Page 1 of _____
SEC Registration Nos.
2-76510 and 811-3416
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 32
XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 32
XX
The Calvert Fund
(Exact Name of Registrant as Specified in Charter)
Calvert Strategic Growth Fund
New Vision Small Cap Fund
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
Registrant's Telephone Number: (301) 951-4800
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
__ Immediately upon filing XX on July, 31 1997
pursuant to paragraph (b) pursuant to
paragraph (b)
__ 60 days after filing __ on (date)
pursuant to paragraph (a) pursuant to
paragraph (a)
of Rule 485.
Pursuant to the provisions of Rule 24f-2 under the Investment Company
Act of 1940, an indefinite number of shares of beneficial interest is
being registered by this Registration Statement. On May 29, 1997,
Registrant filed a Rule 24f-2 Notice for Calvert Strategic Growth Fund
for its fiscal year ended March 31, 1997.
<PAGE>
The Calvert Fund
Form N-1A Cross Reference Sheet
Item number Prospectus Caption
1. Cover Page
2. Fund Expenses
3. Financial Highlights
Total Return
4. Investment Objective and Policies
Management of the Fund
5. Management of the Fund
6. Alternative Sales Options
Management of the Fund
Dividends, Capital Gains and Taxes
7. How to Buy Shares
Net Asset Value
Reduced Sales Charges
When Your Account Will Be Credited
Exchanges
8. Alternative Sales Options
How to Sell Your Shares
9. *
Statement of Additional Information Caption
10. Cover Page
11. Table of Contents
12. General Information
13. Investment Objective and Policies
Loans of Portfolio Securities
Repurchase Agreements
Investment Restrictions
Fund Transactions
14. Trustees and Officers
15. *
16. Investment Advisor and Investment Manager
Transfer and Shareholder Servicing Agent
Independent Accountants and Custodians
17. Portfolio Transactions
18. *
19. Valuation of Shares
Purchase and Redemption of Shares
Reduced Sales Charge
20. Dividends and Taxes
21. Method of Distribution
22. Calculation of Total Return
23. Financial Statements
* Inapplicable or negative answer
<PAGE>
PROSPECTUS July 31, 1997
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
("SAI") for the Fund dated July 31, 1997, has been filed with the Securities
and Exchange Commission (the "Commission") and is incorporated by reference.
This free Statement is available upon request from the Fund: 800-368-2748.
The Commission maintains a website (http://www.sec.gov) that contains the SAI,
material incorporated by reference, and other information regarding
registrants that file electronically with the Commission.
<TABLE>
<CAPTION>
<S> <C> <C>
FUND EXPENSES
A. Shareholder Transaction Costs Class A Class C
Maximum Front-End Sales Charge on
Purchases (as a percentage of offering price) 4.75% None
Maximum Contingent Deferred Sales Charge None None
B. Annual Fund Operating Expenses (Fiscal Year 1997)
(as a percentage of average net assets)
Management Fees 1.70% 1.70%
Rule 12b-1 Service and Distribution Fees 0.25% 1.00%
Other Expenses 0.47% 0.41%
Total Fund Operating Expenses<F1>1 2.42% 3.11%
<FN>
<F1> Net Fund Operating Expenses after reduction for fees paid indirectly for
Class A and Class C were 2.30% and 3.09%, respectively.
</FN>
</TABLE>
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 $71 $119 $170 $310
Class C $31 $96 $163 $342
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).
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.
Annual Fund Operating Expenses
are based on the Fund's 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. 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. Other
Expenses are shown inclusive (gross) of the Advisor's fiscal year 1997
reimbursement, which is not expected to continue.
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. In addition to
the compensation itemized above (sales charge and Rule 12b-1 service and
distribution fees), certain broker/dealers and/or their salespersons may
receive certain compensation for the sale and distribution of the securities
or for services to the Fund. (See the SAI, "Method of Distribution.")
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
SAI.
Strategic Growth Fund Class A Shares
FOR THE PERIODS
ENDING MARCH 31,
1997 1996 1995*
Net asset value, beginning of period $18.64 $16.96 $15.00
Income from investment operations
Net investment income (.16) .13 .20
Net realized and unrealized gain (loss)
on investments (3.53) 1.96 2.21
Total from investment operations (3.69) 2.09 2.41
Distributions from
Net investment income - (.20) (.04)
Net realized gain (1.03) (.21) (.41)
Total distributions (1.03) (.41) (.45)
Total increase (decrease) in net
asset value (4.72) 1.68 1.96
Net asset value, end of period $13.92 $18.64 $16.96
Total return** (21.17%) 12.56% 16.08%
Ratios to average net assets:
Net investment income (.73%) .90% 1.47%(a)
Total Expenses*** 2.32% 2.32% -
Net Expenses 2.30% 2.29% 2.55%(a)
Expenses Reimbursed .10% .14% .31%(a)
Portfolio turnover 151% 402% 480%
Average commission rate paid $.0782 $- $-
Net assets, end of period (in thousands) $94,625 $125,606
$107,004
Number of shares outstanding at end
of period (in thousands) 6,798 6,740 6,310
(a) Annualized
* From May 5, 1994, inception.
** Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
***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.
Strategic Growth Fund Class C Shares
FOR THE PERIODS
ENDING MARCH 31,
1997 1996 1995*
Net asset value, beginning of period $18.47 $16.86 $15.00
Income from investment operations
Net investment income (.35) (.02) .12
Net realized and unrealized gain (loss)
on investments (3.41) 1.94 2.18
Total from investment operations (3.76) 1.92 2.30
Distributions from
Net investment income - (.10) (.03)
Net realized gain (1.03) (.21) (.41)
Total distributions (1.03) (.31) (.44)
Total increase (decrease) in
net asset value (4.79) 1.61 1.86
Net asset value, end of period $13.68 $18.47 $16.86
Total return** (21.75%) 11.57% 15.32%
Ratios to average net assets:
Net investment income (2.00%) .02% .83%(a)
Total Expenses 3.11% 3.18% -
Net Expenses 3.09% 3.16% 3.45%(a)
Expenses Reimbursed - - .20%(a)
Portfolio turnover 151% 402% 480%
Average commission rate paid $.0782 $- $-
Net assets, end of period (in thousands) $16,524 $25,490
$19,778
Number of shares outstanding at end
of period (in thousands) 1,208 1,380 1,173
(a) Annualized
* From May 5, 1994, inception.
** Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
*** 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.
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.
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. 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.
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
SAI 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.
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.
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 SAI for more information on bond ratings.
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 SAI.)
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"). 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.
The High Social Impact Investments Committee of the Board of Trustees
identifies, evaluates, selects and values these investments, subject to
ratification by the Board of Trustees.
Socially Responsible Investment Criteria
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 SAI 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 returns 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 Company, Inc. serves as Advisor to the Fund.
Calvert Asset Management Company, Inc. ("CAMCO" 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 SAI.
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 March 31, 1997, Calvert Group managed and administered assets in excess
of $5.1 billion and more than 225,000 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 1997, 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 0.0027%.
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 1997, 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 South
Figueroa Street, Suite 2328, Los Angeles, California, 90017. As of March 31,
1996, PASI managed in excess of $359 million, including mutual fund assets.
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
The portfolio management team for the Calvert Strategic Growth Fund (since
inception) is led by 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.
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,
provides certain administrative services to the Fund, 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, while payments under the Class C Distribution Plan are 1.00% of the
average daily net asset value of Class C shares.
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 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:
As a % As a % Concession to
of of Net Dealers as a
Offering Amount % of Amount
Price Invested Invested
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 1997, 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 1997, 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. All such payments will be in compliance with NASD
rules.
Dealers or others may receive different levels of compensation depending on
which class of shares they sell.
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 Please make your check
payable to the Fund and payable to the Fund and
mail it with your with your investment slip to:
application to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas City, MO 64141-6544 Kansas City, MO 64141-6739
By Registered, CALVERT GROUP CALVERT GROUP
Certified, or C/O NFDS, 6TH FLOOR C/O NFDS, 6TH FLOOR
Overnight Mail 1004 BALTIMORE 1004 BALTIMORE
Kansas City, MO 64105-1807 Kansas City, MO 64105-1807
Through Your $2,000 MINIMUM $250 MINIMUM
Broker
AT THE Visit the Calvert Branch Office to make investments by check.
CALVERT See the back cover page for the address.
BRANCH OFFICE
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR FINANCIAL PROFESSIONAL OR CALVERT
GROUP AT 800-368-2745
By Exchange $2,000 MINIMUM $250 MINIMUM
(From your WHEN OPENING AN ACCOUNT BY EXCHANGE, YOUR
account in NEW ACCOUNT MUST BE ESTABLISHED WITH THE
another Calvert SAME NAME(S), ADDRESS AND TAXPAYER
Group fund) IDENTIFICATION NUMBER AS YOUR EXISTING CALVERT ACCOUNT.
By Bank Wire $2,000 MINIMUM $250 MINIMUM
By Calvert NOT AVAILABLE $50 MINIMUM
Money FOR INITIAL INVESTMENT
Controller*
*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.
All of 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 is not paid, your purchase will be canceled and your will
be charged a $10 fee plus costs incurred by the Fund. When you purchase by
check or with Calvert Money Controller, those funds will be on hold for up to
10 business days from the date of receipt. During that period, the proceeds of
redemptions against those funds will be held until the transfer agent is
reasonably satisfied that the purchase payment has been collected. To avoid
this collection period, you can wire federal funds from your bank, which may
charge you a fee. Check purchases received at the branch location will be
credited the next business day. Any check purchase received without an
investment slip may cause delayed crediting.
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
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.
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.
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.")
You may exchange shares on which you have already paid a sales charge
at Calvert Group and shares acquired by reinvestment of dividends or
distributions into another Fund at no additional charge. You may exchange
Class C shares for shares of another fund, but you will have to pay the
front-end sales charge, if applicable.
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, 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 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 more information.
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 postage expense.
If you have multiple accounts with Calvert, you may receive combined mailings
of some shareholder information, such as statements, confirms, prospectuses,
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, Letter of instruction and corporate resolution, signed by
Associations 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 a 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 SAI.
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.
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 trust, include, 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.
Prospectus
July 31, 1997
THE CALVERT FUND:
CALVERT STRATEGIC GROWTH FUND
To Open an Account:
800-368-2748
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
<PAGE>
PROSPECTUS JULY 31, 1997
CALVERT CAPITAL ACCUMULATION FUND
CALVERT NEW VISION SMALL CAP FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND
20814
.................................................
Calvert Capital Accumulation Fund seeks
long-term capital appreciation by investing
primarily in the stock of small- to
medium-sized companies using the talent of one
or more investment subadvisors. The market
capitalization of companies chosen for
investment will generally be within the range
of capitalization of the S&P 400 Mid-Cap Index,
but the Fund may also invest in larger and
smaller companies as deemed appropriate. It is
the Advisor's intent that on average, the
market capitalization of the companies
represented in the Fund's portfolio will be
mid-sized, with a slight bias toward the
growth-style of investing. Other investments
may include foreign securities, convertible
issues, and certain options and futures
transactions. The Fund will take reasonable
risks in seeking to achieve its investment
objective.
Calvert New Vision Small Cap Fund seeks to
achieve long-term capital appreciation by
investing primarily in the equity securities of
small companies1 publicly traded in the United
States. In seeking capital appreciation, the
Fund invests primarily in the equity securities
of small capitalized growth companies
(including American Depositary Receipts
("ADRs")) that have historically exhibited
exceptional growth characteristics and that, in
the Advisor's opinion, have strong earnings
potential relative to the U.S. market as a
whole. The Fund employs aggressive investment
strategies that have the potential for yielding
high returns. The Fund will take reasonable
risks in seeking to achieve its investment
objective. There is, of course, no assurance
that the Fund will be successful in meeting its
objective since there is risk involved in the
ownership of all equity securities.
Share prices of both funds may experience
substantial fluctuations so that your shares
may be worth less than when you originally
purchased them. Income is not an objective of
either Fund; the Funds should not be used to
meet short-term financial needs.
.................................................
Responsible Investing
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.
- ----------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE FEDERAL 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 FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED
BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
WHEN INVESTORS SELL SHARES OF THE FUND, THE
VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT
ORIGINALLY PAID.
1 Currently those with a total capitalization
of less than $1 billion at the time of the
Fund's initial investment.
<PAGE>
Purchase Information
The Funds both offer two classes of shares,
each with different expense levels and sales
charges. You may choose to purchase (i) Class A
shares, with a sales charge imposed at the time
you purchase the shares ("front-end sales
charge"); or (ii) Class C shares which impose
neither a front-end sales charge nor a
contingent deferred sales charge. Class C
shares are not available through all dealers.
Class C shares have a higher level of expenses
than Class A shares, including higher Rule
12b-1 fees. These alternatives permit you to
choose the method of purchasing shares that is
most beneficial to you, depending 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.
.................................................
To Open An Account
Call your investment professional, 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 ("SAI") (dated July 31, 1997) has
been filed with the Securities and Exchange
Commission (the "Commission") and is
incorporated by reference. This free Statement
is available upon request from the Fund:
800-368-2748. The Commission maintains a
website (http://www.sec.gov) that contains the
SAI, material incorporated by reference, and
other information regarding registrants that
file electronically with the Commission.
- -------------------------------------------------
FUND EXPENSES
.................................................
Capital Accumulation New Vision
Fund Small Cap Fund
A.Shareholder Transaction Costs Class A Class C Class A Class C
Maximum Front-End Sales Charge
on Purchases (as a percentage of
offering price) 4.75% None 4.75% None
Maximum Contingent Deferred Sales Charge None None None None
.................................................
B. Annual Fund Operating Expenses (Fiscal Year
1997)
(as a percentage of average net assets)
Management Fees 0.90% 0.90% 0.90% 0.90%
Rule 12b-1 Service and Distribution Fees 0.35% 1.00% 0.25% 1.00%
Other Expenses 0.71% 1.35% 0.35%3 0.60%3
- -------------------------------------------------
Total Fund Operating Expenses2 1.96% 3.25% 1.50% 2.50%
2 Net Fund Operating Expenses after reduction
for fees paid indirectly for the Capital
Accumulation fund were:
Class A - 1.86%, Class C - 3.14%
3 Estimated
<PAGE>
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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10 Years
Capital Accumulation Fund Class A $66 $106 $148 $265
Class C $33 $100 $170 $355
New Vision Small Cap Fund Class A $62 $93 N/A N/A
Class C $25 $78 N/A N/A
</TABLE>
The example 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).
.................................................
Shareholder Transaction Costs
are charges you pay when you buy or sell shares
of the Fund. See "Reduced Sales Charges" 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.
.................................................
Annual Fund Operating Expenses
are based on fiscal 1997 historical expenses
for the Capital Accumulation Fund and are
estimates for the New Vision Small Cap Fund.
Management fees are paid by the Funds to the
Advisor for managing the Fund's investments and
business affairs. Management fees include the
subadvisory fees paid by Calvert Asset
Management Company, Inc. (the "Advisor") to the
various subadvisors and the administrative
service fee paid to Calvert Administrative
Services Company. Management Fees have been
restated to reflect expenses anticipated in the
current fiscal year. (See "Management of the
Fund") The Management fees for the Capital
Accumulation Fund are subject to a performance
adjustment which could cause the fee to be as
high as 0.95% or as low as 0.65%, depending on
performance. The Funds incur 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 Funds' 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 Funds. The
respective Investment Advisory Agreements
provide 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 Funds' Rule 12b-1 fees include an
asset-based sales charge. Thus, long-term
shareholders in each 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. In addition to the compensation
itemized above (sales charge and Rule 12b-1
service and distribution fees), certain
broker/dealers and/or their salespersons may
receive certain compensation for the sale and
distribution of the securities or for services
to the Funds. See the SAI, "Method of
Distribution."
FINANCIAL HIGHLIGHTS
.....................................................
The following table provides information about the
financial history of the Funds' 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., whose reports are included in
the Annual Reports 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 SAI.
Class A Shares
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From Oct.31,
Period Ended Year Ended 1994(incep-
March 31, Sept. 30, tion)to Sept.
1997 1997 30, 1997
Capital Accumulation Fund
Net asset value, beginning of period $ 22.55 $ 21.48 $ 15.00
Income from investment operations
Net investment income (loss) (.14) (.24) (.11)
Net realized and unrealized gain (loss) 1.12) 1.88 6.61
Total from investment operations 1.26) 1.64 6.50
Distributions from
Net investment income - - (.02)
Net realized gains - (.57) -
Total Distributions - (.57) (.02)
Total increase (decrease) in
net asset value (1.26) 1.07 6.48
Net asset value, ending $ 21.2 $ 22.55 $ 21.48
Total return<F4> (5.59%) 7.92% 43.40%
Ratio to average net assets:
Net investment income (loss) (1.27%)(a) (1.56%) (1.55%)(a)
Total expenses<F5> 1.96%(a) 2.16% 2.35 (a)
Net expenses 1.86%(a) 1.98% 2.06% (a)
Expenses reimbursed - - .05% (a)
Portfolio turnover 117% 114% 95%
Average commission rate paid $ .0541 $ .0563 $ -
Net assets, ending (in thousands) $ 41,070 $ 39,834 $ 16,111
Number of shares outstanding,
ending (in thousands) 1,929 1,767 750
<FN>
<F4> Total return is not annualized and does not
reflect deduction of Class A front-end sales
charges.
<F5> This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio
of net expenses.
(a) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class C Shares
From Oct.31,
Period Ended Year Ended 1994(incep-
March 31, Sept. 30, tion)to Sept.
1997 1997 30, 1997
Capital Accumulation Fund
Net asset value, beginning of period $ 22.34 $ 21.55 $ 15.00
Income from investment operations
Net investment income (loss) (.27) (.55) (.15)
Net realized and unrealized gain (loss)
(1.11) 1.91 6.70
Total from investment operations (1.38) 1.36 6.55
Distributions from
Net investment income - - -
Net realized gains - (.57) -
Total Distributions - (.57) -
Total increase (decrease) in
net asset value (1.38) .79 6.55
Net asset value, ending $ 20.96 $ 22.34 $ 21.55
Total return<F6> (6.18%) 6.56% 43.67%
Ratio to average net assets:
Net investment income (loss) (2.56%)(a) (2.82%) (3.13%)(a)
Total expenses<F7> 3.25%(a) 3.42% 3.79%(a)
Net expenses 3.14%(a) 3.24% 3.50%(a)
Expenses reimbursed - - 2.79%(a)
Portfolio turnover 117% 114% 95%
Average commission rate paid $ .0541 $ .0563 $ -
Net assets, ending (in thousands) $ 3,054 $ 3,164 $ 1,992
Number of shares outstanding,
ending (in thousands) 146 142 92
<FN>
<F6> Total return is not annualized and does not
reflect deduction of Class A front-end sales
charges.
<F7> This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio
of net expenses.
(a) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Class A Shares Class C Shares
From Jan. 31, From Jan, 31
1997 (inception) 1997 (inception)
to March 31, 1997 to March 31, 1997
New Vision Small Cap Fund
Net asset value, beginning of period $ 15.00 $ 15.00
Income from investment operations
Net investment income (loss) - -
Net realized and unrealized gain (loss) (3.01) (3.01)
Total from investment operations (3.01) (3.01)
Distributions from
Net investment income - -
Net realized gains - -
Total Distributions - -
Total increase (decrease) in
net asset value (3.01) (3.01)
Net asset value, ending $ 11.99 $ 11.99
Total return<F8> (20.07%) (20.07%)
Ratio to average net assets:
Net investment income (loss)
Total expense<F9> .82%(a) .82%(a)
Net expenses - -
Expenses reimbursed 8.96%(a) 21.08%(a)
Portfolio turnover 97% 97%
Average commission rate paid $ .0500 $ .0500
Net assets, ending (in thousands) $ 1,215 $ 200
Number of shares outstanding,
ending (in thousands) 101 17
<FN>
<F8> Total return is not annualized and does not
reflect deduction of Class A front-end sales
charges.
<F9> This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio of net expenses.
(a) Annualized
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
.................................................
The Capital Accumulation Fund seeks to provide
long-term capital appreciation by investing,
under normal market conditions, at least 65% of
its assets in the equity securities of small-
to mid-sized companies.
The Capital Accumulation Fund seeks to provide
long-term capital appreciation by investing
primarily in a nondiversified portfolio of the
equity securities of small- to mid-sized
companies that are undervalued but demonstrate
a potential for growth. The Fund will rely on
its proprietary research to identify stocks
that may have been overlooked by analysts,
investors, and the media, and which will
generally be within the range of capitalization
of the S&P 400 Mid-Cap Index, but which may be
larger or smaller as deemed appropriate.
Investments may also include, but are not
limited to, preferred stocks, foreign
securities, convertible securities, bonds,
notes and other debt securities. The Fund may
use certain futures and options, invest in
repurchase agreements, and lend its portfolio
securities. The Fund will take reasonable risks
in seeking to achieve its investment objective.
There is, of course, no assurance that the Fund
will be successful in meeting its objective
since there is risk involved in the ownership
of all equity securities. The Fund's investment
objective is not fundamental and may be changed
without shareholder approval. The Fund will
notify shareholders at least thirty days in
advance of a change in the investment objective
of the Fund so that shareholders may determine
whether the Fund's goals continue to meet their
own.
.................................................
The Capital Accumulation Fund has a pool of
several portfolio managers from which to choose.
The Capital Accumulation Fund will use the
services of one or more investment subadvisors
as portfolio managers in selecting companies in
which to invest. Taking into account the
individual styles of the portfolio managers,
the Advisor will allocate assets to achieve the
Fund's objective. The portfolio managers will
select investments by examining such factors as
company growth prospects, industry economic
outlook, new product development, management,
security value, risk, and financial
characteristics.
.................................................
New Vision Small Cap Fund
The Calvert New Vision Small Cap Fund seeks to
provide long-term capital appreciation by
investing primarily in equity securities of
companies that have small market
capitalizations. In seeking capital
appreciation, the Fund invests primarily in
equity securities of small capitalized growth
companies that have historically exhibited
exceptional growth characteristics and that, in
the Advisor's opinion, have strong earnings
potential relative to the U.S. market as a
whole. The Fund's investment objective is not
fundamental and may be changed without
shareholder approval.
The New Vision Small Cap Fund pursues the
objective of capital appreciation by investing
primarily in equity securities of primarily
small companies with promising growth
potential. These companies typically are
developing innovative products or services to
seize emerging opportunities.
<PAGE>
Under normal circumstances, the New Vision
Small Cap Fund will invest at least 65% of its
total assets in equity securities of companies
publicly traded in the United States (currently
those with a total market capitalization of
under $1 billion at the time of the Fund's
initial investment).
The New Vision Small Cap Fund considers issuers
of all industries with operations in all
geographic markets, and does not seek interest
income or dividends. Equity securities may
include common stocks, preferred stocks,
convertible securities and warrants. In
selecting equity investments, the Fund focuses
on individual companies by screening over nine
thousand stocks traded on all major U.S. stock
exchanges. By applying proprietary stock
selection criteria, the Fund identifies
suitable investments to buy. The Fund may hold
cash or cash equivalents for temporary
defensive purposes or to enable it to take
advantage of buying opportunities. There is, of
course, no assurance that the Fund will be
successful in meeting its objective.
Companies whose capitalization increases or
decreases after initial purchase by the Fund
continue to be considered small-capitalized for
purposes of the 65% policy. Accordingly, less
than 65% of the Fund's total assets may be
invested in securities of issuers of companies
publicly traded in the United States (currently
those with a total market capitalization of
less than $1 billion).
The New Vision Small Cap Fund will normally be
as fully invested as practicable in common
stocks (including ADRs), but also may invest in
warrants and rights to purchase common stocks
and in debt securities and preferred stocks
convertible into common stocks (collectively,
"equity securities").
- -------------------------------------------------
INVESTMENT TECHNIQUES AND RISKS
.................................................
Risks
A company's market capitalization is the total
market value of its outstanding equity
securities. The value of the Fund's investments
will vary from day to day, and generally
reflect market conditions, interest rates and
other company, political, or economic news. In
the short-term, stock prices can fluctuate
dramatically in response to these factors. Over
time, however, stocks have shown greater growth
potential than other types of securities.
.................................................
Nondiversified
There may be risks associated with the Capital
Accumulation Fund being nondiversified.
Specifically, since a relatively high
percentage of the assets of the Capital
Accumulation Fund may be invested in the
obligations of a limited number of issuers, the
value of the shares of the Capital Accumulation
Fund may be more susceptible to any single
economic, political or regulatory event than
the shares of a diversified fund would be.
.................................................
Small Cap Issuers
While any investment in securities carries a
certain degree of risk, the approach of the
Fund is designed to maximize growth in relation
to the risks assumed. The securities of small
cap issuers may be less actively traded than
the securities of larger issuers, may trade in
a more limited volume, and may change in value
more abruptly than securities of larger
companies. Information concerning these
securities may not be readily available so that
the companies may be less actively followed by
stock analysts. Small-cap issuers do not
usually participate in market rallies to the
same extent as more widely-known securities,
and they tend to have a relatively higher
percentage of insider ownership.
Investing in smaller, new issuers generally
involves greater risk than investing in larger,
established issuers. Companies in which the
Fund is likely to invest may have limited
product lines, markets or financial resources
and may lack management depth. The securities
in such companies may also have limited
marketability and may be subject to more abrupt
or erratic market movements than securities of
larger, more established companies or the
market averages in general. Accordingly an
investment in the Fund may not be appropriate
for all investors.
.................................................
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
Capital Accumulation Fund may invest up to 100%
of its total assets, and the New Vision Small
Cap Fund may invest up to 35% of its total
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 currently intends to invest in no more
than 5% of its net assets in
noninvestment-grade debt obligations.
Although the Capital Accumulation Fund invests
primarily in equity securities, it may invest
in debt securities and, although the New Vision
Small Cap Fund also invests primarily in equity
securities, it may invest up to 35% of its
total 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, are deemed to be of
comparable quality by the Advisor.
Noninvestment-grade securities are those rated
below Baa or BBB, or unrated obligations that
the investment subadvisor has determined are
not investment-grade; such securities are
speculative in nature, the Funds currently
intend to limit such investments to 5% of their
respective net assets. The Funds will not buy
debt securities rated lower than C.
.................................................
Interest-rate risk
All fixed income instruments are subject to
interest-rate risk: that is, if market interest
rates rise, the current principal value of a
bond will decline. In general, the longer the
maturity of the bond, the greater the decline
in value will be.
<PAGE>
The Fund may use options and futures as
defensive strategies.
The Capital Accumulation Fund may attempt to
reduce the overall risk of its investments by
using options and and futures contracts. 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. The Subadvisors will make
decisions whether to invest in these
instruments based on market conditions,
regulatory limits and tax considerations. If
this strategy is used, the Fund may be required
to cover assets used for this purpose in a
segregated account for the protection of
shareholders.
In extraordinary circumstances, the New Vision
Small Cap 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 only as protection against an adverse
move of the holdings in the Fund to adjust the
risk and return characteristics of the Fund.
The decision to invest in these instruments
will be based on market conditions, regulatory
limits and tax considerations. If market
conditions are judged incorrectly, a strategy
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.
.................................................
Risks of using defensive strategies
There can be no assurance that engaging in
options, futures, or any other defensive
strategy will be successful. While defensive
strategies are designed to protect the Funds
from potential declines, if the Subadvisor
misgauges market values, interest rates, or
other economic factors, the Funds may be worse
off than had they not employed the defensive
strategy. While the Subadvisors attempt 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 a
defensive strategy so that a loss is incurred.
While defensive strategies can reduce the risk
of loss, they can also reduce the opportunity
for gain since they offset favorable price
movements. The use of defensive strategies may
result in a disadvantage to the Funds if a 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 a Fund to
liquidate its position because of its relative
illiquidity.
.................................................
Repurchase agreements
The Funds 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 Funds 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
Funds' respective Board of Directors/Trustees.
In addition, the Funds will only engage in
repurchase agreements reasonably designed to
fully secure during the term of the agreement,
the seller's obligation to repurchase the
underlying security. The Funds 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 Funds 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.
.................................................
Foreign Securities and ADRs
The New Vision Small Cap Fund may invest up to
15% of its total assets in ADRs. The Capital
Accumulation Fund may also invest in ADRs,
subject to the restrictions applicable to
investments in foreign securities discussed
below. By investing in ADRs rather than
directly in foreign issuers' stock, the Funds
may avoid some currency and some liquidity
risks. The information available for ADRs is
subject to the more uniform and more exacting
accounting, auditing and financial reporting
standards of the domestic market or exchange on
which they are traded. U.S. dollar-denominated
ADRs, which are traded in the U.S. on exchanges
or over the counter, are receipts typically
issued by a U.S. bank or trust company which
evidence ownership of underlying securities of
a foreign corporation. In general, there is a
large, liquid market in the U.S. for many ADRs.
The Capital Accumulation Fund may invest up to
25% of its assets in the securities of foreign
issuers, although it currently holds or intends
to hold no more than 5% of its assets in such
securities. The Capital Accumulation Fund may
purchase foreign securities directly, on
foreign markets, or those represented by ADRs,
or other receipts evidencing ownership of
foreign securities, such as International
Depositary Receipts and Global Depositary
Receipts. Foreign securities may involve
additional risks, including currency
fluctuations, risks relating to political or
economic conditions, and the potentially less
stringent investor protection and disclosure
standards of foreign markets. These factors
could make foreign investments, especially
those in developing countries, less liquid and
more volatile. In addition, the costs of
foreign investing, including withholding taxes,
brokerage commissions and custodial costs are
generally higher than for U.S. investments. See
the SAI for more information on investing in
foreign securities.
.................................................
The Funds may lend their portfolio securities.
Both Funds may lend portfolio securities to
member firms of the New York Stock Exchange and
commercial banks with assets of one billion
dollars or more, although the New Vision Small
Cap Fund does not intend to do so and the
Capital Accumulation Fund does not currently
intend to lend more than 5% of its portfolio
securities. The advantage of such loans is that
the Funds continue to receive the equivalent of
the interest earned or dividends paid by the
issuers on the loaned securities while at the
same time earning interest on the cash or
equivalent collateral which may be invested in
accordance with the Funds' investment
objective, policies and restrictions. 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.
.................................................
Borrowing
The New Vision Small Cap Fund may borrow money
from banks (and pledge its assets to secure
such borrowing) for temporary or emergency
purposes, but not for leverage. Such borrowing
may not exceed one third of the value of the
Fund's total assets.
High Social Impact Investments
The Funds have both adopted nonfundamental
policies that permit investments which, with
respect to the Capital Accumulation Fund, may
be up to three percent, and with respect to the
New Vision Small Cap Fund, may be up to one
percent, of that Fund's assets in securities
that offer a rate of return below the
then-prevailing market rate and that present
attractive opportunities for furthering each
Fund's social criteria ("High Social Impact
Investments"). 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 and credit analysis and
limited maturity, investment risk can be
reduced, although there can be no assurance
that losses will not occur. The High Social
Impact Investments committee of the Board of
Directors/Trustees identifies, evaluates and
selects these investments, subject to
ratification by the respective Board.
- -------------------------------------------------
SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
.................................................
The Funds carefully review company policies and
behavior regarding social issues important to
quality of life:
environment employee relations product criteria
weapons systems nuclear energy human rights
Once securities are determined to fall within
the investment objective of a Fund and are
deemed financially viable investments, they are
analyzed according to the social criteria
described below. These social screens are
applied to potential investment candidates by
the Advisor in consultation with the
Subadvisors.
The following criteria may be changed by the
respective Fund's Board of Directors/Trustees
without shareholder approval:
(1) The Funds avoid 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 Funds
will avoid investing in nuclear power plant
operators and owners, or manufacturers of key
components in the nuclear power process.
(2) The Funds will not invest in companies
that are significantly engaged in weapons
production. This includes weapons systems
contractors and major nuclear weapons systems
contractors.
(3) The Funds 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 that have major labor-management disputes.
(4) The Funds will not invest in companies
that are significantly involved in the
manufacture of tobacco or alcohol products. The
Funds will not invest in companies that
make products or offer services that, under
proper use, in the Advisor's opinion, are
considered harmful.
The Advisor will seek to review companies'
overseas operations consistent with the social
criteria stated above.
While the Funds may invest in companies that
exhibit positive social characteristics, it
makes no explicit claims to seek out companies
with such practices.
TOTAL RETURN
.................................................
The Funds may advertise total return for each
class of shares. 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 class' performance 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 return usually will include the effect
of paying the 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 sales load" do not reflect
deduction of the sales charge. You should
consider these figures only if you qualify for
a reduced sales charge, or for purposes of
comparison with comparable figures which also
do not reflect sales charges, such as mutual
fund averages compiled by Lipper Analytical
Services, Inc. ("Lipper"). Further information
about the Funds' performance is contained in
its Annual Report to Shareholders, which may be
obtained without charge.
- -------------------------------------------------
MANAGEMENT OF THE FUND
.................................................
The Funds' Board of Directors/Trustees
supervise the Funds' activities and review
their contracts with companies that provide
them with services.
The Capital Accumulation Fund is a series of
Calvert World Values Fund, Inc. an open-end
management investment company organized as a
Maryland corporation on February 14, 1992. The
other series is the International Equity Fund,
a socially-screened portfolio of equity
securities from around the world.
The New Vision Small Cap 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 are the Calvert
Income Fund and Calvert Strategic
Growth Fund.
Neither Fund is required to hold annual
shareholder meetings, but special meetings may
be called for certain purposes such as electing
Directors/Trustees, changing fundamental
policies, or approving a management contract.
As a shareholder, you receive one vote for each
share of a Fund you own, except that matters
affecting classes differently, such as
Distribution Plans, will be voted on separately
by class.
Calvert Asset Management Company, Inc. serves
as Advisor to the Funds.
Calvert Asset Management Company, Inc. (the
"Advisor") is both Funds' investment advisor.
The Advisor provides the Funds with investment
supervision and management; administrative
services and office space; furnishes executive
and other personnel to the Funds; and pays the
salaries and fees of all Directors/Trustees who
are affiliated persons of the Advisor. The
Advisor may also assume and pay certain
advertising and promotional expenses of the
Funds and reserves the right to compensate
broker-dealers in return for their promotional
or administrative services. The Funds pay all
other operating expenses as noted in the SAI.
.................................................
Calvert Group is one of the largest investment
management firms in the Washington, D.C. area.
Calvert Group, Ltd., parent of the Fund's
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 March 31, 1997, Calvert
Group managed and administered assets in excess
of $5.1 billion and more than 225,000
shareholder and depositor accounts.
.................................................
The Advisor receives a fee based on a
percentage of the Fund's assets.
The respective Investment Advisory Agreements
between the Funds and the Advisor both provide
that the Advisor is entitled to a base annual
fee, payable monthly, of 0.80% of the Capital
Accumulation Fund's, and 0.90% of the New
Vision Small Cap Fund's, average daily net
assets. For its services during the fiscal year
ended March 31, 1997, pursuant to the
Investment Advisory Agreements, the Advisor
received an investment advisory fee of 0.80% of
the Capital Accumulation Fund's average daily
net assets, and waived the advisory fee for the
New Vision Small Cap Fund.
With respect to the Capital Accumulation Fund,
the Advisor may earn (or have its fee reduced
by) a performance adjustment based on the
extent to which performance of the Fund exceeds
or trails the Standard & Poor's 400 Mid-Cap
Index:
Performance versus the Performance Fee
S&P 400 Mid-Cap Index Adjustment
.................................................
10% to less than 25% 0.01%
25% to less than 40% 0.03%
40% or more 0.05%
For its services for fiscal year 1997, the
Advisor received, pursuant to the Investment
Advisory Agreement, an advisory fee of 0.80% of
the Fund's average daily net assets, which
included a performance adjustment of 0.0028%.
The Advisor may in its discretion defer its
fees or assume the Fund's operating expenses.
The Capital Accumulation Fund may use a
multi-manager approach.
The Capital Accumulation Fund has a pool of
five investment subadvisors ("Subadvisors")
ready to manage the Fund's assets. The
subadvisors are listed below, the asterisk
indicates the subadvisor(s) currently
comprising the management team.
Subadvisor Ownership
.................................................
*Brown Capital African American
Fortaleza Asset Management Hispanic/Women
Apodaca Hispanic American
New Amsterdam Women
Sturdivant African American
.................................................
The Advisor has retained a consultant to make
recommendations on allocations to Subadvisors.
The Advisor will select which Subadvisors will
manage the Capital Accumulation Fund's assets
at any given time and the allocation of assets
among the managers. Each firm has selected a
performance index against which it will be
measured with respect to payment of a
performance fee, as explained in the next
section.
.................................................
Brown Capital Management, Inc.
Brown Capital Management, Inc. of Baltimore,
Maryland believes that capital can be enhanced
in times of opportunity and preserved in times
of adversity without timing the market. The
firm uses a bottom-up approach that
incorporates growth-adjusted price earnings.
Stocks purchased are generally undervalued and
have momentum, have earnings per share growth
rates greater than the market, are more
profitable than the market, and have relatively
low price-earnings ratios. Its performance
index is a blended 60% Russell 1000 Growth and
40% Russell 2000.
Eddie C. Brown is founder and President of
Brown Capital Management. He has over 22 years
of investment experience, having served as a
Vice President and Portfolio Manager for 10
years at T. Rowe Price Associates immediately
prior to starting his own firm. Mr. Brown holds
an M.S. in Electrical Engineering from New York
University, and an M.S. in Business
Administration from the Indiana University
School of Business. Additionally, he is a
professionally-designated Chartered Financial
Analyst (CFA) and Chartered Investment
Counselor.
The Capital Accumulation Fund's remaining pool
of Subadvisors are described in the SAI. See
"Investment Advisor and Subadvisors."
<PAGE>
Capital Accumulation Fund subadvisory
compensation
The Investment Subadvisory Agreement between
the Advisor and each of the Subadvisors
provides that the Subadvisors currently
managing Fund assets are entitled to a base
subadvisory fee of 0.25% of that portion of the
Fund's average daily net assets managed by the
Subadvisor, paid by the Advisor out of the fee
the Advisor receives from the Fund. Each
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 index agreed on with the
Advisor:
Performance versus Performance Fee
the Index Adjustment
.................................................
10% to less than 25% 0.02%
25% to less than 40% 0.05%
40% or more 0.10%
Payment by the Fund of a performance adjustment
will be conditioned on: (1) the performance of
the Fund as a whole having exceeded the S&P 400
Mid-Cap Index; and (2) payment of the
performance adjustment not causing the Fund's
performance to fall below the S&P 400 Mid-Cap
Index. The performance adjustment will be paid
by the Fund to the Advisor, which will then
pass it on to the Subadvisor.
.................................................
Portfolio Advisory Services, Inc. ("PASI") is
the investment subadvisor to the New Vision
Small Cap Fund.
PASI's principal business office is 725 South
Figueroa Street, Suite 2328, Los Angeles,
California, 90017. As of March 31, 1997, PASI
managed in excess of $244 million, including
mutual fund assets. PASI 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. PASI's investment style
features quantitative screens and in-depth
"bottom-up" fundamental analysis to identify
superior growth stocks.
.................................................
Portfolio Manager for the New Vision Small Cap
Fund
The portfolio management team for the New
Vision Small Cap Fund (since inception) is led
by 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 founding PASI in 1988.
Mr. Moses is assisted by portfolio managers
Kathleen Kalp and Stuart L. Peterson, both firm
vice presidents. Ms. Kalp, a member of the
investment policy committee, is responsible for
the general analysis of securities. In 1990,
she joined Pilgrim America where her
responsibilities included general equity
analysis for the $250 million "Magnacap" Growth
and Income Fund. Ms. Kalp began her career in
1984 with William O'Neil & Co. as a research
analyst. She has an MBA from Loyola Marymount
University, a BA in Business Economics from the
University of California at Santa Barbara, and
is currently a CFA Level III candidate.
<PAGE>
Mr. Peterson, also an investment policy
committee member, is responsible for the
general analysis of securities and development
of PASI's original security screens.
Previously, he worked at Chase Manhattan Bank
in the Financial Products Group (1994),
analyzing investment management industry trends
and various derivative products. Mr. Peterson
began his career with Lehman Brothers in 1989,
and was a Registered Representative at Dean
Witter Reynolds, Inc. from 1990 to 1993. He
received an MBA in Analytic Finance from the
University of Chicago and a BA in Economics
from the University of California, Los Angeles.
The Investment Subadvisory Agreement between
the Advisor and PASI provides that PASI is
entitled to a base subadvisory fee of 0.47% of
the Fund's average daily net assets managed by
PASI. PASI's fee is paid by the Advisor out of
the fee the Advisor receives from the Fund.
The Funds have obtained an exemptive order from
the Securities and Exchange Commission to
permit them, pursuant to approval by the Board
of Directors/Trustees, to enter into and
materially amend contracts with a Subadvisor
without shareholder approval. See "Investment
Advisor and Subadvisor" in the SAI for further
details.
.................................................
Calvert Administrative Services Company
provides administrative services for the Fund.
Calvert Administrative Services Company
("CASC"), an affiliate of the Advisor, provides
certain administrative services to the Fund,
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, payable monthly, from both Funds of
0.10% of the respective Fund's average daily
net assets.
.................................................
Calvert Distributors, Inc. serves as
underwriter to market the Funds' shares.
Calvert Distributors, Inc. ("CDI") is both
Funds' principal underwriter and distributor.
Under the terms of its underwriting agreement
with the Funds, CDI markets and distributes the
Funds' 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 both
Funds' transfer, dividend disbursing and
shareholder servicing agent.
<PAGE>
SHAREHOLDER GUIDE
.................................................
Opening An Account
You can buy shares of the Fund in several ways.
An account application accompanies 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.
Each 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 up to 0.35% with respect to the
Capital Accumulation Fund, and up to 0.25% with
respect to the New Vision Small Cap Fund,
annually of the average daily net asset value
of Class A shares, while payments under Class C
Distribution Plan are 1.00% of the average
daily net asset value of Class C shares.
.................................................
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.
<PAGE>
Class A Shares
Class A shares are offered at net asset value
plus a front-end sales charge as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Concession
As a % of As a % of to Dealers as a
Amount of Offering Net Amount % of Amount
Investment Price Invested Invested
.................................................
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%*
</TABLE>
*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 dealers
with whom it has dealer agreements, CDI may
reallow up to the full applicable sales charge.
Dealers to whom 90% or more of 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
Each 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 rate of 0.35% with
respect to the Capital Accumulation Fund, and
0.25% with respect to the New Vision Small Cap
Fund, 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. During the fiscal year
ended March 31, 1997, Class A distribution Plan
expenses for the Capital Accumulation Fund were
0.35% and were waived for the New Vision Small
Cap Fund.
<PAGE>
Class C Shares
Class C shares are not available through all
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
Each 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 of up to 0.25%, of the average
daily net asset value of each share sold by
such others. During the fiscal year ended March
31, 1997, Class C Distribution Plan expenses
for the Capital Accumulation Fund were 1.00% of
the average daily net assets. For the period
ended March 31, 1997, distribution expenses
were waived for the New Vision Small Cap Fund.
.................................................
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
dealer's registered representatives,
advertising or equipment, or to defray the
expenses of sales contests. CDI may receive
reimbursement of eligible marketing and
distribution expenses from the Fund's Rule
12b-1 Distribution Plan and in compliance with
the rules of the NASD.
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.
<PAGE>
HOW TO BUY SHARES
METHOD INITIAL INVESTMENT ADDITIONAL
INVESTMENT
BY MAIL $2,000 minimum $250 minimum
Please make your check payable Please make your check payable
to the Fund ad mail it to the Fund and mail it
with your application to: with your investment slip to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419544
Kansas City, MO 64141-6544 Kansas City, MO 64141-6544
BY REGISTERED, Calvert Group Calvert Group
CERTIFIED, OR c/o NFDS, 6th Floor c/o NFDS, 6th Floor
OVERNIGHT MAIL 1004 Baltimore 1004 Baltimore
Kansas City, MO 64105-1807 Kansas City, MO 64105-1807
THROUGH $2,000 minimum $250 minimum
BROKER
AT THE CALVERT Visit the Calvert Branch Office to make investments by check.
BRANCH OFFICE See the back cover page for the address.
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR
FINANCIAL PROFESSIONAL OR
CALVERT GROUP AT 800-368-2745
BY EXCHANGE $2,000 minimum $250 minimum
(FROM YOUR
ACCOUNT IN When opening an account by exchange, your new account
ANOTHER must be established with the same name (s), address and taxpayer
CALVERT identification number as your existing Calvert account.
FUND)
BY BANK WIRE $2,000 minimum $250 minimum
BY CALVERT Not Available $50 minimum
MONEY for Initial Investment
CONTROLLER
*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.
<PAGE>
NET ASSET VALUE
.................................................
Net asset value per share ("NAV)" refers to the
worth of one share. 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.
The NAV of each class will vary daily based on
the market values of the Fund's investments.
Portfolio 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 Directors/Trustees believes
accurately reflects fair value.
The NAV 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 1/1000 of a
share).
- -------------------------------------------------
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. All your purchases must be made
in U.S. dollars and checks must be drawn on
U.S. banks. No cash will be accepted. Each 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 is not
paid, your purchase will be canceled 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. As a convenience, check
purchases can be received at Calvert's offices
for overnight mail delivery to the transfer
agent and will be credited when received by the
transfer agent. Any check purchase received
without an investment slip may cause delayed
crediting.
Certain financial institutions or
broker-dealers which have entered into a sales
agreement with CDI 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.
<PAGE>
EXCHANGES
.................................................
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.
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, to protect a Fund's performance and to
minimize costs, Calvert Group discourages
frequent exchanges and may prohibit additional
purchases of Fund shares by persons engaged
in too many short-term trades. Before you make
an exchange from a Fund or Portfolio, 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 or Portfolio into
which you want to exchange for relevant
information, including class offerings.
Complete and sign an application for an
account in that Fund or Portfolio, taking
care to register your new account in the
same name and taxpayer identification
number as your existing Calvert
account(s). Exchange instructions may then
be given by telephone if telephone
redemptions have been authorized and the
shares are not in certificate form.
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.
Class C shares may be exchanged for shares
of another fund, but will be charged the
front-end sales charge, if applicable.
Shareholders (and those managing multiple
accounts) who make two purchases and two
exchange redemptions of shares of the same
Portfolio 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,
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.
<PAGE>
OTHER CALVERT GROUP SERVICES
.................................................
Calvert Information Network
Calvert Group has a round-the-clock telephone
service that lets existing customers 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
Calvert Group account with one phone call.
Allow one or 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
requests will be honored. 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.
.................................................
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. You
automatically have telephone privileges unless
you elect otherwise. Each 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 account 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 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,
trust company, savings and loan association,
credit union, 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 while saving
paper and postage expenses.
If you have multiple accounts with Calvert, you
may receive combined mailings of statements,
confirms, prospectuses, semi-annual and annual
reports. Please contact Calvert Investor
Relations at 800-368-2745 to consolidate
mailings and 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 may be modified in these programs, and
administrative charges may be imposed by the
broker-dealer or financial institution 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 chart on page 21. 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.
403(b)(7) Custodial Accounts: available to
employees of most non-profit organizations
and public schools and universities.
<PAGE>
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 NAV calculated after your
redemption request is received and accepted.
See below for specific requirements necessary
to make sure your redemption request is
acceptable. 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). The Fund reserves the right to redeem in
kind (i.e., to give you the value of your
redemption in portfolio securities instead of
in cash).
.................................................
- -------------------------------------------------
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 seven (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 each of your fund
accounts of at least $1,000, per Fund, per
class. If, due to redemptions, the account
falls below $1,000, or you fail to invest at
least $1,000, your account may be charged a
service fee or closed and the proceeds mailed
to you. You will be given a notice that your
account will be closed after 30 days if the
balance is not brought up to the required
minimum amount.
.................................................
By Mail To: Calvert Group, P.O. Box 419544
Kansas City, MO 64141-6544.
You may redeem available shares 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, Letter of instruction and corporate resolution, signed by
Associations 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 a 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. If your account is
held through a broker, see "Through Your
Broker."
.................................................
Exchange to Another Calvert Group Fund
You must meet the minimum investment
requirement of the other Calvert Group Fund or
Portfolio. 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 maintain an account with $10,000 or
more, you may have up to two (2) redemption
checks for $100 or more sent to you on the 15th
of each month, simply by sending a letter with
all the information, including your account
number, and the dollar amount. 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, CAPITAL GAINS AND TAXES
.................................................
Each year, both Funds distribute substantially
all of their respective net investment income
to their shareholders.
Dividends from a Fund's net investment income
are declared and paid annually. Net investment
income consists of the interest income, net
short-term capital gains, if any, and dividends
declared and paid on investments, less
expenses. Distributions of a Fund's net
short-term capital gains (treated as dividends
for tax purposes) and its net long-term capital
gains, if any, are normally declared and paid
by a Fund once a year; however, a Fund does not
anticipate making any such distributions unless
available capital loss carryovers have been
used or have expired. Dividend and distribution
payments will vary between classes; dividend
payments will generally be higher for Class A
shares.
<PAGE>
Dividend and Distribution Payment Options
Dividends and any distributions are
automatically reinvested in the same Fund at
NAV (no sales charge), unless you elect to have
the dividends of $10 or more paid in cash (by
check or by Calvert Money Controller).
Dividends and distributions may be
automatically invested in an identically
registered account with the same account number
in any other Calvert Group Fund at NAV. If
reinvested in the same Fund account, new shares
will be purchased at NAV on the reinvestment
date, which is generally 1 to 3 days prior to
the payment date. You must notify the Fund in
writing prior to the record date 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 a
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. On the record date for a distribution,
the Fund's 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
Each 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 Funds will mail you Form 1099-DIV
in January indicating the federal tax status of
your dividends. If distributions exceed the
respective Fund's net investment income and
capital gain for the year, the excess will
reduce your tax basis for your shares in that
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, each 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
If we do not have your correct Social Security
or Corporate Tax Identification Number ("TIN")
and a signed certified application or Form W9,
Federal law requires the Funds to withhold 31%
of your dividends and certain 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
Funds reserve 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 Funds 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 SAI.
.................................................
Group Purchases
If you are a member of a qualified group, you
may purchase shares of a 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 (i) has been
in existence for more than six months, (ii) has
a purpose other than acquiring Fund shares at a
discount, and (iii) 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.
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 a) its
401(k) plan has at least 200 eligible
employees; or b) 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 Funds, 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) Directors, Trustees, Officers, Advisory
Council Members, employees of the Calvert Group
of Funds or affiliated companies, employees of
broker dealers distributing the Funds' shares
and family members of the above; (2) Purchases
made through a Registered Investment Advisor;
(3) Trust departments of banks or savings
institutions for trust clients of such bank or
institution; and (4) Purchases through a broker
maintaining an omnibus account with the Fund
and 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 automatically invested in your
account with no additional sales charge.
.................................................
Purchases made at net asset value ("NAV")
Except for money market funds, if you make a
purchase at NAV, you may exchange that amount
to another fund at no additional 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 NAV next computed after the
reinvestment order is received, without a sales
charge. You may use the reinstatement privilege
only once. The Funds reserve the right to
modify or eliminate this privilege.
<PAGE>
The Calvert Fund:
Calvert Strategic Growth Fund
Statement of Additional Information
July 31, 1997
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
217 E. Redwood Street
Baltimore, Maryland 21202-3316
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 6
Dividends, Distributions and Taxes 7
Net Asset Value 8
Calculation of Total Return 9
Purchase and Redemption of Shares 10
Reduced Sales Charges (Class A) 11
Advertising 11
Trustees and Officers 11
Investment Advisor and Subadvisor 15
Method of Distribution 16
Transfer and Shareholder Servicing Agent 17
Fund Transactions 17
Independent Accountant and Custodians 17
General Information 17
Financial Statements 18
Appendix 18
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-July 31, 1997
THE CALVERT FUND
CALVERT STRATEGIC GROWTH FUND
4550 Montgomery Avenue,
Bethesda, Maryland 20814
New Account (800) 368-2748
Information: (301) 951-4820
Shareholder Services: (800) 368-2745
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, 1997, 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.
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. 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 options
on 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
based upon William O Neil's Investor's Business Daily industry
classification.
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 will 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 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
($94,624,910/6,798,190 shares $13.92
Maximum sales charge
(4.75% of Class A offering price) 0.69
Offering price per Class A share $14.61
Class C net asset value and offering price per share
($16,523,655/1,207,832 shares) $13.68
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. Total return
is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n
= number of years; and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period. Total
return is historical in nature and is not intended to indicate future
performance. All total return quotations reflect the deduction of the
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,
1997 are as follows:
Class A Shares Class A Shares Class C
Shares
Return Without Average Annual Return
Without
Maximum Return Maximum
Sales Load With Maximum Sales Load
Sales Load
One Year -21.17% -24.92% -21.75%
Since Inception
(May 5, 1994) 1.02% -.66% .23%
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
Trustee, RICHARD L. BAIRD, JR., 211 Overlook Drive, Pittsburgh,
Pennsylvania 15216, 05/09/48. 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 World Fund, Inc. and Calvert World Values Fund, Inc.
Trustee, FRANK H. BLATZ, JR., Esq., 308 East Broad Street, P.O. Box
2007, Westfield, New Jersey 07091, 10/29/35. 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
Trustee, FREDERICK T. BORTS, M.D., 2040 Nuuanu Avenue #1805, Honolulu,
Hawaii, 96817, 07/23/49. Dr. Borts is a radiologist with Kaiser
Permanente. Prior to that, he was a radiologist at Bethlehem Medical
Imaging in Allentown, Pennsylvania.
*Trustee, CHARLES E. DIEHL, 1658 Quail Hollow Court, McLean, Virginia
22101, 10/13/22. 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.
Trustee, DOUGLAS E. FELDMAN, M.D., 7536 Pepperell Drive, Bethesda,
Maryland 20817, 05/23/48. Dr. Feldman practices head and neck
reconstructive surgery in the Washington, D.C. metropolitan area.
Trustee, PETER W. GAVIAN, CFA, 3005 Franklin Road, North Arlington,
Virginia 22201, 12/08/32. 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.
Trustee, JOHN G. GUFFEY, JR., 7205 Pomander Lane, Chevy Chase, Maryland
20815, 05/15/48. 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, Inc.
*President and Trustee, BARBARA J. KRUMSIEK, Ms. Krumsiek serves as
President, Chief Executive Officer and Vice Chairman of Calvert Group,
Ltd. and as an officer and director of each of its affiliated companies.
She is director of Calvert-Sloan Advisers, L.L.C., and a
trustee/director of each of the investment companies in the Calvert
Group of Funds.
Trustee, M. CHARITO KRUVANT, 5301 Wisconsin Avenue, N.W. Washington,
D.C. 20015, 12/08/45. 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.
Trustee, ARTHUR J. PUGH, 4823 Prestwick Drive, Fairfax, Virginia 22030,
09/24/37. Mr. Pugh serves as a Director of Acacia Federal Savings Bank.
* Senior Vice President and Trustee, DAVID R. ROCHAT, Box 93, Chelsea,
Vermont 05038, 10/07/37. 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.
*Trustee, D. WAYNE SILBY, Esq., 1715 18th Street, N.W. Washington, D.C.
20009, 07/20/48. 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, Inc. 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.
Senior Vice President, RENO J. MARTINI, 01/13/50. 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, Inc.
Treasurer, RONALD M. WOLFSHEIMER, CPA, 07/24/52. 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.
Vice President and Secretary, WILLIAM M. TARTIKOFF, Esq., 08/12/47. 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.
Vice President, EVELYNE S. STEWARD, 11/14/52. 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.
Vice President, DANIEL K. HAYES, 09/09/50. 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.
Assistant Secretary, SUSAN WALKER BENDER, Esq., 01/29/59. Ms. Bender is
Associate General Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer
of each of the other investment companies in the Calvert Group of Funds.
Assistant Secretary, KATHERINE STONER, Esq., 10/21/56. Ms. Stoner is
Associate General Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer
of each of the other investment companies in the Calvert Group of Funds.
Assistant Secretary and Compliance Officer, LISA CROSSLEY, Esq.,
12/31/61. Ms. Crossley is Associate General Counsel of Calvert Group and
an officer of each of its subsidiaries and Calvert-Sloan Advisers,
L.L.C. She is also an officer of each of the other investment companies
in the Calvert Group of Funds.
Assistant Secretary, IVY WAFFORD DUKE, Esq., 09/07/68. Ms. Duke is
Assistant Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer
of each of the other investment companies in the Calvert Group of Funds.
*"Interested persons" of the Fund under the Investment Company Act of
1940.
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 Ms. Krumsiek are
among the trustees, Acacia Capital Corporation, of which only Messrs.
Blatz, Diehl, Pugh and Ms. Krumsiek are among the directors, Calvert
World Values Fund, Inc., of which only Messrs. Guffey, Silby and Ms.
Krumsiek are among the directors, and Calvert New World Fund, Inc., of
which only Mr. Martini and Ms. Krumsiek is 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, and Ms. Kruvant. The Board's Investment
Policy Committee is composed of Messrs. Borts, Diehl, Gavian, Rochat,
Silby and Ms. Krumsiek.
Messrs. Baird, Guffey and Silby serve on the 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 and 1997, trustees of the Fund not
affiliated with the Fund's Advisor were paid $13,288 and $18,144.
Trustees of the Fund not affiliated with the Advisor presently receive
an annual fee of $20,500 for service as a member of the Board of
Trustees of the Calvert Group of Funds, and a fee of $750 to $1,500 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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name of Director Aggregate Pension or Total
Compensation Retirement Compensation
from Registrant Benefits from
for service Accrued as Registrant and
as Director part of Fund Complex
Registrant paid to
Expenses<F1> Directors<F2>
Richard L. Baird, Jr. $400 $0 $8,725
Frank H. Blatz, Jr. $372 $8,875 $8,875
Frederick T. Borts $372 $0 $8,125
Charles E. Diehl $372 $8,875 $8,875
Douglas E. Feldman $372 $0 $8,125
Peter W. Gavian $372 $2,438 $8,125
John G. Guffey, Jr. $372 $0 $12,654
M. Charito Kruvant $372 $0 $8,125
Arthur J. Pugh $372 $0 $8,125
D. Wayne Silby $372 $0 $14,832
<FN>
<F1> Messrs. Blatz, Diehl, Gavian, and Pugh have chosen to defer a
portion of their compensation. As of March 31, 1997, total deferred
compensation, including dividends and capital appreciation, was $428,690,
$428,442, $96,333, and $156,717, for each trustee, respectively.
<F2> As of March 31, 1997 the Fund Complex consists of nine (9)
registered investment companies.
</FN>
</TABLE>
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
Advisor 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 its 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)
exceeding the most restrictive expense limitation in those states where
the Fund's shares are qualified for sale.
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, plus or minus a performance adjustment as described in the
prospectus.
For fiscal years 1997, 1996, and 1995, the Fund paid advisory
fees of $2,368,558, $2,282,948 and $791,257 and was reimbursed $133,668,
$178,157 and $157,095 from the Advisor, respectively. The Advisor may
voluntarily defer its fees or assume expenses of the Fund. For fees
waived or expenses assumed between January 1, 1995 through December 31,
1996, the Advisor may recapture from (charge to) the Fund for any such
expenses provided that such recapture shall be made to the Advisor only
from the two-year period from January 1, 1997 through December 31, 1998,
and the original expense ratio at the time the fees were waived or
expenses assumed is not exceeded. 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 1997 and
1996.
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 of
0.20% of the Fund's average daily net assets.
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 1997, 1996 and 1995, Class A Distribution Plan expenses totaled
$330,161, $317,541 and $112,467, respectively. Of the Class A
Distribution Plan expenses paid in fiscal year 1997, 1996 and 1995,
$285,996, $270,850 and $66,370 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). CDI
received net sales charges of $194,570, $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 1997, 1996, and 1995, Class C Distribution Plan
expenses totaled $255,511, $247,589, $73,949, respectively. Of the Class
C Distribution Plan expenses paid in fiscal year 1997, $243,491 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.
Certain broker-dealers, and/or other persons may receive
compensation from the investment advisor, underwriter, or their
affiliates for the sale and distribution of the securities or for
services to the Fund. Such compensation may include additional
compensation based on assets held through that firm beyond the regularly
scheduled rates, and finder's fee payments to firms whose
representatives are responsible for soliciting a new account where the
accountholder does not choose to purchase through that firm.
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 1997, 1996 and 1995, the Fund paid Calvert
Shareholder Services, Inc. fees of $369,737, $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 1997, 1996 and 1995, the portfolio turnover
rate of the Fund was 151%, 402% and 480%, respectively. The decrease is
attributable to the Subadvisor's view of a more stable market
environment which allowed for longer holding periods.
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 1998. 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,
Calvert Strategic Growth Fund, and Calvert New Vision Small Cap 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 1997 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.
<PAGE>
LETTER OF INTENT
Date_________________
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the
Letter of Intent option on my Fund Account Application Form, I agree to
be bound by the terms and conditions applicable to Letters of Intent
appearing in the Prospectus and the Statement of Additional Information
for the Fund and the provisions described below as they may be amended
from time to time by the Fund. Such amendments will apply automatically
to existing Letters of Intent.
I intend to invest in the shares of:
_______________Fund or Portfolio name*
during the thirteen (13) month period from the date of my first
purchase pursuant to this Letter (which cannot be more than ninety (90)
days prior to the date of this Letter or my Fund Account Application
Form, whichever is applicable), an aggregate amount (excluding any
reinvestments of distributions) of at least fifty thousand dollars
($50,000) which, together with my current holdings of the Fund (at
public offering price on date of this Letter or my Fund Account
Application Form, whichever is applicable), will equal or exceed the
amount checked below:
__ $50,000(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.
<PAGE>
CALVERT WORLD VALUES FUND, INC.
CAPITAL ACCUMULATION FUND
Statement of Additional Information
July 31, 1997
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
217 E. Redwood Street
Baltimore, Maryland 21202-3316
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 8
Purchase and Redemption of Shares 10
Reduced Sales Charges (Class A) 11
Net Asset Value 11
Calculation of Total Return 11
Advertising 12
Dividends and Taxes 13
Directors and Officers 15
Investment Advisor and Subadvisors 17
Transfer and Shareholder Servicing Agent 19
Method of Distribution 20
Portfolio Transactions 21
Independent Accountants and Custodians 21
General Information 22
Financial Statements 22
Appendix 22
<PAGE>
CALVERT WORLD VALUES FUND, INC.
CAPITAL ACCUMULATION FUND
Statement of Additional Information
July 31, 1997
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
217 E. Redwood Street
Baltimore, Maryland 21202-3316
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 8
Purchase and Redemption of Shares 10
Reduced Sales Charges (Class A) 11
Net Asset Value 11
Calculation of Total Return 11
Advertising 12
Dividends and Taxes 13
Directors and Officers 15
Investment Advisor and Subadvisors 17
Transfer and Shareholder Servicing Agent 19
Method of Distribution 20
Portfolio Transactions 21
Independent Accountants and Custodians 21
General Information 22
Financial Statements 22
Appendix 22
STATEMENT OF ADDITIONAL INFORMATION-July 31, 1997
CALVERT CAPITAL ACCUMULATION FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
New Account (800) 368-2748
Information: (301) 951-4820
Shareholder Services: (800) 368-2745
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, 1997, which may be obtained free of
charge by writing the Fund at the above address or calling the Fund.
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to provide long-term capital appreciation by investing
primarily in the equity securities of small- to mid-sized companies that are
undervalued but demonstrate a potential for growth. Currently, and for the
foreseeable future, the Advisor manages the Fund as a mid-cap fund, with a
slight bias toward growth style. The Fund will rely on its proprietary
research to identify stocks that may have been overlooked by analysts,
investors, and the media, and which generally are within the range of
capitalization of the S&P 400 Mid-Cap Index, but which may be larger or
smaller as deemed appropriate.
Investments may also include, but are not limited to, preferred
stocks, foreign securities, convertible securities, certain options and
futures transactions, bonds, notes and other debt securities. The Fund will
take reasonable risks in seeking to achieve its investment objective. There
is, of course, no assurance that the Fund will be successful in meeting its
objective since there is risk involved in the ownership of all equity
securities. The Fund's investment objective is not fundamental and may be
changed without shareholder approval.
Defensive Strategies
The Fund may employ certain defensive strategies (generally options
and futures contracts) in an attempt to protect against the decline of its
investments. 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
particular months in the future at a specified price. Buying or selling
futures contracts -- contracts that establish a price level at a given time
for items to be delivered later -- amounts to insurance against adverse price
changes, or "hedging."
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.
Special Risks of Defensive Strategies
Successful use of defensive strategies 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 defensive 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 used for defensive purposes may result in a loss to the Fund.
The Fund may be required to cover its assets in a segregated account.
If an investment is not able to be liquidated at the time the Subadvisor
believes it is best for the Fund to do so, 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.
Instruments used as part of a Defensive Strategy
The Fund may write covered call options and purchase call and put
options on securities and securities indices, and may write secured put
options and enter into option transactions on foreign currency. It may also
engage in transactions in financial futures contracts and related options for
hedging purposes, and invest in repurchase agreements. A call option on a
security, security index or a foreign currency gives the purchaser of the
option, in return for the premium paid to the writer (seller), the right to
buy the underlying security, index or foreign currency at the exercise price
at any time during the option period. Upon exercise by the purchaser, the
writer of a call option on an individual security or foreign currency has the
obligation to sell the underlying security or currency at the exercise price.
A call option on a securities index is similar to a call option on an
individual security, 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 it
purchases an option of the same series as the option previously written.
A put option on a security, security index, or foreign currency gives
the purchaser of the option, in return for the premium paid to the writer
(seller), the right to sell the underlying security, index, or foreign
currency at the exercise price at any time during the option period. 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, 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. The Fund may write exchange-traded call options on its securities.
Call options may be written on portfolio securities, securities indices, or
foreign currencies. With respect to securities and foreign currencies, the
Fund may write 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. Call options on securities indices will be written only
to hedge in an economically appropriate way against anticipated changes in the
market value of portfolio securities which are not otherwise hedged with
options or financial futures contracts and will be "covered" by identifying
the specific portfolio securities being hedged.
Options on foreign currencies will be covered by securities
denominated in that currency. Options on securities indices will be covered by
securities that substantially replicate the movement of the index.
The Fund may not write options on more than 50% of its total assets.
Management presently intends to cease writing options if and as long as 25% of
such total assets are subject to outstanding options contracts or if required
under regulations of state securities administrators. The Fund may purchase a
put or call option on securities (including a straddle or spread) only if the
value of that option premium, when aggregated with the premiums on all other
options on securities held by the Fund, does not exceed 5% of the Fund's total
assets.
The Fund may write 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. It retains the risk of loss should the price of the
underlying security or foreign currency decline. Writing call options also
involves risks relating to the Fund's ability to close out options it has
written. During the option period, the writer of a put option has assumed the
risk that the price of the underlying security or foreign currency will
decline below the exercise price. However, the writer of the put option has
retained the opportunity for an appreciation above the exercise price should
the market price of the underlying security or foreign currency increase.
Writing put options also involves risks relating to the Fund's ability to
close out options it has written.
The Fund may sell a call option or a 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. Purchasing a call or put option
involves the risk that the Fund may lose the premium it paid plus transaction
costs.
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
in warrants and stock rights not listed on the New York Stock Exchange or the
American Stock Exchange.
The Fund may enter into financial futures contracts and related
options as a hedge against anticipated changes in the market value of
portfolio securities or securities which it or the Fund intends to purchase or
in the exchange rate of foreign currencies. Hedging is the initiation of an
offsetting position in the futures market which is intended to minimize the
risk associated with a position's underlying securities in the cash market.
Investment techniques related to financial futures and options are summarized
below.
Financial futures contracts in which the Fund may invest include
interest rate futures contracts, foreign currency futures contracts and
securities index 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.
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 may purchase and sell financial 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. It will
engage in transactions in financial futures contracts and related options only
for hedging purposes and not for speculation. In addition, 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 requirements of the Internal Revenue
Code of 1986 for qualification as a regulated investment company.
Noninvestment-grade (High Yield/High Risk - or Junk Bond) Debt Securities
The Fund may invest in lower quality debt securities (generally those
rated BB or lower by S&P or Ba or lower by Moody s), which provides that no
more than 35% of its assets is in securities rated below BBB, or in unrated
securities determined by the Advisor to be comparable to securities rated
below BBB. 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 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.
If an obligation held by the Fund is later downgraded, the Fund's Advisor,
under the supervision of the Fund's Board of Directors, will consider whether
it is in the best interest of the Fund's shareholders to hold or to dispose of
the obligation. Among the criteria that may be considered by the Advisor and
the Board are the probability that the obligations will be able to make
scheduled interest and principal payments in the future, the extent to which
any devaluation of the obligation has already been reflected in the Fund's net
asset value, and the total percentage, if any, of obligations currently rated
below investment grade held by the Fund.
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 may purchase foreign securities. 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 and 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.
Lending 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 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.
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 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.
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 Directors 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 directors, 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 sell stock index futures,
foreign currency futures, interest rate futures and options
thereon.
7. Invest in the shares of other investment companies,
except as permitted by the 1940 Act or other applicable law,
or pursuant to Calvert's nonqualified deferred compensation
plan adopted by the Board of Directors in an amount not to
exceed 10% or as permitted by law.
8. Purchase more than 10% of the outstanding voting
securities of any issuer.
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
Directors without shareholder approval. The Fund may not:
9. 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.
10. 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.
11. 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. Purchases of
securities outside the U.S. that are not registered with the
SEC or marketable in the U.S. are not per se restricted.
12. Make short sales of securities or purchase any
securities on margin except that the Fund may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities. The depositor payment by
the Fund of initial or maintenance margin in connection with
financial futures contracts or related options transactions
is not considered the purchase of a security on margin.
13. Purchase or retain securities of any issuer if the
officers, Directors 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.
14. Invest in warrants if more than 5% of the value of
the Fund's net assets would be invested in such securities.
15. 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.
16. Borrow money, except from banks for temporary or
emergency purposes, and then only in an amount not to exceed
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.
17. Invest for the purpose of exercising control or
management of another issuer.
For purposes of the Fund's concentration policy contained in
restriction (2), above, 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.
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.
PURCHASE AND REDEMPTION OF SHARES
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.
Amounts redeemed by check redemption may be mailed to the investor
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 commercial bank 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 investor's bank is not a Federal Reserve System
member, failure of immediate notification to that bank by the correspondent
bank could result in a delay in crediting the funds to the investor's bank
account.
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.
New shareholders wishing to use the Fund's telephone redemption
procedure must so indicate on their Investment Applications and, if desired,
designate a commercial bank or securities broker and account to receive the
redemption proceeds. Existing shareholders who at any time desire to arrange
for the telephone redemption procedure, or to change instructions already
given, must send a written notice to the Fund, with a voided check for the
bank wiring instructions to be added. If a voided check does not accompany the
request, then the request must be signature guaranteed by a commercial bank,
savings and loan association, trust company, member firm of any national
securities exchange, or certain credit unions. Further documentation may be
required from corporations, fiduciaries, pension plans, 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 the
written or telephone redemption request. If the investor so instructs in the
redemption request, the check will be mailed or the redemption proceeds wired
to a predesignated account at the investor's bank. Redemption proceeds are
normally paid in cash. However, at the sole discretion of the Fund, 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, or as allowed by law.
The right of redemption of Fund shares 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 SEC, or if the Commission has ordered such a suspension for
the protection of shareholders. Redemption proceeds are normally mailed or
wired the next business day after a proper redemption request has been
received unless redemptions have been suspended or postponed as described
above.
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. See "Exhibit A -
Reduced Sales Charges" in the Prospectus.
NET ASSET VALUE
The net asset value per share of the Fund, the price at which the
Fund's shares are redeemed, is determined every business day as of the close of
the New York Stock Exchange (generally, 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 public offering price of the Fund's shares is the net asset value
per share (plus, for Class A shares, the applicable sales charge). The net
asset value per share is computed separately for each class by dividing the
value of the Fund's total assets, less its liabilities, by the total number of
shares outstanding for that class. The Fund's securities 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 are valued at cost, plus or
minus any amortized discount or premium, unless the Board of Directors
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 are fairly valued by the Advisor in good faith under the supervision
of the Board of Directors.
CALCULATION OF TOTAL RETURN
The Fund may, from time to time, advertise "total return." Total
return is calculated separately for each class. Total return is computed by
taking the total number of shares purchased by a hypothetical $1,000
investment, after deducting the applicable sales charge for Class A shares,
adding all additional shares purchased within the period with reinvested
dividends and distributions, calculating the value of those shares at the end
of the period, and dividing the result by the initial $1,000 investment. Note:
"Total Return" when quoted in the Financial Highlights section of the Fund's
Prospectus and the Annual Report to Shareholders, however, per SEC
instructions, does not reflect deduction of the sales charge, and corresponds
to "return without maximum sales load" return as referred to herein. For
periods of more than one year, the cumulative total return is then adjusted
for the number of years, taking compounding into account, to calculate average
annual total return during that period.
Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $l,000 (less the maximum sales
charge imposed during the period calculated); 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.
Performance is historical in nature and is not intended to indicate
future performance. All total return quotations reflect the deduction of the
Fund's maximum sales charge, except quotations of "return without maximum
sales load" which do not reflect deduction of the sales charge. Return without
maximum sales load, which will be higher than total return, should be
considered only by investors, such as participants in certain pension plans,
to whom the sales charge does not apply, or for purposes of comparison only
with comparable figures which also do not reflect sales charges, such as
Lipper averages. Thus, in the above formula, for return without maximum sales
load, P = the entire $1,000 hypothetical initial investment and does not
reflect deduction of any sales charge. Return may be advertised for other
periods, such as by quarter, or cumulatively for more than one year.
Return for the Fund's shares are as follows:
Class A Shares Class A Shares
Without Total Return
Maximum With Maximum Class C Shares
Sales Load Sales Load Total Return
9/30/96 to 3/31/97 -5.59% -10.05% -6.18%
Since inception,
10/31/94 16.97% 14.63% 16.15%
Total return, like net asset value per share, fluctuates in response
to changes in market conditions. Performance for any particular time period
should not be considered an indication of future return.
ADVERTISING
The Fund or its affiliates may provide information such as, but not
limited to, the economy, investment climate, investment principles,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the
investor in determining whether the Fund is compatible with the investor's
goals. The Fund may list portfolio holdings or give examples or securities
that may have been considered for inclusion in the Portfolio, whether held or
not.
The Fund or its affiliates may supply comparative performance data
and rankings from independent sources such as Donoghue's Money Fund Report,
Bank Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Wiesenberger Investment Companies Service,
Russell 2000/Small Stock Index, Mutual Fund Values Morningstar Ratings, Mutual
Fund Forecaster, Barron s, The Wall Street Journal, and Schabacker Investment
Management, Inc. Such averages generally do not reflect any front- or back-end
sales charges that may be charged by Funds in that grouping. The Fund may also
cite to any source, whether in print or on-line, such as Bloomberg, in order
to acknowledge origin of information. The Fund may compare itself or its
portfolio holdings to other investments, whether or not issued or regulated by
the securities industry, including, but not limited to, certificates of
deposit and Treasury notes. The Fund, its Advisor, and its affiliates reserve
the right to update performance rankings as new rankings become available.
Calvert Group is the nation's leading family of socially responsible
mutual funds, both in terms of socially responsible mutual fund assets under
management, and number of socially responsible mutual fund portfolios offered
(source: Social Investment Forum, December 31, 1996). Calvert Group was also
the first to offer a family of socially responsible mutual fund portfolios.
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
because of different expenses.
Certain options, futures contracts, and options on futures contracts
are section 1256 contracts. Any gains or losses on section 1256 contracts are
generally considered 60% long-term and 40% short-term capital gains or losses
("60/40 gains or losses"). Also, section 1256 contracts held by the Fund at
the end of each taxable year are treated for federal income tax purposes as
being sold on such date for their fair market value. The resultant gains or
losses are treated as 60/40 gains or losses. When the section 1256 contract is
subsequently disposed of, the actual gain or loss will be adjusted by the
amount of the year-end gain or loss. The use of section 1256 contracts may
increase the amount of short-term capital gain realized by the Fund and taxed
as ordinary income when distributed to shareholders.
Hedging transactions in options, futures contracts and straddles or
other similar transactions will subject the Fund to special tax rules
(including mark-to-market, straddle, wash sale and short sales rules). The
effect of these rules may be to accelerate income to the Fund, defer losses to
the Fund, cause adjustments in the holding periods of the Fund's securities or
convert short-term capital losses into long-term capital losses. Hedging
transactions may increase the amount of short-term capital gain realized by
the Fund which is taxed as ordinary income when distributed to shareholders.
The Fund may make one or more of the various selections available under the
Code with respect to hedging transactions. If the Fund makes any of the
elections, the amount, character and timing of the recognition of gains or
losses from the affected positions will be determined under rules that vary
according to the elections made. The Fund will use its best efforts to make
any available elections pertaining to the foregoing transactions in a manner
believed to be in the best interests of the Fund. The 30% limit on gains from
the sale of securities held for less than three months and the diversification
requirements applicable to the Fund's assets may limit the extent to which the
Fund will be able to engage in transactions in options, futures contracts, or
options on futures contracts.
The Fund's transactions in foreign currency-denominated debt and
equity securities, certain foreign currency options, futures contracts, and
forward contracts may give rise to ordinary income or loss to the extent such
income or loss results from fluctuations in the value of the foreign currency
concerned.
If more than 50% of the Fund's assets at year end consist of the debt
and equity securities of foreign corporations, the Fund may elect to permit
shareholders to claim a credit or deduction on their income tax returns for
their pro rata portion of qualified taxes paid by the Fund to foreign
countries. In such a case, shareholders will include in gross income from
foreign sources their pro rata shares of such taxes. A shareholder's ability
to claim a foreign tax credit or deduction in respect of foreign taxes paid by
the Fund may be subject to certain limitations imposed by the Code, as a
result of which a shareholder may not get a full credit or deduction for the
amount of such taxes. Shareholders who do not itemize on their federal income
tax returns may claim a credit (but no deduction) for such foreign taxes.
Dividends and distributions may be subject to state and local taxes.
Dividends paid by the Fund from income attributable to interest on obligations
of the U.S. Government and certain of its agencies and instrumentalities may
be exempt from state and local taxes in certain states. The Fund will advise
shareholders of the proportion of its dividends consisting of such
governmental interest. Shareholders should consult their tax advisors
regarding the possible exclusion of this portion of their dividends for state
and local tax purposes.
Investors should note that the Internal Revenue 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 dividends or redemption
payments 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 dividends, not on redemptions); or (c)
the Fund is notified by the Internal Revenue Service that the TIN provided by
the shareholder is incorrect or that there has been underreporting of interest
or dividends by the shareholder. Affected shareholders will receive statements
at least annually specifying the amount withheld.
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; or 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.
DIRECTORS AND OFFICERS
JOHN G. GUFFEY, JR., Director. 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
Calvert New World Fund, Inc., and Acacia Capital Corporation. Address: 7205
Pomander Lane, Chevy Chase, Maryland 20815. DOB: 05/15/48.
*BARBARA J. KRUMSIEK, President and Director. Ms. Krumsiek serves as
President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.
and as an officer and director of each of its affiliated companies. She is
President and 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: 08/09/52.
TERRENCE J. MOLLNER, Ed.D, Director. Dr. Mollner is Founder and
Chairperson of Trusteeship Institute, Inc., a diverse foundation known
principally for its consultation to corporations converting to cooperative
employee-ownership. He served as a Trustee of the Cooperative Fund of New
England, Inc., and is now a member of its Board of Advisors. Mr. Mollner also
serves as Trustee for the Calvert Social Investment Fund. He is also a founder
and member of the Board of Trustees of the Foundation for Soviet-American
Economic Cooperation. Address: 15 Edwards Square, Northampton, Massachusetts
01060. DOB: 12/13/44.
RUSTUM ROY, Director. Mr. Roy is the Evan Pugh Professor of the Solid
State Geochemistry at Pennsylvania State University, and Corporation Chair,
National Association of Science, Technology, and Society. Address: Material
Research Laboratory, Room 102A, Pennsylvania State University, University
Park, Pennsylvania, 16802. DOB: 7/3/24.
*D. WAYNE SILBY, Esq., Director. Mr. Silby is a trustee/director of
each of the investment companies in the Calvert Group of Funds, except for
Calvert New World Fund, Inc., and Acacia Capital Corporation. 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. Address: 1715 18th
Street, N.W., Washington, D.C. 20009. DOB: 07/20/48.
TESSA TENNANT, Director. Ms. Tennant is the head of green and ethical
investing for National Provident Investment Managers Ltd. Previously, she was
in charge of the Environmental Research Unit of Jupiter Tyndall Merlin Ltd.,
and was the Director of the Jupiter Tyndall Merlin investment managers.
Address: 55 Calverley Road, Tunbridge Wells, Kent, TN1 2UE, United Kingdom.
DOB: 5/29/59.
MOHAMMAD YUNUS, Director. Mr. Yunus is a Managing Director of Grameen
Bank in Bangladesh. Address: Grameen Bank, Mirpur Two, Dhaka 1216, Bangladesh.
DOB: 6/28/40.
RENO J. MARTINI, Senior Vice President. Mr. Martini is Senior Vice
President of Calvert Group, Ltd. and Senior Vice President and Chief
Investment Officer of Calvert Asset Management Company, Inc. DOB: 01/13/50.
WILLIAM M. TARTIKOFF, Esq., Vice President and 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 Vice
President and Secretary of Calvert-Sloan Advisers, L.L.C., and is an officer
of Acacia National Life Insurance Company. DOB: 08/12/47.
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. DOB: 09/09/50.
RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is Senior Vice
President and Controller of Calvert Group, Ltd. and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. He is also an officer of each
of the other investment companies in the Calvert Group of Funds. DOB: 07/24/52.
SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer of each
of the other investment companies in the Calvert Group of Funds. DOB: 01/29/59.
KATHERINE STONER, Esq., Assistant Secretary. Ms. Stoner is Associate
General Counsel of Calvert Group and an officer of each of its subsidiaries
and Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. DOB: 10/21/56.
LISA CROSSLEY, Esq., Assistant Secretary and Compliance Officer. Ms.
Crossley is Associate General Counsel of Calvert Group and an officer of each
of its subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer
of each of the other investment companies in the Calvert Group of Funds. DOB:
12/31/61.
IVY WAFFORD DUKE, Esq., Assistant Secretary. Ms. Duke is Assistant
Counsel of Calvert Group and an officer of each of its subsidiaries and
Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. DOB: 09/07/68.
*"Interested persons" of the Fund under the Investment Company Act of 1940.
The address of directors and officers, unless otherwise noted, is
4550 Montgomery Avenue, Bethesda, Maryland 20814. Directors and officers as a
group own less than one percent of the total outstanding shares of the Fund.
During fiscal 1997, Directors of the Fund not affiliated with the
Fund's Advisor were paid aggregate fees and expenses of $3,072.
Directors 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.
Director Compensation Table
(Fiscal Year 1997)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name of Director Aggregate Pension or Total
Compensation Retirement Compensation
from Portfolio Benefits from Registrant
for service Accrued as and Fund
as Director part of Complex paid
Registrant to Directors <F2>
Expenses<F1>
John Guffey, Jr. $101 $0 $12,564
Terrence J. Mollner $0 $0 $10,158
Rustum Roy $0 $0 $2,000
D. Wayne Silby $101 $0 $14,832
Tessa Tennant $0 $2,000 $2,000
Mohammad Yunus $0 $2,000 $2,000
<FN>
<F1> None of the Directors have chosen to defer a portion of their
compensation as of March 31, 1997.
<F2> As of December 31, 1996, the Fund complex consists of nine (9)
registered investment companies.
</FN>
</TABLE>
INVESTMENT ADVISOR AND SUB-ADVISORS
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 Contract between the Fund and the Advisor was entered
into on May 21, 1992, 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 Directors 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.
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 Directors. For its services, the Advisor receives an
annual base fee, payable monthly, of 0.80% of the Fund's average daily net
assets. For the 1995 fiscal period, the Advisor received a fee of $50,418,
reimbursed $12,183, and voluntarily waived or assumed $3,256 of expenses. For
the 1996 fiscal period, the Advisor received a fee of $243,241 and there were
no expenses reimbursed or fees voluntarily waived. For the 1997 fiscal period,
the Advisor received a fee of $177,369. There were no expenses reimbursed or
fees voluntarily waived.
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 directors,
executive officers and employees of the Fund, who are not "affiliated persons"
of the Advisor or the Subadvisors 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 Fund's current Subadvisor is described in the Prospectus. See
"Management of the Fund." The remaining pool of Sub-Advisors are described
below.
Apodaca Investment Group, Inc.: Apodaca Investment Group, Inc. of San
Francisco, California is a small-cap growth manager that seeks to discover
compelling investment ideas by focusing on those entrepreneurial companies
that identify and capitalize on positive trends. It looks for companies that
are experiencing a powerful acceleration in earnings, exhibit a strong, high
quality balance sheet or decidedly improving financial statements and
demonstrate strong relative price strength. Its performance index is the
Russell 2000.
Jerry Apodaca is Vice President of Apodaca Investment Group, Inc. He
earned a B.A. from the University of New Mexico in 1983, and has had active
business experience since that time.
Fortaleza Asset Management, Inc.: Fortaleza Asset Management, Inc., of
Chicago, Illinois, is a small-cap growth manager that bases its investment
principles on three key elements: (1) a proprietary stock valuation system
that incorporates technical and market sentiment indicators to determine
optimal buy points; (2) an emphasis on the preservation of capital through the
implementation of a strict selling discipline to lock in capital gains and
reduce losses; and (3) a discipline that does not force equity commitment in
overvalued markets. The investment approach is based on a bottom-up stock
selection process. Its performance index is the Russell 2000.
Ms. Margarita Perez is the founder, President and Portfolio Manager
of Fortaleza, and has over 14 years of investment experience. Prior to forming
Fortaleza, Ms. Perez was Vice President and Portfolio Manager for Monetta
Financial Services, Inc., where she was directly involved in the management of
equity accounts totaling in excess of $100 million.
Ms. Perez is a native of Puerto Rico. She earned an MBA fro DePaul
University School of Commerce. Ms. Perez is a member of various professional
organizations including the American Institute of CPA s, National Society of
Hispanic MBA s, Association for Investment Management and Research, and the
National Association of Securities Professionals. She is also a trustee of the
Chicago Historical Society.
New Amsterdam Partners, L.P.: New Amsterdam Partners, L.P. is a mid-cap value
investment manager in New York, New York. New Amsterdam Partners is a
quantitative investment firm, evaluating investment opportunities by comparing
expected investment returns. The firm believes that the disciplined use of
their valuation techniques, in conjunction with fundamental analysis of
companies, is the key to understanding and maximizing investment returns.
Michelle Clayman, General Partner of New Amsterdam, was a founding
partner of the company, which was started in 1986. Prior to co-founding New
Amsterdam, Ms. Clayman was a Vice President of Salomon Brothers in charge of
STOCKFACTS, an on-line computer system that combines analytical tools for
equity analysis and databases and was designed and developed by Ms. Clayman.
Ms. Clayman received her Bachelor of Arts from Oxford University and an MBA
from Stanford University. She is a CFA and is past President of the Society of
Quantitative Analysts.
Keith Graham is Vice President and Special Limited Partner of New
Amsterdam. Before joining the company in 1987, Mr. Graham was an Assistant
Treasurer at the Bankers Trust Company, first in the Trust Administration
Group and later in the Investment Management Consulting Group.
Sturdivant & Co., Inc.: Sturdivant & Co., Inc., of Clementon, New Jersey,
seeks to identify undervalued companies or companies undergoing significant
changes that will enhance shareholder value. The company utilizes a
conservative, disciplined and consistently-applied decision making process
designed to achieve lower risk than the market.
Ralph Sturdivant is Chairman and CEO who, prior to founding the firm,
was a Vice President at Prudential-Bache Securities and an Account Executive
with Merrill Lynch. Mr. Sturdivant holds a Bachelor of Arts from Morgan State
University and is a member of the Financial Analysts of Philadelphia.
Albert Sturdivant is President and CIO, and was a principal and
manager of the capital markets division of Grigsby, Brandford & Company prior
to co-founding Sturdivant & Co. Mr. Sturdivant earned an MBA from the Wharton
Business School of the University of Pennsylvania.
Administrative Services
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 of 0.10% of the Fund's average daily net assets. For
the 1995, 1996 and 1997 fiscal periods, CASC received $6,251, $30,405 and
$22,248 in administrative fees, respectively.
TRANSFER AND SHAREHOLDER SERVICING AGENT
Calvert Shareholder Services, Inc. ("CSSI"), 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; updating of shareholder accounts to reflect declaration and
payment of dividends; and preparing and distributing quarterly statements to
shareholders regarding their accounts. For such services, Calvert Shareholder
Services, Inc. receives compensation based on the number of shareholder
accounts and the number of shareholder transactions. During fiscal period
1995, 1996 and 1997, CSSI received $13,179, $134,497, and $77,552 from the
Fund, respectively.
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
fiscal period 1997, CDI received distribution fees of $72,378 under the Class
A Distribution Plan. Of the Class A distribution expenses paid in fiscal 1997,
$44,432 was used to compensate dealers for their share distribution
promotional services, and the remainder was used for Advertising. CDI also
receives the portion of the sales charge in excess of the dealer reallowance.
CDI received net sales charges of $23,647, $151,785, and $49,218 for fiscal
periods ending 1995, 1996 and 1997, respectively.
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. Expenses under the Fund's Class C Plan may not
exceed, on an annual basis, 1.00% of the average daily net assets of Class C.
For the period from inception (October 31, 1994) to September 30, 1995, Class
C Distribution Plan expenses totaled $4,448. That amount was used entirely to
compensate dealers distributing shares, and to compensate the underwriter. For
the fiscal year 1996, Class C Distribution Plan expenses totaled $27,695. That
amount was used entirely to compensate dealers distributing shares, and to
compensate the underwriter. For the fiscal year 1997, Class C Distribution
Plan expenses totaled $15,686.
The Fund's Distribution Plans were approved by the Board of
Directors, including the Directors 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
Directors who are not interested persons of the Fund is committed to the
discretion of such disinterested Directors. In establishing the Plans, the
Directors considered various factors including the amount of the distribution
expenses. The Directors 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 Directors 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 Directors, including a majority of
the non-interested Directors 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 Directors 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 Directors.
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.
Certain broker-dealers, and/or other persons may receive compensation
from the investment advisor, underwriter, or their affiliates for the sale and
distribution of the securities or for services to the Fund. Such compensation
may include additional compensation based on assets held through that firm
beyond the regularly scheduled rates, and finder's fee payments to firms whose
representatives are responsible for soliciting a new account where the
accountholder does not choose to purchase through that firm.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken on the basis of their
desirability from an investment standpoint. Investment decisions and choice of
brokers and dealers are made by the Fund's Advisor under the direction and
supervision of the Fund's Board of Directors.
The Fund's policy is to limit portfolio turnover to transactions
necessary to carry out its investment policies and to obtain cash for
redemption of its shares. Depending upon market conditions, the Fund's
turnover expressed as a percentage may in some years exceed 100%, but is not
expected to exceed 200%. For the 1995, 1996 and 1997 fiscal periods, the
portfolio turnover rates of the Fund were 95%, 114% and 117%, respectively. In
all transactions, the Fund seeks to obtain the best price and most favorable
execution and selects broker-dealers on the basis of their professional
capability and the value and quality of their services. Broker-dealers may be
selected who provide the Fund with statistical, research, or other information
and services. Such broker-dealers may receive compensation for executing
portfolio transactions that is in excess of the compensation another
broker-dealer would have received for executing such transactions, if the
Advisor determines in good faith that such compensation is reasonable in
relation to the value of the information and services provided. Although any
statistical, research, or other information or services provided by
broker-dealers may be useful to the Advisor, its dollar value is generally
indeterminable and its availability or receipt does not materially reduce the
Advisor's normal research activities or expenses. During fiscal 1995, no
commissions were paid to any officer or director of the Fund, or to any of
their affiliates. During fiscal year 1996, $177,000 in aggregate brokerage
commissions were paid to broker-dealers. During fiscal year 1997, $17,728 in
aggregate brokerage commissions were paid to broker-dealers.
The Advisor may also execute Fund 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.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
Coopers and Lybrand, L.L.P., has been selected by the Board of
Directors to serve as independent accountants of the Fund for fiscal year
1998. State Street Bank & Trust Company, N.A., 225 Franklin Street, Boston, MA
02110 acts 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. Neither custodian has a part
in deciding the Fund's investment policies or the choice of securities that
are to be purchased or sold for the Fund.
GENERAL INFORMATION
The Fund was organized as a Maryland Corporation on February 14,
1992. The other series of the Fund is the Calvert International Equity 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 Fund's audited financial statements included in its Annual Report
to Shareholders dated March 31, 1997, are 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 Calvert
Fund.
APPENDIX
Corporate Bond Ratings:
Description of Moody's Investors Service Inc. s/Standard & Poor's bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. This rating indicates an extremely strong capacity to pay
principal and interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree. They are rated
lower than the best bonds because margins of protection may not be as large as
in Aaa securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present which make long-term risks
appear somewhat larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which make the bond somewhat more susceptible to the adverse effects of
circumstances and economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay principal
and interest. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in higher rated categories.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is
regarded as predominantly speculative with respect to capacity to pay interest
and repay principal. The higher the degree of speculation, the lower the
rating. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposure to adverse conditions.
C/C: This rating is only for income bonds on which no interest is
being paid.
D: Debt in default; payment of interest and/or principal is in
arrears.
Commercial Paper Ratings:
MOODY's INVESTORS SERVICE, INC.:
The Prime rating is the highest commercial paper rating assigned by
Moody s. Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance;
(4) liquidity; (5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management
of obligations which may be present or may arise as a result of public
interest questions and preparations to meet such obligations. Issuers within
this Prime category may be given ratings 1, 2, or 3, depending on the relative
strengths of these factors.
STANDARD & POOR's CORPORATION:
Commercial paper rated A by Standard & Poor's has the following
characteristics: (i) liquidity ratios are adequate to meet cash requirements;
(ii) long-term senior debt rating should be A or better, although in some
cases BBB credits may be allowed if other factors outweigh the BBB; (iii) the
issuer should have access to at least two additional channels of borrowing;
(iv) basic earnings and cash flow should have an upward trend with allowances
made for unusual circumstances; and (v) typically the issuer's industry should
be well established and the issuer should have a strong position within its
industry and the reliability and quality of management should be unquestioned.
Issuers rated A are further referred to by use of numbers 1, 2 and 3 to denote
the relative strength within this highest classification.
<PAGE>
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter
of Intent option on my Fund Account Application Form, I agree to be bound by
the terms and conditions applicable to Letters of Intent appearing in the
Prospectus and the Statement of Additional Information for the Fund and the
provisions described below as they may be amended from time to time by the
Fund. Such amendments will apply automatically to existing Letters of Intent.
I intend to invest in the shares of: (Fund or Portfolio name*)
during the thirteen (13) month period from the date of my first purchase
pursuant to this Letter (which cannot be more than ninety (90) days prior to
the date of this Letter or my Fund Account Application Form, whichever is
applicable), an aggregate amount (excluding any reinvestments of
distributions) of at least fifty thousand dollars ($50,000) which, together
with my current holdings of the Fund (at public offering price on date of this
Letter or my Fund Account Application Form, whichever is applicable), will
equal or exceed the amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of
escrow, to which I hereby agree, each purchase occurring after the date of
this Letter will be made at the public offering price applicable to a single
transaction of the dollar amount specified above, as described in the Fund's
prospectus. No portion of the sales charge imposed on purchases made prior to
the date of this Letter will be refunded.
I am making no commitment to purchase shares, but if my purchases
within thirteen months from the date of my first purchase do not aggregate the
minimum amount specified above, I will pay the increased amount of sales
charges prescribed in the terms of escrow described below. I understand that
4.75% of the minimum dollar amount specified above will be held in escrow in
the form of shares (computed to the nearest full share). These shares will be
held subject to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary),
4.75% of the dollar amount specified in this Letter shall be held in escrow in
shares of the Fund by the Fund's transfer agent. For example, if the minimum
amount specified under the Letter is $50,000, the escrow shall be shares
valued in the amount of $2,375 (computed at the public offering price adjusted
for a $50,000 purchase). All dividends and any capital gains distribution on
the escrowed shares will be credited to my account.
If the total minimum investment specified under the Letter is
completed within a thirteen month period, escrowed shares will be promptly
released to me. However, shares disposed of prior to completion of the
purchase requirement under the Letter will be deducted from the amount
required to complete the investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the
Letter are less than the amount specified in the Letter as the intended
aggregate purchases, Calvert Distributors, Inc. ("CDI") will bill me for an
amount equal to the difference between the lower load I paid and the dollar
amount of sales charges which I would have paid if the total amount purchased
had been made at a single time. If not paid by the investor within 20 days,
CDI will debit the difference from my account. Full shares, if any, remaining
in escrow after the aforementioned adjustment will be released and, upon
request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact, with
full power of substitution, to surrender for redemption any or all escrowed
shares on the books of the Fund. This power of attorney is coupled with an
interest.
The commission allowed by Calvert Distributors, Inc. 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.
<PAGE>
The Calvert Fund:
Calvert New Vision Small Cap Fund
Statement of Additional Information
July 31, 1997
Statement of Additional Information
July 31, 1997
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
217 E. Redwood Street
Baltimore, Maryland 21202-3316
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
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 charge (Class A) 9
Advertising 9
Trustees and Officer 10
Investment Advisor and Subadvisor 12
Method of Distribution 12
Transfer and Shareholder Servicing Agent 13
Fund Transactions 13
Independent Accountant and Custodians 14
General Informatio 14
Financial Statements 14
Appendix 14
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-July 31, 1997
THE CALVERT FUND
CALVERT NEW VISION SMALL CAP FUND
4550 Montgomery Avenue, Bethesda, Maryland 20814
New Account (800) 368-2748
Information: (301) 951-4820
Shareholder Services: (800) 368-2745
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, 1997, which may be
obtained free of charge by writing the Fund at the above address or
calling the Fund.
INVESTMENT OBJECTIVE
Calvert New Vision Small Cap Fund (the "Fund") is a diversified
series of The Calvert Fund, an open-end management investment company.
The investment objective of the Fund is to achieve long-term capital
appreciation by investing primarily in the equity securities of small
companies* publicly traded in the United States. The following
discussion supplements the discussion in the Prospectus. Unless
otherwise specified, the investment objective, programs and restrictions
of the Fund are not fundamental policies. The operating policies of the
Fund are subject to change by its Board of Directors without shareholder
approval.
In seeking capital appreciation, the Fund invests primarily in
equity securities of small capitalized growth companies that have
historically exhibited exceptional growth characteristics and that, in
the Adviser's opinion, have strong earnings potential relative to the
U.S. market as a whole. The Fund will take reasonable risks in seeking
to achieve its investment objective. There is, of course, no assurance
that the Fund will be successful in meeting its objective since there is
risk involved in the ownership of all equity securities. The Fund will
invest in enterprises that make a significant positive contribution to
our society through their products and services and through the way they
do business.
The Fund's investment philosophy emphasizes sustained growth
and concentrates on the securities of issuers not generally recognized
by the investment community that have a consistent earnings-per-share
growth, a unique product or service, conservative accounting and
financial policies, and management capable of long-term growth. While
the Fund's policies may, from time to time, result in income return, any
such return will be incidental to the objective of long-term capital
appreciation.
Under normal market conditions, the Fund strives to be fully
invested. In a declining market, the Fund may raise cash or employ other
defensive strategies in an attempt to protect against the decline of its
investments.
*Currently those with a total capitalization for initial purchases of less
than $1 billion at the time of the Fund's initial investment.
<PAGE>
SPECIAL RISKS OF THE FUND'S DEFENSIVE STRATEGIES
The Fund may purchase put and call options, and write (sell)
covered put and call options on equity and debt securities and stock or
debt indices. The Fund may purchase or write both exchange-traded and
OTC options. These defensive 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 and options 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 on equities and equity indexes, warrants and stock rights for
hedging purposes only, 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. The Fund presently intends to cease writing options in the
event that 25% of total assets are subject to outstanding options
contracts. As an operating policy, the Fund may purchase a call or put
option on securities (including combinations of options such as
straddles or spreads) only if the value of that option premium, when
aggregated with the premiums of all other options on 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 or
security index gives the holder (buyer) of the option the right (but not
the obligation) to purchase the underlying security or security index 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 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,
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 or security
index. 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 at the exercise price. A put option on a securities index is
similar to a put option on an individual security, 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 securities indexes, 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. 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 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 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. 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 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 to meet
margin requirements 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, 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 liquid debt or equity securities 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) DEBT SECURITIES
The Fund may invest up to 5% of its total 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. This may also impact the Fund's Board of Trustees'
ability to accurately value these securities and the Fund's assets.
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,
and any adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may make them less marketable.
The Fund will not purchase any securities rated lower than C
(for an explanation of Corporate Bond and Commercial Paper ratings, see
Appendix). The quality limitation set forth in the investment policy is
determined immediately upon the Fund's acquisition of a security.
Accordingly, any later change in ratings may not be considered when
determining whether an investment complies with the Fund's investment
policy. Credit ratings evaluate the safety of principal and interest
payments, not market value risk of the securities.
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. The
Subadvisor also continuously monitors the issuers of the securities in
the Fund to assure that their financial condition continues to be
adequate. Through portfolio diversification and credit analysis,
investment risk can be reduced, although there can be no assurance that
losses will not occur.
LENDING PORTFOLIO SECURITIES
Although it does not currently intend to do so, 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. 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 terms the Advisor 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 recognize 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.
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 75% of its total 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.
2. Concentrate 25% or more of the value of its
total 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 total
assets of the Fund, other than through the purchase of
money market instruments and repurchase agreements
or by the purchase of bonds, debentures or other debt
securities, or the lending of portfolio securities as
detailed in the prospectus, 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. Issue senior securities or 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.
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. 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.
10. Invest in warrants if more than 5% of the
value of the Fund's net assets would be invested in
such securities.
11. 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.
12. 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.
13. Invest in the shares of other investment
companies, except as permitted by the 1940
Act or other applicable law, or pursuant to Calvert's
nonqualified deferred compensation plan
adopted by the Board of Trustees, in any
event, not to exceed 5% of the Fund's net assets.
14. With respect to 75% of its total assets,
invest 10% or more of its assets in the voting
securities of any one issuer.
For purposes of the Fund's concentration policy contained in
restriction (2), above, the Fund classifies the respective industries
according to a revised version of William O'Neil's Investor's Business
Daily industry classification.
Any investment restriction (with the exception of borrowings
and illiquid holdings) 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.
Investors should note that the Internal Revenue Code (the
"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 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 dividends, not on
redemptions); or (c) the Fund is notified by the Internal Revenue
Service that the TIN provided by the shareholder is incorrect or that
there has been underreporting of interest or dividends by the
shareholder. Affected shareholders will receive statements at least
annually specifying the amount withheld.
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
Code. Shareholders claiming exemption from backup withholding and broker
reporting should call or write the Fund for further information.
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.
Equity options are valued at the last sale price; if not available, then
the previous day's 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.
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.
Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n
= number of years; and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period.
Total return is historical in nature and is not intended to
indicate future performance. All total return quotations reflect the
deduction of the maximum class A front-end sales charge ("return with
maximum load"), 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
return with maximum load, 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.
Return for the Funds' shares for the period from inception (January 31,
1997) to March 31, 1997, are as follows:
Class A Shares Class A Shares Class C
without Maximum total Return Shares
Sales Load with Maximum Total Return
Sales Load
Since Inception -20.07 -23.87 -20.07
Total return, like net asset value per share, fluctuates in response to
changes in market conditions. Performance for any particular time period
should not be considered an indication of future return.
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 to investors whose purchase checks are
returned for insufficient funds.
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 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 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.
Net Asset Value and Offering Price Per Share
Class A net asset value per share
($1,214,896/101,347 shares) $11.99
Maximum sales charge
(4.75% of Class A offering price) 0.60
Offering Price per Class A share 12.59
Class C net asset value and offering price per share
($200,089/16,690 shares) $11.99
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 its holdings or give examples of
securities that may have been considered for inclusion in the Fund,
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.
Calvert Group is the nation's leading family of socially
responsible mutual funds, both in terms of socially responsible mutual
fund assets under management, and number of socially responsible mutual
fund portfolios offered (source: Social Investment Forum, December 31,
1996). Calvert Group was also the first to offer a family of socially
responsible mutual fund portfolios.
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 and Silby and Ms. Krumsiek are
among the trustees, Acacia Capital Corporation, of which only Messrs.
Blatz, Diehl and Pugh and Ms. Krumsiek are among the directors, Calvert
World Values Fund, Inc., of which only Messrs. Guffey and Silby and Ms.
Krumsiek are among the directors, and Calvert New World Fund, Inc., of
which only Ms.Krumsiek and Mr. Martini is among the directors. The
address of directors and officers, unless otherwise noted, is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
The Audit Committee of the Board is composed of Messrs. Baird,
Blatz, Feldman, Guffey and Pugh, and Ms. Kruvant. The Board's Investment
Policy Committee is composed of Messrs. Borts, Diehl, Gavian, Rochat and
Silby.
Messrs. Baird, Guffey and Silby serve on the 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.
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. Deferral of the fees is designed to maintain
the parties in the same position as if the fees were paid on a current
basis. Management believes this will have a negligible effect on the
Fund's assets, liabilities, net assets, and net income per share.
Trustee Compensation Table<F1>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year 1997 Aggregate Compensation from Pension or Retirement
(unaudited numbers) Portfolio for service as Benefits Accrued as part
Trustee of Fund Expenses<F2>
Name of Director
Richard L. Baird, Jr. $-0- $-0-
Frank H. Blatz, Jr. $-0- $8,875
Frederick T. Borts $-0- $-0-
Charles E. Diehl $-0- $8,875
Douglas E. Feldman $-0- $-0-
Peter W. Gavian $-0- $2,438
John Guffey, Jr. $-0- $-0-
M. Charito Kruvant $-0- $-0-
Arthur J. Pugh $-0- $-0-
D. Wayne Silby $-0- $-0-
Total Compensation from
Registrant and Fund
Complex paid to Trustees<F3>
Name of Director
Richard L. Baird, Jr. $8,725
Frank H. Blatz, Jr. $8,875
Frederick T. Borts $8,125
Charles E. Diehl $8,875
Douglas E. Feldman $8,125
Peter W. Gavian $8,125
John Guffey, Jr. $12,654
M. Charito Kruvant $8,125
Arthur J. Pugh $8,125
D. Wayne Silby 14,832
<FN>
<F1> For the period since inception (January 31, 1997) through March 31, 1997.
<F2> Messrs. Blatz, Diehl, Gavian, and Pugh have chosen to defer a portion
of their compensation. As of March 31, 1997, total deferred
compensation, including dividends and capital appreciation, was
$428,689, $428,442, $96,333 and $156,717 for each trustee, respectively.
<F3> As of December 31, 1996, the Fund Complex consists of nine (9) registered
investment companies.
</FN>
</TABLE>
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 Contract between the Fund and the Advisor was
entered into as of January 30, 1997, 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.
The Fund has received an exemptive order to permit the Fund and
the Advisor to enter into and materially amend the Investment
Subadvisory Agreement without shareholder approval. Within 90 days of
the hiring of any Subadvisor or the implementation of any proposed
material changed in the Investment Subadvisory Agreement, the Fund will
furnish its shareholders information about the new Subadvisor or
Investment Subadvisory Agreement that would be included in a proxy
statement. Such information will include any change in such disclosure
caused by the addition of a new Subadvisor or any proposed material
change in the Investment Subadvisory Agreement of the Fund. The Fund
will meet this condition by providing shareholders, within 90 days of
the hiring of the Subadvisor or implementation of any material change to
the terms of an Investment Subadvisory Agreement, with an information
statement to this effect.
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, registration, 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 federal law or
regulation).
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 an annual fee of 0.90% of the Fund's average daily net
assets.
For fiscal year 1997, the Fund paid advisory fees of $1,796.
The Advisor may voluntarily defer its fees or assume expenses of the
Fund. For fiscal year 1997, the Advisor reimbursed the Fund $20,861 for
fees and expenses. The Advisor may recapture from (charge to) the Fund
(through December 31, 1999) for such expenses incurred, provided that
such recapture would not cause the Fund's aggregate expenses to exceed
the annual expense limit. The Advisor may voluntarily agree to further
defer its fees or assume Fund expenses from January 1, 1997 through
December 31, 1998 ("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
the annual expense limit, and that such recapture shall be made to the
Advisor only from the two-year period from January 1, 1999 through
December 31, 2000. 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.
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 of
0.10% of the Fund's average daily net assets.
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 "Distribution 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, 0.25% of the Fund's Class A average daily net assets, and 1.00%
of the Fund's Class C average daily net assets. For fiscal year 1997,
Class A Distribution Plan expenses totaled $437. Of the Class A
Distribution Plan expenses paid in fiscal year 1997, $255 was used
almost entirely for broker/dealer compensation and the remainder for the
printing and mailing of prospectuses and sales materials to investors
(other than current shareholders). During the same period, CDI received
net sales charges of $1,444. For fiscal year 1997, Class C Distribution
Plan expenses totaled $246. Of the Class Distribution Plan expenses paid
in fiscal year 1997, almost entirely all of the expenses were 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 Distribution Plans or in any agreements related to the Distribution
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 Distribution Plans, the
Trustees considered various factors including the amount of the
distribution expenses. The Trustees determined that there is a
reasonable likelihood that the Distribution Plans will benefit the Fund
and its shareholders.
The Distribution Plans may be terminated by vote of a majority
of the non-interested Trustees who have no direct or indirect financial
interest in the Distribution Plans, or by vote of a majority of the
outstanding shares of the Fund. Any change in the Distribution Plans
that would materially increase the distribution cost to the Fund
requires approval of the shareholders of the affected class; otherwise,
the Distribution Plans may be amended by the Trustees, including a
majority of the non-interested Trustees as described above. The
Distribution 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 Distribution
Plans or interested persons of any such party and who have no direct or
indirect financial interest in the Distribution Plans, and (ii) the vote
of a majority of the entire Board of Trustees.
Apart from the Distribution 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.
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. Notwithstanding the quality
of execution and other services provided, the Fund may pay commissions
that are higher than those available elsewhere. Any such payments are
subject to the criteria of Section 28(e) of the Securities Exchange Act
of 1934. 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
materially to reduce the Advisor's or Subadvisor's normal research
activities or expenses. During fiscal year 1997, $988 in aggregate
brokerage commissions were paid to broker-dealers.
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.
Depending upon market conditions, portfolio turnover, generally defined as
the lesser of annual sales or purchases of portfolio securities divided by
the average monthly value of the Fund's portfolio securities (excluding
from both the numerator and the denominator all securities whose
maturities or expiration dates as of the date of acquisition are one year
or less), expressed as a percentage. For fiscal year 1997, it was 97%.
INDEPENDENT ACCOUNTANT AND CUSTODIANS
Coopers & Lybrand, L.L.P. has been selected by the Board of Trustees to
serve as independent accountant for fiscal year 1998. 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 Calvert Fund was organized as a Massachusetts business
trust on March 15, 1982. The series of the Fund include Calvert Income
Fund, Calvert Strategic Growth Fund and Calvert New Vision Small Cap
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 Annual Report to
Shareholders will be expressly incorporated by reference and made a part
of this Statement of Additional Information once available. Once
available, a copy of the Annual Report may be obtained free of charge by
writing or calling the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of June 30, 1997, the following shareholders owned of record
5% of the Class A shares of the Fund:
Name and Address % of Ownership
Calvert Distributors, Inc. 16.51%
4550 Montgomery Ave., Ste. 1000N
Bethesda, MD 20814
Portfolio Advisory Services, Inc., 8.59%
725 s. Figueroa St., Ste. 2328
Los Angeles, CA 90017-5425
Norwin Wong 7.93%
c/o Portfolio Advisor Services, Inc.,
725 S. Figueroa St., Ste. 2328
Los Angeles, CA 90017-5425
As of June 30, 1997, the following shareholders owned of record
5% or more of the Class C shares of the Fund:
Name and Address % of Ownership
Calvert Distributors, Inc. 8.92%
4550 Montgomery, Ave., Ste. 1000N
Bethesda, MD 20814-3343
Robin Van Doren 21.49%
323 E. Matilija #110-138
Ojai, CA 93023
Frances A. Rothman 20.68%
323 E. Matilija #110-138
Ojai, CA 93023
APPENDIX
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
Corporate Bonds:
Description of Moody's Investors Service Inc.'s/Standard & Poor's bond
ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin
and principal is secure. This rating indicates an extremely strong
capacity to pay principal and interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and
in the majority of instances they differ from AAA issues only in small
degree. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of
protective elements may be of greater amplitude, or there may be other
elements present which make long-term risks appear somewhat larger than
in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be
present which make the bond somewhat more susceptible to the adverse
effects of circumstances and economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this category than for bonds in
higher rated categories.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is
regarded as predominantly speculative with respect to capacity to pay
interest and repay principal. The higher the degree of speculation, the
lower the rating. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposure to adverse conditions.
C/C: This rating is only for income bonds on which no interest
is being paid.
D: Debt in default; payment of interest and/or principal is in
arrears.
Commercial Paper:
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.
GLOSSARY OF PERMITTED INVESTMENTS
The following is a description of permitted investments and other
applicable terms for the Fund:
American Depositary Receipts ("ADRs"): ADRs are securities typically
issued by a U.S. financial institution that evidence ownership interest
in a security or a pool of securities issued by a foreign issuer and
deposited with the depository. ADRs may be available for investment
through "sponsored" or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the security underlying the receipt
and a depository, whereas an unsponsored facility may be established by
a depository without participation by the issuer of the receipt's
underlying security.
Banker's Acceptance: A bill of exchange or time draft drawn on and
accepted by a commercial bank. It is used by corporations to finance the
shipment and storage of goods and to furnish dollar exchange. Maturities
are generally six months or less.
Certificate of Deposit: A negotiable interest bearing instrument with a
specific maturity. Certificates of deposit are issued by banks and
savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market prior to maturity.
Certificates of deposit generally carry penalties for early withdrawal.
Commercial Paper: The term used to designate unsecured short-term
promissory notes issued by corporations and other entities. Maturities
on these issues typically vary from a few days to nine months.
Convertible Securities: Securities such as rights, bonds, notes and
preferred stocks which are convertible into or exchangeable for common
stocks. Convertible securities have characteristics similar to both
fixed income and equity securities. Because of the conversion feature,
the market value of convertible securities tends to move together with
the market value of the underlying common stock. As a result, the
Portfolio's selection of convertible securities is based, to a great
extent, on the potential for capital appreciation that may exist in the
underlying stock. The value of convertible securities is also affected
by prevailing interest rates, the credit quality of the issuer, and any
call provisions.
Futures Contracts and Options on Futures Contracts: The Fund may enter
into contracts for the purchase or sale of securities. A purchase of a
futures contract means the acquisition of a contractual right to obtain
delivery to the Fund of securities called for by the contract at a
specified price during a specified future month. When a futures contract
is sold, the Fund incurs a contractual obligation to deliver the
securities underlying the contract at a specified price on a specified
date during a specified future month. The Fund may sell stock index
futures contracts in anticipation of, or during, a market decline to
attempt to offset the decrease in market value of its common stocks that
might otherwise result; and it may purchase such contracts in order to
offset increases in the cost of common stocks that it intends to
purchase.
The Fund may also purchase and write options to buy or sell
futures contracts. The Fund may write options on futures only on a
covered basis. Options on futures are similar to options on securities
except that options on futures give the purchaser the right, in return
for the premium paid, to assume a position in a futures contract, rather
than actually to purchase or sell the futures contract, at a specified
exercise price at any time during the period of the option. When the
Fund enters into a futures transaction it must deliver to the futures
commission merchant selected by the Fund, an amount referred to as
"initial margin." This amount is maintained by the futures commission
merchant in a segregated account at the custodian bank. Thereafter, a
"variation margin" may be paid by the Fund to, or drawn by the Fund
from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities to the
futures contract.
Options: The Fund may invest in put and call options for various stocks
and stock indices that are traded on national securities exchanges, from
time to time as the Subadvisor deems to be appropriate. Options will be
used for hedging purposes and will not be engaged in for speculative
purposes.
A put option gives the purchaser of the option the right to
sell, and the writer the obligation to buy, the underlying security at
any time during the option period. A call option gives the purchaser of
the option the right to buy, and the writer of the option the obligation
to sell, the underlying security at any time during the option period.
The premium paid to the writer is the consideration for undertaking the
obligations under the option contract. Although the Fund will engage in
option transactions only as hedging transactions and not for speculative
purposes, there are risks associated with such investment including the
following: (i) the success of a hedging strategy may depend on the
ability of the Subadvisor to predict movements in the prices of the
individual securities, fluctuations in markets and movements in interest
rates; (ii) there may be an imperfect correlation between the changes in
market value of the stocks held by the Fund and the prices of options;
(iii) there may not be liquid secondary market for options; and (iv)
while the Fund will receive a premium when it writes covered call
options, it may not participate fully in a rise in the market value of
the underlying security. When writing options (other than covered call
options), the Fund must establish and maintain a segregated account with
the Fund's Custodian containing cash or liquid, high grade debt
securities in an amount at least equal to the market value of the option.
Rabbi Trust: Nonqualified deferred compensation plan which is an
irrevocable trust established by an employer to hold assets to provide
deferred compensation for such employer's employees.
Repurchase Agreements: Agreements by which a person obtains a security
and simultaneously commits to return it to the seller at any agreed upon
price (including principal and interest) on an agreed upon date within a
number of days from the date of purchase. The Fund's Custodian or its
agents will hold the security as collateral for the repurchase
agreement. The Fund bears a risk of loss in the event the other party
defaults on its obligations and the Fund is delayed or prevented from
its right to dispose of the collateral securities.
Time Deposit: A non-negotiable receipt issued by a bank in exchange for
the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it
cannot be traded in the secondary market. Time deposits with a
withdrawal penalty are considered to be illiquid securities.
U.S. Government Agency Obligations: Certain Federal agencies such as the
Government National Mortgage Association ("GNMA") have been established
as instrumentalities of the United States Government to supervise and
finance certain types of activities. Issues of these agencies, while not
direct obligations of the United States Government, are either backed by
the full faith and credit of the United States (i.e., GNMA securities)
or supported by the issuing agencies' right to borrow from the Treasury.
The issues of other agencies are supported by the credit of the
instrumentality (i.e., Federal National Mortgage Association securities).
U.S. Government Securities: Bills, notes and bonds issued by the U.S.
Government and backed by the full faith and credit of the United States.
U.S. Treasury Obligations: Bills, notes and bonds issued by the U.S.
Treasury, and separately traded interest and principal component parts
of such obligations that are transferable through the Federal book-entry
system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS").
Warrants: Instruments giving holders the right, but not the obligations,
to buy shares of a company at a given price during a specified period.
<PAGE>
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter of
Intent option on my Fund Account Application Form, I agree to be bound
by the terms and conditions applicable to Letters of Intent appearing in
the Prospectus and the Statement of Additional Information for the Fund
and the provisions described below as they may be amended from time to
time by the Fund. Such amendments will apply automatically to existing
Letters of Intent.
I intend to invest in the shares of:
Fund or Portfolio name*
during the thirteen (13) month period from the date of my first purchase
pursuant to this Letter (which cannot be more than ninety (90) days
prior to the date of this Letter or my Fund Account Application Form,
whichever is applicable), an aggregate amount (excluding any
reinvestments of distributions) of at least fifty thousand dollars
($50,000) which, together with my current holdings of the Fund (at
public offering price on date of this Letter or my Fund Account
Application Form, whichever is applicable), will equal or exceed the
amount checked below:
__ $50,000(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.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements
Financial statements incorporated by reference to:
All financial statements for The Calvert Strategic
Growth Fund and New Vision Small Cap Fund series are incorporated by
reference to Registrant's Annual Report to Shareholders dated March 31,
1997, and filed June 11, 1997.
Schedules II-VII, inclusive, for which provision is
made in the applicable accounting regulation of the Securities and
Exchange Commission, are omitted because they are not required under the
related instructions, or they are inapplicable, or the required
information is presented in the financial statements or notes thereto.
(b) Exhibits:
1. Declaration of Trust (incorporated by reference to
Registrant's Initial Registration Statement,
March 15, 1982).
2. By-Laws (incorporated by reference to Registrant's
Pre-Effective Amendment No. 2, September 3, 1982).
4. Specimen Stock Certificate for all series of The
Calvert Fund (incorporated by reference to
Registrant's Post-Effective Amendment No. 28,
July 19, 1995).
5.a. Advisory Contract (incorporated by reference to
Registrant's Post-Effective Amendment No. 3,
November 1, 1984).
5.b. Sub-Advisory Contract (Portfolio Advisory
Services, Inc.) (incorporated by reference to
Registrant's Post-Effective Amendment No. 30).
6. Underwriting and Dealer Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 27, January 31, 1995).
7. Trustees' Deferred Compensation Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 20, January 28, 1992).
8. Custodial Contract (incorporated by reference
to Registrant's Post-Effective Amendment No. 21,
January 29, 1993).
9. Transfer Agency Contract (incorporated by
reference to Registrant's Post-Effective
Amendment No. 3, November 1, 1984).
10. Opinion and Consent of Counsel as to Legality
of Shares Being Registered filed herewith.
11. Consent of Independent Accountants filed herewith.
14. Retirement Plans (incorporated by reference to
Registrant's Post-Effective Amendment No. 20,
January 28, 1992).
15. Rule 12b-1 Distribution Plan with respect to
Registrant's Class B and C shares, incorporated by
reference to Registrant's Post-Effective Amendment
No. 27, January 31, 1995. With respect to Class A
shares, incorporated by reference to Registrant's
Post-Effective Amendment No. 28, July 19, 1995,
for all series of The Calvert Fund.
16. Schedule for computation of performance
quotation (incorporated by reference to Registrant's
Post-effective Amendment No. 14, January 25, 1989).
17 (ii) Financial Data Schedules filed herewith.
18. Multiple-class Plan under the Investment
Company Act of 1940 Rule 18f-3, (incorporated by
reference to Registrant's Post-Effective Amendment
No. 29, January 31, 1996).
Exhibits 3, 12 and 13 are omitted because they are
inapplicable.
Item 25. Persons Controlled By or Under Common Control With Registrant
Registrant is controlled by its Board of Trustees, which is a
common Board with four other registered investment companies, Calvert
Tax-Free Reserves, First Variable Rate Fund for Government Income,
Calvert Cash Reserves, and Calvert Municipal Fund, Inc. In addition,
some members of Registrant's Board of Trustees also serve on the Board
of Calvert Social Investment Fund, Acacia Capital Corporation, Calvert
New World Fund, Inc., and Calvert World Values Fund, Inc.
Item 26. Number of Holders of Securities
As of May 31, 1997, there were 235 holders of record of
Registrant's Class A shares of beneficial interest for Calvert New
Vision Small Cap Fund.
As of May 31, 1997, there were 38 holders of record of
Registrant's Class C shares of beneficial interest for Calvert New
Vision Small Cap Fund.
As of May 31, 1997, there were 13,288 holders of record of
Registrant's Class A shares of beneficial interest for Calvert Strategic
Growth Fund.
As of May 31, 1997, there were 1,860 holders of record of
Registrant's Class C shares of beneficial interest for Calvert Strategic
Growth Fund.
Item 27. Indemnification
Registrant's Declaration of Trust, which Declaration is Exhibit
1 of this Registration Statement, provides, in summary, that officers,
trustees, employees, and agents shall be indemnified by Registrant
against liabilities and expenses incurred by such persons in connection
with actions, suits, or proceedings arising out of their offices or
duties of employment, except that no indemnification can be made to such
a person if he has been adjudged liable of willful misfeasance, bad
faith, gross negligence, or reckless disregard of his duties. In the
absence of such an adjudication, the determination of eligibility for
indemnification shall be made by independent counsel in a written
opinion or by the vote of a majority of a quorum of trustees who are
neither "interested persons" of Registrant, as that term is defined in
Section 2(a)(19) of the Investment Company Act of 1940, nor parties to
the proceeding.
Registrant's Declaration of Trust also provides that Registrant
may purchase and maintain liability insurance on behalf of any officer,
trustee, employee or agent against any liabilities arising from such
status. In this regard, Registrant maintains a Directors & Officers
(Partners) Liability Insurance Policy with Chubb Group of Insurance
Companies, 15 Mountain View Road, Warren, New Jersey 07061, providing
Registrant with $5 million in directors and officers liability coverage,
plus $3 million in excess directors and officers liability coverage for
the independent trustees/directors only. Registrant also maintains an
$8 million Investment Company Blanket Bond issued by ICI Mutual
Insurance Company, P.O. Box 730, Burlington, Vermont, 05402.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Barbara J. Krumsiek Calvert Asset Management Officer
Company, Inc. and
Investment Advisor Director
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert-Sloan Advisers, L.L.C. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Shareholder Officer
Services, Inc. and
Transfer Agent Director
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company and
Service Company Director
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Director
Broker-Dealer and Officer
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund for Officer
Government Income and
Calvert Tax-Free Reserve Trustee
Calvert Social Investment Fund
Money Management Plus
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Acacia Capital Corporation Officer
Calvert Municipal Fund, Inc. and
Calvert World Values Fund, Inc Director
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Ronald M. First Variable Rate Fund for Government Income
Wolfsheimer Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company and
Service Company Director
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Md. 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
David R. Rochat First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus and
The Calvert Fund Trustee
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Municipal Fund, Inc. Officer
Investment Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc. and
Investment Advisor Director
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Chelsea Securities, Inc. Officer
Securities Firm and
Post Office Box 93 Director
Chelsea, Vermont 05038
---------------
Grady, Berwald & Co. Officer
Holding Company and
43A South Finley Avenue Director
Basking Ridge, NJ 07920
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Reno J. Martini Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor and
4550 Montgomery Avenue Officer
Bethesda, Md. 20814
---------------
<PAGE>
Charles T. Nason Acacia Mutual Life Insurance Officer
Acacia National Life Insurance and
Director
Insurance Companies
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
Acacia Financial Corporation Officer
Holding Company and
51 Louisiana Avenue, NW Director
Washington, D.C. 20001
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
51 Louisiana Avenue, NW
Washington, D.C. 20001
----------------
Acacia Federal Savings Bank Director
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
Acacia Insurance Management
Services Corporation Officer
Service Corporation and
51 Louisiana Avenue, N.W. Director
Washington, D.C. 20001
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Administrative Director
Services Co.
Service Company
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Social Investment Fund Trustee
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
-----------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Robert John. Acacia National Life Insurance Officer
H. Sands Insurance Company and
51 Louisiana Avenue, NW Director
Washington, D.C. 20001
----------------
Acacia Mutual Life Insurance Officer
Insurance Company
51 Louisiana Avenue, NW
Washington, D.C. 20001
----------------
Acacia Financial Corporation Officer
Holding Company and
51 Louisiana Avenue, NW Director
Washington, D.C. 20001
----------------
Acacia Federal Savings Bank Officer
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
Acacia Realty Corporation Officer
Real Estate Investments
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
Acacia Insurance Management
Services Corporation Officer
Service Corporation and
51 Louisiana Avenue, N.W Director
Washington, D.C. 20001
---------------
Gardner Montgomery Company Officer
Tax Return Preparation Services and
51 Louisiana Avenue, NW Director
Washington, D.C. 20001
----------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
51 Louisiana Avenue, NW
Washington, D.C. 20001
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Administrative Director
Services, Co.
Service Company
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, MD 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
William M. Tartikoff Acacia National Life Insurance Officer
Insurance Company
51 Louisiana Avenue, NW
Washington, D.C. 20001
----------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, L.L.C. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Susan Walker Calvert Group, Ltd. Officer
Bender Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, L.L.C. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Katherine Calvert Group, Ltd. Officer
Stoner Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, L.L.C. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Lisa Crossley Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, L.L.C. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Ivy Wafford Calvert Group, Ltd. Officer
Duke Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Officer
Services, Inc.
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, L.L.C. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Daniel K. Hayes Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
First Variable Rate Fund for Government Income
Calvert Tax-Free Reserves Officer
Money Management Plus
Calvert Social Investment Fund
The Calvert Fund
Acacia Capital Corporation
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Geoffrey Ashton Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Item 28. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Annette Krakovitz Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
John Nichols Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
David Leach Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
<PAGE>
Item 29. Principal Underwriters
(a) Registrant's principal underwriter also underwrites First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves,
Calvert Social Investment Fund, Calvert Cash Reserves (d/b/a Money
Management Plus), The Calvert Fund, Calvert Municipal Fund, Inc.,
Calvert World Values Fund, Inc., and Acacia Capital Corporation's PRISM
variable annuity product.
(b) Positions of Underwriter's Officers and Directors
Name and Principal Position(s) with Position(s) with
Business Address Underwriter Registrant
Ronald M. Wolfsheimer Director, Senior Vice President
Vice President, Treasurer
and Controller
William M. Tartikoff Director, Senior Vice President,
Vice-President, Secretary
Secretary, and
General Counsel
Barbara J. Krumsiek Director and President Director and Sr.
Vice President
Steve Cohen Vice-President None
Karen Becker Vice-President None
Geoffrey Ashton Regional
Vice-President None
Tim McCabe Regional
Vice-President None
Susan Walker Bender Assistant Secretary Assistant Secretary
Katherine Stoner Assistant Secretary Assistant
Secretary
Lisa Crossley Compliance Officer Assistant Secretary
and Assistant Secretary
Ivy Wafford Duke Assistant Secretary Assistant Secretary
The principal business address of the above individuals is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
(c) Inapplicable.
<PAGE>
Item 30. Location of Accounts and Records
Ronald M. Wolfsheimer, Treasurer
and
William M. Tartikoff, Secretary
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Item 31. Management Services
Not Applicable
Item 32. Undertakings
a) Not Applicable
b) Not Applicable
c) The Registrant undertakes to furnish to each person to
whom a Prospectus is delivered, a copy of the Registrant's latest Annual
Report to Shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it
meets all of the requirements for effectiveness of this registration
statement pursuant to Rule 485(b) under the Securities Act of 1933 and
has duly caused this registration statement to be signed on its behalf
by the undersigned, thereto duly authorized in the City of Bethesda, and
State of Maryland, on the 30th day of July, 1997.
THE CALVERT FUND
By: _________________________________
Barbara J. Krumsiek
President and Director
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities indicated on July 30, 1997.
Signature Title
_________**_____________ Trustee and Principal
Barbara Krumsiek. Executive Officer
__________**____________ Principal Accounting
Ronald M. Wolfsheimer Officer
__________**____________ Trustee
Richard L. Baird, Jr.
__________**____________ Trustee
Frank H. Blatz, Jr., Esq.
__________**____________ Trustee
Frederick T. Borts, M.D.
__________**____________ Trustee
Charles E. Diehl
__________**____________ Trustee
Douglas E. Feldman
__________**____________ Trustee
Peter W. Gavian
__________**____________ Trustee
John G. Guffey, Jr.
________________________ Trustee
M. Charito Kruvant
__________**____________ Trustee
Arthur J. Pugh
__________**____________ Trustee
David R. Rochat
__________**____________ Trustee
D. Wayne Silby
**By:____________________________
Name: Susan Walker Bender
as Attorney-in-fact
Executed by Susan Walker Bender
on behalf of those indicated pursuant
to a Power of Attorney dated
May 8, 1997, March 1, 1995, and
May 4, 1994, filed here with.
<PAGE>
EXHIBIT INDEX
Form N-1A
Item No.
Ex-23
24(b)(10) Form of Opinion and Consent of Counsel
Ex-23
24(b)(11) Independent Auditors' Consent
Ex-24 Power of Attorney
Ex-27
24(17) Financial Data Schedules
Exhibit 10
July 30, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 10, Form N-1A
The Calvert Fund
File numbers 2-76510 and 811-3416
Ladies and Gentlemen:
As Assistant Counsel to The Calvert Fund (the "Trust"), it is
my opinion, based upon an examination of the Trust's Declaration of
Trust and By-Laws and such other original or photostatic copies of Trust
records, certificates of public officials, documents, papers, statutes,
and authorities as I deemed necessary to form the basis of this opinion,
that the securities being registered by this Post-Effective Amendment
No. 32 of the Trust will, when sold, be legally issued, fully paid and
non-assessable.
Consent is hereby given to file this opinion of counsel with
the Securities and Exchange Commission as an Exhibit to the Trust's
Post-Effective Amendment No. 32 to its Registration Statement.
Sincerely,
Susan Walker Bender
Assistant Counsel
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of The Calvert Fund
We consent to the incorporation by reference in Post-Effective Amendment
No. 32 to the Registration Statement of The Calvert Fund on Form N-1A
(File Numbers 2-76510 and 811-3416) of our report dated May 9, 1997, on our
audit of the financial statements and financial highlights of Calvert Strategic
Growth Fund and Calvert New Vision Small Cap Fund, which report is included
in the Annual Report to Shareholders for the year ended March 31, 1997, which
is incorporated by reference in the Registration Statement. We also
consent to the reference to our firm under the captions "Financial
Highlights" in the Prospectus and "Independent Accountants and
Custodians" in the Statement of Additional Information.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
July 17, 1997
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
Douglas E. Feldman
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
Frederick T. Borts
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
Peter W. Gavian
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
David R. Rochat
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
D. Wayne Silby
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Officer of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute William M. Tartikoff, Susan Walker Bender,
Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and lawful
attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and
amendments filed by the Funds with any federal or state agency, and to
do all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Funds
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
Ronald M. Wolfsheimer
Witness Name of Officer
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves,
The Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford
Duke my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
Date Signature
Barbara Krumsiek
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves,
Calvert Cash Reserves (doing business as Money Management Plus), The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the
"Funds"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Funds with any federal or state agency, and to
do all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Funds
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994
Date Signature
Richard L. Baird, Jr.
Witness Name of
Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves
(doing business as Money Management Plus), The Calvert Fund, and Calvert
Municipal Fund, Inc. (collectively, the "Funds"), hereby constitute
Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender,
Beth-ann Roth, and Katherine Stoner my true and lawful attorneys, with
full power to each of them, to sign for me and in my name in the
appropriate capacities, all registration statements and amendments filed
by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Funds with any
government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994
Date Signature
Frank H. Blatz, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves
(doing business as Money Management Plus), The Calvert Fund, and Calvert
Municipal Fund, Inc. (collectively, the "Funds"), hereby constitute
Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender,
Beth-ann Roth, and Katherine Stoner my true and lawful attorneys, with
full power to each of them, to sign for me and in my name in the
appropriate capacities, all registration statements and amendments filed
by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Funds with any
government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994
Date Signature
Charles E. Diehl
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves
(doing business as Money Management Plus), The Calvert Fund, and Calvert
Municipal Fund, Inc. (collectively, the "Funds"), hereby constitute
Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender,
Beth-ann Roth, and Katherine Stoner my true and lawful attorneys, with
full power to each of them, to sign for me and in my name in the
appropriate capacities, all registration statements and amendments filed
by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Funds with any
government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994
Date Signature
John G. Guffey, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund
for Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves
(doing business as Money Management Plus), The Calvert Fund, and Calvert
Municipal Fund, Inc. (collectively, the "Funds"), hereby constitute
Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender,
Beth-ann Roth, and Katherine Stoner my true and lawful attorneys, with
full power to each of them, to sign for me and in my name in the
appropriate capacities, all registration statements and amendments filed
by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining
registration or exemptions from registration of the Funds with any
government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994
Date Signature
Arthur J. Pugh
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Officer of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves
(doing business as Money Management Plus), The Calvert Fund, and Calvert
Municipal Fund, Inc. (collectively, the "Funds"), hereby constitute
William M. Tartikoff, Susan Walker Bender, Beth-ann Roth, and Katherine
Stoner my true and lawful attorneys, with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
registration statements and amendments filed by the Funds with any
federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions
from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Funds, including, but not limited to, the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Company Act of 1940,
the Investment Advisers Act of 1940, and all state laws regulating the
securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in
connection with any transaction approved by the Board of
Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Funds, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
March 1, 1995
Date Signature
Ronald M. Wolfsheimer
Witness Name of Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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