRESS & DATE OF BIRTH POSITION WITH FUND LAST 5 YEARS
REBECCA ADAMSON, DIRECTOR PRESIDENT OF THE NATIONAL
DOB: 09/10/47 NON-PROFIT, FIRST NATIONS
FINANCIAL PROJECT.
MILES DOUGLAS HARPER, III DIRECTOR PARTNER
DOB: 10/16/62 GAINER DONNELLY & DESROCHES
SINCE JANUARY 1999. PRIOR
TO THAT MR. HARPER WAS
VICE PRESIDENT, WOOD,
HARPER, PC.
JOY V. JONES, ESQ., DIRECTOR ATTORNEY AND ENTERTAINMENT
DOB: 07/02/50 MANAGER IN NEW YORK CITY.
*BARBARA J. KRUMSIEK, DIRECTOR PRESIDENT, CHIEF EXECUTIVE
DOB: 08/09/52 OFFICER AND VICE CHAIRMAN
OF CALVERT GROUP, LTD. PRIOR
TO JOINING CALVERT GROUP,IN
1997, MS. KRUMSIEK HAD SERVED
AS A MANAGING DIRECTOR OF
ALLIANCE FUND DISTRIBUTORS,
INC. SINCE 1974.
*D. WAYNE SILBY, DIRECTOR PRESIDENT OF CALVERT SOCIAL
DOB: 07/20/48 INVESTMENT FUND. MR. SILBY IS
ALSO EXECUTIVE CHAIRMAN OF
GROUP SERVE, INC., AN INTERNET
COMPANY FOCUSED ON COMMUNITY
BUILDING COLLABORATIVE TOOLS.
RENO J. MARTINI, DIRECTOR SENIOR VICE PRESIDENT OF
DOB: 01/13/50 CALVERT GROUP. LTD., SENIOR
VICE PRESIDENT AND CHIEF
INVESTMENT OFFICER OF CALVERT
ASSET MANAGEMENT COMPANY, INC.,
AND DIRECTOR AND PRESIDENT OF
CALVERT-SLOAN ADVISERS, L.L.C.
RONALD M. WOLFSHEIMER, CPA, OFFICER SENIOR VICE PRESIDENT AND
DOB: 07/24/52 CHIEF FINANCIAL OFFICER OF
CALVERT GROUP, LTD.
--------------------------------------------------------------------------------
*WILLIAM M. TARTIKOFF, ESQ. DIRECTOR SENIOR VICE PRESIDENT,
DOB: 08/12/47 SECRETARY, AND GENERAL COUNSEL
OF CALVERT GROUP, LTD.
--------------------------------------------------------------------------------
SUSAN WALKER BENDER, ESQ. OFFICER ASSOCIATE GENERAL COUNSEL
DOB: 01/29/59 OF CALVERT GROUP, LTD.
--------------------------------------------------------------------------------
IVY WAFFORD DUKE, ESQ. OFFICER ASSOCIATE GENERAL COUNSEL
DOB: 09/07/68 OF CALVERT GROUP, LTD. PRIOR TO
JOINING CALVERT GROUP IN 1996,
MS. DUKE HAD BEEN AN ASSOCIATE
IN THE INVESTMENT MANAGEMENT
GROUP OF THE BUSINESS AND
FINANCE DEPARTMENT AT DRINKER
BIDDLE & REATH SINCE 1993.
--------------------------------------------------------------------------------
VICTOR FRYE, ESQ. OFFICER COUNSEL AND COMPLIANCE OFFICER
DOB: 10/15/58 OF CALVERT GROUP, LTD. PRIOR TO
WORKING AT CALVERT GROUP IN
1999, MR. FRYE HAD BEEN COUNSEL
AND MANAGER OF THE COMPLIANCE
DEPARTMENT AT THE ADVISORS
GROUP SINCE 1986.
--------------------------------------------------------------------------------
JENNIFER STREAKS, ESQ. OFFICER ASSISTANT GENERAL COUNSEL OF
DOB: 08/02/71 CALVERT GROUP, LTD. PRIOR TO
WORKING AT CALVERT GROUP IN
1999, MS. STREAKS HAD BEEN A
REGULATORY ANALYST IN THE
MARKET REGULATION DEPARTMENT
OF THE NATIONAL ASSOCIATION
OF SECURITIES DEALERS SINCE
1997. PRIOR TO THIS,
MS. STREAKS HAD BEEN A LAW
CLERK TO THE HONORABLE
MAURICE FOLEY AT THE U.S.
TAX COURT FOR THE YEAR SINCE
GRADUATING FROM HOWARD
UNIVERSITY SCHOOL OF LAW,
WHERE SHE WAS A STUDENT
1993-1996.
--------------------------------------------------------------------------------
MICHAEL V. YUHAS JR., CPA OFFICER DIRECTOR OF FUND
DOB: 08/04/61 ADMINISTRATION OF
CALVERT GROUP, LTD.
--------------------------------------------------------------------------------
Investment Advisor and Subadvisor
---------------------------------
The Fund's Investment Advisor is Calvert Asset Management Company, Inc.,
4550 Montgomery Avenue, 1000N, Bethesda, Maryland 20814, a subsidiary of Calvert
Group Ltd., which is a subsidiary of Acacia Life Insurance Company of
Washington, D.C. ("Acacia"). Acacia is a subsidiary of Ameritas Acacia Mutual
Holding Company. Under the Advisory Contract, the Advisor provides investment
advice to the Fund and oversees its day-to-day operations, subject to direction
and control by the Fund's Board of Directors. The Advisor provides the Fund with
investment supervision and management, and office space; furnishes executive and
other personnel to the Fund; and pays the salaries and fees of all Directors who
are employees of the Advisor or its affiliates. The Fund pays all other
administrative and operating expenses, including: custodial, registrar, dividend
disbursing and transfer agency fees; administrative service fees; fund
accounting fees; federal and state securities registration fees; salaries, fees
and expenses of Directors, executive officers and employees of the Fund, who are
not employees of the Advisor or of its affiliates; insurance premiums; trade
association dues; legal and audit fees; interest, taxes and other business fees;
expenses of printing and mailing reports, notices, prospectuses, and proxy
material to shareholders; annual shareholders' meeting expenses; and brokerage
commissions and other costs associated with the purchase and sale of portfolio
securities.
The Advisor has agreed to limit annual fund operating expenses (net of any
expense offset arrangements and exclusive of any performance fee adjustment)
through November 1, 2001. The contractual expense cap is 1.50% for Class A,
2.50% for Class B, 2.50% for Class C and 0.90% for Class I. For the purposes of
this expense limit, operating expenses do not include interest expense,
brokerage commissions, extraordinary expenses, taxes and capital items. The Fund
has an offset arrangement with the custodian bank whereby the custodian and the
transfer agent fees may be paid indirectly by credits on the Fund's uninvested
cash balances. These credits are used to reduce the Fund's expenses.
For its services, the Advisor receives an annual fee, payable monthly, of
0.25% of the Fund's average daily net assets. Advisory fees are allocated among
classes as a Portfolio-level expense based on net assets.
Subadvisor
Bridgeway Capital Management Inc. is controlled by John Montgomery and his
family. The Subadvisor receives a subadvisory fee, paid by the Fund. The
investment subadvisory agreement between Bridgeway Capital Management and the
Fund provides that the Subadvisor is entitled to a base annual fee ("Base Fee"),
payable monthly, of 0.45% of the Fund's average daily net assets. The
Subadvisor may earn (or have its base fee reduced by) a performance fee
adjustment ("Performance Fee"), which shall vary with the Fund's performance
over a "performance period" as compared to a "benchmark index" and will range
from a minimum of -0.25% to a maximum of +0.25% based on the extent to which
performance exceeds or trails the S&P 500 Index, the Fund's benchmark index
until such time as the Securities and Exchange Commission permits use of the
Lipper indices as appropriate index benchmarks; such permission cannot be
guaranteed. The performance rate adjustment will be 1.67% times the difference
between the
performance of the Fund and that of the benchmark index, except that there will
be no performance adjustment if the difference between the Fund performance and
the benchmark Index performance is less than or equal to 2%. The performance
period would be the most recent one-year period ending on the last day of the
previous month that the New York Stock Exchange was open for trading. For
purposes of calculating the base fee, net assets would be averaged over the most
recent month, and for purposes of calculating the performance fee, net assets
would be averaged over the rolling one-year performance period.
The Subadvisor is seeking permission (in the form of a "no action
letter") from the Securities and Exchange Commission with respect to the
accounting methodology to be applied to the calculation of the performance fee.
If the Subadvisor receives such no action letter acceptable to the Advisor (at
its sole discretion and determination), the performance period will be five
years and the benchmark index used will be the S&P 500 Index with dividends
reinvested. The performance rate adjustment would then be 1.67% times the
difference between the performance of the Fund and that of the benchmark index,
except that there
will be no performance adjustment if the difference between the Fund performance
and the benchmark Index performance is less than or equal to 2%. The performance
period would be the most recent five-year period ending on the last day of the
previous quarter (March, June, September, or December) that the New York Stock
Exchange was open for trading. For purposes of calculating the performance fee,
the performance rate would be multiplied times the current net assets. Thus, the
net assets used to calculate the performance fee and the base fee would be the
same
The Fund has received an exemptive order to permit the Fund and the Advisor
to enter into and materially amend the Investment Subadvisory Agreement without
shareholder approval. Within 90 days of the hiring of any Subadvisor or the
implementation of any proposed material change in the Investment Subadvisory
Agreement, the Fund will furnish its shareholders information about the new
Subadvisor or Investment Subadvisory Agreement that would be included in a proxy
statement. Such information will include any change in such disclosure caused by
the addition of a new Subadvisor or any proposed material change in the
Investment Subadvisory Agreement of the Fund. The Fund will meet this condition
by providing shareholders, within 90 days of the hiring of the Subadvisor or
implementation of any material change to the terms of an Investment Subadvisory
Agreement, with an information statement to this effect.
administrative services agent
-----------------------------
Calvert Administrative Services Company ("CASC"), an affiliate of the
Advisor, has been retained by the Fund to provide certain administrative
services necessary to the conduct of its affairs, including the preparation of
regulatory filings and shareholder reports. For providing such services, CASC
receives an annual administrative service fee payable monthly (as a percentage
of net assets) as follows:
Class A, B, and C Class I
0.20% 0.10%
Administrative services fee are allocated among classes as a class-level
expense based on net assets.
method of distribution
----------------------
Calvert Distributors, Inc. ("CDI") is the principal underwriter and
distributor for the Fund. CDI is an affiliate of the Fund's Advisor. Under the
terms of its underwriting agreement with the Fund, CDI markets and distributes
the Fund's shares and is responsible for preparing advertising and sales
literature, and printing and mailing prospectuses to prospective investors.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted Distribution Plans (the "Plans") which permit the Fund to pay
certain expenses associated with the distribution of its shares. Such expenses
may not exceed, on an annual basis, 0.25% of the Fund's Class A average daily
net assets.
Expenses under the Fund's Class B and Class C Plans may not exceed, on an annual
basis, 1.00% of the average daily net assets of Class B and Class C,
respectively. Class I has no Distribution Plan. Class A Distribution Plans
reimburse CDI only for expenses it incurs, while the Class B and C Distribution
Plans compensate CDI at a set rate regardless of CDI's expenses. Distribution
Plan expenses may be spent for advertising, printing and mailing of prospectuses
to persons who are not already Fund shareholders, compensation to
broker/dealers, underwriters, and salespersons, and, for Class B, interest and
finance charges.
The Fund's Distribution Plans were approved by the Board of Directors,
including the Directors who are not "interested persons" of the Fund (as that
term is defined in the Investment Company Act of 1940) and who have no direct or
indirect financial interest in the operation of the Plans or in any agreements
related to the Plans. The selection and nomination of the Directors who are not
interested persons of the Fund is committed to the discretion of such
disinterested Directors. In establishing the Plans, the Directors considered
various factors including the amount of the distribution expenses. The Directors
determined that there is a reasonable likelihood that the Plans will benefit the
Fund and its shareholders, including economies of scale at higher asset levels,
better investment opportunities and more flexibility in managing a growing
portfolio.
The Plans may be terminated by vote of a majority of the non-interested
Directors who have no direct or indirect financial interest in the Plans, or by
vote of a majority of the outstanding shares of the Fund. If the Fund should
ever switch to a new principal underwriter without terminating the Class B Plan,
the fee would be prorated between CDI and the new principal underwriter. Any
change in the Plans that would materially increase the distribution cost to a
Class requires approval of the shareholders of the affected class; otherwise,
the Plans may be amended by the Directors, including a majority of the
non-interested Directors as described above. The Plans will continue in effect
for successive one-year terms provided that such continuance is specifically
approved by: (i) the vote of a majority of the Directors who are not parties to
the Plans or interested persons of any such party and who have no direct or
indirect financial interest in the Plans, and (ii) the vote of a majority of the
entire Board of Directors.
Apart from the Plans, the Advisor and CDI, at their own expense, may incur
costs and pay expenses associated with the distribution of shares of the Fund.
The Advisor and/or CDI may pay certain firms compensation based on sales of Fund
shares or on assets held in those Firm's accounts for their marketing and
distribution of the Fund shares, above the usual sales charges and service fees.
CDI makes a continuous offering of the Fund's securities on a "best
efforts" basis. Under the terms of the agreement, CDI is entitled to receive,
pursuant to the Distribution Plans, a distribution fee and a service fee from
the Fund based on the average daily net assets of each class. These fees are
paid pursuant to the Fund's Distribution Plan.
Class A shares are offered at net asset value plus a front-end sales charge as
follows:
As a % of As a % of Allowed to
Amount of offering net amount Brokers as a % of
Investment price invested offering price
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 3.75% 3.90% 3.00%
$100,000 but less than $250,000 2.75% 2.83% 2.25%
$250,000 but less than $500,000 1.75% 1.78% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.00%
CDI receives any front-end sales charge or CDSC paid. A portion of the
front-end sales charge may be reallowed to dealers.
Fund Directors and certain other affiliated persons of the Fund are exempt
from the sales charge since the distribution costs are minimal to persons
already familiar with the Fund. Other groups (i.e., group retirement plans) are
exempt due to economies of scale in distribution. See Exhibit A to the
Prospectus.
Transfer and shareholder servicing agentS
-----------------------------------------
National Financial Data Services, Inc. ("NFDS"), a subsidiary of State
Street Bank & Trust, has been retained by the Fund to act as transfer agent and
dividend disbursing agent. These responsibilities include: responding to certain
shareholder inquiries and instructions, crediting and debiting shareholder
accounts for purchases and redemptions of Fund shares and confirming such
transactions, and daily updating of shareholder accounts to reflect declaration
and payment of dividends.
Calvert Shareholder Services, Inc. ("CSSI"), a subsidiary of Calvert Group,
Ltd. and Acacia, has been retained by the Fund to act as shareholder servicing
agent. Shareholder servicing responsibilities include responding to shareholder
inquiries and instructions concerning their accounts, entering any telephoned
purchases or redemptions into the NFDS system, maintenance of broker-dealer
data, and preparing and distributing statements to shareholders regarding their
accounts.
For these services, CSSI receives a fee of $6 per shareholder account and
$0.65 per transaction.
portfolio transactions
----------------------
Fund transactions are undertaken on the basis of their desirability from an
investment standpoint. The Fund's Advisor and Subadvisor make investment
decisions and the choice of brokers and dealers under the direction and
supervision of the Fund's Board of Directors.
Broker-dealers who execute portfolio transactions on behalf of the Fund are
selected on the basis of their execution capability and trading expertise
considering, among other factors, the overall reasonableness of the brokerage
commissions, current market conditions, size and timing of the order, difficulty
of execution, per share price, market familiarity, reliability, integrity, and
financial condition, subject to the Advisor/Subadvisor obligation to seek best
execution. The Advisor or Subadvisor may also consider sales of Fund shares as a
factor in the selection of brokers, again, subject to best execution (i.e., the
Fund will not "pay up" for such transactions.)
While the Fund's Advisor and Subadvisor select brokers primarily on the
basis of best execution, in some cases they may direct transactions to brokers
based on the quality and amount of the research and research-related services
which the brokers provide to them. These research services include advice,
either directly or through publications or writings, 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 of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software used in security analyses;
providing portfolio performance evaluation and technical market analyses; and
providing other services relevant to the investment decision making process.
Other such services are designed primarily to assist the Advisor in monitoring
the investment activities of the Subadvisor of the Fund. Such services include
portfolio attribution systems, return-based style analysis, and trade-execution
analysis.
The Advisor and/or Subadvisor may also direct selling concessions and/or
discounts in fixed-price offerings for research services.
If, in the judgment of the Advisor or Subadvisor, the Fund or other accounts
managed by them will be benefited by supplemental research services, they are
authorized to pay brokerage commissions to a broker furnishing such services
which are in excess of commissions which another broker may have charged for
effecting the same transaction. It is the policy of the Advisor that such
research services will be used for the benefit of the Fund as well as other
Calvert Group funds and managed accounts.
Personal securities transactions
--------------------------------
The Fund, its Advisor, and principal underwriter have adopted a Code of
Ethics pursuant to Rule 17j-1 of the Investment Company Act of 1940. The Code of
Ethics is designed to protect the public from abusive trading practices and to
maintain ethical standards for access persons as defined in the rule when
dealing with the public. The Code of Ethics permits the Fund's investment
personnel to invest in securities that maybe purchased or held by the Fund. The
Code of Ethics contains certain conditions such as preclearance and restrictions
on use of material information.
independent accountant and custodians
-------------------------------------
Arthur Andersen LLP has been selected by the Board of Directors to serve as
independent accountants for fiscal year 2000. State Street Bank & Trust Company,
N.A., 225 Franklin Street, Boston, MA 02110, serves as custodian of the Fund's
investments. Allfirst Financial, Inc., 25 South Charles Street, Baltimore,
Maryland 21203 also serves as custodian of certain of the Fund's cash assets.
The custodians have no part in deciding the Fund's investment policies or the
choice of securities that are to be purchased or sold for the Fund.
FINANCIAL STATEMENTS
--------------------
The Fund's audited financial statements are included at Schedule A of this
Statement of Additional Information.
general information
-------------------
The Fund is a series of Calvert Impact Fund, Inc., an open-end management
investment company organized as a Maryland corporation on August 10, 2000. The
Fund is diversified. Each share represents an equal proportionate interest
with each other share and is entitled to such dividends and distributions out of
the income belonging to such class as declared by the Board. The Fund offers
four separate classes of shares: Class A, Class B, Class C, and Class I. Each
class represents interests in the same portfolio of investments but, as further
described in the prospectus, each class is subject to differing sales charges
and expenses, which differences will result in differing net asset values and
distributions. Upon any liquidation of the Fund, shareholders of each class are
entitled to share pro rata in the net assets belonging to that series available
for distribution.
The Fund is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing Directors, changing
fundamental policies, or approving a management contract. As a shareholder, you
receive one vote for each share of a Fund you own. Matters affecting classes
differently, such as Distribution Plans, will be voted on separately by class.
appendix
--------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
Corporate Bonds:
Description of Moody's Investors Service Inc.'s/Standard & Poor's bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. This rating indicates an extremely strong capacity to pay principal and
interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree. They are rated lower
than the best bonds because margins of protection may not be as large as in Aaa
securities, fluctuation of protective elements may be of greater amplitude, or
there may be other elements present which make long-term risks appear somewhat
larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present which make the
bond somewhat more susceptible to the adverse effects of circumstances and
economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay principal and
interest. Whereas they normally exhibit adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay principal and interest for bonds in this category than
for bonds in higher rated categories.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is regarded as
predominantly speculative with respect to capacity to pay interest and repay
principal. The higher the degree of speculation, the lower the rating. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposure to adverse
conditions.
C/C: This rating is only for income bonds on which no interest is being
paid.
D: Debt in default; payment of interest and/or principal is in arrears.
Commercial Paper:
MOODY'S INVESTORS SERVICE, INC.:
The Prime rating is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations. Issuers within this Prime
category may be given ratings 1, 2, or 3, depending on the relative strengths of
these factors.
STANDARD & POOR'S CORPORATION:
Commercial paper rated A by Standard & Poor's has the following
characteristics: (i) liquidity ratios are adequate to meet cash requirements;
(ii) long-term senior debt rating should be A or better, although in some cases
BBB credits may be allowed if other factors outweigh the BBB; (iii) the issuer
should have access to at least two additional channels of borrowing; (iv) basic
earnings and cash flow should have an upward trend with allowances made for
unusual circumstances; and (v) typically the issuer's industry should be well
established and the issuer should have a strong position within its industry and
the reliability and quality of management should be unquestioned. Issuers rated
A are further referred to by use of numbers 1, 2 and 3 to denote the relative
strength within this highest classification.
<PAGE>
LETTER OF INTENT
----------------
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter of
Intent option on my Fund Account Application Form, I agree to be bound by the
terms and conditions applicable to Letters of Intent appearing in the Prospectus
and the Statement of Additional Information for the Fund and the provisions
described below as they may be amended from time to time by the Fund. Such
amendments will apply automatically to existing Letters of Intent.
I intend to invest in the shares of:_____________________ (Fund name)
during the thirteen (13) month period from the date of my first purchase
pursuant to this Letter (which cannot be more than ninety (90) days prior to the
date of this Letter or my Fund Account Application Form, whichever is
applicable), an aggregate amount (excluding any reinvestments of distributions)
of at least fifty thousand dollars ($50,000) which, together with my current
holdings of the Fund (at public offering price on date of this Letter or my Fund
Account Application Form, whichever is applicable), will equal or exceed the
amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of escrow,
to which I hereby agree, each purchase occurring after the date of this Letter
will be made at the public offering price applicable to a single transaction of
the dollar amount specified above, as described in the Fund's prospectus. "Fund"
in this Letter of Intent shall refer to the Fund. No portion of the sales charge
imposed on purchases made prior to the date of this Letter will be refunded.
I am making no commitment to purchase shares, but if my purchases within
thirteen months from the date of my first purchase do not aggregate the minimum
amount specified above, I will pay the increased amount of sales charges
prescribed in the terms of escrow described below. I understand that 4.75% of
the minimum dollar amount specified above will be held in escrow in the form of
shares (computed to the nearest full share). These shares will be held subject
to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary), 4.75% of
the dollar amount specified in this Letter shall be held in escrow in shares of
the Fund by the Fund's transfer agent. For example, if the minimum amount
specified under the Letter is $50,000, the escrow shall be shares valued in the
amount of $2,375 (computed at the public offering price adjusted for a $50,000
purchase). All dividends and any capital gains distribution on the escrowed
shares will be credited to my account.
If the total minimum investment specified under the Letter is completed
within a thirteen month period, escrowed shares will be promptly released to me.
However, shares disposed of prior to completion of the purchase requirement
under the Letter will be deducted from the amount required to complete the
investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the Letter
are less than the amount specified in the Letter as the intended aggregate
purchases, Calvert Distributors, Inc. ("CDI") will bill me for an amount equal
to the difference between the lower load I paid and the dollar amount of sales
charges which I would have paid if the total amount purchased had been made at a
single time. If not paid by the investor within 20 days, CDI will debit the
difference from my account. Full shares, if any, remaining in escrow after the
aforementioned adjustment will be released and, upon request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact, with full
power of substitution, to surrender for redemption any or all escrowed shares on
the books of the Fund. This power of attorney is coupled with an interest.
The commission allowed by CDI to the broker-dealer named herein shall be at
the rate applicable to the minimum amount of my specified intended purchases.
The Letter may be revised upward by me at any time during the
thirteen-month period, and such a revision will be treated as a new Letter,
except that the thirteen-month period during which the purchase must be made
will remain unchanged and there will be no retroactive reduction of the sales
charges paid on prior purchases.
In determining the total amount of purchases made hereunder, shares
disposed of prior to termination of this Letter will be deducted. My
broker-dealer shall refer to this Letter of Intent in placing any future
purchase orders for me while this Letter is in effect.
Dealer Name of Investor(s)
By
Authorized Signer Address
Date Signature of Investor(s)
Date Signature of Investor(s)
<PAGE>
SCHEDULE A
----------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
The Calvert Impact Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Calvert Large Cap Growth Fund, one portfolio comprising the Calvert Impact Fund,
Inc. (the "Fund"), as of October 19, 2000. This financial statement is the
responsibility of the Trust's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities presents fairly, in all
material respects, the financial position of the Calvert Large Cap Growth Fund,
as of October 19, 2000, in conformity with accounting principles generally
accepted in the United States.
Philadelphia, Pennsylvania
October 19, 2000
<PAGE>
ASSETS
------
Cash $100,000
--------
Total assets 100,000
-------
LIABILITIES
-----------
Accrued expenses and other liabilities 0
-
Total liabilities 0
-
NET ASSETS $100,000
========
NET ASSETS CONSIST OF:
-------------------------
Paid-in capital applicable to the following shares of common stock,
with 250,000,000 shares of $0.01 par value share authorized for
Class A, B, C and I combined:
Class A: 6,466 shares outstanding $97,000
Class B: 67 shares outstanding 1,000
Class C: 67 shares outstanding 1,000
Class I: 67 shares outstanding 1,000
-----
NET ASSETS $100,000
========
NET ASSET VALUE PER SHARE
-----------------------------
Class A: (based on net assets of $97,000) $15.00
======
Class B: (based on net assets of $1,000) $15.00
======
Class C: (based on net assets of $1,000) $15.00
======
Class I: (based on net assets of $1,000) $15.00
======
See notes to statement of assets and liabilities.
<PAGE>
CALVERT LARGE CAP GROWTH FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
General: The Calvert Large Cap Growth Fund (the "Fund"), the sole series of
Calvert Impact Fund, Inc., is registered under the Investment Company Act of
1940 as a diversified, open-end management investment company. The Fund was
organized as a Maryland Corporation on August 10, 2000. It has had no
operations since that date, except for matters relating to the Fund's
organization and registration under the Investment Company Act of 1940 and the
Securities Act of 1933 and the sale of 6,667 shares ("initial shares") of the
Fund to Calvert Asset Management Company, Inc. The Fund offers four separate
classes of shares: Class A, Class B, Class C and Class I.
The Advisor is assuming all organization costs of the Fund.
NOTE B - RELATED PARTY TRANSACTIONS
The Fund has entered into an Investment Advisory Agreement with Calvert Asset
Management Company, Inc. Calvert Asset Management Company, Inc. (the "Advisor")
is wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly
wholly-owned by Ameritas Acacia Mutual Holding Company. The Advisor provides
investment advisory services and pays the salaries and fees of officers and
affiliated Directors of the Fund. For its services, the Advisor is entitled to
receive an annual fee, payable monthly, of 0.25% of the Fund's average daily net
assets.
The Fund has entered into an Investment Subadvisory Agreement with Bridgeway
Capital Management, Inc. (the "Subadvisor"), controlled by John Montgomery and
his family. For its services, the Subadvisor is entitled to receive an annual
fee, payable monthly, of 0.45% of the Fund's average daily net assets. The
Subadvisor may earn (or have its base fee reduced by) a performance adjustment
of plus or minus 0.25%, based on the extent to which performance of the Fund
exceeds or trails the S&P 500 Index.
The Advisor has agreed to limit annual fund operating expenses (net of expense
offset arrangements and exclusive of any performance fee adjustments) through
November 1, 2001. The contractual expense cap is 1.50% for Class A, 2.50% for
Class B, 2.50% for Class C and 0.90% for Class I. For the purpose of this
expense limit; operating expenses do not include interest expense, brokerage,
taxes, extraordinary expenses and capital items.
The Fund has entered into an Administrative Services Agreement with Calvert
Administrative Services Company. Calvert Administrative Services Company
("CASC"), an affiliate of the Advisor, provides administrative services to the
Fund. CASC is entitled to receive an annual fee, payable monthly, of 0.20% for
Classes A, B, and C, and 0.10% for Class I, of the Fund's average daily net
assets.
The Fund has entered into a Distribution Agreement and Distribution Plan with
Calvert Distributors, Inc. Calvert Distributors, Inc. ("CDI"), an affiliate of
the Advisor, is the distributor and principal underwriter for the Fund.
Distribution Plans, adopted by Class A, Class B, and Class C shares allow the
Fund to pay the distributor for expenses and services associated with
distribution of shares. Such expenses may not exceed 0.25%, 1.00%, and 1.00%
annually of average daily net assets of each Class A, Class B and Class C.
The Fund has entered into a Shareholder Servicing Agreement with Calvert
Shareholder Services, Inc. Calvert Shareholder Services, Inc. ("CSSI"), an
affiliate of the Advisor, is the shareholder servicing agent of the Fund.
National Financial Data Services, Inc. ("NFDS"), is the transfer and dividend
disbursing agent. For its services, CSSI is entitled to receive a fee of $6.00
per shareholder account and $0.65 per transaction.
<PAGE>
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Shareholder ServiceS TRANSFER AGENT
Calvert Shareholder Services, Inc. National Financial Data Services, Inc.
4550 Montgomery Avenue 330 West 9th Street
Suite 1000N Kansas City, Missouri 64105
Bethesda, Maryland 20814
PRINCIPAL UNDERWRITER INDEPENDENT accountants
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814 Arthur Andersen LLP
1601 Market Street
Philadelphia, PA 19103
Part C. other information
Item 23. Exhibits
a Articles of Incorporation filed herewith.
b By-laws filed herewith.
c Instruments defining the security holder rights (not applicable)
d Investment Advisory Agreement with Calvert Asset Management
filed herewith.
Investment Subadvisory Agreement with Bridgeway Capital
filed herewith.
e Underwriting Agreement with Calvert Distributors, Inc.
filed herewith.
f Directors' Deferred Compensation Agreement filed herewith.
g Custodial Agreement with State Street Bank and Trust
filed herewith.
h Transfer Agency Agreement with National Financial Data Services
filed herewith.
Servicing Agreement with Calvert Shareholder Services
filed herewith.
Administrative Services Agreement with Calvert Administrative
Services Company filed herewith.
i Opinion and Consent of Counsel as to legality
of shares being registered filed herewith.
j Independent Auditors' Consent filed herewith.
k Omitted financial statement re computation of ratios
(not applicable)
l Letter regarding initial capital filed herewith.
m Plan of distribution, Class A, B, and C filed herewith.
n 18f-3 Multiple Class Plan, Class A, B, C, and I,
filed herewith.
o EXHIBIT 24 - Power of Attorney Forms filed herewith.
p Code of Ethics filed herewith.
Item 24. Persons controlled by or under common control with registrant
Not applicable.
Item 25. Indemnification
Registrant's By-Laws, Exhibit 2 of this Registration Statement,
provides, in summary, that officers and directors shall be indemnified by
Registrant against liabilities and expenses incurred by such persons in
connection with actions, suits, or proceedings arising out of their offices or
duties of employment, except that no indemnification can be made to such a
person if he has been adjudged liable of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his duties. In the absence of such an
adjudication, the determination of eligibility for indemnification shall be made
by independent counsel in a written opinion or by the vote of a majority of a
quorum of directors who are neither "interested persons" of Registrant, as that
term is defined in Section 2(a)(19) of the Investment Company Act of 1940, nor
parties to the proceeding.
Registrant may purchase and maintain liability insurance on behalf of
any officer, trustee, employee or agent against any liabilities arising from
such status. In this regard, Registrant will maintain a Directors & Officers
(Partners) Liability Insurance Policy with Chubb Group of Insurance Companies,
15 Mountain View Road, Warren, New Jersey 07061, providing Registrant with $5
million in directors and officers liability coverage, plus $5 million in excess
directors and officers liability coverage for the independent trustees/directors
only. Registrant also maintains an $9 million Investment Company Blanket Bond
issued by ICI Mutual Insurance Company, P.O. Box 730, Burlington, Vermont,
05402. The Fund maintains joint coverage with the other Calvert Group Funds, and
for the liability coverage, with the Advisor and its affiliated companies
("Calvert operating companies.") The premium and the coverage are allocated
based on a method approved by the disinterested Fund Directors.
Item 26. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Barbara J. Krumsiek Calvert Variable Series, Inc. Officer
Calvert Municipal Fund, Inc. and
Calvert World Values Fund, Inc. Director
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Social Investment Fund
Calvert Cash Reserves
The Calvert Fund
Calvert Social Index Series
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Group, Ltd. Officer
Holding Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Alliance Capital Mgmt. L.P. Sr. Vice President
Mutual Fund Division Director
1345 Avenue of the Americas
New York, NY 10105
--------------
Ronald M. Wolfsheimer First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
David R. Rochat First Variable Rate Fund Officer
for Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Municipal Fund, Inc. Officer
Investment Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Chelsea Securities, Inc. Officer
Securities Firm and
Post Office Box 93 Director
Chelsea, Vermont 05038
---------------
Grady, Berwald & Co. Officer
Holding Company and
43A South Finley Avenue Director
Basking Ridge, NJ 07920
---------------
Reno J. Martini Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Charles T. Nason Ameritas Acacia Mutual Holding Company Officer
Acacia Life Insurance and Director
Insurance Companies
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
---------------
Acacia Federal Savings Bank Director
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Social Investment Fund Trustee
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
-----------------
The Advisors Group, Ltd. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Robert-John H. Ameritas Acacia Mutual Holding Company Officer
Acacia Life Insurance
Acacia National Life Insurance Officer
Insurance Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Federal Savings Bank Officer
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
The Advisors Group, Ltd. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management, Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
William M. Tartikoff Acacia National Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co. Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Susan Walker Bender Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Ivy Wafford Duke Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Jennifer Streaks Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Victor Frye Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
The Advisors Group, Ltd. Counsel
Broker-Dealer and and
Investment Advisor Compliance
7315 Wisconsin Avenue Manager
Bethesda, Maryland 20814
---------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Calvert Social Index Series
Daniel K. Hayes Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
John Nichols Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
David Leach Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Matthew D. Gelfand Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Strategic Investment Management Officer
Investment Advisor
1001 19th Street North
Arlington, Virginia 20009
------------------
Item 27. Principal Underwriters
(a) Registrant's principal underwriter underwrites shares of
First Variable Rate Fund for Government Income, Calvert Tax-Free Reserves,
Calvert Social Investment Fund, Calvert Cash Reserves, The Calvert Fund,
Calvert Municipal Fund, Inc., Calvert World Values Fund, Inc., Calvert New
World Fund, Inc., Calvert Social Index Series, Inc., Calvert Variable
Series, Inc., and Calvert Impact Fund, Inc.
(b) Positions of Underwriter's Officers and Directors
Name and Principal Position(s) with Position(s) with
Business Address* Underwriter Registrant
Barbara J. Krumsiek Director and President President and Director
Ronald M. Wolfsheimer Director, Senior Vice Treasurer
President and Chief Financial
Officer
William M. Tartikoff Director, Senior Vice Vice President and
President and Secretary Secretary and Director
Craig Cloyed Senior Vice President None
Karen Becker Vice President, Operations None
Matthew Gelfand Vice President None
Geoffrey Ashton Regional Vice President None
Martin Brown Regional Vice President None
Bill Hairgrove Regional Vice President None
Anthony Eames Regional Vice President None
Steve Himber Regional Vice President None
Tanya Williams Regional Vice President None
Ben Ogbogu Regional Vice President None
Christine Teske Regional Vice President None
Jennifer Streaks Assistant Secretary None
Susan Walker Bender Assistant Secretary Assistant Secretary
Ivy Wafford Duke Assistant Secretary Assistant Secretary
Victor Frye Assistant Secretary None
and Compliance Officer
Mike Yuhas Controller None
Hui Ping Ho Assistant Treasurer None
*4550 Montgomery Avenue, Bethesda, Maryland 20814
(c) Inapplicable.
Item 28. Location of Accounts and Records
Ronald M. Wolfsheimer, Treasurer
and
William M. Tartikoff, Assistant Secretary
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Item 29. Management Services
Not Applicable
Item 30. Undertakings
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, duly authorized, in
the City of Bethesda, and State of Maryland, on the 25th day of October, 2000.
Calvert Impact Fund, Inc.
By:
____________**____________________
Barbara J. Krumsiek
President and Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities indicated.
Signature Title Date
__________**____________ President 10/25/2000
Barbara J. Krumsiek Director
__________**____________ Principal Accounting 10/25/2000
Ronald M. Wolfsheimer Officer
/s/William M. Tartikoff Director 10/25/2000
William M. Tartikoff
__________**____________ Director 10/25/2000
REBECCA L. ADAMSON
__________**____________ Director 10/25/2000
JOY V. JONES
__________**____________ Director 10/25/2000
D. Wayne Silby
__________**____________ Director 10/25/2000
Miles Douglas Harper, III
** Signed by Ivy Wafford Duke pursuant to power of attorney.
/s/____________________
