September 30, 1998
Annual Report
CALVERT SOCIAL INVESTMENT FUND
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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
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.
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
New 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
TABLE OF CONTENTS
President's Letter 1
A Note from the Chairman 2
Portfolio Manager Remarks 4
Report of Independent Accountants 16
Portfolio of Investments 17
Statement of Assets and Liabilities 35
Statements of Operations 37
Statements of Changes in net Assets 40
Notes to Financial Statements 48
Financial Highlights 53
Dear Shareholders:
I'd like to take a minute to share with you our views on the current
investment environment and offer some information you can use to put recent
financial market events in perspective.
Today's investment climate reflects an unprecedented confluence of factors:
1. Global economic turmoil. The financial crisis touched off in Asia has
spread, by way of Russia, to emerging markets in Latin America, Africa and
elsewhere. Weakened economies abroad affect the profit outlook for U.S.
companies.
2. Low interest rates in the U.S. The shakeup of world economies and markets
caused investors to seek shelter in the safest securities, especially U.S.
Treasuries. Increased demand for fixed-income securities has pushed Treasury
yields to historic lows.
3. A high level of volatility. The Standard & Poor's 500 Stock Index posted 17
consecutive quarters of positive returns before surprising investors with
negative returns for the third quarter of 1998. Since the end of that quarter,
the S&P 500 has rallied back and, as of this writing, is in positive territory
again for the year.
No one can assure you there won't be further jolts. However, we believe the
underpinnings of the market are solid. Our forecast calls for slower growth in
the U.S., but not a recession, and continued low interest rates. We are also
encouraged by recent progress to implement solutions that should help to take
the pressure off world markets.
You should know that Calvert Group fund managers are working to capitalize on
opportunities, within appropriate levels of risk for each portfolio. This
challenging environment underscores the value of professional money
management, and we certainly appreciate your trust.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
October 20, 1998
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Dear Investor:
This past fiscal year has been one of financial tumult around the world--and
quite a lesson to the American people -- that an event in a developing country
such as Thailand can cascade around the world to affect the livelihood or
prosperity of our friends and neighbors.
The world is now so interconnected that we, as the self-appointed leaders of
the free world, as well as the head of our own households, do indeed have some
responsibility for what goes on in the rice paddies of Asia and elsewhere.
America has allowed a system to develop where much of our best talent goes
into financial engineering schemes for the benefit of the few instead of
considering the quality of life for the many.
We need fewer "top down" policies, such as those of the IMF, and more "trickle
up" lending. Even the World Bank president has publicly questioned IMF
policies and suggested more lending should be on meeting basic human needs.
We need more "trickle up" lending where the loans address small enterprises,
health and education. Without political and social stability, he has
observed, how can any country loans be assured of repayment to anyone?
U. S. financial assets have seen almost a $2 trillion loss this year due to
the crisis. We continue to believe that responsibly investing a small
fraction of that amount in support of the aspirations of those less fortunate
around the world can only increase our own economic sustainability.
Investment Performance
While the Managed Growth has been beating its benchmark, the equity portfolio
have lagged. As a result we have decided to change managers for the Equity
Portfolio and, after a thorough search, have chosen Atlanta Capital (see the
CSIF Equity letter). We regret the relatively poor performance of the Equity
Portfolio and are convinced that the poor returns were not due to the social
screens and that competitive performance can be achieved with the new manager.
Effective December 1, 1998, the CSIF Managed Growth Portfolio will change its
name to CSIF Balanced Portfolio to more accurately describe its investment
category and style.
Special Equities Highlights
The Fund continues to support new private companies and projects that are not
yet available on the stock markets. We added to our investment in Wild
Planet Toys, creator of some of the most popular and innovative science and
nature discovery toys on the market. We also made an investment in Pioneer
Human Services of Seattle, a model for the well managed and financially
self-sustaining social service enterprise that employs ex convicts. We
invested in Viridian Partners, a venture capital fund that shares our social
and financial goals by investing in women led and women owned businesses in
the life sciences industry. And our portfolio company Aviron, now public, has
been very successful in demonstrating a nasal flu vaccine for kids that now
looks to be even better than shots. The company is expected to have the
product on the shelves for the 1999-2000 flu season.
Stakeholder Actions
Calvert filed a shareholder resolution with Heinz, a portfolio company,
stating concerns we had about their environmental practices. Company
officials met with Calvert and gave us satisfactory responses. We continued
to press the company, however, to publish an environmental analysis of their
operations. We are pleased to report that the new President agreed to the
suggestion and, in March 1999, Heinz will be the first food company to publish
an environmental report.
We also filed a shareholder resolution with Home Depot requesting that the
company adhere to a higher level of accountability on the issue of workforce
diversity. The company fought the resolution but nevertheless the resolution
garnered 14% of the votes, which is quite positive for such an action.
Investors interested in the Calvert stakeholder issues may wish to visit the
Calvert web site to get more detailed information on our methods and efforts.
See www.CalvertGroup.com.
High Social Impact
A $300,000 investment was made though our High Social Impact Investments to
the Minnesota Community Development Corporation which operates a program to
support small business, low income housing and commercial development as a
part of integrated community economic development strategies. They have
pioneered a new model for a construction cooperative whereby artisans and
contractors can earn a much more reasonable wage. By reducing the need for a
general contractor they can lower costs to homeowners.
Calvert Management News
Barbara Krumsiek, Calvert's President, was selected by President Clinton to
participate in the first National Summit on Retirement Income Savings on June
4-5. In response to the urgent need to increase the nation's low savings rate
and promote long-term financial security into retirement, this conference was
created through legislation passed last year by the House and Senate.
Calvert Group was also recognized for the sixth year in a row by Working
Mother Magazine as one of the 100 Best Companies for working mothers.
Thank you again for your support in making these achievements possible.
Building a model of investment that serve today's needs as well as those of
future generations remains our mission.
Sincerely,
/s/
D. Wayne Silby
Chairman
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Money Market Portfolio Statistics
September 30, 1998
Investment Performance
6 Months 12 Months
ended ended
9/30/98 9/30/98
Money
Market Portfolio 2.47% 5.02%
Lipper Money
Market Funds Average 2.43% 4.93%
Maturity Schedule
Weighted Average
9/30/98 9/30/97
36 days 23 days
Portfolio Quality Structure
First Tier 100%
All securities in Calvert Group money market funds are eligible securities
under rule 2a-7 of the Investment Company Act of 1940. First Tier Securities
are eligible securities rated in the highest rating category for short-term
debt obligations by at least two of the Nationally Recognized Statistical
Rating Organizations. Second Tier Securities are eligible securities not in
the First Tier.
Beth Bunnell Hunter
of Calvert Asset Management Company
How did events in Asia and Russia affect the investment climate?
While the Portfolio has no direct ownership in any Russian or Asian
securities, the financial crises in these regions have had a notable impact on
the money market as a whole. In our report six months ago, we noted that
evidence of an economic slowdown might begin to emerge but we were unsure if
the slowdown would be sufficient to keep the Federal Reserve from raising
rates given their tightening bias. Since that time, it has become apparent
that the Asian contagion has spread and that not only Russia, but other
emerging markets (such as Latin America) have also entered a period of great
uncertainty. World confidence has been shaken and investors have flocked to
the safety of U.S. Treasury issues. With mounting evidence of a slowdown in
U.S. business activity, the Federal Reserve very rapidly shifted from a
tightening to neutral to easing bias and brought the federal funds rate down
25 basis points at their September meeting. We think it very likely that more
easing of rates is ahead in the months to come.
What was your strategy?
We continue to invest in a mix of variable rate demand notes, repurchase
agreements, commercial paper, certificates of deposit, government agency
issues and short-term corporate notes.
As the summer wound down, the effects of the Asian contagion on the U.S.
economy became more clear, and the Federal Reserve moved to an easing bias, we
increased our commercial paper purchases to lock in fixed rates before the
easing occurred. Simultaneously, we reduced our exposure to variable rate
demand notes, since the rates reset downward very quickly after an easing.
However, since the yields on variable rate demand notes are still quite high
relative to other types of money market securities, we continue to hold a high
percentage of these issues in the Portfolio.
Total return assumes reinvestment of dividends. Past performance is no
guarantee of future results.
As we more actively purchased commercial paper, we extended our average days
to maturity. At the close of the quarter, our average days to maturity was 36
days versus 23 days in our annual report.
How has the Portfolio performed?
During the one year period ending September 30, 1998, the Portfolio's return
was 5.02% versus the Lipper Money Market Funds average of 4.93%.
What's your near-term outlook for the strength of the economy and direction of
short-term interest rates?
In the near future, it is likely that we will continue to see economic data
reports which indicate that U.S. growth has slowed considerably from its
earlier pace. In response to this and to mounting concerns over the global
liquidity crisis, the Federal Reserve will likely continue to lower borrowing
rates. If the flight to quality in U.S. Treasury issues continues, prices for
these issues will remain high and will exert more downward pressure on money
market fund yields.
While the prospect of a further decline in yields is not welcome news,
investors should bear in mind that money market returns over inflation remain
quite attractive, especially in light of the current historic low yields
available on longer-term Treasury bonds.
October 14, 1998
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Money Market Portfolio Statistics
September 30, 1998
Average Annual Total Returns
as of 9/30/98
One year 5.02%
Five year 4.61%
Ten year 5.22%
Since inception 6.20%
(10/21/82)
Managed Growth Portfolio Statistics
September 30, 1998
Investment Performance
6 Months 12 Months
ended ended
9/30/98 9/30/98
Class A (4.51%) 5.50%
Class B (5.10%) N/A
Class C (5.00%) 4.35%
Lehman Aggregate
Bond Index TR 6.66% 11.51%
S&P 500 Index
Mthly. Reinvested (6.93%) 9.08%
Lipper Balanced
Funds Average (5.37%) 3.26%
Ten Largest Long-Term Holdings
% of Net Assets
Onbank Capital Trust I,
9.25%, 2/1/27 2.13%
Cardinal Health, Inc. 2.05%
Johnson & Johnson 1.75%
Merck & Co. 1.73%
Conseco, Inc.,
6.80%, 6/15/05 1.49%
BMC Software, Inc. 1.44%
Microsoft Corp. 1.43%
Umbono Investment 1.40%
International Business Machines
Corp. 1.28%
Greenpoint Capital Trust,
9.10%, 6/1/27 1.26%
Total 15.96
Investment performance does not reflect the deduction of any front-end or
deferred sales charge. TR represents total return.
Source: Lipper Analytical Services, Inc.
New subadvisors assumed management of the equity portion of the Portfolio
effective July 1995.
CAMCO
Vice President
of Equities, John Nichols
What were the key factors in stock and bond market performance?
The financial crises in Asia, Russia and Latin America created exceptional
volatility in the financial markets and touched off a flight to quality.
Investors moved en masse to the relative safety and liquidity of U.S.
Treasury securities and the biggest and best known names in the stock market.
How did the Portfolio's asset allocation affect returns?
We manage the Portfolio to maintain consistent exposure to stocks and bonds.
Stocks represent roughly 60% of assets; bonds account for roughly 40%.
The Portfolio's fixed-income assets contributed positive results, as a decline
in interest rates pushed bond prices higher. Our equity investments also
posted a gain for the 12-month period, despite a third quarter shakeout that
erased a good bit of the year's advance. We continue to utilize a team
approach to equity management, with part of the Portfolio overseen by Brown
Capital Management and part directed by NCM Capital.
What strategy was utilized by the fixed-income manger?
Calvert Asset Management Company, CAMCO, continued with its strategy of making
frequent relative value trades within the corporate bond arena. Relative value
trades are attempts to capitalize on undervalued sectors or securities. When
supply and demand conditions would not support this approach, CAMCO focused on
the highest quality issues. This Portfolio does not allow investment in
Treasury securities, the standout performer in the fixed-income universe this
year. However, the manager's emphasis on other high-quality securities was
positive for performance, as prices for these issues appreciated more fully
than those of lower quality issues.
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And on the equity side?
In light of the financial turmoil abroad, NCM Capital positioned their portion
of the Portfolio defensively. Towards the latter half of 1997, they began to
reduce exposure to economic sectors that had the highest sensitivity to
slowing world economies. These included industries dependent on commodities
priced in the world markets, including steel, aluminum and other basic
materials. The capital goods sector was also pared back, as NCM expected
capital expenditures for industrialized goods would also slow. They added to
positions in the healthcare, communication services and consumer staples
sectors. Performance for these stocks is less tied to economic trends. This
reallocation of assets among sectors was positive for performance.
NCM's gains were diluted a bit by exposure to companies in the financial
services and energy sectors. The financial stocks will be retained as it
appears the worst for these companies is behind us and the outlook for the
industry is positive. The energy stocks were sold.
Brown Capital Management held to their bottom-up, fundamental approach to
finding the most promising opportunities that are also selling at reasonable
prices. They realized good gains from their technology holdings and
large-company stocks. Large-company stocks led small-company stocks especially
in the first half of the Portfolio's fiscal year.
In light of the increased market volatility, Brown Capital also reevaluated
all of their stock picks to make sure managers have the same level of
confidence in them now as they did when the positions were added.
What's your outlook for the financial markets in the months ahead?
Investors should expect a continuation of above-average volatility. While
there has been some progress towards finding solutions for the troubled Asian,
Russian and Latin American economies, resolutions are far from assured.
Managed Growth shareholders have the benefit of broad diversification across
different asset categories. This helps to cushion against setbacks in any one
security type or market sector.
October 14, 1998
Managed Growth Portfolio Statistics
September 30, 1998
Average Annual Total Returns
Class A Shares
as of 9/30/98
One year 0.46%
Five year 8.99%
Ten year 9.63%
Since inception 11.15%
(10/21/82)
Class B Shares
as of 9/30/98
Since inception (9.85%)
(4/1/98)
Class C Shares
as of 9/30/98
One year 3.35%
Since inception 9.70%
(3/01/94)
Performance Comparison
Comparison of change in value of $10,000 investment. (Source: Lipper
Analytical Services, Inc.)
Line graph here from 10/1/89-9/98:
CSIF Managed Growth Portfolio (Class A) - $25,079
Lehman aggregate Bond Index TR - $24,341
S&P 500 Monthly Reinvest - $49,182
Lipper Balanced Funds Index - $31,928
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charge. No sales charge has
been applied to the index used for comparison. Past performance is no
guarantee of future results. The value of an investment in Class A shares is
plotted in the line graph. The value of an investment in another class of
shares would be different.
Managed Growth Portfolio Statistics
September 30, 1998
Asset Allocation
Stocks 57%
Bonds 40%
Cash & Cash Equivalents 3%
100%
The Five Economic Sectors
(Equity Holdings)
Technology 22.74%
Financial Services 19.01%
Health Care 18.01%
Business Equip. and Services 9.68%
Consumer Durables 8.61%
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Bond
Portfolio Statistics
September 30, 1998
Investment Performance
6 Months 12 Months
ended ended
9/30/98 9/30/98
Class A 4.03% 8.46%
Class B 3.36% N/A
Class C N/A N/A
Lehman Aggregate
Bond Index TR 6.66% 11.51%
Lipper Corporate
Debt Funds
A Rated Average 6.00% 10.40%
Maturity Schedule
Weighted Average
9/30/98 9/30/97
13 years 14 years
SEC Yields
30 days ended
9/30/98 9/30/97
Class A Shares 5.56% 4.75%
Class B Shares 4.33% N/A
Class C Shares 4.36% N/A
Portfolio Quality Structure
AAA 26%
AA 7%
A 31%
BBB 26%
BB 4%
B -
NR 4%
Cash & Cash Equivalents 2%
100%
Investment performance does not reflect the deduction of any front-end or
deferred sales charge. TR represents total return.
Source: Lipper Analytical Services, Inc.
Greg Habeeb
of Calvert Asset Management Company
Describe the investment climate over the past year.
The financial crises in Asia, Russia and Latin America caused investors
worldwide to seek the safety and liquidity of U.S. Treasury securities. This
massive flight to quality created widespread financial market turmoil.
Relative to Treasuries, all other fixed-income securities lost significant
value. Also heavily affected were U.S. capital markets, including the
investment-grade and junk bond markets. Liquidity dried up and new issuance
ground to a halt, causing spreads over risk-free Treasuries to widen to levels
not seen since past recessions.
Interest rates generally declined, as the Federal Reserve changed its
objective from tightening rates on concern for inflation to easing rates in
light of the dampening effect of weakened economies and markets abroad on the
U.S. economy.
What was your approach?
For the first six months of 1998 our strategy was the same as always: to hold
a diverse portfolio of corporate bonds and other debt securities and to
improve our returns compared to the competition's by making frequent relative
value trades. This was a very challenging approach, given that the high demand
for Treasury securities caused many corporations to postpone new issuance.
These already unfavorable supply and demand conditions were made worse by
continued weakness in world economies. In July, we shifted to a policy of
investing new money only in bonds rated AAA or better. Higher quality
securities outperformed their lower rated counterparts.
How did the Portfolio perform?
The decline in yields and resulting rise in prices allowed the Portfolio to
generate robust and positive returns for the six- and 12-month periods.
We lagged our competitors in the corporate bond arena (represented by the
Lipper Average) and a wider universe of Treasury, corporate and other types of
bond funds (represented by the Lehman Aggregate Index). This was due to our
lack of representation in Treasury securities. Many of our peers, even those
investing primarily in corporate-issued debt, invest a portion of assets in
Treasuries. This Portfolio is managed in accordance with strict social and
environmental screening criteria which disallow investment in Treasuries. In
this market environment Treasuries were the clear winners; thus our results
did not keep pace.
What should investors expect in the coming months?
We expect interest rates will remain low and may trend lower still. Price
appreciation will likely continue to be the primary component of your return.
Right now, the financial markets are struggling with a world economy that has
deteriorated dramatically from one year ago, extreme volatility and
exceptionally risk-averse investors. In order for us to return to our strategy
of relative value trading, some stability will need to return to the financial
markets. Relief is likely to come only when there are fundamental positive
developments for the troubled economies of Asia, Russia and Latin America.
October 20, 1998
Bond
Portfolio Statistics
September 30, 1998
Average Annual Total Returns
Class A Shares
as of 9/30/98
One year 4.38%
Five year 4.84%
Ten year 8.07%
Since inception 8.26%
(8/24/87)
Class B Shares
as of 9/30/98
Since inception (.64%)
(4/1/98)
Class C Shares
as of 9/30/98
Since inception .42%
(6/1/98)
Performance Comparison
Comparison of change in value of $10,000 investment. (Source: Lipper
Analytical Services, Inc.)
Line graph here from 10/1/89-9/98
CSIF Bond Portfolio- $21,722
Lehman aggregate Bond Index TR - $24,341
Lipper Corp. Debt Funds A Rated Index - $23,643
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charge. No sales charge has
been applied to the index used for comparison. Past performance is no
guarantee of future results. The value of an investment in Class A shares is
plotted in the line graph. The value of an investment in another class of
shares would be different.
Equity
Portfolio Statistics
September 30, 1998
Investment Performance
6 Months 12 Months
ended ended
9/30/98 9/30/98
Class A (21.84%) (15.70%)
Class B (22.11%) N/A
Class C (22.12%) (16.47%)
S&P 500 Index
Mthly. Reinvested (6.93%) 9.08%
Lipper Growth
Funds Average (11.80%) (1.44%)
Ten Largest Stock Holdings
% of Net Assets
Schering Plough Corp. 3.80%
Merck & Co., Inc. 3.71%
Sun Microsystems, Inc. 3.65%
Black & Decker Corp. 3.58%
Ameritech Corp. 3.54%
Masco Corp. 3.37%
BankAmerica Corp. 3.13%
Cisco Systems. Inc. 2.95%
Federated Dept. Stores, Inc. 2.67%
Office Depot, Inc. 2.63%
Total 33.03%
Investment performance does not reflect the deduction of any front-end or
deferred sales charge. TR represents total return.
Source: Lipper Analytical Services, Inc.
New subadvisor assumed management of the Portfolio effective September 1998
CAMCO Vice President
of Equities, John Nichols
How have events in Asia and Russia affected the U.S. stock market?
The financial crises in Asia and Russia have produced a very high level of
volatility in the equity markets. After a few years of very high returns with
low volatility, domestic equity markets are experiencing the converse. These
events have certainly had an impact on the performance of stocks held in the
Equity Portfolio.
One of the precipitating events, global deflation in commodity prices, has
caused stocks in raw materials, energy and basic industries to underperform
the market. The expected slowing of developing economies combined with the
strength of the U.S. dollar has had a negative impact on exporters, especially
companies in the technology and consumer goods areas. The effects of
slackening global demand and lessening pricing power have compounded to change
the prospects for many of the fastest growing companies in the U.S..
What was the Portfolio manager's strategy during the past year?
Loomis, Sayles & Company was at the helm for the 12-month period covered by
this report. This manager used a relative value approach in an attempt to
identify stocks selling at unusually low valuations relative to the market and
relative to the stock's historical valuations. While a time-tested and sound
approach, this strategy did not generate above-market returns. During the past
year, stocks trading at historically high valuations tended to rise even
higher, while more attractively priced stocks fell further.
How did the Portfolio perform relative to its benchmark?
We were disappointed with the Portfolio's performance. Our 12-month total
return of (15.70%) was significantly behind the 9.08% return for the Standard
& Poor's 500 Stock Index and the (1.44%) return for the Lipper Growth Funds
Index. Weaker returns were due in part to the size of the companies the
manager selected and the character of the markets over the past year. In
addition to the tendency for expensive stocks to get more expensive and cheap
stocks to get cheaper, investors generally favored the largest stocks in terms
of market capitalization over the smaller stocks. (Market capitalization
equals share price times number of shares outstanding.) The Portfolio is not
as fully invested in the largest companies as the S&P 500 is.
Will the Fund utilize the same strategy going forward?
No. The Portfolio will continue to seek stocks that are reasonably priced,
poised for growth and mainly in the large-capitalization universe, but we
believe investors will benefit from the talents of a new money manager. On
September 22, we asked shareholders to approve our appointment of Atlanta
Capital as the replacement for Loomis, Sayles. Atlanta Capital was founded in
1969, is headquartered in Atlanta, Georgia and oversees approximately $3.8
billion in assets.
We selected Atlanta Capital after conducting a far-reaching and detailed
review of equity management teams. Our evaluation included an assessment of 1)
the firm's level of management experience across different market cycles 2)
the firm's performance track record and 3) whether the firm's style is
naturally compatible with the Portfolio's investment philosophy, including its
social and environmental standards.
Equity
Portfolio Statistics
September 30, 1998
Average Annual Total Returns
Class A Shares
as of 9/30/98
One year (19.78%)
Five year 5.72%
Ten year 7.73%
Since inception 6.72%
(8/24/87)
Class B Shares
as of 9/30/98
Since inception (26.11%)
(4/1/98)
Class C Shares
as of 9/30/98
One year (17.30%)
Since inception 4.97%
(3/01/94)
Performance Comparison
Comparison of change in value of $10,000 investment. (Source: Lipper
Analytical Services, Inc.)
Line graph here from 10/1/89-9/98:
CSIF Equity Portfolio - $21,060
S&P 500 Monthly Reinvest - $49,182
Lipper Growth Funds Index - $40,488
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charge. No sales charge has
been applied to the index used for comparison. Past performance is no
guarantee of future results. The value of an investment in Class A shares is
plotted in the line graph. The value of an investment in another class of
shares would be different.
Could you describe this new strategy?
Atlanta Capital uses a bottom-up approach to identifying high-quality stocks
that fit into their overall view of which industries and sectors will drive
the economy's future growth. They look for companies with strong and steady
profit margins and healthy balance sheets that are trading at reasonable
valuations. In keeping with the manager's strict sell criteria, positions will
be reduced or eliminated when financial quality or profitability deteriorates
or when Atlanta's investment themes change.
What changes has Atlanta Capital made thus far?
Assets were transferred on September 21, very near the close of this reporting
period. In our next report, we'll be able to provide an update from the new
manager describing the changes they've made and their success in turning
around the Portfolio's performance.
October 14, 1998
<PAGE>
Equity
Portfolio Statistics
September 30, 1998
Asset Allocation
Stocks 97%
Bonds 1%
Cash & Cash Equivalents 2%
100%
Top Five Economic Sectors
% of Equity Holdings
Technology 18.38%
Health Care 13.64%
Financial Services 12.30%
Capital Goods 11.60%
Retail 10.45%
<PAGE>
Managed Index
Portfolio Statistics
September 30, 1998
Ten Largest Stock Holdings
% of Net Assets
US West, Inc. 3.91%
Bellsouth Corp. 3.46%
Merck & Co., Inc. 2.88%
Microsoft Corp. 2.82%
Johnson & Johnson 2.76%
Amgen, Inc. 2.63%
First Union Corp. 2.63%
Federal Nat'l Mortgage Assn. 2.58%
NationsBank Corp. 2.41%
American Int'l Group, Inc. 2.16%
Total 28.24%
Average Annual Total Returns
Class A Shares
as of 9/30/98
Since inception (14.10%)
(4/15/98)
Class B Shares
as of 9/30/98
Since inception (14.63%)
(4/15/98)
Class C Shares
as of 9/30/98
Since inception (7.82%)
(6/1/98)
Class I Shares
as of 9/30/98
Since inception (9.73%)
(4/15/98)
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charges.
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charge.
Ted Gekas of State Street Global Advisors
As this is the first report to shareholders, it would be helpful if you set
forth the Portfolio's investment objective and strategy.
The Managed Index Portfolio began operations on April 15, 1998. Welcome to all
investors.
Our objective is to generate returns that move in line with but, over time,
exceed those of the Russell 1000 Index. The Russell 1000 is a broadly
diversified set of the larger companies trading on U.S. exchanges. We use the
universe of Russell 1000 stocks as a starting point, filter out those
companies that don't meet the Portfolio's standards for social and
environmental responsibility, then build a portfolio whose composition is
similar to the Russell 1000's. As a final step, we analyze the relative value
and momentum qualities of potential investments and select those we believe
offer strongest potential for superior performance. This is an active, rather
than passive, approach to index fund management.
How closely should shareholders expect the Portfolio's return to track the
Index's?
The Portfolio's annualized returns are likely to be within 2.5% of the Russell
1000's.
We expect to achieve this close correlation through the use of a mathematical
modeling process. Modeling is a way of keeping the Portfolio's overall
characteristics (market capitalization, price/earnings ratio, etc.) aligned
with the Index's. It should allow our performance to keep pace with the
Index's without requiring us to maintain identical stock positions.
How has the Portfolio performed?
We were pleased with Managed Index Portfolio's ability to track the Index. For
the five months ending September 30, 1998, we lagged the Index by just one
basis point. (A basis point is one hundredth of a percent.)
Tracking is especially difficult during the start-up phase, as we have to
absorb the transaction costs of establishing positions in many stocks. The
Russell 1000 is a hypothetical portfolio and unlike Managed Index Portfolio
pays no transaction costs or operating expenses. Increased stock market
volatility was also a challenge.
What were the leading market events?
Performance for the period from the Portfolio's inception through September
was primarily driven by the decline in the U.S. equity market. Stocks appeared
to be weathering the storm of the Asian financial crisis fairly well in the
second quarter, but the economic effects of the global slowdown took their
toll in the third quarter and prices plummeted.
During the second quarter, the largest companies continued to lead the U.S.
stock market's advance. The S&P 500 Stock Index added a 3.3% gain to its
phenomenal first quarter return of 14.0%. The Russell 1000 returned 2.5%.
Small-cap stocks didn't fair as well. The Russell 2000 Index, which has
greater exposure to smaller companies, returned (4.7%). With many economies
virtually collapsing around the Pacific Rim, U.S. corporate profits slowing
and signs of decelerating economic growth around the world, the resilience of
the U.S. stock market surprised most investors.
U.S. market returns in the third quarter seemed to reflect the worsening
effects of the global economic slowdown on the U.S. economy. The S&P 500
returned (9.9%) in the three months ending September 30, the Russell 1000
returned (10.3%) and small-cap stocks continued their slide of the previous
quarter with a third quarter return of (20.2%).
Which sectors had the greatest impact on the Portfolio's return?
From an industry perspective, the greatest contributors to the Portfolio's
return were stocks in the pharmaceuticals industry, closely followed by
positions in the telephone industry. The greatest inhibitor to performance
was the Portfolio's exposure to the banking industry.
October 14, 1998
Managed Index
Portfolio Statistics
September 30, 1998
Asset Allocation
Stocks 97%
Cash & Cash Equivalents 3%
Total 100%
Top Five Economic Sectors
% of Equity Holdings
Financial Services 24.36%
Technology 17.36%
Health Care 16.44%
Utilities 15.00%
Consumer Non-durables 6.17%
<PAGE>
Report of Independent Accountants
To the Board of Trustees and Shareholders of Calvert Social Investment Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations, statements of changes in net assets and financial highlights
present fairly, in all material respects, the financial position of Calvert
Social Investment Fund (comprised of the Money Market, Managed Growth, Bond,
Equity, and Managed Index Portfolios, hereafter referred to as the "Fund"), at
September 30, 1998, and the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended and the financial highlights for each of the periods indicated therein,
in conformity with generally accepted accounting principles. Theses 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 misstatment. 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 September 30, 1998 by correspondence with
custodians provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 6, 1998
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
U.S. GOVERNMENT AGENCIES PRINCIPAL
AND INSTRUMENTALITIES (15.9%) AMOUNT VALUE
Federal Home Loan Bank, 5.71%, 10/1/98 $1,600,000 $1,600,000
Federal Home Loan Mortgage
Notes, 5.447%, 10/15/98 5,000,000 4,989,409
Federal Home Loan Mortgage
Notes, 5.432%, 11/10/98 3,000,000 2,981,893
Federal Home Loan Mortgage
Notes, 5.075%, 3/19/99 5,000,000 4,880,878
Federal National Mortgage
Assn., 5.435%, 10/29/98 5,000,000 4,978,864
Student Loan Marketing
Assn., 5.72%, 11/20/98 3,000,000 2,999,761
Student Loan Marketing
Assn., 4.993%, 2/18/99 5,000,000 5,000,000
Total U.S. Government
Agencies and Instrumentalities
(Cost $27,430,805) 27,430,805
CERTIFICATES OF DEPOSIT (3.6%)
Bank of Cherokee County,
4.85%, 4/22/99 (^) 100,000 100,000
Broadway Federal Savings
& Loan, 5.20%, 8/20/99 (^) 100,000 100,000
Community Bank of the
Bay, 5.45%, 10/7/98 (^) 100,000 100,000
Community Capital Bank,
4.95%, 1/20/99 (^) 100,000 100,000
Elk Horn Bank & Trust,
5.43%, 12/18/98 (^) 100,000 100,000
Family Savings Bank,
5.40%, 8/20/99 (^) 100,000 100,000
First Community Bank, 5.40%, 4/22/99 (^) 100,000 100,000
Founders National Bank, 5.00%, 8/30/99 (^) 100,000 100,000
Seaway National Bank Chicago,
IL, 5.20%, 1/27/99 (^) 100,000 100,000
Self Help Credit Union,
5.45%, 7/16/99 (^) 100,000 100,000
Shore Bank &Trust, 5.35%, 12/18/98 (^) 100,000 100,000
Societe Generale, 5.70%, 3/23/99 5,000,000 4,998,865
South Shore Bank of
Chicago, 5.60%, 10/30/98 (^) 100,000 100,000
Total Certificates of
Deposit (Cost $6,198,865) 6,198,865
COMMERCIAL PAPER (11.6%)
Ing America Insurance VRDN,
5.50%, 10/26/98, GA:
International Neder Verz 5,000,000 4,980,903
National Australia Funding, 5.20,2/25/99, GA:
National Australia Bank 5,000,000 4,893,833
Northwestern University, 5.51%, 11/1/98 3,000,000 2,981,633
Northwestern University, 5.50%, 12/1/98 5,000,000 4,953,403
Princeton Univeristy, 5.54%, 10/5/98 2,200,000 2,198,646
Total Commercial Paper (Cost $20,008,418) 20,008,418
CORPORATE TAXABLE NOTE (2.9%)
First National Bank of Chicago,
IL, 5.52%, 2/16/99 5,000,000 4,997,088
Total Corporate Taxable Note (Cost $4,997,088) 4,997,088
<PAGE>
TAXABLE VARIABLE RATE PRINCIPAL
DEMAND NOTES (64.3%) AMOUNT VALUE
ABAG Financing Authority for Nonprofit Corporations
CA Certificates of
Participation VRDN, 5.80%, 10/1/27,
LOC: Banque National de Paris $3,280,000 $3,280,000
Aspen Institute Inc. VRDN, 5.69375%,
12/1/04, LOC:
First National Bank of Maryland 1,260,000 1,260,000
Barton Healthcare LLC VRDN, 5.50%,
2/15/25, LOC:
American National Bank & Trust 7,100,000 7,100,000
Berks County PA Industrial
Development Authority Revenue
VRDN, 5.45%, 6/1/15, LOC: Corestates 2,135,000 2,135,000
Betters Group LP VRDN, 5.65%, 2/1/12, LOC:
Century National Bank & Trust,
Confirming LOC: Mellon Bank 2,190,000 2,190,000
California Statewide Community
Development Revenue VRDN,
6.25%, 7/1/27, LOC: Sanwa Bank 345,000 345,000
Clinic Building Inc., 5.79%, 12/1/18,
LOC: Rabobank Nederland 4,000,000 3,999,609
Colorado Health Facilities Authority
VRDN, 5.85, 11/1/26,
LOC: Kredietbank 5,000,000 4,998,789
Colorado Health Facilities Authority
VRDN, 5.75, 2/1/25,
LOC: Kredietbank 3,000,000 3,000,000
Episcopal Health Services, Inc.
VRDN, 5.65%, 3/1/28,
LOC: Banque Paribas 4,750,000 4,750,000
Gardena Certificates of Participation
VRDN, 6.40%, 7/1/25,
LOC: Sumitomo Trust & Banking,
Confirming
LOC: Dai-Ichi Kangyo Bank 8,310,000 8,310,000
Health Midwest Ventures Group,
5.50%, 8/1/19, LOC:
Bank of America-IL 8,100,0008, 100,000
IPC Industries, Inc. VRDN,
5.65%, 10/1/11, LOC:
National Bank of Canada 4,065,000 4,065,000
La Mirada CA Industrial
Development Authority VRDN, 5.50%,
12/1/26, LOC: First National
Bank of Chicago 3,000,000 3,000,000
Lexington Financial Services LLC
VRDN, 5.50%, 3/1/27,
LOC: LaSalle Bank 200,000 200,000
Memphis Center Finance Corp.
Multi-family Housing Revenue
VRDN, 5.97%, 11/1/30, LOC:
National Bank of Commerce TN 255,000 255,000
Mississippi Business Financial
Corporation Industrial Development
Revenue VRDN, 5.85%, 5/1/12,
LOC: Mercantile Bank 3,000,000 3,000,000
Montgomery County KY
Industrial Building Revenue VRDN,
5.65%, 8/1/06, LOC: Fleet Bank 1,826,000 1,826,000
Montgomery County PA
Industrial Development Authority Revenue
VRDN, 5.45%, 3/1/10, LOC: Corestates 300,000 300,000
Mt Vernon Industrial Economic
Development 6.00%, 7/1/07, LOC:
Citizens National Bank of Evansville,
Confirming LOC: Suntrust Bank 125,000 125,000
New Hampshire State Business
Financial Authority Revenue VRDN,
5.75%, 6/1/28, LOC: Fleet Bank 2,000,000 2,000,000
Physicians Plus Medical Group VRDN,
5.70%, 8/1/16,
LOC: LaSalle Bank 8,400,000 8,400,000
Pleasant Hill CA Redevelopment
Agency VRDN, 5.70%,
8/1/26, LOC: Heller Financial,
Confirming LOC:
Commerze Bank, AG 50,000 50,000
San Jose Financing Authority Revenue
VRDN, 5.45%,
12/1/25, INSUR: AMBAC, BPA:
Bank of Nova Scotia 7,900,000 7,900,000
<PAGE>
TAXABLE VARIABLE RATE PRINCIPAL
DEMAND NOTES (Cont'd) AMOUNT VALUE
Sault Sainte Marie Tribe Building
Authority Revenue VRDN,
6.15%, 6/1/03, LOC:
First America Bank of Michigan $5,505,000 $5,505,000
South Central Communications Corp.,
5.95%, 9/1/13,
LOC: Citizens National
Bank of Evansville, Confirming
LOC: Suntrust Bank 4,000,000 4,000,000
St Josephs County
Multi-family Housing VRDN,
Pin Oak Apartments, 5.55%, 6/1/27, LOC:
Federal Home Loan Bank 905,000 905,000
St Josephs County Multi-family Housing
VRDN,
West Manor Apartments, 5.55%, 6/1/27, LOC:
Federal Home Loan Bank 695,000 695,000
St. Paul MN Port Authority
Industrial Revenue VRDN, 5.95%,
6/1/11, LOC: US Bank N.A. 795,000 795,000
Texas St., Texas Veterans Land,
5.67%, 12/1/27, TOA: Citibank 8,000,000 8,000,000
Virginia St. Housing
Development Authority VRDN, 5.50%,
1/10/47 8,000,000 8,000,000
W.L. Petrey Wholesaling, Inc.
VRDN, 5.65%, 3/1/08,
LOC: Southtrust Bank of Alabama 2,670,000 2,670,000
Total Taxable Variable Rate
Demand Notes (Cost $111,159,398) . 111,159,398
REPURCHASE AGREEMENTS (0.6%)
State Street Bank, 5.35%, dated 9/30/98,
due 10/1/98
(Collateral: $1,034,354 Federal
Home Loan Bank, 5.61%, 1/23/03) 1,000,000 1,000,000
Total Repurchase Agreements (Cost $1,000,000) 1,000,000
TOTAL INVESTMENTS (Cost $170,794,574) - 98.9% 170,794,574
Other assets and liabilities, net - 1.1% 1,905,950
Net Assets - 100% $172,700,524
<PAGE>
MANAGED GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
PRINCIPAL
CERTIFICATES OF DEPOSIT (0.1%) AMOUNT VALUE
Blackfeet National Bank, 5.75%, 11/13/98 (^) $92,000 $91,565
D. Edward Wells Federal Credit Union,
5.00%, 11/20/98 (^) 50,000 49,389
First American Credit Union, 5.75%, 12/23/98 (^) 92,000 90,695
Mission Area Federal Credit Union, 4.95%,
11/18/98 (^) 50,000 49,796
New Alternative Federal, 5.25%, 11/18/98 (^) 50,000 49,353
Northeast Community Federal Credit
Union, 5.00%, 11/18/98 (^) 50,000 49,815
South Shore Bank of Chicago:
5.55%, 12/6/98 (^) 100,000 98,625
5.30%, 2/9/99 350,000
348,475
Total Certificates of Deposit (Cost $834,000) 827,713
CONVERTIBLE DEBENTURE BONDS (0.0%)
WorldWater, Inc., 9.00%, 9/28/97 (*)(b) 150,000 45,000
Total Convertible Debenture Bonds (Cost $150,000) 45,000
COMMUNITY LOAN NOTES (*)(0.7%)
Accion International Corp., 4.00%, 1/13/00 250,000 246,085
Accion US Bridge Fund, 4.00%, 1/12/01 100,000 98,434
Boston Community Loan Fund, 4.50%, 1/12/01 500,000 492,800
Coastal Enterprises, Inc., 4.00%, 7/15/01 200,000 191,424
Community Reinvestment Fund, 4.00%, 4/5/00 100,000 97,187
Co-op Fund of New England, Inc., 4.00%, 1/13/00 105,000 103,356
Eastside Community Investment, 4.00%, 4/5/00 (b) 100,000 50,000
Ecumenical Development Corp., 5.00%, 12/31/01 100,000 98,685
Environmental Enterprises Assistance
Fund, 4.50%, 6/28/99 125,000 120,430
First State Community Loan Fund, 4.00%, 1/15/99 25,000 24,579
Foundation for International Community Asst.,
3.50%, 4/30/01 50,000 48,265
Housing Assistance Council, 4.50%, 6/30/02 75,000 72,293
Institute for Community Development,
4.00%, 10/1/01 250,000 237,730
Institute for Community Economics,
4.00%, 1/13/00 150,000 147,651
Interfaith Housing Delaware, 4.50%, 12/31/98 50,000 40,000
Low Income Housing Fund:
4.00%, 1/13/99 50,000 49,173
3.50%, 9/30/99 100,000 94,464
Manna, Inc., 4.50%, 9/30/02 250,000 238,832
Michigan Housing Trust, 4.50%, 6/28/99 100,000 96,344
Micro Industry Credit Rural Corp.,
4.50%, 1/13/01 100,000 98,560
Minnesota Non Profit Assistance
Fund, 4.00%, 4/7/00 200,000 194,374
National Fed of Community
Development Credit Union,
4.00%, 4/7/01 400,000 388,748
New Hampshire Community Loan
Fund, 4.00%, 7/15/01 400,000 384,224
Nonprofit Facilities Fund, 4.50%, 6/30/99 100,000 96,321
North Country Co-op Development
Fund, 4.50%, 1/12/01 100,000 98,560
Northeast South Dakota Energy
Conservation Corp., 4.50%, 1/13/03 25,000 24,640
Opportunity International, 3.50%, 9/30/99 100,000 94,464
<PAGE>
PRINCIPAL
Community Loans (Cont'd) AMOUNT VALUE
Saint Ambrose Housing Center,
4.50%, 3/31/99 $25,000 $24,357
Vermont Community Loan Fund,
4.50%, 4/30/01 200,000 194,120
Washington Area Community
Investment Fund, 4.50%, 12/31/01 317,000 312,435
Western Massachusetts Enterprise
Fund, 4.50%, 9/30/03 50,000 47,767
Women's Self-Employment Loan
Fund, 4.50%, 12/30/98 50,000 49,334
Total Community Loan Notes (Cost $4,747,000) 4,555,636
CORPORATE BONDS (35.6%)
Advanta Corp., 7.05%, 7/30/99 3,000,000 2,949,780
AGL Capital Trust, 8.17%, 6/1/37 4,000,000 4,266,800
All Media Solutions, 9.00%, 7/31/99 (*)(#) 50,000 33,000
Allmerica Financial Corp., 7.625%, 10/15/25 7,450,000 8,240,519
Atlantic Mutual Insurance Co., 8.15%, 2/15/28 5,500,000 5,842,870
BCI US Funding Trust I, 8.01%, 12/29/49 2,000,000 1,990,260
BNP US Funding LLC, 7.738%, 12/31/49 5,500,000 5,117,095
Bank One Corp., 7.25%, 8/1/02 1,000,000 1,073,080
Bell Atlantic Financial Services, Inc.,
6.53%, 2/22/00 2,000,000 2,043,720
Bellsouth Telecommunications, 6.00%,
6/15/02 3,000,000 3,133,830
Block Financial Corp., 6.75%, 11/1/04 1,500,000 1,610,265
Chase Credit Card Master Trust, 6.194%, 8/15/05 3,500,000 3,661,385
Cigna Corp., 6.375%, 1/15/06 5,000,000 5,133,050
Clean Air Cab, 6.00%, 12/31/98 (*)(b) 250,000 0
Community Reinvestment Fund, 6.35%, 6/1/15(*) 90,879 93,513
Computer Associates International, Inc.:
6.25%, 4/15/03 3,000,000
3,044,220
6.375%, 4/15/05 2,000,000 2,045,500
Conseco Medium Term Notes, 6.40%, 6/15/11 4,000,000 4,043,880
Conseco, Inc., 6.80%, 6/15/05 10,000,000 10,262,500
Credit Suisse First Boston, 7.90%, 4/29/49 5,000,000 5,249,895
Crescent Real Estate Equities, 6.625%, 9/15/02 5,000,000 4,955,250
Dayton Hudson Corp., 5.95%, 6/15/00 2,000,000 2,021,700
Dime Bancorp, Inc., 6.12%, 3/10/99 3,000,000 3,003,030
Dime Capital Trust I, 9.33%, 5/6/27 1,000,000 1,134,250
First Interstate Bancorp, 9.90%, 11/15/01 1,000,000 1,139,640
Fuji Bank, Ltd., 9.87%, 12/31/49 10,750,000 4,935,077
Goldman Sachs Group LP:
7.875%, 1/15/03 6,000,000 6,425,028
6.625%, 12/1/04 1,000,000 1,048,800
Greenpoint Capital Trust, 9.10%, 6/1/27 7,860,000 8,668,165
Greentree Financial Corp., 6.50%, 9/26/02 5,000,000 5,063,200
GS Escrow Corp., 7.00%, 8/1/03 5,000,000 5,115,700
Homeside Lending, Inc., 6.86%, 7/2/01 3,000,000 3,121,680
Interpool, Inc., 6.625%, 3/1/03 7,000,000 6,815,410
Localiza Rent A Car, 10.25%, 10/1/05 500,000 245,000
Long Island Savings Bank, 7.00%, 6/13/02 2,500,000 2,621,550
Mark IV Industries, Inc., 7.50%, 9/1/07 5,000,000 4,857,500
Mckesson Corp., 6.30%, 3/1/05 900,000 948,780
Medpartners, Inc., 6.875%, 9/1/00 7,000,000 5,600,000
Merita Bank, Ltd., 7.15%, 12/29/49 6,000,000 6,185,382
Meyer Fred, Inc., 7.375%, 3/1/05 6,500,000 6,796,985
PRINCIPAL
Corporate Bonds (Cont'd) AMOUNT VALUE
Money Store Trust, 6.115%, 5/15/10 $5,000,000 $5,027,000
National Association of People with
AIDS, 10.00%, 1/31/98 (*)(b) 250,000 25,000
National Rural Utilities, 6.125%, 5/15/05 5,000,000 5,254,350
NCB Affordable Housing /
Market Rate Cooperative First
Mortgage Certificates Series
1993-3 B, 7.50%, 1/1/99 (*) 2,592,436 2,665,024
Onbank Capital Trust I, 9.25%, 2/1/27 12,600,000 14,648,130
Paine Webber Group, Inc., 7.00%, 3/1/00 2,000,000 2,028,540
Paribas New York, 6.95%, 7/22/13 5,500,000 5,722,805
Penny (J.C.), Inc.:
6.95%, 4/1/00 3,500,000
3,578,575
7.25%, 4/1/02 4,250,000
4,477,545
Picturetalk, Inc., 8.00%, 3/13/99 (*) 500,000 471,550
Pioneer Human Services, 8.75%, 5/27/01(*) 500,000 515,410
Poland Partners, 5.875%, 4/13/04 (*) 570,343 432,107
Prime Property Funding II, 6.80%, 8/15/02 4,000,000 4,158,800
Puget Sound Energy, 6.23%, 7/11/02 3,949,705 4,040,627
Sage Bruno, 6.00%, 12/31/99 (*) 125,000 100,000
Security Benefit Life Co., 8.75%, 5/15/16 3,000,000 3,526,338
Seventh Generation, 10.85%, 6/30/02 (*) 100,000 100,000
Socgen Real Estate Co., 7.64%, 12/29/49 7,150,000 7,286,779
Sun Life Canada Capital Trust I, 8.526%,
5/29/49 1,000,000 1,137,660
Time Warner Pass Thru Asset Trust, 4.90%,
7/29/99 2,740,000 2,729,637
Tyco International Group, 6.125%, 6/15/01 7,000,000 7,169,260
12th Street Historic Rehabilitation
Associates Mortgage,
10.75%, 4/15/99 (b)(*) 356,745 89,186
Umbono Investment, 10.00%, 1/16/02 871,375 753,701
Union Bank Norway, 7.35%, 12/31/49 4,000,000 4,196,680
United Utilities:
6.45%, 4/1/08 2,000,000
2,091,200
6.875%, 8/15/28 2,000,000 2,014,980
US West Capital Funding, Inc.:
6.125%, 7/15/02 500,000 516,855
6.25%, 7/15/05 500,000 529,115
Xerox Capital Trust I, 8.00%, 2/1/27 2,525,000 2,746,341
Zurich Capital Trust, 8.376%, 6/1/37 5,750,000 6,292,110
Total Corporate Bonds (Cost $246,798,522) 244,862,594
MUNICIPAL OBLIGATIONS (2.5%)
Chickasaw Nation Certificates of Participation,
10.00%, 8/1/03 (b) 5,234,721 3,140,832
Maryland State Economic Development
Corp. Revenue Bonds,
8.00%, 10/1/05 4,000,000 4,237,480
Maryland State Economic Development Corp.
Revenue Bonds,
8.625%, 10/1/19 3,750,000 4,481,100
San Mateo Redevelopment Agency Tax
Allocation Refunding Bonds,
7.125%, 8/1/08 1,415,000 1,548,010
Virginia Development Authority
Revenue Bonds, 7.40%, 7/1/06 1,000,000 1,118,500
Virginia Development Authority
Revenue Bonds, 7.45%, 7/1/07 2,270,000 2,565,554
Total Municipal Obligations (Cost $17,729,883) 17,091,476
<PAGE>
U.S. GOVERNMENT AGENCIES Principal
AND INSTRUMENTALITIES (1.4%) Amount Value
Federal Home Loan Banks, 5.62%,
5.57%, 8/17/00 $5,000,000 $5,078,555
Federal National Mortgage Assn.,
6.09%, 7/11/00 3,400,000 3,478,370
Federal National Mortgage Assn.,
6.09%, 9/27/27 1,250,000 1,319,762
Total U.S. Government Agencies and
Instrumentalities (Cost $9,771,479) 9,876,687
REPURCHASE AGREEMENTS (2.7%)
Prudential Securities, 5.45%,
dated 9/30/98, due 10/1/98
(Collateral: $18,852,043 FNMA,
6.00%, 9/1/13) 18,300,000 18,300,000
Total Repurchase Agreements (Cost $18,300,000) 18,300,000
LIMITED PARTNERSHIP INTEREST (0.5%)
Environment Allies Investment Trust 50,000 13,016
Environment Private Equity Fund 200,000 179,337
Global Environment Emerging Markets Fund 2 1,022,239
GEEMF Partners 255,500 243,000
Hambrecht & Quist Environmental
Technology Fund 500,000 425,452
HFG Expansion Fund I 125,000 48,508
IEPF Equity Fund III 400,000 385,945
Labrador Ventures III (#) 100,000 100,000
Liberty Environmental Partners 350,000 277,940
Poland Partners 320,000 424,362
Ukraine Fund 70,000 57,144
Utah Ventures (#) 175,000 175,000
Venture Strategy Partners (#) 48,724 48,724
Viridian Capital (#) 154,687 154,687
Total Limited Partnership Interest (*)(Cost $3,327,221) 3,555,354
EQUITY SECURITIES (55.9%) Shares
Capital Goods (2.5%)
Avery Dennison Corp. 47,500 2,075,156
Belden, Inc. 15,800 212,312
Illinois Tool Works, Inc. 74,300 4,049,350
Miller Herman, Inc. 200 3,950
Solectron Corp. (#) 115,200 5,529,600
Tyco International, Ltd. 98,600 5,447,650
17,318,018
Communication Services (2.8%)
Ameritech Corp. 30 1,421
Century Telephone Enterprises 140,962 6,660,454
MCI Worldcom, Inc. (#) 104,985 5,131,149
SBC Communications, Inc. 167,440 7,440,615
19,233,639
Consumer Cyclicals (7.0%)
Acxiom Corp. (#) 155,500 3,858,343
Autozone, Inc. (#) 149,000 3,669,125
Barnes & Noble, Inc. (#) 60 1,620
Block H & R, Inc. 63,600 2,631,450
Dayton Hudson Corp. 50,500 1,805,375
<PAGE>
EQUITY SECURITIES (Cont'd) Shares Value
Consumer Cyclicals (Cont'd))
Dollar General Corp. 116,890 $3,112,196
Fastenal Co. 141,900 3,547,500
Harley Davidson, Inc. 198,200 5,822,125
Home Depot, Inc. 197,840 7,814,680
IMS Health, Inc. 46,300 2,867,706
Jones Apparel Group, Inc. (#) 178,400 4,092,050
New York Times Co. 60 1,650
Office Max, Inc. (#) 237,200 2,327,525
Omnicom Group, Inc. 85,800 3,861,000
Penny (J.C.), Inc. 20 699
Real Goods Trading Corp. (#) 125,000 515,625
Rouse Co. 81,600 2,198,100
UOL Publishing, Inc. (#) 25,080 122,265
48,249,034
Consumer Staples (8.6%)
Cardinal Health, Inc. 136,450 14,088,462
Colgate Palmolive Co. 32,300 2,212,550
CVS Corp. 106,200 4,652,887
Dial Corp. 128,500 2,650,312
Donnelley (R.R.) & Sons Co. 82,500 2,902,968
Fort James Corp. 70 2,297
Gillette Co. 178,300 6,819,975
Heinz (H. J.) Co. 20 1,022
Hershey Foods Corp. 79,400 5,433,937
Interstate Bakeries Corp. 40 1,240
Newell Co. 138,100 6,361,231
Robert Half International, Inc. (#)77,900 3,364,306
Safeway, Inc. (#) 138,000 6,399,750
Sysco Corp. 189,700 4,469,806
59,360,743
Energy (0.9%)
Cinergy Corp. 157,900 6,039,675
Financial Services (10.8%)
Aflac, Inc. 104,600 2,987,637
American International Group, Inc. 83,927 6,462,379
Banc One Corp. 122,160 5,207,070
BankBoston Corp. 50,400 1,663,200
Chase Manhattan Corp. 98,000 4,238,500
Conseco, Inc. 62,500 1,910,156
Countrywide Credit Industries,
Inc. 59,400 2,472,525
Federal National Mortgage Assn. 108,720 6,985,260
Franklin Resources, Inc. 105,000 3,150,000
Highwood Properties, Inc. 6,900 6,557,691
Mellon Bank Corp. 63,100 3,474,444
MGIC Investment Corp. 44,500 1,640,937
Nationsbank Corp. (#) 67,600 3,616,600
Price (T. Rowe) Associates, Inc. 163,800 4,811,625
SLM Holding Corp. 123,500 4,006,031
State Street Boston Corp. 38,600 2,106,112
Sunamerica, Inc. 48,750 2,973,750
<PAGE>
Equity Securities (Cont'd) Shares Value
Financial Services (Cont'd)
Umbuno Investments Corp.(#)(a) 22,670,603 $9,642,551
73,906,468
Pharmaceutical & Health Care (7.2%)
Amgen, Inc. (#) 35,100 2,652,243
Aviron (#) 37,074 572,329
Boston Scientific Corp. (#) 72,400 3,719,550
Hayes Medical Services (#)(*) 303,030 545,454
Health Management
ssociation (#) 183,425 3,347,506
Johnson & Johnson 154,000 12,050,500
Merck & Co., Inc. 92,012 11,921,304
Quadrant Healthcare Plc. (#) 305,263 373,663
Schering Plough Corp. 73,400 7,601,487
Twinlab Corp. (#) 68,600 1,757,875
Watson Pharmaceuticals (#) 94,600 4,800,950
49,342,861
Technology (15.1%)
America Online, Inc. (#) 18,600 2,069,250
Automatic Data Processing, Inc. 95,700 7,153,575
BMC Software, Inc. (#) 165,120 9,917,520
Cisco Systems, Inc. (#) 87,000 5,377,687
Compaq Computer Corp. 110,700 3,500,887
Compuware Corp. (#) 80,300 4,727,662
EMC Corp. (#) 87,670 5,013,628
Fiserv, Inc. (#) 40,800 1,879,350
Gateway 2000, Inc. (#) 61,200 3,190,050
HBO & Co. 77,600 2,240,700
Hewlett Packard Co. 20 1,059
Intel Corp. 34,900 2,992,675
International Business Machines Corp. 68,900 8,819,200
Lucent Technologies, Inc. 26,600 1,837,062
Microsoft Corp. (#) 89,140 9,810,971
Network Associates, Inc. (#) 99,550 3,534,025
Northern Telecom, Ltd. 30,020 960,640
Oracle Systems Corp. (#) 199,663 5,815,184
Parametric Technology (#) 160,700 1,617,043
Paychex, Inc. 123,900 6,388,593
Sterling Commerce, Inc. (#) 152,500 5,280,312
Sterling Software, Inc. (#) 180,400 4,972,275
Sun Microsystems, Inc. (#) 56,900 2,834,331
Tellabs, Inc. (#) 102,500 4,080,781
104,014,460
Utilities (0.3%)
California Energy, Inc. (#) 84,700 2,244,784
Equity Securities (Cont'd) Shares Value
Venture Capital (0.7%)
Agraquest, Inc., Series B Preferred (#)(*) 190,477 $323,810
Agraquest, Inc., Series C Convertible
Preferred (#)(*) 117,647 200,000
All Media Solutions, Inc.(#)(*) 389,692 167,178
Calypte Biomed (#)(*) 100,000 175,000
Clean Air Cab (#)(*) 80 0
Coastal Venture Partners (*) 80,000 78,142
Community Bank of the Bay (#)(*) 4,000 100,000
Community Growth Fund 1,286,582 389,118
Eco Timber International, Inc. (#)(*) 12,468 99,993
Energia Global, Inc., Series A,
Convertible Preferred (#)(*) 80,129 560,903
Energia Global, Inc., Series B,
Convertible Preferred (#)(*) 28,571 199,997
Envirolutions, Inc. (#)(*) 814 26,184
Evergreen Solar, Series B (#)(*) 100,000 200,000
Evergreen Solar, Series C (#)(*) 76,972 153,944
Evergreen Solar (warrants)(#)(*) 30,789 300
Fountainhead Technologies, Inc.,
Preferred (#)(*) 3,295 25,000
Knowaste LLC (#)(*) 814 81,400
Living Technologies, Inc. (#)(*) 25,000 100,000
Neighborhood Bancorp (#)(*) 10,000 100,000
Paradigm Biosciences (#)(*) 125,000 275,000
Paradigm, Inc. (#)(*) 121,591 250,000
Picturetalk (warrants) (#)(*) 22,222 0
Pro Fund International (#)(*) 5,729 5,729
Pro Fund International,
Preferred (#)(*) 567,119 567,119
Take the Lead (#)(*) 23,630 50,945
Ultrafem, Inc. (#)(*) 25,000 275
Ultrafem, Inc. (warrants)(#)(*) 175,000 0
Wild Planet Toys, Inc., Series B,
Preferred (#)(*) 476,190 666,666
Wild Planet Toys, Inc.,
Series E, Preferred (#)(*) 29,089 180,724
Wind Harvest Co., Inc., Series A,
Preferred (#)(*) 8,696 50,000
5,027,427
Total Equity Securities (Cost $332,644,314) 384,737,109
TOTAL INVESTMENTS (Cost $634,302,419)
- 99.4% 683,851,569
Other assets and liabilities, net - 0.6% 4,078,293
Net Assets - 100% $687,929,862
See notes to financial statements.
<PAGE>
Bond PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
PRINCIPAL
CORPORATE BONDS (76.8%) AMOUNT VALUE
AGL Capital Trust, 8.17%, 6/1/37 $1,000,000 $1,066,700
Advanta Corp., 7.05%, 7/30/99 2,000,000 1,966,520
Allmerica Financial Corp, 7.625, 10/15/25 2,550,000 2,820,580
BCI US Funding Trust I, 8.01%, 12/29/49 1,000,000 995,130
BNP US Funding LLC, 7.738%, 12/31/49 1,500,000 1,395,571
Banc One Corp, 7.25%, 8/1/02 3,000,000 3,219,240
Bell Atlantic Financial Services, Inc., 6.53%,
2/22/00 1,000,000 1,021,860
BellSouth Savings & Employee ESOP, 9.125%,
7/1/03 154,592 170,699
BellSouth Telecommunications,
6.00%, 6/15/02 2,000,000 2,089,220
Chase Credit Card MasterTrust,
6.194%, 8/15/05 2,500,000 2,615,275
Citizens Utilities Co., 8.45%, 9/1/01 1,000,000 1,092,260
Computer Associates International Inc.,
6.375%, 4/15/05 2,000,000 2,045,500
Conseco Inc., 6.80%, 6/15/05 3,000,000 3,078,750
Dayton Hudson Corp., 5.95%, 6/15/00 2,000,000 2,021,700
Dime Bancorp Inc., 6.12%, 3/10/99 1,000,000 1,001,010
Fuji JGB Investments LLC, 9.87%, 12/31/49 1,750,000 803,385
GS Escrow Corp., 6.75%, 8/1/01 1,000,000 1,007,600
Greenpoint Capital Trust I, 9.10%, 6/1/27 2,000,000 2,205,640
Interpool, Inc., 6.625%, 3/1/03 1,000,000 973,630
KeyCorp, 7.50%, 6/15/06 760,000 843,281
Mark IV Industries, Inc., 7.50%, 9/1/07 500,000 485,750
Medpartners, Inc., 6.875%, 9/1/00 1,000,000 800,000
Merita Bank, Ltd., 7.15%, 12/29/49 1,000,000 1,030,897
National Cooperative Bank, 7.50%, 7/1/12 777,731 805,029
Onbank Capital Trust I, 9.25%, 2/1/27 2,000,000 2,325,100
Paribas New York BRH, 6.95%, 7/22/13 500,000 520,255
Prime Property Funding II, 6.80%, 8/15/02 2,000,000 2,079,400
Socgen Real Estate Co. LLC, 7.64%, 12/29/49 1,260,000 1,284,104
Time Warner, 4.90%, 7/29/99 1,000,000 996,218
Tyco International Group, 6.125%, 6/15/01 1,000,000 1,024,180
Union Bank Norway, 7.35%, 12/31/49 1,000,000 1,049,170
Union Pacific Resources Group Inc.,
7.05%, 5/15/18 500,000 481,265
United Utilities PLC, 6.875%, 8/15/28 500,000 503,745
Xerox Capital Trust I, 8.00%, 2/01/27 2,000,000 2,175,320
Zurich Capital Trust, 8.376%, 6/1/37 3,000,000 3,282,840
Total Corporate Bonds (Cost $51,223,609) 51,276,824
U.S. GOVERNMENT AGENCIES
AND INSTRUMENTALITIES (15.5%)
Federal Home Loan Banks, 5.62%, 8/10/00 1,000,000 1,016,520
Federal Home Loan Mortgage Corp.,
7.12%, 6/25/28 2,750,000 2,904,104
Federal National Mortgage
Assn., 6.09%, 7/11/00 2,400,000 2,455,320
Federal National Mortgage
Assn., 6.09%, 9/27/27 1,250,000 1,319,762
Federal National Mortgage
Assn., 6.08%, 9/1/28 2,500,000 2,648,775
Total U.S. Government Agencies
and Instrumentalities
(Cost $10,187,019) 10,344,481
PRINCIPAL
MUNICIPAL OBLIGATIONS (2.3%) AMOUNT VALUE
Missouri Higher Education Student
Loan Revenue Bonds,
6.80%, 2/15/01 $1,000,000 $1,037,950
Somerville, Massachusetts, U.S.
Government Guaranteed Notes,
7.12%, 8/1/01 475,000 502,821
Total Municipal Obligations (Cost $1,473,840) 1,540,771
COMMERCIAL LOAN NOTES (0.7%)
DC Habitat for Humanity, 4.50%, 2/17/01 150,000 147,257
Northeast Entrepreneur Fund, 4.50%, 6/30/03 100,000 96,391
St. Vincent de Paul Society, 4.50%, 7/29/01 200,000 192,006
Total Commercial Loan Notes(*) (Cost $450,000) 435,654
EQUITY SECURITIES (1.7%) SHARES
Highwoods Properties Inc., Series A, Preferred 600 570,234
Northern Borders Partners, LP 17,900 613,075
Total Equity Securities (Cost $957,288) 1,183,309
TOTAL INVESTMENTS (Cost $64,291,756) - 97.0% 64,781,039
Other assets and liabilities, net - 3.0%
1,981,594
Net Assets - 100% $66,762,633
<PAGE>
EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
EQUITY SECURITIES (93.8%) SHARES VALUE
Basic Industries (5.9%)
Jefferson Smurfit Corp. (#) 1,000 $11,500
Morton International, Inc. 151,000 3,303,125
Nalco Chemical Co. 105,600 3,115,200
UCAR International, Inc. (#) 90,000 1,620,000
8,049,825
Capital Goods (7.0%)
Dover Corp. 96,000 2,964,000
Pitney Bowes, Inc. 40,000 2,102,500
Sensormatic Electronics Co. (#) 50,000 293,750
Solectron Corp. (#) 30,000 1,440,000
Tyco International, Ltd. 50,000 2,762,500
9,562,750
Communication Services (3.5%)
Ameritech Corp. 102,000 4,832,250
Consumer Cyclicals (19.9%)
American Greetings Corp. 100 3,956
Autozone, Inc. (#) 120,000 2,955,000
Black & Decker Corp. 117,400 4,886,775
Dayton Hudson Corp. 43,000 1,537,250
Family Dollar Stores, Inc. 100,000 1,575,000
Federated Department Stores,
Inc.(#) 100,000 3,637,500
Gap, Inc. 25,000 1,318,750
Harley Davidson, Inc. 35,000 1,028,125
Liz Claiborne, Inc. 500 13,094
Lowes Companies, Inc. 60,000 1,908,750
Masco Corp. 186,800 4,599,950
Office Depot, Inc. (#) 160,100
3,592,243
Office Max, Inc. (#) 100 981
Reebok International,
Ltd. (#) 600 8,137
27,065,511
Consumer Staples (7.0%)
Albertsons, Inc 100 5,412
Colgate Palmolive Co. 46,000 3,151,000
Gillette Co. 40,000 1,530,000
Kroger Co. (#) 70,000 3,500,000
Newell Co. 30,000 1,381,875
Rubbermaid, Inc. 1,000 23,938
9,592,225
Energy (3.9%)
Anadarko Petroleum Corp. 60,000 2,358,750
Enron Corp. 169,700 2,969,750
5,328,500
Financial Services (11.6%)
Aflac, Inc. 45,000 1,285,312
American International Group, Inc. 30,000 2,310,000
BankAmerica Corp. 71,000 4,268,875
EQUITY SECURITIES (Cont'd) SHARES VALUE
Financial Services (Cont'd)
Chubb Corp. 54,000 $3,402,000
Federal National Mortgage Assn. 40,000 2,570,000
Frontier Insurance Group, Inc. 150,000 1,987,500
15,823,687
Pharmaceutical & Health Care (12.9%)
Biomet, Inc, 20,500 711,094
Dentsply International, Inc. 90,000 2,013,750
Healthsouth Corp. (#) 100,000 1,056,250
Merck & Co., Inc. 39,000 5,052,937
Mylan Labs, Inc. 75,000 2,212,500
Schering Plough Corp. 50,000 5,178,125
Stryker Corp. 40,000 1,360,000
17,584,656
Technology (20.2%)
Adobe Systems, Inc. 50,000 1,734,375
Cisco Systems, Inc. (#) 65,000 4,017,812
Computer Associates
International, Inc. 50,000 1,850,000
EMC Corp. (#) 41,000 2,344,687
Electronic Data Systems Corp. 75,000 2,489,062
Grainger (W.W.), Inc. 65,000 2,738,125
Hewlett Packard Co. 60,000 3,176,250
Intel Corp. 30,000 2,572,500
Scientific Atlanta, Inc. 75,000 1,584,375
Sun Microsystems, Inc. (#) 100,000 4,981,250
27,488,436
Transportation (1.9%)
CNF Transportation, Inc. 90,000 2,621,254
Total Equity Securities (Cost $125,206,780) 127,949,094
PRINCIPAL
Commercial Loan Notes (1.0%) AMOUNT
Chicago Community Loan
Fund, 4.50%, 6/30/03 $150,000 144,586
Community Loan Fund of SW
Pennsylvania, 4.50%, 4/15/01 100,000 97,417
Delaware Valley Reinvestment Fund,
4.50%, 7/15/03 250,000 240,205
Enterprise Corp. of Delta, 4.50%, 7/29/01 300,000 288,246
Midwest Minnesota CDC, 4.50%, 9/30/01 300,000 286,599
Primary Care Development Corp., 4.50%,
2/17/01 200,000 196,342
Total Commercial Loan Notes (*)
(Cost $1,300,000) 1,253,395
TOTAL INVESTMENTS (Cost $126,506,780) - 94.8% 129,202,489
Other assets and liabilities, net - 5.2% 7,132,013
Net Assets - 100% $136,334,502
See notes to financial statements.
<PAGE>
MANAGED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1998
EQUITY SECURITIES (97.3%) SHARES VALUE
Basic Industries (0.2%)
Praxair, Inc. 1,200 $39,225
Capital Goods (4.3%)
Case Corp. 2,100 45,675
Cummins Engine, Inc. 400 11,900
Deere & Co. 1,400 42,350
National Service Industries, Inc. 8,900 283,687
Paccar, Inc. 2,000 82,375
Parker Hannifin Corp. 4,800 142,500
Pitney Bowes, Inc. 1,800 94,612
Premark International, Inc. 3,400 95,412
Solectron Corp. (#) 1,300 62,400
Trinity Industries, Inc. 700 22,706
883,617
Communication Services (11.1%)
Ameritech Corp. 8,900 421,637
Bellsouth Corp. 9,500 714,875
SBC Communications, Inc. 7,800 346,612
US West, Inc. 15,400 807,537
2,290,661
Consumer Cyclicals (9.3%)
American Greetings Corp. 5,100 201,768
Costco Companies, Inc. (#) 900 42,637
Dayton Hudson Corp. 1,400 50,050
Dow Jones & Co., Inc. 2,500 116,250
Dun & Bradstreet Corp. 6,800 183,600
Federated Department Stores,
Inc. (#) 2,600 94,575
Fruit of the Loom, Inc. (#) 1,700 25,606
Gap, Inc. 700 36,925
General Nutrition Companies,
Inc. (#) 3,300 35,681
Home Depot, Inc. 5,600 221,200
Lear Corp. (#) 800 35,000
Limited, Inc. 1,600 35,100
Lowes Companies, Inc. 1,400 44,537
May Department Stores Co. 3,600 185,400
Mcgraw Hill Companies, Inc. 400 31,700
Nielsen Media Research, Inc. 2,600 26,650
Omnicom Group, Inc. 1,200 54,000
Ross Stores, Inc. 1,700 48,662
Tiffany & Co. 2,300 72,162
TJX Companies, Inc. 600 10,687
Washington Post Co. 700 357,700
Whirlpool Corp. 400 18,800
1,928,690
<PAGE>
EQUITY SECURITIES (Cont'd) SHARES VALUE
Consumer Staples (6.4%)
Albertsons, Inc. 700 $37,887
Bergen Brunswig Corp. 500 25,281
CVS Corp. .800 35,050
Darden Restaurant, Inc. 4,600 73,600
Deluxe Corp. 4,300 122,281
Dial Corp. 1,300 26,812
Heinz (H. J.) Co. 4,600 235,175
King World Productions, Inc. (#) 2,900 75,762
Mckesson Corp. 700 64,137
Newell Co. 2,400 110,550
Quaker Oats Co. 2,800 165,200
Rubbermaid, Inc. 4,200 100,537
Supervalu, Inc. 6,200 144,537
Wrigley (Wm.) Jr Co. 1,300 98,718
1,315,527
Energy (2.5%)
Anadarko Petroleum Corp. 2,600 102,212
Enron Corp. 3,900 68,250
Pioneer Natural Resources Co. 12,500 175,781
Union Pacific Resources
Group, Inc. 6,800 83,725
Valero Energy Corp. 2,900 57,637
Varco International, Inc. (#) 2,700 22,613
510,218
Financial Services (24.7%)
American General Corp. 2,400 153,300
American International Group,
Inc. 5,800 446,600
Amsouth Bancorporation 150 5,119
Aon Corp. 1,200 77,400
BankAmerica Corp. 3,400 204,425
BankBoston Corp. 3,000 99,000
Chase Manhattan Corp. 6,200 268,150
Cigna Corp 900 59,512
Comerica, Inc. 1,900 104,143
Conseco, Inc. 1,900 58,068
Countrywide Credit
Industries, Inc. 3,700 154,012
Edwards (A.G.), Inc. 6,200 187,937
Equitable Companies, Inc. 1,000 41,375
Equity Office Properties Trust 500 12,250
Everest Reinsurance Holdings 900 33,581
Federal Home Loan Mortgage
Corp. 2,900 143,368
Federal National Mortgage Assn. 8,300 533,275
First Chicago NBD Corp. 300 20,550
First Union Corp. 10,600 542,587
Firstplus Financial Group, Inc.(#) 300 3,431
Liberty Property Trust 8,700 207,168
Lincoln National Corp. 2,700 222,075
Marsh & Mclennan
Companies, Inc. 4,300 213,925
MBIA, Inc. 1,000 53,687
MGIC Investment Corp. 400 14,750
Nationsbank Corp. (#) 9,300 497,550
North Fork Bancorporation 1,500 30,000
<PAGE>
EQUITY SECURITIES (Cont'd) SHARES VALUE
Financial Services (Cont'd)
Paine Webber Group, Inc. 3,800 $114,000
PMI Group, Inc. 2,000 91,500
Republic New York Corp. 2,800 110,600
Suntrust Banks, Inc. 2,600 161,200
Wells Fargo & Co. 700 248,500
5,113,038
Pharmaceutical & Health Care (15.4%)
Allegiance Corp. 3,600 107,100
Amgen, Inc. (#) 7,200 544,050
Arterial Vascular Engineering,
Inc. (#) 3,400 125,800
Becton Dickinson & Co. 3,600 148,050
Biogen, Inc. (#) 1,300 85,556
Genzyme Corp. (#) 2,300 83,087
Guidant Corp. 1,300 96,525
Integrated Health Services, Inc. 1,500 25,218
Johnson & Johnson 7,300 571,225
Medtronic, Inc. 2,900 167,837
Merck & Co., Inc. 4,600 595,987
Mylan Labs, Inc. 2,800 82,600
Pacificare Health Systems,
Inc. (#) 1,400 104,300
Quorum Health Group,
Inc. (#) 1,500 24,375
Rexall Sundown, Inc. (#) 200 3,088
Schering Plough Corp. 3,700 383,181
Wellpoint Health Networks,
Inc. (#) 500 28,031
3,176,010
Technology (18.4%)
Altera Corp. (#) 700 24,587
America Online, Inc. (#) 500 55,625
Apple Computer (#) 5,700 217,312
Autodesk, Inc. 3,700 97,125
BMC Software, Inc.(#) 100 6,006
Cadence Design Systems, Inc. (#) 1,000 25,562
Cisco Systems, Inc. (#) 3,450 213,253
Comdisco, Inc. 9,700 132,162
Compaq Computer Corp. 2,900 91,712
Computer Associates
International, Inc. 1,900 70,300
Compuware Corp. (#) 200 11,775
Dell Computer Corp. (#) 3,000 197,250
EMC Corp. (#) 1,300 74,343
First Data Corp. 4,200 98,700
General Instrument Corp. (#) 4,400 95,150
Grainger (W.W.), Inc. 600 25,275
HBO & Co. 1,400 40,425
Hewlett Packard Co. 1,900 100,581
Intel Corp. 4,600 394,450
International Business
Machines Corp. 2,200 281,600
Keane, Inc. (#) 400 14,050
Learning Company, Inc. (#) 1,700 33,681
Lucent Technologies, Inc. 3,800 262,437
Maxim Integrated Products,
Inc. (#) 1,300 36,237
Microsoft Corp. (#) 5,300 583,331
Oracle Systems Corp. (#) 4,100 119,412
Qualcomm, Inc. (#) 1,200 57,525
<PAGE>
EQUITY SECURITIES (Cont'd) SHARES VALUE
Technology (Cont'd)
Sabre Group Holdings, Inc. (#) 800 $24,000
Sterling Software, Inc. (#) 3,600 99,225
Sun Microsystems, Inc. (#) 1,700 84,681
Tellabs, Inc. (#) 400 15,925
Xerox Corp. 2,600 220,350
3,804,047
Transportation (1.5%)
AMR Corp. (#) 1,800 99,787
Continental Airlines, Inc. (#) 300 11,325
FDX Corp. (#) 600 27,075
UAL Corp. (#) 2,800 181,475
319,662
Utilities (3.5%)
Allegheny Energy, Inc. 2,800 88,375
Cinergy Corp. 3,500 133,875
Columbia Energy Group 5,100 298,987
Marketspan Corp. 7,100 203,709
724,946
Total Equity Securities (Cost $22,172,516) 20,105,641
TOTAL INVESTMENTS (Cost $22,172,516) - 97.3% 20,105,641
Other assets and liabilities, net - 2.7% 563,535
Net Assets - 100% $20,669,176
(^) These certificates of deposit are fully insured by agencies of the federal
government.
(#) Non-income producing.
(*) Restricted securities represents, 2.7% of net assets for Managed Growth,
0.7% for Bond, and 1.0% for Equity.
(v) See Note B.
(b) This security is in default.
Explanation of Guarantees: Abbreviations:
BPA: Bond Purchase Agreement AMBAC: American Municipal Bond
Assurance Corp.
GA: Guarantee Agreement VRDN: Variable Rate Demand Notes
INSUR: Insurance MFH: Multi-family Housing
LOC: Letter of Credit COPs: Certificates of Participation
TOA: Tender Option Agreement
See notes to financial statements.
<PAGE>
Statements of assets and liabilities
sSptember 30, 1998
money managed
market growth bond
assets portfolio portfolio portfolio
Investments in securities, at value $170,794,574 $683,851,569 $64,781,039
Cash . . . . . 535,325 1,935,806 1,086,363
Receivable for securities sold 417,867 3,483,896 -
Receivable for shares sold - - 113,092
Interest & dividends receivable 1,311,222 5,182,284 955,646
Other assets 12,642 27,094 20,178
Total assets 173,071,630 694,480,649 66,956,318
liabilities
Payable for securities purchased - 5,041,068 -
Payable for shares redeemed 132,209 614,872 98,493
Payable to Calvert Asset
Management, Inc. 110,463 453,268 44,440
Payable to Calvert Shareholders
Services, Inc. 19,005 19,264 2,864
Payable to Calvert Distributors,
Inc. - 142,252 11,415
Accrued expenses and
other liabilities 109,429 280,063 36,473
Total liabilities 371,106 6,550,787 193,685
Net Assets $172,700,524 $687,929,862 $66,762,633
net assets consist of:
Paid-in capital applicable to the
Following shares of beneficial
interest, unlimited
number of no par value
shares authorized:
Money Market Portfolio:
172,738,893 shares outstanding $172,716,806
Managed Growth Portfolio:
Class A: 20,768,354 shares
outstanding $554,037,933
Class B: 78,440 shares outstanding 2,660,617
Class C: 358,253 shares outstanding 11,011,902
Bond Portfolio:
Class A: 3,897,466 shares outstanding $63,214,454
Class B: 33,081 shares outstanding 554,783
Class C: 23,697 shares outstanding 398,805
Undistributed net investment income 12,583 926,233 69,443
Accumulated net realized gain (loss)
on investments (28,865) 69,739,952 2,035,865
Net unrealized appreciation
(depreciation)
on investments and assets and
liabilities
in foreign currencies - 49,553,225 489,283
Net Assets $172,700,524 $687,929,862 $66,762,633
<PAGE>
net asset value per share
Money Market Portfolio $1.00
Managed Growth Portfolio
Class A (based on net assets of $673,906,995) . $32.45
Class B (based on net assets of $2,540,141) $32.38
Class C (based on net assets of $11,482,726) $32.05
Bond Portfolio
Class A (based on net assets of $65,806,586) $16.88
Class B (based on net assets of $556,972) $16.84
Class C (based on net assets of $399,075) $16.84
See notes to financial statements.
<PAGE>
statements of assets and liabilities
september 30, 1998
managed
equity index
assets portfolio portfolio
Investments in securities, at value $129,202,489 $20,105,641
Cash 2,113,224 539,723
Receivable for securities sold 23,044,287 1,387
Receivable for shares sold 227,757 11,230
Interest & dividends receivable 122,272 22,308
Other assets 19,131 14,986
Total assets 154,729,160 20,695,275
liabilities
Payable for securities purchased 18,128,267 -
Payable for shares redeemed 50,734 -
Payable to Calvert Asset
Management, Inc. 92,774 5,149
Payable to Calvert Administrative
Service Company - 1,877
Payable to Calvert Shareholders
Services, Inc. 9,575 406
Payable to Calvert Distributors, Inc. 30,805 1,823
Accrued expenses and other liabilities 82,503 16,844
Total liabilities 18,394,658 26,099
Net Assets $136,334,502 $20,669,176
net assets consist of:
Paid-in capital applicable to the
following shares of beneficial
interest, unlimited number of no
par value shares authorized:
Equity Growth Portfolio
Class A: 6,319,836 shares outstanding $128,152,938 -
Class B: 82,447 shares
outstanding 2,001,081 -
Class C: 314,868 shares outstanding 6,867,125 -
Managed Index Portfolio
Class A: 324,918 shares outstanding - $4,811,944
Class B: 72,272 shares outstanding - 1,059,639
Class C: 29,363 shares outstanding - 426,737
Class I: 1,100,007 shares outstanding - 16,499,841
Undistributed net investment income (loss) - 42,792
Accumulated net realized gain
(loss) on investments (3,382,351) (104,902)
Net unrealized appreciation
(depreciation) on investments 2,695,709 (2,066,875)
Net Assets $136,334,502 $20,669,176
net asset value per share
Equity Portfolio:
Class A (based on net assets of $128,683,076) $20.36
Class B (based on net assets of $1,670,337) $20.26
Class C (based on net assets of $5,981,089) $19.00
Managed Index Portfolio:
Class A (based on net assets of $4,400,710) $13.54
Class B (based on net assets of $974,587) $13.48
Class C (based on net assets of $397,066) $13.52
Class I (based on net assets of $14,896,813) $13.54
See notes to financial statements.
<PAGE>
Statements of Operations
Year Ended September 30, 1998
Money Managed
Market Growth
Net Investment Income Portfolio Portfolio
Investment Income:
Interest income $9,793,003 $20,520,066
Dividend income (net of foreign taxes
withheld of $3,174
for Managed Growth) - 3,267,466
Total investment income 9,793,0032 3,787,532
Expenses:
Investment advisory fee 846,146 4,374,411
Transfer agency fees and expenses 515,615 1,071,388
Distribution Plan expenses:
Class A - 1,653,703
Class B - 5,468
Class C - 106,158
Trustees' fees and expenses 43,289 179,492
Custodian fees 24,837 117,783
Registration fees 32,8346 2,840
Reports to shareholders 74,774 174,415
Professional fees 13,406 167,052
Miscellaneous 45,484 138,689
Reimbursement from Advisor (92,697) (6,361)
Total expenses 1,503,688 8,045,038
Fees paid indirectly (32,106) (100,800)
Net expenses 1,471,582 7,944,238
Net Investment Income 8,321,421 15,843,294
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on:
Securities 1,009 77,009,632
Foreign currencies - (31,638)
Futures - (11,622)
1,009 76,966,372
Change in unrealized appreciation
or (depreciation):
Securities - (55,910,157)
Assets and Liabilities in foreign currencies - 4,075
- (55,906,082)
Net Realized and Unrealized
Gain (Loss) on Investments 1,009 21,060,290
Increase (Decrease) in Net Assets
Resulting From Operations $8,322,430 $36,903,584
See notes to financial statements.
<PAGE>
Statements of Operations
Year Ended September 30, 1998
Bond Equity
Net Investment Income Portfolio Portfolio
Investment Income:
Interest income $4,217,790 $89,176
Dividend income (net of foreign taxes
withheld of $4,338
for Equity) 25,875 1,396,078
Total investment income 4,243,665 1,485,254
Expenses:
Investment advisory fee 345,357 889,599
Transfer agency fees and expenses 143,868 398,931
Distribution Plan expenses:
Class A 125,123 350,271
Class B 1,120 4,818
Class C 833 70,863
Trustees' fees and expenses 15,807 45,492
Custodian fees 23,235 19,241
Registration fees 27,959 44,525
Reports to shareholders 21,439 65,185
Professional fees 5,360 12,218
Miscellaneous 16,560 42,591
Reimbursement from Advisor (9,820) (4,464)
Total expenses 716,841 1,939,270
Fees paid indirectly (40,429) (145,524)
Net expenses 676,412 1,793,746
Net Investment Income (Loss) 3,567,253 (308,492)
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) 2,273,322 609,268
Change in unrealized appreciation
or (depreciation) (735,972) (26,063,542)
Net Realized and Unrealized
Gain (Loss) on Investments 1,537,350 (25,454,274)
Increase (Decrease) in Net Assets
Resulting From Operations $5,104,603 $(25,762,766)
See notes to financial statements.
<PAGE>
Statement of Operations
From Inception
April 15, 1998 through September 30, 1998
Managed Index
Net Investment Income Portfolio
Investment Income:
Dividend income $117,868
Total investment income 117,868
Expenses:
Investment advisory fee 54,079
Administrative fees 9,840
Transfer agency fees and expenses 8,478
Distribution Plan expenses:
Class A 3,460
Class B 2,100
Class C 590
Trustees' fees and expenses 943
Custodian fees 10,855
Registration fees 19,239
Reports to shareholders 633
Professional fees 6,085
Miscellaneous 79
Reimbursement from Advisor(35,778)
Total expenses 80,603
Fees paid indirectly (5,527)
Net expenses 75,076
Net Investment Income 42,792
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) (104,902)
Change in unrealized appreciation
or (depreciation) (2,066,875)
Net Realized and Unrealized
Gain (Loss) on Investments (2,171,777)
Increase (Decrease) in Net Assets
Resulting From Operations $(2,128,985)
See notes to financial statements.
<PAGE>
Money Market Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
Sept. 30 Sept. 30
Increase (Decrease) in Net Assets 1998 1997
Operations:
Net investment income $8,321,421 $7,946,799
Net realized gain (loss) 1,009 1,226
Increase (Decrease) in Net Assets
Resulting From Operations 8,322,430 7,948,025
Distributions to shareholders from
Net investment income (8,308,855) (7,947,645)
Capital share transactions:
Shares sold 154,779,292 169,708,929
Reinvestment of distributions 7,819,897 7,481,634
Shares redeemed (156,022,801) (177,596,704)
6,576,388 (406,141)
Total Increase (Decrease)
in Net Assets 6,589,963 (405,761)
Net Assets
Beginning of year 166,110,561 166,516,322
End of year (including
undistributed net investment
income of $12,583
and $17, respectively) $172,700,524 $166,110,561
Capital Share Activity
Shares sold 154,779,292 169,708,929
Reinvestment of distributions 7,819,897 7,481,634
Shares redeemed (156,022,801) (177,596,704)
Total capital share activity 6,576,388 (406,141)
See notes to financial statements.
<PAGE>
Managed Growth Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
September 30 September 30,
Increase (Decrease) in Net Assets 1998 1997
Operations:
Net investment income $15,843,294 $16,012,323
Net realized gain (loss) 76,966,372 78,959,819
Change in net unrealized appreciation
or (depreciation) (55,906,082) 31,223,397
Increase (Decrease) in Net Assets
Resulting From Operations 36,903,584 126,195,539
Distributions to shareholders from
Net investment income:
Class A Shares (15,407,301) (15,615,127)
Class B Shares (13,826) -
Class C Shares (132,534) (108,855)
Net realized gain:
Class A Shares (64,690,996) (39,194,997)
Class C Shares (945,605) (483,529)
Total distributions (81,190,262) (55,402,508)
Capital share transactions:
Shares sold:
Class A Shares 68,087,988 91,060,464
Class B Shares 2,658,548 -
Class C Shares 4,076,426 3,006,364
Reinvestment of distributions:
Class A Shares 74,176,448 50,874,854
Class B Shares 12,756 -
Class C Shares 1,056,857 576,655
Shares redeemed:
Class A Shares (100,217,586) (131,005,332)
Class B Shares (10,687) -
Class C Shares (1,828,205) (2,299,384)
Total capital share transactions 48,012,545 12,213,621
Total Increase (Decrease) in
Net Assets 3,725,867 83,006,652
Net Assets
Beginning of year 684,203,995 601,197,343
End of year (including undistributed
net investment
income of $957,871 and $668,238,
respectively) $687,929,862 $684,203,995
See notes to financial statements.
<PAGE>
Managed Growth Portfolio (Cont'd)
Year Ended Year Ended
September 30 September 30,
Capital Share Activity 1998 1997
Shares sold:
Class A Shares 2,018,239 2,817,950
Class B Shares 78,358 -
Class C Shares 121,111 94,710
Reinvestment of distributions:
Class A Shares 2,377,203 1,649,098
Class B Shares 385 -
Class C Shares 34,413 18,971
Shares redeemed:
Class A Shares (2,988,777) (4,069,195)
Class B Shares (303) -
Class C Shares (55,002) (72,209)
Total capital share activity 1,585,627 439,325
See notes to financial statements.
<PAGE>
Bond Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
September 30, September 30,
Increase (Decrease) in Net Assets 1998 1997
Operations:
Net investment income $3,567,253 $3,581,523
Net realized gain (loss) 2,273,322 1,243,910
Change in net unrealized
appreciation or (depreciation) (735,972) 941,907
Increase (Decrease) in Net Assets
Resulting From Operations 5,104,603 5,767,340
Distributions to shareholders from
Net investment income:
Class A Shares (3,574,287) (3,580,791)
Class B Shares (6,098) -
Class C Shares (4,656) (4,713)
Net Realized Gain:
Class A Shares (599,165) -
Total distributions (4,184,206) (3,585,504)
Capital share transactions:
Shares sold:
Class A Shares 13,656,586 10,499,743
Class B Shares 567,123 -
Class C Shares 651,468 86,938
Reinvestment of distributions:
Class A Shares 3,302,128 2,785,981
Class B Shares 3,781 -
Class C Shares 4,537 4,537
Shares redeemed:
Class A Shares (11,726,163) (18,062,343)
Class B Shares (16,121) -
Class C Shares (257,200) (1,540,798)
Total capital share transactions 6,186,139 (6,225,942)
Total Increase (Decrease) In
Net Assets 7,106,536 (4,044,106)
Net Assets
Beginning of year 59,656,097 63,700,203
End of year (including undistributed
net investment
income of $69,443 and
$105,577, respectively) $66,762,633 $59,656,097
See notes to financial statements.
<PAGE>
Year Ended Year Ended
September 30, September 30,
Bond Portfolio (Cont'd) 1998 1997
Capital Share Activity
Shares sold:
Class A Shares 813,667 645,000
Class B Shares 33,817 -
Class C Shares 38,777 4,676
Reinvestment of distributions:
Class A Shares 197,486 171,179
Class B Shares 226 -
Class C Shares 272 283
Shares redeemed:
Class A Shares (698,634) (1,107,488)
Class B Shares (962) -
Class C Shares (15,352) (95,628)
Total capital share activity 369,297 (381,978)
See notes to financial statements.
<PAGE>
Equity Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
September 30, September 30,
Increase (Decrease) in Net Assets 1998 1997
Operations:
Net investment income (loss) $(308,492) $(14,475)
Net realized gain (loss) 609,268 16,858,163
Change in net unrealized
appreciation or (depreciation) (26,063,542) 17,734,994
Increase (Decrease) in Net Assets
Resulting From Operations (25,762,766) 34,578,682
Distributions to shareholders from
Net investment income:
Class A Shares - (35,431)
Class C Shares - (1,209)
Net realized gain:
Class A Shares (18,421,731) (6,816,291)
Class C Shares (881,454) (231,649)
Total distributions (19,303,185) (7,084,580)
Capital share transactions:
Shares sold:
Class A Shares 32,530,473 35,065,087
Class B Shares 2,076,520 -
Class C Shares 3,144,295 2,841,400
Reinvestment of distributions:
Class A Shares 16,511,336 6,224,717
Class C Shares 847,807 221,462
Shares redeemed:
Class A Shares (24,740,783) (22,155,024)
Class B Shares (75,439) -
Class C Shares (2,144,660) (780,271)
Total capital share transactions 28,149,549 21,417,371
Total Increase (Decrease) in
Net Assets (16,916,402) 48,911,473
Net Assets
Beginning of year 153,250,904 104,339,431
End of year $136,334,502 $153,250,904
See notes to financial statements.
<PAGE>
Year Ended Year Ended
September 30, September 30,
Equity Portfolio (Cont'd) 1998 1997
Capital Share Activity
Shares sold:
Class A Shares 1,294,816 1,437,044
Class B Shares 85,813 -
Class C Shares 130,969 122,108
Reinvestment of distributions:
Class A Shares 735,141 273,375
Class C Shares 40,161 10,163
Shares redeemed:
Class A Shares (1,004,381) (911,939)
Class B Shares (3,366) -
Class C Shares (93,240) (33,306)
Total capital share activity 1,185,913 897,445
See notes to financial statements.
<PAGE>
Managed Index Portfolio
Statement of Changes in Net Assets
From Inception
April 15, 1998
Through
Increase (Decrease) in Net Assets September 30, 1998
Operations:
Net investment income (loss) $42,792
Net realized gain (loss) (104,902)
Change in net unrealized appreciation
or (depreciation) (2,066,875)
Increase (Decrease) in Net Assets
Resulting From Operations (2,128,985)
Capital share transactions:
Shares sold:
Class A Shares 5,107,452
Class B Shares 1,062,922
Class C Shares 455,574
Class I Shares 16,515,346
Shares redeemed:
Class A Shares (295,508)
Class B Shares (3,283)
Class C Shares (28,837)
Class I Shares (15,505)
Total capital share transactions 22,798,161
Total Increase (Decrease) in Net Assets 20,669,176
Net Assets
Beginning of period -
End of period (including undistributed
net investment
income of $42,792) $20,669,176
Capital Share Activity
Shares sold:
Class A Shares 346,063
Class B Shares 72,487
Class C Shares 31,384
Class I Shares 1,101,064
Shares redeemed:
Class A Shares (21,145)
Class B Shares (215)
Class C Shares (2,021)
Class I Shares (1,057)
Total capital share activity 1,526,560
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: The Calvert Social Investment Fund (the "Fund") is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund operates as a series fund with five separate
portfolios: Money Market, Managed Growth, Bond, Equity, and Managed Index.
Money Market shares are sold without sales charge. Managed Growth, Bond,
Equity and Managed Index offer Class A, Class B, and Class C shares. Managed
Index also offers Class I shares. Class A shares are sold with a maximum
front-end sales charge of 4.75% (3.75% for Bond). Managed Index's A shares
became effective April 15, 1998.
Effective April 1, 1998, the Fund began to offer Class B shares of
beneficial interest for Managed Growth, Bond and Equity (April 15, 1998 for
Managed Index). Class B shares are sold without a front-end sales charge. With
certain exceptions, the Portfolios will impose a deferred sales charge at the
time of redemption, depending on how long you have owned the shares. Class B
shares have a higher level of expenses than Class A shares, including higher
Distribution Plan expenses.
Effective June 1, 1998, the Fund began to offer Class C shares of
beneficial interest for Bond and Managed Index and converted the existing Class
C shares to new Class C shares of Managed Growth and Equity. Class C shares are
sold without a front-end sales charge. With certain exceptions, the Portfolios
will impose a deferred sales charge on shares sold within one year. Class C
shares have a higher level of expenses than Class A shares, including higher
Distribution Plan expenses.
Effective April 15, 1998, the Fund began to offer Class I shares of
beneficial interest for Managed Index. Class I shares require a minimum account
balance of $1,000,000. They have no front-end or deferred sales charge. Each
class has different: (a) dividend rates, due to differences in Distribution Plan
expenses and other class specific expenses (b) exchange privileges and (c) class
specific voting rights.
On October 29, 1996, all outstanding Class C shares in the Bond Portfolio
were converted into an equivalent value of Class A shares. This transaction was
a non-taxable exchange and no sales charge was applied to the Class A shares
issued.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Municipal securities are valued utilizing the
average of bid prices or at bid prices based on a matrix system (which
considers such factors as security prices, yields, maturities and ratings)
furnished by dealers through an independent pricing service. Foreign security
prices, furnished by quotation services in the security's local currency, are
translated using the current U.S. dollar exchange rate. All securities held by
Money Market are valued at amortized cost which approximates market. The Fund
may invest in securities whose resale is subject to restrictions. Restricted
securities and other securities and assets for which market quotations are not
available or deemed inappropriate are valued in good faith under the direction
of the Board of Trustees.
In determining fair value, the Board considers all
relevant qualitative and quantitative information available. These factors are
subject to change over time and are reviewed periodically. The values assigned
to fair value investments are based on available information and do not
necessarily represent amounts that might ultimately be realized, since such
amounts depend on future developments inherent in long-term investments.
Further, because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have been used had
a ready market of the investments existed, and the differences could be
material.
At September 30, 1998, $21,564,300 or 3.1% of net assets, for Managed Growth,
$1,240,683 or 1.9% for Bond, and $1,253,395 or 1.0% for Equity were valued by
the Board of Trustees.
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.
Options: The Fund may write or purchase option securities. The option premium
is the basis for recognition of unrealized or realized gain or loss on the
option. The cost of securities acquired or the proceeds from securities sold
through the exercise of the option is adjusted by the amount of the premium.
Risks from writing or purchasing option securities arise from possible
illiquidity of the options market and the movement in the value of the
investment or in interest rates. The risk associated with purchasing options
is limited to the premium originally paid.
Futures Contracts: The Fund may enter into futures contracts agreeing to buy
or sell a financial instrument for a set price at a future date. The Fund
maintains securities with a value equal to its obligation under each contract.
Initial margin deposits of either cash or securities are made upon entering
into futures contracts; thereafter, variation margin payments are made or
received daily reflecting the change in market value. Unrealized or realized
gains and losses are recognized based on the change in market value. Risks of
futures contracts arise from the possible illiquidity of the futures markets
and the movement in the value of the investment or in interest rates.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Dividend income is recorded on the ex-dividend date or,
in the case of dividends on certain foreign securities, as soon as the Fund is
informed of the ex-dividend date. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis. Investment income,
expenses and realized and unrealized gains and losses are allocated to
separate classes of shares based upon the relative net assets of each class.
Foreign Currency Transactions: The Fund's accounting records are maintained
in U.S. dollars. For valuation of assets and liabilities on each date of net
asset value determination, foreign denominations are translated into U.S.
dollars using the current exchange rate. Security transactions, income and
expenses are translated at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on securities is
included in the net realized and unrealized gain or loss on securities.
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 by Money Market and Bond, quarterly by Managed Growth
and annually by Equity and Managed Index. 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 the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reported
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 are paid indirectly by
credits earned on each Portfolio'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 Life Insurance Company. 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 monthly fees based on the
following annual rates of average daily net assets: .50% for Money Market,
.65% for Bond, .70% for Equity, and .60% for Managed Index. Effective March
1997 the Advisor agreed to reduce its fee to .55% for Bond until March 2000.
Effective June 1995, Equity began paying a monthly performance fee of plus or
minus .20%, on an annual basis, of average daily net assets of the performance
period depending on the Portfolio's performance compared to the Standard &
Poor's 500 Index Total Return. For Managed Growth, the Advisor receives a
monthly fee based on the following annual rates of average daily net assets:
.70% on the first $500 million, .675% on the next $500 million and .65% on the
excess of $1 billion. Effective January, 1997, Managed Growth began paying a
monthly performance fee of plus or minus .15%, on an annual basis, of average
daily net assets of the performance period depending on the portfolio's
performance compared to the Lipper Balanced Funds Index. For the year ended
September 30, 1998, the performance fee adjustment increased (or decreased)
management fees by $(229,421) and $(493,434) for Equity and Managed Growth,
respectively.
The Advisor reimburses the Portfolios for their respective operating expenses
(excluding brokerage fees, taxes, interest, Distribution Plan expenses and
extraordinary items) exceeding the following annual rates of average daily net
assets: 1.5% on the first $30 million and 1.0% on the excess of $30 million
for Money Market and Bond. Through March 31, 1999, the Advisor has agreed to
cap the expenses for Managed Index at 1.25% for Class A, 2.50% for Class B and
Class C, and 0.75% for Class I.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by each
class of shares, allow the Portfolios to pay the distributor for expenses and
services associated with distribution of shares. The expenses of Money Market
are limited to .25% annually of average daily net assets. The expenses paid
may not exceed .35%, 1.0%, and 1.0% annually of average daily net assets of
each Class A, Class B, and Class C for Managed Growth, Bond and Equity,
respectively. The expenses paid may not exceed .25%, 1.0%, and 1.0% annually
of average daily net assets of each Class A, Class B, and Class C for Managed
Index. Class I for Managed Index does not have Distribution Plan expenses.
The Distributor received the following front-end sales charges (net of dealer
reallowances and contingent deferred sales charges): $356,525 for Managed
Growth, $54,024 for Bond, $216,176 for Equity, and $4,026 for Managed Index.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, is the
shareholder servicing agent for the Fund. National Financial Data Services,
Inc., is the transfer and dividend disbursing agent.
Calvert Administrative Services Company (CASC), and affiliate of the Advisor,
provides administrative services for the Fund. For providing such services,
CASC receives an annual fee, payable monthly, from Managed Index of 0.15%
(0.10% for Class I shares) of the average daily net assets.
Each Trustee who is not affiliated with the Advisor receives an annual fee of
$15,430 plus $600 for each Board and Committee meeting attended. Additional
fees of up to $10,000 annually may be paid to the Chairperson of special
committees of the Board. Trustee's fees are allocated to each of the funds
served.
Umbono Investment Corp., which is an affiliate because Managed Growth owns
over 43% of the voting securities, was purchased at a cost of $6,261,630 for
22,670,603 shares.
Note C - Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were:
Managed Managed
Growth Bond Equity Index
Purchases: $1,223,182,836 $366,145,431 $171,870,778 $26,778,889
Sales: $1,225,876,939 $351,823,702 $167,306,646 $4,501,471
Money Market held only short-term investments.
The cost of investments owned at September 30 1998 was substantially the
same for federal income tax and financial reporting purposes for each Portfolio.
The following table presents the components of net unrealized appreciation
(depreciation) as of September 30, 1998 and the net realized capital loss
carryforwards as of September 30, 1998 with expiration dates:
<PAGE>
Money Managed Managed
Market Growth Bond Equity Index
Unrealized
appreciation - $87,166,824 $1,640,592 $12,506,131 $1,187,405
Unrealized
(depreciation) - $37,617,674 $1,151,309 $9,810,422 $3,254,280
Capital loss
carryforward $29,000 - - - -
Expiration dates 1999-2004 - - - -
Capital losses may be utilized to offset current and future capital gains
until expiration.
As a cash management practice, Portfolios may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
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 September 30, 1998.
Tax Information (Unaudited)
The Fund designates the following as capital gain dividends paid during fiscal
year ended September 30, 1998.
Capital Gain Taxable Taxable
Dividends at 28% at 20%
Managed Growth $47,930,697 60.05% 39.95%
Bond . . . . . 198,143 99.72% .28%
Equity . . . . . 7,431,250 52.56% 47.44%
<PAGE>
Money Market Portfolio
Financial Highlights
Years Ended
September 30, September 30, September 30,
1998 1997 1996
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .049 .048 .048
Distributions from
Net investment income (.049) (.048) (.048)
Net asset value, ending $1.00 $1.00 $1.00
Total return 5.02% 4.89% 4.88%
Ratios to average net assets:
Net investment income 4.92% 4.79% 4.77%
Total expenses+ .89% .89% .89%
Net expenses .87% .87% .87%
Expenses reimbursed .05% .11% .21%
Net assets, ending
(in thousands) $172,701 $166,111 $166,516
Number of shares outstanding,
ending (in thousands) 172,739 166,163 166,569
Years Ended
September 30, September 30,
1995 1994
Net asset value, beginning $1.00 $1.00
Income from investment operations
Net investment income .050 .031
Distributions from
Net investment income (.050) (.031)
Net asset value, ending $1.00 $1.00
Total return 5.13% 3.13%
Ratios to average net assets:
Net investment income 5.03% 3.07%
Total expenses+ .89% N/A
Net expenses .87% .87%
Expenses reimbursed .18% .18%
Net assets, ending (in thousands) $153,996 $143,779
Number of shares outstanding,
ending (in thousands) 154,044 143,826
<PAGE>
Managed Growth Portfolio
Financial Highlights
Years Ended
September 30,September 30, September 30,
Class A Shares 1998 1997 1996
Net asset value, beginning $34.88 $31.35 $32.81
Income from investment
operations
Net investment income .77 .83 .78
Net realized and unrealized
gain (loss) .92 5.61 2.28
Total from investment
operations 1.69 6.44 3.06
Distributions from
Net investment income (.76) (.81) (.77)
Net realized gain (3.36) (2.10) (3.75)
Total distributions (4.12) (2.91) (4.52)
Total increase (decrease) in
net asset value (2.43) 3.53 (1.46)
Net asset value, ending $32.45 $34.88 $31.35
Total return* 5.50% 21.94% 10.27%
Ratios to average net assets:
Net investment income 2.27% 2.57% 2.58%
Total expenses+ 1.13% 1.14% 1.28%
Net expenses 1.11% 1.12% 1.26%
Expenses reimbursed - - .01%
Portfolio turnover 185% 215% 111%
Net assets, ending
(in thousands) $673,907 $675,306 $594,482
Number of shares outstanding,
ending (in thousands) 20,768 19,362 18,964
Years Ended
September 30, September 30,
Class A Shares 1995 1994
Net asset value, beginning $28.77 $30.85
Income from investment operations
Net investment income .87 .93
Net realized and unrealized gain (loss) 4.25 (1.83)
Total from investment operations 5.12 (.90)
Distributions from
Net investment income (.87) (.95)
Net realized gain (.21) (.23)
Total distributions (1.08) (1.18)
Total increase (decrease) in net asset value 4.04 (2.08)
Net asset value, ending $32.81 $28.77
Total return* 18.21% (2.95%)
Ratios to average net assets:
Net investment income 2.89% 3.14%
Total expenses+ 1.28% N/A
Net expenses 1.26% 1.24%
Expenses reimbursed .02% -
Portfolio turnover 114% 34%
Net assets, ending (in thousands) $560,981 $512,027
Number of shares outstanding,
ending (in thousands) 17,099 17,800
Managed Growth Portfolio
Financial Highlights
Period Ended
September 30,
Class B Shares 1998 #
Net asset value, beginning $34.37
Income from investment operations
Net investment income 0.15
Net realized and unrealized gain (loss) (1.90)
Total from investment operations (1.75)
Distributions from
Net investment income (0.24)
Net realized gain -
Total distributions (0.24)
Total increase (decrease) in net asset value (1.99)
Net asset value, ending $32.38
Total return* (5.10%)
Ratios to average net assets:
Net investment income 1.22%(a)
Total expenses+ 2.43%(a)
Net expenses 2.41%(a)
Expenses reimbursed 1.16%(a)
Portfolio turnover 185%
Net assets, ending (in thousands) $2,540
Number of shares outstanding,
ending (in thousands) 78
<PAGE>
Managed Growth Portfolio
Financial Highlights
Years Ended
September 30,September 30, September 30,
Class C Shares 1998 1997 1996
Net asset value, beginning $34.52 $31.05 $32.60
Income from investment operations
Net investment income .41 .47 .46
Net realized and unrealized
gain (loss) .89 5.54 2.17
Total from investment operations 1.30 6.01 2.63
Distributions from
Net investment income (.41) (.44) (.43)
Net realized gain (3.36) (2.10) (3.75)
Total distributions (3.77) (2.54) (4.18)
Total increase (decrease)
in net asset value (2.47) 3.47 (1.55)
Net asset value, ending $32.05 $34.52 $31.05
Total return* 4.35% 20.56% 8.85%
Ratios to average net assets:
Net investment income 1.16% 1.42% 1.34%
Total expenses+ 2.25% 2.29% 2.52%
Net expenses 2.23% 2.27% 2.50%
Expenses reimbursed - - .14%
Portfolio turnover 185% 215% 111%
Net assets, ending (in thousands) $11,483 $8,898 $6,715
Number of shares outstanding,
ending (in thousands) 358 258 216
Years Ended
September 30, September 30,
Class C Shares 1995 1994^
Net asset value, beginning $28.65 $30.43
Income from investment operations
Net investment income .54 .51
Net realized and unrealized gain (loss) 4.20 (1.66)
Total from investment operations 4.74 (1.15)
Distributions from
Net investment income (.58) (.63)
Net realized gain (.21) -
Total distributions (.79) (.63)
Total increase (decrease) in net asset value 3.95 (1.78)
Net asset value, ending $32.60 $28.65
Total return* 16.85% (3.30%)
Ratios to average net assets:
Net investment income 1.61% 1.83%(a)
Total expenses+ 2.51% N/A
Net expenses 2.50% 2.47%(a)
Expenses reimbursed .42% 1.46%(a)
Portfolio turnover 114% 34%
Net assets, ending (in thousands) $4,065 $1,893
Number of shares outstanding,
ending (in thousands) 125 66
<PAGE>
Bond Portfolio
Financial Highlights
Years Ended
September 30,September 30, September 30,
Class A Shares 1998 1997 1996
Net asset value, beginning $16.64 $16.06 $16.34
Income from investment operations
Net investment income .95 .96 .92
Net realized and unrealized
gain (loss) .41 .58 (.29)
Total from investment
operations 1.36 1.54 .63
Distributions from
Net investment income (.96) (.96) (.91)
Net realized gain (.16) - -
Total distributions (1.12) (.96) (.91)
Total increase (decrease) in
net asset value .24 .58 (.28)
Net asset value, ending $16.88 $16.64 $16.06
Total return* 8.46% 9.89% 3.96%
Ratios to average net assets:
Net investment income 5.69% 5.85% 5.60%
Total expenses+ 1.14% 1.23% 1.29%
Net expenses 1.07% 1.19% 1.26%
Portfolio turnover 620% 319% 22%
Net assets, ending (in thousands) $65,807 $59,656 $62,259
Number of shares outstanding,
ending (in thousands) 3,897 3,585 3,876
<PAGE>
Years Ended
September 30, September 30,
Class A Shares 1995 1994
Net asset value, beginning $15.49 $17.77
Income from investment operations
Net investment income .96 .94
Net realized and unrealized gain (loss).91 (1.81)
Total from investment operations 1.87 (.87)
Distributions from
Net investment income (.93) (.94)
Net realized gain (.06) (.47)
Tax return of capital (.03) -
Total distributions (1.02) (1.41)
Total increase (decrease) in net asset value .85 (2.28)
Net asset value, ending $16.34 $15.49
Total return* 12.57% (5.18%)
Ratios to average net assets:
Net investment income 6.04% 5.64%
Total expenses+ 1.24% N/A
Net expenses 1.22% 1.10%
Portfolio turnover 29% 19%
Net assets, ending (in thousands) $62,929 $61,573
Number of shares outstanding,
ending (in thousands) 3,850 3,976
<PAGE>
Bond Portfolio
Financial Highlights
Period Ended
September 30
Class B Shares 1998#
Net asset value, beginning $16.69
Income from investment operations
Net investment income .36
Net realized and unrealized gain (loss) .19
Total from investment operations .55
Distributions from
Net investment income (.40)
Total increase (decrease) in net asset value .15
Net asset value, ending $16.84
Total return* 3.36%
Ratios to average net assets:
Net investment income 4.14%(a)
Total expenses+ 2.55%(a)
Net expenses 2.50%(a)
Expenses reimbursed 5.53%(a)
Portfolio turnover 620%
Net assets, ending (in thousands) $557
Number of shares outstanding,
ending (in thousands) 33
Period Ended
September 30,
Class C Shares 1998^^
Net asset value, beginning $16.81
Income from investment operations
Net investment income .21
Net realized and unrealized gain (loss) .08
Total from investment operations .29
Distributions from
Net investment income (.26)
Total increase (decrease) in net asset value .03
Net asset value, ending $16.84
Total return* 1.75%
Ratios to average net assets:
Net investment income 4.06%(a)
Total expenses+ 2.74%(a)
Net expenses 2.50%(a)
Expenses reimbursed 4.35%(a)
Portfolio turnover 620%
Net assets, ending (in thousands) $399
Number of shares outstanding,
ending (in thousands) 24
<PAGE>
Equity Portfolio
Financial Highlights
Years Ended
September 30,September 30, September 30,
Class A Shares 1998 1997 1996
Net asset value, beginning $27.77 $22.54 $21.12
Income from investment operations
Net investment income (.04) - .03
Net realized and unrealized
gain (loss) (4.01) 6.73 3.26
Total from investment operations (4.05) 6.73 3.29
Distributions from
Net investment income - (.01) (.06)
Net realized gain (3.36) (1.49) (1.81)
Total distributions (3.36) (1.50) (1.87)
Total increase (decrease) in net
asset value (7.41) $5.23 1.42
Net asset value, ending 20.36 $27.77 $22.54
Total return* (15.70%) 31.34% 16.62%
Ratios to average net assets:
Net investment income (.14%) .03% .15%
Total expenses+ 1.16% 1.21% 1.29%
Net expenses 1.07% 1.20% 1.27%
Portfolio turnover 110% 93% 118%
Net assets, ending (in thousands) $128,683 $147,002 $101,344
Number of shares outstanding,
ending (in thousands) 6,320 5,294 4,496
Years Ended
September 30, September 30,
Class A Shares 1995 1994
Net asset value, beginning $20.13 $21.43
Income from investment operations
Net investment income .06 .13
Net realized and unrealized gain (loss) 2.22 (1.04)
Total from investment operations 2.28 (.91)
Distributions from
Net investment income (.04) (.28)
Net realized gain (1.25) (.11)
Total distributions (1.29) (.39)
Total increase (decrease) in net asset
value .99 (1.30)
Net asset value, ending $21.12 $20.13
Total return* 12.43% (4.33%)
Ratios to average net assets:
Net investment income .32% .65%%
Total expenses+ 1.38% N/A
Net expenses 1.36% 1.27%
Portfolio turnover 35% 94%
Net assets, ending (in thousands) $90,951 $92,970
Number of shares outstanding,
ending (in thousands) 4,307 4,620
Equity Portfolio
Financial Highlights
Period Ended
September 30,
Class B Shares 1998 #
Net asset value, beginning $26.01
Income from investment operations
Net investment income (.09)
Net realized and unrealized gain (loss) (5.66)
Total from investment operations (5.75)
Total increase (decrease) in net asset value (5.75)
Net asset value, ending $20.26
Total return* (22.11%)
Ratios to average net assets:
Net investment income
(1.55%)(a)
Total expenses+ 3.19%(a)
Net expenses 2.56%(a)
Expenses reimbursed .93%(a)
Portfolio turnover 110%
Net assets, ending (in thousands) $1,670
Number of shares outstanding,
ending (in thousands) 82
<PAGE>
Equity Portfolio
Financial Highlights
Periods Ended
September 30,September 30, September 30,
Class C Shares 1998 1997 1996
Net asset value, beginning $26.37 $21.71 $20.66
Income from investment operations.
Net investment income (loss) (.16) (.05) (.16)
Net realized and unrealized
gain (loss) (3.85) 6.21 3.04
Total from investment operations (4.01) 6.16 2.88
Distributions from
Net investment income - (.01) (.02)
Net realized gain (3.36) (1.49) (1.81)
Total distributions (3.36) (1.50) (1.83)
Total increase (decrease) in net
asset value (7.37) 4.66 1.05
Net asset value, ending $19.00 $26.37 $21.71
Total return* (16.47%) 29.84% 14.85%
Ratios to average net assets:
Net investment income (loss) (1.17%) (1.08%) (1.42%)
Total expenses+ 2.21% 2.31% 2.86%
Net expenses 2.09% 2.30% 2.85%
Portfolio turnover 110% 93% 118%
Net assets, ending (in thousands) $5,981 $6,249 $2,996
Number of shares outstanding,
ending (in thousands) 315 237 138
Years Ended
September 30, September 30,
Class C Shares 1995 1994^
Net asset value, beginning $19.98 $22.12
Income from investment operations.
Net investment income (.03) (.06)
Net realized and unrealized gain (loss) 2.05 (2.08)
Total from investment operations 2.02 (2.14)
Distributions from
Net investment income (.09) -
Net realized gain (1.25) -
Total distributions (1.34) -
Total increase (decrease) in net asset value .68 (2.14)
Net asset value, ending $20.66 $19.98
Total return* 11.16% (9.14%)
Ratios to average net assets:
Net investment income (loss) (.84%) (1.06%)(a)
Total expenses+ 2.51% N/A
Net expenses 2.50% 2.75%(a)
Expenses reimbursed 1.07% 4.60%(a)
Portfolio turnover 35% 94%
Net assets, ending (in thousands) $1,802 $670
Number of shares outstanding,
ending (in thousands) 87 34
<PAGE>
Managed Index Portfolio
Financial Highlights
Class A Shares Class B
Shares
Period Ended Period Ended
September 30, September 30,
1998 ## 1998 ##
Net asset value, beginning $15.00 $15.00
Income from investment operations
Net investment income .02 (.03)
Net realized and unrealized gain (loss) (1.48) (1.49)
Total from investment operations (1.46) (1.52)
Total increase (decrease) in net asset value (1.46) (1.52)
Net asset value, ending $13.54 $13.48
Total return* (9.73%) (10.13%)
Ratios to average net assets:
Net investment income .42%(a) (.98%)(a)
Total expenses+ 1.01%(a) 2.56%(a)
Net expenses .95%(a) 2.50%(a)
Expense reimbursed .85%(a) 3.05%(a)
Portfolio turnover 27% 27%
Net assets, ending (in thousands) $4,401 $975
Number of shares outstanding,
ending (in thousands) 325 72
Class C Shares Class I Shares
Period Ended Period Ended
September 30, September 30,
1998 ^^ 1998 ##
Net asset value, beginning $14.52 $15.00
Income from investment operations
Net investment income (.02) .04
Net realized and unrealized gain (loss) (.98) (1.50)
Total from investment operations (1.00) (1.46)
Total increase (decrease) in net asset value (1.00) (1.46)
Net asset value, ending $13.52 $13.54
Total return* (6.89%) (9.73%)
Ratios to average net assets:
Net investment income (.96%)(a) .54%(a)
Total expenses+ 2.56%(a) .81%(a)
Net expenses 2.50%(a) .75%(a)
Expenses reimbursed 2.26%(a) .22%(a)
Portfolio turnover 27% 27%
Net assets, ending (in thousands) $397 $14,897
Number of shares outstanding,
ending (in thousands) 29 1,100
(a) Annualize
* Total return is not annualized for periods less than one year and does not
reflect deduction of any front-end or deferred charge
+ Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the ratio
of net expenses.
# From April 1, 1998 inception.
^ From March 1, 1994 inception
^^ From June 1, 1998 inception
## From April 15, 1998 inception
N/A Disclosure not applicable to prior periods.
<PAGE>
Calvert Social Investment Fund
Equity Portfolio
Prospectus dated January 31, 1998, revised March 31, 1998
Date of Supplement: September 22, 1998
The following is added to the cover page of the Prospectus:
Effective September 21, 1998, Loomis, Sayles & Company, L.P. is no longer the
investment subadvisor for the Calvert Social Investment Fund Equity Portfolio
("Equity Portfolio"). The Fund's Board of Trustees and investment advisor
have retained Atlanta Capital Management Company, L.L.C. ("Atlanta Capital"),
also effective September 21, 1998, to manage the Equity Portfolio. Atlanta
Capital's principal business office is located at Two Midtown Plaza, Suite
1600, 1360 Peachtree Street, Atlanta, Georgia 30309. All references in the
Prospectus to "Loomis, Sayles" or "Subadvisor" of the Equity Portfolio will
refer to Atlanta Capital as of September 21, 1998.
Management of the Equity Portfolio will be undertaken by a team of investment
professionals. The senior investment professional is Daniel W. Boone, III,
CFA. Mr. Boone's primary responsibilities are in equity portfolio management
and research. Before joining Atlanta Capital in 1976, he was with the
international firm of Lazard Freres in New York. Prior to that, he was an
analyst with the Wellington Management Company. Mr. Boone has earned an MBA
from the Wharton School of The University of Pennsylvania, where he graduated
with distinction, and a B.A. from Davidson College.
Thus, shareholders of the Equity Portfolio will receive a proxy statement to
vote on approval of a new investment subadvisory agreement with Atlanta
Capital which provides for Atlanta Capital to receive a subadvisory fee of
0.30% of Portfolio assets, to be paid by the investment advisor. Shareholders
may also be asked to consider other matters concerning the Portfolio
<PAGE>
This page is reserved for any comments and questions.
Calvert Social
Investment Fund
