SEC REGISTRATION NOS.
2-75106 AND 811-3334
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 31 XX
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 31 XX
CALVERT SOCIAL INVESTMENT FUND
THIS FILING IS FOR THE TECHNOLOGY PORTFOLIO ONLY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (301) 951-4800
WILLIAM M. TARTIKOFF, ESQ.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(NAME AND ADDRESS OF AGENT FOR SERVICE)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
___IMMEDIATELY UPON FILING ___ ON (DATE)
PURSUANT TO PARAGRAPH (B) PURSUANT TO PARAGRAPH (B)
XX 75 DAYS AFTER FILING ___ ON (DATE)
PURSUANT TO PARAGRAPH (A) PURSUANT TO PARAGRAPH (A)
<PAGE>
PRELIMINARY PROSPECTUS
AUGUST 4, 2000
CALVERT SOCIAL INVESTMENT FUND - TECHNOLOGY PORTFOLIO
ABOUT THE FUND
2 INVESTMENT OBJECTIVE AND STRATEGY
3 FEES AND EXPENSES
5 INVESTMENT PRACTICES AND RISKS
9 INVESTMENT SELECTION PROCESS AND SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
11 SHAREHOLDER ADVOCACY AND SOCIAL RESPONSIBILITY
ABOUT YOUR INVESTMENT
12 ABOUT CALVERT
12 ADVISORY FEES
13 HOW TO BUY SHARES
13 GETTING STARTED
13 CHOOSING A SHARE CLASS
16 CALCULATION OF CDSC/WAIVER
17 DISTRIBUTION AND SERVICE FEES
17 ACCOUNT APPLICATION
18 IMPORTANT - HOW SHARES ARE PRICED
18 WHEN YOUR ACCOUNT WILL BE CREDITED
19 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
21 DIVIDENDS, CAPITAL GAINS AND TAXES
23 HOW TO SELL SHARES
25 EXHIBIT A- REDUCED SALES CHARGES (CLASS A)
27 EXHIBIT B- SERVICE FEES AND
OTHER ARRANGEMENTS WITH DEALERS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATES WHERE THE OFFER OR SALE IS NOT PERMITTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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OBJECTIVE
CALVERT SOCIAL INVESTMENT FUND TECHNOLOGY PORTFOLIO SEEKS GROWTH OF CAPITAL
THROUGH INVESTMENT IN STOCKS IN COMPANIES INVOLVED IN THE DEVELOPMENT,
ADVANCEMENT, AND USE OF TECHNOLOGY.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS PRIMARILY IN STOCKS OF COMPANIES THAT THE ADVISOR EXPECTS TO
BENEFIT FROM THE DEVELOPMENT AND USE OF TECHNOLOGY. HOLDINGS CAN RANGE
FROM SMALL COMPANIES DEVELOPING NEW TECHNOLOGY TO BLUE CHIP FIRMS WITH
ESTABLISHED TRACK RECORDS OF DEVELOPING AND MARKETING TECHNOLOGICAL
ADVANCES.
THE FUND WILL INVEST AT LEAST 65% OF ITS ASSETS IN THE STOCKS OF U.S. AND
NON-U.S. COMPANIES PRINCIPALLY ENGAGED IN RESEARCH, DEVELOPMENT, AND MANUFACTURE
OF TECHNOLOGY AND IN THE STOCKS OF COMPANIES THAT SHOULD BENEFIT FROM THE
COMMERCIALIZATION OF TECHNOLOGICAL ADVANCES. THE FUND MAY ALSO INVEST UP TO 10%
IN PRIVATE EQUITY AND SHORT AT LEAST 10% OF THE NET ASSET VALUE.
THE GOAL OF THE INVESTMENT SELECTION PROCESS IS TO IDENTIFY CANDIDATES FOR
INVESTMENT THAT ARE GROWTH COMPANIES WITH SUPERIOR EARNINGS PROSPECTS,
REASONABLE VALUATIONS, AND FAVORABLE TRADING VOLUME AND PRICE PATTERNS. THE
PROCESS IS BASED ON ONE PHILOSOPHY: EARNINGS EXPECTATIONS DRIVE STOCK
PRICES. THE FUND INVESTS IN COMPANIES WITH STRONG EARNINGS PROSPECTS THAT THE
SUBADVISOR EXPECTS TO PRODUCE GAINS OVER TIME. THE FUND BUYS COMPANIES WITH
STRONG EARNINGS DYNAMICS, AND SELLS THOSE WITH DETERIORATING EARNINGS PROSPECTS.
SECURITY SELECTION IS THE PRIMARY MEANS OF ADDING INVESTMENT VALUE. THE FUND
USES AN ACTIVE TRADING STRATEGY WHICH MAY CAUSE THE FUND TO HAVE A RELATIVELY
HIGH AMOUNT OF SHORT-TERM CAPITAL GAINS, WHICH ARE TAXABLE TO YOU, THE
SHAREHOLDER, AT THE ORDINARY INCOME TAX RATE.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA.
PRINCIPAL RISKS
THE FUND IS DESIGNED FOR LONG-TERM INVESTORS WHO ARE WILLING TO ACCEPT
ABOVE-AVERAGE RISK AND VOLATILITY IN ORDER TO SEEK A HIGHER RATE OF RETURN OVER
TIME. YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED.
- THE FUND IS SUBJECT TO THE RISK THAT ITS PRINCIPAL MARKET SEGMENT, TECHNOLOGY
STOCKS, MAY UNDERPERFORM COMPARED TO OTHER MARKET SEGMENTS OR TO THE EQUITY
MARKETS AS A WHOLE.
- THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST MORE
OF ITS ASSETS IN A SMALLER NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE
STOCK MAY HAVE GREATER IMPACT ON THE FUND.
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AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
(NO PERFORMANCE RESULTS ARE SHOWN FOR THE FUND SINCE IT WAS RECENTLY ORGANIZED.)
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUND.
CLASS A CLASS B CLASS C
SHAREHOLDER FEES
(PAID DIRECTLY FROM YOUR ACCOUNT)
MAXIMUM SALES CHARGE (LOAD)
IMPOSED ON PURCHASES % NONE NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE OR NONE2 % 3 %4
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
ANNUAL FUND OPERATING EXPENSES1
(DEDUCTED FROM FUND ASSETS)
MANAGEMENT FEES % % %
DISTRIBUTION AND SERVICE (12B-1) FEES % % %
OTHER EXPENSES % % %
TOTAL ANNUAL FUND OPERATING EXPENSES % % %
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT5 % % %
NET EXPENSES % % %
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NOTES TO FEES AND EXPENSES TABLE
1 EXPENSES ARE BASED ON ESTIMATES FOR THE FUND'S CURRENT FISCAL YEAR.
MANAGEMENT FEES INCLUDE THE SUBADVISORY FEES PAID BY THE ADVISOR, CALVERT
ASSET MANAGEMENT COMPANY ("CAMCO" OR "CALVERT") TO THE SUBADVISOR, AND
THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF CAMCO.
2 PURCHASES OF CLASS A SHARES FOR ACCOUNTS WITH $1 MILLION OR MORE ARE NOT
SUBJECT TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A 1% CONTINGENT
DEFERRED SALES CHARGE ON SHARES REDEEMED WITHIN 1 YEAR OF PURCHASE.
(SEE "HOW TO BUY SHARES" - CLASS A.)
3 A CONTINGENT DEFERRED SALES CHARGE IS IMPOSED ON THE PROCEEDS OF CLASS B
SHARES REDEEMED WITHIN 6 YEARS, SUBJECT TO CERTAIN EXCEPTIONS. THE CHARGE IS A
PERCENTAGE OF NET ASSET VALUE AT THE TIME OF PURCHASE OR REDEMPTION,
WHICHEVER IS LESS, AND DECLINES FROM 5% IN THE FIRST YEAR THAT SHARES ARE HELD,
TO 4% IN THE SECOND AND THIRD YEAR, 3% IN THE FOURTH YEAR, 2% IN THE FIFTH
YEAR, AND 1% IN THE SIXTH YEAR. THERE IS NO CHARGE ON REDEMPTIONS OF CLASS B
SHARES HELD FOR MORE THAN SIX YEARS. SEE "CALCULATION OF CONTINGENT DEFERRED
SALES CHARGE."
4 A CONTINGENT DEFERRED SALES CHARGE OF 1% IS IMPOSED ON THE PROCEEDS OF
CLASS C SHARES REDEEMED WITHIN ONE YEAR. THE CHARGE IS A PERCENTAGE OF NET
ASSET VALUE AT THE TIME OF PURCHASE OR REDEMPTION, WHICHEVER IS LESS. SEE
"CALCULATION OF CONTINGENT DEFERRED SALES CHARGE."
5 CAMCO HAS AGREED TO LIMIT ANNUAL FUND OPERATING EXPENSES (NET OF ANY
EXPENSE OFFSET ARRANGEMENTS) THROUGH SEPTEMBER 30, 2001. THE CONTRACTUAL EXPENSE
CAP IS SHOWN AS "NET EXPENSES," THIS IS THE MAXIMUM AMOUNT OF OPERATING EXPENSES
THAT MAY BE CHARGED TO THE FUND THROUGH SEPTEMBER 30, 2001. FOR THE PURPOSES OF
THIS EXPENSE LIMIT, OPERATING EXPENSES DO NOT INCLUDE INTEREST EXPENSE,
BROKERAGE COMMISSIONS, EXTRAORDINARY EXPENSES, TAXES AND CAPITAL ITEMS. THE FUND
HAS AN OFFSET ARRANGEMENT WITH THE CUSTODIAN BANK WHEREBY THE CUSTODIAN AND
TRANSFER AGENT FEES MAY BE PAID INDIRECTLY BY CREDITS ON THE FUND'S UNINVESTED
CASH BALANCES. THESE CREDITS ARE USED TO REDUCE THE FUND'S EXPENSES.
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EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
- YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
CLASS NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS
A
B (WITH REDEMPTION)
B (NO REDEMPTION)
C (WITH REDEMPTION)
C (NO REDEMPTION)
INVESTMENT PRACTICES AND RELATED RISKS
ON THE FOLLOWING PAGES ARE BRIEF DESCRIPTIONS OF THE PRINCIPAL INVESTMENTS AND
TECHNIQUES, SUMMARIZED EARLIER, ALONG WITH CERTAIN ADDITIONAL INVESTMENT
TECHNIQUES AND THEIR RISKS. FOR EACH OF THE INVESTMENT PRACTICES LISTED,WE SHOW
THE PRINCIPAL TYPES OF RISK INVOLVED. (SEE THE FOLLOWING PAGES FOR A DESCRIPTION
OF THE TYPES OF RISKS).
INVESTMENT PRACTICES
STOCKS IN GENERAL. THE FUND IS SUBJECT TO STOCK MARKET RISK. STOCK PRICES
OVERALL MAY DECLINE OVER SHORT OR EVEN LONG PERIODS. THE FUND IS ALSO SUBJECT
TO INVESTMENT STYLE RISK, WHICH IS THE CHANCE THAT RETURNS THE TECHNOLOGY
SECTOR STOCKS WILL TRAIL RETURNS FROM OTHER ASSET CLASSES OR THE OVERALL STOCK
MARKET. EACH TYPE OF STOCK TENDS TO GO THROUGH CYCLES OF DOING BETTER OR WORSE
THAN THE STOCK MARKET IN GENERAL. FINALLY, INDIVIDUAL STOCKS MAY LOSE VALUE FOR
A VARIETY OF REASONS, EVEN WHEN THE OVERALL STOCK MARKET HAS INCREASED.
RISKS: MARKET.
ACTIVE TRADING STRATEGY/TURNOVER INVOLVES SELLING A SECURITY SOON AFTER
PURCHASE. AN ACTIVE TRADING STRATEGY CAUSES A FUND TO HAVE HIGHER PORTFOLIO
TURNOVER COMPARED TO OTHER FUNDS AND HIGHER TRANSACTION COSTS, SUCH AS
COMMISSIONS AND CUSTODIAN AND SETTLEMENT FEES, AND MAY INCREASE YOUR TAX
LIABILITY. RISKS: OPPORTUNITY, MARKET, TRANSACTION AND TAX.
TEMPORARY DEFENSIVE POSITIONS.
DURING ADVERSE MARKET, ECONOMIC OR POLITICAL CONDITIONS, THE FUND MAY DEPART
FROM ITS PRINCIPAL INVESTMENT STRATEGIES BY INCREASING ITS INVESTMENT IN
SHORT-TERM INTEREST-BEARING SECURITIES. DURING TIMES OF ANY TEMPORARY DEFENSIVE
POSITIONS, THE FUND MAY NOT BE ABLE TO ACHIEVE ITS INVESTMENT OBJECTIVE RISKS:
OPPORTUNITY.
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CONVENTIONAL SECURITIES
FOREIGN SECURITIES. SECURITIES ISSUED BY COMPANIES LOCATED OUTSIDE THE U.S.
AND/OR TRADED PRIMARILY ON A FOREIGN EXCHANGE. RISKS: MARKET, CURRENCY,
TRANSACTION, LIQUIDITY, INFORMATION AND POLITICAL.
SMALL CAP STOCKS. INVESTING IN SMALL COMPANIES INVOLVES GREATER RISK THAN WITH
MORE ESTABLISHED COMPANIES. SMALL CAP STOCK PRICES ARE MORE VOLATILE AND THE
COMPANIES OFTEN HAVE LIMITED PRODUCT LINES, MARKETS, FINANCIAL RESOURCES, AND
MANAGEMENT EXPERIENCE. RISKS: MARKET, LIQUIDITY AND INFORMATION.
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET AND CREDIT.
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA OR COMPARABLE UNRATED
BONDS ARE CONSIDERED JUNK BONDS. THEY ARE SUBJECT TO GREATER CREDIT RISK THAN
INVESTMENT GRADE BONDS. RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY AND
INFORMATION.
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT BEEN RATED BY A RECOGNIZED RATING
AGENCY; THE ADVISOR HAS DETERMINED THE CREDIT QUALITY BASED ON ITS OWN RESEARCH.
RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY AND INFORMATION.
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE READILY SOLD BECAUSE THERE IS NO
ACTIVE MARKET. RISKS: LIQUIDITY, MARKET AND TRANSACTION.
INITIAL PUBLIC OFFERINGS ("IPOS"). IPOS AND OTHER INVESTMENTS MAY MAGNIFY THE
PERFORMANCE IMPACT ON A PORTFOLIO WITH A SMALL ASSET BASE. THE PORTFOLIO MAY NOT
EXPERIENCE SIMILAR PERFORMANCE AS THE ASSETS GROW.
LEVERAGED DERIVATIVE INSTRUMENTS
CURRENCY CONTRACTS. CONTRACTS INVOLVING THE RIGHT OR OBLIGATION TO BUY OR SELL A
GIVEN AMOUNT OF FOREIGN CURRENCY AT A SPECIFIED PRICE AND FUTURE DATE. RISKS:
CURRENCY, LEVERAGE, CORRELATION, LIQUIDITY AND OPPORTUNITY.
OPTIONS ON SECURITIES AND INDICES. CONTRACTS GIVING THE HOLDER THE RIGHT BUT NOT
THE OBLIGATION TO PURCHASE OR SELL A SECURITY (OR THE CASH VALUE, IN THE CASE OF
AN OPTION ON AN INDEX) AT A SPECIFIED PRICE WITHIN A SPECIFIED TIME. IN THE CASE
OF SELLING (WRITING) OPTIONS, THE FUNDS WILL WRITE CALL OPTIONS ONLY IF THEY
ALREADY OWN THE SECURITY (IF IT IS "COVERED"). RISKS: INTEREST RATE, CURRENCY,
MARKET, LEVERAGE, CORRELATION, LIQUIDITY, CREDIT AND OPPORTUNITY.
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A SPECIFIC AMOUNT OF A COMMODITY OR
FINANCIAL INSTRUMENT AT A PARTICULAR PRICE ON A SPECIFIC FUTURE DATE. RISKS:
INTEREST RATE, CURRENCY, MARKET, LEVERAGE, CORRELATION, LIQUIDITY AND
OPPORTUNITY.
<PAGE>
HIGH SOCIAL IMPACT INVESTMENTS
HIGH SOCIAL IMPACT INVESTMENTS IS A PROGRAM THAT TARGETS A PERCENTAGE OF THE
FUND'S ASSETS (UP TO 1%) TO DIRECTLY SUPPORT THE GROWTH OF COMMUNITY-BASED
ORGANIZATIONS FOR THE PURPOSES OF PROMOTING BUSINESS CREATION, HOUSING
DEVELOPMENT, AND ECONOMIC AND SOCIAL DEVELOPMENT OF URBAN AND RURAL COMMUNITIES.
THE FUND MAY ENGAGE IN THIS PROGRAM UPON REACHING $50 MILLION IN ASSETS. THESE
TYPES OF INVESTMENTS OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING MARKET
RATE, AND ARE CONSIDERED ILLIQUID, UNRATED AND MAY BE DEEMED BELOW-INVESTMENT
GRADE. THEY ALSO INVOLVE A GREATER RISK OF DEFAULT OR PRICE DECLINE THAN
INVESTMENT GRADE SECURITIES. HOWEVER, THEY HAVE SIGNIFICANT SOCIAL RETURN BY
MAKING A TREMENDOUS DIFFERENCE IN OUR LOCAL COMMUNITIES. HIGH SOCIAL IMPACT
INVESTMENTS ARE VALUED UNDER THE DIRECTION AND CONTROL OF THE FUND'S BOARD.
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER TO PERMIT IT TO INVEST THOSE ASSETS
ALLOCATED FOR INVESTMENT IN HIGH SOCIAL IMPACT INVESTMENTS THROUGH THE PURCHASE
OF COMMUNITY INVESTMENT NOTES FROM THE CALVERT SOCIAL INVESTMENT FOUNDATION. THE
CALVERT SOCIAL INVESTMENT FOUNDATION IS A NON-PROFIT ORGANIZATION, LEGALLY
DISTINCT FROM CALVERT GROUP, ORGANIZED AS A CHARITABLE AND EDUCATIONAL
FOUNDATION FOR THE PURPOSE OF INCREASING PUBLIC AWARENESS AND KNOWLEDGE OF THE
CONCEPT OF SOCIALLY RESPONSIBLE INVESTING. THE CALVERT SOCIAL INVESTMENT
FOUNDATION HAS INSTITUTED THE CALVERT COMMUNITY INVESTMENTS PROGRAM TO RAISE
ASSETS FROM INDIVIDUAL AND INSTITUTIONAL INVESTORS AND THEN INVEST THESE ASSETS
DIRECTLY IN NON-PROFIT OR NOT-FOR-PROFIT COMMUNITY DEVELOPMENT ORGANIZATIONS
AND COMMUNITY DEVELOPMENT BANKS THAT FOCUS ON LOW INCOME HOUSING, ECONOMIC
DEVELOPMENT AND BUSINESS DEVELOPMENT IN URBAN AND RURAL COMMUNITIES.
SPECIAL EQUITIES
THE FUND HAS A SPECIAL EQUITIES INVESTMENT PROGRAM THAT ALLOWS THE FUND TO
PROMOTE ESPECIALLY PROMISING APPROACHES TO SOCIAL GOALS THROUGH PRIVATELY PLACED
INVESTMENTS. THE INVESTMENTS ARE GENERALLY VENTURE CAPITAL INVESTMENTS IN SMALL,
UNTRIED ENTERPRISES. THE SPECIAL EQUITIES COMMITTEE OF THE FUND'S BOARD
IDENTIFIES, EVALUATES, AND SELECTS THE SPECIAL EQUITIES INVESTMENTS. SPECIAL
EQUITIES INVOLVE A HIGH DEGREE OF RISK - THEY ARE SUBJECT TO LIQUIDITY,
INFORMATION, AND, IF A DEBT INVESTMENT, CREDIT RISK. SPECIAL EQUITIES ARE
VALUED UNDER THE DIRECTION AND CONTROL OF THE FUND'S BOARD.
THE FUND HAS ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS (FOR EXAMPLE,
REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND REVERSE REPURCHASE AGREEMENTS,
AND SECURITIES LENDING.) THESE POLICIES AND RESTRICTIONS ARE DISCUSSED IN THE
STATEMENT OF ADDITIONAL INFORMATION ("SAI ").
<PAGE>
TYPES OF INVESTMENT RISK
CORRELATION RISK
THIS OCCURS WHEN A FUND "HEDGES"- USES ONE INVESTMENT TO OFFSET THE FUND'S
POSITION IN ANOTHER. IF THE TWO INVESTMENTS DO NOT BEHAVE IN RELATION TO ONE
ANOTHER THE WAY FUND MANAGERS EXPECT THEM TO, THEN UNEXPECTED OR UNDESIRED
RESULTS MAY OCCUR. FOR EXAMPLE, A HEDGE MAY ELIMINATE OR REDUCE GAINS AS WELL AS
OFFSET LOSSES.
CREDIT RISK
THE RISK THAT THE ISSUER OF A SECURITY OR THE COUNTERPARTY TO AN INVESTMENT
CONTRACT MAY DEFAULT OR BECOME UNABLE TO PAY ITS OBLIGATIONS WHEN DUE.
CURRENCY RISK
CURRENCY RISK OCCURS WHEN A FUND BUYS, SELLS OR HOLDS A SECURITY DENOMINATED IN
FOREIGN CURRENCY. FOREIGN CURRENCIES "FLOAT" IN VALUE AGAINST THE U.S. DOLLAR.
ADVERSE CHANGES IN FOREIGN CURRENCY VALUES CAN CAUSE INVESTMENT LOSSES WHEN A
FUND'S INVESTMENTS ARE CONVERTED TO U.S. DOLLARS.
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY REDUCING
THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-TERM
SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE SUBJECT
TO GREATER INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT
EXCEEDS THE AMOUNT ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID SECURITY
OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
THE RISK THAT A FUND'S PORTFOLIO MANAGEMENT PRACTICES MIGHT NOT WORK TO ACHIEVE
THEIR DESIRED RESULT.
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MARKET RISK
THE RISK THAT SECURITIES PRICES IN A MARKET, A SECTOR OR AN INDUSTRY WILL
FLUCTUATE, AND THAT SUCH MOVEMENTS MIGHT REDUCE AN INVESTMENT'S VALUE.
OPPORTUNITY RISK
THE RISK OF MISSING OUT ON AN INVESTMENT OPPORTUNITY BECAUSE THE ASSETS NEEDED
TO TAKE ADVANTAGE OF IT ARE COMMITTED TO LESS ADVANTAGEOUS INVESTMENTS OR
STRATEGIES.
POLITICAL RISK
THE RISK THAT MAY OCCUR WITH FOREIGN INVESTMENTS, AND MEANS THAT THE VALUE OF AN
INVESTMENT MAY BE ADVERSELY AFFECTED BY NATIONALIZATION, TAXATION, WAR,
GOVERNMENT INSTABILITY OR OTHER ECONOMIC OR POLITICAL ACTIONS OR FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT, MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
VOLATILITY RISK
THE RISK THAT THE VALUE OF A SECURITY WILL INCREASE OR DECREASE GREATLY WITHIN A
SHORT PERIOD OF TIME.
INVESTMENT SELECTION PROCESS
INVESTMENTS ARE SELECTED ON THE BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL
OBJECTIVES OF FINANCIAL SOUNDNESS AND SOCIAL CRITERIA.
POTENTIAL INVESTMENTS FOR THE FUND ARE FIRST SELECTED FOR FINANCIAL SOUNDNESS
AND THEN EVALUATED ACCORDING TO THE FUND'S SOCIAL CRITERIA. TO THE GREATEST
EXTENT POSSIBLE, THE FUND SEEKS TO INVEST IN COMPANIES THAT EXHIBIT
POSITIVE ACCOMPLISHMENTS WITH RESPECT TO ONE OR MORE OF THE SOCIAL CRITERIA.
INVESTMENTS FOR THE FUND MUST MEET THE MINIMUM STANDARDS FOR ALL ITS
FINANCIAL AND SOCIAL CRITERIA.
ALTHOUGH THE FUND'S SOCIAL CRITERIA TEND TO LIMIT THE AVAILABILITY OF INVESTMENT
OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER INVESTMENT COMPANIES, CAMCO AND
THE SUBADVISOR OF THE FUND BELIEVE THERE ARE SUFFICIENT INVESTMENT OPPORTUNITIES
TO PERMIT FULL INVESTMENT AMONG ISSUERS WHICH SATISFY THE FUND'S INVESTMENT AND
SOCIAL OBJECTIVES.
THE SELECTION OF AN INVESTMENT BY THE FUND DOES NOT CONSTITUTE ENDORSEMENT OR
VALIDATION BY THE FUND, NOR DOES THE EXCLUSION OF AN INVESTMENT NECESSARILY
REFLECT FAILURE TO SATISFY THE FUND'S SOCIAL CRITERIA. INVESTORS ARE INVITED TO
SEND A BRIEF DESCRIPTION OF COMPANIES THEY BELIEVE MIGHT BE SUITABLE FOR
INVESTMENT.
<PAGE>
SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
THE FUND INVESTS IN ACCORDANCE WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO
INVESTORS WILL COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND
METHODS ENHANCE THE HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF
INDIVIDUAL INITIATIVE, EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. IN
ADDITION, WE BELIEVE THAT THERE ARE LONG-TERM BENEFITS IN AN INVESTMENT
PHILOSOPHY THAT DEMONSTRATES CONCERN FOR THE ENVIRONMENT, LABOR RELATIONS, HUMAN
RIGHTS AND COMMUNITY RELATIONS. THOSE ENTERPRISES THAT EXHIBIT A SOCIAL
AWARENESS IN THESE ISSUES SHOULD BE BETTER PREPARED TO MEET FUTURE SOCIETAL
NEEDS. BY RESPONDING TO SOCIAL CONCERNS, THESE ENTERPRISES SHOULD NOT ONLY
AVOID THE LIABILITY THAT MAY BE INCURRED WHEN A PRODUCT OR SERVICE IS DETERMINED
TO HAVE A NEGATIVE SOCIAL IMPACT OR HAS OUTLIVED ITS USEFULNESS, BUT ALSO BE
BETTER POSITIONED TO DEVELOP OPPORTUNITIES TO MAKE A PROFITABLE CONTRIBUTION TO
SOCIETY. THESE ENTERPRISES SHOULD BE READY TO RESPOND TO EXTERNAL DEMANDS AND
ENSURE THAT OVER THE LONGER TERM THEY WILL BE VIABLE TO SEEK TO PROVIDE A
POSITIVE RETURN TO BOTH INVESTORS AND SOCIETY AS A WHOLE.
THE FUND HAS DEVELOPED SOCIAL INVESTMENT CRITERIA, DETAILED BELOW. THESE
CRITERIA REPRESENT STANDARDS OF BEHAVIOR WHICH FEW, IF ANY, ORGANIZATIONS
TOTALLY SATISFY. AS A MATTER OF PRACTICE, EVALUATION OF A PARTICULAR
ORGANIZATION IN THE CONTEXT OF THESE CRITERIA WILL INVOLVE SUBJECTIVE JUDGMENT
BY CAMCO AND THE SUBADVISOR. ALL SOCIAL CRITERIA MAY BE CHANGED BY THE BOARD OF
TRUSTEES WITHOUT SHAREHOLDER APPROVAL.
THE FUND SEEKS TO INVEST IN COMPANIES THAT:
- DELIVER SAFE PRODUCTS AND SERVICES IN WAYS THAT SUSTAIN OUR NATURAL
ENVIRONMENT. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES THAT PRODUCE ENERGY FROM
RENEWABLE RESOURCES, WHILE AVOIDING CONSISTENT POLLUTERS.
- MANAGE WITH PARTICIPATION THROUGHOUT THE ORGANIZATION IN DEFINING AND
ACHIEVING OBJECTIVES. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES THAT OFFER
EMPLOYEE STOCK OWNERSHIP OR PROFIT-SHARING PLANS.
- NEGOTIATE FAIRLY WITH THEIR WORKERS, PROVIDE AN ENVIRONMENT SUPPORTIVE OF
THEIR WELLNESS, DO NOT DISCRIMINATE ON THE BASIS OF RACE, GENDER, RELIGION, AGE,
DISABILITY, ETHNIC ORIGIN, OR SEXUAL ORIENTATION, DO NOT CONSISTENTLY VIOLATE
REGULATIONS OF THE EEOC, AND PROVIDE OPPORTUNITIES FOR WOMEN, DISADVANTAGED
MINORITIES, AND OTHERS FOR WHOM EQUAL OPPORTUNITIES HAVE OFTEN BEEN DENIED. FOR
EXAMPLE, THE FUND CONSIDERS BOTH UNIONIZED AND NON-UNION FIRMS WITH GOOD LABOR
RELATIONS.
- FOSTER AWARENESS OF A COMMITMENT TO HUMAN GOALS, SUCH AS CREATIVITY,
PRODUCTIVITY, SELF-RESPECT AND RESPONSIBILITY, WITHIN THE ORGANIZATION AND THE
WORLD, AND CONTINUALLY RECREATES A CONTEXT WITHIN WHICH THESE GOALS CAN BE
<PAGE>
REALIZED. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES WITH AN ABOVE AVERAGE
COMMITMENT TO COMMUNITY AFFAIRS AND CHARITABLE GIVING.
THE FUND WILL NOT INVEST IN COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- BUSINESS ACTIVITIES IN SUPPORT OF REPRESSIVE REGIMES
- PRODUCTION, OR THE MANUFACTURE OF EQUIPMENT, TO PRODUCE NUCLEAR ENERGY
- MANUFACTURE OF WEAPON SYSTEMS
- MANUFACTURE OF ALCOHOLIC BEVERAGES OR TOBACCO PRODUCTS
- OPERATION OF GAMBLING CASINOS
- A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS PEOPLE. WE
URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE AMERICANS AND OTHER
INDIGENOUS PEOPLES. FOR EXAMPLE, THE FUND OBJECTS TO THE UNAUTHORIZED USE OF
NAMES AND IMAGES THAT PORTRAY NATIVE AMERICANS IN A NEGATIVE LIGHT, AND
SUPPORTS THE PROMOTION OF POSITIVE PORTRAYALS OF ALL INDIVIDUALS AND ETHNIC
GROUPS.
WITH RESPECT TO U.S. GOVERNMENT SECURITIES, THE FUND INVESTS PRIMARILY IN DEBT
OBLIGATIONS ISSUED OR GUARANTEED BY AGENCIES OR INSTRUMENTALITIES OF THE U.S.
GOVERNMENT WHOSE PURPOSES FURTHER OR ARE COMPATIBLE WITH THE FUND'S SOCIAL
CRITERIA, SUCH AS OBLIGATIONS OF THE STUDENT LOAN MARKETING ASSOCIATION, RATHER
THAN GENERAL OBLIGATIONS OF THE U.S. GOVERNMENT, SUCH AS TREASURY SECURITIES.
SHAREHOLDER ADVOCACY AND SOCIAL RESPONSIBILITY
CALVERT TAKES A PROACTIVE ROLE TO MAKE A TANGIBLE POSITIVE CONTRIBUTION TO OUR
SOCIETY AND THAT OF FUTURE GENERATIONS. WE SEEK TO POSITIVELY INFLUENCE
CORPORATE BEHAVIOR THROUGH OUR ROLE AS THE FUND'S SHAREHOLDER BY PUSHING
COMPANIES TOWARD HIGHER STANDARDS OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY.
OUR ACTIVITIES MAY INCLUDE BUT ARE NOT LIMITED TO:
DIALOGUE WITH COMPANIES
WE REGULARLY INITIATE DIALOGUE WITH MANAGEMENT AS PART OF OUR SOCIAL RESEARCH
PROCESS. AFTER THE FUND BECOMES A SHAREHOLDER, WE OFTEN CONTINUE OUR DIALOGUE
WITH MANAGEMENT THROUGH PHONE CALLS, LETTERS AND IN-PERSON MEETINGS.
THROUGH OUR INTERACTION, WE LEARN ABOUT MANAGEMENT'S SUCCESSES AND CHALLENGES
AND PRESS FOR IMPROVEMENT ON ISSUES OF CONCERN.
<PAGE>
PROXY VOTING
AS A SHAREHOLDER IN OUR VARIOUS PORTFOLIO COMPANIES, THE FUND IS
GUARANTEED AN OPPORTUNITY EACH YEAR TO EXPRESS ITS VIEWS ON ISSUES OF CORPORATE
GOVERNANCE AND SOCIAL RESPONSIBILITY AT ANNUAL STOCKHOLDER MEETINGS. WE
TAKE OUR VOTING RESPONSIBILITY SERIOUSLY AND VOTE ALL PROXIES CONSISTENT WITH
THE FINANCIAL AND SOCIAL OBJECTIVES OF THE FUND.
SHAREHOLDER RESOLUTIONS
CALVERT PROPOSES RESOLUTIONS ON A VARIETY OF SOCIAL ISSUES. WE FILE SHAREHOLDER
RESOLUTIONS WHEN OUR DIALOGUE WITH CORPORATE MANAGEMENT PROVES UNSUCCESSFUL TO
ENCOURAGE A COMPANY TO TAKE ACTION. IN MOST CASES, OUR EFFORTS HAVE LED TO
NEGOTIATED SETTLEMENTS WITH POSITIVE RESULTS FOR SHAREHOLDERS AND COMPANIES
ALIKE. FOR EXAMPLE, ONE OF OUR SHAREHOLDER RESOLUTIONS RESULTED IN THE COMPANY'S
FIRST-EVER DISCLOSURE OF ITS EQUAL EMPLOYMENT POLICIES, PROGRAMS AND WORKFORCE
DEMOGRAPHICS.
ABOUT CALVERT
CALVERT ASSET MANAGEMENT COMPANY, INC. (4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO" OR "CALVERT") IS THE FUND'S INVESTMENT ADVISOR.
CALVERT PROVIDES THE FUND WITH INVESTMENT SUPERVISION AND MANAGEMENT AND OFFICE
SPACE; FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE FUND; AND PAYS THE
SALARIES AND FEES OF ALL DIRECTORS WHO ARE EMPLOYEES OF CALVERT. IT HAS BEEN
MANAGING MUTUAL FUNDS SINCE 1976. CALVERT IS THE INVESTMENT ADVISOR FOR OVER 25
MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST AND LARGEST FAMILY OF SOCIALLY
SCREENED FUNDS. AS OF DECEMBER 31, 1999, CALVERT HAD OVER $6.5 BILLION IN
ASSETS UNDER MANAGEMENT.
SUBADVISOR
TURNER INVESTMENT PARTNERS, INC. (1235 WESTLAKES DRIVE, BERWYN, PENNSYLVANIA
19312) HAS MANAGED THE PORTFOLIO SINCE INCEPTION. IT USES A DISCIPLINED
APPROACH TO INVESTING IN GROWTH STOCKS BASED ON THE PREMISE THAT EARNINGS
EXPECTATIONS DRIVE STOCK PRICES.
BOB TURNER IS THE FOUNDER, CHAIRMAN, AND CHIEF INVESTMENT OFFICER OF TURNER
INVESTMENT PARTNERS. HE HEADS THE FUND'S PORTFOLIO MANAGEMENT TEAM. A
CHARTERED FINANCIAL ANALYST, HE WAS PREVIOUSLY SENIOR INVESTMENT MANAGER WITH
MERIDIAN INVESTMENT COMPANY.
THE FUND HAS OBTAINED AN EXEMPTIVE ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO PERMIT THE FUND, PURSUANT TO APPROVAL BY THE BOARD OF TRUSTEES, TO
ENTER INTO AND MATERIALLY AMEND CONTRACTS WITH THE FUND'S SUBADVISORS WITHOUT
SHAREHOLDER APPROVAL. SEE "INVESTMENT ADVISOR AND SUBADVISOR" IN THE SAI FOR
FURTHER DETAILS.
ADVISORY FEES
THE FUND'S ADVISORY AGREEMENT PROVIDES FOR THE FUND TO PAY CAMCO A FEE OF 1.25%
OF THE FUND'S AVERAGE DAILY NET ASSETS.
<PAGE>
HOW TO BUY SHARES
GETTING STARTED - BEFORE YOU OPEN AN ACCOUNT
YOU HAVE A FEW DECISIONS TO MAKE BEFORE YOU OPEN AN ACCOUNT IN A MUTUAL FUND.
FIRST, DECIDE WHICH FUND OR FUNDS BEST SUITS YOUR NEEDS AND YOUR GOALS.
SECOND, DECIDE WHAT KIND OF ACCOUNT YOU WANT TO OPEN. CALVERT OFFERS INDIVIDUAL,
JOINT, TRUST, UNIFORM GIFTS/TRANSFERS TO MINOR ACCOUNTS, TRADITIONAL, EDUCATION
AND ROTH IRAS, QUALIFIED PROFIT-SHARING AND MONEY PURCHASE PLANS, SIMPLE IRAS,
SEP-IRAS, 403(B)(7) ACCOUNTS, AND SEVERAL OTHER TYPES OF ACCOUNTS. MINIMUM
INVESTMENTS ARE LOWER FOR THE RETIREMENT PLANS.
THEN DECIDE WHICH CLASS OF SHARES IS BEST FOR YOU.
YOU SHOULD MAKE THIS DECISION CAREFULLY, BASED ON:
- THE AMOUNT YOU WISH TO INVEST;
- THE LENGTH OF TIME YOU PLAN TO KEEP THE INVESTMENT; AND
- THE CLASS EXPENSES.
CHOOSING A SHARE CLASS
THIS PROSPECTUS OFFERS THREE DIFFERENT CLASSES (CLASS A, B, OR C) OF THE FUND.
THIS CHART SHOWS THE DIFFERENCE IN THE CLASSES AND THE GENERAL TYPES OF
INVESTORS WHO MAY BE INTERESTED IN EACH CLASS:
<PAGE>
CLASS A:
FRONT-END SALES
CHARGE
FOR ALL INVESTORS, PARTICULARLY THOSE INVESTING A SUBSTANTIAL AMOUNT WHO PLAN TO
HOLD THE SHARES FOR A LONG PERIOD OF TIME.
SALES CHARGE ON EACH PURCHASE OF 4.75% OR LESS, DEPENDING ON THE AMOUNT YOU
INVEST.
CLASS A SHARES HAVE AN ANNUAL 12B-1 FEE OF UP TO %.
CLASS A SHARES HAVE LOWER ANNUAL EXPENSES DUE TO A LOWER 12B-1 FEE.
PURCHASES OF CLASS A SHARES AT NAV FOR ACCOUNTS WITH $1,000,000 OR MORE WILL BE
SUBJECT TO A 1.0% DEFERRED SALES CHARGE FOR 1 YEAR.
CLASS B:
DEFERRED SALES
CHARGE FOR 6 YEARS
FOR INVESTORS WHO PLAN TO HOLD THE SHARES AT LEAST 6 YEARS. THE EXPENSES OF THIS
CLASS ARE HIGHER THAN CLASS A, BECAUSE OF THE 12B-1 FEE.
NO SALES CHARGE ON EACH PURCHASE, BUT IF YOU SELL YOUR SHARES WITHIN 6 YEARS,
YOU WILL PAY A DEFERRED SALES CHARGE OF 5% OR LESS ON SHARES YOU SELL.
CLASS B SHARES HAVE AN ANNUAL 12B-1 FEE OF 1.00%.
YOUR SHARES WILL AUTOMATICALLY CONVERT TO CLASS A SHARES AFTER 8 YEARS, REDUCING
YOUR FUTURE ANNUAL EXPENSES.
IF YOU ARE INVESTING MORE THAN $250,000, YOU SHOULD CONSIDER INVESTING IN CLASS
A OR C.
CLASS C:
DEFERRED SALES
CHARGE FOR 1 YEAR
FOR INVESTORS WHO ARE INVESTING FOR AT LEAST ONE YEAR, BUT LESS THAN SIX YEARS.
THE EXPENSES OF THIS CLASS ARE HIGHER THAN CLASS A, BECAUSE OF THE 12B-1 FEE.
NO SALES CHARGE ON EACH PURCHASE, BUT IF YOU SELL SHARES WITHIN 1 YEAR, THEN YOU
WILL PAY A DEFERRED SALES CHARGE OF 1% AT THAT TIME.
CLASS C SHARES HAVE AN ANNUAL 12B-1 FEE OF 1.00%.
CLASS C SHARES HAVE HIGHER ANNUAL EXPENSES THAN CLASS A AND THERE IS NO
AUTOMATIC CONVERSION TO CLASS A.
IF YOU ARE INVESTING MORE THAN $1,000,000, YOU SHOULD INVEST IN CLASS A.
<PAGE>
CLASS A
IF YOU CHOOSE CLASS A, YOU WILL PAY A SALES CHARGE AT THE TIME OF EACH PURCHASE.
THIS TABLE SHOWS THE CHARGES BOTH AS A PERCENTAGE OF OFFERING PRICE AND AS A
PERCENTAGE OF THE AMOUNT YOU INVEST. THE TERM "OFFERING PRICE" MEANS THE NAV PER
SHARE PLUS THE FRONT-END SALES CHARGE. IF YOU INVEST MORE, THE PERCENTAGE RATE
OF THE SALES CHARGE WILL BE LOWER. FOR EXAMPLE, IF YOU INVEST MORE THAN $50,000,
OR IF YOUR CUMULATIVE PURCHASES OR THE VALUE IN YOUR ACCOUNT IS MORE THAN
$50,000,4 THEN THE SALES CHARGE IS REDUCED TO 3.75%.
YOUR INVESTMENT IN SALES CHARGE % % OF AMT.
CLASS A SHARES OF OFFERING PRICE INVESTED
LESS THAN $50,000 4.75% 4.99%
$50,000 BUT LESS THAN $100,000 3.75% 3.90%
$100,000 BUT LESS THAN $250,000 2.75% 2.83%
$250,000 BUT LESS THAN $500,000 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01%
$1,000,000 AND OVER NONE* NONE*
4 THIS IS CALLED "RIGHTS OF ACCUMULATION." THE SALES CHARGE IS CALCULATED BY
TAKING INTO ACCOUNT NOT ONLY THE DOLLAR AMOUNT OF THE NEW PURCHASE OF SHARES,
BUT ALSO THE HIGHER OF COST OR CURRENT VALUE OF SHARES YOU HAVE PREVIOUSLY
PURCHASED IN CALVERT GROUP FUNDS THAT IMPOSE SALES CHARGES. THIS AUTOMATICALLY
APPLIES TO YOUR ACCOUNT FOR EACH NEW PURCHASE OF CLASS A SHARES.
* PURCHASES OF CLASS A SHARES AT NAV FOR ACCOUNTS WITH $1,000,000 OR MORE ARE
SUBJECT TO A ONE YEAR CDSC OF 1.00%. SEE THE "CALCULATION OF CONTINGENT DEFERRED
SALES CHARGE AND WAIVER OF SALES CHARGES."
THE CLASS A FRONT-END SALES CHARGE MAY BE WAIVED FOR CERTAIN PURCHASES OR
INVESTORS, SUCH AS PARTICIPANTS IN CERTAIN GROUP RETIREMENT PLANS OR OTHER
QUALIFIED GROUPS AND CLIENTS OF REGISTERED INVESTMENT ADVISERS. FOR DETAILS ON
THESE AND OTHER PURCHASES THAT MAY QUALIFY FOR A REDUCED SALES CHARGE, SEE
EXHIBIT A.
CLASS B
IF YOU CHOOSE CLASS B, THERE IS NO FRONT-END SALES CHARGE LIKE CLASS A, BUT IF
YOU SELL THE SHARES WITHIN THE FIRST 6 YEARS, YOU WILL HAVE TO PAY A "CONTINGENT
DEFERRED" SALES CHARGE ("CDSC"). KEEP IN MIND THAT THE LONGER YOU HOLD THE
SHARES, THE LESS YOU WILL HAVE TO PAY IN DEFERRED SALES CHARGES.
TIME SINCE PURCHASE CDSC %
1ST YEAR 5%
2ND YEAR 4%
3RD YEAR 4%
4TH YEAR 3%
5TH YEAR 2%
6TH YEAR 1%
AFTER 6 YEARS NONE
<PAGE>
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE AND WAIVER OF SALES CHARGES
THE CDSC WILL NOT BE CHARGED ON SHARES YOU RECEIVED AS DIVIDENDS OR FROM CAPITAL
GAINS DISTRIBUTIONS OR ON ANY CAPITAL APPRECIATION (GAIN IN THE VALUE) OF SHARES
THAT ARE SOLD.
SHARES THAT ARE NOT SUBJECT TO THE CDSC WILL BE REDEEMED FIRST, FOLLOWED BY
SHARES YOU HAVE HELD THE LONGEST. THE CDSC IS CALCULATED BY DETERMINING THE
SHARE VALUE AT BOTH THE TIME OF PURCHASE AND REDEMPTION AND THEN MULTIPLYING
WHICHEVER VALUE IS LESS BY THE PERCENTAGE THAT APPLIES AS SHOWN ABOVE. IF YOU
CHOOSE TO SELL ONLY PART OF YOUR SHARES, THE CAPITAL APPRECIATION FOR THOSE
SHARES ONLY IS INCLUDED IN THE CALCULATION, RATHER THAN THE CAPITAL APPRECIATION
FOR THE ENTIRE ACCOUNT.
THE CDSC ON CLASS B SHARES WILL BE WAIVED IN THE FOLLOWING CIRCUMSTANCES:
- REDEMPTION UPON THE DEATH OR DISABILITY OF THE SHAREHOLDER, PLAN PARTICIPANT,
OR BENEFICIARY.1
- MINIMUM REQUIRED DISTRIBUTIONS FROM RETIREMENT PLAN ACCOUNTS FOR SHAREHOLDERS
70 1/2 AND OLDER.2
- THE RETURN OF AN EXCESS CONTRIBUTION OR DEFERRAL AMOUNTS, PURSUANT TO SECTIONS
408(D)(4) OR (5), 401(K)(8), 402(G)(2), OR 401(M)(6) OF THE INTERNAL REVENUE
CODE.
- INVOLUNTARY REDEMPTIONS OF ACCOUNTS UNDER PROCEDURES SET FORTH BY THE FUND'S
BOARD OF TRUSTEES/DIRECTORS.
- A SINGLE ANNUAL WITHDRAWAL UNDER A SYSTEMATIC WITHDRAWAL PLAN OF UP TO 10% OF
THE SHAREHOLDER'S ACCOUNT BALANCE.3
1 "DISABILITY" MEANS A TOTAL DISABILITY AS EVIDENCED BY A DETERMINATION BY THE
FEDERAL SOCIAL SECURITY ADMINISTRATION.
2 THE MAXIMUM AMOUNT SUBJECT TO THIS WAIVER IS BASED ONLY UPON THE SHAREHOLDER'S
CALVERT GROUP RETIREMENT ACCOUNTS.
3 THIS SYSTEMATIC WITHDRAWAL PLAN REQUIRES A MINIMUM ACCOUNT BALANCE OF $50,000
TO BE ESTABLISHED.
CLASS C
IF YOU CHOOSE CLASS C, THERE IS NO FRONT-END SALES CHARGE LIKE CLASS A, BUT IF
YOU SELL THE SHARES WITHIN THE FIRST YEAR, YOU WILL HAVE TO PAY A 1% CDSC. CLASS
C MAY BE A GOOD CHOICE FOR YOU IF YOU PLAN TO BUY SHARES AND HOLD THEM FOR AT
LEAST 1 YEAR, BUT NOT MORE THAN FIVE OR SIX YEARS.
<PAGE>
DISTRIBUTION AND SERVICE FEES
THE FUND HAS ADOPTED A PLAN UNDER RULE 12B-1 OF THE INVESTMENT COMPANY ACT OF
1940 THAT ALLOWS THE FUND TO PAY DISTRIBUTION FEES FOR THE SALE AND DISTRIBUTION
OF ITS SHARES. THE DISTRIBUTION PLAN ALSO PAYS SERVICE FEES TO PERSONS (SUCH AS
YOUR FINANCIAL PROFESSIONAL) FOR SERVICES PROVIDED TO SHAREHOLDERS. BECAUSE
THESE FEES ARE PAID OUT OF A FUND'S ASSETS ON AN ONGOING BASIS, OVER TIME, THESE
FEES WILL INCREASE THE COST OF YOUR INVESTMENT AND MAY COST YOU MORE THAN PAYING
OTHER TYPES OF SALES CHARGES. PLEASE SEE EXHIBIT B FOR MORE SERVICE FEE
INFORMATION.
THE TABLE BELOW SHOWS THE MAXIMUM ANNUAL PERCENTAGE PAYABLE UNDER THE
DISTRIBUTION PLAN, AND THE AMOUNT ACTUALLY PAID BY THE FUND FOR THE MOST RECENT
FISCAL YEAR. THE FEES ARE BASED ON AVERAGE DAILY NET ASSETS OF THE PARTICULAR
CLASS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
CLASS A CLASS B CLASS C
%/NA 1.00%/NA 1.00%/NA
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. PLEASE SPECIFY WHICH
CLASS YOU WISH TO PURCHASE. FOR MORE INFORMATION, CONTACT YOUR FINANCIAL
PROFESSIONAL OR OUR SALES DEPARTMENT AT 800-368-2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL INVESTMENTS -
$ $
PLEASE MAKE YOUR CHECK PAYABLE
TO THE FUND AND MAIL IT TO CALVERT'S TRANSFER AGENT AT:
NEW ACCOUNTS SUBSEQUENT INVESTMENTS
(INCLUDE APPLICATION): (INCLUDE INVESTMENT SLIP):
CALVERT GROUP CALVERT GROUP
P.O. BOX 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
BY REGISTERED, CALVERT GROUP
CERTIFIED, OR C/O NFDS,
OVERNIGHT MAIL 330 WEST 9TH ST.
KANSAS CITY, MO 64105-1807
<PAGE>
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON THE FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF THE FUND'S HOLDINGS PLUS OTHER ASSETS,
SUBTRACTING LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES
OUTSTANDING. THE NAV OF EACH CLASS WILL BE DIFFERENT, DEPENDING ON THE NUMBER OF
SHARES OUTSTANDING FOR EACH CLASS.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS,
EXCEPT THAT SECURITIES MATURING WITHIN 60 DAYS ARE VALUED AT AMORTIZED COST. IF
MARKET QUOTATIONS ARE NOT READILY AVAILABLE, SECURITIES ARE VALUED BY A METHOD
THAT THE FUND'S BOARD OF TRUSTEES BELIEVES ACCURATELY REFLECTS FAIR VALUE.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4 P.M. ET). THE FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE RECEIVED BECAUSE THE BANKS AND POST OFFICES ARE CLOSED.
THE FUND MAY HOLD SECURITIES THAT ARE PRIMARILY LISTED ON FOREIGN EXCHANGES THAT
TRADE ON DAYS WHEN THE NYSE IS CLOSED. THE FUND DOES NOT PRICE SHARES ON DAYS
WHEN THE NYSE IS CLOSED, EVEN IF FOREIGN MARKETS MAY BE OPEN. AS A RESULT, THE
VALUE OF THE FUND'S SHARES MAY CHANGE ON DAYS WHEN YOU WILL NOT BE ABLE TO BUY
OR SELL YOUR SHARES.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED BY THE TRANSFER AGENT IN KANSAS CITY, MO (SEE ADDRESSES ON PRECEDING
PAGE). ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS AND INDICATE THE FUND
AND CLASS. NO CASH WILL BE ACCEPTED OR THIRD PARTY CHECKS WILL BE ACCEPTED. NO
CREDIT CARD OR CREDIT LOAN CHECKS WILL BE ACCEPTED. THE FUND RESERVES THE RIGHT
TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC
PURCHASE ORDER. AS A CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE
IN BETHESDA, MARYLAND WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER AGENT
AND WILL BE CREDITED THE NEXT BUSINESS DAY UPON RECEIPT BY THE TRANSFER AGENT.
YOU SHOULD NOTE THAT THE SHARE PRICE MAY CHANGE DURING THIS PERIOD. ANY CHECK
PURCHASE RECEIVED WITHOUT AN INVESTMENT SLIP MAY CAUSE DELAYED CREDITING. ANY
PURCHASE LESS THAN $250 MINIMUM FOR SUBSEQUENT INVESTMENTS WILL BE CHARGED A FEE
OF $5 PAYABLE TO THE FUND. IF YOUR CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE
WILL BE CANCELED AND YOU WILL BE CHARGED A $25 FEE PLUS ANY COSTS INCURRED. ALL
PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND FRACTIONAL
SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
<PAGE>
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800-368-2745 OR VISIT
HTTP://WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE PHONE
CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER DATE, A
SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM ANY BANK,
TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-DEALER FIRM
OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC CANNOT PROVIDE A
SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED EXPENSE OF
A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000 ELECTRONICALLY. ALLOW ONE OR
TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR THE TRANSFER TO TAKE PLACE.
MONEY TRANSFERRED TO PURCHASE NEW SHARES MAY BE SUBJECT TO A HOLD OF UP TO 10
BUSINESS DAYS BEFORE REDEMPTION REQUESTS WILL BE HONORED. TRANSACTION REQUESTS
MUST BE RECEIVED BY 4 P.M. ET TO RECEIVE THAT DAY'S PRICE. YOU MAY REQUEST THIS
SERVICE ON YOUR INITIAL ACCOUNT APPLICATION. CALVERT MONEY CONTROLLER
TRANSACTIONS RETURNED BY YOUR BANK WILL INCUR A $25 CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS AND
ESTABLISHED BANK INSTRUCTIONS ON YOUR ACCOUNT, WHEN OPENED OR AT A LATER DATE BY
A SIGNATURE GUARANTEED LETTER . YOU RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY
WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU INSTRUCT US OTHERWISE IN WRITING WHILE
TELEPHONE REDEMPTION IS EASY AND CONVENIENT, THIS ACCOUNT FEATURE INVOLVES A
RISK OF LOSS FROM UNAUTHORIZED OR FRAUDULENT TRANSACTIONS. CALVERT WILL TAKE
REASONABLE PRECAUTIONS TO PROTECT YOUR ACCOUNT FROM FRAUD. YOU SHOULD DO THE
SAME BY KEEPING YOUR ACCOUNT INFORMATION PRIVATE AND IMMEDIATELY REVIEWING ANY
CONFIRMATIONS OR ACCOUNT STATEMENTS THAT WE SEND YOU. MAKE SURE TO CONTACT
CALVERT IMMEDIATELY ABOUT ANY TRANSACTION YOU BELIEVE TO BE UNAUTHORIZED.
WE RESERVE THE RIGHT TO REFUSE A TELEPHONE REDEMPTION IF THE CALLER IS UNABLE TO
PROVIDE:
- THE ACCOUNT NUMBER.
- THE NAME AND ADDRESS EXACTLY AS REGISTERED ON THE ACCOUNT.
- THE PRIMARY SOCIAL SECURITY OR EMPLOYER IDENTIFICATION NUMBER AS REGISTERED ON
THE ACCOUNT.
<PAGE>
PLEASE NOTE THAT CALVERT WILL NOT BE RESPONSIBLE FOR ANY ACCOUNT LOSSES DUE TO
TELEPHONE FRAUD, SO LONG AS WE HAVE TAKEN REASONABLE STEPS TO VERIFY THE
CALLER'S IDENTITY. IF YOU WISH TO REMOVE THE TELEPHONE REDEMPTION FEATURE FROM
YOUR ACCOUNT, PLEASE NOTIFY US IN WRITING.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR BROKER OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE MAKE IT EASY FOR
YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR INVESTMENT GOALS CHANGE.
THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY ALLOWING YOU TO EXCHANGE SHARES ON
WHICH YOU HAVE ALREADY PAID A SALES CHARGE FROM ONE CALVERT MUTUAL FUND TO
ANOTHER AT NO ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
NO CDSC IS IMPOSED ON EXCHANGES OF SHARES SUBJECT TO A CDSC AT THE TIME OF THE
EXCHANGE. THE APPLICABLE CDSC IS IMPOSED AT THE TIME THE SHARES ACQUIRED BY THE
EXCHANGE ARE REDEEMED.
BANK HOLIDAYS: ON ANY DAY CALVERT IS OPEN BUT THE FUND'S CUSTODIAN BANK IS
CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY) EXCHANGE REQUESTS INTO OR OUT OF
A MONEY MARKET FUND WILL BE PRICED AT THE NEXT DETERMINED NAV, BUT WILL
NOT RECEIVE ANY DIVIDEND IN THE MONEY MARKET FUND UNTIL THE NEXT DAY THE
FUND'S CUSTODIAN BANK IS OPEN.
THE FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, EACH FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED TO BE MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
<PAGE>
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND ANNUAL
REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER MAILINGS.
SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND WILL BE
MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED TO PAY A FEE FOR
THESE SPECIAL SERVICES; FOR EXAMPLE, THE FEE FOR STOP PAYMENTS IS $25. IF YOU
ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A BROKER/DEALER
OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM MATERIALS TOGETHER WITH
THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED IN THESE PROGRAMS. INVESTORS
MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS IN FUND SHARES THROUGH A
FINANCIAL INTERMEDIARY.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR FUND ACCOUNTS OF AT LEAST ______ PER
CLASS. IF THE BALANCE IN YOUR ACCOUNT FALLS BELOW THE MINIMUM DURING A MONTH,
YOUR ACCOUNT MAY BE CLOSED AND THE PROCEEDS MAILED TO THE ADDRESS OF RECORD. YOU
WILL RECEIVE NOTICE THAT YOUR ACCOUNT IS BELOW THE MINIMUM (FOR ANY REASON,
INCLUDING A DECLINE IN THE VALUE OF THE FUND'S SHARES), AND WILL BE CLOSED IF
THE BALANCE IS NOT BROUGHT UP TO THE REQUIRED MINIMUM WITHIN 30 DAYS.
TO PROTECT INVESTORS, THE FUND MAY REJECT CERTAIN SMALL RETIREMENT PLAN ACCOUNTS
WHERE THE ACCOUNTING AND TRANSACTION EXPENSES WOULD BE A BURDEN TO OTHER FUND
SHAREHOLDERS.
DIVIDENDS, CAPITAL GAINS AND TAXES
THE FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME ANNUALLY. NET INVESTMENT
INCOME CONSISTS OF INTEREST INCOME, NET SHORT-TERM CAPITAL GAINS, IF ANY, AND
DIVIDENDS DECLARED AND PAID ON INVESTMENTS, LESS EXPENSES. DISTRIBUTIONS OF NET
SHORT-TERM CAPITAL GAINS (TREATED AS DIVIDENDS FOR TAX PURPOSES) AND NET
LONG-TERM CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE A YEAR; HOWEVER, THE
FUND DOES NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS UNLESS AVAILABLE CAPITAL
LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED. DIVIDEND AND DISTRIBUTION
PAYMENTS WILL VARY BETWEEN CLASSES.
<PAGE>
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID
IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN THE SAME SHARE
CLASS OF AN IDENTICALLY REGISTERED ACCOUNT IN THE SAME SHARE CLASS OF ANY OTHER
CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE SAME ACCOUNT, NEW SHARES WILL BE
PURCHASED AT NAV ON THE REINVESTMENT DATE, WHICH IS GENERALLY 1 TO 3 DAYS PRIOR
TO THE PAYMENT DATE. YOU MUST NOTIFY THE FUNDS IN WRITING TO CHANGE YOUR PAYMENT
OPTIONS. IF YOU ELECT TO HAVE DIVIDENDS AND/OR DISTRIBUTIONS PAID IN CASH, AND
THE US POSTAL SERVICE RETURNS THE CHECK AS UNDELIVERABLE, IT, AS WELL AS FUTURE
DIVIDENDS AND DISTRIBUTIONS, WILL BE REINVESTED IN ADDITIONAL SHARES. NO
DIVIDENDS WILL ACCRUE ON AMOUNTS REPRESENTED BY UNCASHED DISTRIBUTION OR
REDEMPTION CHECKS.
BUYING A DIVIDEND
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE FULLY
TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED BY THE
AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD DATE
("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND THEN
RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
FEDERAL TAXES
IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-DIV INDICATING THE FEDERAL TAX
STATUS OF DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU DURING THE
PAST YEAR. GENERALLY, DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE IN THE YEAR THEY
ARE PAID. HOWEVER, ANY DIVIDENDS AND DISTRIBUTIONS PAID IN JANUARY BUT DECLARED
DURING THE PRIOR THREE MONTHS ARE TAXABLE IN THE YEAR DECLARED. DIVIDENDS AND
DISTRIBUTIONS ARE TAXABLE TO YOU REGARDLESS OF WHETHER THEY ARE TAKEN IN CASH OR
REINVESTED. DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS
ORDINARY INCOME. DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS
LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES.
YOU MAY REALIZE A CAPITAL GAIN OR LOSS WHEN YOU SELL OR EXCHANGE SHARES. THIS
CAPITAL GAIN OR LOSS WILL BE SHORT- OR LONG-TERM, DEPENDING ON HOW LONG YOU HAVE
OWNED THE SHARES WHICH WERE SOLD. IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-B
INDICATING THE TOTAL AMOUNT OF ALL SALES, INCLUDING EXCHANGES. YOU SHOULD KEEP
YOUR ANNUAL YEAR-END ACCOUNT STATEMENTS TO DETERMINE THE COST (BASIS) OF THE
SHARES TO REPORT ON YOUR TAX RETURNS.
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM US GOVERNMENT
SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
<PAGE>
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
CALVERT GROUP RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT OR ANY PURCHASE ORDER
FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY YOUR FUND IS OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. WHEN YOU PURCHASE BY
CHECK OR WITH CALVERT MONEY CONTROLLER (ELECTRONIC FUNDS TRANSFER), THE PURCHASE
MAY BE ON HOLD FOR UP TO 10 BUSINESS DAYS FROM THE DATE OF RECEIPT. DURING THE
HOLD PERIOD, REDEMPTIONS PROCEEDS WILL NOT BE SENT UNTIL THE TRANSFER AGENT IS
REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS BEEN COLLECTED. YOUR SHARES
WILL BE REDEEMED AT THE NAV NEXT CALCULATED (LESS ANY APPLICABLE CDSC) AFTER
YOUR REDEMPTION REQUEST IS RECEIVED BY THE TRANSFER AGENT IN GOOD ORDER (SEE
BELOW). THE PROCEEDS WILL NORMALLY BE SENT TO YOU ON THE NEXT BUSINESS DAY, BUT
IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT YOUR FUND, IT MAY TAKE UP TO
SEVEN (7) DAYS TO MAKE PAYMENT. CALVERT MONEY CONTROLLER REDEMPTIONS GENERALLY
WILL BE CREDITED TO YOUR BANK ACCOUNT BY THE SECOND BUSINESS DAY AFTER YOUR
PHONE CALL. THE FUND HAS THE RIGHT TO REDEEM SHARES IN ASSETS OTHER THAN CASH
FOR REDEMPTION AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD, $250,000 OR 1% OF THE
NET ASSET VALUE OF THE AFFECTED FUND, WHICHEVER IS LESS. WHEN THE NYSE IS CLOSED
(OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS CUSTOMARY WEEKEND
OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY CIRCUMSTANCES AS DETERMINED BY THE
SECURITIES AND EXCHANGE COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR PAYMENT
DATES POSTPONED. PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH
AS COLUMBUS DAY AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN
BUT REDEMPTIONS CANNOT BE MAILED OR WIRED BECAUSE THE POST OFFICES AND BANKS ARE
CLOSED.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU
HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON WIRE TRANSFERS OF
LESS THAN $1,000. SEE "OTHER CALVERT GROUP FEATURES-TELEPHONE TRANSACTIONS."
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
<PAGE>
SYSTEMATIC CHECK REDEMPTIONS
IF YOU MAINTAIN AN ACCOUNT WITH A BALANCE OF $10,000 OR MORE, YOU MAY HAVE UP TO
TWO (2) REDEMPTION CHECKS FOR A FIXED AMOUNT SENT TO YOU ON THE 15TH OF THE
MONTH, SIMPLY BY SENDING A LETTER WITH ALL INFORMATION, INCLUDING YOUR ACCOUNT
NUMBER, AND THE DOLLAR AMOUNT ($100 MINIMUM). IF YOU WOULD LIKE A REGULAR CHECK
MAILED TO ANOTHER PERSON OR PLACE, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
UNLESS THEY OTHERWISE QUALIFY FOR A WAIVER, CLASS B OR CLASS C SHARES REDEEMED
BY SYSTEMATIC CHECK REDEMPTION WILL BE SUBJECT TO THE CONTINGENT DEFERRED SALES
CHARGE.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT, PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE LAST
60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR FURNISHING
ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE YOU FOR SERVICES
PROVIDED.
REQUEST IN "GOOD ORDER"
ALL REDEMPTION REQUESTS MUST BE RECEIVED BY THE TRANSFER AGENT IN "GOOD ORDER."
THIS MEANS THAT YOUR REQUEST MUST INCLUDE:
- THE FUND NAME AND ACCOUNT NUMBER
- THE AMOUNT OF THE TRANSACTION (IN DOLLARS OR SHARES).
- SIGNATURES OF ALL OWNERS EXACTLY AS REGISTERED ON THE ACCOUNT (FOR MAIL
REQUESTS).
- SIGNATURE GUARANTEES (IF REQUIRED).*
- ANY SUPPORTING LEGAL DOCUMENTATION THAT MAY BE REQUIRED.
- ANY OUTSTANDING CERTIFICATES REPRESENTING SHARES TO BE REDEEMED.
*FOR INSTANCE, A SIGNATURE GUARANTEE MUST BE PROVIDED BY ALL REGISTERED ACCOUNT
SHAREHOLDERS WHEN REDEMPTION PROCEEDS ARE SENT TO A DIFFERENT PERSON OR ADDRESS.
A SIGNATURE GUARANTEE CAN BE OBTAINED FROM MOST COMMERCIAL AND SAVINGS BANKS,
CREDIT UNIONS, TRUST COMPANIES, OR MEMBER FIRMS OF A U.S. STOCK EXCHANGE.
TRANSACTIONS ARE PROCESSED AT THE NEXT DETERMINED SHARE PRICE AFTER THE TRANSFER
AGENT HAS RECEIVED ALL REQUIRED INFORMATION.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES (CLASS A ONLY)
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE THROUGH SEVERAL PURCHASE PLANS
AVAILABLE. YOU MUST NOTIFY THE FUND AT THE TIME OF PURCHASE TO TAKE ADVANTAGE OF
THE REDUCED SALES CHARGE.
RIGHTS OF ACCUMULATION CAN BE APPLIED TO SEVERAL ACCOUNTS
CLASS A SALES CHARGE BREAKPOINTS ARE AUTOMATICALLY CALCULATED FOR EACH ACCOUNT
BASED ON THE HIGHER OF COST OR CURRENT VALUE OF SHARES PREVIOUSLY PURCHASED.
THIS PRIVILEGE CAN BE APPLIED TO A FAMILY GROUP OR OTHER QUALIFIED GROUP* UPON
REQUEST. SHARES COULD THEN BE PURCHASED AT THE REDUCED SALES CHARGE WHICH
APPLIES TO THE ENTIRE GROUP; THAT IS, BASED ON THE HIGHER OF COST OR CURRENT
VALUE OF SHARES PREVIOUSLY PURCHASED AND CURRENTLY HELD BY ALL THE MEMBERS OF
THE GROUP.
* A "QUALIFIED GROUP" IS ONE WHICH:
1. HAS BEEN IN EXISTENCE FOR MORE THAN SIX MONTHS, AND
2. HAS A PURPOSE OTHER THAN ACQUIRING SHARES AT A DISCOUNT, AND
3. SATISFIES UNIFORM CRITERIA WHICH ENABLE CDI AND BROKERS OFFERING SHARES TO
REALIZE ECONOMIES OF SCALE IN DISTRIBUTING SUCH SHARES.
A QUALIFIED GROUP MUST HAVE MORE THAN 10 MEMBERS, MUST BE AVAILABLE TO ARRANGE
FOR GROUP MEETINGS BETWEEN REPRESENTATIVES OF CDI OR BROKERS DISTRIBUTING
SHARES, MUST AGREE TO INCLUDE SALES AND OTHER MATERIALS RELATED TO THE FUNDS IN
ITS PUBLICATIONS AND MAILINGS TO MEMBERS AT REDUCED OR NO COST TO CDI OR
BROKERS. A PENSION PLAN IS NOT A QUALIFIED GROUP FOR RIGHTS OF ACCUMULATION.
LETTER OF INTENT
IF YOU (OR YOUR GROUP, AS DESCRIBED ABOVE) PLAN TO PURCHASE $50,000 OR MORE OF
CALVERT FUND SHARES OVER THE NEXT 13 MONTHS, YOUR SALES CHARGE MAY BE REDUCED
THROUGH A "LETTER OF INTENT." YOU PAY THE LOWER SALES CHARGE APPLICABLE TO THE
TOTAL AMOUNT YOU PLAN TO INVEST OVER THE 13-MONTH PERIOD, EXCLUDING ANY MONEY
MARKET FUND PURCHASES, INSTEAD OF THE HIGHER 4.75% SALES CHARGE. PART OF YOUR
SHARES WILL BE HELD IN ESCROW, SO THAT IF YOU DO NOT INVEST THE AMOUNT
INDICATED, YOU WILL HAVE TO PAY THE SALES CHARGE APPLICABLE TO THE SMALLER
INVESTMENT ACTUALLY MADE. FOR MORE INFORMATION, SEE THE SAI.
RETIREMENT PLANS UNDER SECTION 457, SECTION 403(B)(7), OR SECTION 401(K)
THERE IS NO SALES CHARGE ON SHARES PURCHASED FOR THE BENEFIT OF A RETIREMENT
PLAN UNDER SECTION 457 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
("CODE"), OR FOR A PLAN QUALIFYING UNDER SECTION 403(B) OR 401(K) OF THE CODE
IF, AT THE TIME OF PURCHASE, (I) CALVERT GROUP HAS BEEN NOTIFIED IN WRITING THAT
THE 403(B) OR 401(K) PLAN HAS AT LEAST 200 ELIGIBLE EMPLOYEES AND IS NOT
SPONSORED BY A K-12 SCHOOL DISTRICT, OR (II) THE COST OR CURRENT VALUE OF SHARES
A 401(K) PLAN HAS IN CALVERT GROUP OF FUNDS (EXCEPT MONEY MARKET FUNDS) IS AT
LEAST $1 MILLION.
NEITHER THE FUND, NOR CALVERT DISTRIBUTORS, INC. ("CDI"), NOR ANY AFFILIATE
THEREOF WILL REIMBURSE A PLAN OR PARTICIPANT FOR ANY SALES CHARGES PAID PRIOR TO
RECEIPT OF SUCH WRITTEN COMMUNICATION AND CONFIRMATION BY CALVERT GROUP.
<PAGE>
PLAN ADMINISTRATORS SHOULD SEND REQUESTS FOR THE WAIVER OF SALES CHARGES BASED
ON THE ABOVE CONDITIONS TO: CALVERT GROUP RETIREMENT PLANS, 4550 MONTGOMERY
AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814.
OTHER CIRCUMSTANCES
THERE IS NO SALES CHARGE ON SHARES OF ANY FUND OF THE CALVERT GROUP OF FUNDS
SOLD TO (I) CURRENT OR RETIRED DIRECTORS, TRUSTEES, OR OFFICERS OF THE CALVERT
GROUP OF FUNDS, EMPLOYEES OF CALVERT GROUP, LTD. AND ITS AFFILIATES, OR THEIR
FAMILY MEMBERS; (II) CSIF ADVISORY COUNCIL MEMBERS, DIRECTORS, OFFICERS, AND
EMPLOYEES OF ANY SUBADVISOR FOR THE CALVERT GROUP OF FUNDS, EMPLOYEES OF
BROKER/DEALERS DISTRIBUTING THE FUND'S SHARES AND IMMEDIATE FAMILY MEMBERS OF
THE COUNCIL, SUBADVISOR, OR BROKER/DEALER; (III) PURCHASES MADE THROUGH A
REGISTERED INVESTMENT ADVISOR; (IV) TRUST DEPARTMENTS OF BANKS OR SAVINGS
INSTITUTIONS FOR TRUST CLIENTS OF SUCH BANK OR INSTITUTION, (V) PURCHASES
THROUGH A BROKER MAINTAINING AN OMNIBUS ACCOUNT WITH THE FUND, PROVIDED THE
PURCHASES ARE MADE BY (A) INVESTMENT ADVISORS OR FINANCIAL PLANNERS PLACING
TRADES FOR THEIR OWN ACCOUNTS (OR THE ACCOUNTS OF THEIR CLIENTS) AND WHO CHARGE
A MANAGEMENT, CONSULTING, OR OTHER FEE FOR THEIR SERVICES; OR (B) CLIENTS OF
SUCH INVESTMENT ADVISORS OR FINANCIAL PLANNERS WHO PLACE TRADES FOR THEIR OWN
ACCOUNTS IF SUCH ACCOUNTS ARE LINKED TO THE MASTER ACCOUNT OF SUCH INVESTMENT
ADVISOR OR FINANCIAL PLANNER ON THE BOOKS AND RECORDS OF THE BROKER OR AGENT; OR
(C) RETIREMENT AND DEFERRED COMPENSATION PLANS AND TRUSTS, INCLUDING, BUT NOT
LIMITED TO, THOSE DEFINED IN SECTION 401(A) OR SECTION 403(B) OF THE I.R.C., AND
"RABBI TRUSTS."
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM OTHER CALVERT GROUP FUNDS
YOU MAY PREARRANGE TO HAVE YOUR DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM
ANY CALVERT GROUP FUND AUTOMATICALLY INVESTED IN ANOTHER ACCOUNT WITH NO
ADDITIONAL SALES CHARGE.
PURCHASES MADE AT NAV
EXCEPT FOR MONEY MARKET FUNDS, IF YOU MAKE A PURCHASE AT NAV, YOU MAY EXCHANGE
THAT AMOUNT TO ANOTHER CALVERT GROUP FUND AT NO ADDITIONAL SALES CHARGE.
REINSTATEMENT PRIVILEGE
IF YOU REDEEM SHARES AND THEN WITHIN 60 DAYS DECIDE TO REINVEST IN THE SAME
FUND, YOU MAY DO SO AT THE NET ASSET VALUE NEXT COMPUTED AFTER THE REINVESTMENT
ORDER IS RECEIVED, WITHOUT A SALES CHARGE. YOU MAY USE THE REINSTATEMENT
PRIVILEGE ONLY ONCE. THE FUND RESERVES THE RIGHT TO MODIFY OR ELIMINATE THIS
PRIVILEGE.
<PAGE>
EXHIBIT B
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
CALVERT DISTRIBUTORS, INC., THE FUND'S UNDERWRITER, PAYS DEALERS A COMMISSION,
OR REALLOWANCE (EXPRESSED AS A PERCENTAGE OF THE OFFERING PRICE FOR CLASS A, AND
A PERCENTAGE OF AMOUNT INVESTED FOR CLASS B AND C) WHEN YOU PURCHASE SHARES OF
NON-MONEY MARKET FUNDS. CDI ALSO PAYS DEALERS AN ONGOING SERVICE FEE WHILE YOU
OWN SHARES OF THAT FUND (EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY
NET ASSETS HELD IN CALVERT ACCOUNTS BY THAT DEALER). THE TABLE BELOW SHOWS THE
AMOUNT OF PAYMENT WHICH DIFFERS DEPENDING ON THE CLASS.
MAXIMUM COMMISSION/SERVICE FEES
CLASS A CLASS B* CLASS C**
4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
*CLASS B SERVICE FEES BEGINS TO ACCRUE IN 13TH MONTH.
**CLASS C PAYS DEALERS A SERVICE FEE OF 0.25% AND ADDITIONAL COMPENSATION OF
0.75% FOR A TOTAL OF 1.00%. BEGINS TO ACCRUE IN 13TH MONTH.
OCCASIONALLY, CDI MAY REALLOW TO DEALERS THE FULL CLASS A FRONT-END SALES
CHARGE. CDI MAY ALSO PAY ADDITIONAL CONCESSIONS, INCLUDING NON-CASH PROMOTIONAL
INCENTIVES, SUCH AS MERCHANDISE OR TRIPS, TO BROKERS EMPLOYING REGISTERED
REPRESENTATIVES WHO HAVE SOLD OR ARE EXPECTED TO SELL A MINIMUM DOLLAR AMOUNT OF
SHARES OF THE FUNDS AND/OR SHARES OF OTHER FUNDS UNDERWRITTEN BY CDI. CDI MAY
MAKE EXPENSE REIMBURSEMENTS FOR SPECIAL TRAINING OF A BROKER'S REGISTERED
REPRESENTATIVES, ADVERTISING OR EQUIPMENT, OR TO DEFRAY THE EXPENSES OF SALES
CONTESTS. CAMCO, CDI, OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES,
CERTAIN BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF
THE SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY SCHEDULED
RATES, AND FINDER'S FEES. CDI PAYS DEALERS A FINDER'S FEE ON CLASS A SHARES
PURCHASED AT NAV IN ACCOUNTS WITH $1 MILLION OR MORE. THE FINDER'S FEE IS 1% OF
THE PURCHASE NAV AMOUNT ON THE FIRST $2 MILLION, 0.80% ON $2 TO $3 MILLION,
0.50% ON $3 TO $50 MILLION, 0.25% ON $50 TO $100 MILLION, AND 0.15% OVER $100
MILLION. ALL PAYMENTS WILL BE IN COMPLIANCE WITH THE RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
<PAGE>
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
WWW.CALVERT.COM
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-368-2745
BROKERS 800-368-2746
TDD FOR HEARING-IMPAIRED:
800-541-1524
BRANCH OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE
ADDRESS: HTTP://WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUND, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
THE FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR THE FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING YOUR BROKER, OR THE FUND AT:
CALVERT GROUP
4550 MONTGOMERY AVE, SUITE 1000N
BETHESDA, MD. 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
ADDRESS: HTTP://WWW.CALVERT.COM
YOU CAN REVIEW THE FUND'S REPORT AND SAI AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT-ONLY COPIES:
FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE ROOM OF THE COMMISSION,
WASHINGTON, D.C. 20549-6009, TELEPHONE: 1-800-SEC-0330.
FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-3334
<PAGE>
PRELIMINARY PROSPECTUS
AUGUST 4, 2000
CALVERT SOCIAL INVESTMENT FUND - TECHNOLOGY PORTFOLIO
CLASS I (INSTITUTIONAL) SHARES
TABLE OF CONTENTS
ABOUT THE FUND
INVESTMENT OBJECTIVE, STRATEGY 1
FEES AND EXPENSES 1
INVESTMENT PRACTICES AND RELATED RISKS 2
HIGH SOCIAL IMPACT INVESTMENTS 3
SPECIAL EQUITIES 4
SHAREHOLDER ADVOCACY AND SOCIAL RESPONSIBILITY 5
ABOUT YOUR INVESTMENT
SUBADVISOR 5
ADVISORY FEES 5
HOW TO OPEN AN ACCOUNT 5
IMPORTANT - HOW SHARES ARE PRICED 5
WHEN YOUR ACCOUNT WILL BE CREDITED 6
OTHER CALVERT GROUP FEATURES (EXCHANGES,
MINIMUM ACCOUNT BALANCE, ETC.) 6
DIVIDENDS, CAPITAL GAINS AND TAXES 7
HOW TO SELL SHARES 7
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATES WHERE THE OFFER OR SALE IS NOT PERMITTED.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
OBJECTIVE
THE FUND SEEKS GROWTH OF CAPITAL THROUGH INVESTMENT IN STOCKS IN COMPANIES
INVOLVED IN THE DEVELOPMENT, ADVANCEMENT, AND USE OF TECHNOLOGY.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS PRIMARILY IN STOCKS OF COMPANIES THAT THE ADVISOR EXPECTS TO
BENEFIT FROM THE DEVELOPMENT AND USE OF TECHNOLOGY. HOLDINGS CAN RANGE
FROM SMALL COMPANIES DEVELOPING NEW TECHNOLOGY TO BLUE CHIP FIRMS WITH
ESTABLISHED TRACK RECORDS OF DEVELOPING AND MARKETING TECHNOLOGICAL
ADVANCES.
THE FUND WILL INVEST AT LEAST 65% OF ITS ASSETS IN THE STOCKS OF U.S. AND
NON-U.S. COMPANIES PRINCIPALLY ENGAGED IN RESEARCH, DEVELOPMENT, AND MANUFACTURE
OF TECHNOLOGY AND IN THE STOCKS OF COMPANIES THAT SHOULD BENEFIT FROM THE
COMMERCIALIZATION OF TECHNOLOGICAL ADVANCES. THE FUND MAY ALSO INVEST UP TO 10%
IN PRIVATE EQUITY AND SHORT AT LEAST 10% OF THE NET ASSET VALUE.
THE GOAL OF THE INVESTMENT SELECTION PROCESS IS TO IDENTIFY CANDIDATES FOR
INVESTMENT THAT ARE GROWTH COMPANIES WITH SUPERIOR EARNINGS PROSPECTS,
REASONABLE VALUATIONS, AND FAVORABLE TRADING VOLUME AND PRICE PATTERNS. THE
PROCESS IS BASED ON ONE PHILOSOPHY: EARNINGS EXPECTATIONS DRIVE STOCK
PRICES. THE FUND INVESTS IN COMPANIES WITH STRONG EARNINGS PROSPECTS THAT THE
SUBADVISOR EXPECTS TO PRODUCE GAINS OVER TIME. THE FUND BUYS COMPANIES WITH
STRONG EARNINGS DYNAMICS, AND SELLS THOSE WITH DETERIORATING EARNINGS PROSPECTS.
SECURITY SELECTION IS THE PRIMARY MEANS OF ADDING INVESTMENT VALUE. THE FUND
USES AN ACTIVE TRADING STRATEGY WHICH MAY CAUSE THE FUND TO HAVE A RELATIVELY
HIGH AMOUNT OF SHORT- TERM CAPITAL GAINS, WHICH ARE TAXABLE TO YOU, THE
SHAREHOLDER, AT THE ORDINARY INCOME TAX RATE.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA.
PRINCIPAL RISKS
THE FUND IS DESIGNED FOR LONG-TERM INVESTORS WHO ARE WILLING TO ACCEPT
ABOVE-AVERAGE RISK AND VOLATILITY IN ORDER TO SEEK A HIGHER RATE OF RETURN OVER
TIME. YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
-THE STOCK MARKET GOES DOWN
- THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED
- THE FUND IS SUBJECT TO THE RISK THAT ITS PRINCIPAL MARKET SEGMENT, TECHNOLOGY
STOCKS, MAY UNDERPERFORM COMPARED TO OTHER MARKET SEGMENTS OR TO THE EQUITY
MARKETS AS A WHOLE
- THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST MORE
OF ITS ASSETS IN A SMALLER NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE
STOCK MAY HAVE GREATER IMPACT ON THE FUND
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
(NO PERFORMANCE RESULTS ARE SHOWN FOR THE FUND SINCE IT WAS RECENTLY ORGANIZED.)
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF
YOU BUY AND HOLD SHARES OF THE FUND. ANNUAL FUND OPERATING
EXPENSES ARE DEDUCTED FROM FUND ASSETS.
ANNUAL FUND OPERATING EXPENSES1
(EXPENSES DEDUCTED FROM FUND ASSETS)
MANAGEMENT FEES --%
DISTRIBUTION AND SERVICE (12B-1) FEES --%
OTHER EXPENSES --%
TOTAL ANNUAL FUND OPERATING EXPENSES --%
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT2 --%
NET EXPENSES --%
1 EXPENSES ARE BASED ON ESTIMATES FOR THE FUND'S CURRENT FISCAL YEAR.
MANAGEMENT FEES INCLUDE THE SUBADVISORY FEES PAID BY THE ADVISOR, CALVERT ASSET
MANAGEMENT COMPANY, INC. ("CAMCO" OR "CALVERT") TO THE SUBADVISOR, AND THE
ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE SERVICES
COMPANY, AN AFFILIATE OF CAMCO.
2 CAMCO HAS AGREED TO LIMIT ANNUAL FUND OPERATING EXPENSES (NET OF ANY EXPENSE
OFFSET ARRANGEMENTS) THROUGH SEPTEMBER 30, 2001. THE CONTRACTUAL EXPENSE CAP IS
SHOWN AS "NET EXPENSES," THIS IS THE MAXIMUM AMOUNT OF OPERATING EXPENSES THAT
MAY BE CHARGED TO THE FUND THROUGH SEPTEMBER 30, 2001. FOR THE PURPOSES OF THIS
EXPENSE LIMIT, OPERATING EXPENSES DO NOT INCLUDE INTEREST EXPENSE, BROKERAGE
COMMISSIONS, EXTRAORDINARY EXPENSES, TAXES AND CAPITAL ITEMS. THE FUND HAS AN
OFFSET ARRANGEMENT WITH THE CUSTODIAN BANK WHEREBY THE CUSTODIAN AND TRANSFER
AGENT FEES MAY BE PAID INDIRECTLY BY CREDITS ON THE FUND'S UNINVESTED CASH
BALANCES. THESE CREDITS ARE USED TO REDUCE THE FUND'S EXPENSES.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT:
- YOU INVEST $1,000,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
- YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
<PAGE>
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE AS FOLLOWS IF THE CLASS I SHARES ARE HELD FOR 1, OR 3 YEARS:
NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS
--- ---
INVESTMENT PRACTICES AND RELATED RISKS
ON THE FOLLOWING PAGES ARE BRIEF DESCRIPTIONS OF THE PRINCIPAL INVESTMENTS AND
TECHNIQUES, SUMMARIZED EARLIER, ALONG WITH CERTAIN ADDITIONAL INVESTMENT
TECHNIQUES AND THEIR RISKS. FOR EACH OF THE INVESTMENT PRACTICES LISTED, WE SHOW
THE PRINCIPAL TYPES OF RISK INVOLVED. (SEE THE FOLLOWING PAGES FOR A DESCRIPTION
OF THE TYPES OF RISKS).
INVESTMENT PRACTICES
STOCKS IN GENERAL. THE FUND IS SUBJECT TO STOCK MARKET RISK. STOCK PRICES
OVERALL MAY DECLINE OVER SHORT OR EVEN LONG PERIODS. THE FUND IS ALSO SUBJECT TO
INVESTMENT STYLE RISK, WHICH IS THE CHANCE THAT RETURNS FROM LARGE AND
MID-CAPITALIZATION STOCKS WILL TRAIL RETURNS FROM OTHER ASSET CLASSES OR THE
OVERALL STOCK MARKET. EACH TYPE OF STOCK TENDS TO GO THROUGH CYCLES OF DOING
BETTER OR WORSE THAN THE STOCK MARKET IN GENERAL. FINALLY, INDIVIDUAL STOCKS MAY
LOSE VALUE FOR A VARIETY OF REASONS, EVEN WHEN THE OVERALL STOCK MARKET HAS
INCREASED. RISKS: MARKET.
ACTIVE TRADING STRATEGY/TURNOVER INVOLVES SELLING A SECURITY SOON AFTER
PURCHASE. AN ACTIVE TRADING STRATEGY CAUSES A FUND TO HAVE HIGHER PORTFOLIO
TURNOVER COMPARED TO OTHER FUNDS AND HIGHER TRANSACTION COSTS, SUCH AS
COMMISSIONS AND CUSTODIAN AND SETTLEMENT FEES, AND MAY INCREASE YOUR TAX
LIABILITY. RISKS: OPPORTUNITY, MARKET, TRANSACTION AND TAX.
TEMPORARY DEFENSIVE POSITIONS.
DURING ADVERSE MARKET, ECONOMIC OR POLITICAL CONDITIONS, THE FUND MAY DEPART
FROM ITS PRINCIPAL INVESTMENT STRATEGIES BY INCREASING ITS INVESTMENT IN
SHORT-TERM INTEREST-BEARING SECURITIES. DURING TIMES OF ANY TEMPORARY DEFENSIVE
POSITIONS, THE FUND MAY NOT BE ABLE TO ACHIEVE ITS INVESTMENT OBJECTIVE RISKS:
OPPORTUNITY.
CONVENTIONAL SECURITIES
FOREIGN SECURITIES. SECURITIES ISSUED BY COMPANIES LOCATED OUTSIDE THE U.S.
AND/OR TRADED PRIMARILY ON A FOREIGN EXCHANGE. RISKS: MARKET, CURRENCY,
TRANSACTION, LIQUIDITY, INFORMATION AND POLITICAL.
SMALL CAP STOCKS. INVESTING IN SMALL COMPANIES INVOLVES GREATER RISK THAN WITH
MORE ESTABLISHED COMPANIES. SMALL CAP STOCK PRICES ARE MORE VOLATILE AND THE
COMPANIES OFTEN HAVE LIMITED PRODUCT LINES, MARKETS, FINANCIAL RESOURCES, AND
MANAGEMENT EXPERIENCE. RISKS: MARKET, LIQUIDITY AND INFORMATION.
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET AND CREDIT.
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA OR COMPARABLE UNRATED
BONDS ARE CONSIDERED JUNK BONDS. THEY ARE SUBJECT TO GREATER CREDIT RISK THAN
INVESTMENT GRADE BONDS. RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY AND
INFORMATION.
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT BEEN RATED BY A RECOGNIZED RATING
AGENCY; THE ADVISOR HAS DETERMINED THE CREDIT QUALITY BASED ON ITS OWN RESEARCH.
RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY AND INFORMATION.
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE READILY SOLD BECAUSE THERE IS NO
ACTIVE MARKET. RISKS: LIQUIDITY, MARKET AND TRANSACTION.
INITIAL PUBLIC OFFERINGS ("IPOS"). IPOS AND OTHER INVESTMENTS MAY MAGNIFY THE
PERFORMANCE IMPACT ON A PORTFOLIO WITH A SMALL ASSET BASE. THE PORTFOLIO MAY NOT
EXPERIENCE SIMILAR PERFORMANCE AS THE ASSETS GROW. RISKS: MARKET.
LEVERAGED DERIVATIVE INSTRUMENTS
CURRENCY CONTRACTS. CONTRACTS INVOLVING THE RIGHT OR OBLIGATION TO BUY OR SELL A
GIVEN AMOUNT OF FOREIGN CURRENCY AT A SPECIFIED PRICE AND FUTURE DATE. RISKS:
CURRENCY, LEVERAGE, CORRELATION, LIQUIDITY AND OPPORTUNITY.
OPTIONS ON SECURITIES AND INDICES. CONTRACTS GIVING THE HOLDER THE RIGHT BUT NOT
THE OBLIGATION TO PURCHASE OR SELL A SECURITY (OR THE CASH VALUE, IN THE CASE OF
AN OPTION ON AN INDEX) AT A SPECIFIED PRICE WITHIN A SPECIFIED TIME. IN THE CASE
OF SELLING (WRITING) OPTIONS, THE FUNDS WILL WRITE CALL OPTIONS ONLY IF THEY
ALREADY OWN THE SECURITY (IF IT IS "COVERED").
RISKS: INTEREST RATE, CURRENCY, MARKET, LEVERAGE, CORRELATION, LIQUIDITY, CREDIT
AND OPPORTUNITY.
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A SPECIFIC AMOUNT OF A COMMODITY OR
FINANCIAL INSTRUMENT AT A PARTICULAR PRICE ON A SPECIFIC FUTURE DATE. RISKS:
INTEREST RATE, CURRENCY, MARKET, LEVERAGE, CORRELATION, LIQUIDITY AND
OPPORTUNITY.
HIGH SOCIAL IMPACT INVESTMENTS
HIGH SOCIAL IMPACT INVESTMENTS IS A PROGRAM THAT TARGETS A PERCENTAGE OF THE
FUND'S ASSETS (UP TO 1%) TO DIRECTLY SUPPORT THE GROWTH OF COMMUNITY-BASED
ORGANIZATIONS FOR THE PURPOSES OF PROMOTING BUSINESS CREATION, HOUSING
DEVELOPMENT, AND ECONOMIC AND SOCIAL DEVELOPMENT OF URBAN AND RURAL COMMUNITIES.
THE FUND MAY ENGAGE IN THIS PROGRAM UPON REACHING $50 MILLION IN ASSETS. THESE
TYPES OF INVESTMENTS OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING MARKET
RATE, AND ARE CONSIDERED ILLIQUID, UNRATED AND MAY BE DEEMED BELOW-INVESTMENT
GRADE. THEY ALSO INVOLVE A GREATER RISK OF DEFAULT OR PRICE DECLINE THAN
INVESTMENT GRADE SECURITIES. HOWEVER, THEY HAVE A SIGNIFICANT SOCIAL RETURN BY
MAKING A TREMENDOUS DIFFERENCE IN OUR LOCAL COMMUNITIES. HIGH SOCIAL IMPACT
INVESTMENTS ARE VALUED UNDER THE DIRECTION AND CONTROL OF THE FUND'S BOARD.
<PAGE>
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER TO PERMIT IT TO INVEST THOSE ASSETS
ALLOCATED FOR INVESTMENT IN HIGH SOCIAL IMPACT INVESTMENTS THROUGH THE PURCHASE
OF COMMUNITY INVESTMENT NOTES FROM THE CALVERT SOCIAL INVESTMENT FOUNDATION. THE
CALVERT SOCIAL INVESTMENT FOUNDATION IS A NON-PROFIT ORGANIZATION, LEGALLY
DISTINCT FROM CALVERT GROUP, ORGANIZED AS A CHARITABLE AND EDUCATIONAL
FOUNDATION FOR THE PURPOSE OF INCREASING PUBLIC AWARENESS AND KNOWLEDGE OF THE
CONCEPT OF SOCIALLY RESPONSIBLE INVESTING. THE CALVERT SOCIAL INVESTMENT
FOUNDATION HAS INSTITUTED THE CALVERT COMMUNITY INVESTMENTS PROGRAM TO RAISE
ASSETS FROM INDIVIDUAL AND INSTITUTIONAL INVESTORS AND THEN INVEST THESE ASSETS
DIRECTLY IN NON-PROFIT OR NOT-FOR-PROFIT COMMUNITY DEVELOPMENT ORGANIZATIONS
AND COMMUNITY DEVELOPMENT BANKS THAT FOCUS ON LOW INCOME HOUSING, ECONOMIC
DEVELOPMENT AND BUSINESS DEVELOPMENT IN URBAN AND RURAL COMMUNITIES.
SPECIAL EQUITIES
THE FUND HAS A SPECIAL EQUITIES INVESTMENT PROGRAM THAT ALLOWS THE FUND TO
PROMOTE ESPECIALLY PROMISING APPROACHES TO SOCIAL GOALS THROUGH PRIVATELY PLACED
INVESTMENTS. THE INVESTMENTS ARE GENERALLY VENTURE CAPITAL INVESTMENTS IN SMALL,
UNTRIED ENTERPRISES. THE SPECIAL EQUITIES COMMITTEE OF THE FUND'S BOARD
IDENTIFIES, EVALUATES, AND SELECTS THE SPECIAL EQUITIES INVESTMENTS. SPECIAL
EQUITIES INVOLVE A HIGH DEGREE OF RISK - THEY ARE SUBJECT TO LIQUIDITY,
INFORMATION, AND, IF A DEBT INVESTMENT, CREDIT RISK. SPECIAL EQUITIES ARE
VALUED UNDER THE DIRECTION AND CONTROL OF THE FUND'S BOARD.
THE FUND HAS ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS (FOR EXAMPLE,
REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND REVERSE REPURCHASE AGREEMENTS,
AND SECURITIES LENDING.) THESE POLICIES AND RESTRICTIONS ARE DISCUSSED IN THE
STATEMENT OF ADDITIONAL INFORMATION ("SAI").
TYPES OF INVESTMENT RISK
CORRELATION RISK
THIS OCCURS WHEN A FUND "HEDGES"- USES ONE INVESTMENT TO OFFSET THE FUND'S
POSITION IN ANOTHER. IF THE TWO INVESTMENTS DO NOT BEHAVE IN RELATION TO ONE
ANOTHER THE WAY FUND MANAGERS EXPECT THEM TO, THEN UNEXPECTED OR UNDESIRED
RESULTS MAY OCCUR. FOR EXAMPLE, A HEDGE MAY ELIMINATE OR REDUCE GAINS AS WELL AS
OFFSET LOSSES.
CREDIT RISK
THE RISK THAT THE ISSUER OF A SECURITY OR THE COUNTERPARTY TO AN INVESTMENT
CONTRACT MAY DEFAULT OR BECOME UNABLE TO PAY ITS OBLIGATIONS WHEN DUE.
CURRENCY RISK
CURRENCY RISK OCCURS WHEN A FUND BUYS, SELLS OR HOLDS A SECURITY DENOMINATED IN
FOREIGN CURRENCY. FOREIGN CURRENCIES "FLOAT" IN VALUE AGAINST THE U.S. DOLLAR.
ADVERSE CHANGES IN FOREIGN CURRENCY VALUES CAN CAUSE INVESTMENT LOSSES WHEN A
FUND'S INVESTMENTS ARE CONVERTED TO U.S. DOLLARS.
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY REDUCING
THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-TERM
SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE SUBJECT
TO GREATER INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT
EXCEEDS THE AMOUNT ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID SECURITY
OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
THE RISK THAT A FUND'S PORTFOLIO MANAGEMENT PRACTICES MIGHT NOT WORK TO ACHIEVE
THEIR DESIRED RESULT.
MARKET RISK
THE RISK THAT SECURITIES PRICES IN A MARKET, A SECTOR OR AN INDUSTRY WILL
FLUCTUATE, AND THAT SUCH MOVEMENTS MIGHT REDUCE AN INVESTMENT'S VALUE.
OPPORTUNITY RISK
THE RISK OF MISSING OUT ON AN INVESTMENT OPPORTUNITY BECAUSE THE ASSETS NEEDED
TO TAKE ADVANTAGE OF IT ARE COMMITTED TO LESS ADVANTAGEOUS INVESTMENTS OR
STRATEGIES.
POLITICAL RISK
THE RISK THAT MAY OCCUR WITH FOREIGN INVESTMENTS, AND MEANS THAT THE VALUE OF AN
INVESTMENT MAY BE ADVERSELY AFFECTED BY NATIONALIZATION, TAXATION, WAR,
GOVERNMENT INSTABILITY OR OTHER ECONOMIC OR POLITICAL ACTIONS OR FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT, MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
<PAGE>
INVESTMENT SELECTION PROCESS
INVESTMENTS ARE SELECTED ON THE BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL
OBJECTIVES OF FINANCIAL SOUNDNESS AND SOCIAL CRITERIA.
POTENTIAL INVESTMENTS FOR THE FUND ARE FIRST SELECTED FOR FINANCIAL SOUNDNESS
AND THEN EVALUATED ACCORDING TO THE FUND'S SOCIAL CRITERIA. TO THE GREATEST
EXTENT POSSIBLE, THE FUND SEEKS TO INVEST IN COMPANIES THAT EXHIBIT
POSITIVE ACCOMPLISHMENTS WITH RESPECT TO ONE OR MORE OF THE SOCIAL CRITERIA.
INVESTMENTS FOR THE FUND MUST MEET THE MINIMUM STANDARDS FOR ALL ITS
FINANCIAL AND SOCIAL CRITERIA.
ALTHOUGH THE FUND'S SOCIAL CRITERIA TEND TO LIMIT THE AVAILABILITY OF INVESTMENT
OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER INVESTMENT COMPANIES, CAMCO AND
THE SUBADVISOR OF THE FUND BELIEVE THERE ARE SUFFICIENT INVESTMENT OPPORTUNITIES
TO PERMIT FULL INVESTMENT AMONG ISSUERS WHICH SATISFY THE FUND'S INVESTMENT AND
SOCIAL OBJECTIVES.
THE SELECTION OF AN INVESTMENT BY THE FUND DOES NOT CONSTITUTE ENDORSEMENT OR
VALIDATION BY THE FUND, NOR DOES THE EXCLUSION OF AN INVESTMENT NECESSARILY
REFLECT FAILURE TO SATISFY THE FUND'S SOCIAL CRITERIA. INVESTORS ARE INVITED TO
SEND A BRIEF DESCRIPTION OF COMPANIES THEY BELIEVE MIGHT BE SUITABLE FOR
INVESTMENT.
SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
THE FUND INVESTS IN ACCORDANCE WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO
INVESTORS WILL COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND
METHODS ENHANCE THE HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF
INDIVIDUAL INITIATIVE, EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. IN
ADDITION, WE BELIEVE THAT THERE ARE LONG-TERM BENEFITS IN AN INVESTMENT
PHILOSOPHY THAT DEMONSTRATES CONCERN FOR THE ENVIRONMENT, LABOR RELATIONS, HUMAN
RIGHTS AND COMMUNITY RELATIONS. THOSE ENTERPRISES THAT EXHIBIT A SOCIAL
AWARENESS IN THESE ISSUES SHOULD BE BETTER PREPARED TO MEET FUTURE SOCIETAL
NEEDS. BY RESPONDING TO SOCIAL CONCERNS, THESE ENTERPRISES SHOULD NOT ONLY
AVOID THE LIABILITY THAT MAY BE INCURRED WHEN A PRODUCT OR SERVICE IS DETERMINED
TO HAVE A NEGATIVE SOCIAL IMPACT OR HAS OUTLIVED ITS USEFULNESS, BUT ALSO BE
BETTER POSITIONED TO DEVELOP OPPORTUNITIES TO MAKE A PROFITABLE CONTRIBUTION TO
SOCIETY. THESE ENTERPRISES SHOULD BE READY TO RESPOND TO EXTERNAL DEMANDS AND
ENSURE THAT OVER THE LONGER TERM THEY WILL BE VIABLE TO SEEK TO PROVIDE A
POSITIVE RETURN TO BOTH INVESTORS AND SOCIETY AS A WHOLE.
THE FUND HAS DEVELOPED SOCIAL INVESTMENT CRITERIA, DETAILED BELOW. THESE
CRITERIA REPRESENT STANDARDS OF BEHAVIOR WHICH FEW, IF ANY, ORGANIZATIONS
TOTALLY SATISFY. AS A MATTER OF PRACTICE, EVALUATION OF A PARTICULAR
ORGANIZATION IN THE CONTEXT OF THESE CRITERIA WILL INVOLVE SUBJECTIVE JUDGMENT
BY CAMCO AND THE SUBADVISOR. ALL SOCIAL CRITERIA MAY BE CHANGED BY THE BOARD OF
TRUSTEES WITHOUT SHAREHOLDER APPROVAL.
THE FUND SEEKS TO INVEST IN COMPANIES THAT:
- DELIVER SAFE PRODUCTS AND SERVICES IN WAYS THAT SUSTAIN OUR NATURAL
ENVIRONMENT. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES THAT PRODUCE ENERGY FROM
RENEWABLE RESOURCES, WHILE AVOIDING CONSISTENT POLLUTERS.
- MANAGE WITH PARTICIPATION THROUGHOUT THE ORGANIZATION IN DEFINING AND
ACHIEVING OBJECTIVES. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES THAT OFFER
EMPLOYEE STOCK OWNERSHIP OR PROFIT-SHARING PLANS.
- NEGOTIATE FAIRLY WITH THEIR WORKERS, PROVIDE AN ENVIRONMENT SUPPORTIVE OF
THEIR WELLNESS, DO NOT DISCRIMINATE ON THE BASIS OF RACE, GENDER, RELIGION, AGE,
DISABILITY, ETHNIC ORIGIN, OR SEXUAL ORIENTATION, DO NOT CONSISTENTLY VIOLATE
REGULATIONS OF THE EEOC, AND PROVIDE OPPORTUNITIES FOR WOMEN, DISADVANTAGED
MINORITIES, AND OTHERS FOR WHOM EQUAL OPPORTUNITIES HAVE OFTEN BEEN DENIED. FOR
EXAMPLE, THE FUND CONSIDERS BOTH UNIONIZED AND NON-UNION FIRMS WITH GOOD LABOR
RELATIONS.
- FOSTER AWARENESS OF A COMMITMENT TO HUMAN GOALS, SUCH AS CREATIVITY,
PRODUCTIVITY, SELF-RESPECT AND RESPONSIBILITY, WITHIN THE ORGANIZATION AND THE
WORLD, AND CONTINUALLY RECREATES A CONTEXT WITHIN WHICH THESE GOALS CAN BE
REALIZED. FOR EXAMPLE, THE FUND LOOKS FOR COMPANIES WITH AN ABOVE AVERAGE
COMMITMENT TO COMMUNITY AFFAIRS AND CHARITABLE GIVING.
THE FUND WILL NOT INVEST IN COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- BUSINESS ACTIVITIES IN SUPPORT OF REPRESSIVE REGIMES
- PRODUCTION, OR THE MANUFACTURE OF EQUIPMENT, TO PRODUCE NUCLEAR ENERGY
- MANUFACTURE OF WEAPON SYSTEMS
- MANUFACTURE OF ALCOHOLIC BEVERAGES OR TOBACCO PRODUCTS
- OPERATION OF GAMBLING CASINOS
- A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS PEOPLE. WE
URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE AMERICANS AND OTHER
INDIGENOUS PEOPLES. FOR EXAMPLE, THE FUND OBJECTS TO THE UNAUTHORIZED USE OF
NAMES AND IMAGES THAT PORTRAY NATIVE AMERICANS IN A NEGATIVE LIGHT, AND
SUPPORTS THE PROMOTION OF POSITIVE PORTRAYALS OF ALL INDIVIDUALS AND ETHNIC
GROUPS.
WITH RESPECT TO U.S. GOVERNMENT SECURITIES, THE FUND INVESTS PRIMARILY IN DEBT
OBLIGATIONS ISSUED OR GUARANTEED BY AGENCIES OR INSTRUMENTALITIES OF THE U.S.
GOVERNMENT WHOSE PURPOSES FURTHER OR ARE COMPATIBLE WITH THE FUND'S SOCIAL
CRITERIA, SUCH AS OBLIGATIONS OF THE STUDENT LOAN MARKETING ASSOCIATION, RATHER
THAN GENERAL OBLIGATIONS OF THE U.S. GOVERNMENT, SUCH AS TREASURY SECURITIES.
<PAGE>
SHAREHOLDER ADVOCACY AND SOCIAL RESPONSIBILITY
AS THE FUND'S ADVISOR, CALVERT TAKES A PROACTIVE ROLE TO MAKE A TANGIBLE
POSITIVE CONTRIBUTION TO OUR SOCIETY AND THAT OF FUTURE GENERATIONS. WE SEEK TO
POSITIVELY INFLUENCE CORPORATE BEHAVIOR THROUGH OUR ROLE AS SHAREHOLDERS BY
PUSHING COMPANIES TOWARD HIGHER STANDARDS OF SOCIAL AND ENVIRONMENTAL
RESPONSIBILITY. OUR ACTIVITIES MAY INCLUDE BUT ARE NOT LIMITED TO:
DIALOGUE WITH COMPANIES
WE REGULARLY INITIATE DIALOGUE WITH MANAGEMENT AS PART OF OUR SOCIAL RESEARCH
PROCESS. AFTER THE FUND BECOMES A SHAREHOLDER, WE OFTEN CONTINUE OUR DIALOGUE
WITH MANAGEMENT THROUGH PHONE CALLS, LETTERS AND IN-PERSON MEETINGS.
THROUGH OUR INTERACTION, WE LEARN ABOUT MANAGEMENT'S SUCCESSES AND CHALLENGES
AND PRESS FOR IMPROVEMENT ON ISSUES OF CONCERN.
PROXY VOTING
AS A SHAREHOLDER IN OUR VARIOUS PORTFOLIO COMPANIES, THE FUND IS
GUARANTEED AN OPPORTUNITY EACH YEAR TO EXPRESS ITS VIEWS ON ISSUES OF CORPORATE
GOVERNANCE AND SOCIAL RESPONSIBILITY AT ANNUAL STOCKHOLDER MEETINGS. WE
TAKE OUR VOTING RESPONSIBILITY SERIOUSLY AND VOTE ALL PROXIES CONSISTENT WITH
THE FINANCIAL AND SOCIAL OBJECTIVES OF OUR FUND.
SHAREHOLDER RESOLUTIONS
CALVERT PROPOSES RESOLUTIONS ON A VARIETY OF SOCIAL ISSUES. WE FILE SHAREHOLDER
RESOLUTIONS WHEN OUR DIALOGUE WITH CORPORATE MANAGEMENT PROVES UNSUCCESSFUL TO
ENCOURAGE A COMPANY TO TAKE ACTION. IN MOST CASES, OUR EFFORTS HAVE LED TO
NEGOTIATED SETTLEMENTS WITH POSITIVE RESULTS FOR SHAREHOLDERS AND COMPANIES
ALIKE. FOR EXAMPLE, ONE OF OUR SHAREHOLDER RESOLUTIONS RESULTED IN THE COMPANY'S
FIRST-EVER DISCLOSURE OF ITS EQUAL EMPLOYMENT POLICIES, PROGRAMS AND WORKFORCE
DEMOGRAPHICS.
ABOUT CALVERT
CALVERT ASSET MANAGEMENT COMPANY, INC.(4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO") IS THE FUND'S INVESTMENT ADVISOR. CAMCO PROVIDES
THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT AND OFFICE SPACE; FURNISHES
EXECUTIVE AND OTHER PERSONNEL TO THE FUND, AND PAYS THE SALARIES AND FEES OF ALL
DIRECTORS WHO ARE AFFILIATED PERSONS OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL
FUNDS SINCE 1976. CALVERT IS THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND
PORTFOLIOS, INCLUDING THE FIRST AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS.
AS OF SEPTEMBER 30, 2000, CALVERT HAD OVER $____ BILLION IN ASSETS UNDER
MANAGEMENT.
SUBADVISOR
TURNER INVESTMENT PARTNERS, INC. (1235 WESTLAKES DRIVE, BERWYN, PENNSYLVANIA
19312) HAS MANAGED THE PORTFOLIO SINCE INCEPTION. IT USES A DISCIPLINED
APPROACH TO INVESTING IN GROWTH STOCKS BASED ON THE PREMISE THAT EARNINGS
EXPECTATIONS DRIVE STOCK PRICES.
ROBERT TURNER IS THE FOUNDER, CHAIRMAN, AND CHIEF INVESTMENT OFFICER OF TURNER
INVESTMENT PARTNERS. HE HEADS THE FUND'S PORTFOLIO MANAGEMENT TEAM. A
CHARTERED FINANCIAL ANALYST, HE WAS PREVIOUSLY SENIOR INVESTMENT MANAGER WITH
MERIDIAN INVESTMENT COMPANY.
THE FUND HAS OBTAINED AN EXEMPTIVE ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO PERMIT THE FUND, PURSUANT TO APPROVAL BY THE BOARD OF TRUSTEES, TO
ENTER INTO AND MATERIALLY AMEND CONTRACTS WITH THE FUND'S SUBADVISORS WITHOUT
SHAREHOLDER APPROVAL. SEE "INVESTMENT ADVISOR AND SUBADVISOR" IN THE SAI FOR
FURTHER DETAILS.
ADVISORY FEES
THE FUND'S ADVISORY AGREEMENT PROVIDES FOR THE FUND TO PAY CAMCO A FEE OF 1.25%
OF THE FUND'S AVERAGE DAILY NET ASSETS.
HOW TO OPEN AN ACCOUNT
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. BE SURE TO SPECIFY CLASS
I. ALL PURCHASES MUST BE MADE BY BANKWIRE IN U.S. DOLLARS. FOR MORE
INFORMATION AND WIRE INSTRUCTIONS, CALL CALVERT GROUP AT 800-327-2109.
MINIMUM TO OPEN AN ACCOUNT $1,000,000
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
IF A FUND HAS MORE THAN ONE CLASS OF SHARES, THE NAV OF EACH CLASS WILL BE
DIFFERENT, DEPENDING ON THE NUMBER OF SHARES OUTSTANDING FOR EACH CLASS.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS,
EXCEPT THAT SECURITIES MATURING WITHIN 60 DAYS ARE VALUED AT AMORTIZED COST. IF
MARKET QUOTATIONS ARE NOT READILY AVAILABLE, SECURITIES ARE VALUED BY A METHOD
THAT THE FUND'S BOARD OF TRUSTEES BELIEVES ACCURATELY REFLECTS FAIR VALUE.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4 P.M. ET). THE FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERAN'S DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE RECEIVED BECAUSE THE BANKS AND POST OFFICES ARE CLOSED.
<PAGE>
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NEXT NAV CALCULATED AFTER YOUR ORDER IS
RECEIVED IN GOOD ORDER. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF
SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER. ALL
PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND FRACTIONAL
SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
OTHER CALVERT GROUP FEATURES
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION
VISIT WWW.CALVERT.COM OR CALL 800-368-2745
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES AND WIRE FUNDS BY TELEPHONE IF YOU
HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS AND ESTABLISHED BANK INSTRUCTIONS ON
YOUR ACCOUNT, WHEN OPENED OR AT A LATER DATE BY A SIGNATURE-GUARANTEED LETTER.
YOU RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS
YOU INSTRUCT US OTHERWISE IN WRITING.
WHILE TELEPHONE REDEMPTION IS EASY AND CONVENIENT, THIS ACCOUNT FEATURE INVOLVES
A RISK OF LOSS FROM UNAUTHORIZED OR FRAUDULENT TRANSACTIONS. CALVERT WILL TAKE
REASONABLE PRECAUTIONS TO PROTECT YOUR ACCOUNT FROM FRAUD. YOU SHOULD DO THE
SAME BY KEEPING YOUR ACCOUNT INFORMATION PRIVATE AND IMMEDIATELY REVIEWING ANY
CONFIRMATIONS OR ACCOUNT STATEMENTS THAT WE SEND TO YOU. MAKE SURE TO CONTACT
CALVERT IMMEDIATELY ABOUT ANY TRANSACTION YOU BELIEVE TO BE UNAUTHORIZED.
WE RESERVE THE RIGHT TO REFUSE A TELEPHONE REDEMPTION IF THE CALLER IS UNABLE TO
PROVIDE:
- THE ACCOUNT NUMBER.
- THE NAME AND ADDRESS EXACTLY AS REGISTERED ON THE ACCOUNT.
- THE PRIMARY SOCIAL SECURITY OR EMPLOYER IDENTIFICATION NUMBER AS REGISTERED ON
THE ACCOUNT.
PLEASE NOTE THAT CALVERT WILL NOT BE RESPONSIBLE FOR ANY ACCOUNT LOSSES DUE TO
TELEPHONE FRAUD, SO LONG AS WE HAVE TAKEN REASONABLE STEPS TO VERIFY THE
CALLER'S IDENTITY. IF YOU WISH TO REMOVE THE TELEPHONE REDEMPTION FEATURE FROM
YOUR ACCOUNT, PLEASE NOTIFY US IN WRITING.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR BROKER OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE MAKE IT EASY FOR
YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR INVESTMENT GOALS CHANGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
SHARES MAY ONLY BE EXCHANGED FOR CLASS I SHARES OF ANOTHER CALVERT FUND.
BANK HOLIDAYS: ON ANY DAY CALVERT IS OPEN BUT THE FUND'S CUSTODIAN BANK IS
CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY) EXCHANGE REQUESTS INTO OR OUT OF A
MONEY MARKET FUND WILL BE PRICED AT THE NEXT-DETERMINED NAV, BUT WILL NOT
RECEIVE ANY DIVIDEND IN THE MONEY MARKET FUND UNTIL THE NEXT DAY THE FUND'S
CUSTODIAN BANK IS OPEN.
THE FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, THE FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND ANNUAL
REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER MAILINGS.
SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND WILL BE
MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT. YOU MAY BE REQUIRED TO PAY A FEE FOR THESE SPECIAL SERVICES.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR FUND ACCOUNTS OF AT LEAST $1,000,000
PER FUND. IF DUE TO REDEMPTIONS, THE ACCOUNT FALLS BELOW THE MINIMUM, YOUR
ACCOUNT MAY BE CLOSED AND THE PROCEEDS MAILED TO THE ADDRESS OF RECORD. YOU
WILL BE GIVEN A NOTICE THAT YOUR ACCOUNT IS BELOW THE MINIMUM AND WILL BE
CLOSED, OR MOVED TO CLASS A (AT NAV) AFTER 30 DAYS IF THE BALANCE IS NOT BROUGHT
UP TO THE REQUIRED MINIMUM AMOUNT.
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
THE FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME ANNUALLY. NET INVESTMENT
INCOME CONSISTS OF INTEREST INCOME, NET SHORT-TERM CAPITAL GAINS, IF ANY, AND
DIVIDENDS DECLARED AND ON INVESTMENTS, LESS EXPENSES. DISTRIBUTIONS OF NET
SHORT-TERM CAPITAL GAINS (TREATED AS DIVIDENDS FOR TAX PURPOSES) AND NET
LONG-TERM CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE A YEAR; HOWEVER, THE
FUND DOES NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS UNLESS AVAILABLE CAPITAL
LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED. DIVIDEND AND DISTRIBUTION
PAYMENTS WILL VARY BETWEEN CLASSES.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV, UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID TO YOU BY WIRE TO A
PREDESIGNATED BANK ACCOUNT. DIVIDENDS AND DISTRIBUTIONS FROM ANY CALVERT GROUP
FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY REGISTERED ACCOUNT IN THE
CAME SHARE CLASS OF ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUND IN WRITING TO CHANGE YOUR PAYMENT OPTIONS.
BUYING A DIVIDEND
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE FULLY
TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED BY THE
AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD DATE
("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND THEN
RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
FEDERAL TAXES
IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-DIV INDICATING THE FEDERAL TAX
STATUS OF DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU DURING THE
PAST YEAR. GENERALLY, DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE IN THE YEAR THEY
ARE PAID. HOWEVER, ANY DIVIDENDS AND DISTRIBUTIONS PAID IN JANUARY BUT DECLARED
DURING THE PRIOR THREE MONTHS ARE TAXABLE IN THE YEAR DECLARED. DIVIDENDS AND
DISTRIBUTIONS ARE TAXABLE TO YOU REGARDLESS OF WHETHER THEY ARE TAKEN IN CASH OR
REINVESTED. DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS
ORDINARY INCOME. DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS
LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES.
YOU MAY REALIZE A CAPITAL GAIN OR LOSS WHEN YOU SELL OR EXCHANGE SHARES. THIS
CAPITAL GAIN OR LOSS WILL BE SHORT- OR LONG-TERM, DEPENDING ON HOW LONG YOU HAVE
OWNED THE SHARES WHICH WERE SOLD. IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-B
INDICATING THE TOTAL AMOUNT OF ALL SALES, INCLUDING EXCHANGES. YOU SHOULD KEEP
YOUR ANNUAL YEAR-END ACCOUNT STATEMENTS TO DETERMINE THE COST (BASIS) OF THE
SHARES TO REPORT ON YOUR TAX RETURNS.
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM US GOVERNMENT
SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
CALVERT GROUP RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT OR ANY PURCHASE ORDER
FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY YOUR FUND IS OPEN FOR
BUSINESS. YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR
REDEMPTION REQUEST IS RECEIVED BY THE TRANSFER AGENT IN GOOD ORDER (SEE BELOW).
THE PROCEEDS WILL NORMALLY BE SENT TO YOU ON THE NEXT BUSINESS DAY, BUT IF
MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT THE FUND, IT MAY TAKE UP TO
SEVEN (7) DAYS TO MAKE PAYMENT. THE FUNDS HAVE THE RIGHT TO REDEEM SHARES IN
ASSETS OTHER THAN CASH FOR REDEMPTION AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD,
$250,000 OR 1% OF THE NET ASSET VALUE OF THE FUND, WHICHEVER IS LESS. WHEN THE
NYSE IS CLOSED (OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS
CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY CIRCUMSTANCES AS
DETERMINED BY THE SECURITIES AND EXCHANGE COMMISSION, REDEMPTIONS MAY BE
SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE NOTE THAT THERE ARE SOME FEDERAL
HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND VETERANS' DAY, WHEN THE NYSE IS OPEN
AND THE FUND IS OPEN BUT REDEMPTIONS CANNOT BE MAILED OR WIRED BECAUSE THE POST
OFFICES AND BANKS ARE CLOSED.
REQUEST IN "GOOD ORDER"
ALL REDEMPTION REQUESTS MUST BE RECEIVED BY THE TRANSFER AGENT IN "GOOD ORDER."
THIS MEANS THAT YOUR REQUEST MUST INCLUDE:
- THE FUND NAME AND ACCOUNT NUMBER
- THE AMOUNT OF THE TRANSACTION (IN DOLLARS OR SHARES).
- SIGNATURES OF ALL OWNERS EXACTLY AS REGISTERED ON THE ACCOUNT (FOR MAIL
REQUESTS).
- SIGNATURE GUARANTEES (IF REQUIRED).*
- ANY SUPPORTING LEGAL DOCUMENTATION THAT MAY BE REQUIRED.
- ANY OUTSTANDING CERTIFICATES REPRESENTING SHARES TO BE REDEEMED.
*FOR INSTANCE, A SIGNATURE GUARANTEE MUST BE PROVIDED BY ALL REGISTERED ACCOUNT
SHAREHOLDERS WHEN REDEMPTION PROCEEDS ARE SENT TO A DIFFERENT PERSON OR ADDRESS.
A SIGNATURE GUARANTEE CAN BE OBTAINED FROM MOST COMMERCIAL AND SAVINGS BANKS,
CREDIT UNIONS, TRUST COMPANIES, OR MEMBER FIRMS OF A U.S. STOCK EXCHANGE.
<PAGE>
TRANSACTIONS ARE PROCESSED AT THE NEXT DETERMINED SHARE PRICE AFTER THE TRANSFER
AGENT HAS RECEIVED ALL REQUIRED INFORMATION.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE - CALL 800-368-2745
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY WIRED
TO AN ADDRESS OR BANK YOU HAVE PREVIOUSLY AUTHORIZED. CLASS I REDEMPTIONS MUST
BE MADE BY WIRE.
IF YOU WANT THE MONEY TO BE WIRED TO A BANK NOT PREVIOUSLY AUTHORIZED, THEN A
VOIDED BANK CHECK MUST BE PROVIDED. TO ADD INSTRUCTIONS TO WIRE TO A
DESTINATION NOT PREVIOUSLY ESTABLISHED, OR IF YOU WOULD LIKE FUNDS SENT TO A
DIFFERENT ADDRESS OR ANOTHER PERSON, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
<PAGE>
TO OPEN AN INSTITUTIONAL (CLASS I) ACCOUNT:
800-327-2109
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-327-2109
TDD FOR HEARING-IMPAIRED:
800-541-1524
CALVERT OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUND, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
THE FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR THE FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUND AT:
CALVERT GROUP
4550 MONTGOMERY AVE, SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUND'S REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION.
YOU CAN GET TEXT-ONLY COPIES:
FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102. TELEPHONE: 202-942-8090.
FREE FROM THE COMMISSION'S INTERNET WEBSITE AT
WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE:
NO.811-3334
<PAGE>
CALVERT SOCIAL INVESTMENT FUND
(BALANCED, BOND, EQUITY, MONEY MARKET, MANAGED INDEX AND TECHNOLOGY PORTFOLIOS)
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
JANUARY 31, 2000, REVISED AUGUST 4, 2000
NEW ACCOUNT (800) 368-2748 SHAREHOLDER
INFORMATION: (301) 951-4820 SERVICES: (800) 368-2745
BROKER (800) 368-2746 TDD FOR THE HEARING-IMPAIRED
SERVICES: (301) 951-4850 (800) 541-1524
THIS PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A
PROSPECTUS. INVESTORS SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN
CONJUNCTION WITH THE FUND'S PRELIMINARY PROSPECTUS, DATED AUGUST 4, 2000. THE
FUND'S AUDITED FINANCIAL STATEMENTS INCLUDED IN ITS MOST RECENT ANNUAL
AND SEMI-ANNUAL REPORT TO SHAREHOLDERS, ARE EXPRESSLY INCORPORATED BY
REFERENCE, AND MADE A PART OF THIS SAI. THE PROSPECTUS AND THE MOST RECENT
SHAREHOLDER REPORT MAY BE OBTAINED FREE OF CHARGE BY WRITING THE FUND AT THE
ABOVE ADDRESS OR CALLING THE FUND, OR BY VISITING OUR WEBSITE AT
WWW.CALVERT.COM.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RISKS 2
INVESTMENT RESTRICTIONS 8
INVESTMENT SELECTION PROCESS 10
DIVIDENDS, DISTRIBUTIONS AND TAXES 10
NET ASSET VALUE 11
CALCULATION OF YIELD AND TOTAL RETURN 13
PURCHASE AND REDEMPTION OF SHARES 16
ADVERTISING 16
TRUSTEES, OFFICERS AND ADVISORY COUNCIL 17
INVESTMENT ADVISOR AND SUBADVISOR 20
ADMINISTRATIVE SERVICES AGENT 21
METHOD OF DISTRIBUTION 22
TRANSFER AND SHAREHOLDER SERVICING AGENTS 25
PORTFOLIO TRANSACTIONS 25
PERSONAL SECURITIES TRANSACTIONS 26
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 26
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 26
GENERAL INFORMATION 28
APPENDIX 29
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
FOREIGN SECURITIES (NOT APPLICABLE TO MANAGED INDEX OR MONEY MARKET)
INVESTMENTS IN FOREIGN SECURITIES MAY PRESENT RISKS NOT TYPICALLY INVOLVED
IN DOMESTIC INVESTMENTS. THE PORTFOLIOS MAY PURCHASE FOREIGN SECURITIES
DIRECTLY, ON FOREIGN MARKETS, OR THOSE REPRESENTED BY AMERICAN DEPOSITARY
RECEIPTS ("ADRS"), OR OTHER RECEIPTS EVIDENCING OWNERSHIP OF FOREIGN SECURITIES,
SUCH AS INTERNATIONAL DEPOSITORY RECEIPTS AND GLOBAL DEPOSITARY RECEIPTS. ADRS
ARE US DOLLAR-DENOMINATED AND TRADED IN THE US ON EXCHANGES OR OVER THE COUNTER.
BY INVESTING IN ADRS RATHER THAN DIRECTLY IN FOREIGN ISSUERS' STOCK, THE
PORTFOLIOS MAY POSSIBLY AVOID SOME CURRENCY AND SOME LIQUIDITY RISKS. THE
INFORMATION AVAILABLE FOR ADRS IS SUBJECT TO THE MORE UNIFORM AND MORE EXACTING
ACCOUNTING, AUDITING AND FINANCIAL REPORTING STANDARDS OF THE DOMESTIC MARKET OR
EXCHANGE ON WHICH THEY ARE TRADED.
ADDITIONAL COSTS MAY BE INCURRED IN CONNECTION WITH INTERNATIONAL
INVESTMENT SINCE FOREIGN BROKERAGE COMMISSIONS AND THE CUSTODIAL COSTS
ASSOCIATED WITH MAINTAINING FOREIGN PORTFOLIO SECURITIES ARE GENERALLY HIGHER
THAN IN THE UNITED STATES. FEE EXPENSE MAY ALSO BE INCURRED ON CURRENCY
EXCHANGES WHEN THE PORTFOLIOS CHANGE INVESTMENTS FROM ONE COUNTRY TO ANOTHER OR
CONVERT FOREIGN SECURITIES HOLDINGS INTO US DOLLARS.
UNITED STATES GOVERNMENT POLICIES HAVE AT TIMES, IN THE PAST, THROUGH
IMPOSITION OF INTEREST EQUALIZATION TAXES AND OTHER RESTRICTIONS, DISCOURAGED
CERTAIN INVESTMENTS ABROAD BY UNITED STATES INVESTORS. IN ADDITION, FOREIGN
COUNTRIES MAY IMPOSE WITHHOLDING AND TAXES ON DIVIDENDS AND INTEREST.
INVESTING IN EMERGING MARKETS IN PARTICULAR, THOSE COUNTRIES WHOSE
ECONOMIES AND CAPITAL MARKETS ARE NOT AS DEVELOPED AS THOSE OF MORE
INDUSTRIALIZED NATIONS, CARRIES ITS OWN SPECIAL RISKS. AMONG OTHER RISKS, THE
ECONOMIES OF SUCH COUNTRIES MAY BE AFFECTED TO A GREATER EXTENT THAN IN OTHER
COUNTRIES BY PRICE FLUCTUATIONS OF A SINGLE COMMODITY, BY SEVERE CYCLICAL
CLIMACTIC CONDITIONS, LACK OF SIGNIFICANT HISTORY IN OPERATING UNDER A
MARKET-ORIENTED ECONOMY, OR BY POLITICAL INSTABILITY, INCLUDING RISK OF
EXPROPRIATION.
SINCE INVESTMENTS IN SECURITIES OF ISSUERS DOMICILED IN FOREIGN COUNTRIES
USUALLY INVOLVE CURRENCIES OF THE FOREIGN COUNTRIES, AND SINCE THE PORTFOLIOS
MAY TEMPORARILY HOLD FUNDS IN FOREIGN CURRENCIES DURING THE COMPLETION OF
INVESTMENT PROGRAMS, THE VALUE OF THE ASSETS OF THE PORTFOLIOS AS MEASURED IN
UNITED STATES DOLLARS MAY BE AFFECTED FAVORABLY OR UNFAVORABLY BY CHANGES IN
FOREIGN CURRENCY EXCHANGE RATES AND EXCHANGE CONTROL REGULATIONS. FOR EXAMPLE,
IF THE VALUE OF THE FOREIGN CURRENCY IN WHICH A SECURITY IS DENOMINATED
INCREASES OR DECLINES IN RELATION TO THE VALUE OF THE US DOLLAR, THE VALUE OF
THE SECURITY IN US DOLLARS WILL INCREASE OR DECLINE CORRESPONDINGLY. THE
PORTFOLIOS WILL CONDUCT THEIR FOREIGN CURRENCY EXCHANGE TRANSACTIONS EITHER ON A
SPOT (I.E., CASH) BASIS AT THE SPOT RATE PREVAILING IN THE FOREIGN EXCHANGE
MARKET, OR THROUGH ENTERING INTO FORWARD CONTRACTS TO PURCHASE OR SELL FOREIGN
CURRENCIES. A FORWARD FOREIGN CURRENCY CONTRACT INVOLVES AN OBLIGATION TO
PURCHASE OR SELL A SPECIFIC CURRENCY AT A FUTURE DATE WHICH MAY BE ANY FIXED
NUMBER OF DAYS FROM THE DATE OF THE CONTRACT AGREED UPON BY THE PARTIES, AT A
PRICE SET AT THE TIME OF THE CONTRACT. THESE CONTRACTS ARE TRADED IN THE
INTERBANK MARKET CONDUCTED DIRECTLY BETWEEN CURRENCY TRADERS (USUALLY LARGE,
COMMERCIAL BANKS) AND THEIR CUSTOMERS. A FORWARD FOREIGN CURRENCY CONTRACT
GENERALLY HAS NO DEPOSIT REQUIREMENT, AND NO COMMISSIONS ARE CHARGED AT ANY
STAGE FOR TRADES.
THE PORTFOLIOS MAY ENTER INTO FORWARD FOREIGN CURRENCY CONTRACTS FOR TWO
REASONS. FIRST, THE PORTFOLIOS MAY DESIRE TO PRESERVE THE UNITED STATES DOLLAR
PRICE OF A SECURITY WHEN IT ENTERS INTO A CONTRACT FOR THE PURCHASE OR SALE OF A
SECURITY DENOMINATED IN A FOREIGN CURRENCY. THE PORTFOLIOS MAY BE ABLE TO
PROTECT THEMSELVES AGAINST POSSIBLE LOSSES RESULTING FROM CHANGES IN THE
RELATIONSHIP BETWEEN THE UNITED STATES DOLLAR AND FOREIGN CURRENCIES DURING THE
PERIOD BETWEEN THE DATE THE SECURITY IS PURCHASED OR SOLD AND THE DATE ON WHICH
PAYMENT IS MADE OR RECEIVED BY ENTERING INTO A FORWARD CONTRACT FOR THE PURCHASE
OR SALE, FOR A FIXED AMOUNT OF DOLLARS, OF THE AMOUNT OF THE FOREIGN CURRENCY
INVOLVED IN THE UNDERLYING SECURITY TRANSACTIONS.
SECOND, WHEN THE ADVISOR OR SUBADVISOR BELIEVES THAT THE CURRENCY OF A
PARTICULAR FOREIGN COUNTRY MAY SUFFER A SUBSTANTIAL DECLINE AGAINST THE UNITED
STATES DOLLAR, THE PORTFOLIOS ENTER INTO A FORWARD FOREIGN CURRENCY CONTRACT TO
SELL, FOR A FIXED AMOUNT OF DOLLARS, THE AMOUNT OF FOREIGN CURRENCY
APPROXIMATING THE VALUE OF SOME OR ALL OF THE PORTFOLIOS' SECURITIES DENOMINATED
IN SUCH FOREIGN CURRENCY. THE PRECISE MATCHING OF THE FORWARD FOREIGN CURRENCY
CONTRACT AMOUNTS AND THE VALUE OF THE PORTFOLIOS' SECURITIES INVOLVED WILL NOT
GENERALLY BE POSSIBLE SINCE THE FUTURE VALUE OF THE SECURITIES WILL CHANGE AS A
CONSEQUENCE OF MARKET MOVEMENTS BETWEEN THE DATE THE FORWARD CONTRACT IS ENTERED
INTO AND THE DATE IT MATURES. THE PROJECTION OF SHORT-TERM CURRENCY MARKET
MOVEMENT IS DIFFICULT, AND THE SUCCESSFUL EXECUTION OF THIS SHORT-TERM HEDGING
STRATEGY IS UNCERTAIN. ALTHOUGH FORWARD FOREIGN CURRENCY CONTRACTS TEND TO
MINIMIZE THE RISK OF LOSS DUE TO A DECLINE IN THE VALUE OF THE HEDGED CURRENCY,
AT THE SAME TIME THEY TEND TO LIMIT ANY POTENTIAL GAIN WHICH MIGHT RESULT SHOULD
THE VALUE OF SUCH CURRENCY INCREASE. THE PORTFOLIOS DO NOT INTEND TO ENTER INTO
SUCH FORWARD CONTRACTS UNDER THIS CIRCUMSTANCE ON A REGULAR OR CONTINUOUS BASIS.
EUROCURRENCY CONVERSION RISK. EUROPEAN COUNTRIES THAT ARE MEMBERS OF THE
EUROPEAN MONETARY UNION HAVE AGREED TO USE A COMMON CURRENCY UNIT, THE "EURO."
CURRENTLY, EACH OF THESE COUNTRIES HAS ITS OWN CURRENCY UNIT. ALTHOUGH THE
ADVISOR AND SUBADVISORS DO NOT ANTICIPATE ANY PROBLEMS IN CONVERSION FROM THE
OLD CURRENCIES TO THE EURO, THERE MAY BE ISSUES INVOLVED IN SETTLEMENT,
VALUATION, AND NUMEROUS OTHER AREAS THAT COULD IMPACT THE PORTFOLIOS. CALVERT
HAS BEEN REVIEWING ALL OF ITS COMPUTER SYSTEMS FOR EUROCURRENCY CONVERSION
COMPLIANCE. THERE CAN BE NO ASSURANCE THAT THERE WILL BE NO NEGATIVE IMPACT ON
THE PORTFOLIOS, HOWEVER, THE ADVISOR, SUBADVISOR AND CUSTODIAN HAVE ADVISED THE
PORTFOLIOS THAT THEY HAVE BEEN ACTIVELY WORKING ON ANY NECESSARY CHANGES TO
THEIR COMPUTER SYSTEMS TO PREPARE FOR THE CONVERSION, AND EXPECT THAT THEIR
SYSTEMS, AND THOSE OF THEIR OUTSIDE SERVICE PROVIDERS, WILL BE ADAPTED IN TIME
FOR THAT EVENT.
FOREIGN MONEY MARKET INSTRUMENTS
THE MONEY MARKET PORTFOLIO MAY INVEST WITHOUT LIMITATION IN MONEY MARKET
INSTRUMENTS OF BANKS, WHETHER FOREIGN OR DOMESTIC, INCLUDING OBLIGATIONS OF US
BRANCHES OF FOREIGN BANKS ("YANKEE" INSTRUMENTS) AND OBLIGATIONS OF FOREIGN
BRANCHES OF US BANKS ("EURODOLLAR" INSTRUMENTS). ALL SUCH INSTRUMENTS MUST BE
HIGH-QUALITY, US DOLLAR-DENOMINATED OBLIGATIONS. ALTHOUGH THESE INSTRUMENTS ARE
NOT SUBJECT TO FOREIGN CURRENCY RISK SINCE THEY ARE US DOLLAR-DENOMINATED,
INVESTMENTS IN FOREIGN MONEY MARKET INSTRUMENTS MAY INVOLVE RISKS THAT ARE
DIFFERENT THAN INVESTMENTS IN SECURITIES OF US ISSUERS. SEE "FOREIGN SECURITIES"
ABOVE.
TRACKING THE INDEX (MANAGED INDEX ONLY)
THE PROCESS USED BY THE PORTFOLIO TO ATTEMPT TO TRACK THE INDEX WITHIN ITS
EXPECTED TRACKING ERROR LIMIT RELIES ON ASSESSING THE DIFFERENCE BETWEEN THE
PORTFOLIO'S EXPOSURE TO FACTORS WHICH INFLUENCE RETURNS AND THE INDEX'S EXPOSURE
TO THOSE SAME FACTORS. THE COMBINED VARIABILITY OF THESE FACTORS AND THE
CORRELATION BETWEEN FACTORS ARE USED TO ESTIMATE THE RISK IN THE PORTFOLIO. THE
EXTENT TO WHICH THE TOTAL RISK CHARACTERISTICS OF THE PORTFOLIO VARY FROM THAT
OF THE INDEX IS ACTIVE RISK OR TRACKING ERROR.
THE PORTFOLIO'S ABILITY TO TRACK THE INDEX WILL BE MONITORED BY ANALYZING
RETURNS TO ENSURE THAT THE RETURNS ARE REASONABLY CONSISTENT WITH INDEX RETURNS.
BY REGRESSING PORTFOLIO RETURNS AGAINST INDEX RETURNS, THE ADVISOR CAN CALCULATE
THE GOODNESS OF FIT, AS MEASURED BY THE COEFFICIENT OF DETERMINATION OR R
-SQUARED. VALUES IN EXCESS OF 90% INDICATE A VERY HIGH DEGREE OF CORRELATION
BETWEEN THE PORTFOLIO AND THE INDEX. THE PORTFOLIO WILL ALSO BE MONITORED TO
ENSURE THOSE GENERAL CHARACTERISTICS, SUCH AS SECTOR EXPOSURES, CAPITALIZATION
AND VALUATION CRITERIA, ARE RELATIVELY CONSISTENT OVER TIME.
ANY DEVIATIONS OF REALIZED RETURNS FROM THE INDEX WHICH ARE IN EXCESS OF
THOSE EXPECTED WILL BE ANALYZED FOR SOURCES OF VARIANCE.
SHORT SALES (TECHNOLOGY ONLY)
THE FUND MAY ENGAGE IN SHORT SALES TO GAIN OPTIMUM RETURN ON A SHORT
POSITION IN A COMPANY'S STOCK. A SHORT SALE IS "AGAINST THE BOX" IF AT ALL TIMES
DURING WHICH THE SHORT POSITION IS OPEN, A FUND OWNS AT LEAST AN EQUAL AMOUNT OF
THE SECURITIES OR SECURITIES CONVERTIBLE INTO, OR EXCHANGEABLE WITHOUT FURTHER
CONSIDERATION FOR, SECURITIES OF THE SAME ISSUE AS THE SECURITIES THAT ARE SOLD
SHORT.
TEMPORARY DEFENSIVE POSITIONS
FOR TEMPORARY DEFENSIVE PURPOSES - WHICH MAY INCLUDE A LACK OF ADEQUATE
PURCHASE CANDIDATES OR AN UNFAVORABLE MARKET ENVIRONMENT - THE FUND MAY INVEST
IN CASH OR CASH EQUIVALENTS. CASH EQUIVALENTS INCLUDE INSTRUMENTS SUCH AS, BUT
NOT LIMITED TO, US GOVERNMENT AND AGENCY OBLIGATIONS, CERTIFICATES OF DEPOSIT,
BANKER'S ACCEPTANCES, TIME DEPOSITS COMMERCIAL PAPER, SHORT-TERM CORPORATE DEBT
SECURITIES, AND REPURCHASE AGREEMENTS.
REPURCHASE AGREEMENTS
THE FUND MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE AGREEMENTS,
WHICH ARE ARRANGEMENTS UNDER WHICH THE FUND BUYS A SECURITY, AND THE SELLER
SIMULTANEOUSLY AGREES TO REPURCHASE THE SECURITY AT A SPECIFIED TIME AND PRICE
REFLECTING A MARKET RATE OF INTEREST. THE FUND ENGAGES IN REPURCHASE AGREEMENTS
IN ORDER TO EARN A HIGHER RATE OF RETURN THAN IT COULD EARN SIMPLY BY INVESTING
IN THE OBLIGATION WHICH IS THE SUBJECT OF THE REPURCHASE AGREEMENT. REPURCHASE
AGREEMENTS ARE NOT, HOWEVER, WITHOUT RISK. IN THE EVENT OF THE BANKRUPTCY OF A
SELLER DURING THE TERM OF A REPURCHASE AGREEMENT, A LEGAL QUESTION EXISTS AS TO
WHETHER THE FUND WOULD BE DEEMED THE OWNER OF THE UNDERLYING SECURITY OR WOULD
BE DEEMED ONLY TO HAVE A SECURITY INTEREST IN AND LIEN UPON SUCH SECURITY. THE
FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES
DEALERS AND BANKS DETERMINED TO PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN
ADDITION, THE FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS REASONABLY DESIGNED
TO SECURE FULLY DURING THE TERM OF THE AGREEMENT THE SELLER'S OBLIGATION TO
REPURCHASE THE UNDERLYING SECURITY AND WILL MONITOR THE MARKET VALUE OF THE
UNDERLYING SECURITY DURING THE TERM OF THE AGREEMENT. IF THE VALUE OF THE
UNDERLYING SECURITY DECLINES AND IS NOT AT LEAST EQUAL TO THE REPURCHASE PRICE
DUE THE FUND PURSUANT TO THE AGREEMENT, THE FUND WILL REQUIRE THE SELLER TO
PLEDGE ADDITIONAL SECURITIES OR CASH TO SECURE THE SELLER'S OBLIGATIONS PURSUANT
TO THE AGREEMENT. IF THE SELLER DEFAULTS ON ITS OBLIGATION TO REPURCHASE AND THE
VALUE OF THE UNDERLYING SECURITY DECLINES, THE FUND MAY INCUR A LOSS AND MAY
INCUR EXPENSES IN SELLING THE UNDERLYING SECURITY. REPURCHASE AGREEMENTS ARE
ALWAYS FOR PERIODS OF LESS THAN ONE YEAR. REPURCHASE AGREEMENTS NOT TERMINABLE
WITHIN SEVEN DAYS ARE CONSIDERED ILLIQUID.
REVERSE REPURCHASE AGREEMENTS
THE FUND MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A REVERSE
REPURCHASE AGREEMENT, THE FUND SELLS PORTFOLIO SECURITIES TO A BANK OR
SECURITIES DEALER AND AGREES TO REPURCHASE THOSE SECURITIES FROM SUCH PARTY AT
AN AGREED UPON DATE AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE FUND
INVESTS THE PROCEEDS FROM EACH REVERSE REPURCHASE AGREEMENT IN OBLIGATIONS IN
WHICH IT IS AUTHORIZED TO INVEST. THE FUND INTENDS TO ENTER INTO A REVERSE
REPURCHASE AGREEMENT ONLY WHEN THE INTEREST INCOME PROVIDED FOR IN THE
OBLIGATION IN WHICH THE FUND INVESTS THE PROCEEDS IS EXPECTED TO EXCEED THE
AMOUNT THE FUND WILL PAY IN INTEREST TO THE OTHER PARTY TO THE AGREEMENT PLUS
ALL COSTS ASSOCIATED WITH THE TRANSACTIONS. THE FUND DOES NOT INTEND TO BORROW
FOR LEVERAGE PURPOSES. THE PORTFOLIOS WILL ONLY BE PERMITTED TO PLEDGE ASSETS TO
THE EXTENT NECESSARY TO SECURE BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.
DURING THE TIME A REVERSE REPURCHASE AGREEMENT IS OUTSTANDING, THE FUND
WILL MAINTAIN IN A SEGREGATED CUSTODIAL ACCOUNT AN AMOUNT OF CASH, US GOVERNMENT
SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN VALUE TO THE
REPURCHASE PRICE. THE FUND WILL MARK TO MARKET THE VALUE OF ASSETS HELD IN THE
SEGREGATED ACCOUNT, AND WILL PLACE ADDITIONAL ASSETS IN THE ACCOUNT WHENEVER THE
TOTAL VALUE OF THE ACCOUNT FALLS BELOW THE AMOUNT REQUIRED UNDER APPLICABLE
REGULATIONS.
THE FUND'S USE OF REVERSE REPURCHASE AGREEMENTS INVOLVES THE RISK THAT THE
OTHER PARTY TO THE AGREEMENTS COULD BECOME SUBJECT TO BANKRUPTCY OR LIQUIDATION
PROCEEDINGS DURING THE PERIOD THE AGREEMENTS ARE OUTSTANDING. IN SUCH EVENT, THE
FUND MAY NOT BE ABLE TO REPURCHASE THE SECURITIES IT HAS SOLD TO THAT OTHER
PARTY. UNDER THOSE CIRCUMSTANCES, IF AT THE EXPIRATION OF THE AGREEMENT SUCH
SECURITIES ARE OF GREATER VALUE THAN THE PROCEEDS OBTAINED BY THE FUND UNDER THE
AGREEMENTS, THE FUND MAY HAVE BEEN BETTER OFF HAD IT NOT ENTERED INTO THE
AGREEMENT. HOWEVER, THE FUND WILL ENTER INTO REVERSE REPURCHASE AGREEMENTS ONLY
WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES PRESENT MINIMAL CREDIT RISKS
UNDER GUIDELINES ADOPTED BY THE FUND'S BOARD OF TRUSTEES. IN ADDITION, THE FUND
BEARS THE RISK THAT THE MARKET VALUE OF THE SECURITIES IT SOLD MAY DECLINE BELOW
THE AGREED-UPON REPURCHASE PRICE, IN WHICH CASE THE DEALER MAY REQUEST THE FUND
TO POST ADDITIONAL COLLATERAL.
NON-INVESTMENT GRADE DEBT SECURITIES
NON-INVESTMENT GRADE DEBT SECURITIES ARE LOWER QUALITY DEBT SECURITIES
(GENERALLY THOSE RATED BB OR LOWER BY S&P OR BA OR LOWER BY MOODY'S, KNOWN AS
"JUNK BONDS." THESE SECURITIES HAVE MODERATE TO POOR PROTECTION OF PRINCIPAL AND
INTEREST PAYMENTS AND HAVE SPECULATIVE CHARACTERISTICS. SEE APPENDIX FOR A
DESCRIPTION OF THE RATINGS.) THESE SECURITIES INVOLVE GREATER RISK OF DEFAULT OR
PRICE DECLINES DUE TO CHANGES IN THE ISSUER'S CREDITWORTHINESS THAN
INVESTMENT-GRADE DEBT SECURITIES. BECAUSE THE MARKET FOR LOWER-RATED SECURITIES
MAY BE THINNER AND LESS ACTIVE THAN FOR HIGHER-RATED SECURITIES, THERE MAY BE
MARKET PRICE VOLATILITY FOR THESE SECURITIES AND LIMITED LIQUIDITY IN THE RESALE
MARKET. MARKET PRICES FOR THESE SECURITIES MAY DECLINE SIGNIFICANTLY IN PERIODS
OF GENERAL ECONOMIC DIFFICULTY OR RISING INTEREST RATES. UNRATED DEBT SECURITIES
MAY FALL INTO THE LOWER QUALITY CATEGORY. UNRATED SECURITIES USUALLY ARE NOT
ATTRACTIVE TO AS MANY BUYERS AS RATED SECURITIES ARE, WHICH MAY MAKE THEM LESS
MARKETABLE.
THE QUALITY LIMITATION SET FORTH IN THE FUND'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE FUND'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE FUND'S INVESTMENT POLICY.
WHEN PURCHASING NON-INVESTMENT GRADE DEBT SECURITIES, RATED OR UNRATED, THE
ADVISORS PREPARE THEIR OWN CAREFUL CREDIT ANALYSIS TO ATTEMPT TO IDENTIFY THOSE
ISSUERS WHOSE FINANCIAL CONDITION IS ADEQUATE TO MEET FUTURE OBLIGATIONS OR IS
EXPECTED TO BE ADEQUATE IN THE FUTURE. THROUGH PORTFOLIO DIVERSIFICATION AND
CREDIT ANALYSIS, INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO
ASSURANCE THAT LOSSES WILL NOT OCCUR.
DERIVATIVES
THE FUND CAN USE VARIOUS TECHNIQUES TO INCREASE OR DECREASE ITS EXPOSURE TO
CHANGING SECURITY PRICES, INTEREST RATES, OR OTHER FACTORS THAT AFFECT SECURITY
VALUES. THESE TECHNIQUES MAY INVOLVE DERIVATIVE TRANSACTIONS SUCH AS BUYING AND
SELLING OPTIONS AND FUTURES CONTRACTS AND LEVERAGED NOTES, ENTERING INTO SWAP
AGREEMENTS, AND PURCHASING INDEXED SECURITIES. THE FUND CAN USE THESE PRACTICES
EITHER AS SUBSTITUTION OR AS PROTECTION AGAINST AN ADVERSE MOVE IN THE FUND TO
ADJUST THE RISK AND RETURN CHARACTERISTICS OF THE FUND. IF THE ADVISOR AND/OR
SUBADVISOR JUDGES MARKET CONDITIONS INCORRECTLY OR EMPLOYS A STRATEGY THAT DOES
NOT CORRELATE WELL WITH A FUND'S INVESTMENTS, OR IF THE COUNTERPARTY TO THE
TRANSACTION DOES NOT PERFORM AS PROMISED, THESE TECHNIQUES COULD RESULT IN A
LOSS. THESE TECHNIQUES MAY INCREASE THE VOLATILITY OF A FUND AND MAY INVOLVE A
SMALL INVESTMENT OF CASH RELATIVE TO THE MAGNITUDE OF THE RISK ASSUMED.
DERIVATIVES ARE OFTEN ILLIQUID.
OPTIONS AND FUTURES CONTRACTS (NOT APPLICABLE TO MONEY MARKET)
THE PORTFOLIOS MAY, IN PURSUIT OF THEIR RESPECTIVE INVESTMENT OBJECTIVES,
PURCHASE PUT AND CALL OPTIONS AND ENGAGE IN THE WRITING OF COVERED CALL OPTIONS
AND SECURED PUT OPTIONS ON SECURITIES WHICH MEET THE FUND'S SOCIAL CRITERIA, AND
EMPLOY A VARIETY OF OTHER INVESTMENT TECHNIQUES. SPECIFICALLY, THESE PORTFOLIOS
MAY ALSO ENGAGE IN THE PURCHASE AND SALE OF STOCK INDEX FUTURE CONTRACTS,
FOREIGN CURRENCY FUTURES CONTRACTS, INTEREST RATE FUTURES CONTRACTS, AND OPTIONS
ON SUCH FUTURES, AS DESCRIBED MORE FULLY BELOW.
THESE PORTFOLIOS MAY ENGAGE IN SUCH TRANSACTIONS ONLY TO HEDGE THE EXISTING
POSITIONS IN THE RESPECTIVE PORTFOLIOS (OR FOR MANAGED INDEX, FOR LIQUIDITY OR
TO HEDGE CASH EXPOSURE). THEY WILL NOT ENGAGE IN SUCH TRANSACTIONS FOR THE
PURPOSES OF SPECULATION OR LEVERAGE. SUCH INVESTMENT POLICIES AND TECHNIQUES MAY
INVOLVE A GREATER DEGREE OF RISK THAN THOSE INHERENT IN MORE CONSERVATIVE
INVESTMENT APPROACHES.
THESE PORTFOLIOS MAY WRITE "COVERED OPTIONS" ON SECURITIES IN STANDARD
CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THESE PORTFOLIOS MAY WRITE
SUCH OPTIONS IN ORDER TO RECEIVE THE PREMIUMS FROM OPTIONS THAT EXPIRE AND TO
SEEK NET GAINS FROM CLOSING PURCHASE TRANSACTIONS WITH RESPECT TO SUCH OPTIONS.
PUT AND CALL OPTIONS. THESE PORTFOLIOS MAY PURCHASE PUT AND CALL OPTIONS, IN
STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES, ON SECURITIES OF
ISSUERS WHICH MEET THE FUND'S SOCIAL CRITERIA. THESE PORTFOLIOS WILL PURCHASE
SUCH OPTIONS ONLY TO HEDGE AGAINST CHANGES IN THE VALUE OF SECURITIES THE
PORTFOLIOS HOLD AND NOT FOR THE PURPOSES OF SPECULATION OR LEVERAGE. BY BUYING A
PUT, A PORTFOLIO HAS THE RIGHT TO SELL THE SECURITY AT THE EXERCISE PRICE, THUS
LIMITING ITS RISK OF LOSS THROUGH A DECLINE IN THE MARKET VALUE OF THE SECURITY
UNTIL THE PUT EXPIRES. THE AMOUNT OF ANY APPRECIATION IN THE VALUE OF THE
UNDERLYING SECURITY WILL BE PARTIALLY OFFSET BY THE AMOUNT OF THE PREMIUM PAID
FOR THE PUT OPTION AND ANY RELATED TRANSACTION COSTS. PRIOR TO ITS EXPIRATION, A
PUT OPTION MAY BE SOLD IN A CLOSING SALE TRANSACTION AND ANY PROFIT OR LOSS FROM
THE SALE WILL DEPEND ON WHETHER THE AMOUNT RECEIVED IS MORE OR LESS THAN THE
PREMIUM PAID FOR THE PUT OPTION PLUS THE RELATED TRANSACTION COSTS.
THESE PORTFOLIOS MAY PURCHASE CALL OPTIONS ON SECURITIES WHICH THEY MAY
INTEND TO PURCHASE AND WHICH MEET THE FUND'S SOCIAL CRITERIA. SUCH TRANSACTIONS
MAY BE ENTERED INTO IN ORDER TO LIMIT THE RISK OF A SUBSTANTIAL INCREASE IN THE
MARKET PRICE OF THE SECURITY WHICH THE PORTFOLIOS INTENDS TO PURCHASE. PRIOR TO
ITS EXPIRATION, A CALL OPTION MAY BE SOLD IN A CLOSING SALE TRANSACTION. ANY
PROFIT OR LOSS FROM SUCH A SALE WILL DEPEND ON WHETHER THE AMOUNT RECEIVED IS
MORE OR LESS THAN THE PREMIUM PAID FOR THE CALL OPTION PLUS THE RELATED
TRANSACTION COSTS.
COVERED OPTIONS. THESE PORTFOLIOS MAY WRITE ONLY COVERED OPTIONS ON EQUITY AND
DEBT SECURITIES IN STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES.
THIS MEANS THAT, IN THE CASE OF CALL OPTIONS, SO LONG AS A PORTFOLIO IS
OBLIGATED AS THE WRITER OF A CALL OPTION, THAT PORTFOLIO WILL OWN THE UNDERLYING
SECURITY SUBJECT TO THE OPTION AND, IN THE CASE OF PUT OPTIONS, THAT PORTFOLIO
WILL, THROUGH ITS CUSTODIAN, DEPOSIT AND MAINTAIN EITHER CASH OR SECURITIES WITH
A MARKET VALUE EQUAL TO OR GREATER THAN THE EXERCISE PRICE OF THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED CALL OPTION, THE PORTFOLIO GIVES THE
PURCHASER THE RIGHT TO PURCHASE THE SECURITY AT THE CALL OPTION PRICE AT ANY
TIME DURING THE LIFE OF THE OPTION. AS THE WRITER OF THE OPTION, THE PORTFOLIO
RECEIVES A PREMIUM, LESS A COMMISSION, AND IN EXCHANGE FOREGOES THE OPPORTUNITY
TO PROFIT FROM ANY INCREASE IN THE MARKET VALUE OF THE SECURITY EXCEEDING THE
CALL OPTION PRICE. THE PREMIUM SERVES TO MITIGATE THE EFFECT OF ANY DEPRECIATION
IN THE MARKET VALUE OF THE SECURITY. WRITING COVERED CALL OPTIONS CAN INCREASE
THE INCOME OF THE PORTFOLIO AND THUS REDUCE DECLINES IN THE NET ASSET VALUE PER
SHARE OF THE PORTFOLIO IF SECURITIES COVERED BY SUCH OPTIONS DECLINE IN VALUE.
EXERCISE OF A CALL OPTION BY THE PURCHASER HOWEVER WILL CAUSE THE PORTFOLIO TO
FOREGO FUTURE APPRECIATION OF THE SECURITIES COVERED BY THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED PUT OPTION, IT WILL GAIN A PROFIT IN THE
AMOUNT OF THE PREMIUM, LESS A COMMISSION, SO LONG AS THE PRICE OF THE UNDERLYING
SECURITY REMAINS ABOVE THE EXERCISE PRICE. HOWEVER, THE PORTFOLIO REMAINS
OBLIGATED TO PURCHASE THE UNDERLYING SECURITY FROM THE BUYER OF THE PUT OPTION
(USUALLY IN THE EVENT THE PRICE OF THE SECURITY FALLS BELOW THE EXERCISE PRICE)
AT ANY TIME DURING THE OPTION PERIOD. IF THE PRICE OF THE UNDERLYING SECURITY
FALLS BELOW THE EXERCISE PRICE, THE PORTFOLIO MAY REALIZE A LOSS IN THE AMOUNT
OF THE DIFFERENCE BETWEEN THE EXERCISE PRICE AND THE SALE PRICE OF THE SECURITY,
LESS THE PREMIUM RECEIVED.
THESE PORTFOLIOS MAY PURCHASE SECURITIES WHICH MAY BE COVERED WITH CALL
OPTIONS SOLELY ON THE BASIS OF CONSIDERATIONS CONSISTENT WITH THE INVESTMENT
OBJECTIVES AND POLICIES OF THE FUND AND THE AFFECTED PORTFOLIO. THE PORTFOLIO'S
TURNOVER MAY INCREASE THROUGH THE EXERCISE OF A CALL OPTION; THIS WILL GENERALLY
OCCUR IF THE MARKET VALUE OF A "COVERED" SECURITY INCREASES AND THE PORTFOLIO
HAS NOT ENTERED INTO A CLOSING PURCHASE TRANSACTION.
RISKS RELATED TO OPTIONS TRANSACTIONS. THE PORTFOLIOS CAN CLOSE OUT THEIR
RESPECTIVE POSITIONS IN EXCHANGE-TRADED OPTIONS ONLY ON AN EXCHANGE WHICH
PROVIDES A SECONDARY MARKET IN SUCH OPTIONS. ALTHOUGH THESE PORTFOLIOS INTEND TO
ACQUIRE AND WRITE ONLY SUCH EXCHANGE-TRADED OPTIONS FOR WHICH AN ACTIVE
SECONDARY MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL EXIST FOR ANY PARTICULAR OPTION CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT
PREVENT THE PORTFOLIOS FROM CLOSING AN OPTIONS POSITION, WHICH COULD IMPAIR THE
PORTFOLIOS' ABILITY TO HEDGE EFFECTIVELY. THE INABILITY TO CLOSE OUT A CALL
POSITION MAY HAVE AN ADVERSE EFFECT ON LIQUIDITY BECAUSE THE PORTFOLIO MAY BE
REQUIRED TO HOLD THE SECURITIES UNDERLYING THE OPTION UNTIL THE OPTION EXPIRES
OR IS EXERCISED.
FUTURES TRANSACTIONS. THESE PORTFOLIOS MAY PURCHASE AND SELL FUTURES CONTRACTS,
BUT ONLY WHEN, IN THE JUDGMENT OF THE ADVISOR, SUCH A POSITION ACTS AS A HEDGE
AGAINST MARKET CHANGES WHICH WOULD ADVERSELY AFFECT THE SECURITIES HELD BY THE
PORTFOLIOS. THESE FUTURES CONTRACTS MAY INCLUDE, BUT ARE NOT LIMITED TO, MARKET
INDEX FUTURES CONTRACTS AND FUTURES CONTRACTS BASED ON US GOVERNMENT
OBLIGATIONS.
A FUTURES CONTRACT IS AN AGREEMENT BETWEEN TWO PARTIES TO BUY AND SELL A
SECURITY ON A FUTURE DATE WHICH HAS THE EFFECT OF ESTABLISHING THE CURRENT PRICE
FOR THE SECURITY. ALTHOUGH FUTURES CONTRACTS BY THEIR TERMS REQUIRE ACTUAL
DELIVERY AND ACCEPTANCE OF SECURITIES, IN MOST CASES THE CONTRACTS ARE CLOSED
OUT BEFORE THE SETTLEMENT DATE WITHOUT THE MAKING OR TAKING OF DELIVERY OF
SECURITIES. UPON BUYING OR SELLING A FUTURES CONTRACT, THE PORTFOLIO DEPOSITS
INITIAL MARGIN WITH ITS CUSTODIAN, AND THEREAFTER DAILY PAYMENTS OF MAINTENANCE
MARGIN ARE MADE TO AND FROM THE EXECUTING BROKER. PAYMENTS OF MAINTENANCE MARGIN
REFLECT CHANGES IN THE VALUE OF THE FUTURES CONTRACT, WITH THE PORTFOLIO BEING
OBLIGATED TO MAKE SUCH PAYMENTS IF ITS FUTURES POSITION BECOMES LESS VALUABLE
AND ENTITLED TO RECEIVE SUCH PAYMENTS IF ITS POSITIONS BECOME MORE VALUABLE.
THESE PORTFOLIOS MAY ONLY INVEST IN FUTURES CONTRACTS TO HEDGE THEIR
RESPECTIVE EXISTING INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT,
SPECULATION OR LEVERAGE PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING A
FUTURES CONTRACT MAY NOT NECESSARILY MEET THE FUND'S SOCIAL CRITERIA, ANY SUCH
HEDGE POSITION TAKEN BY THESE PORTFOLIOS WILL NOT CONSTITUTE A DIRECT OWNERSHIP
INTEREST IN THE UNDERLYING SECURITIES.
FUTURES CONTRACTS ARE DESIGNED BY BOARDS OF TRADE WHICH ARE DESIGNATED
"CONTRACTS MARKETS" BY THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"). AS
SERIES OF A REGISTERED INVESTMENT COMPANY, THE PORTFOLIOS ARE ELIGIBLE FOR
EXCLUSION FROM THE CFTC'S DEFINITION OF "COMMODITY POOL OPERATOR," MEANING THAT
THE PORTFOLIOS MAY INVEST IN FUTURES CONTRACTS UNDER SPECIFIED CONDITIONS
WITHOUT REGISTERING WITH THE CFTC. FUTURES CONTRACTS TRADE ON CONTRACTS MARKETS
IN A MANNER THAT IS SIMILAR TO THE WAY A STOCK TRADES ON A STOCK EXCHANGE AND
THE BOARDS OF TRADE, THROUGH THEIR CLEARING CORPORATIONS, GUARANTEE PERFORMANCE
OF THE CONTRACTS.
OPTIONS ON FUTURES CONTRACTS. THESE PORTFOLIOS MAY PURCHASE AND WRITE PUT OR
CALL OPTIONS AND SELL CALL OPTIONS ON FUTURES CONTRACTS IN WHICH A PORTFOLIO
COULD OTHERWISE INVEST AND WHICH ARE TRADED ON A US EXCHANGE OR BOARD OF TRADE.
THE PORTFOLIOS MAY ALSO ENTER INTO CLOSING TRANSACTIONS WITH RESPECT TO SUCH
OPTIONS TO TERMINATE AN EXISTING POSITION; THAT IS, TO SELL A PUT OPTION ALREADY
OWNED AND TO BUY A CALL OPTION TO CLOSE A POSITION WHERE THE PORTFOLIO HAS
ALREADY SOLD A CORRESPONDING CALL OPTION.
THE PORTFOLIOS MAY ONLY INVEST IN OPTIONS ON FUTURES CONTRACTS TO HEDGE
THEIR RESPECTIVE EXISTING INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT,
SPECULATION OR LEVERAGE PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING THE
FUTURES CONTRACT UNDERLYING THE OPTION MAY NOT NECESSARILY MEET THE FUND'S
SOCIAL CRITERIA, ANY SUCH HEDGE POSITION TAKEN BY THESE PORTFOLIOS WILL NOT
CONSTITUTE A DIRECT OWNERSHIP INTEREST IN THE UNDERLYING SECURITIES.
AN OPTION ON A FUTURES CONTRACT GIVES THE PURCHASER THE RIGHT, IN RETURN
FOR THE PREMIUM PAID, TO ASSUME A POSITION IN A FUTURES CONTRACT-A LONG POSITION
IF THE OPTION IS A CALL AND A SHORT POSITION IF THE OPTION IS A PUT-AT A
SPECIFIED EXERCISE PRICE AT ANY TIME DURING THE PERIOD OF THE OPTION. THE
PORTFOLIOS WILL PAY A PREMIUM FOR SUCH OPTIONS PURCHASED OR SOLD. IN CONNECTION
WITH SUCH OPTIONS BOUGHT OR SOLD, THE PORTFOLIOS WILL MAKE INITIAL MARGIN
DEPOSITS AND MAKE OR RECEIVE MAINTENANCE MARGIN PAYMENTS WHICH REFLECT CHANGES
IN THE MARKET VALUE OF SUCH OPTIONS. THIS ARRANGEMENT IS SIMILAR TO THE MARGIN
ARRANGEMENTS APPLICABLE TO FUTURES CONTRACTS DESCRIBED ABOVE.
PUT OPTIONS ON FUTURES CONTRACTS. THE PURCHASE OF PUT OPTIONS ON FUTURES
CONTRACTS IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT
THE PORTFOLIOS AGAINST THE RISK OF DECLINING PRICES. THESE PORTFOLIOS MAY
PURCHASE PUT OPTIONS AND SELL PUT OPTIONS ON FUTURES CONTRACTS THAT ARE ALREADY
OWNED BY THAT PORTFOLIO. THE PORTFOLIOS WILL ONLY ENGAGE IN THE PURCHASE OF PUT
OPTIONS AND THE SALE OF COVERED PUT OPTIONS ON MARKET INDEX FUTURES FOR HEDGING
PURPOSES.
CALL OPTIONS ON FUTURES CONTRACTS. THE SALE OF CALL OPTIONS ON FUTURES CONTRACTS
IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT THE
PORTFOLIOS AGAINST THE RISK OF DECLINING PRICES. THE PURCHASE OF CALL OPTIONS ON
FUTURES CONTRACTS IS ANALOGOUS TO THE PURCHASE OF A FUTURES CONTRACT. THESE
PORTFOLIOS MAY ONLY BUY CALL OPTIONS TO CLOSE AN EXISTING POSITION WHERE THE
PORTFOLIO HAS ALREADY SOLD A CORRESPONDING CALL OPTION, OR FOR A CASH HEDGE. THE
PORTFOLIOS WILL ONLY ENGAGE IN THE SALE OF CALL OPTIONS AND THE PURCHASE OF CALL
OPTIONS TO COVER FOR HEDGING PURPOSES.
WRITING CALL OPTIONS ON FUTURES CONTRACTS. THE WRITING OF CALL OPTIONS ON
FUTURES CONTRACTS CONSTITUTES A PARTIAL HEDGE AGAINST DECLINING PRICES OF THE
SECURITIES DELIVERABLE UPON EXERCISE OF THE FUTURES CONTRACT. IF THE FUTURES
CONTRACT PRICE AT EXPIRATION IS BELOW THE EXERCISE PRICE, THE PORTFOLIOS WILL
RETAIN THE FULL AMOUNT OF THE OPTION PREMIUM WHICH PROVIDES A PARTIAL HEDGE
AGAINST ANY DECLINE THAT MAY HAVE OCCURRED IN THE PORTFOLIO'S SECURITIES
HOLDINGS.
RISKS OF OPTIONS AND FUTURES CONTRACTS. IF ONE OF THESE PORTFOLIOS HAS SOLD
FUTURES OR TAKES OPTIONS POSITIONS TO HEDGE ITS PORTFOLIO AGAINST DECLINE IN THE
MARKET AND THE MARKET LATER ADVANCES, THE PORTFOLIO MAY SUFFER A LOSS ON THE
FUTURES CONTRACTS OR OPTIONS WHICH IT WOULD NOT HAVE EXPERIENCED IF IT HAD NOT
HEDGED. CORRELATION IS ALSO IMPERFECT BETWEEN MOVEMENTS IN THE PRICES OF FUTURES
CONTRACTS AND MOVEMENTS IN PRICES OF THE SECURITIES WHICH ARE THE SUBJECT OF THE
HEDGE. THUS THE PRICE OF THE FUTURES CONTRACT OR OPTION MAY MOVE MORE THAN OR
LESS THAN THE PRICE OF THE SECURITIES BEING HEDGED. WHERE A PORTFOLIO HAS SOLD
FUTURES OR TAKEN OPTIONS POSITIONS TO HEDGE AGAINST DECLINE IN THE MARKET, THE
MARKET MAY ADVANCE AND THE VALUE OF THE SECURITIES HELD IN THE PORTFOLIO MAY
DECLINE. IF THIS WERE TO OCCUR, THE PORTFOLIO MIGHT LOSE MONEY ON THE FUTURES
CONTRACTS OR OPTIONS AND ALSO EXPERIENCE A DECLINE IN THE VALUE OF ITS PORTFOLIO
SECURITIES. HOWEVER, ALTHOUGH THIS MIGHT OCCUR FOR A BRIEF PERIOD OR TO A SLIGHT
DEGREE, THE VALUE OF A DIVERSIFIED PORTFOLIO WILL TEND TO MOVE IN THE DIRECTION
OF THE MARKET GENERALLY.
THE PORTFOLIOS CAN CLOSE OUT FUTURES POSITIONS ONLY ON AN EXCHANGE OR BOARD
OF TRADE WHICH PROVIDES A SECONDARY MARKET IN SUCH FUTURES. ALTHOUGH THE
PORTFOLIOS INTEND TO PURCHASE OR SELL ONLY SUCH FUTURES FOR WHICH AN ACTIVE
SECONDARY MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL EXIST FOR ANY PARTICULAR FUTURES CONTRACT AT ANY PARTICULAR TIME. THIS
MIGHT PREVENT THE PORTFOLIOS FROM CLOSING A FUTURES POSITION, WHICH COULD
REQUIRE A PORTFOLIO TO MAKE DAILY CASH PAYMENTS WITH RESPECT TO ITS POSITION IN
THE EVENT OF ADVERSE PRICE MOVEMENTS.
OPTIONS ON FUTURES TRANSACTIONS BEAR SEVERAL RISKS APART FROM THOSE
INHERENT IN OPTIONS TRANSACTIONS GENERALLY. THE PORTFOLIOS' ABILITY TO CLOSE OUT
THEIR OPTIONS POSITIONS IN FUTURES CONTRACTS WILL DEPEND UPON WHETHER AN ACTIVE
SECONDARY MARKET FOR SUCH OPTIONS DEVELOPS AND IS IN EXISTENCE AT THE TIME THE
PORTFOLIOS SEEK TO CLOSE THEIR POSITIONS. THERE CAN BE NO ASSURANCE THAT SUCH A
MARKET WILL DEVELOP OR EXIST. THEREFORE, THE PORTFOLIOS MIGHT BE REQUIRED TO
EXERCISE THE OPTIONS TO REALIZE ANY PROFIT.
LENDING PORTFOLIO SECURITIES
THE PORTFOLIOS MAY LEND ITS SECURITIES TO MEMBER FIRMS OF THE NEW YORK
STOCK EXCHANGE AND COMMERCIAL BANKS WITH ASSETS OF ONE BILLION DOLLARS OR MORE.
ANY SUCH LOANS MUST BE SECURED CONTINUOUSLY IN THE FORM OF CASH OR CASH
EQUIVALENTS SUCH AS US TREASURY BILLS. THE AMOUNT OF THE COLLATERAL MUST ON A
CURRENT BASIS EQUAL OR EXCEED THE MARKET VALUE OF THE LOANED SECURITIES, AND THE
PORTFOLIOS MUST BE ABLE TO TERMINATE SUCH LOANS UPON NOTICE AT ANY TIME. THE
PORTFOLIOS WILL EXERCISE THEIR RIGHT TO TERMINATE A SECURITIES LOAN IN ORDER TO
PRESERVE THEIR RIGHT TO VOTE UPON MATTERS OF IMPORTANCE AFFECTING HOLDERS OF THE
SECURITIES.
THE ADVANTAGE OF SUCH LOANS IS THAT THE PORTFOLIOS CONTINUE TO RECEIVE THE
EQUIVALENT OF THE INTEREST EARNED OR DIVIDENDS PAID BY THE ISSUERS ON THE LOANED
SECURITIES WHILE AT THE SAME TIME EARNING INTEREST ON THE CASH OR EQUIVALENT
COLLATERAL WHICH MAY BE INVESTED IN ACCORDANCE WITH THE PORTFOLIOS' INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS.
SECURITIES LOANS ARE USUALLY MADE TO BROKER-DEALERS AND OTHER FINANCIAL
INSTITUTIONS TO FACILITATE THEIR DELIVERY OF SUCH SECURITIES. AS WITH ANY
EXTENSION OF CREDIT, THERE MAY BE RISKS OF DELAY IN RECOVERY AND POSSIBLY LOSS
OF RIGHTS IN THE LOANED SECURITIES SHOULD THE BORROWER OF THE LOANED SECURITIES
FAIL FINANCIALLY. HOWEVER, THE PORTFOLIOS WILL MAKE LOANS OF THEIR SECURITIES
ONLY TO THOSE FIRMS THE ADVISOR OR SUBADVISOR DEEMS CREDITWORTHY AND ONLY ON
TERMS THE ADVISOR BELIEVES SHOULD COMPENSATE FOR SUCH RISK. ON TERMINATION OF
THE LOAN, THE BORROWER IS OBLIGATED TO RETURN THE SECURITIES TO THE PORTFOLIO.
THE PORTFOLIO WILL RECOGNIZE ANY GAIN OR LOSS IN THE MARKET VALUE OF THE
SECURITIES DURING THE LOAN PERIOD. THE PORTFOLIO MAY PAY REASONABLE CUSTODIAL
FEES IN CONNECTION WITH THE LOAN.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
EACH PORTFOLIO HAS ADOPTED THE FOLLOWING FUNDAMENTAL INVESTMENT
RESTRICTIONS. THESE RESTRICTIONS CANNOT BE CHANGED WITHOUT THE APPROVAL OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF THE AFFECTED PORTFOLIO.
(1) CSIF MONEY MARKET, BALANCED, EQUITY, AND MANAGED INDEX: EACH PORTFOLIO
MAY NOT MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS A
DIVERSIFIED INVESTMENT COMPANY UNDER THE 1940 ACT; AND CSIF BOND: CSIF BOND
AND TECHNOLOGY PORTFOLIOS MAY NOT MAKE ANY INVESTMENT INCONSISTENT WITH ITS
CLASSIFICATION AS A NONDIVERSIFIED INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) NO PORTFOLIO MAY CONCENTRATE ITS INVESTMENTS IN THE SECURITIES OF ISSUERS
PRIMARILY ENGAGED IN ANY PARTICULAR INDUSTRY (OTHER THAN SECURITIES ISSUED OR
GUARANTEED BY THE US GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES AND
REPURCHASE AGREEMENTS SECURED THEREBY), OR, FOR CSIF MONEY MARKET, DOMESTIC BANK
MONEY MARKET INSTRUMENTS.
(3) NO PORTFOLIO MAY ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS
FOR TEMPORARY OR EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF
THE VALUE OF A PORTFOLIO'S TOTAL ASSETS OR AS PERMITTED BY LAW AND EXCEPT BY
ENGAGING IN REVERSE REPURCHASE AGREEMENTS, WHERE ALLOWED. IN ORDER TO SECURE ANY
PERMITTED BORROWINGS AND REVERSE REPURCHASE AGREEMENTS UNDER THIS SECTION, THE
AFFECTED PORTFOLIO MAY PLEDGE, MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) NO PORTFOLIO MAY UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS
ALLOWED BY LAW OR TO THE EXTENT THAT THE PURCHASE OF OBLIGATIONS IN ACCORDANCE
WITH A PORTFOLIO'S INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE
ISSUER, OR FROM AN UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) NO PORTFOLIO MAY INVEST DIRECTLY IN COMMODITIES OR REAL ESTATE, ALTHOUGH A
PORTFOLIO MAY INVEST IN SECURITIES WHICH ARE SECURED BY REAL ESTATE OR REAL
ESTATE MORTGAGES AND SECURITIES OF ISSUERS WHICH INVEST OR DEAL IN COMMODITIES,
COMMODITY FUTURES, REAL ESTATE OR REAL ESTATE MORTGAGES.
(6) NO PORTFOLIO MAY MAKE LOANS, OTHER THAN THROUGH THE PURCHASE OF MONEY MARKET
INSTRUMENTS AND REPURCHASE AGREEMENTS OR BY THE PURCHASE OF BONDS, DEBENTURES OR
OTHER DEBT SECURITIES, OR AS PERMITTED BY LAW. THE PURCHASE OF ALL OR A PORTION
OF AN ISSUE OF PUBLICLY OR PRIVATELY DISTRIBUTED DEBT OBLIGATIONS IN ACCORDANCE
WITH A PORTFOLIO'S INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS, SHALL NOT
CONSTITUTE THE MAKING OF A LOAN.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE BOARD OF TRUSTEES HAS ADOPTED THE FOLLOWING NONFUNDAMENTAL INVESTMENT
RESTRICTIONS. A NONFUNDAMENTAL INVESTMENT RESTRICTION CAN BE CHANGED BY THE
BOARD AT ANY TIME WITHOUT A SHAREHOLDER VOTE.
MONEY MARKET PORTFOLIO MAY NOT:
(1) PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS (EXCEPT FOREIGN MONEY MARKET
INSTRUMENTS THAT ARE US DOLLAR DENOMINATED).
(2) PURCHASE ILLIQUID SECURITIES IF MORE THAN 10% OF THE VALUE OF THE
PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(3) MAKE SHORT SALES OF SECURITIES OR PURCHASE ANY SECURITIES ON MARGIN.
(4) WRITE, PURCHASE OR SELL PUTS, CALLS OR COMBINATIONS THEREOF.
(5) ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE PROCEEDS FROM
OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER OUTSTANDING
BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF ITS TOTAL ASSETS.
CSIF MONEY MARKET DOES NOT INTEND TO MAKE ANY PURCHASES OF SECURITIES IF
BORROWING EXCEEDS 5% OF ITS TOTAL ASSETS.
BALANCED, EQUITY, AND BOND PORTFOLIOS MAY NOT:
(1) PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS IF, AS A RESULT, SUCH SECURITIES
WOULD EXCEED 25% OF THE VALUE OF THE PORTFOLIO'S ASSETS.
(2) PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE VALUE OF THAT
PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(3) MAKE SHORT SALES OF SECURITIES OR PURCHASE ANY SECURITIES ON MARGIN EXCEPT
AS PROVIDED WITH RESPECT TO OPTIONS, FUTURES CONTRACTS, AND OPTIONS ON FUTURES
CONTRACTS.
(4) ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES CONTRACT IF THE
AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH THESE POSITIONS
WOULD EXCEED 5% OF THE PORTFOLIO'S NET ASSETS.
(5) PURCHASE A PUT OR CALL OPTION ON A SECURITY (INCLUDING A STRADDLE OR SPREAD)
IF THE VALUE OF THAT OPTION PREMIUM, WHEN AGGREGATED WITH THE PREMIUMS ON ALL
OTHER OPTIONS ON SECURITIES HELD BY THE PORTFOLIO, WOULD EXCEED 5% OF THE
PORTFOLIO'S TOTAL ASSETS.
(6) ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE PROCEEDS FROM
OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER OUTSTANDING
BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF A PORTFOLIO'S
TOTAL ASSETS. NO PORTFOLIO INTENDS TO MAKE ANY PURCHASES OF SECURITIES IF
BORROWING EXCEEDS 5% OF ITS TOTAL ASSETS.
INDEX PORTFOLIO MAY NOT:
(1) PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS.
(2) PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE VALUE OF THE
PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(3) PURCHASE DEBT SECURITIES (OTHER THAN MONEY MARKET INSTRUMENTS).
(4) MAKE SHORT SALES OF SECURITIES OR PURCHASE ANY SECURITIES ON MARGIN EXCEPT
AS PROVIDED WITH RESPECT TO OPTIONS, FUTURES CONTRACTS AND OPTIONS ON FUTURES
CONTRACTS.
(5) ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES CONTRACT IF THE
AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH THESE POSITIONS
WOULD EXCEED 5% OF THE PORTFOLIO'S NET ASSETS.
(6) PURCHASE A PUT OR CALL OPTION ON A SECURITY (INCLUDING A STRADDLE OR SPREAD)
IF THE VALUE OF THAT OPTION PREMIUM, WHEN AGGREGATED WITH THE PREMIUMS ON ALL
OTHER OPTIONS ON SECURITIES HELD BY THE PORTFOLIO, WOULD EXCEED 5% OF THE
PORTFOLIO'S TOTAL ASSETS.
(7) ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE PROCEEDS FROM
OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER OUTSTANDING
BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF THE PORTFOLIO'S
TOTAL ASSETS. THE PORTFOLIO DOES NOT INTEND TO MAKE ANY PURCHASES OF SECURITIES
IF BORROWING EXCEEDS 5% OF ITS TOTAL ASSETS.
TECHNOLOGY PORTFOLIO MAY NOT:
(1) PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS OR ADRS IF MORE THAN 25% OF THE
VALUE OF THE PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(2) PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE VALUE OF THE
PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(3) ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES CONTRACT IF THE
AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH THESE POSITIONS
WOULD EXCEED 5% OF THE PORTFOLIO'S NET ASSETS.
(4) PURCHASE A PUT OR CALL OPTION ON A SECURITY (INCLUDING A STRADDLE OR SPREAD)
IF THE VALUE OF THAT OPTION PREMIUM, WHEN AGGREGATED WITH THE PREMIUMS ON ALL
OTHER OPTIONS SECURITIES HELD BY THE PORTFOLIO, WOULD EXCEED 5% OF THE
PORTFOLIO'S TOTAL ASSETS.
(5) ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE PROCEEDS FROM
OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER OUTSTANDING
BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF THE PORTFOLIO'S
TOTAL ASSETS. THE PORTFOLIO DOES NOT INTEND TO MAKE ANY PURCHASES OF SECURITIES
IF BORROWING EXCEEDS 5% OF ITS TOTAL ASSETS.
ANY INVESTMENT RESTRICTION THAT INVOLVES A MAXIMUM PERCENTAGE OF SECURITIES
OR ASSETS SHALL NOT BE CONSIDERED TO BE VIOLATED UNLESS AN EXCESS OVER THE
APPLICABLE PERCENTAGE OCCURS IMMEDIATELY AFTER AN ACQUISITION OF SECURITIES OR
UTILIZATION OF ASSETS AND RESULTS THEREFROM.
INVESTMENT SELECTION PROCESS
----------------------------
INVESTMENTS IN THE FUND ARE SELECTED ON THE BASIS OF THEIR ABILITY TO
CONTRIBUTE TO THE DUAL OBJECTIVE OF THE FUND, (I.E., THOSE THAT SATISFY THE
FUND'S INVESTMENT AND SOCIAL CRITERIA). THE FUND HAS DEVELOPED A NUMBER OF
TECHNIQUES FOR EVALUATING THE PERFORMANCE OF ISSUERS IN EACH OF THESE AREAS. THE
PRIMARY SOURCES OF INFORMATION ARE REPORTS PUBLISHED BY THE ISSUERS THEMSELVES,
THE REPORTS OF PUBLIC AGENCIES, AND THE REPORTS OF GROUPS WHICH MONITOR
PERFORMANCE IN PARTICULAR AREAS. THESE SOURCES OF INFORMATION ARE SOMETIMES
AUGMENTED WITH DIRECT INTERVIEWS OR WRITTEN QUESTIONNAIRES ADDRESSED TO THE
ISSUERS. IT SHOULD BE RECOGNIZED, HOWEVER, THAT THERE ARE FEW GENERALLY ACCEPTED
MEASURES BY WHICH ACHIEVEMENT IN THESE AREAS CAN BE READILY DISTINGUISHED;
THEREFORE, THE DEVELOPMENT OF SUITABLE MEASUREMENT TECHNIQUES IS LARGELY WITHIN
THE DISCRETION AND JUDGMENT OF THE ADVISORS OF THE FUND.
CANDIDATES FOR INCLUSION IN ANY PARTICULAR CLASS OF ASSETS ARE THEN
EXAMINED ACCORDING TO THE SOCIAL CRITERIA. ISSUERS ARE CLASSIFIED INTO THREE
CATEGORIES OF SUITABILITY UNDER THE SOCIAL CRITERIA. IN THE FIRST CATEGORY ARE
THOSE ISSUERS, WHICH EXHIBIT UNUSUAL POSITIVE ACCOMPLISHMENT WITH RESPECT TO
SOME OF THE CRITERIA AND DO NOT FAIL TO MEET MINIMUM STANDARDS WITH RESPECT TO
THE REMAINING CRITERIA. TO THE GREATEST EXTENT POSSIBLE, INVESTMENT SELECTIONS
ARE MADE FROM THIS GROUP. IN THE SECOND CATEGORY ARE THOSE ISSUERS, WHICH MEET
MINIMUM STANDARDS WITH RESPECT TO ALL THE CRITERIA BUT DO NOT EXHIBIT
OUTSTANDING ACCOMPLISHMENT WITH RESPECT TO ANY CRITERION. THIS CATEGORY INCLUDES
ISSUERS WHICH MAY LACK AN AFFIRMATIVE RECORD OF ACCOMPLISHMENT IN THESE AREAS
BUT WHICH ARE NOT KNOWN BY ADVISORS TO VIOLATE ANY OF THE SOCIAL CRITERIA. THE
THIRD CATEGORY UNDER THE SOCIAL CRITERIA CONSISTS OF ISSUERS WHO FLAGRANTLY
VIOLATE, OR HAVE VIOLATED, ONE OR MORE OF THOSE VALUES, FOR EXAMPLE, A COMPANY,
WHICH REPEATEDLY ENGAGES IN UNFAIR LABOR PRACTICES. THE FUND WILL NOT KNOWINGLY
PURCHASE THE SECURITIES OF ISSUERS IN THIS THIRD CATEGORY.
IT SHOULD BE NOTED THAT THE FUND'S SOCIAL CRITERIA TEND TO LIMIT THE
AVAILABILITY OF INVESTMENT OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER
INVESTMENT COMPANIES. THE ADVISORS OF THE FUND, HOWEVER, BELIEVE THAT WITHIN THE
FIRST AND SECOND CATEGORIES THERE ARE SUFFICIENT INVESTMENT OPPORTUNITIES TO
PERMIT FULL INVESTMENT AMONG ISSUERS, WHICH SATISFY THE FUND'S SOCIAL INVESTMENT
OBJECTIVE.
TO THE GREATEST EXTENT POSSIBLE, THE ADVISORS APPLY THE SAME SOCIAL
CRITERIA TO THE PURCHASE OF NON-EQUITY SECURITIES AS IT APPLIES TO EQUITY
INVESTMENTS. WITH RESPECT TO GOVERNMENT SECURITIES, THE MONEY MARKET PORTFOLIO
INVESTS PRIMARILY IN DEBT OBLIGATIONS ISSUED OR GUARANTEED BY AGENCIES OR
INSTRUMENTALITIES OF THE FEDERAL GOVERNMENT WHOSE PURPOSES FURTHER OR ARE
COMPATIBLE WITH THE FUND'S SOCIAL CRITERIA, SUCH AS OBLIGATIONS OF THE BANK FOR
COOPERATIVES AND THE STUDENT LOAN MARKETING ASSOCIATION, RATHER THAN GENERAL
OBLIGATIONS OF THE FEDERAL GOVERNMENT, SUCH AS TREASURY SECURITIES. BANK
CERTIFICATES OF DEPOSIT, COMMERCIAL PAPER, REPURCHASE AGREEMENTS, AND CORPORATE
BONDS ARE JUDGED IN THE SAME WAY AS A PROSPECTIVE PURCHASE OF THE BANK'S OR
ISSUING COMPANY'S COMMON STOCK.
DIVIDENDS, DISTRIBUTIONS AND TAXES
----------------------------------
THE FUNDS INTEND TO CONTINUE TO QUALIFY AS REGULATED INVESTMENT COMPANIES
UNDER SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON THE FUND
SHOULD FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION AT THE FUND LEVEL,
RATHER THAN PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
DISTRIBUTIONS OF REALIZED NET CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE
A YEAR; HOWEVER, THE FUND DOES NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS UNLESS
AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE EXPIRED.
CAPITAL LOSS CARRYFORWARDS AS OF SEPTEMBER 30, 1999, FOR THE MONEY MARKET
PORTFOLIO WAS $6,959, BALANCED PORTFOLIO WAS $0, BOND PORTFOLIO WAS $0, EQUITY
PORTFOLIO WAS $0, AND MANAGED INDEX PORTFOLIO WAS $492,447.
GENERALLY, DIVIDENDS (INCLUDING SHORT-TERM CAPITAL GAINS) AND DISTRIBUTIONS
ARE TAXABLE TO THE SHAREHOLDER IN THE YEAR THEY ARE PAID. HOWEVER, ANY DIVIDENDS
AND DISTRIBUTIONS PAID IN JANUARY BUT DECLARED DURING THE PRIOR THREE MONTHS ARE
TAXABLE IN THE YEAR DECLARED.
THE FUND IS REQUIRED TO WITHHOLD 31% OF ANY REPORTABLE DIVIDENDS AND
LONG-TERM CAPITAL GAIN DISTRIBUTIONS PAID AND 31% OF EACH REPORTABLE REDEMPTION
TRANSACTION OCCURRING IN THE BALANCED, EQUITY, BOND, AND MANAGED INDEX
PORTFOLIOS IF: (A) THE SHAREHOLDER'S SOCIAL SECURITY NUMBER OR OTHER TAXPAYER
IDENTIFICATION NUMBER ("TIN") IS NOT PROVIDED OR AN OBVIOUSLY INCORRECT TIN IS
PROVIDED; (B) THE SHAREHOLDER DOES NOT CERTIFY UNDER PENALTIES OF PERJURY THAT
THE TIN PROVIDED IS THE SHAREHOLDER'S CORRECT TIN AND THAT THE SHAREHOLDER IS
NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION 3406(A)(1)(C) OF THE INTERNAL
REVENUE CODE BECAUSE OF UNDERREPORTING (HOWEVER, FAILURE TO PROVIDE
CERTIFICATION AS TO THE APPLICATION OF SECTION 3406(A)(1)(C) WILL RESULT ONLY IN
BACKUP WITHHOLDING ON DIVIDENDS, NOT ON REDEMPTIONS); OR (C) THE FUND IS
NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT THE TIN PROVIDED BY THE
SHAREHOLDER IS INCORRECT OR THAT THERE HAS BEEN UNDERREPORTING OF INTEREST OR
DIVIDENDS BY THE SHAREHOLDER. AFFECTED SHAREHOLDERS WILL RECEIVE STATEMENTS AT
LEAST ANNUALLY SPECIFYING THE AMOUNT WITHHELD.
IN ADDITION, THE FUND IS REQUIRED TO REPORT TO THE INTERNAL REVENUE SERVICE
THE FOLLOWING INFORMATION WITH RESPECT TO EACH REDEMPTION TRANSACTION OCCURRING
IN THE FUND (NOT APPLICABLE TO MONEY MARKET PORTFOLIO): (A) THE SHAREHOLDER'S
NAME, ADDRESS, ACCOUNT NUMBER AND TAXPAYER IDENTIFICATION NUMBER; (B) THE TOTAL
DOLLAR VALUE OF THE REDEMPTIONS; AND (C) THE FUND'S IDENTIFYING CUSIP NUMBER.
CERTAIN SHAREHOLDERS ARE, HOWEVER, EXEMPT FROM THE BACKUP WITHHOLDING AND
BROKER REPORTING REQUIREMENTS. EXEMPT SHAREHOLDERS INCLUDE: CORPORATIONS;
FINANCIAL INSTITUTIONS; TAX-EXEMPT ORGANIZATIONS; INDIVIDUAL RETIREMENT PLANS;
THE US, A STATE, THE DISTRICT OF COLUMBIA, A US POSSESSION, A FOREIGN
GOVERNMENT, AN INTERNATIONAL ORGANIZATION, OR ANY POLITICAL SUBDIVISION, AGENCY
OR INSTRUMENTALITY OF ANY OF THE FOREGOING; US REGISTERED COMMODITIES OR
SECURITIES DEALERS; REAL ESTATE INVESTMENT TRUSTS; REGISTERED INVESTMENT
COMPANIES; BANK COMMON TRUST FUNDS; CERTAIN CHARITABLE TRUSTS; FOREIGN CENTRAL
BANKS OF ISSUE. NON-RESIDENT ALIENS, CERTAIN FOREIGN PARTNERSHIPS AND FOREIGN
CORPORATIONS ARE GENERALLY NOT SUBJECT TO EITHER REQUIREMENT BUT MAY INSTEAD BE
SUBJECT TO WITHHOLDING UNDER SECTIONS 1441 OR 1442 OF THE INTERNAL REVENUE CODE.
SHAREHOLDERS CLAIMING EXEMPTION FROM BACKUP WITHHOLDING AND BROKER REPORTING
SHOULD CALL OR WRITE THE FUND FOR FURTHER INFORMATION.
MANY STATES DO NOT TAX THE PORTION OF THE FUND'S DIVIDENDS WHICH IS DERIVED
FROM INTEREST ON US GOVERNMENT OBLIGATIONS. STATE LAW VARIES CONSIDERABLY
CONCERNING THE TAX STATUS OF DIVIDENDS DERIVED FROM US GOVERNMENT OBLIGATIONS.
ACCORDINGLY, SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE TAX STATUS
OF DIVIDENDS AND DISTRIBUTIONS FROM THE FUND IN THEIR RESPECTIVE JURISDICTIONS.
DIVIDENDS PAID BY THE FUND MAY BE ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION AVAILABLE TO CORPORATE TAXPAYERS. CORPORATE TAXPAYERS REQUIRING THIS
INFORMATION MAY CONTACT CALVERT.
NET ASSET VALUE
---------------
SHARES OF THE MONEY MARKET PORTFOLIO ARE ISSUED AND REDEEMED AT THE NET
ASSET VALUE PER SHARE OF THE PORTFOLIO. THE PUBLIC OFFERING PRICE OF THE SHARES
OF THE BALANCED, EQUITY, BOND, AND MANAGED INDEX PORTFOLIOS IS THE RESPECTIVE
NET ASSET VALUE PER SHARE (PLUS, FOR CLASS A SHARES, THE APPLICABLE SALES
CHARGE). SHARES OF THE OTHER PORTFOLIOS ARE REDEEMED AT THEIR RESPECTIVE NET
ASSET VALUES PER SHARE, LESS ANY APPLICABLE CONTINGENT DEFERRED SALES CHARGE
("CDSC"). THE MONEY MARKET PORTFOLIO ATTEMPTS TO MAINTAIN A CONSTANT NET ASSET
VALUE OF $1.00 PER SHARE; THE NET ASSET VALUES OF THE OTHER PORTFOLIOS FLUCTUATE
BASED ON THE RESPECTIVE MARKET VALUE OF THE PORTFOLIOS' INVESTMENTS. THE NET
ASSET VALUE PER SHARE OF EACH OF THE PORTFOLIOS IS DETERMINED EVERY BUSINESS DAY
AS OF THE CLOSE OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE (NORMALLY
4:00 P.M. EASTERN TIME) AND AT SUCH OTHER TIMES AS MAY BE NECESSARY OR
APPROPRIATE. THE FUND DOES NOT DETERMINE NET ASSET VALUE ON CERTAIN NATIONAL
HOLIDAYS OR OTHER DAYS ON WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED: NEW
YEAR'S DAY, MARTIN LUTHER KING DAY, PRESIDENTS' DAY, GOOD FRIDAY, MEMORIAL DAY,
INDEPENDENCE DAY, LABOR DAY, THANKSGIVING DAY, AND CHRISTMAS DAY. THE
PORTFOLIO'S NET ASSET VALUE PER SHARE IS DETERMINED BY DIVIDING THE TOTAL NET
ASSETS (THE VALUE OF ITS ASSETS NET OF LIABILITIES, INCLUDING ACCRUED EXPENSES
AND FEES) BY THE NUMBER OF SHARES OUTSTANDING FOR EACH CLASS.
THE ASSETS OF THE BALANCED, EQUITY, BOND AND MANAGED INDEX PORTFOLIOS ARE
VALUED AS FOLLOWS: (A) SECURITIES FOR WHICH MARKET QUOTATIONS ARE READILY
AVAILABLE ARE VALUED AT THE MOST RECENT CLOSING PRICE, MEAN BETWEEN BID AND
ASKED PRICE, OR YIELD EQUIVALENT AS OBTAINED FROM ONE OR MORE MARKET MAKERS FOR
SUCH SECURITIES; (B) SECURITIES MATURING WITHIN 60 DAYS MAY BE VALUED AT COST,
PLUS OR MINUS ANY AMORTIZED DISCOUNT OR PREMIUM, UNLESS THE BOARD OF TRUSTEES
DETERMINES SUCH METHOD NOT TO BE APPROPRIATE UNDER THE CIRCUMSTANCES; AND (C)
ALL OTHER SECURITIES AND ASSETS FOR WHICH MARKET QUOTATIONS ARE NOT READILY
AVAILABLE WILL BE FAIRLY VALUED BY THE ADVISOR IN GOOD FAITH UNDER THE
SUPERVISION OF THE BOARD OF TRUSTEES.
THE MONEY MARKET PORTFOLIO'S ASSETS, INCLUDING SECURITIES SUBJECT TO
REPURCHASE AGREEMENTS, ARE NORMALLY VALUED AT THEIR AMORTIZED COST WHICH DOES
NOT TAKE INTO ACCOUNT UNREALIZED CAPITAL GAINS OR LOSSES. THIS INVOLVES VALUING
AN INSTRUMENT AT ITS COST AND THEREAFTER ASSUMING A CONSTANT AMORTIZATION TO
MATURITY OF ANY DISCOUNT OR PREMIUM, REGARDLESS OF THE IMPACT OF FLUCTUATING
INTEREST RATES ON THE MARKET VALUE OF THE INSTRUMENT. WHILE THIS METHOD PROVIDES
CERTAINTY IN VALUATION, IT MAY RESULT IN PERIODS DURING WHICH VALUE, AS
DETERMINED BY AMORTIZED COST, IS HIGHER OR LOWER THAN THE PRICE THAT WOULD BE
RECEIVED UPON SALE OF THE INSTRUMENT.
NET ASSET VALUE AND OFFERING PRICE PER SHARE, AS OF 9/30/99
CSIF MONEY MARKET PORTFOLIO
NET ASSET VALUE PER SHARE
($193,940,734/194,031,124 SHARES) $ 1.00
CSIF BALANCED PORTFOLIO
CLASS A NET ASSET VALUE PER SHARE
($708,654,877/22,048,556 SHARES) $32.14
MAXIMUM SALES CHARGE, CLASS A
(4.75% OF OFFERING PRICE) 1.60
OFFERING PRICE PER SHARE, CLASS A $33.74
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($9,909,810/309,988 SHARES) $31.97
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($13,646,283/430,473 SHARES) $31.70
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($13,458,467/418,846 SHARES) $32.13
CSIF BOND PORTFOLIO
CLASS A NET ASSET VALUE PER SHARE
($66,944,220/4,295,248 SHARES) $15.59
MAXIMUM SALES CHARGE
(3.75% OF OFFERING PRICE) .61
OFFERING PRICE PER SHARE $16.20
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($2,772,712/178,496 SHARES) $16.20
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($1,779,159/114,699 SHARES) $15.51
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($--/-- SHARES) $N/A
CSIF EQUITY PORTFOLIO
CLASS A NET ASSET VALUE PER SHARE
($166,715,719/6,160,076 SHARES) $27.06
MAXIMUM SALES CHARGE, CLASS A
(4.75% OF OFFERING PRICE) 1.35
OFFERING PRICE PER SHARE, CLASS A $28.41
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($8,037,848/302,157 SHARES) $26.60
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($10,413,428/416,552 SHARES) $25.00
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($--/-- SHARES) $N/A
CSIF MANAGED INDEX PORTFOLIO
CLASS A NET ASSET VALUE PER SHARE
($12,256,925/728,391 SHARES) $16.83
MAXIMUM SALES CHARGE, CLASS A
(4.75% OF OFFERING PRICE) .84
OFFERING PRICE PER SHARE, CLASS A $17.67
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($4,077,731/245,894 SHARES) $16.58
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($2,453,630/147,598 SHARES) $16.62
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($18,651,506/1,104,330 SHARES) $16.89
CALCULATION OF YIELD AND TOTAL RETURN
-------------------------------------
MONEY MARKET PORTFOLIO: YIELD
FROM TIME TO TIME, THE MONEY MARKET PORTFOLIO ADVERTISES ITS "YIELD" AND
"EFFECTIVE YIELD." BOTH YIELD FIGURES ARE BASED ON HISTORICAL EARNINGS AND ARE
NOT INTENDED TO INDICATE FUTURE PERFORMANCE. THE "YIELD" OF THE MONEY MARKET
PORTFOLIO REFERS TO THE ACTUAL INCOME GENERATED BY AN INVESTMENT IN THE
PORTFOLIO OVER A PARTICULAR BASE PERIOD OF TIME. IF THE BASE PERIOD IS LESS THAN
ONE YEAR, THE YIELD IS THEN "ANNUALIZED." THAT IS, THE NET CHANGE, EXCLUSIVE OF
CAPITAL CHANGES, IN THE VALUE OF A SHARE DURING THE BASE PERIOD IS DIVIDED BY
THE NET ASSET VALUE PER SHARE AT THE BEGINNING OF THE PERIOD, AND THE RESULT IS
MULTIPLIED BY 365 AND DIVIDED BY THE NUMBER OF DAYS IN THE BASE PERIOD. CAPITAL
CHANGES EXCLUDED FROM THE CALCULATION OF YIELD ARE: (1) REALIZED GAINS AND
LOSSES FROM THE SALE OF SECURITIES, AND (2) UNREALIZED APPRECIATION AND
DEPRECIATION. THE MONEY MARKET PORTFOLIO'S "EFFECTIVE YIELD" FOR A SEVEN-DAY
PERIOD IS ITS ANNUALIZED COMPOUNDED YIELD DURING THE PERIOD, CALCULATED
ACCORDING TO THE FOLLOWING FORMULA:
EFFECTIVE YIELD = (BASE PERIOD RETURN + 1)365/7 -1
THE "EFFECTIVE YIELD" IS CALCULATED LIKE YIELD, BUT ASSUMES REINVESTMENT OF
EARNED INCOME. THE EFFECTIVE YIELD WILL BE SLIGHTLY HIGHER THAN THE YIELD
BECAUSE OF THE COMPOUNDING EFFECT OF THIS ASSUMED REINVESTMENT. FOR THE
SEVEN-DAY PERIOD ENDED SEPTEMBER 30, 1999, THE MONEY MARKET PORTFOLIO'S YIELD
WAS 4.64% AND ITS EFFECTIVE YIELD WAS 4.75%.
BOND PORTFOLIO: YIELD
THE BOND PORTFOLIO MAY ALSO ADVERTISE ITS YIELD FROM TIME TO TIME. YIELD IS
CALCULATED SEPARATELY FOR EACH CLASS OF THE PORTFOLIO. YIELD QUOTATIONS ARE
HISTORICAL AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. YIELD QUOTATIONS
FOR THE BOND PORTFOLIO REFER TO THE AGGREGATE IMPUTED YIELD-TO-MATURITY OF EACH
OF THE PORTFOLIO'S INVESTMENTS BASED ON THE MARKET VALUE AS OF THE LAST DAY OF A
GIVEN THIRTY-DAY OR ONE-MONTH PERIOD, LESS ACCRUED EXPENSES (NET OF
REIMBURSEMENT), DIVIDED BY THE AVERAGE DAILY NUMBER OF OUTSTANDING SHARES
ENTITLED TO RECEIVE DIVIDENDS TIMES THE MAXIMUM OFFERING PRICE ON THE LAST DAY
OF THE PERIOD (SO THAT THE EFFECT OF THE SALES CHARGE IS INCLUDED IN THE
CALCULATION), COMPOUNDED ON A "BOND EQUIVALENT," OR SEMIANNUAL, BASIS. THE BOND
PORTFOLIO'S YIELD IS COMPUTED ACCORDING TO THE FOLLOWING FORMULA:
YIELD = 2 (A-B/CD+1)6 - 1
WHERE A = DIVIDENDS AND INTEREST EARNED DURING THE PERIOD USING THE AGGREGATE
IMPUTED YIELD-TO MATURITY FOR EACH OF THE PORTFOLIO'S INVESTMENTS AS NOTED
ABOVE; B = EXPENSES ACCRUED FOR THE PERIOD (NET OF REIMBURSEMENT); C = THE
AVERAGE DAILY NUMBER OF SHARES OUTSTANDING DURING THE PERIOD THAT WERE ENTITLED
TO RECEIVE DIVIDENDS; AND D = THE MAXIMUM OFFERING PRICE PER SHARE ON THE LAST
DAY OF THE PERIOD. USING THIS CALCULATION, THE BOND PORTFOLIO'S YIELD FOR THE
MONTH ENDED SEPTEMBER 30, 1999 WAS 6.07% FOR CLASS A SHARES, 9.90% FOR CLASS B
SHARES, AND 9.90% FOR CLASS C SHARES.
THE YIELD OF BOTH THE MONEY MARKET AND BOND PORTFOLIOS WILL FLUCTUATE IN
RESPONSE TO CHANGES IN INTEREST RATES AND GENERAL ECONOMIC CONDITIONS, PORTFOLIO
QUALITY, PORTFOLIO MATURITY, AND OPERATING EXPENSES. YIELD IS NOT FIXED OR
INSURED AND THEREFORE IS NOT COMPARABLE TO A SAVINGS OR OTHER SIMILAR TYPE OF
ACCOUNT. YIELD DURING ANY PARTICULAR TIME PERIOD SHOULD NOT BE CONSIDERED AN
INDICATION OF FUTURE YIELD. IT IS, HOWEVER, USEFUL IN EVALUATING A PORTFOLIO'S
PERFORMANCE IN MEETING ITS INVESTMENT OBJECTIVE.
BALANCED, EQUITY, BOND, MANAGED INDEX AND TECHNOLOGY PORTFOLIOS: TOTAL RETURN
AND OTHER QUOTATIONS
THE BALANCED, EQUITY, BOND, MANAGED INDEX AND TECHNOLOGY PORTFOLIOS MAY
EACH ADVERTISE "TOTAL RETURN." TOTAL RETURN IS CALCULATED SEPARATELY FOR EACH
CLASS. TOTAL RETURN DIFFERS FROM YIELD IN THAT YIELD FIGURES MEASURE ONLY THE
INCOME COMPONENT OF A PORTFOLIO'S INVESTMENTS, WHILE TOTAL RETURN INCLUDES NOT
ONLY THE EFFECT OF INCOME DIVIDENDS BUT ALSO ANY CHANGE IN NET ASSET VALUE, OR
PRINCIPAL AMOUNT, DURING THE STATED PERIOD. TOTAL RETURN IS COMPUTED BY TAKING
THE TOTAL NUMBER OF SHARES PURCHASED BY A HYPOTHETICAL $1,000 INVESTMENT AFTER
DEDUCTING ANY APPLICABLE SALES CHARGE, ADDING ALL ADDITIONAL SHARES PURCHASED
WITHIN THE PERIOD WITH REINVESTED DIVIDENDS AND DISTRIBUTIONS, CALCULATING THE
VALUE OF THOSE SHARES AT THE END OF THE PERIOD, AND DIVIDING THE RESULT BY THE
INITIAL $1,000 INVESTMENT. NOTE: "TOTAL RETURN" AS QUOTED IN THE FINANCIAL
HIGHLIGHTS SECTION OF THE FUND'S PROSPECTUS AND ANNUAL REPORT TO SHAREHOLDERS,
HOWEVER, PER SEC INSTRUCTIONS, DOES NOT REFLECT DEDUCTION OF THE SALES CHARGE,
AND CORRESPONDS TO "RETURN WITHOUT MAXIMUM LOAD" (OR "W/O MAX LOAD" OR "AT NAV")
AS REFERRED TO HEREIN. FOR PERIODS OF MORE THAN ONE YEAR, THE CUMULATIVE TOTAL
RETURN IS THEN ADJUSTED FOR THE NUMBER OF YEARS, TAKING COMPOUNDING INTO
ACCOUNT, TO CALCULATE AVERAGE ANNUAL TOTAL RETURN DURING THAT PERIOD.
TOTAL RETURN IS COMPUTED ACCORDING TO THE FOLLOWING FORMULA:
P(1 + T)N = ERV
WHERE P = A HYPOTHETICAL INITIAL PAYMENT OF $1,000; T = TOTAL RETURN; N = NUMBER
OF YEARS; AND ERV = THE ENDING REDEEMABLE VALUE OF A HYPOTHETICAL $1,000 PAYMENT
MADE AT THE BEGINNING OF THE PERIOD.
TOTAL RETURN IS HISTORICAL IN NATURE AND IS NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. ALL TOTAL RETURN QUOTATIONS REFLECT THE DEDUCTION OF THE
PORTFOLIO'S MAXIMUM SALES CHARGE, EXCEPT QUOTATIONS OF "RETURN WITHOUT MAXIMUM
LOAD" (OR "WITHOUT CDSC" OR "AT NAV") WHICH DO NOT DEDUCT SALES CHARGE, AND
"ACTUAL RETURN," WHICH REFLECT DEDUCTION OF THE SALES CHARGE ONLY FOR THOSE
PERIODS WHEN A SALES CHARGE WAS ACTUALLY IMPOSED. RETURN WITHOUT MAXIMUM LOAD,
WHICH WILL BE HIGHER THAN TOTAL RETURN, SHOULD BE CONSIDERED ONLY BY INVESTORS,
SUCH AS PARTICIPANTS IN CERTAIN PENSION PLANS, TO WHOM THE SALES CHARGE DOES NOT
APPLY, OR FOR PURPOSES OF COMPARISON ONLY WITH COMPARABLE FIGURES WHICH ALSO DO
NOT REFLECT SALES CHARGES, SUCH AS LIPPER AVERAGES. CLASS I SHARES DO NOT HAVE
A SALES CHARGE.
THE STANDARDIZED TOTAL RETURN FOR CLASS I SHARES OF THE BALANCED PORTFOLIO
IS "LINKED" TO THE CLASS A TOTAL RETURN. THAT IS, THESE CLASS I SHARES HAVE AN
ACTUAL INCEPTION DATE OF 1999. HOWEVER, CLASS A SHARES HAVE AN INCEPTION DATE
OF SEVERAL YEARS EARLIER. IN THE TABLE BELOW, PERFORMANCE RESULTS BEFORE THE
CLASS I ACTUAL INCEPTION DATE ARE FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT
THE DEDUCTION OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD
HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED
IN THE SAME PERIOD. NONSTANDARDIZED TOTAL RETURN FOR CLASS I SHARE MAY ALSO BE
SHOWN FROM THE ACTUAL CLASS I INCEPTION DATE; THIS FIGURE IS NOT LINKED TO CLASS
A TOTAL RETURN.
RETURN FOR THE BALANCED, BOND, EQUITY, AND MANAGED INDEX PORTFOLIOS' SHARES
FOR THE PERIODS INDICATED ARE AS FOLLOWS:
PERIODS ENDED CLASS A CLASS B CLASS C CLASS I
SEPTEMBER 30, 1999 TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
WITH/WITHOUT MAXIMUM LOAD WITH/WITHOUT CDSC WITH/WITHOUT CDSC LINKED/ACTUAL
BALANCED PORTFOLIO
ONE YEAR
6.22% 11.52% 5.15% 10.15% 9.40% 10.40% 11.83% N/A
FIVE YEARS
12.25% 13.34% N/A N/A 12.07% 12.07% 13.40% N/A
TEN YEARS
9.17% 9.70% N/A N/A N/A N/A 9.73% N/A
FROM INCEPTION
11.23% 11.55% 0.36% 2.99% 9.96% 9.96% (0.55%)
(OCTOBER 21, 1982, FOR CLASS A)
(MARCH 31, 1998, FOR CLASS B)
(MARCH 1, 1994, FOR CLASS C)
(FEBRUARY 26, 1999, FOR ACTUAL CLASS I)
BOND PORTFOLIO
ONE YEAR
(2.63%) 1.18% (4.21%) (0.22%) (1.33%) (0.33%) N/A N/A
FIVE YEARS
6.32% 7.13% N/A N/A N/A N/A N/A N/A
TEN YEARS
7.13% 7.54% N/A N/A N/A N/A N/A N/A
FROM INCEPTION
7.70% 8.03% 0.09% 2.07% 1.15% 1.15% N/A N/A
(AUGUST 24, 1987, FOR CLASS A)
(MARCH 31, 1998, FOR CLASS B)
(JUNE 1, 1998, FOR CLASS C)
PERIODS ENDED CLASS A CLASS B CLASS C CLASS I
SEPTEMBER 30, 1999
TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
WITH/WITHOUT MAXIMUM LOAD WITH/WITHOUT CDSC WITH/WITHOUT CDSC LINKED/ACTUAL
EQUITY PORTFOLIO
ONE YEAR
26.92% 33.23% 26.56% 31.56% 30.80% (0.33%) N/A N/A
FIVE YEARS
12.97% 14.07% N/A N/A 12.76% 12.76% N/A N/A
TEN YEARS
8.28% 8.81% N/A N/A N/A N/A N/A N/A
FROM INCEPTION
8.70% 9.13% (1.12%) 1.54% 9.33% 9.33% N/A N/A
(AUGUST 24, 1987, FOR CLASS A)
(MARCH 31, 1998, FOR CLASS B)
(MARCH 1, 1994, FOR CLASS C)
MANAGED INDEX PORTFOLIO
ONE YEAR
18.89% 24.77% 18.00% 23.00% 21.93% 22.93% 25.99%
FROM INCEPTION
4.86% 8.41% 4.42% 7.08% 10.65% 10.65% 8.66%
(AUGUST 15, 1998, FOR CLASS A)
(APRIL 15, 1998, FOR CLASS B)
(JUNE 1, 1998 FOR CLASS C)
(APRIL 15, 1998 FOR ACTUAL CLASS I)
-----------------------------------------
THE CLASS A TOTAL RETURN FIGURES ABOVE AND THE BOND PORTFOLIO YIELD FIGURES
ABOVE WERE CALCULATED USING THE MAXIMUM SALES CHARGE IN EFFECT AT THAT TIME.
CAMCO ASSUMED ACTIVE MANAGEMENT OF THE BOND PORTFOLIO EFFECTIVE MARCH, 1997, NEW
SUBADVISORS ASSUMED MANAGEMENT OF THE EQUITY PORTFOLIO EFFECTIVE SEPTEMBER,
1998, AND NEW SUBADVISORS ASSUMED MANAGEMENT OF THE BALANCED PORTFOLIO EFFECTIVE
JULY, 1995. TOTAL RETURN, LIKE YIELD AND NET ASSET VALUE PER SHARE, FLUCTUATES
IN RESPONSE TO CHANGES IN MARKET CONDITIONS. NEITHER TOTAL RETURN NOR YIELD FOR
ANY PARTICULAR TIME PERIOD SHOULD BE CONSIDERED AN INDICATION OF FUTURE RETURN.
THE FUND MAY ADVERTISE AN INTERNAL RATE OF RETURN ("IRR") ON DIRECT COMPANY
HOLDINGS IN ITS SPECIAL EQUITIES PROGRAM. THIS IS A NON-STANDARDIZED PERFORMANCE
CALCULATION. SEE THE EXPLANATION IN THE "ADVERTISING" PORTION OF THIS STATEMENT,
BELOW. THESE DIRECT COMPANY HOLDINGS REPRESENT ONLY A VERY SMALL PORTION OF A
PORTFOLIO'S ASSETS, AND THE IRR ON THIS PART OF THE SPECIAL EQUITIES PROGRAM
SHOULD NOT BE CONFUSED WITH THE YIELD AND TOTAL RETURN OF ANY PARTICULAR
PORTFOLIO.
PURCHASE AND REDEMPTION OF SHARES
---------------------------------
SHARE CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED IN WRITING BY THE
INVESTOR. NO CERTIFICATES WILL BE ISSUED FOR FRACTIONAL SHARES OF ANY PORTFOLIO.
SEE THE PROSPECTUS FOR MORE DETAILS ON PURCHASES AND REDEMPTIONS.
SHAREHOLDERS IN THE MONEY MARKET PORTFOLIO WISHING TO HAVE DRAFTS SHOULD
COMPLETE THE SIGNATURE CARD ENCLOSED WITH THE INVESTMENT APPLICATION. EXISTING
SHAREHOLDERS MAY ARRANGE FOR DRAFT WRITING BY CONTACTING THE FUND FOR A
SIGNATURE CARD. OTHER DOCUMENTATION MAY BE REQUIRED FROM CORPORATIONS,
FIDUCIARIES AND INSTITUTIONAL INVESTORS. THIS DRAFT WRITING SERVICE WILL BE
SUBJECT TO THE CUSTOMARY RULES AND REGULATIONS GOVERNING CHECKING ACCOUNTS, AND
THE FUND RESERVES THE RIGHT TO CHANGE OR SUSPEND THE SERVICE. GENERALLY, THERE
IS NO CHARGE TO YOU FOR THE MAINTENANCE OF THIS SERVICE OR FOR THE CLEARANCE OF
DRAFTS, BUT THE FUND RESERVES THE RIGHT TO CHARGE A SERVICE FEE FOR DRAFTS
RETURNED FOR INSUFFICIENT OR UNCOLLECTED FUNDS. AS A SERVICE TO SHAREHOLDERS,
THE FUND MAY AUTOMATICALLY TRANSFER THE DOLLAR AMOUNT NECESSARY TO COVER DRAFTS
YOU HAVE WRITTEN ON THE FUND TO YOUR FUND ACCOUNT FROM ANY OTHER OF YOUR
IDENTICALLY REGISTERED ACCOUNTS IN CALVERT MONEY MARKET FUNDS OR CALVERT INSURED
PLUS. THE FUND MAY CHARGE A FEE FOR THIS SERVICE.
WHEN A PAYABLE THROUGH DRAFT IS PRESENTED FOR PAYMENT, A SUFFICIENT NUMBER
OF FULL AND FRACTIONAL SHARES FROM THE SHAREHOLDER'S ACCOUNT TO COVER THE AMOUNT
OF THE DRAFT WILL BE REDEEMED AT THE NET ASSET VALUE NEXT DETERMINED. IF THERE
ARE INSUFFICIENT SHARES IN THE SHAREHOLDER'S ACCOUNT, THE DRAFT MAY BE RETURNED.
THIS DRAFT WRITING PROCEDURE FOR REDEMPTION ENABLES SHAREHOLDERS TO RECEIVE THE
DAILY DIVIDENDS DECLARED ON THE SHARES TO BE REDEEMED UNTIL SUCH TIME AS THE
DRAFT IS PRESENTED TO THE CUSTODIAN BANK FOR PAYMENT. DRAFTS PRESENTED TO THE
BANK FOR PAYMENT WHICH WOULD REQUIRE THE REDEMPTION OF SHARES PURCHASED BY CHECK
OR ELECTRONIC FUNDS TRANSFER WITHIN THE PREVIOUS 10 BUSINESS DAYS MAY NOT BE
HONORED.
ADVERTISING
-----------
THE FUND OR ITS AFFILIATES MAY PROVIDE INFORMATION SUCH AS, BUT NOT LIMITED
TO, THE ECONOMY, INVESTMENT CLIMATE, INVESTMENT PRINCIPLES, SOCIOLOGICAL
CONDITIONS AND POLITICAL AMBIANCE. DISCUSSION MAY INCLUDE HYPOTHETICAL SCENARIOS
OR LISTS OF RELEVANT FACTORS DESIGNED TO AID THE INVESTOR IN DETERMINING WHETHER
THE FUND IS COMPATIBLE WITH THE INVESTOR'S GOALS. THE FUND MAY LIST PORTFOLIO
HOLDINGS OR GIVE EXAMPLES OR SECURITIES THAT MAY HAVE BEEN CONSIDERED FOR
INCLUSION IN THE PORTFOLIO, WHETHER HELD OR NOT.
THE FUND OR ITS AFFILIATES MAY SUPPLY COMPARATIVE PERFORMANCE DATA AND
RANKINGS FROM INDEPENDENT SOURCES SUCH AS DONOGHUE'S MONEY FUND REPORT, BANK
RATE MONITOR, MONEY, FORBES, LIPPER ANALYTICAL SERVICES, INC., CDA INVESTMENT
TECHNOLOGIES, INC., WIESENBERGER INVESTMENT COMPANIES SERVICE, RUSSELL
2000/SMALL STOCK INDEX, MUTUAL FUND VALUES MORNINGSTAR RATINGS, MUTUAL FUND
FORECASTER, BARRON'S, THE WALL STREET JOURNAL, AND SCHABACKER INVESTMENT
MANAGEMENT, INC. SUCH AVERAGES GENERALLY DO NOT REFLECT ANY FRONT- OR BACK-END
SALES CHARGES THAT MAY BE CHARGED BY FUNDS IN THAT GROUPING. THE FUND MAY ALSO
CITE TO ANY SOURCE, WHETHER IN PRINT OR ON-LINE, SUCH AS BLOOMBERG, IN ORDER TO
ACKNOWLEDGE ORIGIN OF INFORMATION. THE FUND MAY COMPARE ITSELF OR ITS PORTFOLIO
HOLDINGS TO OTHER INVESTMENTS, WHETHER OR NOT ISSUED OR REGULATED BY THE
SECURITIES INDUSTRY, INCLUDING, BUT NOT LIMITED TO, CERTIFICATES OF DEPOSIT AND
TREASURY NOTES.
CALVERT GROUP IS THE NATION'S LEADING FAMILY OF SOCIALLY RESPONSIBLE MUTUAL
FUNDS, BOTH IN TERMS OF SOCIALLY RESPONSIBLE MUTUAL FUND ASSETS UNDER
MANAGEMENT, AND NUMBER OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS OFFERED
(SOURCE: SOCIAL INVESTMENT FORUM, DECEMBER 31, 1999). CALVERT GROUP WAS ALSO THE
FIRST TO OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
THE IRR INCLUDES DIRECT INVESTMENTS IN COMPANIES ONLY (NO FUNDS,
PARTNERSHIPS, OR FINANCIAL INSTITUTIONS). IT IS BASED ON ANNUAL CASH FLOWS
BEGINNING WITH THE FIRST DIRECT INVESTMENT ON DECEMBER 18, 1992 TO THE DATE
SHOWN IN THE ADVERTISEMENT. CASH OUTFLOWS INCLUDE ALL DISBURSEMENTS TO
COMPANIES, INCLUDING FOLLOW-ONS. THE IRR ASSUMES FULL EXERCISE OF WARRANT
POSITIONS IN THE YEAR OF CALCULATION IF NOT PREVIOUSLY EXERCISED. CASH INFLOWS
INCLUDES ALL RECEIPTS FROM ACQUISITIONS AND EARNOUTS. IT ALSO ASSUMES POSITIONS
ARE FULLY LIQUIDATED IN THE YEAR OF CALCULATION. PUBLIC COMPANY HOLDINGS ARE
LIQUIDATED AT MARKET PRICE, INCLUDING WARRANTS; OTHERS ARE LIQUIDATED AT
CARRYING VALUE WHETHER MARKED UP, DOWN, OR AT COST. ALL BUT A SMALL PORTION OF
THESE RETURNS ARE UNREALIZED. THE IRR ON DIRECT COMPANY HOLDINGS IN THE SPECIAL
EQUITIES PROGRAM OF THE BALANCED PORTFOLIO WAS 7.05% FROM DECEMBER 18, 1992
THROUGH SEPTEMBER 30, 1999. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
TRUSTEES, OFFICERS, AND ADVISORY COUNCIL
----------------------------------------
THE FUND'S BOARD OF TRUSTEES SUPERVISES THE FUND'S ACTIVITIES AND REVIEWS
ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES. BUSINESS INFORMATION
IS PROVIDED BELOW ABOUT THE TRUSTEES.
REBECCA ADAMSON, TRUSTEE. SINCE 1983, MS. ADAMSON HAS SERVED AS PRESIDENT
OF THE NATIONAL NON-PROFIT, FIRST NATIONS FINANCIAL PROJECT. FOUNDED BY HER IN
1980, FIRST NATIONS IS THE ONLY AMERICAN INDIAN ALTERNATIVE DEVELOPMENT
INSTITUTE IN THE COUNTRY. SHE IS ON THE BOARD OF DIRECTORS OF THE CALVERT SOCIAL
INVESTMENT FOUNDATION. DOB: 9/10/47. ADDRESS: FIRST NATIONS DEVELOPMENT
INSTITUTE, 11917 MAIN STREET, FREDERICKSBURG, VIRGINIA 22408.
RICHARD L. BAIRD, JR., TRUSTEE. MR. BAIRD IS EXECUTIVE VICE PRESIDENT FOR
THE FAMILY HEALTH COUNCIL, INC. IN PITTSBURGH, PENNSYLVANIA, A NON-PROFIT
CORPORATION THAT PROVIDES FAMILY PLANNING SERVICES, NUTRITION, MATERNAL/CHILD
HEALTH CARE, AND VARIOUS HEALTH SCREENING SERVICES. MR. BAIRD IS A
TRUSTEE/DIRECTOR OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF
FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES, INC., CALVERT NEW WORLD FUND, INC.
AND CALVERT WORLD VALUES FUND, INC. DOB: 5/9/48. ADDRESS: 211 OVERLOOK DRIVE,
PITTSBURGH, PENNSYLVANIA 15216.
*JOHN G. GUFFEY, JR., TRUSTEE. EXECUTIVE VICE PRESIDENT AND TRUSTEE. MR.
GUFFEY IS EXECUTIVE VICE PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. HE IS ON
THE BOARD OF DIRECTORS OF THE CALVERT SOCIAL INVESTMENT FOUNDATION, ORGANIZING
DIRECTOR OF THE COMMUNITY CAPITAL BANK IN BROOKLYN, NEW YORK, AND A FINANCIAL
CONSULTANT TO VARIOUS ORGANIZATIONS. IN ADDITION, HE IS A DIRECTOR OF THE
COMMUNITY BANKERS MUTUAL FUND OF DENVER, COLORADO, A DIRECTOR OF ARIEL FUNDS,
AND THE TREASURER AND DIRECTOR OF SILBY, GUFFEY, AND CO., INC., A VENTURE
CAPITAL FIRM. MR. GUFFEY IS A TRUSTEE/DIRECTOR OF EACH OF THE OTHER INVESTMENT
COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES,
INC. AND CALVERT NEW WORLD FUND, INC. DOB: 05/15/48. ADDRESS: 388 CALLE COLINA
SANTA FE, NM 87501.
MR. GUFFEY HAS BEEN ADVISED THAT THE SECURITIES AND EXCHANGE COMMISSION
("SEC") HAS ENTERED AN ORDER AGAINST HIM RELATING TO HIS FORMER SERVICE AS A
DIRECTOR OF COMMUNITY BANKERS MUTUAL FUND, INC. THIS FUND IS NOT CONNECTED WITH
ANY CALVERT FUND OR THE CALVERT GROUP AND CEASED OPERATIONS IN SEPTEMBER, 1994.
MR. GUFFEY CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER. THE ORDER CONTAINS FINDINGS THAT: (1) THE COMMUNITY
BANKERS MUTUAL FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION WERE
MATERIALLY FALSE AND MISLEADING BECAUSE THEY MISSTATED OR FAILED TO STATE
MATERIAL FACTS CONCERNING THE PRICING OF FUND SHARES AND THE PERCENTAGE OF
ILLIQUID SECURITIES IN THE FUND'S PORTFOLIO AND THAT MR. GUFFEY, AS A MEMBER OF
THE FUND'S BOARD, SHOULD HAVE KNOWN OF THESE MISSTATEMENTS AND THEREFORE
VIOLATED THE SECURITIES ACT OF 1933; (2) THE PRICE OF THE FUND'S SHARES SOLD TO
THE PUBLIC WAS NOT BASED ON THE CURRENT NET ASSET VALUE OF THE SHARES, IN
VIOLATION OF THE INVESTMENT COMPANY ACT OF 1940 (THE "INVESTMENT COMPANY ACT");
AND (3) THE BOARD OF THE FUND, INCLUDING MR. GUFFEY, VIOLATED THE INVESTMENT
COMPANY ACT BY DIRECTING THE FILING OF A MATERIALLY FALSE REGISTRATION
STATEMENT. THE ORDER DIRECTED MR. GUFFEY TO CEASE AND DESIST FROM COMMITTING OR
CAUSING FUTURE VIOLATIONS AND TO PAY A CIVIL PENALTY OF $5,000. THE SEC PLACED
NO RESTRICTIONS ON MR. GUFFEY'S CONTINUING TO SERVE AS A TRUSTEE OR DIRECTOR OF
MUTUAL FUNDS.
JOY V. JONES, ESQ., TRUSTEE. MS. JONES IS AN ATTORNEY AND ENTERTAINMENT
MANAGER IN NEW YORK CITY. MS. JONES IS ALSO CHAIRMAN OF THE BOARD OF ULTRAFEM,
INC. TRUSTEE OF SARAH LAWRENCE COLLEGE, A MEMBER OF THE ASSOCIATION OF BLACK
WOMEN ATTORNEYS, INC., AND A TRUSTEE OF THE COMMUNITY SERVICE SOCIETY OF NEW
YORK. DOB: 7/2/50. ADDRESS: 175 WEST 12TH STREET, NEW YORK, NEW YORK 10011.
*BARBARA J. KRUMSIEK, SENIOR VICE PRESIDENT AND TRUSTEE. MS. KRUMSIEK
SERVES AS PRESIDENT, CHIEF EXECUTIVE OFFICER AND VICE CHAIRMAN OF CALVERT GROUP,
LTD. AND AS AN OFFICER AND DIRECTOR OF EACH OF ITS AFFILIATED COMPANIES. SHE IS
A DIRECTOR OF CALVERT-SLOAN ADVISERS, L.L.C., AND A TRUSTEE/DIRECTOR OF EACH OF
THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, AS WELL AS SENIOR VICE
PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. MS. KRUMSIEK IS ON THE BOARD OF
DIRECTORS OF THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO JOINING CALVERT
GROUP, MS. KRUMSIEK SERVED AS A MANAGING DIRECTOR OF ALLIANCE FUND DISTRIBUTORS,
INC. DOB: 08/09/52.
TERRENCE J. MOLLNER, ED.D., TRUSTEE. DR. MOLLNER IS FOUNDER, CHAIRPERSON,
AND PRESIDENT OF TRUSTEESHIP INSTITUTE, INC., A DIVERSE FOUNDATION KNOWN
PRINCIPALLY FOR ITS CONSULTATION TO CORPORATIONS CONVERTING TO COOPERATIVE
EMPLOYEE-OWNERSHIP. HE IS ALSO A DIRECTOR OF CALVERT WORLD VALUES FUND, INC. HE
SERVED AS A TRUSTEE OF THE COOPERATIVE FUND OF NEW ENGLAND, INC., AND IS NOW A
MEMBER OF ITS BOARD OF ADVISORS. IN ADDITION, DR. MOLLNER IS A FOUNDER AND
MEMBER OF THE BOARD OF TRUSTEES OF THE FOUNDATION FOR SOVIET-AMERICAN ECONOMIC
COOPERATION AND IS ON THE BOARD OF DIRECTORS OF THE CALVERT SOCIAL INVESTMENT
FOUNDATION.
ON OCTOBER 8, 1998, MR. MOLLNER DECLARED AND FILED FOR PERSONAL BANKRUPTCY
PROTECTION UNDER CHAPTER 7 OF THE FEDERAL BANKRUPTCY CODE. THE CAUSE OF MR.
MOLLNER'S FINANCIAL DIFFICULTIES WAS LOSSES SUSTAINED IN TRADING IN THE OPTIONS
AND FUTURES MARKET. DOB: 12/13/44. ADDRESS: 15 EDWARDS SQUARE, NORTHAMPTON,
MASSACHUSETTS 01060.
SYDNEY AMARA MORRIS, TRUSTEE. REV. MORRIS PREVIOUSLY SERVES AS A MINISTER
OF THE UNITARIAN-UNIVERSALIST FELLOWSHIP. REV. MORRIS IS A GRADUATE OF THE
HARVARD DIVINITY SCHOOL. DOB: 9/7/49. ADDRESS: 2915 WEST 12TH VANCOUVER,
BRITISH COLUMBIA, CANADA V6K2R2.
*CHARLES T. NASON, TRUSTEE. MR. NASON SERVES AS CHAIRMAN, PRESIDENT
AND CHIEF EXECUTIVE OFFICER OF THE ACACIA GROUP, A WASHINGTON, D.C.-BASED
FINANCIAL SERVICES ORGANIZATION, INCLUDING ACACIA MUTUAL LIFE INSURANCE COMPANY
AND CALVERT GROUP, LTD. HE IS A DIRECTOR OF CALVERT ADMINISTRATIVE SERVICES
COMPANY, INC., CALVERT ASSET MANAGEMENT COMPANY, INC., CALVERT SHAREHOLDER
SERVICES, INC., AND THE ADVISOR GROUP, INC. DOB: 4/22/46. ADDRESS: 7315
WISCONSIN AVENUE, BETHESDA, MARYLAND 20814.
*D. WAYNE SILBY, ESQ., PRESIDENT AND TRUSTEE. MR. SILBY IS A
TRUSTEE/DIRECTOR OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF
FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES, INC. AND CALVERT NEW WORLD FUND, INC.
HE IS THE PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. MR. SILBY IS EXECUTIVE
CHAIRMAN OF GROUP SERVE, INC., AN INTERNET COMPANY FOCUSED ON COMMUNITY BUILDING
COLLABORATIVE TOOLS, AND AN OFFICER, DIRECTOR AND SHAREHOLDER OF SILBY, GUFFEY &
COMPANY, INC., WHICH SERVES AS GENERAL PARTNER OF CALVERT SOCIAL VENTURE
PARTNERS ("CSVP"). CSVP IS A VENTURE CAPITAL FIRM INVESTING IN SOCIALLY
RESPONSIBLE SMALL COMPANIES. HE IS ALSO A DIRECTOR OF ACACIA MUTUAL LIFE
INSURANCE COMPANY AND CHAIRMAN OF THE CALVERT SOCIAL INVESTMENT FOUNDATION. DOB:
7/20/48. ADDRESS: 1715 18TH STREET, N.W., WASHINGTON, D.C. 20009.
RENO J. MARTINI, SENIOR VICE PRESIDENT. MR. MARTINI IS SENIOR VICE
PRESIDENT OF CALVERT GROUP, LTD., AND SENIOR VICE PRESIDENT AND CHIEF INVESTMENT
OFFICER OF CALVERT ASSET MANAGEMENT COMPANY, INC. MR. MARTINI IS ALSO A DIRECTOR
AND PRESIDENT OF CALVERT-SLOAN ADVISERS, L.L.C., AND A DIRECTOR AND OFFICER OF
CALVERT NEW WORLD FUND. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, TREASURER. MR. WOLFSHEIMER IS SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF CALVERT GROUP, LTD. AND ITS
SUBSIDIARIES AND AN OFFICER OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE
CALVERT GROUP OF FUNDS. MR. WOLFSHEIMER IS VICE PRESIDENT AND TREASURER OF
CALVERT-SLOAN ADVISERS, L.L.C., AND A DIRECTOR OF CALVERT DISTRIBUTORS, INC.
DOB: 7/24/52.
WILLIAM M. TARTIKOFF, ESQ., VICE PRESIDENT AND ASSISTANT SECRETARY. MR.
TARTIKOFF IS AN OFFICER OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP
OF FUNDS, AND IS SENIOR VICE PRESIDENT, SECRETARY, AND GENERAL COUNSEL OF
CALVERT GROUP, LTD., AND EACH OF ITS SUBSIDIARIES. MR. TARTIKOFF IS ALSO VICE
PRESIDENT AND SECRETARY OF CALVERT-SLOAN ADVISERS, L.L.C., A DIRECTOR OF CALVERT
DISTRIBUTORS, INC., AND IS AN OFFICER OF ACACIA NATIONAL LIFE INSURANCE COMPANY.
DOB: 8/12/47.
CATHERINE S. BARDSLEY, ESQ., SECRETARY. MS. BARDSLEY IS COUNSEL TO
KIRKPATRICK & LOCKHART, LLP, THE FUND'S LEGAL COUNSEL. DOB: 10/4/49. ADDRESS:
1800 MASSACHUSETTS AVENUE, N.W., WASHINGTON, D.C. 20036.
DANIEL K. HAYES, VICE PRESIDENT. MR. HAYES IS VICE PRESIDENT OF CALVERT
ASSET MANAGEMENT COMPANY, INC., AND IS AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT NEW WORLD
FUND, INC. DOB: 9/9/50.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP, AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 1/29/59.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. SHE ALSO SERVES AS SECRETARY
AND PROVIDES COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO
WORKING AT CALVERT GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT
GROUP OF THE BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB:
09/07/68.
VICTOR FRYE, ESQ., ASSISTANT SECRETARY AND COMPLIANCE OFFICER. MR. FRYE IS
COUNSEL AND COMPLIANCE OFFICER OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. HE IS ALSO AN OFFICER OF EACH OF
THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. PRIOR TO WORKING
AT CALVERT GROUP, MR. FRYE WAS COUNSEL AND MANAGER OF THE COMPLIANCE DEPARTMENT
AT THE ADVISORS GROUP. DOB: 10/15/58.
JENNIFER P. STREAKS, ESQ., ASSISTANT SECRETARY. MS. STREAKS IS ASSISTANT
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS.
THE ADDRESS OF TRUSTEE AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814. TRUSTEES AND OFFICERS
OF THE FUND AS A GROUP OWN LESS THAN 1% OF ANY CLASS OF EACH PORTFOLIO'S
OUTSTANDING SHARES. TRUSTEES MARKED WITH AN *, ABOVE, ARE "INTERESTED PERSONS"
OF THE FUND, UNDER THE INVESTMENT COMPANY ACT OF 1940.
MR. BAIRD, DR. MOLLNER, MS. ADAMSON, MS. JONES, AND REV. MORRIS SERVE ON
THE FUND'S AUDIT COMMITTEE. MS. ADAMSON, DR. MOLLNER, AND MR. SILBY SERVE ON THE
FUND'S HIGH SOCIAL IMPACT INVESTMENTS COMMITTEE WHICH ASSISTS THE FUND IN
IDENTIFYING, EVALUATING AND SELECTING INVESTMENTS IN SECURITIES THAT OFFER A
RATE OF RETURN BELOW THE THEN-PREVAILING MARKET RATE AND THAT PRESENT ATTRACTIVE
OPPORTUNITIES FOR FURTHERING THE FUND'S SOCIAL CRITERIA. MS. JONES, REV. MORRIS,
AND MESSRS. GUFFEY AND SILBY SERVE ON THE FUND'S SPECIAL EQUITIES COMMITTEE
WHICH ASSISTS THE FUND IN IDENTIFYING, EVALUATING, AND SELECTING APPROPRIATE
SPECIAL EQUITY INVESTMENT OPPORTUNITIES FOR THE FUND.
THE ADVISORY COUNCIL IS A RESOURCE TO THE FUND'S BOARD OF TRUSTEES
REGARDING COMMUNICATIONS NETWORKS FOR THE FUND AND THE APPLICATION AND
REFINEMENT OF THE FUND'S SOCIAL CRITERIA. THE ADVISORY COUNCIL HAS NO POWER,
AUTHORITY, OR RESPONSIBILITY WITH RESPECT TO THE MANAGEMENT OF THE FUND OR THE
CONDUCT OF THE AFFAIRS OF THE FUND. MESSRS. SILBY, GUFFEY AND MOLLNER, AND MS.
KRUMSIEK SERVE AS DIRECTORS OF THE CALVERT SOCIAL INVESTMENT FOUNDATION, A
NON-PROFIT ORGANIZATION FORMED TO INCREASE AWARENESS AND EDUCATE THE GENERAL
PUBLIC ABOUT THE BENEFITS OF SOCIALLY CONSCIOUS INVESTING. THE FOUNDATION IS NOT
DIRECTLY AFFILIATED WITH CALVERT GROUP.
FROM TIME TO TIME, THE FUND MAY MAKE CHARITABLE CONTRIBUTIONS TO GROUPS
INTENDED TO FURTHER THE FUND'S SOCIAL PURPOSE, INCLUDING BUT NOT LIMITED TO
EDUCATING INVESTORS ABOUT SOCIALLY RESPONSIBLE INVESTING.
DURING FISCAL 1999, TRUSTEES OF THE FUND NOT AFFILIATED WITH THE FUND'S
ADVISOR WERE PAID $39,781 BY THE MONEY MARKET PORTFOLIO, $142,545 BY THE
BALANCED PORTFOLIO, $15,264 BY THE BOND PORTFOLIO, $37,479 BY THE EQUITY
PORTFOLIO, AND $8,228 BY THE MANAGED INDEX PORTFOLIO. TRUSTEES OF THE FUND NOT
AFFILIATED WITH THE ADVISOR PRESENTLY RECEIVE AN ANNUAL FEE OF $20,500 FOR
SERVICE AS A MEMBER OF THE BOARD OF TRUSTEES OF THE CALVERT GROUP OF FUNDS, AND
A FEE OF $750 TO $1500 FOR EACH REGULAR BOARD OR COMMITTEE MEETING ATTENDED;
SUCH FEES ARE ALLOCATED AMONG THE RESPECTIVE PORTFOLIOS BASED UPON THEIR
RELATIVE NET ASSETS. TRUSTEES WHO SERVE ONLY THE CSIF BOARD RECEIVE AN ANNUAL
FEE OF $15,430, PLUS $600 FOR EACH BOARD AND COMMITTEE MEETING ATTENDED.
TRUSTEES OF THE FUND NOT AFFILIATED WITH THE FUND'S ADVISOR MAY ELECT TO
DEFER RECEIPT OF ALL OR A PERCENTAGE OF THEIR FEES AND INVEST THEM IN ANY FUND
IN THE CALVERT FAMILY OF FUNDS THROUGH THE TRUSTEES DEFERRED COMPENSATION PLAN
(SHOWN AS "PENSION OR RETIREMENT BENEFITS ACCRUED AS PART OF FUND EXPENSES,"
BELOW). DEFERRAL OF THE FEES IS DESIGNED TO MAINTAIN THE PARTIES IN THE SAME
POSITION AS IF THE FEES WERE PAID ON A CURRENT BASIS. MANAGEMENT BELIEVES THIS
WILL HAVE A NEGLIGIBLE EFFECT ON THE FUND'S ASSETS, LIABILITIES, NET ASSETS, AND
NET INCOME PER SHARE.
TRUSTEE COMPENSATION TABLE
FISCAL YEAR 1999
(UNAUDITED NUMBERS)
AGGREGATE COMPENSATION PENSION OR RETIREMENT TOTAL COMPENSATION FROM
FROM REGISTRANT FOR SERVICE BENEFITS ACCRUED AS PART REGISTRANT AND FUND
AS TRUSTEE/OFFICER OF REGISTRANT EXPENSES* COMPLEX PAID TO TRUSTEE**
NAME OF TRUSTEE/OFFICER
REBECCA ADAMSON $32,283 $0 $32,283
RICHARD L. BAIRD, JR. $2,999 $0 $39,250
JOHN G. GUFFEY, JR. $11,114 $1,896 $56,365
JOY V. JONES $29,580 $0 $29,580
TERRENCE J. MOLLNER $24,830 $0 $33,830
SYDNEY AMARA MORRIS $22,630 $12,000 $22,630
D. WAYNE SILBY $20,332 $0 $60,831
*MS. ADAMSON, MS. JONES, REV. MORRIS, AND MR. GUFFEY HAVE CHOSEN TO DEFER A
PORTION OF THEIR COMPENSATION. AS OF SEPTEMBER 30, 1999, TOTAL DEFERRED
COMPENSATION, INCLUDING DIVIDENDS AND CAPITAL APPRECIATION, WAS $54,604,
$17,765, $31,559 AND $11,022, FOR EACH OF THEM, RESPECTIVELY.
**AS OF SEPTEMBER 30, 1999, THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED
INVESTMENT COMPANIES.
INVESTMENT ADVISOR AND SUBADVISOR
---------------------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT
GROUP LTD., WHICH IS A SUBSIDIARY OF ACACIA MUTUAL LIFE INSURANCE COMPANY OF
WASHINGTON, D.C. ("ACACIA"). ACACIA IS A SUBSIDIARY OF AMERITAS ACACIA MUTUAL
HOLDING COMPANY. UNDER THE ADVISORY CONTRACT, THE ADVISOR PROVIDES INVESTMENT
ADVICE TO THE FUND AND OVERSEES ITS DAY-TO-DAY OPERATIONS, SUBJECT TO DIRECTION
AND CONTROL BY THE FUND'S BOARD OF TRUSTEES. THE ADVISOR PROVIDES THE FUNDS WITH
INVESTMENT SUPERVISION AND MANAGEMENT, AND OFFICE SPACE; FURNISHES EXECUTIVE AND
OTHER PERSONNEL TO THE FUNDS; AND PAYS THE SALARIES AND FEES OF ALL
TRUSTEES/DIRECTORS WHO ARE EMPLOYEES OF THE ADVISOR OR ITS AFFILIATES. THE FUND
PAYS ALL OTHER ADMINISTRATIVE AND OPERATING EXPENSES, INCLUDING: CUSTODIAL,
REGISTRAR, DIVIDEND DISBURSING AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE
FEES; FEDERAL AND STATE SECURITIES REGISTRATION FEES; SALARIES, FEES AND
EXPENSES OF TRUSTEES, EXECUTIVE OFFICERS AND EMPLOYEES OF THE FUND, AND ADVISORY
COUNCIL MEMBERS, WHO ARE NOT EMPLOYEES OF THE ADVISOR OR OF ITS AFFILIATES;
INSURANCE PREMIUMS; TRADE ASSOCIATION DUES; LEGAL AND AUDIT FEES; INTEREST,
TAXES AND OTHER BUSINESS FEES; EXPENSES OF PRINTING AND MAILING REPORTS,
NOTICES, PROSPECTUSES, AND PROXY MATERIAL TO SHAREHOLDERS; ANNUAL SHAREHOLDERS'
MEETING EXPENSES; AND BROKERAGE COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE
PURCHASE AND SALE OF PORTFOLIO SECURITIES.
UNDER A NEW ADVISORY AGREEMENT APPROVED BY SHAREHOLDERS IN EARLY 1999, THE
ADVISOR RECEIVES AN ANNUAL FEE, PAYABLE MONTHLY, OF 0.425% OF THE FIRST $500
MILLION OF THE BALANCED PORTFOLIO'S AVERAGE DAILY NET ASSETS, 0.40% OF THE NEXT
$500 MILLION OF SUCH ASSETS, AND 0.375% OF ALL ASSETS ABOVE $1 BILLION; 0.35% OF
THE BOND PORTFOLIO'S AVERAGE DAILY NET ASSETS; 0.50% OF THE EQUITY PORTFOLIO'S
AVERAGE DAILY NET ASSETS; 0.30% OF THE MONEY MARKET PORTFOLIO'S AVERAGE DAILY
NET ASSETS AND 0.60% OF THE MANAGED INDEX PORTFOLIO'S AVERAGE DAILY NET ASSETS.
THE ADVISOR RESERVES THE RIGHT TO (I) WAIVE ALL OR A PART OF ITS FEE; (II)
REIMBURSE THE FUND FOR EXPENSES; AND (III) PAY BROKER-DEALERS IN CONSIDERATION
OF THEIR PROMOTIONAL OR ADMINISTRATIVE SERVICES.
THE ADVISOR MAY, BUT IS NOT REQUIRED TO WAIVE CURRENT PAYMENT OF ITS FEES,
OR TO REIMBURSE EXPENSES OF THE FUND. THE ADVISOR HAS AGREED TO REIMBURSE THE
MONEY MARKET, BALANCED, AND BOND PORTFOLIOS FOR THEIR RESPECTIVE OPERATING
EXPENSES (EXCLUDING BROKERAGE, TAXES, INTEREST, DISTRIBUTION PLAN EXPENSES
AND EXTRAORDINARY ITEMS,) EXCEEDING, ON A PRO RATA BASIS, 1.5% OF THE FIRST
$30 MILLION OF THE RESPECTIVE PORTFOLIO'S AVERAGE DAILY NET ASSETS, AND 1% OF
SUCH ASSETS IN EXCESS OF $30 MILLION.
ANY FEES THE CURRENT PAYMENT OF WHICH IS WAIVED BY THE ADVISOR AND ANY
EXPENSES PAID ON BEHALF OF OR REIMBURSED TO THE MANAGED INDEX PORTFOLIO BY
THE ADVISOR THROUGH FEBRUARY 29, 2000, MAY BE RECAPTURED BY THE ADVISOR FROM
THE PORTFOLIO DURING THE TWO YEARS BEGINNING MARCH 1, 2000, AND ENDING FEBRUARY
28, 2002. SUCH RECAPTURE SHALL ONLY BE MADE TO THE EXTENT THAT IT DOES
NOT RESULT IN THE PORTFOLIO'S CLASS A AGGREGATE EXPENSES EXCEEDING ON AN
ANNUAL BASIS 2.00% OF CLASS A AVERAGE DAILY NET ASSETS, AND 3.25%, 3.25%, AND
1.25%, RESPECTIVELY, FOR CLASS B, CLASS C AND CLASS I. THE ADVISOR MAY
VOLUNTARILY MAKE ADDITIONAL FEE WAIVERS OR EXPENSE REIMBURSEMENTS WITH
RESPECT TO THE PORTFOLIO FROM MARCH 1, 2000 THROUGH FEBRUARY 28, 2002,
("ADDITIONAL PERIOD"); PROVIDED, HOWEVER, THAT: (A) ANY FEES THE CURRENT
PAYMENT OF WHICH IS WAIVED BY THE ADVISOR AND ANY EXPENSES PAID ON BEHALF OF
OR REIMBURSED TO THE PORTFOLIO BY THE ADVISOR DURING THE ADDITIONAL PERIOD MAY
BE RECAPTURED BY THE ADVISOR FROM THE PORTFOLIO DURING THE TWO YEARS BEGINNING
ON MARCH 1, 2002 AND ENDING FEBRUARY 29, 2004 AND (B) SUCH RECAPTURE SHALL
ONLY BE MADE TO THE EXTENT THAT IT DOES NOT RESULT IN THE PORTFOLIO'S CLASS A
AGGREGATE EXPENSES EXCEEDING ON AN ANNUAL BASIS 2.00% OF CLASS A AVERAGE DAILY
NET ASSETS, AND 3.25%, 3.25% AND 1.25%, RESPECTIVELY, FOR CLASS B, CLASS C, AND
CLASS I.
FOR THOSE PORTFOLIOS WITH MULTIPLE CLASSES, INVESTMENT ADVISORY FEES
ARE ALLOCATED AS A PORTFOLIO-LEVEL EXPENSE BASED ON NET ASSETS.
THE ADVISORY FEES PAID TO THE ADVISOR BY THE MONEY MARKET PORTFOLIO FOR THE
FISCAL YEARS ENDED SEPTEMBER 30, 1997, 1998, AND 1999 WERE $829,686, $846,146,
AND $713,040, RESPECTIVELY. THE ADVISORY FEES PAID TO THE ADVISOR BY THE
BALANCED PORTFOLIO FOR THE SAME YEARS WERE $3,739,407, $4,374,411, AND
$3,809,681, RESPECTIVELY. THE ADVISORY FEES PAID TO THE ADVISOR FOR THESE YEARS
BY THE BOND PORTFOLIO WERE $363,612, $345,357, AND $301,347; BY THE EQUITY
PORTFOLIO $683,046, $889,599, AND $896,683; AND BY THE MANAGED INDEX PORTFOLIO
$54,079 (DATE OF INCEPTION APRIL 15, 1998) AND $189,815, FOR 1999. THESE FIGURES
ARE NET OF THE FOLLOWING CREDITS: BOND PORTFOLIO.
SUBADVISORS
BROWN CAPITAL MANAGEMENT, INC. IS CONTROLLED BY EDDIE C. BROWN. IT RECEIVES
A SUBADVISORY FEE, PAID BY THE ADVISOR, OF 0.25% OF NET ASSETS IT MANAGES FOR
THE BALANCED PORTFOLIO.
NCM CAPITAL MANAGEMENT GROUP, INC. IS A SUBSIDIARY OF THE NORTH CAROLINA
MUTUAL LIFE INSURANCE COMPANY. IT RECEIVES A SUBADVISORY FEE, PAID BY THE
ADVISOR, OF 0.25% OF NET ASSETS IT MANAGES FOR THE BALANCED PORTFOLIO.
ATLANTA CAPITAL MANAGEMENT COMPANY IS OWNED AND OPERATED BY DAN BOONE, GREG
COLEMAN, JERRY DE VORE, BILL HACKNEY, MARILYN R. IRVIN, DALLAS LUNDY, CHIP
REAMES, AND CHRIS REYNOLDS. IT RECEIVES A SUBADVISORY FEE, PAID BY THE ADVISOR,
OF 0.30% OF THE ASSETS IT MANAGES FOR THE EQUITY PORTFOLIO.
STATE STREET GLOBAL ADVISORS IS A DIVISION OF STATE STREET BANK AND TRUST.
IT RECEIVES A SUBADVISORY FEE, PAID BY THE ADVISOR, OF 0.35% OF THE MANAGED
INDEX PORTFOLIO'S FIRST $100 MILLION OF AVERAGE NET ASSETS AND 0.25% OF ANY SUCH
ASSETS OVER $100 MILLION, SUBJECT TO A MINIMUM ANNUAL FEE OF $150,000.
TURNER INVESTMENT PARTNERS, INC. IS 100% EMPLOYEE OWNED. IT RECEIVES A
SUBADVISORY FEE, PAID BY THE ADVISOR, OF 1.00% OF THE TECHNOLOGY PORTFOLIO'S
FIRST $100 MILLION OF AVERAGE NET ASSETS AND 0.90% OF ANY SUCH ASSETS OVER $100
MILLION.
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER TO PERMIT THE FUND AND THE ADVISOR
TO ENTER INTO AND MATERIALLY AMEND THE INVESTMENT SUBADVISORY AGREEMENT WITHOUT
SHAREHOLDER APPROVAL. WITHIN 90 DAYS OF THE HIRING OF ANY SUBADVISOR OR THE
IMPLEMENTATION OF ANY PROPOSED MATERIAL CHANGE IN THE INVESTMENT SUBADVISORY
AGREEMENT, THE PORTFOLIO WILL FURNISH ITS SHAREHOLDERS INFORMATION ABOUT THE NEW
SUBADVISOR OR INVESTMENT SUBADVISORY AGREEMENT THAT WOULD BE INCLUDED IN A PROXY
STATEMENT. SUCH INFORMATION WILL INCLUDE ANY CHANGE IN SUCH DISCLOSURE CAUSED BY
THE ADDITION OF A NEW SUBADVISOR OR ANY PROPOSED MATERIAL CHANGE IN THE
INVESTMENT SUBADVISORY AGREEMENT OF THE PORTFOLIO. THE PORTFOLIO WILL MEET THIS
CONDITION BY PROVIDING SHAREHOLDERS, WITHIN 90 DAYS OF THE HIRING OF THE
SUBADVISOR OR IMPLEMENTATION OF ANY MATERIAL CHANGE TO THE TERMS OF AN
INVESTMENT SUBADVISORY AGREEMENT, WITH AN INFORMATION STATEMENT TO THIS EFFECT.
ADMINISTRATIVE SERVICES AGENT
-----------------------------
CALVERT ADMINISTRATIVE SERVICES COMPANY ("CASC"), AN AFFILIATE OF THE
ADVISOR, HAS BEEN RETAINED BY THE FUND TO PROVIDE CERTAIN ADMINISTRATIVE
SERVICES NECESSARY TO THE CONDUCT OF ITS AFFAIRS, INCLUDING THE PREPARATION OF
REGULATORY FILINGS AND SHAREHOLDER REPORTS. FOR PROVIDING SUCH SERVICES, CASC
RECEIVES AN ANNUAL ADMINISTRATIVE SERVICE FEE PAYABLE MONTHLY (AS A PERCENTAGE
OF NET ASSETS) AS FOLLOWS:
CLASS A, B, AND C CLASS I
BALANCED 0.275% 0.125%
BOND 0.30% 0.10%
EQUITY 0.20% 0.10%
MANAGED INDEX 0.15% 0.10%
MONEY MARKET 0.20% N/A
TECHNOLOGY 0.25% 0.05%
THE ADMINISTRATIVE FEES PAID TO CASC BY THE MANAGED INDEX PORTFOLIO FROM
ITS INCEPTION THROUGH SEPTEMBER 30, 1998, WAS $9,840 AND FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 1999, WAS $38,282. THE ADMINISTRATIVE FEES PAID TO CASC BY
THE BALANCED PORTFOLIO, BOND PORTFOLIO, EQUITY PORTFOLIO AND MONEY MARKET
PORTFOLIO FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, WERE $1,246,925,
$83,992, $ 223,502, AND $226,646, RESPECTIVELY. NO SUCH FEES WERE PAID FOR ANY
EARLIER PERIODS BY ANY PORTFOLIO. ADMINISTRATIVE SERVICES FEES ARE ALLOCATED
AMONG CLASSES AS A CLASS-LEVEL EXPENSE BASED ON NET ASSETS.
METHOD OF DISTRIBUTION
----------------------
CALVERT DISTRIBUTORS, INC. ("CDI") IS THE PRINCIPAL UNDERWRITER AND
DISTRIBUTOR FOR THE FUND. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR. UNDER THE
TERMS OF ITS UNDERWRITING AGREEMENT WITH THE FUNDS, CDI MARKETS AND DISTRIBUTES
THE FUND'S SHARES AND IS RESPONSIBLE FOR PREPARING ADVERTISING AND SALES
LITERATURE, AND PRINTING AND MAILING PROSPECTUSES TO PROSPECTIVE INVESTORS.
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940, THE FUND
HAS ADOPTED DISTRIBUTION PLANS (THE "PLANS") WHICH PERMIT THE FUND TO PAY
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION AND SERVICING OF ITS SHARES.
SUCH EXPENSES FOR CLASS A SHARES MAY NOT EXCEED, ON AN ANNUAL BASIS, 0.35% OF
THE BALANCED, EQUITY AND BOND PORTFOLIOS' RESPECTIVE AVERAGE DAILY NET ASSETS
AND 0.25% OF THE MONEY MARKET AND MANAGED INDEX PORTFOLIOS' AVERAGE DAILY NET
ASSETS. HOWEVER, THE FUND'S BOARD OF TRUSTEES HAS DETERMINED THAT, UNTIL FURTHER
ACTION BY THE BOARD, NO PORTFOLIO SHALL PAY CLASS A DISTRIBUTION EXPENSES IN
EXCESS OF 0.25% OF ITS AVERAGE DAILY NET ASSETS; AND FURTHER, THAT CLASS A
DISTRIBUTION EXPENSES ONLY BE CHARGED ON THE AVERAGE DAILY NET ASSETS OF THE
BALANCED PORTFOLIO IN EXCESS OF $30,000,000.
EXPENSES UNDER THE FUND'S CLASS B AND CLASS C PLANS MAY NOT EXCEED, ON AN
ANNUAL BASIS, 1.00% OF THE BALANCED, BOND, EQUITY AND MANAGED INDEX PORTFOLIOS'
CLASS B AND CLASS C AVERAGE DAILY NET ASSETS, RESPECTIVELY. CLASS A DISTRIBUTION
PLANS REIMBURSE CDI ONLY FOR EXPENSES IT INCURS, WHILE THE CLASS B AND C
DISTRIBUTION PLANS COMPENSATE CDI AT A SET RATE REGARDLESS OF CDI'S EXPENSES.
THE FUND'S DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF TRUSTEES,
INCLUDING THE TRUSTEES WHO ARE NOT "INTERESTED PERSONS" OF THE FUND (AS THAT
TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) AND WHO HAVE NO DIRECT OR
INDIRECT FINANCIAL INTEREST IN THE OPERATION OF THE PLANS OR IN ANY AGREEMENTS
RELATED TO THE PLANS. THE SELECTION AND NOMINATION OF THE TRUSTEES WHO ARE NOT
INTERESTED PERSONS OF THE FUND IS COMMITTED TO THE DISCRETION OF SUCH
DISINTERESTED TRUSTEES. IN ESTABLISHING THE PLANS, THE TRUSTEES CONSIDERED
VARIOUS FACTORS INCLUDING THE AMOUNT OF THE DISTRIBUTION EXPENSES. THE TRUSTEES
DETERMINED THAT THERE IS A REASONABLE LIKELIHOOD THAT THE PLANS WILL BENEFIT THE
FUND AND ITS SHAREHOLDERS, INCLUDING ECONOMIES OF SCALE AT HIGHER ASSET LEVELS,
BETTER INVESTMENT OPPORTUNITIES AND MORE FLEXIBILITY IN MANAGING A GROWING
PORTFOLIO.
THE PLANS MAY BE TERMINATED BY VOTE OF A MAJORITY OF THE NON-INTERESTED
TRUSTEES WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, OR BY
VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE AFFECTED CLASS OR PORTFOLIO
OF THE FUND. IF THE FUND SHOULD EVER SWITCH TO A NEW PRINCIPAL UNDERWRITER
WITHOUT TERMINATING THE CLASS B PLAN, THE FEE WOULD BE PRORATED BETWEEN CDI AND
THE NEW PRINCIPAL UNDERWRITER. ANY CHANGE IN THE PLANS THAT WOULD MATERIALLY
INCREASE THE DISTRIBUTION COST TO A PORTFOLIO REQUIRES APPROVAL OF THE
SHAREHOLDERS OF THE AFFECTED CLASS; OTHERWISE, THE PLANS MAY BE AMENDED BY THE
TRUSTEES, INCLUDING A MAJORITY OF THE NON-INTERESTED TRUSTEES AS DESCRIBED
ABOVE. THE PLANS WILL CONTINUE IN EFFECT FOR SUCCESSIVE ONE-YEAR TERMS PROVIDED
THAT SUCH CONTINUANCE IS SPECIFICALLY APPROVED BY: (I) THE VOTE OF A MAJORITY OF
THE TRUSTEES WHO ARE NOT PARTIES TO THE PLANS OR INTERESTED PERSONS OF ANY SUCH
PARTY AND WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, AND
(II) THE VOTE OF A MAJORITY OF THE ENTIRE BOARD OF TRUSTEES.
APART FROM THE PLANS, THE ADVISOR AND CDI, AT THEIR OWN EXPENSE, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF SHARES OF THE FUND.
THE ADVISOR AND/OR CDI HAS AGREED TO PAY CERTAIN FIRMS COMPENSATION BASED ON
SALES OF FUND SHARES OR ON ASSETS HELD IN THOSE FIRM'S ACCOUNTS FOR THEIR
MARKETING AND DISTRIBUTION OF THE FUND SHARES, ABOVE THE USUAL SALES CHARGES AND
SERVICE FEES. THIS LIST MAY BE CHANGED FROM TIME TO TIME. AS OF DECEMBER 31,
1999, THE ADVISOR AND/OR CDI HAD SPECIAL ARRANGEMENTS WITH THE FOLLOWING FIRMS:
FIDELITY, MORGAN STANLEY DEAN WITTER, PRUDENTIAL SECURITIES, SALOMON SMITH
BARNEY, AMERICAN EXPRESS FINANCIAL ADVISORS, MERRILL LYNCH, AND THE ADVISORS
GROUP.
CDI, MAKES A CONTINUOUS OFFERING OF THE FUND'S SECURITIES ON A "BEST
EFFORTS" BASIS. UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE,
PURSUANT TO THE DISTRIBUTION PLANS, A DISTRIBUTION FEE AND A SERVICE FEE FROM
THE FUND BASED ON THE AVERAGE DAILY NET ASSETS OF EACH PORTFOLIO'S RESPECTIVE
CLASSES. THESE FEES ARE PAID PURSUANT TO THE FUND'S DISTRIBUTION PLAN. TOTAL
DISTRIBUTION PLAN EXPENSES PAID TO CDI BY THE FUND FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1999 WERE $1,745,398 FOR CLASS A, $65,329 FOR CLASS B AND $133,012
FOR CLASS C FOR THE BALANCED PORTFOLIO. TOTAL DISTRIBUTION PLAN EXPENSES PAID TO
CDI BY THE FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999 WERE $133,657 FOR
CLASS A, $18,171 FOR CLASS B AND $12,147 FOR CLASS C FOR THE BOND PORTFOLIO.
TOTAL DISTRIBUTION PLAN EXPENSES PAID TO CDI BY THE FUND FOR THE FISCAL YEAR
ENDED SEPTEMBER 30, 1999 WERE $373,197 FOR CLASS A, $45,687 FOR CLASS B AND
$83,727 FOR CLASS C FOR THE EQUITY PORTFOLIO. TOTAL DISTRIBUTION PLAN EXPENSES
PAID TO CDI BY THE FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999 WERE
$22,697 FOR CLASS A, $27,946 FOR CLASS B AND $14,179 FOR CLASS C FOR THE MANAGED
INDEX PORTFOLIO. FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, THE FUND'S
DISTRIBUTION PLAN EXPENSES FOR EACH CLASS WERE SPENT FOR THE FOLLOWING PURPOSES:
MONEY MARKET
THE PORTFOLIO HAS NEVER PAID DISTRIBUTION PLAN EXPENSES.
BALANCED
CLASS A CLASS B CLASS C CLASS I
COMPENSATION TO BROKER-DEALERS
$1,022,462 $10,345 $80,656 N/A
COMPENSATION TO SALES PERSONNEL
$79,812 $9,365 $6,753 N/A
ADVERTISING $384,375 $45,104 $32,523 N/A
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
$154,554 $18,136 $13,078 N/A
COMPENSATION TO UNDERWRITERS
$104,198 $0 $0 N/A
INTEREST, FINANCING CHARGES
-- -- -- N/A
OTHER -- -- -- N/A
BOND
CLASS A CLASS B CLASS C CLASS I
COMPENSATION TO BROKER-DEALERS
$129,891 $4,543 $1,047 N/A
COMPENSATION TO SALES PERSONNEL
$1,230 $5,024 $4,093 N/A
ADVERTISING $1,585 $6,475 $5,273 N/A
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
$521 $2,128 $1,734 N/A
COMPENSATION TO UNDERWRITERS
$430 $0 $0 N/A
INTEREST, FINANCING CHARGES
-- -- -- N/A
OTHER -- -- -- N/A
EQUITY
CLASS A CLASS B CLASS C CLASS I
COMPENSATION TO BROKER-DEALERS
$348,812 $7,447 $59,899 N/A
COMPENSATION TO SALES PERSONNEL
$5,775 $10,389 $6,473 N/A
ADVERTISING $10,688 $19,226 $11,979 N/A
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
$4,796 $8,628 $5,375 N/A
COMPENSATION TO UNDERWRITERS
$3,126 $0 $0 N/A
INTEREST, FINANCING CHARGES
-- -- -- N/A
OTHER -- -- -- N/A
MANAGED INDEX
CLASS A CLASS B CLASS C CLASS I
COMPENSATION TO BROKER-DEALERS
$18,299 $4,511 $1,698 N/A
COMPENSATION TO SALES PERSONNEL
$1,153 $6,389 $3,402 N/A
ADVERTISING $1,935 $10,722 $5,709 N/A
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
$1,142 $6,328 $3,369 N/A
COMPENSATION TO UNDERWRITERS
$169 $0 $0 N/A
INTEREST, FINANCING CHARGES
-- -- -- N/A
OTHER -- -- -- N/A
BALANCED, EQUITY, MANAGED INDEX AND TECHNOLOGY PORTFOLIOS
CLASS A SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS
FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 4.75% 4.99% 4.00%
$50,000 BUT LESS THAN $100,000 3.75% 3.90% 3.00%
$100,000 BUT LESS THAN $250,000 2.75% 2.83% 2.25%
$250,000 BUT LESS THAN $500,000 1.75% 1.78% 1.25%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00% 0.00% 0.00%
BOND PORTFOLIO
CLASS A SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS
FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 3.75% 3.90% 3.00%
$50,000 BUT LESS THAN $100,000 3.00% 3.09% 2.25%
$100,000 BUT LESS THAN $250,000 2.25% 2.30% 1.75%
$250,000 BUT LESS THAN $500,000 1.75% 1.78% 1.25%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00% 0.00% 0.00%
CDI RECEIVES ANY FRONT-END SALES CHARGE OR CDSC PAID. A PORTION OF THE
FRONT-END SALES CHARGE MAY BE REALLOWED TO DEALERS. THE AGGREGATE AMOUNT OF
SALES CHARGES (GROSS UNDERWRITING COMMISSIONS) AND, FOR CLASS A ONLY, THE NET
AMOUNT RETAINED BY CDI (I.E., NOT REALLOWED TO DEALERS) FOR THE LAST THREE
FISCAL YEARS ARE:
FISCAL YEAR 1997 1998 1999
CLASS A GROSS NET GROSS NET GROSS NET
BALANCED $934,782 $331,679 $969,119 $356,525 $824,681 $271,056
BOND $136,085 $53,362 $138,075 $54,024 $139,354 $45,110
EQUITY $557,333 $211,952 $585,617 $216,176 $397,125 $134,333
MANAGED INDEX N/A N/A $32,049 $4,026 $103,336 $34,279
FISCAL YEAR 1997 1998 1999
CLASS B
BALANCED NA $309 $14,358
BOND NA $0 $1,649
EQUITY NA $1,517 $10,382
MANAGED INDEX NA $164 $8,065
FISCAL YEAR 1997 1998 1999
CLASS C
BALANCED NA $36 $1,072
BOND NA $0 $514
EQUITY NA $13 $916
MANAGED INDEX NA $0 $222
FUND TRUSTEES AND CERTAIN OTHER AFFILIATED PERSONS OF THE FUND ARE EXEMPT
FROM THE SALES CHARGE SINCE THE DISTRIBUTION COSTS ARE MINIMAL TO PERSONS
ALREADY FAMILIAR WITH THE FUND. OTHER GROUPS (E.G., GROUP RETIREMENT PLANS) ARE
EXEMPT DUE TO ECONOMIES OF SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE
PROSPECTUS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), A SUBSIDIARY OF STATE
STREET BANK & TRUST, HAS BEEN RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT. THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN
SHAREHOLDER INQUIRIES AND INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER
ACCOUNTS FOR PURCHASES AND REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH
TRANSACTIONS, AND DAILY UPDATING OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION
AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), A SUBSIDIARY OF CALVERT GROUP,
LTD. AND ACACIA MUTUAL, HAS BEEN RETAINED BY THE FUND TO ACT AS SHAREHOLDER
SERVICING AGENT. SHAREHOLDER SERVICING RESPONSIBILITIES INCLUDE RESPONDING TO
SHAREHOLDER INQUIRIES AND INSTRUCTIONS CONCERNING THEIR ACCOUNTS, ENTERING ANY
TELEPHONED PURCHASES OR REDEMPTIONS INTO THE NFDS SYSTEM, MAINTENANCE OF
BROKER-DEALER DATA, AND PREPARING AND DISTRIBUTING STATEMENTS TO SHAREHOLDERS
REGARDING THEIR ACCOUNTS.
FOR THESE SERVICES, NFDS AND CSSI RECEIVE A FEE BASED ON THE NUMBER OF
SHAREHOLDER ACCOUNTS AND TRANSACTIONS.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE FUND'S ADVISOR AND SUBADVISORS MAKE
INVESTMENT DECISIONS AND THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION
AND SUPERVISION OF THE FUND'S BOARD OF TRUSTEES.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR EXECUTION CAPABILITY AND TRADING EXPERTISE
CONSIDERING, AMONG OTHER FACTORS, THE OVERALL REASONABLENESS OF THE BROKERAGE
COMMISSIONS, CURRENT MARKET CONDITIONS, SIZE AND TIMING OF THE ORDER, DIFFICULTY
OF EXECUTION, PER SHARE PRICE, MARKET FAMILIARITY, RELIABILITY, INTEGRITY, AND
FINANCIAL CONDITION, SUBJECT TO THE ADVISOR/SUBADVISOR OBLIGATION TO SEEK BEST
EXECUTION. THE ADVISOR OR SUBADVISOR MAY ALSO CONSIDER SALES OF FUND SHARES AS A
FACTOR IN THE SELECTION OF BROKERS.
FOR THE LAST THREE FISCAL YEARS, TOTAL BROKERAGE COMMISSIONS PAID ARE AS
FOLLOWS:
1997 1998 1999
BALANCED $547,048 $542,108 $552,292
EQUITY $329,488 $487,723 $213,314*
BOND $0 $0 $0
MANAGED INDEX $0 $9,405 $19,518
*1998 WAS HIGHER DUE TO NEW SUBADVISOR TAKING OVER MANAGEMENT OF THE PORTFOLIO.
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS TO AFFILIATED PERSONS
DURING THE LAST THREE FISCAL YEARS.
WHILE THE FUND'S ADVISOR AND SUBADVISOR(S) SELECT BROKERS PRIMARILY ON THE BASIS
OF BEST EXECUTION, IN SOME CASES THEY MAY DIRECT TRANSACTIONS TO BROKERS BASED
ON THE QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES WHICH
THE BROKERS PROVIDE TO THEM. THESE RESEARCH SERVICES INCLUDE ADVICE, EITHER
DIRECTLY OR THROUGH PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF SECURITIES, THE
ADVISABILITY OF INVESTING IN, PURCHASING OR SELLING SECURITIES, AND THE
AVAILABILITY OF SECURITIES OR PURCHASERS OR SELLERS OF SECURITIES; FURNISHING OF
ANALYSES AND REPORTS CONCERNING ISSUERS, SECURITIES OR INDUSTRIES; PROVIDING
INFORMATION ON ECONOMIC FACTORS AND TRENDS; ASSISTING IN DETERMINING PORTFOLIO
STRATEGY; PROVIDING COMPUTER SOFTWARE USED IN SECURITY ANALYSES; PROVIDING
PORTFOLIO PERFORMANCE EVALUATION AND TECHNICAL MARKET ANALYSES; AND PROVIDING
OTHER SERVICES RELEVANT TO THE INVESTMENT DECISION MAKING PROCESS. OTHER SUCH
SERVICES ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING THE
INVESTMENT ACTIVITIES OF THE SUBADVISOR(S) OF THE FUND. SUCH SERVICES INCLUDE
PORTFOLIO ATTRIBUTION SYSTEMS, RETURN-BASED STYLE ANALYSIS, AND TRADE-EXECUTION
ANALYSIS. THE ADVISOR AND/OR SUBADVISORS MAY ALSO DIRECT SELLING CONCESSIONS
AND/OR DISCOUNTS IN FIXED-PRICE OFFERINGS FOR RESEARCH SERVICES.
IF, IN THE JUDGMENT OF THE ADVISOR OR SUBADVISOR(S), THE FUND OR OTHER
ACCOUNTS MANAGED BY THEM WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES,
THEY ARE AUTHORIZED TO PAY BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH
SERVICES WHICH ARE IN EXCESS OF COMMISSIONS WHICH ANOTHER BROKER MAY HAVE
CHARGED FOR EFFECTING THE SAME TRANSACTION. IT IS THE POLICY OF THE ADVISOR THAT
SUCH RESEARCH SERVICES WILL BE USED FOR THE BENEFIT OF THE FUND AS WELL AS OTHER
CALVERT GROUP FUNDS AND MANAGED ACCOUNTS.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, THE ADVISOR AND/OR
SUBADVISORS DIRECTED BROKERAGE FOR RESEARCH SERVICES IN THE FOLLOWING AMOUNTS:
RELATED
PORTFOLIO AMOUNT OF TRANSACTIONS COMMISSIONS
BALANCED $224,914,459 $224,727
EQUITY $63,298,419 $84,520
BOND $0 $0
MANAGED INDEX $0 $0
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
BALANCED 185% 175%
EQUITY 110% 51%*
BOND 620% 570%
MANAGED INDEX N/A 56%
*1998 WAS HIGHER DUE TO NEW SUBADVISOR TAKING OVER MANAGEMENT OF THE PORTFOLIO.
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISORS, AND PRINCIPAL UNDERWRITER HAVE ADOPTED A CODE OF
ETHICS PURSUANT TO RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940. THE CODE OF
ETHICS IS DESIGNED TO PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO
MAINTAIN ETHICAL STANDARDS FOR ACCESS PERSONS AS DEFINED IN THE RULE WHEN
DEALING WITH THE PUBLIC. THE CODE OF ETHICS PERMITS THE FUND'S INVESTMENT
PERSONNEL TO INVEST IN SECURITIES THAT MAYBE PURCHASED OR HELD BY THE FUND. THE
CODE OF ETHICS CONTAINS CERTAIN CONDITIONS SUCH AS PRECLEARANCE AND RESTRICTIONS
ON USE OF MATERIAL INFORMATION.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP HAS BEEN SELECTED BY THE BOARD OF TRUSTEES TO
SERVE AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST
COMPANY, N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, SERVES AS CUSTODIAN OF THE
FUND'S INVESTMENTS. ALLFIRST FINANCIAL, INC., 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE FUND'S CASH
ASSETS. THE CUSTODIANS HAVE NO PART IN DECIDING THE FUND'S INVESTMENT POLICIES
OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD FOR THE FUND'S
PORTFOLIOS.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF JANUARY 14, 2000, THE FOLLOWING SHAREHOLDERS OWNED OF RECORD 5% OR
MORE OF THE CLASS OF THE FUND AS SHOWN:
NAME AND ADDRESS % OF OWNERSHIP
MONEY MARKET PORTFOLIO
UNITED MINE WORKERS OF AMERICA 5.01%
CASH DEFERRED SAVINGS TRUST OF 98
C/O MARC CLAY
4455 CONNECTICUT AVE., NW
WASHINGTON, DC 20008-2328
AMNESTY INTERNATIONAL USA INC. 9.45%
GARY GISCOMBE
322 8TH AVENUE
NEW YORK, NY 10001-8001
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 13.16% OF CLASS B
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
COMMONWEALTH OF MASSACHUSETTS DEFERRED 92.77% OF CLASS I
COMPENSATION PLAN TRUST
ONE ASHBURTON PL
BOSTON, MASSACHUSETTS 02108-1518
ACACIA GROUP CAPITAL 7.23% OF CLASS I
ACCUMULATION PLAN
LAURA PIERRON
7315 WISCONSIN AVENUE
BETHESDA, MD 20814-3202
BOND PORTFOLIO
CHARLES SCHWAB & CO. INC. 7.92% OF CLASS A
REINVEST ACCOUNT
MUTUAL FUND DEPARTMENT
101 MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4122
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 7.59% OF CLASS B
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 6.90% OF CLASS C
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
NFSC FEBO # HDM- 155276 6.39% OF CLASS C
WILMA K WILKIE TRUST
4503 FARMERS RD
HONOLULU, HI 96816-5216
DONALDSON LUFKIN JENRETTE 36.51% OF CLASS C
SECURITIES CORP INC.
PO BOX 2052
JERSEY CITY, NJ 07303-2052
EQUITY PORTFOLIO
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 5.16% OF CLASS A
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 17.76% OF CLASS B
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 7.97% OF CLASS C
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
TRINITY COLLEGE 100% OF CLASS I
125 MICHIGAN AVENUE, NE
WASHINGTON, DC 20017-1090
MANAGED INDEX PORTFOLIO
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS 11.73% OF CLASS C
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
GENERAL TEAMSTERS LOCAL #174 5.11% OF CLASS C
LABOR UNION STRIKE FUND
553 JOHN STREET
SEATTLE, WASHINGTON 98109-5014
LEGG MASON WOOD WALKER INC. 19.00% OF CLASS C
302-10415-16
PO BOX 1476
BALTIMORE, MD 21203-1476
ACACIA RETIREMENT PLAN 99.68% OF CLASS I
MS. TINA UDELL
5900 O STREET
LINCOLN, NE 68510-2234
GENERAL INFORMATION
-------------------
THE FUND IS AN OPEN-END MANAGEMENT INVESTMENT COMPANY, ORGANIZED AS A
MASSACHUSETTS BUSINESS TRUST ON DECEMBER 14, 1981. PRIOR TO DECEMBER 1, 1998,
THE BALANCED PORTFOLIO WAS NAMED THE MANAGED GROWTH PORTFOLIO. ALL PORTFOLIOS
ARE DIVERSIFIED EXCEPT THE BOND PORTFOLIO, WHICH IS NONDIVERSIFIED. THE FUND'S
DECLARATION OF TRUST CONTAINS AN EXPRESS DISCLAIMER OF SHAREHOLDER LIABILITY FOR
ACTS OR OBLIGATIONS OF THE FUND. THE SHAREHOLDERS OF A MASSACHUSETTS BUSINESS
TRUST MIGHT, HOWEVER, UNDER CERTAIN CIRCUMSTANCES, BE HELD PERSONALLY LIABLE AS
PARTNERS FOR ITS OBLIGATIONS. THE DECLARATION OF TRUST PROVIDES FOR
INDEMNIFICATION AND REIMBURSEMENT OF EXPENSES OUT OF FUND ASSETS FOR ANY
SHAREHOLDER HELD PERSONALLY LIABLE FOR OBLIGATIONS OF THE FUND. THE DECLARATION
OF TRUST ALSO PROVIDES THAT THE FUND SHALL, UPON REQUEST, ASSUME THE DEFENSE OF
ANY CLAIM MADE AGAINST ANY SHAREHOLDER FOR ANY ACT OR OBLIGATION OF THE FUND AND
SATISFY ANY JUDGMENT THEREON. THE DECLARATION OF TRUST FURTHER PROVIDES THAT THE
FUND MAY MAINTAIN APPROPRIATE INSURANCE (FOR EXAMPLE, FIDELITY BONDING AND
ERRORS AND OMISSIONS INSURANCE) FOR THE PROTECTION OF THE FUND, ITS
SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES AND AGENTS TO COVER POSSIBLE TORT
AND OTHER LIABILITIES. THUS, THE RISK OF A SHAREHOLDER INCURRING FINANCIAL LOSS
ON ACCOUNT OF SHAREHOLDER LIABILITY IS LIMITED TO CIRCUMSTANCES IN WHICH BOTH
INADEQUATE INSURANCE EXISTS AND THE FUND ITSELF IS UNABLE TO MEET ITS
OBLIGATIONS.
EACH SHARE OF EACH SERIES REPRESENTS AN EQUAL PROPORTIONATE INTEREST IN
THAT SERIES WITH EACH OTHER SHARE AND IS ENTITLED TO SUCH DIVIDENDS AND
DISTRIBUTIONS OUT OF THE INCOME BELONGING TO SUCH SERIES AS DECLARED BY THE
BOARD. THE BALANCED, BOND, EQUITY, MANAGED INDEX, AND TECHNOLOGY PORTFOLIOS EACH
OFFER FOUR SEPARATE CLASSES OF SHARES: CLASS A, CLASS B, CLASS C AND CLASS I.
EACH CLASS REPRESENTS INTERESTS IN THE SAME PORTFOLIO OF INVESTMENTS BUT, AS
FURTHER DESCRIBED IN THE PROSPECTUS, EACH CLASS IS SUBJECT TO DIFFERING SALES
CHARGES AND EXPENSES, WHICH DIFFERENCES WILL RESULT IN DIFFERING NET ASSET
VALUES AND DISTRIBUTIONS. UPON ANY LIQUIDATION OF THE FUND, SHAREHOLDERS OF EACH
CLASS ARE ENTITLED TO SHARE PRO RATA IN THE NET ASSETS BELONGING TO THAT SERIES
AVAILABLE FOR DISTRIBUTION.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING TRUSTEES, CHANGING
FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A SHAREHOLDER, YOU
RECEIVE ONE VOTE FOR EACH SHARE YOU OWN, EXCEPT THAT MATTERS AFFECTING CLASSES
DIFFERENTLY, SUCH AS DISTRIBUTION PLANS, WILL BE VOTED ON SEPARATELY BY THE
AFFECTED CLASS(ES).
APPENDIX
--------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
CORPORATE BONDS:
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S/STANDARD & POOR'S BOND RATINGS:
AAA/AAA: BEST QUALITY. THESE BONDS CARRY THE SMALLEST DEGREE OF INVESTMENT
RISK AND ARE GENERALLY REFERRED TO AS "GILT EDGE." INTEREST PAYMENTS ARE
PROTECTED BY A LARGE OR BY AN EXCEPTIONALLY STABLE MARGIN AND PRINCIPAL IS
SECURE. THIS RATING INDICATES AN EXTREMELY STRONG CAPACITY TO PAY PRINCIPAL AND
INTEREST.
AA/AA: BONDS RATED AA ALSO QUALIFY AS HIGH-QUALITY DEBT OBLIGATIONS.
CAPACITY TO PAY PRINCIPAL AND INTEREST IS VERY STRONG, AND IN THE MAJORITY OF
INSTANCES THEY DIFFER FROM AAA ISSUES ONLY IN SMALL DEGREE. THEY ARE RATED LOWER
THAN THE BEST BONDS BECAUSE MARGINS OF PROTECTION MAY NOT BE AS LARGE AS IN AAA
SECURITIES, FLUCTUATION OF PROTECTIVE ELEMENTS MAY BE OF GREATER AMPLITUDE, OR
THERE MAY BE OTHER ELEMENTS PRESENT WHICH MAKE LONG-TERM RISKS APPEAR SOMEWHAT
LARGER THAN IN AAA SECURITIES.
A/A: UPPER-MEDIUM GRADE OBLIGATIONS. FACTORS GIVING SECURITY TO PRINCIPAL
AND INTEREST ARE CONSIDERED ADEQUATE, BUT ELEMENTS MAY BE PRESENT WHICH MAKE THE
BOND SOMEWHAT MORE SUSCEPTIBLE TO THE ADVERSE EFFECTS OF CIRCUMSTANCES AND
ECONOMIC CONDITIONS.
BAA/BBB: MEDIUM GRADE OBLIGATIONS; ADEQUATE CAPACITY TO PAY PRINCIPAL AND
INTEREST. WHEREAS THEY NORMALLY EXHIBIT ADEQUATE PROTECTION PARAMETERS, ADVERSE
ECONOMIC CONDITIONS OR CHANGING CIRCUMSTANCES ARE MORE LIKELY TO LEAD TO A
WEAKENED CAPACITY TO PAY PRINCIPAL AND INTEREST FOR BONDS IN THIS CATEGORY THAN
FOR BONDS IN HIGHER RATED CATEGORIES.
BA/BB, B/B, CAA/CCC, CA/CC: DEBT RATED IN THESE CATEGORIES IS REGARDED AS
PREDOMINANTLY SPECULATIVE WITH RESPECT TO CAPACITY TO PAY INTEREST AND REPAY
PRINCIPAL. THE HIGHER THE DEGREE OF SPECULATION, THE LOWER THE RATING. WHILE
SUCH DEBT WILL LIKELY HAVE SOME QUALITY AND PROTECTIVE CHARACTERISTICS, THESE
ARE OUTWEIGHED BY LARGE UNCERTAINTIES OR MAJOR RISK EXPOSURE TO ADVERSE
CONDITIONS.
C/C: THIS RATING IS ONLY FOR INCOME BONDS ON WHICH NO INTEREST IS BEING
PAID.
D: DEBT IN DEFAULT; PAYMENT OF INTEREST AND/OR PRINCIPAL IS IN ARREARS.
COMMERCIAL PAPER RATINGS:
MOODY'S INVESTORS SERVICE, INC.:
THE PRIME RATING IS THE HIGHEST COMMERCIAL PAPER RATING ASSIGNED BY
MOODY'S. AMONG THE FACTORS CONSIDERED BY MOODY'S IN ASSIGNING RATINGS ARE THE
FOLLOWING: (1) EVALUATION OF THE MANAGEMENT OF THE ISSUER; (2) ECONOMIC
EVALUATION OF THE ISSUER'S INDUSTRY OR INDUSTRIES AND AN APPRAISAL OF
SPECULATIVE-TYPE RISKS WHICH MAY BE INHERENT IN CERTAIN AREAS; (3) EVALUATION OF
THE ISSUER'S PRODUCTS IN RELATION TO COMPETITION AND CUSTOMER ACCEPTANCE; (4)
LIQUIDITY; (5) AMOUNT AND QUALITY OF LONG-TERM DEBT; (6) TREND OF EARNINGS OVER
A PERIOD OF TEN YEARS; (7) FINANCIAL STRENGTH OF A PARENT COMPANY AND THE
RELATIONSHIPS WHICH EXIST WITH THE ISSUER; AND (8) RECOGNITION BY MANAGEMENT OF
OBLIGATIONS WHICH MAY BE PRESENT OR MAY ARISE AS A RESULT OF PUBLIC INTEREST
QUESTIONS AND PREPARATIONS TO MEET SUCH OBLIGATIONS. ISSUERS WITHIN THIS PRIME
CATEGORY MAY BE GIVEN RATINGS 1, 2, OR 3, DEPENDING ON THE RELATIVE STRENGTHS OF
THESE FACTORS.
STANDARD & POOR'S CORPORATION:
COMMERCIAL PAPER RATED A BY STANDARD & POOR'S HAS THE FOLLOWING
CHARACTERISTICS: (I) LIQUIDITY RATIOS ARE ADEQUATE TO MEET CASH REQUIREMENTS;
(II) LONG-TERM SENIOR DEBT RATING SHOULD BE A OR BETTER, ALTHOUGH IN SOME CASES
BBB CREDITS MAY BE ALLOWED IF OTHER FACTORS OUTWEIGH THE BBB; (III) THE ISSUER
SHOULD HAVE ACCESS TO AT LEAST TWO ADDITIONAL CHANNELS OF BORROWING; (IV) BASIC
EARNINGS AND CASH FLOW SHOULD HAVE AN UPWARD TREND WITH ALLOWANCES MADE FOR
UNUSUAL CIRCUMSTANCES; AND (V) TYPICALLY THE ISSUER'S INDUSTRY SHOULD BE WELL
ESTABLISHED AND THE ISSUER SHOULD HAVE A STRONG POSITION WITHIN ITS INDUSTRY AND
THE RELIABILITY AND QUALITY OF MANAGEMENT SHOULD BE UNQUESTIONED. ISSUERS RATED
A ARE FURTHER REFERRED TO BY USE OF NUMBERS 1, 2 AND 3 TO DENOTE THE RELATIVE
STRENGTH WITHIN THIS HIGHEST CLASSIFICATION.
<PAGE>
LETTER OF INTENT
DATE
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
BETHESDA, MD 20814
LADIES AND GENTLEMEN:
BY SIGNING THIS LETTER OF INTENT, OR AFFIRMATIVELY MARKING THE LETTER OF
INTENT OPTION ON MY FUND ACCOUNT APPLICATION FORM, I AGREE TO BE BOUND BY THE
TERMS AND CONDITIONS APPLICABLE TO LETTERS OF INTENT APPEARING IN THE PROSPECTUS
AND THE STATEMENT OF ADDITIONAL INFORMATION FOR THE FUND AND THE PROVISIONS
DESCRIBED BELOW AS THEY MAY BE AMENDED FROM TIME TO TIME BY THE FUND. SUCH
AMENDMENTS WILL APPLY AUTOMATICALLY TO EXISTING LETTERS OF INTENT.
I INTEND TO INVEST IN THE SHARES OF:_____________________ (FUND OR
PORTFOLIO NAME) DURING THE THIRTEEN (13) MONTH PERIOD FROM THE DATE OF MY FIRST
PURCHASE PURSUANT TO THIS LETTER (WHICH CANNOT BE MORE THAN NINETY (90) DAYS
PRIOR TO THE DATE OF THIS LETTER OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER
IS APPLICABLE), AN AGGREGATE AMOUNT (EXCLUDING ANY REINVESTMENTS OF
DISTRIBUTIONS) OF AT LEAST FIFTY THOUSAND DOLLARS ($50,000) WHICH, TOGETHER WITH
MY CURRENT HOLDINGS OF THE FUND (AT PUBLIC OFFERING PRICE ON DATE OF THIS LETTER
OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER IS APPLICABLE), WILL EQUAL OR
EXCEED THE AMOUNT CHECKED BELOW:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
SUBJECT TO THE CONDITIONS SPECIFIED BELOW, INCLUDING THE TERMS OF ESCROW,
TO WHICH I HEREBY AGREE, EACH PURCHASE OCCURRING AFTER THE DATE OF THIS LETTER
WILL BE MADE AT THE PUBLIC OFFERING PRICE APPLICABLE TO A SINGLE TRANSACTION OF
THE DOLLAR AMOUNT SPECIFIED ABOVE, AS DESCRIBED IN THE FUND'S PROSPECTUS. "FUND"
IN THIS LETTER OF INTENT SHALL REFER TO THE FUND OR PORTFOLIO, AS THE CASE MAY
BE. NO PORTION OF THE SALES CHARGE IMPOSED ON PURCHASES MADE PRIOR TO THE DATE
OF THIS LETTER WILL BE REFUNDED.
I AM MAKING NO COMMITMENT TO PURCHASE SHARES, BUT IF MY PURCHASES WITHIN
THIRTEEN MONTHS FROM THE DATE OF MY FIRST PURCHASE DO NOT AGGREGATE THE MINIMUM
AMOUNT SPECIFIED ABOVE, I WILL PAY THE INCREASED AMOUNT OF SALES CHARGES
PRESCRIBED IN THE TERMS OF ESCROW DESCRIBED BELOW. I UNDERSTAND THAT 4.75% OF
THE MINIMUM DOLLAR AMOUNT SPECIFIED ABOVE WILL BE HELD IN ESCROW IN THE FORM OF
SHARES (COMPUTED TO THE NEAREST FULL SHARE). THESE SHARES WILL BE HELD SUBJECT
TO THE TERMS OF ESCROW DESCRIBED BELOW.
FROM THE INITIAL PURCHASE (OR SUBSEQUENT PURCHASES IF NECESSARY), 4.75% OF
THE DOLLAR AMOUNT SPECIFIED IN THIS LETTER SHALL BE HELD IN ESCROW IN SHARES OF
THE FUND BY THE FUND'S TRANSFER AGENT. FOR EXAMPLE, IF THE MINIMUM AMOUNT
SPECIFIED UNDER THE LETTER IS $50,000, THE ESCROW SHALL BE SHARES VALUED IN THE
AMOUNT OF $2,375 (COMPUTED AT THE PUBLIC OFFERING PRICE ADJUSTED FOR A $50,000
PURCHASE). ALL DIVIDENDS AND ANY CAPITAL GAINS DISTRIBUTION ON THE ESCROWED
SHARES WILL BE CREDITED TO MY ACCOUNT.
IF THE TOTAL MINIMUM INVESTMENT SPECIFIED UNDER THE LETTER IS COMPLETED
WITHIN A THIRTEEN MONTH PERIOD, ESCROWED SHARES WILL BE PROMPTLY RELEASED TO ME.
HOWEVER, SHARES DISPOSED OF PRIOR TO COMPLETION OF THE PURCHASE REQUIREMENT
UNDER THE LETTER WILL BE DEDUCTED FROM THE AMOUNT REQUIRED TO COMPLETE THE
INVESTMENT COMMITMENT.
UPON EXPIRATION OF THIS LETTER, THE TOTAL PURCHASES PURSUANT TO THE LETTER
ARE LESS THAN THE AMOUNT SPECIFIED IN THE LETTER AS THE INTENDED AGGREGATE
PURCHASES, CALVERT DISTRIBUTORS, INC. ("CDI") WILL BILL ME FOR AN AMOUNT EQUAL
TO THE DIFFERENCE BETWEEN THE LOWER LOAD I PAID AND THE DOLLAR AMOUNT OF SALES
CHARGES WHICH I WOULD HAVE PAID IF THE TOTAL AMOUNT PURCHASED HAD BEEN MADE AT A
SINGLE TIME. IF NOT PAID BY THE INVESTOR WITHIN 20 DAYS, CDI WILL DEBIT THE
DIFFERENCE FROM MY ACCOUNT. FULL SHARES, IF ANY, REMAINING IN ESCROW AFTER THE
AFOREMENTIONED ADJUSTMENT WILL BE RELEASED AND, UPON REQUEST, REMITTED TO ME.
I IRREVOCABLY CONSTITUTE AND APPOINT CDI AS MY ATTORNEY-IN-FACT, WITH FULL
POWER OF SUBSTITUTION, TO SURRENDER FOR REDEMPTION ANY OR ALL ESCROWED SHARES ON
THE BOOKS OF THE FUND. THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST.
THE COMMISSION ALLOWED BY CDI TO THE BROKER-DEALER NAMED HEREIN SHALL BE AT
THE RATE APPLICABLE TO THE MINIMUM AMOUNT OF MY SPECIFIED INTENDED PURCHASES.
THE LETTER MAY BE REVISED UPWARD BY ME AT ANY TIME DURING THE
THIRTEEN-MONTH PERIOD, AND SUCH A REVISION WILL BE TREATED AS A NEW LETTER,
EXCEPT THAT THE THIRTEEN-MONTH PERIOD DURING WHICH THE PURCHASE MUST BE MADE
WILL REMAIN UNCHANGED AND THERE WILL BE NO RETROACTIVE REDUCTION OF THE SALES
CHARGES PAID ON PRIOR PURCHASES.
IN DETERMINING THE TOTAL AMOUNT OF PURCHASES MADE HEREUNDER, SHARES
DISPOSED OF PRIOR TO TERMINATION OF THIS LETTER WILL BE DEDUCTED. MY
BROKER-DEALER SHALL REFER TO THIS LETTER OF INTENT IN PLACING ANY FUTURE
PURCHASE ORDERS FOR ME WHILE THIS LETTER IS IN EFFECT.
DEALER NAME OF INVESTOR(S)
BY
AUTHORIZED SIGNER ADDRESS
DATE SIGNATURE OF INVESTOR(S)
DATE SIGNATURE OF INVESTOR(S)
<PAGE>
INVESTMENT ADVISOR
CALVERT ASSET MANAGEMENT COMPANY, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
SHAREHOLDER SERVICES TRANSFER AGENT
CALVERT SHAREHOLDER SERVICES, INC. NATIONAL FINANCIAL DATA SERVICES, INC.
4550 MONTGOMERY AVENUE 330 WEST 9TH STREET
SUITE 1000N KANSAS CITY, MISSOURI 64105
BETHESDA, MARYLAND 20814
PRINCIPAL UNDERWRITER INDEPENDENT ACCOUNTANTS
CALVERT DISTRIBUTORS, INC. PRICEWATERHOUSECOOPERS LLP
4550 MONTGOMERY AVENUE 250 WEST PRATT STREET
SUITE 1000N BALTIMORE, MARYLAND 21201
BETHESDA, MARYLAND 20814
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS:
99B.1 DECLARATION OF TRUST INCORPORATED BY REFERENCE TO REGISTRANT'S
POST-EFFECTIVE AMENDMENT NO. 30, JANUARY 28, 2000, ACCESSION NUMBER
0000356682-00-000003.
99B.2 BY-LAWS OF THE TRUST INCORPORATED BY REFERENCE TO REGISTRANT'S POST-
EFFECTIVE AMENDMENT NO. 30, JANUARY 28, 2000, ACCESSION NUMBER
0000356682-00-000003.
99.B5. INVESTMENT ADVISORY AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 27, MARCH 1, 1999,
ACCESSION NUMBER 0001047469-98-013128.
99.B5.A INVESTMENT SUB-ADVISORY CONTRACT (ATLANTA CAPITAL), INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 30, JANUARY 28,
2000, ACCESSION NUMBER 0000356682-00-000003.
99.B5.B INVESTMENT SUB-ADVISORY CONTRACT (BROWN CAPITAL MANAGEMENT),
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO.
30, JANUARY 28, 2000, ACCESSION NUMBER 0000356682-00-000003.
99.B5.C INVESTMENT SUB-ADVISORY CONTRACT (NCM CAPITAL MANAGEMENT),
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO.
30, JANUARY 28, 2000, ACCESSION NUMBER 0000356682-00-000003.
99.B5.D INVESTMENT SUB-ADVISORY CONTRACT (STATE STREET GLOBAL ADVISORS),
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO.
30, JANUARY 28, 2000, ACCESSION NUMBER 0000356682-00-000003.
99.B6 UNDERWRITING AGREEMENT INCORPORATED BY REFERENCE TO POST-
EFFECTIVE AMENDMENT NO. 27, DATED MARCH 31, 1998, ACCESSION
NUMBER 0001047469-98-013128.
99.B7 . DEFERRED COMPENSATION AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 30, JANUARY 28, 2000,
ACCESSION NUMBER 0000356682-00-000003.
99.B8. CUSTODIAL CONTRACT, INCORPORATED BY REFERENCE TO REGISTRANT'S POST-
EFFECTIVE AMENDMENT NO. 25, DATED JANUARY 31, 1998, ACCESSION NUMBER
0000356682-98-000001.
99.B9.A. TRANSFER AGENCY CONTRACT AND SHAREHOLDER SERVICING CONTRACT,
INCORPORATED BY REFERENCE TO POST-EFFECTIVE AMENDMENT NO. 27, DATED
MARCH 31, 1998, ACCESSION NUMBER 0001047469-98-013128.
99.B9.B. ADMINISTRATIVE SERVICES AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 30, JANUARY 28, 2000,
ACCESSION NUMBER 0000356682-00-000003.
99.B10 OPINION AND CONSENT OF COUNSEL FILED HEREWITH.
99.B11. CONSENT OF INDEPENDENT ACCOUNTANTS TO USE OF REPORT (NOT APPLICABLE).
99.B15 PLAN OF DISTRIBUTION FOR CLASS A, CLASS B AND CLASS C SHARES,
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT
NO. 30, JANUARY 28, 2000, ACCESSION NUMBER 0000356682-00-000003.
99.B17.A MULTIPLE-CLASS PLAN PURSUANT TO INVESTMENT COMPANY ACT OF 1940 RULE
18F-3, INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE
AMENDMENT NO. 30, JANUARY 28, 2000, ACCESSION NUMBER
0000356682-00-000003.
99.B17.B POWER OF ATTORNEY FORMS SIGNED BY EACH DIRECTOR, INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 29, DATED
JANUARY 28, 1999, ACCESSION NUMBER 0000356682-99-000001.
99.B18 CODE OF ETHICS, INCORPORATED BY REFERENCE TO REGISTRANT'S POST-
EFFECTIVE AMENDMENT NO. 30, JANUARY 28, 2000, ACCESSION NUMBER
0000356682-00-000003.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 25. INDEMNIFICATION
REGISTRANT'S DECLARATION OF TRUST, WHICH DECLARATION IS EXHIBIT 1 OF
THIS REGISTRATION STATEMENT, PROVIDES, IN SUMMARY, THAT OFFICERS, TRUSTEES,
EMPLOYEES, AND AGENTS SHALL BE INDEMNIFIED BY REGISTRANT AGAINST LIABILITIES
AND EXPENSES INCURRED BY SUCH PERSONS IN CONNECTION WITH ACTIONS, SUITS, OR
PROCEEDINGS ARISING OUT OF THEIR OFFICES OR DUTIES OF EMPLOYMENT, EXCEPT THAT
NO INDEMNIFICATION CAN BE MADE TO SUCH A PERSON IF HE HAS BEEN ADJUDGED LIABLE
OF WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR RECKLESS DISREGARD OF
HIS DUTIES. IN THE ABSENCE OF SUCH AN ADJUDICATION, THE DETERMINATION OF
ELIGIBILITY FOR INDEMNIFICATION SHALL BE MADE BY INDEPENDENT COUNSEL IN A
WRITTEN OPINION OR BY THE VOTE OF A MAJORITY OF A QUORUM OF TRUSTEES WHO ARE
NEITHER "INTERESTED PERSONS" OF REGISTRANT, AS THAT TERM IS DEFINED IN SECTION
2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940, NOR PARTIES TO THE PROCEEDING.
REGISTRANT'S DECLARATION OF TRUST ALSO PROVIDES THAT REGISTRANT MAY
PURCHASE AND MAINTAIN LIABILITY INSURANCE ON BEHALF OF ANY OFFICER, TRUSTEE,
EMPLOYEE OR AGENT AGAINST ANY LIABILITIES ARISING FROM SUCH STATUS. IN THIS
REGARD, REGISTRANT MAINTAINS A DIRECTORS & OFFICERS (PARTNERS) LIABILITY
INSURANCE POLICY WITH CHUBB GROUP OF INSURANCE COMPANIES, 15 MOUNTAIN VIEW
ROAD, WARREN, NEW JERSEY 07061, PROVIDING REGISTRANT WITH $5 MILLION IN
DIRECTORS AND OFFICERS LIABILITY COVERAGE, PLUS $5 MILLION IN EXCESS DIRECTORS
AND OFFICERS LIABILITY COVERAGE FOR THE INDEPENDENT TRUSTEES/DIRECTORS ONLY.
REGISTRANT ALSO MAINTAINS AN $9 MILLION INVESTMENT COMPANY BLANKET BOND ISSUED
BY ICI MUTUAL INSURANCE COMPANY, P.O. BOX 730, BURLINGTON, VERMONT, 05402.
THE FUND MAINTAINS JOINT COVERAGE WITH THE OTHER CALVERT GROUP FUNDS, AND
FOR THE LIABILITY COVERAGE, WITH THE ADVISOR AND ITS AFFILIATED COMPANIES
("CALVERT OPERATING COMPANIES.") THE PREMIUM AND THE COVERAGE ARE ALLOCATED
BASED ON A METHOD APPROVED BY THE DISINTERESTED FUND TRUSTEES.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
NAME OF COMPANY, PRINCIPAL
NAME BUSINESS AND ADDRESS CAPACITY
BARBARA J. KRUMSIEK CALVERT VARIABLE SERIES, INC. OFFICER
CALVERT MUNICIPAL FUND, INC. AND
CALVERT WORLD VALUES FUND, INC. DIRECTOR
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
ALLIANCE CAPITAL MGMT. L.P. SR. VICE PRESIDENT
MUTUAL FUND DIVISION DIRECTOR
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
--------------
RONALD M. WOLFSHEIMER FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
DAVID R. ROCHAT FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT MUNICIPAL FUND, INC. OFFICER
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CHELSEA SECURITIES, INC. OFFICER
SECURITIES FIRM AND
POST OFFICE BOX 93 DIRECTOR
CHELSEA, VERMONT 05038
---------------
GRADY, BERWALD & CO. OFFICER
HOLDING COMPANY AND
43A SOUTH FINLEY AVENUE DIRECTOR
BASKING RIDGE, NJ 07920
---------------
RENO J. MARTINI CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CHARLES T. NASON AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE AND
DIRECTOR
INSURANCE COMPANIES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
ACACIA FEDERAL SAVINGS BANK DIRECTOR
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SOCIAL INVESTMENT FUND TRUSTEE
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
-----------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ROBERT-JOHN H. AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE
ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA FEDERAL SAVINGS BANK OFFICER
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT, CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
WILLIAM M. TARTIKOFF ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE OFFICER
SERVICES COMPANY
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO. INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. DIRECTOR
BROKER-DEALER AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
SUSAN WALKER BENDER CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
IVY WAFFORD DUKE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
JENNIFER STREAKS CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
VICTOR FRYE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
THE ADVISORS GROUP, LTD. COUNSEL
BROKER-DEALER AND AND
INVESTMENT ADVISOR COMPLIANCE
7315 WISCONSIN AVENUE MANAGER
BETHESDA, MARYLAND 20814
---------------
DANIEL K. HAYES CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
JOHN NICHOLS CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
DAVID LEACH CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
MATTHEW D. GELFAND CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
STRATEGIC INVESTMENT MANAGEMENT OFFICER
INVESTMENT ADVISOR
1001 19TH STREET NORTH
ARLINGTON, VIRGINIA 20009
------------------
ITEM 27. PRINCIPAL UNDERWRITERS
(A) REGISTRANT'S PRINCIPAL UNDERWRITER UNDERWRITES SHARES OF
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT TAX-FREE RESERVES,
CALVERT SOCIAL INVESTMENT FUND, CALVERT CASH RESERVES, THE CALVERT FUND,
CALVERT MUNICIPAL FUND, INC., CALVERT WORLD VALUES FUND, INC., CALVERT NEW
WORLD FUND, INC., CALVERT SOCIAL INDEX SERIES, AND CALVERT VARIABLE SERIES,
INC. (FORMERLY NAMED ACACIA CAPITAL CORPORATION).
(B) POSITIONS OF UNDERWRITER'S OFFICERS AND DIRECTORS
NAME AND PRINCIPAL POSITION(S) WITH POSITION(S) WITH
BUSINESS ADDRESS UNDERWRITER REGISTRANT
BARBARA J. KRUMSIEK DIRECTOR AND PRESIDENT PRESIDENT AND TRUSTEE
RONALD M. WOLFSHEIMER DIRECTOR, SENIOR VICE TREASURER
PRESIDENT AND CHIEF FINANCIAL OFFICER
WILLIAM M. TARTIKOFF DIRECTOR, SENIOR VICE VICE PRESIDENT AND
PRESIDENT AND SECRETARY SECRETARY
CRAIG CLOYED SENIOR VICE PRESIDENT NONE
KAREN BECKER VICE PRESIDENT, OPERATIONS NONE
MATTHEW GELFAND VICE PRESIDENT NONE
GEOFFREY ASHTON REGIONAL VICE PRESIDENT NONE
MARTIN BROWN REGIONAL VICE PRESIDENT NONE
BILL HAIRGROVE REGIONAL VICE PRESIDENT NONE
ANTHONY EAMES REGIONAL VICE PRESIDENT NONE
STEVE HIMBER REGIONAL VICE PRESIDENT NONE
TANYA WILLIAMS REGIONAL VICE PRESIDENT NONE
BEN OGBOGU REGIONAL VICE PRESIDENT NONE
TOM STANTON REGIONAL VICE PRESIDENT NONE
CHRISTINE TESKE REGIONAL VICE PRESIDENT NONE
JENNIFER STREAKS ASSISTANT SECRETARY NONE
SUSAN WALKER BENDER ASSISTANT SECRETARY ASSISTANT SECRETARY
IVY WAFFORD DUKE ASSISTANT SECRETARY ASSISTANT SECRETARY
VICTOR FRYE ASSISTANT SECRETARY NONE
AND COMPLIANCE OFFICER
(C) INAPPLICABLE.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
RONALD M. WOLFSHEIMER, TREASURER
AND
WILLIAM M. TARTIKOFF, ASSISTANT SECRETARY
4550 MONTGOMERY AVENUE, SUITE 1000N
BETHESDA, MARYLAND 20814
ITEM 29. MANAGEMENT SERVICES
NOT APPLICABLE
ITEM 30. UNDERTAKINGS
INSOFAR AS INDEMNIFICATION FOR LIABILITY ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING
PERSONS OF THE REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS [OF RULE 484],
OR OTHERWISE, THE REGISTRANT HAS BEEN ADVISED THAT IN THE OPINION OF THE
SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY
AS EXPRESSED IN THE ACT AND IS, THEREFORE, UNENFORCEABLE. IN THE EVENT THAT A
CLAIM FOR INDEMNIFICATION AGAINST SUCH LIABILITIES (OTHER THAN THE PAYMENT BY
THE REGISTRANT OF EXPENSES INCURRED OR PAID BY A DIRECTOR, OFFICER OR
CONTROLLING PERSON OF THE REGISTRANT IN THE SUCCESSFUL DEFENSE OF ANY ACTION,
SUIT OR PROCEEDING) IS ASSERTED BY SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON
IN CONNECTION WITH THE SECURITIES BEING REGISTERED, THE REGISTRANT WILL, UNLESS
IN THE OPINION OF COUNSEL THE MATTER HAS BEEN SETTLED BY CONTROLLING PRECEDENT,
SUBMIT TO A COURT OF APPROPRIATE JURISDICTION THE QUESTION WHETHER SUCH
INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND WILL
BE GOVERNED BY THE FINAL ADJUDICATION OF SUCH ISSUE.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, THE REGISTRANT CERTIFIES THAT IT MEETS ALL OF THE
REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT UNDER RULE
485(A) UNDER THE SECURITIES ACT AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, DULY AUTHORIZED, IN
THE CITY OF BETHESDA, AND STATE OF MARYLAND, ON THE 3RD DAY OF AUGUST, 2000.
CALVERT SOCIAL INVESTMENT FUND
BY:
___________/S/______________________
BARBARA J. KRUMSIEK
SENIOR VICE PRESIDENT AND TRUSTEE
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE TITLE DATE
__________**____________ PRESIDENT AND 8/03/2000
D. WAYNE SILBY TRUSTEE (PRINCIPAL EXECUTIVE OFFICER)
__________**____________ TRUSTEE 8/03/2000
JOHN G. GUFFEY, JR.
__________**____________ SENIOR VICE PRESIDENT 8/03/2000
BARBARA J. KRUMSIEK AND TRUSTEE
__________**____________ PRINCIPAL ACCOUNTING 8/03/2000
RONALD M. WOLFSHEIMER OFFICER
__________**____________ TRUSTEE 8/03/2000
REBECCA L. ADAMSON
__________**____________ TRUSTEE 8/03/2000
RICHARD L. BAIRD, JR.
________________________ TRUSTEE 8/03/2000
JOY V. JONES
__________**____________ TRUSTEE 8/03/2000
TERRENCE J. MOLLNER
__________**____________ TRUSTEE 8/03/2000
SYDNEY AMARA MORRIS
__________**____________ TRUSTEE 8/03/2000
CHARLES T. NASON
** SIGNED BY SUSAN WALKER BENDER PURSUANT TO POWER OF ATTORNEY.
