CALVERT INCOME FUND
Dear Shareholder:
This annual report of the Calvert Income Fund covers the 12-month period
ended September 30, 1996. From the fourth quarter of 1995 into the first quarter
1996, the economy continued to expand at a modest pace. The Federal Reserve
continued to maintain an easy monetary policy and, in late January, took steps
to lower short-term interest rates. In the second quarter of 1996, the economy
appeared to gain momentum, which heightened fears of inflation and increased the
likelihood of a rise in interest rates. This brought about a decline in stock
prices at midyear. Bond yields had trended higher during that period in
anticipation of this type of strengthening, so the bond market didn't jolt as
sharply.
For the third quarter of 1996, economic growth appeared to moderate.
Reports of retail sales and personal consumption pointed to a benign level of
inflation. And, the most common indexes of price changes, the consumer price
index and producer price index, did not indicate a build up of inflationary
pressures. Bond prices were choppy for the last three months of this reporting
period, generally declining going into the months and gaining ground in the last
days of the months.
Stocks closed the 12-month period with strong returns, as measured by the
Standard & Poor's 500 Stock Index, which generated a one-year return of 20%.
Long-term bonds, in general, turned in flat or just slightly negative returns.
Money market rates continued to slide during the final quarter of 1995 and into
the first quarter of 1996, then reversed course and moved higher on expectations
of tighter monetary policy.
Fund Strategy and Performance
For the 12-month period, the Fund's return was in-line with that of its
benchmark. We lagged for the six-month period due to the Fund's slightly shorter
than average maturity. This meant that while prices of Fund securities did not
decline as much when long-term rates trended higher early in the year, they did
not benefit fully from the little rallies in the bond market that occurred
during the last quarter of this period.
We maintained the Fund's broad diversification by type of security. At
period end, roughly 33% of assets were invested in corporate bonds, 26% in
mortgage-backed securities, 19% in U.S. Government and Government agency issues
and 14% in taxable municipal securities.
At each opportunity to invest Fund assets, we scoured the market for unique
issues that enhanced the Fund's yield without significantly increasing credit
risk or interest rate sensitivity. In the corporate sector, we were able to
identify issues that were poised to benefit from positive credit developments.
We invested early and benefited as increased demand tightened the yield spreads.
Among mortgages, we sought those with positive collateral and prepayment
characteristics, which helped to decrease the effect of changes in interest
rates on the Fund's share price. We also added a few taxable revenue bonds that
offered a yield advantage as well as favorable pricing characteristics.
Outlook
Over the short-term, we expect the bond market will exhibit considerable
short-term volatility as investors attempt to gauge the strength of the economy
and determine the outlook for interest rates. Our longer-term view is that
yields will eventually break out of the range in which they have been trading
over the past 12 months and trend a bit higher. Accordingly, the portfolio is
defensively structured.
We appreciate your investment in the Fund.
Sincerely,
Clifton S. Sorrell
President
October 17, 1996
Portfolio Statistics
Maturity Schedule
% of Portfolio 9/30/96 3/31/96
- --------------------------------------------------------------------------------
Less than 1 Year 1% 15%
1-5 Years 10% 5%
5-10 Years 30% 38%
10-20 Years 28% 20%
20-30 Years 27% 20%
30 Years and Above 4% 2%
Weighted Average 15 years 13 years
SEC Yields
Thirty Days Ended 9/30/96 3/31/96
- ----------------------------------------------------------------------------
A Shares 5.68% 5.21%
C Shares 3.84% 3.23%
Average Annual Total Returns
for periods ended September 30, 1996
Class A Shares Class C Shares
One Year .28% One Year 1.96%
Five Years 6.35% Since Inception (3/94) 2.51%
Ten Years 7.76%
Performance Comparison
Comparison of change in value of $10,000 investment.
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the Fund's maximum front-end sales charge of 3.75%. No
sales charge has been applied to the index used for comparison. The value of an
investment in Class A shares is plotted in the line graph. The value of an
investment in Class C shares would be different. Past performance is no
guarantee of future results.
Report of Independent Accountants
To the Board of Trustees of The Calvert Fund and Shareholders
of Calvert Income Fund:
We have audited the accompanying statement of net assets of Calvert Income
Fund (one of the portfolios comprising The Calvert Fund), as of September 30,
1996, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the three years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for each of the respective years in the period
ended September 30, 1993, were audited by other auditors whose report dated
October 29, 1993, expressed an unqualified opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
September 30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Calvert Income Fund as of September 30, 1996, and the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and financial highlights for each of the three years in
the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
November 8, 1996
Principal
Debt Securities - 94.8% Amount Value
- --------------------------------------------------------------------------------
Corporate Bonds - 33.2%
Arvin Industries Inc. 6.875%, 2/15/01 $2,000,000 $1,945,460
Continental Valorem Corp. (Optional Put),
6.40%, 6/1/13 700,000 700,000
Dean Witter Discover & Co., 6.75%, 10/15/13 2,000,000 1,805,200
First National Bank of Omaha, 7.32%, 12/1/10 1,000,000 945,890
First Union Corp., 6.55%, 10/15/35 1,000,000 948,320
General Motors Corp., 7.10%, 3/15/06 1,000,000 985,650
K-Mart Corp., 6.00%, 1/1/08 315,000 186,637
Leland Stanford Jr. University, 7.65%, 6/15/26 1,000,000 1,027,020
Nationwide Mutual Insurance, 7.50%, 2/15/24 650,000 588,100
Pacific Bell, 7.375%, 7/15/43 1,000,000 945,440
Parker & Parsley Petro Co., 8.875%, 4/15/05 2,000,000 2,169,360
Union Carbide Corp., 6.79%, 6/1/25 1,000,000 969,910
USG Corp., 8.50%, 8/1/05 2,000,000 2,020,000
- -------------------------------------------------------------------------------
15,236,987
Mortgage Securities - 25.6%
Advanta Mortgage Loan Trust Series 1993-4,
5.50%, 3/25/10 1,091,210 1,031,535
Federal Home Loan Mortgage Corp., CMO Series 1605,
5.125%, 8/15/06 1,949,813 1,898,962
Federal Home Loan Mortgage Corp., CMO Series A,
11.875%, 6/15/13 17,999 18,687
Federal Home Loan Mortgage Corp., CMO Series 1560,
6.60%, 10/15/22 1,000,000 930,700
Federal National Mortgage Assn., CMO Series 1993-211 PH,
6.00%, 3/25/08 1,000,000 938,550
Federal National Mortgage Assn., CMO Series 1993-122 C,
6.50%, 2/25/23 1,500,000 1,343,835
Federal National Mortgage Assn., Pool 318715,
7.00%, 8/1/25 1,908,941 1,844,514
Government National Mortgage Assn., Pool 137518,
11.00%, 10/15/15 2,748 3,073
Prudential Home Mortgage Securities, 6.75%, 12/26/23 1 ,000,000 852,130
Vendee Mortgage Trust, 7.00%, 5/15/08 1,000,000 968,420
Vendee Mortgage Trust, 6.75%, 9/15/09 1,000,000 994,336
Vendee Mortgage Trust, 6.75%, 4/15/22 1,000,000 900,312
Washington Mutual Savings Bank, Mortgage pass-thru,
9.00%, 5/25/08 29,577 29,577
- -----------------------------------------------------------------------------
11,754,631
Municipal Bonds - 13.8%
Arkansas Development Financial Authority CMO,
6.80%, 2/15/10 600,000 568,578
Chicksaw Nation Oklahoma Certificate of Participation,
10.00%, 8/1/03 1,310,000 1,335,493
Maryland State Economic Development Corp.,
8.00%, 10/1/05 1,000,000 995,560
Maryland State Economic Development Corp.,
8.625, 10/1/19 750,000 760,410
Miami Beach Redevelopment Agency, 8.80%, 12/1/15 2,000,000 2,088,400
Texas Veterans Housing Fund II General Obligation,
7.35%, 12/1/21 600,000 565,308
- --------------------------------------------------------------------------------
6,313,749
Principal
Debt Securities (Cont'd) Amount Value
- ---------------------------------------------------------------------
U.S. Government Agency Obligations - 18.9%
Federal Home Loan Mortgage Corp., 6.80%, 5/14/99 $1,000,000 $1,004,610
Federal National Mortgage Assn., 5.94%, 12/12/05 1,000,000 929,980
Small Business Administration, 8.05%, 6/1/12 1,694,794 1,711,912
Small Business Administration, 7.70%, 7/1/16 2,500,000 2,538,250
United States Treasury Notes, 7.50%, 10/31/99 1,400,000 1,446,004
United States Treasury Notes, 7.00%, 7/15/06 1,000,000 1,020,280
- -----------------------------------------------------------------------------
8,651,036
Yankee Dollar Denominated Bonds - 2.2%
Petroliam Nasional Berhad, 7.125%, 8/15/05 1,000,000 992,446
- --------------------------------------------------------------------------------
992,446
Repurchase Agreements - 1.1%
Donaldson, Lufkin, Jenrette, 5.70%, dated 9/30/96,
due 10/1/96
(Collateral: $510,204 Refunding Corp. STRIPS,
10/15/19) 500,000 500,000
- --------------------------------------------------------------------------
500,000
- -------------------------------------------------------------------------------
Total Debt Securities (Cost $43,836,700) 43,448,849
- --------------------------------------------------------------------------------
Equity Securities - 3.1% Shares
- -----------------------------------------------------------------------------
Preferred Stocks
Australian & New Zealand Bank 13,000 349,375
Bankers Trust NY 15,000 371,250
ELF Overseas, Ltd., Series A 12,500 328,125
Santander Oversea Bank, Inc., Series D 15,000 369,375
- --------------------------------------------------------------------------------
Total Equity Securities (Cost $1,388,250) 1,418,125
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (Cost $45,224,950) - 97.9% 44,866,974
Other assets and liabilities, net - 2.1% 942,805
- -----------------------------------------------------------------------------
Net Assets - 100% $45,809,779
================================================================================
Net Assets Consist of:
- --------------------------------------------------------------------------------
Paid-in capital applicable to the following shares of beneficial interest,
unlimited number of no par shares authorized:
Class A: 2,697,580 shares outstanding $45,278,060
Class C: 85,142 shares outstanding 1,386,545
Accumulated net realized gain (loss) on investments (496,850)
Net unrealized appreciation (depreciation) on investments (357,976)
- --------------------------------------------------------------------------------
Net assets $45,809,779
- -------------------------------------------------------------------------------
Net Asset Value per Share
- --------------------------------------------------------------------------------
Class A (based on net assets of $44,431,125) $16.47
================================================================================
Class C (based on net assets of $1,378,654) $16.19
Net Investment Income
- --------------------------------------------------------------------------------
Investment Income
Interest income $3,119,286
Dividend income (net of foreign taxes of $10,658) 104,154
- --------------------------------------------------------------------------------
Total investment income 3,223,440
- --------------------------------------------------------------------------------
Expenses
Investment advisory fee 311,154
Transfer agency fees and expenses 82,542
Distribution Plan expenses:
Class A 64,681
Class C 13,298
Trustees' fees and expenses 4,175
Custodian fees 14,196
Registration fees 34,504
Reports to shareholders 32,224
Professional fees 13,763
Miscellaneous 19,062
- ----------------------------------------------------------------------------
Total expenses 589,599
Fees paid indirectly (14,196)
- -------------------------------------------------------------------------------
Net expenses 575,403
- -------------------------------------------------------------------------------
Net Investment Income 2,648,037
Realized and Unrealized Gain (Loss) on
Investments
- --------------------------------------------------------------------------------
Net realized gain (loss) 83,953
Change in unrealized appreciation or depreciation (889,184)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain
(Loss) on Investments (805,231)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Resulting From Operations $1,842,806
==========================================================================
Increase (Decrease) in Net Assets
- -------------------------------------------------------------------
Operations
Net investment income (loss) $2,648,037 $3,017,175
Net realized gain (loss) 83,953 (197,657)
Change in unrealized appreciation or depreciation (889,184) 3,274,958
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Resulting From Operations 1,842,806 6,094,476
- --------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income:
Class A Shares (2,606,323) (2,966,046)
Class C Shares (54,133) (38,710)
Distribution in excess of net realized gain:
Class A Shares (62,966) --
Class C Shares (1,516) --
- --------------------------------------------------------------------------------
Total distributions (2,724,938) (3,004,756)
- ------------------------------------------------------------------------------
Capital share transactions:
Shares sold:
Class A Shares 4,750,562 5,198,976
Class C Shares 1,203,271 565,580
Shares issued from merger:
Class A Shares 7,603,794 -
Class C Shares 303,797 -
Reinvestment of distributions:
Class A Shares 2,243,906 2,746,478
Class C Shares 54,829 34,511
Shares redeemed:
Class A Shares (11,964,864) (14,290,345)
Class C Shares (905,976) (291,420)
- --------------------------------------------------------------------------------
Total capital share transactions 3,289,319 (6,036,220)
- ------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 2,407,187 (2,946,500)
Net Assets
- --------------------------------------------------------------------------------
Beginning of year 43,402,592 46,349,092
- --------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $0 and $12,419, respectively) $45,809,779 $43,402,592
================================================================================
Capital Share Activity
- --------------------------------------------------------------------------------
Shares sold:
Class A Shares 284,027 322,555
Class C Shares 72,532 35,781
Shares issued from merger:
Class A Shares 461,675 -
Class C Shares 18,753 -
Reinvestment of distributions:
Class A Shares 134,740 172,149
Class C Shares 3,352 2,165
Shares redeemed:
Class A Shares (717,676) (889,362)
Class C Shares (55,738) (18,136)
- ---------------------------------------------------------------------------
Total capital share activity 201,665 (374,848)
================================================================================
Note A--Significant Accounting Policies
General: The Calvert Income Fund (the "Fund"), a series of The Calvert
Fund, is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. The operations of each
series are accounted for separately. The Fund offers Class A and Class C shares
of beneficial interest. Class A shares are sold with a maximum front-end sales
charge of 3.75%. Class C shares, which have no transaction-based sales charge,
have a higher annual expense rate than Class A. Each class has different: (a)
dividend rates, due to differences in Distribution Plan expenses and other class
specific expenses, (b) exchange privileges and (c) class specific voting rights.
On May 23, 1996, the net assets of Calvert U.S. Government Fund were merged
into the Fund. The acquisition was accomplished by a tax free exchange of
480,428 shares of the Fund (valued at $7,907,591) for the 555,054 shares of the
U.S. Government Fund outstanding at May 23, 1996. The U.S. Government Fund's net
assets at that date, including $172,000 of unrealized depreciation and $328,884
of undistributed realized net losses were combined with those of the Fund. The
aggregate net assets of the Fund and U.S. Government Fund immediately before the
acquisition were $40,339,463 and $7,910,153, respectively.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Municipal securities are valued utilizing the average
of bid prices or at bid prices based on a matrix system (which considers such
factors as security prices, yields, maturities and ratings) furnished by dealers
through an independent pricing service. Other securities and assets for which
market quotations are not available or deemed inappropriate are valued in good
faith under the direction of the Board of Trustees.
Repurchase Agreements: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest.
Options: The Fund may write or purchase option securities. The option
premium is the basis for recognition of unrealized or realized gain or loss on
the option. The cost of securities acquired or the proceeds from securities sold
through the exercise of the option is adjusted by the amount of the premium. The
fund maintains liquid assets sufficient to cover, on a daily basis, the current
values of written options.
Futures Contracts: The Fund may enter into futures contracts agreeing to
buy or sell a financial instrument for a set price at a future date. The Fund
maintains securities with a value equal to its obligation under each contract.
Initial margin deposits of either cash or securities are made upon entering in
futures contracts; thereafter, variation margin payments are made or received
daily reflecting the change in market value. Unrealized or realized gains and
losses are recognized based on the change in market value. Risks of futures
contracts arise from the possible illiquidity of the futures markets and the
movement in the value of the investment or in interest rates.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Dividend income is recorded on the ex-dividend date or,
in the case of dividends on certain foreign securities, as soon as the Fund is
informed of the ex-dividend date. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded
by the Fund on ex-dividend date. Dividends from net investment income are paid
monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income tax
regulations.
Expense Offset Arrangement: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such deposit arrangement is an alternative
to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
Note B--Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Trustees of the Fund.
For its services, the Advisor receives a monthly fee based on an annual rate of
.70% of the Fund's average daily net assets.
The Advisor reimburses the Fund for its operating expenses (excluding
brokerage fees, taxes, interest, Distribution Plan expenses and extraordinary
items) exceeding the following annual rates of average daily net assets: 2.5% on
the first $30 million, 2.0% on the next $70 million and 1.5% on the excess of
$100 million.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by each
class of shares, allow the Fund to pay the distributor for expenses and services
associated with distribution of shares. The expenses paid may not exceed .50%
and 1.0% annually of average daily net assets of each Class A and Class C,
respectively.
The Distributor received $15,770 as its portion of the commissions charged
on sales of the Fund's shares.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Trustee who is not affiliated with the Advisor receives an annual fee
of $20,250 plus up to $1,200 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
Note C--Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were $60,639,594 and $62,530,422, respectively.
The cost of investments owned at September 30, 1996 was substantially the
same for federal income tax and financial reporting purposes. Net unrealized
depreciation aggregated $357,976, of which $474,824 related to appreciated
securities and $832,800 related to depreciated securities.
Net realized capital loss carryforwards acquired in the merger of the U.S.
Government Fund, of approximately $329,000, may be utilized to offset current or
future capital gains for federal income tax purposes, until expiration in 2001
through 2002.
Note D--Subsequent Event
Effective October 29, 1996, all outstanding Class C shares in the Fund will
be converted automatically into an equivalent value of Class A shares. This
transaction is a non-taxable exchange and no sales charge will be applied to the
Class A shares issued.
Class A Shares
- --------------------------------------------------------------------------------
Net asset value, beginning $16.82 $15.68 $18.41
================================================================================
Income from investment operations
Net investment income 1.01 1.11 1.16
Net realized and unrealized gain (loss) (.32) 1.14 (2.42)
- --------------------------------------------------------------------------------
Total from investment operations .69 2.25 (1.26)
- --------------------------------------------------------------------------------
Distributions from
Net investment income (1.01) (1.11) (1.16)
In excess of net realized gain (.03) -- (.31)
- -----------------------------------------------------------------------------
Total distributions (1.04) (1.11) (1.47)
- --------------------------------------------------------------------------------
Total increase (decrease) in net asset value (.35) 1.14 (2.73)
- --------------------------------------------------------------------------------
Net asset value, ending $16.47 $16.82 $15.68
================================================================================
Total return* 4.21% 14.90% (6.94%)
================================================================================
Ratios to average net assets:
Net investment income 6.02% 6.89% 6.86%
================================================================================
Total expenses 1.26% 1.26% -
================================================================================
Net expenses 1.23% 1.23% 1.07%
Portfolio turnover 153% 135% 34%
Net assets, ending (in thousands) $44,431 $42,637 $45,936
Number of shares outstanding,
ending (in thousands) 2,698 2,535 2,929
================================================================================
Class A Shares
- ------------------------------------------------------------------------------
Net asset value, beginning $17.50 $16.61
================================================================================
Income from investment operations
Net investment income 1.23 1.28
Net realized and unrealized gain (loss) .91 .89
- --------------------------------------------------------------------------------
Total from investment operations 2.14 2.17
- --------------------------------------------------------------------------------
Distributions from
Net investment income (1.23) (1.28)
Net realized gain - -
- --------------------------------------------------------------------------------
Total distributions (1.23) (1.28)
- -----------------------------------------------------------------------------
Total increase (decrease) in net asset value .91 .89
- -------------------------------------------------------------------------------
Net asset value, ending $18.41 $17.50
============================================================================
Total return* 12.74% 13.66%
================================================================================
Ratios to average net assets:
Net investment income 6.93% 7.59%
================================================================================
Total expenses - -
================================================================================
Net expenses 1.00% 1.04%
================================================================================
Portfolio turnover 25% 18%
===============================================================================
Net assets, ending (in thousands) $53,134 $43,494
Number of shares outstanding,
ending (in thousands) 2,886 2,486
==============================================================================
Class C Shares
- --------------------------------------------------------------------------------
Net asset value, beginning $16.56 $15.63 $17.35
=============================================================================
Income from investment operations
Net investment income .74 .81 .57
Net realized and unrealized gain (loss) (.42) 1.09 (1.67)
- --------------------------------------------------------------------------------
Total from investment operations .32 1.90 (1.10)
- -------------------------------------------------------------------------------
Distributions from
Net investment income (.66) (.97) (.62)
In excess of net realized gain (.03) -- -
- -------------------------------- --------------------------------------------
Total distributions (.69) (.97) (.62)
- --------------------------------------------------------------------------------
Total increase (decrease) in net asset value (.37) .93 (1.72)
- --------------------------------------------------------------------------------
Net asset value, ending $16.19 $16.56 $15.63
================================================================================
Total return* 1.96% 12.58% (5.47%)
================================================================================
Ratios to average net assets:
Net investment income 3.96% 4.71% 5.62%(a)
==============================================================================
Total expenses 3.37% 3.37% --
==============================================================================
Net expenses 3.34% 3.34% 2.65%(a)
Expenses reimbursed - .69% 7.29%(a)
Portfolio turnover 153% 135% 34%
Net assets, ending (in thousands) $1,379 $766 $413
Number of shares outstanding,
ending (in thousands) 85 46 26
===========================================================================
Calvert Income fund
Prospectus dated January 31, 1996
Date of Supplement: July 31, 1996
Effective August 1996, Steve Van Order is no longer the portfolio manager
for Calvert Income Fund. Please replace the paragraph at page 10 of the
prospectus with the following:
The Fund is managed by a committee of the Advisor's fixed-income portfolio
managers.
To Open an Account:
..........................................................................
800-368-2748
Yields and Prices:
............................................................................
Calvert Information Network
24 hours, 7 days a week
800-368-2745
Service for
Existing Account:
.............................................................................
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDDfor 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 64105-1807
Web Site
...........................................................................
Address: http://www.calvertgroup.com
Principal
Underwriter:
...........................................................................
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
