December 31, 1998
ANNUAL
REPORT
CALVERT FIRST
GOVERNMENT MONEY
MARKET FUND
<PAGE>
CONTENTS
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 4
Statement of Net Assets 5
Statements of Operations 7
Statements of Changes in Net Assets 8
Notes to Financial Statements 10
Financial Highlights 13
Year 2000 Update 15
[picture of Barbara Krumsiek, no caption]
Dear Shareholders:
Investors' risk tolerance was tested in 1998. Global financial turmoil
contributed to a high level of market volatility. By the end of the third
quarter, most equity investors were looking at negative results for the
year-to-date. The fourth quarter brought fast relief, however, with stock
market indices bouncing back to provide investors with a fourth consecutive
year of double digit gains. Price appreciation was an integral component of
bond returns, as yields generally declined throughout the year.
Among stocks, the top performers were tightly consolidated by capitalization
range and industry group. Large-capitalization companies and technology
plays fueled most of the advance. In the bond market, long-term U.S.
Treasury securities outperformed other categories substantially.
While investors may be tempted to chase the current trend setters, that
approach comes with increased risk now, given the stock market's high levels
and increased volatility. We encourage investors to make decisions based on
their financial objectives and tolerance for risk. At this point, it would
be a good idea to reevaluate your asset allocation to be sure you are
positioned at a comfortable risk level. If you think change is in order,
your financial professional can suggest strategies that keep you on track to
meet long-term financial objectives without exposing you to undue levels of
risk.
We appreciate your investment in Calvert Group funds and look forward to
providing competitive returns in the year ahead.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
January 19, 1999
<PAGE>
[picture of Beth Bunnell Hunter. Caption: Beth Bunnell Hunter is a member of
the CAMCO portfolio management team.]
[sidebar] Calvert First Government Money Market Fund seeks to earn the
highest possible yield consistent with safety, liquidity and preservation of
capital.
[sidebar] Fund Information
asset allocation
taxable
money market
NASDAQ symbol
FVRXX
CUSIP number
131577-10-8
Calvert First Government Money Market Fund
How did the Fund perform relative to its peer group?
For the period ending December 31, 1998, the fund returned 4.93% versus
4.89% for the average money market fund tracked by Lipper. The Fund also
outperformed the IBC U.S. Government Money Market Fund average by several
basis points.
How would you characterize the investment climate over the period covered by
this report?
During most of the year, the Federal Reserve remained on hold, leaving the
federal funds rate unchanged while they monitored the effect of the Asian
financial crisis on the domestic economy. As the financial crisis spread,
the negative effects on our own markets became more apparent. Buyers became
increasingly credit conscious, and liquidity in the bond markets began
drying up. At times, there were few buyers for anything other than U.S.
government guaranteed issues. Pressure on the Federal Reserve to step in and
provide liquidity to the markets increased, and, in September, the Fed made
the first of three 25 basis point rate cuts.
The rapid change in the federal funds rate from 5.50% to 4.75% affected the
Fund in ways that were both positive and negative. As the market began to
anticipate Fed easing, we extended our average days to maturity in order to
lock in the better rates. However, we also maintained sizable positions in
issues whose rates are reset regularly at a spread relative to Treasury
bills. Unfortunately, these rates were reset just after the Fed easing. This
meant that the Fund realized an immediate yield reduction. By year-end the
effect of the timing of the resets was negligible. Our peers also began
seeing some of the securities purchased before the Fed easing mature. They
were forced to reinvest at lower yields, which leveled the playing field
once again.
What was your strategy?
As I mentioned, we began extending our weighted average maturity in late
summer and early fall. At mid-year, the Fund's weighted average maturity was
35 days. By early December, we had moved to almost 60 days. This helped us
keep most of the Fund assets invested at higher rates and, given the quick
succession of rate cuts, proved to be a very good move.
What is your outlook?
The outlook for the next six months is once again a difficult call. The U.S.
unemployment rate is extremely low by recent historical standards, and
consumers continue to spend at a robust pace. However, several of our
primary international trading partners (Canada, Mexico and Brazil, in
particular) are facing
<PAGE>
economic challenges. We believe this will continue to impact domestic
manufacturers and eventually consumers. The consumer has shown remarkable
resilience this past year, but should the stock market falter, this could
come to an end. In addition, the possibility of another international crisis
spooking the markets cannot be discounted. We believe the Fed will continue
to monitor events closely and, in general, we find it more likely that
interest rates will remain stable or trend down over the coming months.
January 19, 1999
Please remember, this discussion reflects the views and opinions of Calvert
Asset Management Company at December 31, 1998, the end of the reporting
period. Our strategy and the Fund's portfolio composition may differ due to
ever-changing market and economic conditions. While historical performance
is no guarantee of future results, it may give you a better and more
thorough understanding of our investment decisions and management philosophy.
[sidebar] Portfolio Statistics
weighted average maturity
12.31.98 46 days
12.31.97 52 days
credit quality distribution
as of 12.31.98
The Fund invests solely in debt obligations issued or guaranteed by the
United States, its agencies or instrumentalities, assignments of interest in
such obligations and commitments to purchase such obligations ("U.S.
Government-backed obligations"). The Fund may invest in U.S.
Government-backed obligations subject to repurchase agreements with the
recognized securities dealers and banks.
COMPARATIVE MONTH-END YIELDS
12.31.98 4.33% 4.28%
11.30.98 4.48% 4.35%
10.31.98 4.58% 4.48%
9.30.98 4.83% 4.80%
8.31.98 4.88% 4.84%
7.31.98 4.93% 4.83%
6.30.98 4.92% 4.84%
Class O average annual total return
as of 12.31.98
1 year 4.93%
5 year 4.72%
10 year 5.14%
inception 7.43%
(12.07.76)
Total returns assume reinvestment of dividends. Performance information
represents the value of an investment in Class O shares. The value of an
investment in Class B, C or I shares would be different. Past performance is
no guarantee of future results. Source: IBC's Money Fund Report, IBC
Financial Data Inc. and Lipper Analytical Services, Inc.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of First Variable Rate Fund for Government Income
and Shareholders of Calvert First Government Money Market Fund:
In our opinion, the accompanying statement of net assets and the related
statement of operations, statement of changes in net assets and financial
highlights present fairly, in all material respects, the financial position
of Calvert First Government Money Market Fund (hereafter referred to as the
"Fund"), at December 31, 1998, the results of its operations, the changes in
its net assets and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits, which
included confirmation of securities at December 31, 1998 by correspondence
with custodian and brokers, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 10, 1999
<PAGE>
STATEMENT OF NET ASSETS
December 31, 1998
U.S. Government Principal
Agency Obligations - 70.5% Amount Value
Federal Home Loan Bank, 4.91%, 10/27/99 $5,000,000 $4,998,713
Federal Home Loan Mortgage Corporation, Discount Notes
5.01%, 1/13/99 15,000,000 14,974,950
5.10%, 1/26/99 10,000,000 9,964,583
4.907%, 1/29/99 20,000,000 19,923,669
5.00%, 2/3/99 5,000,000 4,977,083
5.03%, 2/12/99 10,000,000 9,941,317
5.19%, 2/19/99 10,000,000 9,929,358
5.17%, 2/22/99 5,569,000 5,527,412
5.03%, 2/26/99 10,000,000 9,921,756
4.92, 2/26/99 5,000,000 4,961,733
4.72%, 3/2/99 10,000,000 9,921,333
4.98%, 3/5/99 10,466,000 10,374,789
5.075%, 3/19/99 7,750,000 7,665,875
4.91%, 3/25/99 9,500,000 9,392,457
Federal National Mortgage Association,
5.53%, 3/11/99 5,000,000 4,999,705
Federal National Mortgage Association, Discount Notes:
5.30%, 1/19/99 5,000,000 4,986,750
4.83%, 2/2/99 2,000,000 1,991,413
4.96%, 3/1/99 7,000,000 6,943,098
5.00%, 3/3/99 7,000,000 6,940,694
4.95%, 3/10/99 12,000,000 11,887,800
4.90%, 4/5/99 6,000,000 5,923,234
4.85%, 5/6/99 4,000,000 3,932,639
Student Loan Marketing Association,
5.088%, 2/18/99 8,000,000 8,000,000
Total U.S. Government Agency Obligations
(Cost $188,080,361) 188,080,361
Depository Receipts for U.S. Government
Guaranteed Loans - 6.0% +
Colson Services Corporation Loan Sets: *
8.25%, 8/1/00 21,778 22,243
7.375%, 2/25/02-9/09/06 190,106 192,177
7.09375%, 3/18/08-4/26/09 643,475 644,771
8.59375%, 1/17/10 82,372 86,320
7.34375%, 5/1/00-7/23/10 401,392 401,891
7.25%, 8/1/10-1/22/11 780,703 780,987
7.50%, 6/5/09-3/23/12 958,127 967,681
7.375%, 3/12/05-5/8/12 1,731,050 1,733,369
7.25%, 3/19/11-8/10/12 7,508,664 7,522,917
7.25%, 4/7/12-8/24/12 3,548,542 3,554,591
Total Depository Receipts for U.S. Government
Guaranteed Loans (Cost $15,906,947) 15,906,947
<PAGE>
Variable rate Loans Guaranteed by Principal
Agencies of the U.S. Government - 21.0% + Amount Value
Audley Investments Opic COPs Variable Rate Notes,
5.10%, 11/29/04 $12,000,000 $12,000,000
Loan pools:
8.59375%, 3/30/99 33,902 33,902
6.25%, 3/1/07 902,945 890,676
7.00%, 8/15/12 1,552,055 1,537,575
Sakhalin Energy Co. Opic COPs,
4.95%, 4/2/07 20,500,000 20,500,000
Rural Electric Coop Grantor Trust
Certificates VRDN, 5.12%, 12/25/17 20,990,000 20,990,000
Total Variable Rate Loans Guaranteed by Agencies
of the U.S. Government (Cost $55,952,153) 55,952,153
Repurchase Agreements, for Delivery at Cost,
Collateralized by Securities Issued or
Guaranteed by the U.S. Government - 1.7%
Donaldson, Lufkin & Jenrette Securities, Inc.: 5.00%, dated 12/31/98,
due 1/4/99 ($4,693,875 REFCO
Stripped Principal, 10/15/19) 4,600,000 4,600,000
Total Repurchase Agreements (Cost $4,600,000) 4,600,000
TOTAL INVESTMENTS
(Cost $264,539,461) - 99.2% 264,539,461
Other assets in excess of liabilities, net - 0.8% 2,020,396
Net Assets - 100.0% $266,559,857
Net Assets Consist of:
Paid-in capital applicable the following shares of beneficial interest,
unlimited number of no par shares authorized
Class O: 246,534,740 shares outstanding $246,289,468
Class B: 74,227 shares outstanding 74,227
Class C: 339,355 shares outstanding 339,355
Institutional Class: 20,128,026 shares outstanding 20,128,026
Undistributed net investment income (loss) 12,974
Accumulated net realized gain (loss) on investments (284,193)
Net Assets $266,559,857
Net Asset Value Per Share
Class O (based on net assets of $246,018,576) $1.00
Class B (based on net assets of $74,210) $1.00
Class C (based on net assets of $339,292) $1.00
Institutional Class (based on net assets of $20,127,779) $1.00
Abbreviations:
COPs: Certificates of Participation
VRDN: Variable Rate Demand Notes
+ Represents rates in effect at December 31, 1998, after regularly scheduled
adjustments on such date. Interest rates adjust monthly and quarterly,
generally at the beginning of the month or calendar quarter, or semiannually
based on prime plus contracted adjustments. As of December 31, 1998, the
prime interest rate was 7.75%.
* Colson Services Corporation is the collection and transfer agent for
certain of the Fund's U.S. Government guaranteed variable rate loans. Each
depository receipt pertains to a set, grouped by interest rate, of these
loans.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
Net Investment Income
Investment Income
Interest income $14,140,409
Expenses
Investment advisory fee 1,037,947
Transfer agency fees and expenses 503,037
Distribution plan expenses:
Class B 273
Class C 1,150
Trustees' fees and expenses 30,434
Administrative Fees:
Class O 204,370
Class B 54
Class C 229
Institutional Class 3,943
Custodian fees 41,028
Registration fees 67,324
Reports to shareholders 92,425
Professional fees 28,830
Miscellaneous15,961
Total expenses 2,027,005
Reimbursement from Advisor:
Class B (9,526)
Class C (7,401)
Institutional Class ( 7,448)
Fees paid indirectly (44,174)
Net expenses 1,958,456
Net Investment Income 12,181,953
Realized Gain (Loss) on Investments
Net realized gain (loss) (24,011)
Increase (Decrease) in Net Assets
Resulting from Operations $12,157,942
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $12,181,953 $11,781,093
Net realized gain (loss) (24,011) 11,055
Increase (Decrease) in Net Assets
Resulting from Operations 12,157,942 11,792,148
Distributions to shareholders from
Net investment income:
Class O shares (11,791,212) (11,790,757)
Class B shares (912) --
Class C shares (3,911) --
Institutional Class shares (390,877) --
Total distributions (12,186,912) (11,790,757)
Capital share transactions
Shares sold:
Class O shares 400,225,222 390,048,098
Class B shares 170,699 --
Class C shares 657,732 --
Institutional Class shares 52,364,180 --
Reinvestment of distributions:
Class O shares 11,511,736 11,513,525
Class B shares 869 --
Class C shares 3,395 --
Institutional Class shares 375,403 --
Shares redeemed:
Class O shares (397,714,517) (408,957,845)
Class B shares (97,341) --
Class C shares (321,772) --
Institutional Class shares (32,611,557) --
Total capital share transactions 34,564,049 (7,396,222)
Total Increase (Decrease) in Net Assets 34,535,079 (7,394,831)
Net Assets
Beginning of year 232,024,778 239,419,609
End of year (including undistributed net investment income
of $12,974 and $17,933, respectively) $266,559,857 $232,024,778
<PAGE>
Capital Share Activity
Shares sold:
Class O shares 400,225,222 390,048,098
Class B shares 170,699 --
Class C shares 657,732 --
Institutional Class shares 52,364,180 --
Reinvestment of distributions:
Class O shares 11,511,736 11,513,525
Class B shares 869 --
Class C shares 3,395 --
Institutional Class shares 375,403 --
Shares redeemed:
Class O shares (397,714,517) (408,957,845)
Class B shares (97,341) --
Class C shares (321,772) --
Institutional Class shares (32,611,557) --
Total capital share activity 34,564,049 (7,396,222)
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A -- Significant Accounting Policies
General: The Calvert First Government Money Market Fund (the "Fund"), the
only series of First Variable Rate Fund for Government Income, is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund offers four classes of shares of
beneficial interest. Class O shares are sold to the public, with no
front-end sales charge at the time of purchase and no back-end load when
they are redeemed. Effective April 1, 1998 the Fund began to offer Class B
shares. Class B shares may be purchased only by exchange from Class B shares
of another Calvert Group Fund. Class B shares are sold without a front-end
sales charge at the time of purchase, but may be subject to a deferred sales
charge upon redemption. Effective June 1, 1998 the Fund began to offer Class
C shares. Class C shares may be purchased only by exchange from Class C
shares of another Calvert Group Fund. Class C shares are sold without a
front-end sales charge at the time of purchase. They may be subject to a
deferred sales charge if they are redeemed within one year after purchase of
the Class C shares in the original fund. Class B and C shares have higher
expenses than Class O shares, including Distribution Plan expenses. Class O
shares are not subject to a Distribution Plan. Effective September 16, 1998
the Fund began to offer Class I shares. Class I shares require a minimum
account balance of $1,000,000. They have no front-end or deferred sales
charge. Class I Shares are not subject to a Distribution Plan.
Security Valuation: Securities are valued at amortized cost which
approximates market.
Repurchase Agreements: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value
and a possible loss of income or value if the counterparty fails to perform
in accordance with the terms of the agreement.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis. Investment income
and realized gains and losses are allocated to separate classes of shares
based upon the relative net assets of each class. Expenses arising in
connection with a class are charged directly to that class. Expenses common
to the classes are allocated to each class in proportion to their relative
net assets.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are
accrued daily and paid monthly. Distributions from net realized capital
gains, if any, are paid at least annually. Distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles; accordingly, periodic reclassifications are
made within the Fund's capital accounts to reflect income and gains
available for distribution under income tax regulations.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
<PAGE>
at the date of the financial statements and the reported amounts of income
and expenses during the reporting period. Actual results could differ from
those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's and transfer agent's fees may be paid
indirectly by credits earned on the Fund's cash on deposit with the bank.
Such a deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to continue to qualify as a regulated
investment company under the Internal Revenue Code and to distribute
substantially all of its earnings.
Note B -- Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Holding Corporation. The Advisor provides investment advisory
services and pays the salaries and fees of officers and affiliated Trustees
of the Fund. For its services, the Advisor receives a monthly fee based on
the following annual rates of average daily net assets:
First Next Next Next Over
$500 M $400 M $400 M $700 M $2 B
1/1/98 - 9/15/98 .50% .45% .40% .35% .30%
9/16/98 - 12/31/98 .25% .225% .20% .175% .15%
M = Million, B = Billion
Due to the inception of Institutional Class on 9/16/98, the fees paid to the
Advisor changed as reflected above. Under the terms of the agreement,
$103,986 was payable at year end.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Fund for an annual fee. Due to the
inception of Institutional Class on 9/16/98, an Administrative Service Fee
was initiated on 9/16/98. Class O, Class B, and Class C pay an annual rate
of .25% and Institutional Class pays an annual rate of .05%, based on their
average daily net assets. Under the terms of the agreement, $54,190 was
payable at year end.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by Class
B and C shares, allow the Fund to pay the distributor for expenses and
services associated with distribution of shares. The expenses paid may not
exceed 1.0% annually of average daily net assets of Class B and Class C.
Under the terms of the agreement, $300 was payable at year end.
Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is
the shareholder servicing agent for the Fund. For its services, CSSI
received a fee of $221,015 for the year ended December 31, 1998. Under terms
of the agreement, $19,345 was payable at year end. National Financial Data
Services, Inc., is the transfer and dividend disbursing agent.
Each Trustee who is not affiliated with the Advisor received an annual fee
of $20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustees fees are allocated to each of the funds served.
<PAGE>
Note C -- Investment Activity
The cost of investments owned at December 31, 1998 was substantially the
same for federal income tax and financial reporting purposes. The table
below presents the net capital loss carryforwards as of December 31, 1998
with expiration dates:
Capital Loss Carryforwards Expiration Dates
$225,116 12/31/99
25,746 12/31/00
9,320 12/31/01
24,001 12/31/06
Capital loss carryforwards may be utilized to offset current and future
capital gains until expiration.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of
$50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings
under this facility bear interest at the overnight Federal Funds Rate plus
.50% per annum. A commitment fee of .10% per annum will be incurred on the
unused portion of the committed facility which will be allocated to all
participating funds. This fee is paid quarterly in arrears. The Fund had no
loans outstanding pursuant to this line of credit at December 31, 1998.
Note E -- Subsequent Event
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Holding Corporation ("Acacia Mutual"). Effective January 1, 1999,
Acacia Mutual merged with Ameritas Mutual Insurance Holding Company to form
Ameritas Acacia Mutual Holding Company.
<PAGE>
Financial Highlights
Years Ended
December 31, December 31, December 31,
Class O Shares 1998 1997 1996
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .048 .049 .047
Distributions from
Net investment income (.048) (.049) (.047)
Net asset value, ending $1.00 $1.00 $1.00
Total return 4.93% 5.00% 4.79%
Ratios to average net assets:
Net investment income 4.82% 4.88% 4.69%
Total expenses + .81% .82% .86%
Net expenses .79% .80% .85%
Net assets, ending
(in thousands) $246,019 $232,025 $239,420
Number of shares outstanding,
ending (in thousands) 246,535 232,514 239,910
Years Ended
December 31, December 31,
Class O Shares 1995 1994
Net asset value, beginning $1.00 $1.00
Income from investment operations
Net investment income .051 .036
Distributions from
Net investment income (.051) (.036)
Net asset value, ending $1.00 $1.00
Total return 5.22% 3.66%
Ratios to average net assets:
Net investment income 5.04% 3.56%
Total expenses + .89% --
Net expenses .88% .81%
Net assets, ending
(in thousands) $241,150 $230,183
Number of shares outstanding,
ending (in thousands) 241,685 230,618
<PAGE>
Financial Highlights
Periods Ended
Class B Shares Class C Shares
December 31, December 31,
Classes B&C Shares 1998^ 1998^^
Net asset value, beginning $1.00 $1.00
Income from investment operations
Net investment income .027 .020
Distributions from
Net investment income (.027) (.020)
Net asset value, ending $1.00 $1.00
Total return 2.72% 2.06%
Ratios to average net assets:
Net investment income 3.28%(a) 3.35%(a)
Total expenses + 2.02%(a) 2.02%(a)
Net expenses 2.00%(a) 2.00%(a)
Expenses reimbursed 34.91%(a) 6.44%(a)
Net assets, ending (in thousands) $74 $339
Number of shares outstanding,
ending (in thousands) 74 339
Period Ended
Class I Shares
December 31,
Class I Shares 1998^^^
Net asset value, beginning $1.00
Income from investment operations
Net investment income .015
Distributions from
Net investment income (.015)
Net asset value, ending $1.00
Total return 1.49%
Ratios to average net assets:
Net investment income 4.95%(a)
Total expenses + .34%(a)
Net expenses .32%(a)
Expenses reimbursed .09%(a)
Net assets, ending
(in thousands) $20,128
Number of shares outstanding,
ending (in thousands) 20,128
(a) Annualized
^ From April 1, 1998 inception
^^ From June 1, 1998 inception
^^^ From September 6, 1998 inception
+ Effective December 31, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses. Total expenses are presented net of expense waivers
and reimbursements.
<PAGE>
CALVERT GROUP AND THE YEAR 2000
PLANS AND PROGRESS
We are now less than a year away from the year 2000, a problematic date for
computer systems coded for two-character year format. Entered as "00," the
year 2000 would be processed as 1900, a mistake that could foul a variety of
date-sensitive transactions.
As your mutual fund sponsor, our goal is make sure there is no interruption
in the level of service you receive. In the summary below, we've outlined
the steps Calvert Group is taking to ensure our systems perform reliably.
Step One--Assess Systems and Software. Develop an Action Plan.
In 1997, we identified all systems, operating platforms and software
potentially affected by the millennium bug. These included:
o Calvert Group systems--portfolio trading, sales contact and
reporting and internal management reporting
o transfer agency systems--shareholder record-keeping and transaction
processing
o subadvisor systems--investment accounting
o other third-party data and service systems.
We also formed a Y2K task force, led by Calvert's vice president of
technology. This group has identified and prioritized our efforts to achieve
year 2000 compliance.
Step Two--Test for Compliance. Repair Systems as Necessary.
Internal systems have been tested. We've made repairs and moved modified
code into production. These systems are now fully compliant. Transfer agency
systems were re-engineered for compliance in 1989. Recent tests indicate
these are, in fact, compliant. The readiness of third-party systems,
including subadvisor systems, has been evaluated. Based on information
received from these groups, we have found no significant obstacles to
compliance.
Step Three--Confirm Compliance. Finalize Contingency Plan.
Testing of transfer agency systems will continue through 1999 to ensure
these remain compliant and continue to interact correctly with external
systems and processes. The transfer agency has established a back-up site,
should main systems fail, and compliance testing of these contingency
measures are also underway. We are developing contingency plans to ensure
that any unforeseen systems failures will not adversely affect our
operations or inconvenience our shareholders.
For more information or to get an update on remediation and testing efforts,
please visit us online at www.calvertgroup.com.
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Calvert First Government Money Market Fund
This report is intended to provide fund information to shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by a prospectus.
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Web Site
http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Calvert Group's
Family of Funds
Tax-Exempt Money Market Funds
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio
Balanced Fund
CSIF Managed Growth Portfolio
Municipal Funds
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Equity Funds
CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
printed on recycled paper
using soy-based inks
