PROSPECTUS
July 31, 1996
THE CALVERT FUND:
CALVERT STRATEGIC GROWTH FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
INVESTMENT OBJECTIVE
Calvert Strategic Growth Fund (the "Fund") is a nondiversified series of
The Calvert Fund, an open-end management investment company. The Fund
seeks maximum long-term growth primarily through investment in equity
securities, consistent with the Investment Principles of the Fund as
developed by its investment subadvisor. Under normal market conditions,
the Fund strives to be fully invested. In a declining market, the Fund
may raise cash, establish short positions, and enter into futures or
options contracts or employ other defensive strategies. To the extent
possible, investments are made in enterprises that make a significant
contribution to our society through their products and services and
through the way they do business. The Fund's social criteria apply
solely to the equity and corporate debt investments of the Fund. The
Fund's investments in futures and options, repurchase agreements, U.S.
Treasury obligations, and defensive strategies such as short positions
and precious metals are exempt from the Fund's social criteria.
WHETHER THIS FUND IS FOR YOU
This Fund employs aggressive investment strategies that have the
potential for yielding high returns. However, share prices may
experience substantial fluctuations so that your shares may be worth
less than when you originally purchased them. Some of the techniques,
such as short sales, options and futures trading, may be considered
speculative and could result in higher operating expenses and a high
degree of volatility. The Fund seeks long-term growth and does not
attempt to maintain a balanced portfolio. Accordingly, the Fund should
not be used to meet short-term financial needs.
PURCHASE INFORMATION
The Fund offers two classes of shares with different expense levels and
sales charges. If you purchase Class A shares you will pay a sales
charge at the time you purchase the shares ("front-end sales charge"),
and the Fund pays Rule 12b-1 fees. Class C shares, which are not
available through all dealers, have no front-end or back-end sales
charge, but have higher expenses than Class A shares, including higher
Rule 12b-1 fees. The Class you choose depends on the amount of the
purchase, the length of time you expect to hold the shares, and other
circumstances. See "Alternative Sales Options" for further details.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. WHEN INVESTORS SELL SHARES OF THE FUND, THE VALUE MAY BE HIGHER
OR LOWER THAN THE AMOUNT ORIGINALLY PAID.
TO OPEN AN ACCOUNT
Call your broker, or complete and return the enclosed Account
Application. Minimum initial investment is $2,000 (may be lower for
certain retirement plans).
ABOUT THIS PROSPECTUS
Please read this Prospectus for information you should know before
investing, and keep it for future reference. A Statement of Additional
Information for the Fund dated July 31, 1996 has been filed with the
Securities and Exchange Commission and is incorporated by reference.
This free Statement is available upon request from the Fund:
800-368-2748.
FUND EXPENSES
A. Shareholder Transaction Costs Class A Class C
Maximum Front-End Sales Charge on 4.75% None
Purchases (as a percentage of offering
price)
Maximum Contingent Deferred Sales Charge None None
B Annual Fund Operating Expenses Fiscal
Year 1996
(as a percentage of average net assets,
net of any applicable expense
reimbursement)
Management Fees 1.70% 1.70%
Rule 12b-1 Service and Distribution Fees
0.25% 1.00%
Other Expenses 0.37% 0.48%
Total Fund Operating Expenses<F1> 2.32% 3.18%
<F1> Net Fund Operating Expenses after reduction for fees paid indirectly
for Class A and Class C were 2.29% and 3.16%, respectively.
C. Example: You would pay the following expenses on a $1,000
investment, assuming, (1) 5% annual return; (2)
redemption at the end of each period; and (3) for
Class A, payment of maximum initial sales charge
at time of purchase.
1 Year 3 Years 5 Years 10 Years
Class A $70 $116 $166 $300
Class C $32 $98 $166 $349
The example, which is hypothetical, should not be considered a
representation of past or future expenses. Actual expenses and return
may be higher or lower than those shown.
Explanation of Table: The purpose of the table is to assist you in
understanding the various costs and expenses that an investor in the
Fund would bear directly (shareholder transaction costs) or indirectly
(annual fund operating expenses).
A. Shareholder Transaction Costs are charges you pay when you buy
or sell shares of the Fund. See "Reduced Sales Charges" at Exhibit A to
see if you qualify for possible reductions in the sales charge. If you
request a wire redemption of less than $1,000, you will be charged a $5
wire fee.
B. Annual Fund Operating Expenses are based on the Funds'
Historical Expenses. Management Fees are paid by the Fund to the Advisor
for managing the Funds' investments and business affairs. Management
fees include the subadvisory fee paid by Calvert Asset Management
Company, Inc. (the "Advisor") to Portfolio Advisory Services, Inc. (the
"Subadvisor"), and the administrative service fee paid to Calvert
Administrative Services Company. (See "Management of the Fund.") The
performance adjustment to the advisory fee may cause the Management Fees
to be as high as 1.85% or as low as 1.55%, depending on the performance
of the Fund. The Fund incurs Other Expenses for maintaining shareholder
records, furnishing shareholder statements and reports, and other
services. Management Fees and Other Expenses have already been reflected
in the Fund's daily share price and are not charged directly to
individual shareholder accounts. Please refer to "Management of the
Fund" for further information. The Advisor may voluntarily defer fees or
assume expenses of the Fund. For fiscal year 1996, the Investment
Advisor reimbursed a portion of the expenses of Class A shares of the
Fund. If the Advisor had not made such reimbursements, the annualized
expenses of Class A shares of the Fund, as a percentage of average daily
net assets, would have been: Other Expenses of 0.51% and Total Fund
Operating Expenses of 2.46%. The Investment Advisory Agreement provides
that the Advisor may, to the extent permitted by law, later recapture
any fees it deferred or expenses it assumed during the two prior years.
The Fund's Rule 12b-1 fees include an asset-based sales charge. Thus,
long-term shareholders in the Fund may pay more in total sales charges
than the economic equivalent of the maximum front-end sales charge
permitted by rules of the National Association of Securities Dealers,
Inc. Please see "Alternative Sales Options" for information on Rule
12b-1 fees for each class.
FINANCIAL HIGHLIGHTS
The following table provides information about the financial history of
the Fund's Class A and C shares. It expresses the information in terms
of a single share outstanding for the Fund throughout each period. The
table has been audited by Coopers & Lybrand L.L.P., independent
accountants, whose report is included in the Annual Report to
Shareholders of the Fund. The table should be read in conjunction with
the financial statements and their related notes. The current Annual
Report to Shareholders is incorporated by reference into the Statement
of Additional Information.
<TABLE>
<CAPTION>
Class A Shares 1996 1995<F1>
For the periods ending March 31,
<S> <C> <C>
Net asset value, beginning of period $16.96 $15.00
Income from investment operations
Net investment income .13 .20
Net realized and unrealized gain (loss) on
investments 1.96 2.21
Total from investment operations 2.09 2.41
Distributions from
Net investment income (.20) (.04)
Net realized gain (.21) (.41)
Total distributions (.41) (.45)
Total increase (decrease)
in net asset value 1.68 1.96
Net asset value, end of period $18.64 $16.96
Total return<F2> 12.56% 16.08%
Ratios to average net assets:
Net investment income .90% 1.47%(a)
Total Expenses<F3> 2.32% ---
Net Expenses 2.29% 2.55%(a)
Expenses Reimbursed .14% .31%(a)
Portfolio turnover 402% 480%
Net assets, end of period (in $125,606 $107,004
thousands)
Number of shares outstanding
at end of period (in thousands) 6,740 6,310
(a) Annualized
<FN>
<F1> From May 5, 1994, inception
<F2> Total return is not annualized and does not reflect deduction of Class
A front-end sales charges.
<F3> Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Class C Shares 1996 1995
For the periods ending March 31,
<S> <C> <C>
Net asset value, beginning of period $16.86 $15.00
Income from investment operation
Net investment income (.02) .12
Net realized and unrealized
gain (loss) on investments 1.94 2.18
Total from investment operations 1.92 2.30
Distributions from
Net investment income (.10) (.03)
Net realized gain (.21) (.41)
Total distributions (.31) (.44)
Total increase (decrease)
in net asset value 1.61 1.86
Net asset value, end of period $18.47 $16.86
Total return<F4> 11.57% 15.32%
Ratios to average net assets:
Net investment income .02% .83%(a)
Total Expenses<F5> 3.18% ---
Net Expenses 3.16% 3.45%(a)
Expenses Reimbursed --- .20%(a)
Portfolio turnover 402% 480%
Net assets, end of period (in $25,490 $19,778
thousands)
Number of shares outstanding
at end of period (in thousands) 1,380 1,173
<FN>
<F4> Total return is not annualized and does not reflect deduction of Class
A front-end sales charges.
<F5> Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses.
</FN>
</TABLE>
INVESTMENT OBJECTIVE AND POLICIES
Under normal circumstances, the Fund will invest at least 65% of its
assets in equity securities.
The Fund seeks maximum long-term growth through investments primarily in
the equity securities of companies that have little or no debt, high
relative strength and substantial management ownership. The Fund
considers issuers of all sizes, industries, and geographic markets, and
does not seek interest income or dividends. In selecting equity
investments, the Fund focuses on individual companies by screening over
seven thousand stocks traded on all major U.S. stock exchanges in
addition to stocks traded on the NASDAQ National Market System. The Fund
invests primarily in common stocks traded in the U.S. securities
markets, including American Depository Receipts (ADRs). While the Fund
does not presently invest in foreign securities, it may do so in the
future. By applying proprietary stock selection criteria, the Fund
identifies suitable investments to buy or sell short. The Fund may
invest in securities other than equities including, but not limited to,
convertible securities, preferred stocks, bonds, notes and other debt
securities. The Fund may hold cash or cash equivalents for temporary
defensive purposes or to enable it to take advantage of buying
opportunities. The Fund may engage in certain options and futures
transactions as part of its investment strategy and may invest in
precious metals. (See "Investment Techniques and Risks.") There is, of
course, no assurance that the Fund will be successful in meeting its
objective. The Fund's investment objective is not fundamental and may be
changed without shareholder approval.
Small Cap Issuers
Among the companies identified for investment may be some small cap
issuers. The securities of small cap issuers may be less actively traded
than the securities of larger issuers, and they accordingly will not
usually participate in market rallies to the same extent as more
widely-known securities. There is also somewhat less readily available
information concerning these securities. The issuers of these securities
tend to have a relatively higher percentage of insider ownership.
The Fund may invest in investment grade and noninvestment grade debt
obligations
Although the Fund invests primarily in equity securities, it may invest
up to 35% of its assets in debt securities, excluding money market
instruments. These debt securities may consist of investment grade and
noninvestment grade obligations. Investment grade obligations are those
which, at the date of investment, are rated within the four highest
grades established by Moody's Investors Services, Inc. (Aaa, Aa, A, or
Baa) or by Standard and Poor's Corporation (AAA, AA, A, or BBB), or, if
unrated, determined by the Advisor to be of equivalent credit quality.
Though still investment grade, securities rated BBB/Baa possess certain
speculative elements and are generally more susceptible to changing
market conditions. Noninvestment grade (high-yield/high-risk, or junk
bond) securities are those rated below Baa or BBB, or unrated
obligations that the investment subadvisor has determined are not
investment grade; such securities have speculative characteristics. The
Fund will not buy debt securities rated lower than C.
Noninvestment grade debt obligations involve greater risks than
investment grade debt obligations
Noninvestment grade securities tend to be less sensitive to interest
rate changes than higher-rated investments, but are more sensitive to
adverse economic changes and individual corporate developments. This may
affect the issuer's ability to make principal and interest payments on
the debt obligation. There is also a greater risk of price declines due
to changes in the issuer's creditworthiness. Because the market for
lower-rated securities may be less active ("thinner") than for
higher-rated securities, it may be difficult for the Fund to sell the
securities. Because of a lack of objective data, a thinly-traded market
may make it difficult to value the securities, so that the Board of
Trustees may have to exercise its judgment in assigning a value. See the
Appendix in the Statement of Additional Information for more information
on bond ratings.
INVESTMENT PRINCIPLES
Market principles
The Fund employs an econometric forecasting model called the "Five
Market Principles," developed by the Subadvisor. This model consists of
contrarian indicators, long- and short-term momentum factors,
fundamental value, monetary policy, and smart money activity. The degree
to which these principles are, on balance, positive or negative,
determines the extent to which the Fund would commit funds to individual
equity positions or initiate defensive strategies.
Contrarian principle
The contrarian principle contains "psychological" indicators that track
the level of optimism among traders. Elements include the put/call ratio
(gauging the sentiment of speculative option traders), put/call premium
spread (monitoring the spread between the relative time premium of puts
or calls), advisory sentiment (tracking the proportion of bullish versus
bearish stock market advisory services), mutual fund cash ratio (cash
and cash equivalents held in mutual funds divided by total assets of the
funds), individual investor sentiment (measured by following the weekly
poll by the American Association of Individual Investors), and short
interest ratio (an indication of existing sentiment and potential buying
power, calculated by dividing the total short sales on the New York
Stock Exchange ("NYSE") by the NYSE's average daily trading volume for
the relevant period).
Fundamental value
Fundamental value measures the valuation of stock prices relative to
historical standards, as well as the supply of stock outstanding. Its
elements include stock offerings (excessive amounts of new offerings can
lead to oversupply and a market downturn), stock buybacks (excessive
amounts indicate a bullish market), dividend yields (as compared with
the S&P 500 Index), and price/earnings ratio (an indicator of a stock's
value, calculated by dividing a stock's current price by earnings per
share over the last twelve months).
Monetary policy
Monetary policy examines behavior in credit markets for shifts in the
Federal Reserve Board's policy on interest rates, which influence stock
prices. Elements of this principle include the discount rate index (what
the Federal Reserve Board charges its member banks for direct loans, a
change in rate indicating a shift in monetary policy), discount
rate/Treasury-bill spread (a sensitive intermediate-term indicator,
computed by subtracting the current 90-day Treasury bill yield from the
Federal Reserve Board Discount Rate), M2 money supply (the total of all
money held by the public - indirectly controlled by the Federal Reserve
Board and a good indicator for the stock market), free reserves (the
measure of liquidity within the U.S. banking system, liquidity
indicating availability of money for financial growth), and yield curve
(a graphic representation of the different yields among debt instruments
of varying maturities).
Momentum
Momentum measures the stock market's internal strength, monitored on a
real-time basis. Indicators include the weekly advance/decline line (a
measure of total market performance, calculated by subtracting the total
number of NYSE issues advancing in price for the week versus those
declining), absolute market strength (gauged by following the relative
strength of the NASDAQ Composite and the NYSE's weekly advance/decline
line versus the Dow Jones Industrials), the McClellan oscillator
(short-term market momentum indicator), the summation index (to confirm
intermediate-term moves in the market), the moving average
convergence/divergence (indicates swings in the market), and the high
low logic index (a forecaster of market tops and bottoms, indicating
bullishness when there is internal uniformity in the market).
Smart money trades
Smart money trades measure the level of optimism among traders. Pieces
of this measure include the behavior of company insiders (heavy insider
buying generally demonstrating a stock that will outperform the market),
the member activity index (measuring trading activity by all members of
the NYSE other than specialists and floor traders, infrequent massive
buying indicating a bullish market), the specialist/public short ratio
(greater volume of shorting relative to the public short generally
indicating a decline in prices), and money flow (tracking "smart money"
trades in the last hour versus "irrational" trading in the first hour).
INVESTMENT TECHNIQUES AND RISKS
Risks
Many of the investment techniques used by the Fund are aggressive, and
may involve higher levels of risk than found in funds not employing
these techniques. Some of the techniques, such as short sales, options
and futures trading, and investment in high-yield/high-risk securities
may be considered speculative and could result in higher operating
expenses.
Temporary defensive positions
Under normal market conditions the Fund strives to be fully invested in
securities. However, for temporary defensive purposes -- which may
include a lack of adequate purchase candidates or an unfavorable market
environment -- the Fund may invest up to 100% of its assets in cash or
cash equivalents. Cash equivalents include instruments such as, but not
limited to, U.S. government and agency obligations, certificates of
deposit, bankers' acceptances, time deposits, commercial paper,
short-term corporate debt securities and repurchase agreements.
The Fund may use options and futures
The Fund may use options and futures contracts 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 for an allowable security or as protection against an
adverse move in the Fund to adjust the risk and return characteristics
of the Fund. The Subadvisor will make decisions whether to invest in
these instruments based on market conditions, regulatory limits and tax
considerations. If the Subadvisor judges market conditions incorrectly
or employs a strategy that does not correlate well with the 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 the Fund and may involve a small
investment of cash relative to the magnitude of the risk assumed. Any
instruments determined to be illiquid are subject to the Fund's
limitation on illiquid securities. See below and the Statement of
Additional Information for more details about these strategies.
Risk factors
There can be no assurance that engaging in options, futures, or any
other investment strategy will be successful. While defensive strategies
are designed to protect the Fund from potential declines, if the
Subadvisor misgauges market values or other economic factors, the Fund
may be worse off than had it not employed the defensive strategy. While
the Subadvisor attempts to determine price movements and thereby prevent
declines in the value of portfolio holdings, there is a risk of
imperfect or no correlation between price movements of portfolio
investments and instruments used as part of an investment strategy, so
that a loss may be incurred. While such strategies can reduce the risk
of loss, they can also reduce the opportunity for gain since they offset
favorable price movements. The use of these strategies may result in a
disadvantage to the Fund if the Fund is not able to purchase or sell a
portfolio holding at an optimal time due to the need to cover its
transaction in its segregated account, or due to the inability of the
Fund to liquidate its position because of its relative illiquidity.
Risks of nondiversification
There may be risks associated with the Fund being nondiversified.
Specifically, since a relatively high percentage of the assets of the
Fund may be invested in the obligations of a limited number of issuers,
the value of the shares of the Fund may be more susceptible to any
single economic, political or regulatory event than the shares of a
diversified Fund would be.
Repurchase agreements
Repurchase agreements are arrangements under which the Fund buys
securities and the seller simultaneously agrees to repurchase the
securities at a specified time and price. The Fund may engage in
repurchase agreements 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. The Fund will only engage in repurchase agreements
with recognized securities dealers and banks determined to present
minimal credit risk by the Advisor under the direction and supervision
of the Fund's Board of Trustees. 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 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, and are considered illiquid if not terminable within
seven days.
Short sales
The Fund may establish short positions in an attempt to protect against
market declines, and will choose from among securities that are fully
listed on a national securities exchange (unless otherwise allowed by
law). The Fund establishes a short position by selling a security it
does not own and makes delivery by borrowing the security it sold. It
then repays the lender of the securities by covering its purchase in the
marketplace, ideally at a lower price than that for which it sold the
securities, thereby taking advantage of declining values. Conversely, if
the price of the security goes up after the Fund establishes its short
position, it will lose money. The Fund may hold up to 25% of its assets
in short positions, and will not normally sell short more than 2% of a
class of securities of any issuer or 2% of the Fund's net assets,
whichever is less. These restrictions may change to reflect amendments
to the law.
Funds for short-sale transactions (other than those for which the Fund
already owns a long position, or "sales against the box") are maintained
in a segregated account with the Fund's custodian. In that account the
Fund attempts to maintain, on a daily basis, liquid assets (such as
cash, U.S. government securities or other high-grade debt obligations)
in an amount sufficient to cover the current value of the securities to
be replaced as well as any dividends, interest and/or transaction costs
due to the broker upon completion of the transaction. In determining the
amount to be held in the segregated account, the securities that have
been sold short are marked to market daily. To the extent the market
price of the security increases, additional assets will be put into the
segregated account to ensure adequate reserves.
Portfolio Turnover
The Fund's investment strategy causes it to have a relatively high
portfolio turnover compared to other funds. All else being equal, a fund
with a higher turnover may incur higher transaction costs. In addition,
the realization of gains in a high turnover fund may subject a
shareholder to capital gains taxes for unsold shares, whereas,
unrealized gains are not subject to taxation until a shareholder sells
the Fund shares. See "Dividends and Taxes" in the Prospectus and "Fund
Transactions" in the Statement of Additional Information.
The Fund may lend its portfolio securities
The Fund may lend its portfolio securities to member firms of the New
York Stock Exchange and commercial banks with assets of one billion
dollars or more, provided the value of the securities loaned from the
Fund will not exceed one-third of the Fund's assets. Loans must be
secured continuously in the form of cash or cash equivalents such as
U.S. Treasury bills; the amount of the collateral must on a current
basis equal or exceed the market value of the loaned securities, and the
Fund must be able to terminate such loans upon notice at any time. The
Fund will exercise its right to terminate a securities loan in order to
preserve its right to vote upon matters of importance affecting holders
of the securities.
The advantage of such loans is that the Fund continues 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 Fund's 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 Fund will make
loans of its portfolio securities only to those firms the Advisor or
Subadvisor deems creditworthy and only on such terms the Advisor or
Subadvisor believes should compensate for such risk. On termination of
the loan the borrower is obligated to return the securities to the Fund.
The Fund will realize any gain or loss in the market value of the
securities during the loan period. The Fund may pay reasonable custodial
fees in connection with the loan.
High Social Impact Investments
The Fund has adopted a nonfundamental policy that permits it to invest
up to three percent of its assets in 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 ("High Social Impact Investments"). The percentage of assets in
these securities will be based on the aggregate cumulative value at the
time of the respective acquisitions of those securities currently held
by the Fund. These securities are typically illiquid and unrated and are
generally considered noninvestment-grade debt securities, which involve
a greater risk of default or price decline than investment-grade
securities. Through diversification, credit analysis and limited
maturity, investment risk can be reduced, although there can be no
assurance that losses will not occur.
SOCIAL SCREENS
The Fund carefully reviews company policies and behavior regarding
social issues important to quality of life:
-Environment
-Weapons Systems
-Employee Relations
-Product Criteria
Once equity and debt securities are determined to fall within the
investment objective of the Fund and are deemed financially viable
investments, they are screened according to the social criteria
described below. These social screens are applied to potential
investment candidates by the Advisor in consultation with the
Subadvisor. However, the Fund may invest in futures and options,
repurchase agreements, U.S. Treasury obligations, short positions,
commodities, and precious metals without regard to the social
criteria.
The following criteria may be changed by the Fund's Board of Trustees
without shareholder approval:
(1) The Fund avoids investing in companies that, in the Advisor's
opinion, have significant or historical patterns of violating
environmental regulations, or otherwise have an egregious environmental
record. Additionally, the Fund will avoid investing in nuclear power
plant operators and owners, or manufacturers of key components in the
nuclear power process.
(2) The Fund will not invest in companies that are listed among the top
100 weapons systems contractors, or major nuclear weapons systems
contractors.
(3) The Fund will not invest in companies that, in the Advisor's
opinion, have significant or historical patterns of discrimination
against employees on the basis of race, gender, religion, age,
disability or sexual orientation, or in companies that have major
labor-management disputes.
(4) The Fund will not invest in companies that are significantly
involved in the manufacture of tobacco or alcohol products. The Fund
will not invest in companies that make products or offer services that,
under proper use, in the Advisor's opinion, are considered harmful.
While the Fund may invest in companies that exhibit positive social
characteristics, it makes no explicit claims to seek out companies with
such practices.
Additional policies and restrictions
The Fund's Statement of Additional Information describes additional
policies and restrictions concerning the portfolio investments of the
Fund.
TOTAL RETURN
The Fund may advertise total return for each class. Total return is
based on historical results and is not intended to indicate future
performance.
Total return is calculated separately for each class. It includes not
only the effect of income dividends but also any change in net asset
value, or principal amount, during the stated period. The total return
of a class shows its overall change in value, including changes in share
price and assuming all of the class' dividends and capital gain
distributions are reinvested. A cumulative total return reflects the
performance of the class over a stated period of time. An average annual
total return ("return with maximum load") reflects the hypothetical
annual compounded return that would have produced the same cumulative
total return if the performance had been constant over the entire
period. Because average annual returns tend to smooth out variations in
the returns, you should recognize that they are not the same as actual
year-by-year results. Both types of total return usually will include
the effect of paying the maximum front-end sales charge in the case of
Class A shares. Of course, total returns will be higher if sales charges
are not taken into account. Quotations of "return without maximum load"
do not reflect deduction of the sales charge. You should consider these
return figures only if you qualify for a reduced sales charge, or for
purposes of comparison with comparable figures which also do not reflect
a sales charge, such as mutual fund averages compiled by Lipper
Analytical Services, Inc. ("Lipper"). Further information about the
Fund's performance is contained in its Annual Report to Shareholders,
which may be obtained without charge.
MANAGEMENT OF THE FUND
The Board of Trustees supervises the Fund's activities and reviews its
contracts with companies that provide it with services.
The Fund is a series of The Calvert Fund (the "Trust"), an open-end
management investment company organized as a Massachusetts business
trust on March 15, 1982. The other series of the Trust is the Calvert
Income Fund.
The Trust is not required to hold annual shareholder meetings, but
special meetings may be called for purposes such as electing or removing
Trustees, changing fundamental policies, or approving a management
contract. As a shareholder, you receive one vote for each share of the
Fund you own, except that matters affecting classes differently, such as
Distribution Plans, will be voted on separately by class.
Calvert Asset Management serves as Advisor to the Fund.
Calvert Asset Management Company, Inc. ("CAM" or the "Advisor") is the
Fund's investment advisor. The Advisor provides the Fund with investment
supervision and management, administrative services and office space;
furnishes executive and other personnel to the Fund; and pays the
salaries and fees of all Trustees who are affiliated persons of the
Advisor. The Advisor may also assume and pay certain advertising and
promotional expenses of the Fund and reserves the right to compensate
broker-dealers in return for their promotional or administrative
services. The Fund pays all other operating expenses as noted in the
Statement of Additional Information.
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of the Fund's investment advisor, transfer
agent, and distributor, is a subsidiary of Acacia Mutual Life Insurance
Company of Washington, D.C. Calvert Group is one of the largest
investment management firms in the Washington, D.C. area. Calvert Group,
Ltd. and its subsidiaries are located at 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814. As of December 31, 1995, Calvert Group
managed and administered assets in excess of $4.8 billion and more than
200,000 shareholder and depositor accounts.
The Advisor receives a fee based on a percentage of the Fund's assets
and the Fund's performance.
The Investment Advisory Agreement between the Fund and the Advisor
provides that the Advisor is entitled to a base annual fee, payable
monthly, of 1.50% of the Fund's average daily net assets. The Advisor
may earn (or have its base fee reduced by) a performance adjustment
based on the extent to which performance of the Fund exceeds or trails
the Russell 2000 Index:
Performance versus the Performance Fee
Russell 2000 Index Adjustment
30% to less than 60% 0.05%
60% to less than 90% 0.10%
90% or more 0.15%
For its services for fiscal year 1996, the Advisor received, pursuant to
the Investment Advisory Agreement, an advisory fee of 1.50% of the
Fund's average daily net assets, which included a performance adjustment
of 0.0042%.
The Advisor may in its discretion defer its fees or assume the Fund's
operating expenses. The Investment Advisory Agreement provides that the
Advisor may, to the extent permitted by law, recapture any fees it
defers or expenses it assumes through December 31, 1996. The Advisor has
until December 31, 1998 to recapture fees deferred or expenses
reimbursed during the previous two-year period. During fiscal year 1996,
the Advisor did not recapture fees.
Portfolio Advisory Services, Inc. is the Fund's Subadvisor.
Portfolio Advisory Services, Inc. ("PASI" or the "Subadvisor") is the
investment subadvisor to the Fund. Its principal business office is 725
Figueroa Street, Suite 2328, Los Angeles, California, 90017. The
Subadvisor manages the investment and reinvestment of the assets of the
Fund, although the Advisor may screen potential investments for
compatibility with the Fund's social criteria. The Advisor will
continuously monitor and evaluate the performance and investment style
of the Subadvisor.
Portfolio Manager
Portfolio manager for the Calvert Strategic Growth Fund (since
inception) is Cedd Moses, Director and Managing Director of Investments
of PASI, and PASI's principal shareholder. Mr. Moses earned a Bachelor
of Science in Mechanical Engineering from UCLA in 1982, and subsequently
worked with several securities firms before joining PASI in 1988. As of
March 31, 1996 PASI managed in excess of $359 million, including mutual
fund assets.
The Investment Subadvisory Agreement between the Advisor and the
Subadvisor provides that the Subadvisor is entitled to a base
Subadvisory fee of 0.95% of the Fund's average daily net assets managed
by the Subadvisor. The Subadvisor may earn (or have its base fee reduced
by) a performance adjustment based on the extent to which performance of
the Fund exceeds or trails the Russell 2000 Index:
Performance versus the Performance
Russell 2000 Index Fee Adjustment
30% to less than 60% 0.025%
60% to less than 90% 0.050%
90% or more 0.075%
The Subadvisor's fee is paid by the Advisor out of the fee the Advisor
receives from the Fund.
Calvert Administrative Services Company provides administrative services
for the Fund.
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, the daily
determination of its net asset value per share and dividends, and the
maintenance of its portfolio and general accounting records. For
providing such services, CASC receives an annual fee from the Fund,
payable monthly, of 0.20% of the Fund's average daily net assets.
Calvert Distributors, Inc. serves as underwriter to market the Fund's
shares.
Calvert Distributors, Inc. ("CDI") is the Fund's principal underwriter
and distributor. Under the terms of its underwriting agreement with the
Fund, CDI markets and distributes the Fund's shares and is responsible
for payment of commissions and service fees to broker-dealers, banks,
and financial services firms, preparation of advertising and sales
literature, and printing and mailing of prospectuses to prospective
investors.
The transfer agent keeps your account records.
Calvert Shareholder Services, Inc. is the Fund's transfer, dividend
disbursing and shareholder servicing agent.
SHAREHOLDER GUIDE
Opening An Account
You can buy shares of the Fund in several ways.
An account application should accompany this prospectus. A completed and
signed application is required for each new account you open, regardless
of the method you choose for making your initial investment. Additional
forms may be required from corporations, associations, and certain
fiduciaries. If you have any questions or need extra applications, call
your broker, or Calvert Group at 800-368-2748. Be sure to specify which
class you wish to purchase.
To invest in any of Calvert's tax-deferred retirement plans, please call
Calvert Group at 800-368-2748 to receive information and the required
separate application.
ALTERNATIVE SALES OPTIONS
The Fund offers two classes of shares:
Class A Shares - Front End Load Option
Class A shares are sold with a front-end sales charge at the time of
purchase. Class A shares are not subject to a sales charge when they are
redeemed.
Class C shares - Level Load Option
Class C shares are sold without a sales charge at the time of purchase
or redemption.
Class C shares have higher expenses than Class A shares
The Fund bears some of the costs of selling its shares under
Distribution Plans adopted with respect to its Class A and Class C
shares pursuant to Rule 12b-1 under the 1940 Act. Payments under the
Class A Distribution Plan are limited to 0.35% annually of the average
daily net asset value of Class A shares. The Class C Distribution Plan
provides for the payment of an annual distribution fee to CSC of up to
0.75%, plus a service fee of up to 0.25%, for a total of 1.00% of the
average daily net assets.
Considerations for deciding which class of shares to buy
Income distributions for Class A shares will probably be higher than
those for Class C shares, as a result of the distribution expenses
described above. (See also "Total Return"). You should consider Class A
shares if you qualify for a reduced sales charge under Class A. Class A
shares may also be more appropriate for larger accounts or if you plan
to hold the shares for several years. Class C shares are not available
for investments of $1 million or more.
Class A Shares
Class A shares are offered at net asset value plus a front-end sales
charge as follows:
Concession to
Dealers as a %
As a % of As a % of Net of Amount
Offering Amount Invested Invested
Amount of Investment 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% 0.25%*
*CDI reserves the right to recoup any portion of the amount paid
to the dealer if the investor redeems some or all of the shares from the
Fund within twelve months of the time of purchase.
Sales charges on Class A shares may be reduced or eliminated in certain
cases. See Exhibit A to this prospectus.
The sales charge is paid to CDI which in turn normally reallows a
portion to your broker-dealer. Upon written notice to broker-dealers
with which it has selling agreements, CDI may reallow up to the full
applicable sales charge. Broker-dealers to which substantially the
entire sales charge is reallowed may be deemed to be underwriters under
the Securities Act of 1933.
In addition to any sales charge reallowance or finder's fee, your
broker-dealer, or other financial service firm through which your
account is held, currently will be paid periodic service fees at an
annual rate of up to 0.25% of the average daily net asset value of Class
A shares held in accounts maintained by that firm.
Class A Distribution Plan
The Fund has adopted a Distribution Plan with respect to its Class A
shares (the "Class A Distribution Plan"), which provides for payments at
a maximum annual rate of 0.35% of the average daily net asset value of
Class A shares, to pay expenses associated with the distribution and
servicing of Class A shares. Amounts paid by the Fund to CDI under the
Class A Distribution Plan are used to pay to broker-dealers and others,
including CDI salespersons who service accounts, service fees at an
annual rate of up to 0.25% of the average daily net asset value of Class
A shares, and to pay CDI for its marketing and distribution expenses,
including, but not limited to, preparation of advertising and sales
literature and the printing and mailing of prospectuses to prospective
investors. For fiscal year 1996, the Fund paid Class A Distribution Plan
expenses of 0.25% of its average net assets.
Class C Shares
Class C shares are not available through all broker-dealers. Class C
shares are offered at net asset value, without a front-end sales charge
or a contingent deferred sales charge. Class C expenses are higher than
those of Class A.
Class C Distribution Plan
The Fund has adopted a Distribution Plan with respect to its Class C
shares (the "Class C Distribution Plan"), which provides for payments at
an annual rate of up to 1.00% of the average daily net asset value of
Class C shares, to pay expenses of the distribution and servicing of
Class C shares. Amounts paid by the Fund under the Class C Distribution
Plan are currently used by CDI to pay broker-dealers and other selling
firms quarterly compensation at an annual rate of up to 0.75%, plus a
service fee, as described above under "Class A Distribution Plan," of up
to 0.25%, of the average daily net asset value of each share sold by
such others. For fiscal year 1996, the Class C Distribution Plan
expenses for the Fund were 1.00% of average net assets.
Arrangements with Broker-Dealers and Others
CDI may also pay additional concessions, including non-cash promotional
incentives, such as merchandise or trips, to dealers employing
registered representatives who have sold or are expected to sell a
minimum dollar amount of shares of the Fund and/or shares of other Funds
underwritten by CDI. CDI may make expense reimbursements for special training
of a broker-dealer's registered representatives, advertising or
equipment, or to defray the expenses of sales contests. Eligible
marketing and distribution expenses may be paid pursuant to the Fund's
Rule 12b-1 Distribution Plan.
Broker-dealers or others may receive different levels of compensation
depending on which class of shares they sell. Payments pursuant to a
Distribution Plan are included in the operating expenses of the class.
HOW TO BUY SHARES
(BE SURE TO SPECIFY WHICH CLASS YOU ARE BUYING)
Method New Accounts Additional Investments
By Mail $2,000 minimum $250 minimum
Please make your check payable Please make your check
to the Fund and mail it with payable to the Fund and
your application to: mail it with your
investment slip to:
Calvert Group Calvert Group
P.O. Box 419739 P.O. Box 419544
Kansas City, MO 64141-6739 Kansas City, MO 64141-6544
By Registered, Certified, or Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Through
Your Broker $2,000 minimum $250 minimum
At the Calvert Visit the Calvert Branch Office to
Branch Office make investments by check. See the back cover
page for the address.
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR BROKER OR CALVERT GROUP AT
800-368-2745
By Exchange $2,000 minimum $250 minimum
(From your account in another Calvert Group fund)
When opening an account by exchange, your new account must be
established with the same name(s), address and taxpayer identification
number as your existing Calvert account.
By Bank Wire $2,000 minimum $250 minimum
By Calvert Money Not Available $50 minimum
Controller* for Initial Investment
*Please allow sufficient time for Calvert Group to process your initial
request for this service, normally 10 business days. The maximum
transaction amount is $300,000, and your purchase request must be
received by 4:00 p.m. Eastern time.
NET ASSET VALUE
Net asset value, or "NAV," refers to the worth of one share of the Fund.
NAV is computed by adding the value of all portfolio holdings, plus
other assets, deducting liabilities and then dividing the result by the
number of shares outstanding. This value is calculated at the close of
the Fund's business day, which coincides with the closing of the regular
session of the New York Stock Exchange (normally 4:00 p.m. Eastern
time). The Fund is open for business each day the New York Stock
Exchange is open. All purchases of Fund shares will be confirmed and
credited to your account in full and fractional shares (rounded to the
nearest 1/1000th of a share).
Fund securities and other assets are valued based on market quotations,
except that securities maturing within 60 days are valued at amortized
cost. If quotations are not available, securities are valued by a method
that the Board of Trustees believes accurately reflects fair value.
Financial futures are valued at the settlement price established each
day by the board of trade or exchange on which they are traded.
WHEN YOUR ACCOUNT WILL BE CREDITED
Before you buy shares, please read the following information to make
sure your investment is accepted and credited properly.
Your purchase will be processed at the next offering price based on the
next net asset value calculated after your order is received and
accepted. If your purchase is made by federal funds wire, or exchange,
and is received by 4:00 p.m. (Eastern time), your account will be
credited on the day of receipt. If your purchase is received after 4:00
p.m. Eastern time, it will be credited the next business day. All your
purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks. No cash 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. If your check does not clear, your purchase will be
cancelled and you will be charged a $10 fee plus costs incurred by the
Fund. When you purchase by check or with Calvert Money Controller, the
Fund may hold payment on redemptions until it is reasonably satisfied
that the investment is collected (normally up to 10 business days from
purchase date). To avoid this collection period, you can wire federal
funds from your bank, which may charge you a fee.
Certain financial institutions or broker-dealers which have entered into
a sales agreement with the Distributor may enter confirmed purchase
orders on behalf of customers by phone, with payment to follow within a
number of days of the order as specified by the program. If payment is
not received in the time specified, the financial institution could be
held liable for resulting fees or losses.
EXCHANGES
You may exchange shares of the Fund for shares of the same class of
other Calvert Group Funds.
If your investment goals change, the Calvert Group Family of Funds has a
variety of investment alternatives that includes common stock funds,
tax-exempt and corporate bond funds, and money market funds. The
exchange privilege is a convenient way to buy shares in other Calvert
Group Funds in order to respond to changes in your goals or in market
conditions. However, the Fund is intended as a long-term investment and
not for frequent short-term trades. Before you make an exchange from a
Fund, please note the following:
Call your broker or a Calvert representative for information
and a prospectus for any of Calvert's other Funds registered in your
state. Read the prospectus of the Fund into which you want to exchange
for relevant information, including class offerings. The exchange
privilege is only available in states where shares of the Fund into
which you want to exchange are registered for sale.
Shares of a particular class of the Fund may be exchanged only
for shares of the same class of another Calvert Fund, except that any
class may be exchanged for shares of any money market fund.
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 on the transaction.
Complete and sign an application for an account in the Fund
into which you want to invest, 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 you have not declined telephone transaction privileges and the shares
are not in certificate form. See "Selling Your Shares" and "How to Sell
Your Shares-- By Telephone, and--By Exchange to Another Calvert Group
Fund."
Shares on which you have already paid a sales charge at Calvert
Group and shares acquired by reinvestment of dividends or distributions
may be exchanged into another Fund at no additional charge.
Shareholders (and those managing multiple accounts) who make
two purchases and two exchange redemptions of shares of the same Fund
during any 6-month period will be given written notice that they may be
prohibited from making additional investments. This policy does not
prohibit a shareholder from redeeming shares of the Fund, and does not
apply to trades solely among money market funds.
For purposes of the exchange privilege, effective July 31, 1996, the
Fund is related to Summit Cash Reserves Fund by investment and investor
services. The Fund reserves the right to terminate or modify the
exchange privilege in the future upon 60 days' written notice.
OTHER CALVERT GROUP SERVICES
Calvert Information Network
24 hour performance and price information
Calvert Group has a round-the-clock telephone service that lets existing
customers use a push button phone to obtain prices, yields, performance
information, account balances, and authorize certain transactions.
Calvert Money Controller
Calvert Money Controller eliminates the delay of mailing a check or the
expense of wiring funds. You can request this free service on your
application.
This service allows you to authorize electronic transfers of money to
purchase or sell shares. You use Calvert Money Controller like an
"electronic check" to move money ($50 to $300,000) between your bank
account and your account in the Fund with one phone call. Allow two
business days after the call for the transfer to take place; for money
recently invested, allow normal check clearing time (up to 10 business
days) before redemption proceeds are sent to your bank. All Calvert
Money Controller transaction requests must be received by 4:00 p.m.
Eastern time.
You may also arrange systematic monthly or quarterly investments
(minimum $50) into your Calvert Group account. After you give us proper
authorization, your bank account will be debited to purchase Fund
shares. A debit entry will appear on your bank statement. Share
purchases made through Calvert Money Controller will be subject to the
applicable sales charge. If you would like to make arrangements for
systematic monthly or quarterly redemptions from your Calvert account,
call your broker or Calvert for a Money Controller Application.
Telephone Transactions
Calvert may record all telephone calls.
You may purchase, redeem, or exchange shares, wire funds and use Calvert
Money Controller by telephone if you have pre-authorized service
instructions. You automatically have telephone privileges unless you
elect otherwise. The Fund, the transfer agent and their affiliates are
not liable for acting in good faith on telephone instructions relating
to your account, so long as they follow reasonable procedures to
determine that the telephone instructions are genuine. Such procedures
may include recording the telephone calls and requiring some form of
personal identification. You should verify the accuracy of telephone
transactions immediately upon receipt of your confirmation statement.
Optional Services
Complete the application for the easiest way to establish services.
The easiest way to establish optional services on your Calvert Group
account is to select the options you desire when you complete your
account application. If you wish to add other options later, you may
have to provide us with additional information and a signature
guarantee. Please call your broker or Calvert Investor Relations at
800-368-2745 for further assistance. For our mutual protection, we may
require a signature guarantee on certain written transaction requests. A
signature guarantee verifies the authenticity of your signature, and may
be obtained from any bank, savings and loan association, credit union,
trust company, broker-dealer firm or member of a domestic stock
exchange. A signature guarantee cannot be provided by a notary public.
Householding of General Mailings
Householding reduces Fund expenses and saves paper and trees for the
environment.
If you have multiple accounts with Calvert, you may receive combined
mailings of some shareholder information, such as semi-annual and annual
reports. Please contact Calvert Investor Relations at 800-368-2745 to
receive additional copies of information.
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 research fee for
these special services.
If you are purchasing shares of the Fund through a program of services
offered by a broker-dealer or financial institution, you should read the
program materials in conjunction with this Prospectus. Certain features
of the Fund may be modified in these programs, and administrative
charges may be imposed for the services rendered.
Tax-Saving Retirement Plans
Contact Calvert Group for complete information kits discussing the
plans, and their benefits, provisions and fees.
Calvert Group can set up your new account in the Fund under one of
several tax-deferred plans. These plans let you invest for retirement
and shelter your investment income from current taxes. Minimums may
differ from those listed in the "How to Buy Shares" chart. Also, reduced
sales charges may apply. See "Exhibit A - Reduced Sales Charges."
Individual retirement accounts (IRAs): available to anyone who
has earned income. You may also be able to make investments in the name
of your spouse, if your spouse has no earned income.
Qualified Profit-Sharing and Money-Purchase Plans (including
401(k) Plans): available to self-employed people and their partners, or
to corporations and their employees.
Simplified Employee Pension Plan (SEP-IRA): available to
self-employed people and their partners, or to corporations. Salary
reduction pension plans (SAR-SEP IRAs) are also available to employers
with 25 or fewer employees.
403(b)(7) Custodial Accounts: available to employees of most
non-profit organizations and public schools and universities.
HOW TO SELL YOUR SHARES
You may redeem all or a portion of your shares on any business day. Your
shares will be redeemed at the next net asset value calculated after
your redemption request is received and accepted. See below for specific
requirements necessary to make sure your redemption request is accepted.
Remember that the Fund may hold payment on the redemption of your shares
until it is reasonably satisfied that investments made by check or by
Calvert Money Controller have been collected (normally up to 10 business
days).
Redemption Requirements To Remember
To ensure acceptance of your redemption request, please follow the
procedures described here and below.
Once your shares are redeemed, 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 7 days. Calvert Money
Controller redemptions generally will be credited to your bank account
on the second business day after your phone call. When the New York
Stock Exchange 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.
Minimum account balance is $1,000 per Fund, per class.
Please maintain a balance in your account of at least $1,000 per Fund,
per class. If, due to redemptions, it falls below $1,000, your account
may be closed and the proceeds mailed to you at the address of record.
You will be given notice that your account will be closed after 30 days
unless you make an additional investment to increase your account
balance to the $1,000 minimum.
By Mail To:
Calvert Group
P.O. Box 419544
Kansas City, MO 64179-6544
You may redeem available funds from your account at any time by sending
a letter of instruction, including your name, account and Fund number,
the number of shares or dollar amount, and where you want the money to
be sent. Additional requirements, below, may apply to your account. The
letter of instruction must be signed by all required authorized signers.
If you want the money to be wired to a bank not previously authorized,
then a voided bank check must be enclosed with your letter. If you do
not have a voided check or if you would like funds sent to a different
address or another person, your letter must be signature guaranteed.
Type of Registration Requirements
Corporations, Associations Letter of
instruction and
corporate
resolution, signed
by person(s)
authorized to act on
the account,
accompanied by
signature
guarantee(s).
Trusts Letter of
instruction signed
by the Trustee(s)
(as Trustees), with
a signature
guarantee. (If the
Trustee's name is
not registered on
your account,
provide a copy of
the trust document,
certified within the
last 60 days.)
By Telephone
Please call 800-368-2745. You may redeem shares from your account by
telephone and have your money mailed to your address of record or wired
to an address or bank you have previously authorized. A charge of $5 is
imposed on wire transfers of less than $1,000. See "Telephone
Transactions." If for any reason you are unable to reach
the Fund by telephone, whether due to mechanical difficulties, heavy
market volume, or otherwise, you may send a written redemption request
to the Fund by overnight mail, or, if your account is held through a
broker, see "Through Your Broker" below.
Calvert Money Controller
Please allow sufficient time for Calvert Group to process your initial
request for this service (normally 10 business days). Your request for a
redemption by this service must be received by 4:00 p.m. Eastern time.
Accounts cannot be closed by this service.
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other Calvert
Group Fund. You can only exchange between accounts with identical names,
addresses and taxpayer identification number, unless previously
authorized with a signature-guaranteed letter. See "Exchanges."
Systematic Check Redemptions
If you have 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 each 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.
Through your Broker
If your account is held in your broker's name ("street name"), you
should contact your broker directly to transfer, exchange or redeem
shares.
DIVIDENDS AND TAXES
Each year, the Fund distributes substantially all of its net investment
income and capital gains to shareholders.
Dividends from the Fund's net investment income are declared and paid
annually. Net investment income consists of the interest income, profits
from securities loans, net short-term capital gains, if any, and
dividends, less expenses. Distributions of net long-term capital gains,
if any, are normally declared and paid by the Fund 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 because of
different fees. Dividend payments are anticipated generally to be higher
for Class A shares.
Dividend Payment Options
Dividends and distributions are automatically reinvested in additional
shares, unless on the account application you request to have them paid
to you in cash (by check or by Calvert Money Controller). You may also
request to have your dividends and distributions from the Fund invested
at net asset value ("NAV") in shares of any other Calvert Group Fund. If
you choose to have them reinvested in the same Fund, the new shares will
be purchased at the NAV (no sales charge) on the reinvest date, which is
generally 1 to 3 days prior to the payment date. You must be a
shareholder on the record date to receive dividends. You must notify the
Fund in writing prior to the record date if you want to change your
payment options. If you elect to have dividends and/or distributions
paid in cash, and the U.S. Postal Service cannot deliver the check, or
if it remains uncashed for six months, it, as well as future dividends
and distributions, will be reinvested in additional shares.
"Buying a Dividend"
At the time of purchase, the share price of the Fund 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 as dividends or capital gains
distributions. On the record date for a distribution, the Fund's per
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
The Fund normally distributes all net income and capital gain to
shareholders. These distributions are taxable to you regardless of
whether they are taken in cash or reinvested. Distributions of net
investment income are taxable as ordinary income; distributions of
long-term capital gains are taxable as long-term capital gains
regardless of how long you have held the shares. Dividends and
distributions declared during October, November or December and paid in
January of the following year are taxable in the year they are declared.
The Fund will mail you Form 1099-DIV in January indicating the federal
tax status of your dividends. If distributions exceed the Fund's net
investment income and capital gain for the year, the excess will reduce
your tax basis for your shares in the Fund.
You may realize a capital gain or loss when you sell or exchange shares.
If you sell or exchange your Fund shares you will have a short or
long-term capital gain or loss, depending on how long you owned the
shares which were sold. In January, the Fund will mail you Form 1099-B
indicating the proceeds from 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.
Taxpayer Identification Number, Back-up Withholding
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 the Fund to withhold 31% of your dividends,
capital gain distributions, and redemptions. In addition, you may be
subject to a fine. You will also be prohibited from opening another
account by exchange. If this TIN information is not received within 60
days after your account is established, your account may be redeemed at
the current NAV on the date of redemption. The Fund reserves the right
to reject any new account or any purchase order for failure to supply a
certified TIN.
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.
Right of Accumulation. The sales charge is calculated by taking into
account not only the dollar amount of a new purchase of shares, but also
the higher of cost or current value of shares previously purchased in
Calvert Group Funds that impose sales charges. This automatically
applies to your account for each new purchase.
Letter of Intent. If you plan to purchase $50,000 or more of 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. 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 Statement of Additional Information.
Group Purchases. If you are a member of a qualified group, you may
purchase shares of the Fund at the reduced sales charge applicable to
the group taken as a whole. The sales charge is calculated by taking
into account not only the dollar amount of the shares you purchase, but
also the higher of cost or current value of shares previously purchased
and currently held by other members of your group.
A "qualified group" is one which (1) has been in existence for more than
six months, (2) has a purpose other than acquiring Fund shares at a
discount, and (3) satisfies uniform criteria which enable CDI and
dealers offering Fund 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 dealers distributing the Fund's shares, must
agree to include sales and other materials related to the Fund in its
publications and mailings to members at reduced or no cost to CDI or
dealers, and must seek to arrange for payroll deduction or other bulk
transmission of investments to the Fund.
Pension plans may not qualify participants for group purchases; however,
such plans may qualify for reduced sales charges under a separate
provision (see below). Members of a group are not eligible for a Letter
of Intent.
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)(7) of the Code
if, at the time of purchase, Calvert Group has been notified in writing
that the 403(b)(7) plan has at least 200 eligible employees.
Furthermore, there is no sales charge on shares purchased for the
benefit of a retirement plan qualifying under Section 401(k) of the Code if,
at the time of such purchase, the 401(k) plan administrator has notified
Calvert Group in writing that (1) its 401(k) plan has at least 200
eligible employees; or (2) the cost or current value of shares the plan
has in Calvert Group of Funds (except money market funds) is at least $1
million.
Neither the Fund, nor CDI, nor any affiliate thereof will reimburse a
plan or participant for any sales charges paid prior to receipt of such
written communication and confirmation by Calvert Group. Plan
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
(Portfolio or Series) of the Calvert Group of Funds sold to: (1) current
and retired members of the Board of Trustees/Directors of the Calvert
Group of Funds, (and the Advisory Council of the Calvert Social
Investment Fund); (2) directors, officers and employees of the Advisor,
Distributor, and their affiliated companies; (3) directors, officers and
registered representatives of brokers distributing the Fund's shares;
and immediate family members of persons listed in (1), (2), or (3)
above; (4) dealers, brokers, or registered investment advisors that have
entered into an agreement with CDI providing specifically for the use of
shares of the Fund (Portfolio or Series) in particular investment
programs or products (where such program or product already has a fee
charged therein) made available to the clients of such dealer, broker,
or registered investment advisor; (5) trust departments of banks or
savings institutions for trust clients of such bank or savings
institution; and (6) purchases placed through a broker maintaining an
omnibus account with the Fund (Portfolio or Series) and 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 another Calvert Group Fund with a sales charge automatically
invested in another account with no additional sales charge. Dividends
and distributions from Calvert Group money market funds used to purchase
shares of the Fund will not be subject to the applicable sales charge.
Reinstatement Privilege. If you redeem Fund shares and then within 30
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.
To Open an Account:
800-368-2748
Prospectus
July 31, 1996
THE CALVERT FUND
Calvert Strategic
Growth Fund
Performance and Prices:
Calvert Information Network
24 hours, 7 days a week
800-368-2745
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, 6th Floor
1004 Baltimore
Kansas City, MO 64105
Calvert Group Web-Site
Address: http://www.calvertgroup.com
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Table of Contents
Fund Expenses
Financial Highlights
Investment Objective and Policies
Investment Principles
Investment Techniques and Risks
Social Screens
Total Return
Management of the Fund
SHAREHOLDER GUIDE:
Alternative Sales Options
How to Buy Shares
Net Asset Value
When Your Account Will Be Credited
Exchanges
Other Calvert Group Services
How to Sell Your Shares
Dividends and Taxes
Exhibit A - Reduced Sales Charges
<PAGE>
The Calvert Fund:
Calvert Strategic Growth Fund
Statement of Additional Information
July 31, 1996
INVESTMENT ADVISOR TRANSFER AGENT
Calvert Asset Management Company, Inc. Calvert Shareholder Services, Inc.
4550 Montgomery Avenue 4550 Montgomery Avenue
Suite 1000N Suite 1000N
Bethesda, Maryland 20814 Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANT PRINCIPAL UNDERWRITER
Coopers & Lybrand, L.L.P. Calvert Distributors, Inc.
217 E. Redwood Street 4550 Montgomery Avenue
Baltimore, Maryland 21202-3316 Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 4
Dividends, Distributions and Taxes 5
Net Asset Value 7
Calculation of Total Return 8
Purchase and Redemption of Shares 8
Reduced Sales Charges (Class A) 9
Advertising 9
Trustees and Officers 10
Investment Advisor and Subadvisor 12
Method of Distribution 12
Transfer and Shareholder Servicing Agent 13
Fund Transactions 13
Independent Auditors and Custodians 14
General Information 14
Financial Statements 14
Appendix 14
STATEMENT OF ADDITIONAL INFORMATION-July 31, 1996
THE CALVERT FUND CALVERT STRATEGIC GROWTH FUND 4550 Montgomery Avenue,
Bethesda, Maryland 20814
New Account (800) 368-2748
Information: (301) 951-4820
Shareholder (800) 368-2745
Services: (301) 951-4810
Broker (800) 368-2746
Services: (301) 951-4850
TDD for the Hearing- Impaired: (800) 541-1524
This Statement of Additional Information is not a prospectus. Investors
should read the Statement of Additional Information in conjunction with the
Fund's Prospectus dated July 31, 1996, which may be obtained free of charge by
writing the Fund at the above address or calling the Fund.
INVESTMENT OBJECTIVE
Calvert Strategic Growth Fund (the "Fund") is a nondiversified series of
The Calvert Fund, an open-end management investment company. The Fund seeks
maximum long-term growth primarily through investment in equity securities,
consistent with the Fund's Investment Principles as developed by the Fund's
investment subadvisor. Under normal market conditions, the Fund strives to be
fully invested. In a declining market, the Fund may raise cash, establish short
positions, or employ other defensive strategies in an attempt to protect against
the decline of its investments. To the extent possible, investments are made in
enterprises that make a significant contribution to our society through their
products and services and through the way they do business. The Fund's social
criteria applies solely to the equity and debt investments of the Fund. Short
positions, futures and options transactions, and defensive strategies are exempt
from the Fund's social criteria.
SPECIAL RISKS OF THE FUND'S INVESTMENT STRATEGIES
The Fund may purchase put and call options, and write (sell) covered put
and call options, on equity and debt securities, foreign currencies and stock or
debt indices. The Fund may purchase or write both exchange-traded and OTC
options. These strategies may also be used with respect to futures.
An option is a legal contract that gives the holder the right to buy or
sell a specified amount of the underlying interest at a fixed or determinable
price (called the exercise or strike price) upon exercise of the option. A
futures contract is an agreement to take delivery or to make delivery of a
standardized quantity and quality of a certain commodity during a particular
month in the future at a specified price. Successful use of the Fund's
investment strategies with respect to futures, options and short sales depends
on the ability to predict movements of the overall securities, currency and
interest rate markets, which is a different skill than that required to select
equity and debt investments. There can be no assurance that a chosen strategy
will succeed.
There may not be an expected correlation between price movements of a
hedging instrument and price movements of the investment being hedged, so that
the Fund may lose money notwithstanding employment of the hedging strategy.
While the Fund's investment strategies can reduce risk of loss by
offsetting the negative effect of unfavorable price movements, they can also
reduce the opportunity for gain by offsetting the positive effect of a favorable
price movement. If the variance is great enough, a decline in the price of an
instrument may result in a loss to the Fund.
The Fund may be required to cover its assets in a segregated account. If an
investment cannot be liquidated at the time the Subadvisor believes it is best
for the Fund, the Fund might be required to keep assets on reserve that it
otherwise would not have had to maintain. Similarly, it might have to sell a
security at an inopportune time in order to maintain the reserves.
FUTURES AND OPTIONS
The Fund is authorized to invest in certain types of futures, options,
warrants and stock rights for the purpose of hedging, that is, protecting
against the risk of market movements that may adversely affect the value of the
Fund's securities or the price of securities that the Fund is considering
purchasing. Although a hedging transaction may partially protect the Fund from a
decline in the value of a particular security or its portfolio generally, the
cost of the transaction will reduce the potential return on the security or the
portfolio. The Fund may only write call options on securities that it owns
(i.e., that are "covered"). No more than 50% of the Fund's total assets shall be
subject to outstanding options contracts. Management presently intends to cease
writing options in the event that 25% of total assets are subject to outstanding
options contracts or if limitations are imposed by state securities regulations.
As an operating policy, the Fund may purchase a call or put option on securities
(including a straddle or spread) only if the value of that option premium, when
aggregated with the premiums of all other optionon securities held by the
Fund, does not exceed 5% of the Fund's assets. Following is a summary of the
futures, options, warrants and stock rights in which the Fund may invest:
In exchange for a premium, a call option on a security, security index or a
foreign currency, gives the holder (buyer) of the option the right (but not the
obligation) to purchase the underlying security, security index or foreign
currency at a specified price (the exercise price) at any time until a certain
date (the expiration date). The writer (seller) of a call option has the
corresponding obligation to deliver the underlying security or foreign currency
in the event the option is exercised by the holder of the option. A call option
on a securities index is similar to a call option on an individual security or
foreign currency, except that the value of the option depends on the weighted
value of the group of securities comprising the index and all settlements are to
be made in cash. A call option may be terminated by the writer (seller) by
entering into a closing purchase transaction in which the writer purchases an
option of the same series as the option previously written.
The Fund may purchase put options on a security, security index or foreign
currency. A put option gives the holder (buyer) of the option the right (but not
the obligation) to sell a security at the exercise price at any time until the
expiration date. Upon exercise by the purchaser, the writer of a put option has
the obligation to purchase the underlying security or foreign currency at the
exercise price. A put option on a securities index is similar to a put option on
an individual security or foreign currency, except that the value of the option
depends on the weighted value of the group of securities comprising the index
and all settlements are made in cash. Purchasing a call or put option involves
the risk that the Fund may lose the premium it paid plus transactions costs.
With respect to securities and foreign currencies, the Fund may write
(sell) call and put options on an exchange or over-the-counter. Call options on
portfolio securities will be covered since the Fund will own the underlying
securities. Options on foreign currencies will be covered by securities
denominated in that currency. Call options on securities indices will be written
only to hedge in an economically appropriate way portfolio securities which are
not otherwise hedged with options or financial futures contracts and will be
covered by maintaining sufficient collateral to cover the option.
The Fund may write (sell) call and put options in order to obtain a return
on its investments from the premiums received and will retain the premiums
whether or not the options are exercised. Any decline in the market value of
portfolio securities or foreign currencies will be offset to the extent of the
premiums received (net of transaction costs). If an option is exercised, the
premium received on the option will effectively increase the exercise price or
reduce the difference between the exercise price and market value. During the
option period, the writer of a call option gives up the opportunity for
appreciation in the market value of the underlying security or currency above
the exercise price. The writer retains the risk of loss should the price of the
underlying security or foreign currency decline.
The Fund may also write a call or put option which it has previously
purchased prior to the purchase (in the case of a call) or the sale (in the case
of a put) of the underlying security or foreign currency. Any such sale would
result in a net gain or loss depending on whether the amount received on the
sale is more or less than the premium and other transaction costs paid on the
call or put which is sold.
The Fund may invest in financial futures contracts including interest rate
futures contracts, foreign currency futures contracts, and securities index
futures contracts which are traded on a recognized exchange or board of trade
and may purchase exchange or board-traded put and call options on financial
futures contracts. An interest rate futures contract obligates the seller of the
contract to deliver, and the purchaser to take delivery of, the interest rate
securities called for in the contract at a specified future time and at a
specified price. A foreign currency futures contract obligates the seller of the
contract to deliver, and the purchaser to take delivery of, the foreign currency
called for in the contract at a specified future time and at a specified price.
(See "Foreign Currency Transactions.") A securities index assigns relative
values to the securities included in the index, and the index fluctuates with
changes in the market values of the securities so included. A securities index
futures contract is a bilateral agreement pursuant to which two parties agree to
take or make delivery of an amount of cash equal to a specified dollar amount
times the difference between the index value at the close of the last trading
day of the contract and the price at which the futures contract is originally
struck. An option on a financial futures contract gives the purchaser the right
to assume a position in the contract (a long position if the option is a call
and a short position if the option is a put) at a specified exercise price at
any time during the period of the option.
The Fund may close out its position in a futures contract or an option on a
futures contract only by entering into an offsetting transaction on the exchange
on which the position was established and only if there is a liquid secondary
market for the futures contract. If it is not possible to close a futures
position entered into by the Fund, it could be required to make continuing daily
cash payments of variation margin in the event of adverse price movements. In
such situations, if the Fund has insufficient cash, it may have to sell
portfolio securities to meet daily variation margin requirements at a time when
it would be disadvantageous to do so. The inability to close futures or options
positions could have an adverse effect on the Fund. There is also risk of loss
by the Fund of margin deposits in the event of bankruptcy of a broker with whom
the Fund has an open position in a futures contract. The correlation is
imperfect between movements in the prices of futures or option contracts, and
the movements of prices of the securities which are subject to the hedge. If the
Fund used a futures or options contract to hedge against a decline in the
market, and the market later advances (or vice-versa), the Fund may suffer a
greater loss than if it had not hedged.
Engaging in transactions in financial futures contracts involves certain
risks, such as the possibility of an imperfect correlation between futures
market prices and cash market prices and the possibility that the Advisor or
Subadvisor could be incorrect in its expectations as to the direction or extent
of various interest rate movements or foreign currency exchange rates, in
which case the Fund's return might have been greater had hedging not taken
place. There is also the risk that a liquid secondary market may not exist. The
risk in purchasing an option on a financial futures contract is that the fund
will lose the premium it paid. Also, there may be circumstances when the
purchase of an option on a financial futures contract would result in a loss to
the Fund while the purchase or sale of the contract would not have resulted in a
loss.
The Fund will not purchase or sell any financial futures contract or
related option if, immediately thereafter, the sum of the cash or U.S. Treasury
bills committed with respect to its existing futures and related options
positions and the premiums paid for related options would exceed 5% of the
market value of its total assets. At the time of purchase of a futures contract
or a call option on a futures contract, an amount of cash, U.S. Government
securities or other appropriate high-grade debt obligations equal to the market
value of the futures contract minus the Fund's initial margin deposit with
respect thereto, will be deposited in a segregated account with the Fund's
custodian bank to collateralize fully the position and thereby ensure that it is
not leveraged. The extent to which the Fund may enter into financial futures
contracts and related options may also be limited by the requirements of the
Internal Revenue Code of 1986 for qualification as a regulated investment
company.
Warrants and stock rights are almost identical to call options in their
nature, use and effect except that they are issued by the issuer of the
underlying security rather than an option writer, and they generally have longer
expiration dates than call options. The fund may invest up to 5% of its net
assets in warrants and stock rights, but no more than 2% of its net assets may
be invested in warrants and stock rights not listed on the New York Stock
Exchange or the American Stock Exchange.
NONINVESTMENT GRADE (HIGH YIELD/HIGH RISK - OR JUNK BOND) DEBT SECURITIES
The Fund may invest up to 35% of its assets in lower quality debt
securities (generally those rated BB or lower by S&P or Ba or lower by Moody's),
or in unrated securities determined by the Advisor to be comparable. These
securities have moderate to poor protection of principal and interest payments
and have speculative characteristics. 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 are rated securities, which may make them less
marketable.
The Fund will not purchase any securities rated lower than C. The
quality limitation set forth in the investment policy is determined immediately
after the Fund's acquisition of a 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 high-yielding securities, rated or unrated, the Subadvisor
prepares its own careful credit analysis to attempt to identify those issuers
whose financial condition is adequate to meet future obligations or is expected
to be adequate in the future. Through portfolio diversification and credit
analysis, investment risk can be reduced, although there can be no assurance
that losses will not occur.
FOREIGN SECURITIES
The Fund does not presently invest in foreign securities, nor does the
Subadvisor intend to become involved in foreign markets in the near future.
However, the Fund may make such investments in the future. In the event the Fund
undertakes investment in foreign securities in the future, additional costs may
be incurred, since foreign brokerage commissions and the custodial costs
associated with maintaining foreign portfolio securities are generally higher
than in the United States. Fee expense may also be incurred on currency
exchanges when the Fund changes investments from one country to another or
converts foreign securities holdings into U.S. dollars. Foreign companies and
foreign investment practices are not subject to uniform accounting, auditing and
financial reporting standards and practices or regulatory requirements
comparable to those applicable to United States companies. There may be less
public information available about foreign companies.
United States Government policies have at times, in the past, through
imposition of interest equalization taxes and other restrictions, discouraged
United States investors from making certain investments abroad. While such taxes
or restrictions are not presently in effect, they may be reinstituted from time
to time as a means of fostering a favorable United States balance of payments.
In addition, foreign countries may impose withholding and taxes on dividends and
interest.
FOREIGN CURRENCY TRANSACTIONS
Forward Foreign Currency Exchange Contracts. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days ("Term") 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 directly between currency traders (usually
large commercial banks) and their customers.
The Fund will not enter into such forward contracts or maintain a net
exposure in such contracts where it would be obligated to deliver an amount of
foreign currency in excess of the value of its portfolio securities and other
assets denominated in that currency. The Subadvisor believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that to do so is in the Fund's best interests.
Foreign Currency Options. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates. Conversely, a
put rises in value if the underlying currency depreciates. While purchasing a
foreign currency option can protect the Fund against an adverse movement in the
value of a foreign currency, it does not limit the gain which might result from
a favorable movement in the value of such currency. For example, if the Fund was
holding securities denominated in an appreciating foreign currency and had
purchased a foreign currency put to hedge against a decline in the value of the
currency, it would not have to exercise its put. Similarly, if the Fund had
entered into a contract to purchase a security denominated in a foreign currency
and had purchased a foreign currency call to hedge against a rise in the value
of the currency but instead the currency had depreciated in value between the
date of purchase and the settlement date, it would not have to exercise its call
but could acquire in the spot market the amount of foreign currency needed for
settlement.
Foreign Currency Futures Transactions. The Fund may use foreign currency
futures contracts and options on such futures contracts. Through the purchase or
sale of such contracts, it may be able to achieve many of the same objectives
attainable through the use of foreign currency forward contracts, but more
effectively and possibly at a lower cost.
Unlike forward foreign currency exchange contracts, foreign currency
futures contracts and options on foreign currency futures contracts are
standardized as to amount and delivery period and are traded on boards of trade
and commodities exchanges. It is anticipated that such contracts may provide
greater liquidity and lower cost than forward foreign currency exchange
contracts.
INVESTMENTS IN PRECIOUS METALS
The price of gold and other precious metal mining securities can face
substantial short-term volatility caused by international monetary and political
developments such as currency devaluations or revaluations, economic and social
conditions within a country, or trade restrictions between countries. Since much
of the world's gold reserves are located in just a few countries, such as South
Africa, the United States, the Commonwealth of Independent States (formerly the
Soviet Union), Australia, Canada and China, the social and economic conditions
in those countries can affect the price of gold and gold-related companies
located elsewhere. The price of gold bullion or coins is more affected by broad
economic and political conditions. Markets in commodities, such as gold, can be
volatile and there may be sharp fluctuations in prices. Such investments,
however, may be beneficial to the investment performance of the Fund as a hedge
against inflation as well as an investment with possible growth potential.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions which cannot be
changed without the approval of the holders of a majority of the outstanding
shares of the Fund. As defined in the Investment Company Act of 1940, this means
the lesser of the vote of (a) 67% of the shares of the Fund at a meeting where
more than 50% of the outstanding shares are present in person or by proxy or (b)
more than 50% of the outstanding shares of the Fund. The Fund may not:
1. With respect to 50% of its assets, purchase securities of any issuer
(other than obligations of, or guaranteed by, the United States Government, its
agencies or instrumentalities) if, as a result, more than 5% of the value of its
total assets would be invested in securities of that issuer. (The remaining 50%
of its total assets may be invested without restriction except to the extent
other investment restrictions may be applicable).
2. Concentrate 25% or more of the value of its assets in any one industry;
provided, however, that there is no limitation with respect to investments in
obligations issued or guaranteed by the United States Government or its agencies
and instrumentalities, and repurchase agreements secured thereby.
3. Make loans of more than one-third of the assets of the Fund, or as
permitted by law. The purchase by the Fund of all or a portion of an issue of
publicly or privately distributed debt obligations in accordance with its
investment objective, policies and restrictions, shall not constitute the making
of a loan.
4. Underwrite the securities of other issuers, except as permitted by the
Board of Trustees within applicable law, and except to the extent that in
connection with the disposition of its portfolio securities, the Fund may be
deemed to be an underwriter.
5. Purchase from or sell to any of the Fund's officers or trustees, or
companies of which any of them are directors, officers or employees, any
securities (other than shares of beneficial interest of the Fund), but such
persons or firms may act as brokers for the Fund for customary commissions.
6. Except as required in connection with permissible options, futures and
commodity activities of the Fund, invest in commodities, commodity futures
contracts, or real estate, although it 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 and provided that it may purchase or enter into futures contracts and
options on futures contracts, foreign currency futures, interest rate futures
and options thereon.
Nonfundamental Investment Restrictions
The Fund has adopted the following operating (i.e., non-fundamental)
investment policies and restrictions which may be changed by the Board of
Trustees without shareholder approval. The Fund may not:
7. Purchase the securities of any issuer with less than three years'
continuous operation if, as a result, more than 5% of the value of its total
assets would be invested in securities of such issuers.
8. Invest, in the aggregate, more than 15% of its net assets in illiquid
securities. Purchases of securities outside the U.S. that are not registered
with the SEC or marketable in the U.S. are not per se illiquid.
9. Invest, in the aggregate, more than 5% of its net assets in the
securities of issuers restricted from selling to the public without registration
under the Securities Act of 1933, excluding restricted securities eligible for
resale pursuant to Rule 144A under that statute.
10. Purchase or retain securities of any issuer if the officers, Trustees
of the Fund or its Advisors, owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own beneficially more than 5% of such
issuer's securities.
11. Invest in warrants if more than 5% of the value of the Fund's net
assets would be invested in such securities.
12. Invest in interests in oil, gas, or other mineral exploration or
development programs or leases although it may invest in securities of issuers
which invest in or sponsor such programs.
13. Borrow money in an amount exceeding one-third of the Fund's total
assets, or as permitted by law. In order to secure any permitted borrowings
under this section, the Fund may pledge, mortgage or hypothecate its assets.
14. Invest for the purpose of exercising control or management of another
issuer.
15. Invest in the shares of other investment companies, except as permitted
by the 1940 Act or pursuant to Calvert's nonqualified deferred compensation plan
adopted by the Board of Trustees.
16. Purchase more than 10% of the outstanding voting securities of any
issuer.
For purposes of the Fund's concentration policy contained in restriction
(2), above, the Fund classifies the respective industries per William O'Neil's
Investor's Business Daily.
Any investment restriction which involves a maximum percentage of
securities or assets shall not be considered to be violated unless an excess
over the applicable percentage occurs immediately after an acquisition of
securities or utilization of assets and results therefrom.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund declares and pays dividends from net investment income on an
annual basis. 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. Dividends and distributions paid may differ among the classes.
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.
Investors should note that the Internal Revenue Code ("Code") may require
investors to exclude the initial sales charge, if any, paid on the purchase of
Fund shares from the tax basis of those shares if the shares are exchanged for
shares of another Calvert Group Fund within 90 days of purchase. This
requirement applies only to the extent that the payment of the original sales
charge on the shares of the Fund causes a reduction in the sales charge
otherwise payable on the shares of the Calvert Group Fund acquired in the
exchange, and investors may treat sales charges excluded from the basis of the
original shares as incurred to acquire the new shares.
The Fund is required to withhold 31% of any long-term capital gain
dividends and 31% of each redemption transaction occurring in the Fund 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 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 capital gain
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 ill receive statements at least annually specifying the
amount withheld.
The Fund is required to report to the Internal Revenue Service the
following information with respect to each redemption transaction: (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 exempt from the backup withholding and broker
reporting requirements. Exempt shareholders include: corporations; financial
institutions; tax-exempt organizations; individual retirement plans; the U.S., a
State, the District of Columbia, a U.S. possession, a foreign government, an
international organization, or any political subdivision, agency or
instrumentality of any of the foregoing; U.S. registered commodities or
securities dealers; real estate investment trusts; registered investment
companies; bank common trust funds; certain charitable trusts; foreign central
banks of issue. Non-resident aliens, certain foreign partnerships and foreign
corporations are generally not subject to either requirement but may instead be
subject to withholding under Sections 1441 or 1442 of the Internal Revenue Code.
Shareholders claiming exemption from backup withholding and broker reporting
should call or write the Fund for further information.
Nondiversified Status
The Fund is a "nondiversified" investment company under the Investment Act
of 1940 (the "Act"), which means the Fund is not limited by the Act in the
proportion of its assets that may be invested in the securities of a single
issuer. A nondiversified fund may invest in a smaller number of issuers than a
diversified fund. Thus, an investment in the Fund may, under certain
circumstances, present greater risk of loss to an investor than an investment in
a diversified fund. However, the Fund intends to conduct its operations so as to
qualify to be taxed as a "regulated investment company" for purposes of the
Code, which will relieve the Fund of any liability for federal income tax to the
extent its earnings are distributed to shareholders. To qualify for this
Subchapter M tax treatment, the Fund will limit its investments to satisfy the
Code diversification requirements so that, at the close of each quarter of the
taxable year, (i) not more than 25% of the fund's assets will be invested in the
securities of a single of a single issuer or of two or more issuers which the
Fund controls and which are determined to be engaged in the same or similar
trades or businesses or related trades or businesses, and (ii) with respect to
50% of its assets, not more than 5% of its assets will be invested in the
securities of a single issuer and the Fund will not own more than 10% of the
outstanding voting securities of a single issuer. Investments in United States
Government securities are not subject to these limitations; while securities
issued or guaranteed by foreign governments are subject to the above tests in
the same manner as the securities of non-governmental issuers. The Fund intends
to comply with the SEC staff position that securities issued or guaranteed as to
principal and interest by any single foreign government are considered to be
securities of issuers in the same industry.
NET ASSET VALUE
The public offering price of the shares of the Fund is the respective net
asset value per share (plus, for Class A shares, the applicable sales charge).
The net asset value fluctuates based on the respective market value of the
Fund's investments. The net asset value per share for each class is determined
every business day at the close of the regular session of the New York Stock
Exchange (normally 4:00 p.m. Eastern time) and at such other times as may be
necessary or appropriate. The Fund does not determine net asset value on certain
national holidays or other days on which the New York Stock Exchange is closed:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day. The Fund's net asset value per
share is determined by dividing total net assets (the value of its assets net of
liabilities, including accrued expenses and fees) by the number of shares
outstanding for that class.
The assets of the Fund are valued as follows: (a) securities for which
market quotations are readily available are valued at the most recent closing
price, mean between bid and asked price, or yield equivalent as obtained from
one or more market makers for such securities; (b) securities maturing within 60
days may be valued at cost, plus or minus any amortized discount or premium,
unless the Board of 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. Securities primarily
traded on foreign securities exchanges are generally valued at the preceding
closing values on their respective exchanges where primarily traded. Equity
options are valued at the last sale price and if not available then the previous
days sales price is used; if the bid price is higher or the asked price is lower
than the previous last sales price, the higher bid or lower asked prices may be
used. Exchange traded fixed income options are valued at the last sale price
unless there is no sale price, in which event current prices provided by market
makers are used. Over-the-counter fixed income options are valued based upon
current prices provided by market makers. Financial futures are valued at the
settlement price established each day by the board of trade or exchange on which
they are traded. Because of the need to obtain prices as of the close of trading
on various exchanges throughout the world, the calculation of the Fund's net
asset value does not take place contemporaneously with the determination of the
prices of U.S. portfolio securities. For purposes of determining the net asset
value, all assets and liabilities initially expressed in foreign currency values
will be converted into United States dollar values at the mean between the bid
and offered quotations of such currencies against United States dollars at last
quoted by any recognized dealer. If an event were to occur after the value
of an investment was so established but before the net asset value per share was
determined which was likely to materially change the net asset value, then the
instrument would be valued using fair value consideration by the Trustees or
their delegates.
Net Asset Value and Offering Price Per Share
Class A net asset value per share
($125,605,662/6,739,990 shares)
Maximum sales charge
(4.75% of Class A offering price)
Offering price per Class A share
Class C net asset value and offering price per share
($25,490,056/1,379,762 shares)
CALCULATION OF TOTAL RETURN
The Fund may advertise "total return." Total return is calculated
separately for each class. Total return is computed per class by taking the
total number of shares purchased by a hypothetical $1,000 investment after
deducting any applicable sales charge, adding all additional shares purchased
within the period with reinvested dividends and distributions, calculating the
value of those shares at the end of the period, and dividing the result by the
initial $1,000 investment. For periods of more than one year, the cumulative
total return is then adjusted for the number of years, taking compounding into
account, to calculate average annual total return during that period.
Totalreturn is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n =
number of years; and ERV = the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period. Total return is historical in
nature and is not intended to indicate future performance. All total return
quotations reflect the deduction of the maximum class A front-end sales charge,
except quotations of "return without maximum load," which do not deduct sales
charge. Thus, in the formula above, for return without maximum load, P = the
entire $1,000 hypothetical initial investment and does not reflect the deduction
of any sales charge; for actual return, P = a hypothetical initial investment of
$1,000 less any sales charge actually imposed at the beginning of the period for
which the performance is being calculated. Returns for the Fund's Class A and C
shares for periods ended March 31, 1996 are as follows:
Class A Shares Class A Shares Class C Shares
w/o Max. Load With Max. Load
One Year 12.56% 7.19% 11.57%
Since Inception
(May 5, 1994) 15.13% 12.21% 14.19%
PURCHASE AND REDEMPTION OF SHARES
Investments in the Fund made by mail, bank wire or electronic funds
transfer, or through the Fund's branch office or brokers participating in the
distribution of Fund shares, are credited to a shareholder's account at the
public offering price which is the net asset value next determined after receipt
by the Fund, plus the sales charge, if applicable, as set forth in the Fund's
Prospectus.
All purchases of Fund shares will be confirmed and credited to shareholder
accounts in full and fractional shares (rounded to the nearest 1/1000th of a
share). Share certificates will not be issued unless requested in writing by the
investor. No charge will be made for share certificate requests. No certificates
will be issued for fractional shares. A service fee of $10.00, plus any costs
incurred by the Fund, will be charged investors whose purchase checks are
returned for insufficient funds.
Telephone redemption requests are processed upon the date of receipt, if
received prior to 4:00 p.m. Redemption proceeds are normally transmitted or
mailed the next business day, although payment by check of redemption proceeds
may take up to five business days; however, telephone redemption requests which
would require the redemption of shares purchased by check or electronic funds
transfer within the previous 10 business days may not be honored. The Fund
reserves the right to modify the telephone redemption privilege.
Amounts redeemed by telephone may be mailed by check to the investor to
the address of record without charge. Amounts of more than $50 and less than
$300,000 may be transferred electronically at no charge to the investor.
Amounts of $1,000 or more will be transmitted by wire without charge by the
Fund to the investor's account at a domestic bank or savings association
that is a member of the Federal Reserve System or to a correspondent bank.
A charge of $5 is imposed on wire transfers of less than $1,000. If the
institution is not a Federal Reserve System member, failure of immediate
notification to that institution by the correspondent bank could result in a
delay in crediting the funds to the investor's account at the institution.
To change redemption instructions already given, shareholders must send a
notice to Calvert Group, with a voided copy of a check for the bank wiring
instructions to be added, to c/o NFDS, P.O. Box 419544, Kansas City, MO
64141-6544. If a voided check does not accompany the request, then the request
must be signature guaranteed by a commercial bank, trust company, savings
association or member firm of any national securities exchange.
Other documentation may be required from corporations, fiduciaries and
institutional investors.
The Fund's redemption check normally will be mailed to
the investor on the next business day following the date of receipt by the Fund
of a written redemption request. If the investor so instructs in such written
redemption request, the check will be mailed or the redemption proceeds wired or
transferred electronically to a preauthorized account at the investor's bank or
savings association.
The right of redemption may be suspended or the date of payment postponed
for any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency exists, as determined by the Commission,
or if the Commission has ordered a suspension of trading for the protection of
shareholders. Redemption proceeds are normally mailed, wired or transferred
electronically the next business day but in no event later than seven days after
a proper redemption request has been received, unless redemptions have been
suspended or postponed as described above.
Redemption proceeds are normally paid in cash. However, 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
Fund, whichever is less.
REDUCED SALES CHARGES (CLASS A)
The Fund imposes reduced sales charges for Class A shares in certain
situations in which the Principal Underwriter and the dealers selling Fund
shares may expect to realize significant economies of scale with respect to such
sales. Generally, sales costs do not increase in proportion to the dollar amount
of the shares sold; the per-dollar transaction cost for a sale to an investor of
shares worth, say, $5,000 is generally much higher than the per-dollar cost for
a sale of shares worth $1,000,000. Thus, the applicable sales charge declines as
a percentage of the dollar amount of shares sold as the dollar amount increases.
When a shareholder agrees to make purchases of shares over a period of time
totaling a certain dollar amount pursuant to a Letter of Intent, the Underwriter
and selling dealers can expect to realize the economies of scale applicable to
that stated goal amount. Thus the Fund imposes the sales charge applicable to
the goal amount.
Similarly, the Underwriter and selling dealers also experience cost savings
when dealing with existing Fund shareholders, enabling the Fund to afford
existing shareholders the Right of Accumulation. The Underwriter and selling
dealers can also expect to realize economies of scale when making sales to the
members of certain qualified groups which agree to facilitate distribution of
Fund shares to their members. Please see "Exhibit A - Reduced Sales Charges" in
the Prospectus. For shareholders who intend to invest at least $50,000, a Letter
of Intent is included in the Appendix to this Statement of Additional
Information.
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 of 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, Mutual Fund
Values Morningstar Ratings, Mutual Fund Forecaster, Barron's, Nelson's and The
Wall Street Journal. The Fund may also cite to any source, whether in print or
on-line, such as Bloomberg, in order to acknowledge origin of information, and
may provide biographical information on, or quote, portfolio managers or Fund
officers. The Fund may compare itself or its portfolio holdings to other
investments, whether or not issued or regulated by the securities industry,
including, but not limited to, certificates of deposit and Treasury notes. The
Fund, its Advisor, and its affiliates reserve the right to update performance
rankings as new rankings become available.
TRUSTEES AND OFFICERS
RICHARD L. BAIRD, JR., Trustee. Mr. Baird is Director of Finance for the
Family Health Council, Inc. in Pittsburgh, Pennsylvania, a non-profit
corporation which 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 Acacia Capital Corporation, Calvert New WorldFund and Calvert
World Values Fund. DOB: 05/09/48. Address: 211 Overlook Drive, Pittsburgh,
Pennsylvania 15216.
FRANK H. BLATZ, JR., Esq., Trustee. Mr. Blatz is a partner in the law firm
of Snevily, Ely, Williams, Gurrieri & Blatz. He was formerly a partner with
Abrams, Blatz, Gran, Hendricks & Reina, P.A. DOB: 10/29/35. Address: 308 East
Broad Street, PO Box 2007, Westfield, New Jersey 07091.
FREDERICK T. BORTS, M.D., Trustee. Dr. Borts is a radiologist with Kaiser
Permanente. Prior to that, he was a radiologist at Bethlehem Medical Imaging in
Allentown, Pennsylvania. DOB: 07/23/49. Address: 2040 Nuuanu Avenue #1805,
Honolulu, Hawaii, 96817.
<F1> CHARLES E. DIEHL, Trustee. Mr. Diehl is Vice President and
Treasurer Emeritus of the George Washington University, and has retired from
University Support Services, Inc. of Herndon, Virginia. He is also a
Director of Acacia Mutual Life Insurance Company. DOB: 10/13/22. Address:
1658 Quail Hollow Court, McLean, Virginia 22101.
DOUGLAS E. FELDMAN, M.D., Trustee. Dr. Feldman practices head and neck
reconstructive surgery in the Washington, D.C., metropolitan area. DOB:
05/23/48. Address: 7536 Pepperell Drive, Bethesda, Maryland 20817.
PETER W. GAVIAN, CFA, Trustee. Mr. Gavian was a principal of Gavian De Vaux
Associates, an investment banking firm. He continues to be President of
Corporate Finance of Washington, Inc. DOB: 12/08/32. Address: 3005 Franklin Road
North, Arlington, Virginia 22201.
JOHN G. GUFFEY, JR., Trustee. Mr. Guffey is chairman 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, 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 Acacia Capital
Corporation and Calvert New World Fund. DOB: 05/15/48. Address: 7205 Pomander
Lane, Chevy Chase, Maryland 20815.
M. CHARITO KRUVANT, Trustee. Ms. Kruvant is President of Creative
Associates International, Inc., a firm that specializes in human resources
development, information management, public affairs and private enterprise
development. DOB: 12/08/45. Address: 5301 Wisconsin Avenue, N.W. Washington,
D.C. 20015.
ARTHUR J. PUGH, Trustee. Mr. Pugh serves as a Director of Acacia Federal
Savings Bank. DOB: 09/24/37. Address: 4823 Prestwick Drive, Fairfax, Virginia
22030.
<F1> DAVID R. ROCHAT, Senior Vice President and Trustee. Mr. Rochat is
Executive Vice President of Calvert Asset Management Company, Inc., Director and
Secretary of Grady, Berwald and Co., Inc., and Director and President of Chelsea
Securities, Inc. DOB: 10/07/37. Address: Box 93, Chelsea, Vermont 05038.
<F1> D. WAYNE SILBY, Esq., Trustee. Mr. Silby is a trustee/director of each
of the investment companies in the Calvert Group of Funds, except for Acacia
Capital Corporation and Calvert New World Fund. Mr. Silby is 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. DOB: 07/20/48. Address: 1715
18th Street, N.W., Washington, D.C. 20009.
<F1> CLIFTON S. SORRELL, JR., President and Trustee. Mr. Sorrell 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. He 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. DOB: 06/26/41.
<F1> RENO J. MARTINI, Senior Vice President. Mr. Martini is a director and
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: 01/13/50.
<F1> RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is Senior Vice
President and Controller 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: 07/24/52.
<F1> 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: 08/12/47
<F1> EVELYNE S. STEWARD, Vice President. Ms. Steward is a director and
Senior Vice President of Calvert Group, Ltd., and a director of Calvert-Sloan
Advisers, L.L.C. She is the sister of Philip J. Schewetti, the portfolio manager
of the CSIF Equity Portfolio. DOB: 11/14/52.
<F1> 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: 09/09/50.
<F1> SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group, Ltd. 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: 01/29/59.
<F1> Officers and trustees deemed to be "interested persons" of the Fund
under the Investment Company Act of 1940, by virtue of their affiliation with
the Fund's Advisor.
Each of the above directors/trustees and officers is a director/trustee or
officer of each of the investment companies in the Calvert Group of Funds with
the exception of Calvert Social Investment Fund, of which only Messrs. Baird,
Guffey, Silby and Sorrell are among the trustees, Acacia Capital Corporation, of
which only Messrs. Blatz, Diehl, Pugh and Sorrell are among the directors,
Calvert World Values Fund, Inc., of which only Messrs. Guffey, Silby and Sorrell
are among the directors, and Calvert New World Fund, Inc., of which only Messrs.
Sorrell and Martini are among the directors. The address of directors 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 the Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird, Blatz,
Feldman, Guffey and Pugh. The Board's Investment Policy Committee is composed of
Messrs. Borts, Diehl, Gavian, Rochat, Silby and Sorrell.
Messrs. Baird, Guffey and 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.
For fiscal year 1996, trustees of the Fund not affiliated with the Fund's
Advisor were paid $13,288. Trustees of the Fund not affiliated with the Advisor
presently receive an annual fee of $20,250 for service as a member of the Board
of Trustees of the Calvert Group of Funds, and a fee of $750 to $1200 for each
regular Board or Committee meeting attended; such fees are allocated among the
respective Funds on the basis of net assets.
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, and will ensure that there is no duplication of advisory
fees
Trustee Compensation Table
Fiscal Year 1996 Aggregate Compensation Pension or Retiremen
(unaudited numbers) from Fund for service as Benefits Accrued as part
Trustee of Fund Expenses<F1>
Name of Trustee
Richard L. Baird, Jr. $1,504 $0
Frank H. Blatz, Jr. $1,491 $1,491
Frederick T. Borts $1,255 $0
Charles E. Diehl $1,435 $1,435
Douglas E. Feldman $1,401 $0
Peter W. Gavian $1,316 $321
John G. Guffey, Jr. $1,422 $0
M. Charito Kruvant $0 $0
Arthur J. Pugh $1,491 $0
D. Wayne Silby $1,366 $0
Fiscal Year 1996 Total Compensation from
(unaudited numbers) Registrant and Fund
Complex paid to Trustees<F2>
Name of Trustee
Richard L. Baird, Jr. $33,450
Frank H. Blatz, Jr. $36,801
Frederick T. Borts $25,050
Charles E. Diehl $35,101
Douglas E. Feldman $30,600
Peter W. Gavian $31,951
John G. Guffey, Jr. $40,450
M. Charito Kruvant $0
Arthur J. Pugh $36,801
D. Wayne Silby $47,965
<F1> Messrs. Blatz, Diehl, Gavian, and Pugh have chosen to defer a portion of
their compensation. As of March 31, 1996, total deferred compensation, including
dividends and capital appreciation, was $64,902, $350,414, $91,494, and
$152,338, for each trustee, respectively.
<F2> As of December 31, 1995, 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 Mutual"). The Advisory serves as investment advisor to
seven other registered investment companies in the Calvert Group of Funds:
First Variable Rate Fund for Government Income; Calvert Tax-Free Reserves;
Calvert Cash Reserves; Calvert Social Investment Fund; Calvert Municipal Fund,
Inc.; Calvert World Values Fund, Inc.; and Acacia Capital Corporation, a
registered investment company whose shares are sold to insurance companies to
fund the benefits under certain variable annuity and variable life insurance
policies; and as sub-advisor to another registered investment company in the
Calvert Group of Funds: Calvert New World Fund, Inc.
The Advisory Contract between the Fund and the Advisor was entered into as
of May 1, 1994, and will remain in effect indefinitely, provided continuance is
approved at least annually by the vote of the holders of a majority of the
outstanding shares of the Fund or by the Board of Trustees of the Fund; and
further provided that such continuance is also approved annually by the vote of
a majority of the trustees of the Fund who are not parties to the Contract or
interested persons of parties to the Contract or interested persons of such
parties, cast in person at a meeting called for the purpose of voting on such
approval. The Contract may be terminated without penalty by either party upon 60
days' prior written notice; it automatically terminates in the event of its
assignment. The Fund's Subadvisor is Portfolio Advisory Services, Inc.
("Subadvisor" or "PASI"). Pursuant to an Investment Subadvisory Agreement with
the Advisor, the Subadvisor determines investment selections for the Fund. PASI
has been recognized by the Nelson's Directory of Investment Managers for it's
private managed accounts.
The Advisor provides the Fund with investment supervision and management,
administrative services, office space, furnishes executive and other personnel
to the Fund, and may pay Fund advertising and promotional expenses. The Advisor
reserves the right to compensate broker-dealers in consideration of their
promotional or administrative services. The Fund pays all other administrative
and operating expenses, including: custodial, registrar, dividend disbursing and
transfer agency fees; federal and state securities registration fees; salaries,
fees and expenses of Trustees, executive officers and employees of the Fund, who
are not ''affiliated persons" of the Advisor or the Subadvisor within the
meaning of the Investment Company Act of 1940; insurance premiums; trade
association dues; legal and audit fees; interest, taxes and other business fees;
expenses of printing and mailing reports, notices, prospectuses, and proxy
material to shareholders; annual shareholders' meeting expenses; and brokerage
commissions and other costs associated with the purchase and sale of portfolio
securities. The Advisor has agreed to reimburse the Fund for all expenses
(excluding brokerage, taxes, interest, and all or a portion of distribution and
certain other expenses, to the extent allowed by state or federal law or
regulation, such as California Rule 260.140.84) exceeding the most restrictive
expense limitation in those states where the Fund's shares are qualified for
sale (currently 2.5% of the Fund's first $30 million of average net assets, 2%
of the next $70 million, and 1.5% of the excess over $100 million).
Under the 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. For its services, the Advisor receives a base annual
fee of 1.50% of the Fund's average daily net assets.
For fiscal years 1996 and 1995, the Fund paid advisory fees of $2,282,948
and $791,257 and was reimbursed $178,157 and $157,095 from the Advisor,
respectively. The Advisor may voluntarily defer its fees or assume expenses of
the Fund. The Advisor may recapture from (charge to) the Fund for such expenses
incurred through December 31, 1994, provided that such recapture would not cause
the Fund's aggregate expenses to exceed an annual expense limit of 2.00%, and
that such recapture shall be made to the Advisor only from the two-year
period from January 1, 1995 through December 31, 1996. The Advisor may
voluntarily agree to further defer its fees or assume Fund expenses from January
1, 1995 through December 31, 1996 ("Additional Deferral/Assumption Period"). If
so, the Advisor may recapture from (charge to) the Fund for any such expenses
incurred during the Additional Deferral/Assumption Period, provided that such
recapture would not cause the Fund's aggregate expenses to exceed an annual
expense limit of 2.00%, and that such recapture shall be made to the Advisor
only from the two-year period from January 1, 1997 through December 31, 1998.
Each year's current advisory fees (incurred in that year) will be paid in full
before any recapture for a prior year is applied. Recapture then will be applied
beginning with the most recent year first. No fees were recaptured for fiscal
year 1996.
METHOD OF DISTRIBUTION
The Fund has entered into an agreement with Calvert Distributors, Inc.
("CDI") whereby CDI, acting as principal underwriter for the Fund, 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 reimbursement of
distribution expenses pursuant to the Distribution Plan (see below). For Class A
Shares, CDI also receives the portion of the sales charge in excess of the
dealer reallowance.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted Distribution Plans (the "Plans") which permits the Fund to pay
certain expenses associated with the distribution of its shares. Such expenses
may not exceed, on an annual basis, 0.35% of the Fund's Class A average daily
net assets. For fiscal years 1996 and 1995, Class A Distribution Plan expenses
totaled $317,541 and $112,467, respectively. Of the Class A Distribution Plan
expenses paid in fiscal year 1996, $270,850 was used for broker/dealer
compensation and the remainder was used for the printing and mailing of
prospectuses and sales materials to investors (other than current shareholders).
During the same periods, CDI received net sales charges of $247,094 and
$419,511, respectively. Expenses under the Fund's Class C Plan may not exceed,
on an annual basis, 1.00% of the Fund's Class C average daily net assets. For
fiscal years 1996 and 1995, Class C Distribution Plan expenses totaled $247,589
and $73,949, respectively. Of the Class C Distribution Plan expenses paid in
fiscal year 1996, $247,589 was used for broker/dealer compensation.
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.
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 Fund. Any change in the
Plans that would materially increase the distribution cost to the Fund 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.
TRANSFER AND SHAREHOLDER SERVICING AGENT
Calvert Shareholder Services, Inc., a subsidiary of Calvert Group, Ltd.,
and Acacia Mutual, has been retained by the Fund to act as transfer agent,
dividend disbursing agent and shareholder servicing agent. These
responsibilities include: responding to shareholder inquiries and instructions
concerning their accounts; crediting and debiting shareholder accounts for
purchases and redemptions of Fund shares and confirming such transactions; daily
updating of shareholder accounts to reflect declaration and payment of
dividends; and preparing and distributing semi-annual statements to shareholders
regarding their accounts. For these services, Calvert Shareholder Services,
Inc., receives a fee based on the number of shareholder accounts and the number
of shareholder transactions.
For fiscal years 1996 and 1995, the Fund paid Calvert Shareholder Services,
Inc. fees of $363,268 and $165,615, respectively.
FUND TRANSACTIONS
Fund transactions are undertaken on the basis of their desirability from an
investment standpoint. Investment decisions and the choice of brokers and
dealers are made by the Fund's Advisor and Subadvisor 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 professional capability and the value and quality
of their services. The Fund may pay brokerage commissions to broker-dealers who
provide the Fund with statistical, research, or other information and services.
Although any statistical research or other information and services provided by
such broker-dealers may be useful to the Advisor and the Subadvisor, the dollar
value of such information and services is generally indeterminable, and its
availability or receipt does not serve to materially reduce the Advisor's or
Subadvisor's normal research activities or expenses.
The Advisor and Subadvisor may also execute portfolio transactions with or
through broker-dealers who have sold shares of the Fund. However, such sales
will not be a qualifying or disqualifying factor in a broker- dealer's selection
nor will the selection of any broker-dealer be based on the volume of Fund
shares sold.
For fiscal years 1996 and 1995, the portfolio turnover rate of the Fund was
402% and 480%, respectively.
INDEPENDENT ACCOUNTANT AND CUSTODIANS
Coopers and Lybrand, L.L.P. has been selected by the Board of Trustees to
serve as independent accountant for fiscal year 1997. State Street Bank & Trust
Company, N.A., 225 Franklin Street, Boston, MA 02110, serves as custodian of the
Fund's investments. First National Bank of Maryland, 25 South Charles Street,
Baltimore, Maryland 21203 also serves as custodian of certain of the Fund's cash
assets. The custodian has 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.
GENERAL INFORMATION
The Fund was organized as a Massachusetts business trust on March 15, 1982.
The series of the Fund include Calvert Income Fund and Calvert Strategic Growth
Fund.
Each share represents an equal proportionate interest with each other share
and is entitled to such dividends and distributions out of the income belonging
to such class as declared by the Board. The Fund offers two separate classes of
shares: Class A and Class C. 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 will send its shareholders confirmations of purchase and
redemption transactions, as well as periodic transaction statements and
unaudited semi-annual and audited annual financial statements of the Fund's
investment securities, assets and liabilities, income and expenses, and changes
in net assets.
The Prospectus and this Statement of Additional Information do not contain
all the information in the Fund's registration statement. The registration
statement is on file with the Securities and Exchange Commission and is
available to the public.
FINANCIAL STATEMENTS
The audited financial statements in the Fund's 1996 Annual Report to
Shareholders is expressly incorporated by reference and made a part of this
Statement of Additional Information. A copy of the Annual Report may be obtained
free of charge by writing or calling the Fund.
APPENDIX
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
Corporate Bonds:
Description of Moody's Investors Service Inc.'s/Standard & Poor's municipal
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 the A category.
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. There may be some large uncertainties and major risk exposure to
adverse conditions. The higher the degree of speculation, the lower the rating.
C/C: This rating is only for no-interest income bonds.
D: Debt in default; payment of interest and/or principal is in arrears.
Commercial Paper:
MOODY'S INVESTORS SERVICE, INC.:
The Prime rating is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations. Issuers within this Prime
category may be given ratings 1, 2, or 3, depending on the relative strengths of
these factors.
STANDARD & POOR'S CORPORATION:
Commercial paper rated A by Standard & Poor's has the following
characteristics: (i) liquidity ratios are adequate to meet cash requirements;
(ii) long-term senior debt rating should be A or better, although in some cases
BBB credits may be allowed if other factors outweigh the BBB; (iii) the issuer
should have access to at least two additional channels of borrowing; (iv) basic
earnings and cash flow should have an upward trend with allowances made for
unusual circumstances; and (v) typically the issuer's industry should be well
established and the issuer should have a strong position within its industry and
the reliability and quality of management should be unquestioned. Issuers rated
A are further referred to by use of numbers 1, 2 and 3 to denote the relative
strength within this highest classification.
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(not available for mid-load funds) __ $100,000 __ $250,000
__ $500,000 __ $1,000,000 __ $2,500,000
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. 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 escorted
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)
*"Fund" in this Letter of Intent shall refer to the Fund or Portfolio, as
the case may be, here indicated.
