Calvert Tax-Free Reserves Vermont Municipal Portfolio Semi-Annual Report
June 30, 1995
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Calvert Group (R)
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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.
Semi-Annual Report-June 30, 1995
CALVERT TAX-FREE RESERVES VERMONT MUNICIPAL PORTFOLIO
Dear Investor:
The slowing economy, firming dollar and expectations that the Federal
Reserve would move to cut interest rates pushed bond yields lower and
prices higher across all maturity ranges. The stock market also rallied in
anticipation of lower interest rates and reports of continued strong
earnings growth. Shortly after the close of this reporting period, the
Federal Reserve moved to lower rates by reducing its target for the federal
funds rate (the rate banks charge each other) from 6% to 5.75%.
Chart 1: ,Municipal Rates
A line graph comparing performance of Twenty Year, Seven Year, and One Year
AA General Obligation from 6/94 through 6/95
Market Review
Bond fund investors who held their course after 1994's dismal bond
market showing were amply rewarded in the first six months of 1995. Prices
of bonds of all maturities soared as yields retraced much of their 1994
advance. Municipals led taxable bonds in the first quarter, but fell behind
in the second quarter as talk of tax reform rattled the market. For
example, the year-to-date principal-only return for the Lipper General
Municipal Debt Funds average was 6.71%, compared to 8.29% for the Lipper
Corporate Bond Fund Average.
Performance and Strategy Review
The Portfolio's strongly positive return for this six-month period was
due to price appreciation, the result of a decline in yields. Thus far in
1995, the Portfolio has recouped all of its 1994 loss (2.88%), and returned
almost 5% above that.
The Fund's return was above the average's for the 12-month period, but
lagged for the 6-month period. The Fund's weaker performance was largely
the result of our having to sell securities in order to meet redemptions in
the early part of the year. In the time lag between our raising cash and
meeting the redemptions, the bond market rallied. Since then, we have
endeavored to close the gap in performance with some success.
Outlook
We believe the Fed will continue to have a neutral to easier policy
bias in reaction to mixed economic data. The markets will likely be
volatile until a clearer picture of second and early-third quarter economic
activity forms later in the summer.
While the possibility of lighter tax burdens depressed the municipal
markets during the first half of 1995, the gap in the performance of
municipals and taxables has narrowed a bit since the close of this
reporting period. In our opinion, the markets had overreacted. Proposals
for tax reform will face a long period of debate-a process that is not
likely to begin until late in 1995. We think municipals are now priced to
reflect the possibility of tax reform, and future jolts are less likely.
Sincerely,
(Signature)
David R. Rochat
Senior Vice President
July 20, 1995
Investment Performance
Periods Ended 6/30/95 6 Months 12 Months
Vermont Municipal Portfolio 7.51% 7.85%
Lipper Other States Muni Fund Avg. 8.76% 7.02%
Investment performance is for Class A shares and does not reflect the
deduction of any front-end sales charge.
Portfolio Statistics
Weighted Average Maturity
12/31/94 6/30/95
Vermont Municipal Portfolio 15 Years 14 Years
SEC Yields
Class A Class C
Thirty Days Ended 6/30/95 6/30/95
Vermont Municipal Portfolio 5.01% 4.19%
Yields assume reinvestment of dividends.
Average Annual Total Returns for periods ended 6/30/95
Class A Shares
One Year 3.82%
Since Inception (4/91) 6.40%
Class C Shares
One Year 6.24%
Since Inception (3/94) 2.76%
Chart 2: Calvert Tax-Free Reserves Vermont Municipal Portfolio
Comparison of change in value of a hypothetical $10,000 investment.
A line graph showing the rise of a $10,000 investment from 4/91 to $13,019
in the Calvert Tax-Free Reserves Vermont Municipal Portfolio, versus the
same investment in the Lehman Municipal Bond Index rising to $14,871
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the fund's maximum sales charge of 3.75%. No sales
charge has been applied to the index used for comparison. The value of an
investment in Class A shares is plotted in the line graph. The value of an
investment in Class C shares would be different. Past performance is no
guarantee of future returns.
Calvert Tax-Free Reserves-
Vermont Municipal Portfolio
Portfolio of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of
Investments
June 30, 1995 (Unaudited)
State or Territory/
Principal Amount Description Value Ratings <F1>
<C> <S> <C> <S>
Municipal Obligations (97.9%)
Puerto Rico (0.4%)
$ 210,000 Puerto Rico Public Improvement Bonds, 6.60%,
7/1/97, FGIC Insured $220,490
Aaa/AAA
Vermont (97.5%)
2,000,000 Burlington Electric Revenue Bonds, 6.25%,
7/1/14, MBIA Insured 2,028,800
Aaa/AAA
600,000 Burlington Electric Revenue Bonds,
7.25%, 7/1/06, MBIA Insured 625,998 Aaa/AAA
265,000 Burlington Public Improvement General Obligation Bonds,
6.40%, 5/1/01 279,482 Aa/NR
700,000 Burlington Public Improvement General Obligation Bonds,
6.50%, 5/1/02 737,926 Aa/NR
100,000 Burlington Public Improvement General Obligation Bonds,
6.50%, 5/1/04 104,636 Aa/NR
220,000 Burlington Public Improvement General Obligation Bonds,
6.50%, 5/1/06 228,494 Aa/NR
1,900,000 Chittenden Unlimited Tax General Obligation Bonds, 6.60%,
1/1/12, Asset Guaranty Insured 1,951,205
NR/AA (a)
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/01/02 266,365 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/00 266,534 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/01 266,365 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/03 266,365 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/04 266,365 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/05 266,365 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/06 266,110 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/07 266,116 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/08 266,110 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/09 266,086 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/10 266,031 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/96 266,526 NR/NR
See notes to portfolio of investments.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of Investments (continued)
June 30, 1995 (Unaudited)
State or Territory/
Principal Amount Description Value
Ratings <F1>
Vermont (continued)
$ 265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/97 $ 266,534NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/98 266,534 NR/NR
265,000 Lyndon School District Unlimited Tax General Obligation Bonds,
7.30%, 3/15/99 266,534 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
5.80%, 11/1/99 115,083 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
5.95%, 11/1/00 115,778 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
6.10%, 11/1/01 116,922 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
6.25%, 11/1/02 118,069 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
6.35%, 11/1/03 118,845 NR/NR
110,000 Rutland County Solid Waste General Obligation Bonds,
6.45%, 11/1/04 119,549 NR/NR
105,000 Rutland County Solid Waste General Obligation Bonds,
6.50%, 11/1/05 114,308 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds,
6.55%, 11/1/06 109,025 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.60%,
11/1/07 108,998 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.70%,
11/1/08 109,438 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.75%,
11/1/09 109,254 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.80%,
11/1/10 108,990 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.80%,
11/1/11 109,122 NR/NR
100,000 Rutland County Solid Waste General Obligation Bonds, 6.85%,
11/1/12 109,755 NR/NR
3,765,000 University of Vermont & State Agricultural College Revenue Bonds,
5.80%, 7/1/13 3,678,669 A/AA-
2,000,000 Vermont Education and Health - Central Vermont Hospital, 7.00%,
10/1/22 1,947,560
Baa1/BBB+
500,000 Vermont Education and Health - Landmark College, 7.15%,
11/1/14, LOC: Vermont National Bank 536,100 NR/NR
2,095,000 Vermont Education and Health - Middlebury College, 6.00%,
11/1/13 2,092,486 NR/AA
See notes to portfolio of investments.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of Investments (continued)
June 30, 1995 (Unaudited)
State or Territory/
Principal Amount Description Value
Ratings <F1>
Vermont (continued)
$ 580,000 Vermont Education and Health - Norwich University,
5.75%, 9/1/05 $ 570,314
Baa/NR
1,500,000 Vermont Education and Health - Norwich University,
6.00%, 9/1/13 1,422,060Baa/NR
1,000,000 Vermont Education and Health - Southwestern Vermont
Medical Center, 5.625%, 5/1/25, FSA Insured 925,610 Aaa/AAA
1,085,000 Vermont Education and Health - St. Johnsbury Academy,
7.30%, 4/15/18 1,133,055NR/BBB
2,000,000 Vermont Education and Health - St. Michael's College,
7.05%, 10/1/16 2,136,960 NR/A-
50,000 Vermont Education and Health - St. Michael's College,
7.40%, 6/1/99 54,071 NR/A-
125,000 Vermont Education and Health - St. Michael's College,
7.80%, 6/1/02 135,064 NR/A-
750,000 Vermont Education and Health - Vermont Medical Center
Bonds, 6.00%, 9/1/22, FGIC Insured 735,150 Aaa/AAA
1,000,000 Vermont Housing Finance Agency Single Family Mortgage
Revenue Bonds, Series 4, 6.40%, 11/1/25 1,001,620 A1/A+
65,000 Vermont Housing Finance Authority Home Mortgage
Purchase Series A Bonds, 7.25%, 12/1/00 67,132 A1/NR
465,000 Vermont Housing Finance Authority Home Mortgage
Purchase Series B Bonds, 8.10%, 6/1/22 487,088 A1/NR
175,000 Vermont Housing Finance Authority Single Family Series 1
Housing Bonds, 8.15%, 5/1/25 186,716 A1/A+
1,200,000 Vermont Housing Finance Authority Single Family Series 2
Housing Bonds, 7.20%, 11/1/11 1,240,788 A1/A+
670,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
6.80%, 12/1/01 734,333 A/A-
130,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
7.35%, 12/1/97 138,765 A/A-
130,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
7.35%, 12/1/98 141,099 A/A-
150,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
8.00%, 12/1/08 173,415
Aaa/AAA (b)
1,000,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
5.375%, 12/1/13 924,530 A/A-
420,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
6.60%, 12/1/98 447,783 A/A-
1,500,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
6.875%, 12/1/22 1,568,550 A/A-
75,000 Vermont Municipal Bond Bank Series 1 Revenue Bonds,
7.30%, 12/1/96 78,284 A/A-
See notes to portfolio of investments.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of Investments (continued)
June 30, 1995 (Unaudited)
State or Territory/
Principal Amount Description Value
Ratings <F1>
Vermont (continued)
$ 100,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 6.50%,
12/1/96 $ 103,384 A/A-
100,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 6.50%,
12/1/97 105,046 A/A-
100,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 7.25%,
12/1/00 111,180
Aaa/AAA (b)
175,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 7.40%,
12/1/01 195,395
Aaa/AAA (b)
105,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 7.50%,
12/1/02 117,566
Aaa/AAA (b)
160,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 7.60%,
12/1/03 179,653
Aaa/AAA (b)
175,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 6.50%,
12/1/95 176,950 A/A-
200,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 6.50%,
12/1/98 212,602 A/A-
500,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 6.60%,
12/1/00 539,505 A/A-
500,000 Vermont Municipal Bond Bank Series 2 Revenue Bonds, 7.10%,
12/1/99 553,540
Aaa/AAA (b)
750,000 Vermont Municipal Bond Bank Series B Revenue Bonds, 7.25%,
12/1/98 795,150 A/A-
190,000 Vermont Public Power Supply Authority Bonds, 6.50%, 7/1/99,
AMBAC Insured 199,016 Aaa/AAA
1,000,000 Vermont State College Revenue Bonds, 8.00%,
7/1/18 1,144,420
NR/AAA(b)
1,015,000 Vermont State College Revenue Bonds, 5.125%,
7/1/18 871,114NR/A (b)
1,000,000 Vermont State General Obligation Bonds, 4.90%,
2/01/10 915,860 Aa/AA-
500,000 Vermont State General Obligation Bonds, 5.40%,
8/1/02 517,210 Aa/AA-
1,500,000 Vermont State General Obligation Bonds, 5.70%,
1/15/00 1,566,900Aa/AA-
2,500,000 Vermont State General Obligation Bonds, 6.30%,
1/15/06 2,706,150Aa/AA-
1,000,000 Vermont State General Obligation Bonds, 6.40%,
2/1/08 1,102,810
Aa/AA- (b)
1,000,000 Vermont State General Obligation Bonds, 6.45%,
2/1/11 1,105,610
Aa/AA- (b)
1,950,000 Vermont State General Obligation Bonds, 6.45%,
2/1/12 2,155,939Aa/AA-
See notes to portfolio of investments.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of Investments (continued)
June 30, 1995
State or Territory/
Principal Amount Description Value
Ratings <F1>
Vermont (continued)
$ 1,740,000 Vermont State General Obligation Bonds, 6.50%,
2/01/01 $ 1,890,440
Aa/AA
500,000 Vermont State General Obligation Bonds, 6.50%,
2/1/07 551,190
Aaa/AAA (b)
25,000 Vermont State General Obligation Bonds, 6.70%,
2/01/99 26,887 Aa/AA-
400,000 Vermont State General Obligation Bonds, Zero Coupon,
8/01/08 185,240 Aa/AA-
300,000 Vermont State General Obligation Bonds, Zero Coupon,
8/01/09 129,036 Aa/AA-
2,440,000 Vermont State Lease Certificates of Participation, 6.50%,
7/1/11, MBIA Insured 2,564,025
Aaa/AAA
2,000,000 Vermont Student Assistance Corporation Education Loan
Series A Revenue Bonds, 6.50%, 6/15/00, AMBAC Insured 2,092,740
Aaa/AAA
2,240,000 Vermont Student Assistance Corporation Education Loan
Series A-3 Revenue Bonds, 6.50%, 12/15/05, FSA Insured 2,359,459
Aaa/AAA
1,000,000 Vermont Student Assistance Corporation Education Loan
Series B Revenue Bonds, 6.70%, 12/15/12, FSA Insured 1,042,100
Aaa/AAA
600,000 Windham County Solid Waste General Obligation Bonds,
6.40%, 12/1/97 600,000 NR/NR
Total Municipal Obligations (Cost $59,163,527) 61,128,426
Options (0.2%)
130,000 U.S. Treasury Bond Futures, 130 Call Contracts, Expiration
8/19/95, Strike Price 116 105,625
Total Options (Cost $100,831) 105,625
TOTAL INVESTMENTS (Cost $59,264,358)
<F3> (98.1%) <F4> $ 61,234,051
<FN>
(a) Issue rated AAA by Duff & Phelps.
(b) Prefunded or escrowed to maturity.
See notes to portfolio of investments.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Portfolio of
Investments (continued)
June 30, 1995 (Unaudited)
Notes to Portfolio of Investments:
<F1> Ratings: Moody's Investors Service, Inc.'s ratings of state and
municipal notes, in descending order of quality, are: MIG1, MIG2, and MIG3.
VMIG rating is the same as MIG rating but is designated for issues that
have periodic demand features. Moody's ratings of municipal bonds, in
descending order of quality, are: Aaa, Aa, A, and Baa. Standard & Poor's
Corporation's ratings of municipal debt, in descending order of quality,
are: AAA, AA, A, and BBB. Standard & Poor's ratings of tax-exempt notes, in
descending order of quality, are: SP-1, SP-2, and SP-3. For variable rate
obligations with a demand feature, S&P ratings are: A-1+, A-1, A-2, A-3.
Numerical modifiers and plus or minus indicate the ranking of a security
within its generic rating category. Moody's ratings are indicated before
Standard & Poor's in the portfolio of investments. NR: Obligation is not
rated by a commercial credit rating service, such as Moody's Investors
Service, Inc., or Standard & Poor's Corporation; obligation has been det-
ermined to be of appropriate quality for the Portfolio by Calvert Asset
Management Company, Inc., the Investment Advisor.
* Obligation is escrowed to maturity in Treasury bills, Government agency
obligations, or commercial paper of high quality, is secured by an
irrevocable letter of credit from a bank with assets of one billion dollars
or more, or has guaranteed investment contracts with various insurance
companies, investment companies, or banks with assets of one billion
dollars or more.
<F2> These obligations have a daily or seven day tender at par, at
holder's option.
<F3> Cost of investments represents amortized cost and is substantially
the same for federal income tax purposes.
<F4> The percentage shown represents the percentage of investments to net
assets.
<F5> Abbreviations:
VRDN: Variable Rate Demand Notes
</FN>
</TABLE>
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Statement of Assets
and Liabilities
June 30, 1995 (Unaudited)
Assets
Investments in securities, at value -
see accompanying portfolio $ 61,234,051
Interest receivable 1,166,171
Receivable for securities sold 120,000
Receivable for shares sold 46,245
Other assets 1,700
Total assets 62,568,167
Liabilities
Payable to Bank 32,289
Payable to Calvert Asset Management Company, Inc. - <F2> Note B 40,962
Payable to Calvert Shareholder Services, Inc. - <F2> Note B 1,804
Payable to Calvert Administrative Services Corp. - <F2> Note B 406
Payable for shares redeemed 64,960
Accrued expenses and other liabilities 1,650
Total liabilities 142,071
Net assets $ 62,426,096
Net Assets
Net assets consisting of:
Paid-in capital applicable to 3,853,764
outstanding Class A shares of beneficial
interest, no par value (unlimited number of
Class A shares authorized) 59,840,588
Paid-in capital applicable to 34,175
outstanding Class C shares
of beneficial interest, no par value
(unlimited number of Class C shares authorized) 538,857
Accumulated net investment income - net of distributions 152,654
Accumulated realized gains/(losses) - net of distributions (75,696)
Net unrealized appreciation (depreciation) on investments 1,969,693
Net assets $62,426,096
Net Asset Value and Offering Price Per Share
Class A net asset value per share
($61,881,272 divided by 3,853,764 Class A shares) $16.06
Maximum sales charge (3.75% of Class A
offering price - <F1> Note A) .63
Offering price per Class A share $16.69
Class C net asset value and offering price per share
($544,824 divided by 34,175 Class C shares) $15.94
See notes to financial statements.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Statement of
Operations
Six Months Ended June 30, 1995 (Unaudited)
Investment Income
Interest income $ 1,990,428
Expenses - <F2> Note B
Investment advisory fee 190,887
Professional fees 14,665
Transfer, dividend disbursing and shareholder
servicing agent's fees 11,517
Printing and stationery 9,137
Valuation service 4,749
Miscellaneous expenses 2,734
Trustee's fees and expenses 2,698
Administrative services fees 2,457
Postage and delivery 2,425
Distribution plan expenses 2,165
Federal and state registration fees 1,863
Insurance 836
Telephone 427
Total expenses 246,560
Net Investment Income 1,743,868
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) 360,330
Change in unrealized appreciation or depreciation 2,537,553
Net Realized and Unrealized Gain (Loss) on Investments 2,897,883
Net Increase (Decrease) in Net Assets
Resulting from Operations $4,641,751
See notes to financial statements.
Calvert Tax-Free Reserves-Vermont Municipal Portfolio Statements of Changes
in Net Assets
Six Months
Ended
June 30, Year Ended
1995 Dec. 31,
Increase (Decrease) in Net Assets (Unaudited) 1994
Operations
Net investment income $ 1,743,868 $ 3,673,693
Net realized gain (loss) on investments 360,330 (484,977)
Change in unrealized appreciation or
depreciation of investments 2,537,553 (5,190,091)
Net Increase (Decrease) in Net Assets
Resulting from Operations 4,641,751 (2,001,375)
Distributions to shareholders
Net investment income:
Class A shares (1,690,580) (3,576,718)
Class C shares (9,876) (6,942)
Total distributions (1,700,456) (3,583,660)
Capital share transactions - <F3> Note C
Class A shares (5,259,357) 2,156,262
Class C shares 305,824 233,106
Total capital share transactions (4,953,533) 2,389,368
Total Increase (Decrease) in Net Assets (2,012,238) (3,195,667)
Net Assets
Beginning of period 64,438,334 67,634,001
End of period (including accumulated net
investment income - net of distributions
of $152,654 and $109,243
for 1995 and 1994, respectively.) $ 62,426,096 $ 64,438,334
See notes to financial statements.
[FN]
Notes To Financial Statements (Unaudited)
<F1> Note A-Summary of Significant Accounting Policies
General: The Vermont Municipal Portfolio (the "Series") is a series of
Calvert Tax-Free Reserves (the "Fund") which is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end
management company. The Fund operates as a series fund, issuing seven
series of shares of beneficial interest. The Fund accounts separately for
the assets, liabilities, and operations of each series. In March, 1994 the
Series began offering a second class of shares, the Class C Shares. The
original class of shares has been designated Class A Shares and is sold
subject to a front-end sales charge with a maximum of 3.75%. The Class C
Shares have no front-end or back-end sales charge, but do have higher
annual expenses than the Class A shares. The Class A and Class C shares
represent interests in the same portfolio of investments and are identical
in all respects, except (a) the Class C shares have different Distribution
Plan expenses; (b) other expenses, including transfer agency fees,
registration fees, postage and delivery expenses, and printing and
stationary expenses are also different for each class; (c) the classes have
different dividend rates due solely to the effects of (a) and (b) above;
and (d) the classes have different exchange privileges and voting rights.
Expenses attributable to the operations of a specific class are charged
directly to that class.
Portfolio Valuation: Municipal obligations in the Portfolio are valued
utilizing the average bid dealer market quotation as furnished by an
independent pricing service. If no market quotation is readily available
from the pricing service, or if the portfolio manager disagrees with the
quotation, then the obligations are priced under the direction of the
Fund's Board of Trustees.
Securities Transactions and Investment Income: Securities transactions are
recorded on a trade date basis. Interest income, including, where
applicable, amortization of premium and discount, is recorded on the
accrual basis. Realized gains and losses from securities transactions are
recorded on the identified cost basis.
Options Written or Purchased: When the Fund writes or purchases an option,
an amount equal to the premium received or paid by the Fund is recorded as
a liability or an asset and is subsequently adjusted to the current market
value of the option sold or purchased. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added
to the proceeds from the sale or cost of the purchase of the underlying
security in determining whether the Fund has realized a gain or loss on
investment transactions.
Share Valuation, Dividends and Distributions to Shareholders: The net asset
value per share, the price at which shares are redeemed, is computed for
the Series by dividing each class' relative share of the Series' net asset
value by the total number of shares outstanding for each respective class
each business day. The net asset value per share of each class in the
Series fluctuates daily in response to changes in the market value of the
investments. The Series declares and pays dividends from its net investment
income on a monthly basis. Distributions to shareholders are recorded by
the Fund on an ex-dividend date.
Federal Income Taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company by complying with the provisions of the
Internal Revenue Code available to certain investment companies, and to
make distributions of taxable income and capital gains sufficient to
relieve it from all, or substantially all, federal income and excise taxes.
The Fund has unused realized capital loss carryforwards for federal income
tax purposes of $436,026 at June 30, 1995, which expire in 2002.
<F2> Note B-Investment Advisory and Other Transactions With Affiliates
The Fund's investment advisor is Calvert Asset Management Company, Inc.
("Advisor"), wholly-owned by Calvert Group, Ltd., which is an indirect
wholly-owned subsidiary of Acacia Mutual Life Insurance Company. Under the
Advisory Contract, the Advisor manages the investment and reinvestment of
the Fund's assets, subject to the direction and control of the Trustees,
pays the salaries and fees of the executive officers and affiliated
Trustees of the Fund may assume and pay certain advertising and promotional
expenses. For its services, the Advisor receives a fee of 0.60% of the
Series' average daily net assets.
The Advisory Contract provides for an expense reimbursement from the
Advisor should the Series' aggregate expenses, exclusive of interest,
taxes, Distribution Plan, brokerage and extraordinary expenses, exceed, on
an annual basis, the lowest state expense limitation in effect.
The Fund has entered into a principal underwriting agreement with Calvert
Distributors, Inc. (the successor to Calvert Securities Corp. effective
April 1, 1995) ("CDI"). Pursuant to the agreement, CDI serves as
distributor and principal underwriter for the Portfolio. Pursuant to Rule
12b-1 under the Investment Company Act of 1940 the Class C Shares of the
Series have adopted a Distribution Plan which permits the class to pay
certain expenses associated with the distribution of its shares. For the
Class C Shares of the Series such expenses may not exceed, on an annual
basis, 1.00% of the class' average daily net assets. For the six months
ended June 30, 1995, Distribution Plan expenses totaled $2,165 for Class C
Shares of the Series.
Calvert Shareholder Services, Inc. ("CSSI"), a wholly-owned subsidiary of
Calvert Group, Ltd., has been retained by the Fund to act as transfer,
dividend disbursing and shareholder servicing agent for the Fund. For these
services CSSI receives an annual fee from the Series of $14 per account per
year plus $1.60 per transaction.
Calvert Administrative Services Company ("CASC"), a wholly-owned subsidiary
of Calvert Group, Ltd., has been retained by the Fund to provide certain
administrative services necessary to the conduct of the Fund's affairs
including the preparation of regulatory filings and shareholder reports,
the daily determination of the net asset value per share and dividends of
the Fund, and the maintenance of the portfolio and general accounting
records of the Fund. CASC receives a fee of $200,000 per year for providing
such services. Such fees are allocated among the Portfolios based upon
their relative net asset.
Certain officers and trustees of the Fund are "affiliated persons", as
defined in the Act, of the Advisor. Each trustee of the Fund who is not
affiliated with the Advisor serves on the Board of Trustees of other Funds
sponsored by the Advisor, and receives an annual fee of $20,250 and a
meeting fee of $1,200 for each Board and Committee meeting attended in
person. Such fees are allocated among the Funds based upon their relative
net assets.
<F3> Note C-Net Assets
<TABLE>
<CAPTION>
The change in net assets resulting from capital share transactions for 1995
and 1994 is indicated below:
Class A Shares Class C Shares Class C Shares
Six Months Six Months From Inception
Ended Class A Shares Ended Mar.1, 1994
June 30, Year Ended June 30, Through
1995 Dec. 31, 1995 Dec. 31,
(Unaudited) 1994 (Unaudited) 1994
<S> <C> <C> <C> <C>
In dollars
Shares sold $ 2,604,872 $ 10,180,856 $ 407,354 $ 272,417
Reinvestment of dividends 1,364,455 3,576,743 9,548 6,942
Shares redeemed (9,228,684) (11,601,337) (111,078) (46,253)
$ (5,259,357) $ 2,156,262 $ 305,824 $ 233,106
In shares
Shares sold 164,208 632,654 26,001 17,148
Reinvestment of dividends 86,069 224,912 603 445
Shares redeemed (581,710) (732,439) (7,053) (2,969)
(331,433) 125,127 19,551 14,624
</TABLE>
<F4> Note D-Investment Transactions
For the six months ended June 30, 1995, the Portfolio made purchases and
sales of municipal obligations, other than short-term securities of
$2,582,026 and $7,602,379 respectively.
<F5> Note E-Tax Basis of Investment Securities
At June 30, 1995, the Portfolio's cost of investment securities for federal
income tax purposes and gross unrealized appreciation and depreciation of
investments, were as follows:
Cost of investments securities $59,264,358
Appreciation 2,387,486
Depreciation (417,793)
Net unrealized appreciation $1,969,693
<TABLE>
<CAPTION>
Financial Highlights
Class A Shares
Six Months Class A Shares
Ended Year Ended Year Ended
June 30, 1995 Dec. 31, Dec. 31,
(Unaudited) 1994 1993
<S> <C> <C> <C>
Net asset value, beginning of period $15.34 $16.66 $15.83
Income from investment operations
Net investment income .43 .87 .86
Net realized and unrealized gain
on investments .71 (1.35) .82
Total from investment operations 1.14 (.48) 1.68
Distributions to shareholders
Dividends from net investment income (.42) (.84) (.85)
Distributions from net realized gains - - -
Total distributions (.42) (.84) (.85)
Total increase (decrease) in net asset value .72 (1.32) .83
Net asset value, end of period $16.06 $15.34 $16.66
Total return* 7.51% (2.88%) 10.84%
Ratio of expenses to average net assets .77%(a) .73% .72%
Ratio of net investment income to
average net assets 5.49%(a) 5.47% 5.25%
Increase reflected in above net
investment income ratios due
to expense reimbursement - - -
Portfolio turnover 4% 11% 5%
Net assets, end of period $61,881,272 $64,215,234 $67,634,001
Number of shares outstanding at
end of period (in thousands) 3,854 4,185 4,060
* Total return does not reflect deduction of Class A front-end sales charge.
(A) Annualized
Financial Highlights (continued)
Class C Shares Class C Shares
From Inception Six Months From Inception
April 1, 1991 Ended Mar. 1, 1994
Year Ended Through June 30, Through
Dec. 31, Dec. 31, 1995 Dec. 31,
1992 1991 (Unaudited) 1994
Net asset value, beginning of period $15.58 $15.00 $15.26 $16.40
Income from investment operations
Net investment income .84 .68 .35 .51
Net realized and unrealized gain
on investments .31 .58 .68 (1.06)
Total from
investment operations 1.15 1.26 1.03 (.55)
Distributions to shareholders
Dividends from net
investment income (.84) (.66) (.35) (.59)
Distributions from
net realized gains (.06) (.02) - -
Total distributions (.90) (.68) (.35) (.59)
Total increase (decrease)
in net asset value .25 .58 .68 (1.14)
Net asset value, end of period $15.83 $15.58 $15.94 $15.26
Total return<F1> 4.99% 11.43% <F2> 6.84% (2.94%)
Ratio of expenses to
average net assets .62% .28% <F2> 2.04%<F2> 2.41%<F2>
Ratio of net investment income
to average net assets 5.41% 5.97% <F2> 4.19%<F2> 3.87%<F2>
Increase reflected in above net
investment income ratios due
to expense reimbursement - .06%<F2> - 1.85%<F2>
Portfolio turnover 11% 8% 4% 11%
Net assets, end of period $53,179,319 $38,828,373 $544,824 $223,100
Number of shares outstanding at
end of period (in thousands) 3,359 2,492 34 15
* Total return does not reflect deduction of Class A front-end sales
charge.
(A) Annualized
</TABLE>
(Logo)
Investing with Vision (TM) Calvert Group (R)
A member of The Acacia Group (R)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
