Page 1 of _____
SEC Registration Nos.
2-76510 and 811-3416
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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)
This filing will become effective on ______ __, 1997 pursuant to Rule
488.
The Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f) under the
Investment Company Act of 1940; accordingly, no fee is payable
herewith because of reliance on Rule 24f-2. A Rule 24f-2 Notice for
the Strategic Growth Fund and New Vision Small Cap Fund Series of
Registrant's fiscal year ended March 31, 1997 was filed with the
Commission on May 29, 1997. Pursuant to Rule 429, this Registration
Statement relates to shares previously registered on Form N-1A.
<PAGE>
The Calvert Fund
Form N-14 Cross Reference Sheet
Part A. Information Required in the Prospectus
1. Cover Page
2. Table of Contents
3. Synopsis; Fund Expenses
4. Synopsis; Reasons for the Reorganization;
Proposed Transaction; Tax Consequences;
Information about the Reorganization; Comparative
Information on Shareholder Rights; Information
about the Funds
5. Synopsis; Comparison of Investment
Policies; Information about the Funds; Investment
Objectives and Policies; Advisory Fees;
Distribution Fees and Expense Ratios;
Purchases; Exchange Privileges; Distribution
Procedures; Redemption Procedures; Prospectus and
Statement of Additional Information of the Small
Cap Fund (incorporated by reference)
6. Synopsis; Comparison of Investment
Policies; Information about the Funds; Investment
Objectives and Policies; Advisory Fees,
Distribution Fees and Expense Ratios;
Purchases; Exchange Privileges; Distribution
Procedures; Redemption Procedures; Prospectus and
Statement of Additional Information of the
Strategic Growth Fund (incorporated by
reference)
7. Voting Information; Adjournment
8. Inapplicable
9. Inapplicable
Part B. Information Required in Statement of Additional
Information
10. Cover Page
11. Table of Contents
12. Additional Information about the Registrant
13. Inapplicable
14. Financial Statements
Part C. Other Information
15. Indemnification
16. Exhibits
17. Inapplicable
<PAGE>
The Calvert Fund
Strategic Growth Fund
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on [DATE]
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of
The Calvert Fund Strategic Growth Fund portfolio will be held in the
Tenth Floor Conference Room of Calvert Group, Ltd., Air Rights North
Tower, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland at
10:00 a.m. on [DAY, DATE] for the following purposes:
I. To consider and act on an Agreement and Plan of Reorganization,
dated September 10, 1997, providing for the transfer of
substantially all of the assets of the Calvert Fund Strategic
Growth Fund portfolio to and the assumption of certain
identified liabilities of the Calvert Fund Strategic Growth Fund
portfolio by the Calvert New Vision Small Cap Fund in exchange
for Calvert New Vision Small Cap Fund portfolio shares of The
Calvert Fund.
II. To transact any other business that may properly come before
the meeting or any adjournment or adjournments thereof.
Shareholders of record at the close of business on [DATE] are
entitled to notice of and to vote at this meeting or any adjournment
thereof.
By Order of the Trustees,
William M. Tartikoff, Esq.
Secretary
[DATE]
Please execute the enclosed proxy and return it promptly in the
enclosed envelope, thus enabling the Calvert Strategic Growth Fund to
avoid unnecessary expense and delay. Your vote is extremely
important, no matter how large or small your holdings may be. No
postage is required if mailed in the United States. The proxy is
revocable and will not affect your right to vote in person if you
attend the Special Meeting.
<PAGE>
Dear Shareholder:
I am writing to inform you of the upcoming special meeting of
shareholders of Calvert Strategic Growth Fund, and to request that
you take a few minutes to read the enclosed material and mail back
the proxy voting card.
You are being asked to vote on a proposal to merge Calvert Strategic
Growth Fund into the Calvert New Vision Small Cap Fund. The Board of
Trustees, including myself, believes this change is in your Fund's
and your best interest.
Calvert New Vision Small Cap Fund uses a narrower subset of small
capitalized growth companies than Strategic Growth and it does not
make use of the market timing and hedging techniques that have been
used in Strategic Growth. Further, Strategic Growth pays the Advisor
a fee of 1.50% of the Fund's average daily net assets along with a
performance adjustment whereas Calvert New Vision only pays the
Advisor a fee of 0.90% of that fund's average daily net assets.
Effective October 1, 1997, Awad & Associates assumed management of
both funds and is expected to continue to manage Calvert New Vision.
Regardless of the number of shares you own, it is important that you
take the time to read the enclosed proxy, and complete and mail your
voting card as soon as you can. A postage paid envelope is enclosed.
If Fund shareholders do not return their proxies, your Fund may have
to incur the expense of additional solicitations. All shareholders
benefit from the speedy return of proxies.
I appreciate the time you will take to review this important matter.
The Q&A which follows will assist you in understanding the proposal,
however, if we may be of any assistance, please call us at
1-800-368-2750.
Sincerely,
/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President
<PAGE>
IMPORTANT NOTICE TO
STRATEGIC GROWTH FUND SHAREHOLDERS
QUESTIONS & ANSWERS
Please read the complete text of the enclosed Proxy Statement. For
your convenience, we have provided a brief overview of the matters to
be voted upon. Your vote is important. If you have any questions
regarding the proposal, please call us at 1-800-368-2745. We
appreciate you investing with Calvert Group, and look forward to a
continuing relationship.
Q. WHY AM I RECEIVING A PROXY STATEMENT?
A. The Fund is seeking your approval of a merger of the shares
of the Calvert Strategic Growth Fund (hereafter, the
"Strategic Growth Fund") into the Calvert New Vision Small
Cap Fund (hereafter, the "Small Cap Fund").
Q. WHAT ARE THE EFFECTS OF THIS MERGER?
A. The merger will affect the Strategic Growth Fund in that all
of the assets of the Strategic Growth Fund will be
transferred to the Small Cap Fund. In turn, you will receive
shares of the Small Cap Fund.
Through the merger, the surviving Small Cap Fund is expected
to fit certain asset allocation models thus enabling the
potential growth of sales of shares while remaining an
aggressive stock fund with a less volatile portfolio
composition and investment philosophy.
Q. IS THERE A NEW FUND MANAGER OF THESE FUNDS?
A. Yes. The manager of both Funds is Awad & Associates, a firm
which specializes in the selection of small capitalized
stocks whose portfolio managers adhere to a bottom-up,
earnings-driven discipline with emphasis on internal
fundamental research. Awad & Associates is expected to
continue to manage the combined fund.
Further, the investment subadvisory agreement with Awad &
Associates is identical to the prior investment subadvisory
agreement in all material respects, except that it reflects
a new lower fee structure and does not provide for a
performance fee.
Q. ARE THERE DIFFERENCES IN THE INVESTMENT OBJECTIVE OF THE
FUNDS BEING MERGED?
A. The Strategic Growth Fund's investment objective is
to seek maximum long-term growth primarily through
investment in equity securities whereas the Small Cap Fund's
investment objective is to achieve long-term capital
appreciation by investing primarily in the equity securities
of small companies publicly traded in the United States.
Accordingly, the main difference between the investment
objectives of the funds is that the Small Cap Fund's focus
is on a narrower subset of small capitalized growth
companies; however, the Small Cap Fund does not utilize some
of the techniques used by the Strategic Growth Fund such as
market timing and hedging.
Q. HOW DO THE EXPENSE STRUCTURES AND FEES OF BOTH FUNDS
COMPARE? IS THERE A BENEFIT TO ME?
A. The same expense structure and fees is in effect for both
Funds. The Board expects that the merger will allow the
Small Cap Fund to achieve certain limited economies of scale
from the combined asset size of both Funds and the
potentially lower operating expenses.
Q. WHAT WILL BE THE NAME OF THE SURVIVING FUND AFTER THE
MERGERS ARE COMPLETE?
A. The Calvert New Vision Small Cap Fund will be the Fund to
survive the merger.
Q. WHAT WILL BE THE SIZE OF THE SURVIVING FUND AFTER THE MERGER?
A. If the proposal presented in the proxy statement is
approved, the combined Small Cap Fund will have
approximately over [$ ] in assets.
Q. WHAT ARE THE FEDERAL TAX IMPLICATIONS OF THE MERGER?
A. The merger will not be a taxable event (i.e., no gain or
loss will be recognized) to either fund or to you as a
shareholder of either Fund.
Q. WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH A QUORUM BY THE
SCHEDULED SPECIAL SHAREHOLDER MEETING DATE?
A. If enough shareholders do not vote, we will need to take
further action. We or outside solicitors may contact you by
mail, telephone, facsimile, or by personal interview.
Therefore, we encourage you to vote as soon as you review
the enclosed proxy materials in order to avoid additional
mailings, telephone calls or other solicitations.
Q. HOW WILL YOU DETERMINE THE NUMBER OF SHARES OF THE SMALL CAP
FUND THAT I WILL RECEIVE?
A. The Closing Date is [DATE]. As of 4:00 p.m. Eastern Time on
the Closing Date, you will receive that number of full and
fractional Small Cap Fund shares equal in class and value of
the shares you hold in the Strategic Growth Fund on that
date.
Q. WHAT IMPACT WILL THE MERGER HAVE ON THE SHARE PRICE OF
CALVERT NEW VISION SMALL CAP FUND?
A. The net asset value per share of the Small Cap Fund will not
be changed by the merger.
Q. WHO IS PAYING FOR EXPENSES RELATED TO THE SHAREHOLDERS
MEETING?
A. The Fund will pay for those expenses relating to the
shareholder meeting.
Q. HOW DO THE TRUSTEES OF THE FUND SUGGEST THAT I VOTE?
A. After careful consideration, the Trustees of the Strategic
Growth Fund unanimously recommend that you vote "FOR" each
of the items proposed on the enclosed proxy card.
Q. WHAT ARE MY OTHER INVESTMENT ALTERNATIVES?
A. Additional equity funds are available through Calvert Group
by calling 1-800-368-2748 for more information.
Q. HOW DO I VOTE MY SHARES?
A. You can vote your shares by completing and signing the
enclosed proxy card, and mailing it in the enclosed postage
paid envelope. If you need any assistance, or have any
questions regarding the proposal or how to vote your shares,
please call us at 1-800-368-2745.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Your vote is needed to ensure that the proposals can be
acted upon. Your immediate response on the enclosed proxy
card will help save on the costs of any further
solicitations for a shareholder vote. We encourage all
shareholders to participate in the governance of the Fund.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. You can expect the same level of management expertise and
high-quality shareholder service you've grown accustomed to.
Q. HOW DO I SIGN THE PROXY CARD?
A. Voting instruction forms must be executed properly. When
forms are not signed as required by law, you and the Fund
must undertake the time and expense to take steps to
validate your vote. The following guide was prepared to help
you choose the proper format for signing your form:
1. Individual Accounts: Your name should be signed
exactly as it appears in the registration on the voting
instruction form.
2. Joint Accounts: Either party may sign, but the
name of the party signing should conform exactly to a name
shown in the registration.
3. All other accounts should show the capacity of the
individual signing. This can be shown either in the form of
the account registration itself or by the individual
executing the voting instruction form. For example:
REGISTRATION VALID SIGNATURE
A.
1) Save the Earth Corp. Jane Q. Nature, Treasurer
2) Save the Earth Corp. Jane Q. Nature, Treasurer
c/o Jane Q. Nature, Treasurer
B.
1) Save the Earth Corp. Jon B. Goodhealth, Trustee
Profit Sharing Plan
2) Save the Earth Trust Jon B. Goodhealth, Trustee
3) Jon B. Goodhealth, Trustee Jon B. Goodhealth, Trustee
u/t/d 5/1/78
C.
1) David Smith, Cust. David Smith
f/b/o Jason Smith UGMA
Voting by mail is quick and easy. Everything you need is
enclosed.
<PAGE>
TABLE OF CONTENTS
Synopsis __
Reasons for the Reorganization __
Comparison of Investment Policies__
Information about the Reorganization __
Comparative Information on Shareholder Rights __
Information about the Funds __
Voting Information __
Adjournment __
Exhibit A - Agreement and Plan of Reorganization
<PAGE>
PROSPECTUS AND PROXY STATEMENT - [DATE]
Acquisition of the assets of the Calvert Strategic Growth Fund
By and in exchange for shares of the Calvert New Vision Small Cap Fund
4550 Montgomery Avenue, Bethesda, Maryland 20814 - (800) 368-2745
This Prospectus and Proxy Statement relates to the proposed transfer
of all the assets and the assumption of certain identified
liabilities of the Calvert Strategic Growth Fund ("Strategic Growth
Fund") to the Calvert New Vision Small Cap Fund ("Small Cap Fund")
(collectively, "the Funds") in exchange for like shares of Small Cap
Fund. Following the transfer, Strategic Growth Fund shares will be
distributed to shareholders of Strategic Growth Fund in liquidation
of Strategic Growth Fund, and Strategic Growth Fund will be
dissolved. As a result of the proposed transaction, each shareholder
of Strategic Growth Fund will receive that number of like Small Cap
Fund shares equal in value at the date of the exchange to the value
of such shareholder's shares of Strategic Growth Fund. The
transaction will occur if shareholders vote in favor of the proposed
transfer.
Small Cap Fund is a series of The Calvert Fund, which is an open-end
management investment company. The net assets of Small Cap Fund were
[$________] as of [DATE]. Its investment objective is to achieve
long-term capital appreciation by investing primarily in the equity
securities of small companies publicly traded in the United States.
In seeking capital appreciation, the Fund invests primarily in the
equity securities of small capitalized growth companies that have
historically exhibited exceptional growth characteristics and that
appear to have strong earnings potential relative to the U.S. market
as a whole.
Strategic Growth Fund is also a series of The Calvert Fund
("Calvert"), with assets of [$________] as of [DATE]. The Strategic
Growth Fund's investment objective is to seek maximum long-term
growth primarily through investment in equity securities. Strategic
Growth Fund is nondiversified.
Small Cap Fund and Strategic Growth Fund both have a 4.75% maximum
sales charge for Class A Shares. The sales charge is added to the
purchase price of shares, but will not be applied to shares issued in
the reorganization (see "Purchase Procedures"). Class C Shares have a
level load charged as higher expenses rather than a front-end sales
charge. Both funds have distribution plans that permit them to pay
certain expenses associated with the distribution of their shares.
Calvert Asset Management Company, Inc. ("Advisor") is the investment
advisor for both Small Cap Fund and Strategic Growth Fund and Awad &
Associates ("AWAD") is the Sub-Advisor for both Small Cap Fund and
Strategic Growth Fund.
This Prospectus and Proxy Statement is expected to be mailed to
shareholders of record on or about [DATE].
This Prospectus and Proxy Statement, which should be retained for
future reference, sets forth concisely the information about Small
Cap Fund that a prospective investor should know before investing.
This Prospectus and Proxy Statement is accompanied by the Prospectus
of Small Cap Fund dated July 31, 1997 and is incorporated herein by
reference. A Statement of Additional Information dated July 31, 1997
containing additional information has been filed with the Securities
and Exchange Commission and is incorporated by reference into this
Prospectus and Proxy Statement. A copy of the Statement may be
obtained without charge by writing the Fund at 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814, or by calling (800)
368-2748.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE 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 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.
<PAGE>
SUMMARY
Reasons for the Reorganization. The Board of Trustees of The Calvert
Fund (the "Trustees") believes that the proposed Reorganization would
be in the best interests of the shareholders of the Strategic Growth
Fund because it would permit the shareholders of the Strategic Growth
Fund to become shareholders of a fund which (i) fits certain asset
allocation models as is increasingly demanded by shareholders and
brokers thus enabling the potential growth of sales of shares; (ii)
remain in an aggressive stock fund while maintaining a less volatile
portfolio composition and investment philosophy; and (iii) achieve
certain limited economies of scale from the combined asset size of
both Funds and the potentially lower operating expenses associated
therewith.
In determining whether to recommend approval of the Reorganization to
shareholders of the Strategic Growth Fund, the Trustees considered a
number of factors, including, but not limited to: (i) the
capabilities and resources of the Small Cap Fund, the Advisor and
Sub-Advisor and other service providers in the areas of marketing,
investment and shareholder services; (ii) the expenses and advisory
fees applicable to the Strategic Growth Fund and the Small Cap Fund
before the Reorganization and the estimated expense ratios of the
Small Cap Fund after the Reorganization; (iii) the comparative
investment performance of the Strategic Growth Fund and the Small Cap
Fund; (iv) the terms and conditions of the Agreement and whether the
Reorganization would result in dilution of Strategic Growth Fund
shareholder interests; (v) the economies of scale potentially
realized through the combination of the two funds; (vi) the identical
service features available to shareholders of both Funds; (vii) the
costs estimated to be incurred to complete the Reorganization; (viii)
the future growth prospects of the Strategic Growth Fund; and (ix)
the anticipated tax consequences of the Reorganization.
In this regard, the Trustees reviewed information provided by the
Advisor relating to the anticipated impact to the shareholders of the
Strategic Growth Fund as a result of the Reorganization. The Trustees
considered the probability that the increase in asset levels of the
combined fund after the Reorganization would result in the following
potential benefits for shareholders of the Strategic Growth Fund,
although there can, of course, be no assurances in this regard:
(1) Asset Allocation Models. Shareholders and brokers have
increasingly demanded that the Fund tightly fit asset allocation
models. The Small Cap Fund tightly fits into such models.
(2) Less Volatile Portfolio Composition. Although the Small Cap
Fund is still an aggressive stock fund, its investment
objectives and policies should produce a less volatile
performance.
(3) Reduced Per Share Expenses and Achievement of Economies of
Scale. Combining the net assets of the Strategic Growth Fund
with the assets of the Small Cap Fund should lead to a modest
reduction at first of total operating expenses for shareholders
of the Strategic Growth Fund, on a per share basis, by allowing
fixed and relatively fixed costs, such as accounting, legal and
printing expenses, and service fees to be spread over a larger
asset base. The Small Cap Fund pays lower investment advisory
fees than the Strategic Growth Fund. Management anticipates that
the reorganization would have a de minimis yet similarly
beneficial effect upon current shareholders of the Small Cap
Fund.
In evaluating the benefits of the proposed transaction, the Board of
Trustees also considered the effect of the loss of a portion of the
capital loss carryforwards that might be available to Strategic
Growth Fund. It has been determined that the benefits of the proposed
reorganization outweigh the uncertain potential detriment resulting
from possible constraints in the use of capital loss carryforwards.
See "Information about the Reorganization."
Proposed Transaction. The Trustees have authorized Calvert, on behalf
of the Funds, to enter into an Agreement and Plan of Reorganization
(the "Agreement" or "Plan") providing for the transfer of all the
assets and liabilities of Strategic Growth Fund to Small Cap Fund in
exchange for like shares of Small Cap Fund. Following the transfer,
Small Cap Fund shares will be distributed to shareholders of
Strategic Growth Fund in liquidation of Strategic Growth Fund, and
Strategic Growth Fund will be dissolved. As a result of the proposed
transaction, each shareholder of Strategic Growth Fund will receive
that number of full and fractional Small Cap Fund shares equal in
class and value at the date of the exchange to the class and value of
such shareholder's shares of Strategic Growth Fund. For the reasons
stated above, the Trustees, including the independent Trustees, have
concluded that the reorganization would be in the best interests of
the shareholders of Strategic Growth Fund and recommend shareholder
approval.
Tax Consequences. The Plan is conditioned upon receipt by Strategic
Growth Fund of an opinion of counsel that no gain or loss will be
recognized by Strategic Growth Fund or Strategic Growth Fund
shareholders as a result of the reorganization. The tax basis of
Small Cap Fund shares received by a shareholder will be the same as
the tax basis of the shareholder's Strategic Growth Fund shares. In
addition, the tax basis of Strategic Growth Fund assets in the hands
of Small Cap Fund as a result of the reorganization will be the same
as the tax basis of such assets in the hands of Strategic Growth Fund
prior to the reorganization. See "Information about the
Reorganization."
Investment Policies. Shareholders should consider the differences in
investment policies between Strategic Growth Fund and Small Cap Fund.
While both Funds seek capital appreciation, the Strategic Growth Fund
pursues 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
Strategic Growth Fund considers issuers of all sizes, industries, and
geographic markets, and does not seek interest income or dividends.
The Small Cap Fund invests in equity securities of companies that
have small market capitalizations (currently those with a total
capitalization of less than $1 billion at the time of the initial
investment). Thus, the focus of each investment portfolio, and in
fact, the portfolio composition of each fund is different. Though
both funds invest in equity securities, the Small Cap Fund's focus is
on a narrower subset of small capitalized growth companies whereas
the Strategic Growth Fund is not so restricted in its investments.
See "Comparison of Investment Policies."
Advisory Fees, Distribution Fees and Expense Ratios. Small Cap Fund
pays the Advisor a fee computed on average daily net assets at an
annual rate of 0.90%. Strategic Growth Fund pays the Advisor a fee
computed on average daily net assets at an annual rate of 1.50%.
Strategic Growth Fund may adjust the Advisor's fee 0.15% 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%
The Advisor pays the Sub-Advisor a base fee computed on average daily
net assets at an annual rate of 0.40% for both the Strategic Growth
Fund and the Small Cap Fund.
Investment Sub-Advisor. The Advisor has traditionally contracted out
subadvisory services for both Funds. From the Strategic Growth
Fund's inception through September 30, 1997, the Fund's subadvisor was
Portfolio Advisory Services, Inc. ("PASI").
At a meeting of the Board of Trustees held on September 9, 1997,
acting pursuant to the exemptive order obtained from the Securities
and Exchange Commission permitting the Fund, subject to Board
approval, to enter into and materially amend contracts with the
subadvisor without shareholder approval, the Board terminated PASI as
the subadvisor to the Strategic Growth Fund effective the same date.
In this connection, the Board determined that shareholders may
benefit from the services of a different investment subadvisor whose
management style might better achieve the Fund's objective of capital
appreciation. After careful consideration by the Advisor of the many
candidates, the Advisor recommended, and the Board selected (subject
to shareholder approval), Awad & Associates ("AWAD") as subadvisor
for the Fund.
Awad & Associates also is the subadvisor for the Small Cap Fund with
an identical fee structure.
AWAD is a joint venture between James D. Awad and Raymond James
Financial, Inc., a New York Stock Exchange investment firm
established in 1992. AWAD is located at 477 Madison Avenue, New York,
New York 10022. AWAD had $724 million in assets under management as
of June 30, 1997. The firm's portfolio managers adhere to a
bottom-up, earnings-driven discipline with emphasis on internal
fundamental research.
AWAD is a division of Raymond James & Associates, Inc., is a
full-service brokerage and New York Stock Exchange member, whose main
offices are located at 880 Carillon Parkway, St. Petersburg, Florida
33716, and is a subsidiary of Raymond James Financial, Inc. Raymond
James Financial is a diversified financial services holding company
whose subsidiaries engage primarily in the securities brokerage,
investment banking, asset management, banking and trust services.
Raymond James Financial's corporate headquarters are located at The
Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg,
Florida 33716.
AWAD currently provides investment advisory services to two other
mutual funds with similar investment objectives to the Fund, as
follows:
Mutual Fund Assets Under Management Management Fees
Heritage Small Cap Stock Fund $121.6 million 50 bp
The Timothy Plan $18 million 45 bp
James D. Awad is the Chairman and Chief Investment Officer of AWAD.
Mr. Awad has been in the investment business since 1965, focusing on
research and portfolio management. Prior to forming AWAD, he was
President of BMI Capital, a successful money management firm he
founded. In addition, he has managed assets at Neuberger & Berman,
Channing Management and First Investment Corp. Mr. Awad has earned an
MBA from Harvard Business School and a BS Cum Laude from Washington &
Lee University.
Dennison T. Veru is President of AWAD. Mr. Veru joined AWAD in 1992
coming from Smith Barney Harris Upham where he was Senior Vice
President of the firm's Whiffletree Capital Management division
specializing in small and medium capitalization stocks. From 1988
through 1990, he was a Vice President of Broad Street Investment
Management. Prior to that, he was an Assistant Vice President at
Drexel Burham Lambert. Mr. Veru is a graduate of Franklin and
Marshall College.
AWAD specializes in small capitalization stocks, focusing on growth
at a value price, bottom-up approach to stock selection. The firm's
main investment objectives in asset management is to protect the
investor's capital, generate capital appreciation substantially in
excess of inflation and reduced-risk returns and provide returns in
excess of applicable stock and bond indices. All portfolio
investments are regularly scrutinized to provide a substantial
risk/return benefit and to ensure that portfolios are properly
positioned relative to the fund's investment objectives.
AWAD's investment strategy is to: (1) "invest in quality" companies
with steady earnings and cash flow growth, dominant market position
or strong niche franchise and a good (or improving) balance sheet,
excess cash flow generation from operations, strong dividend
histories (where appropriate), high management stock ownership and
ability to grow in a stagnant economic environment and thrive as the
economy improves; (2) "buy with discipline" those companies with low
absolute and comparative price-to-earnings ratios, low price-to-book
value and low price relative to the company's industrial value as the
same may be viewed by a strategic acquirer; (3) "sell with
discipline" those companies whose price-to-earnings ratio has risen to
a premium, corporate fundamentals change or stock prices rise above
the target price. Further, AWAD seeks portfolio construction in four
conceptual areas: core growth holdings, restructured companies
demonstrating renewed growth, emerging companies and strategic
acquisition candidates in consolidating industries.
AWAD utilizes the expertise of an investment advisory board which
meets regularly to review results and corporate and investment
strategy. Members are James D. Awad, Dennison T. Veru, Thomas A.
James, Chairman, Raymond James Financial, Inc. and Thomas Barry,
President and CEO, Zephyr Management, Inc. and past President,
Rockefellar & Co.
Investment Subadvisory Agreement. The Investment Subadvisory
Agreement between the Advisor and AWAD is under substantially the
same terms as governed the previous arrangement with PASI, except
that PASI was paid 0.47% of average daily net assets whereas AWAD is
paid 0.40% of the average daily net assets.
The Sub-Advisor's fee is paid by the Advisor out of the fee the
Advisor receives from the Fund.
<PAGE>
FUND EXPENSES: CURRENT AND PRO FORMA
CURRENT:
<TABLE>
<S> <C> <C>
STRATEGIC GROWTH
A. Shareholder Transaction Costs Class A Class C
Maximum Sales Charge on Purchases (as a 4.75% None
percentage of offering price)
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> 2.42% 3.11%
SMALL CAP
A. Shareholder Transaction Costs Class A Class C
Maximum Sales Charge on Purchases (as a 4.75% None
percentage of offering price)
Contingent Deferred Sales Charge None None
B. Annual Fund Operating Expenses (Fiscal
Year 1997)
(as a percentage of average net assets)
Management Fees 1.00% 1.00%
Rule 12b-1 Service and Distribution Fees 0.25% 1.00%
Other Expenses 0.25% 0.50%<F2>
Total Fund Operating Expenses 1.50% 2.50%
PRO FORMA:
SMALL CAP
A. Shareholder Transaction Costs Class A Class C
Maximum Sales Charge on Purchases (as a 4.75% None
percentage of offering price)
Maximum Deferred Sales Charge None None
B. Pro Forma Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees 1.00% 1.00%
Rule 12b-1 Service and Distribution Fees 0.25% 1.00%
Other Expenses 0.48% 0.43%
Total Fund Operating Expenses 1.73% 2.43%
<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.
<F2> Estimated.
</FN>
</TABLE>
<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:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CURRENT 1 Year 3 Years 5 Years 10 Years
Small Cap
Class A $62 $93 N/A N/A
Class C $25 $78 N/A N/A
Strategic Growth
Class A $71 $119 $170 $310
Class C $31 $96 $163 $342
PRO FORMA
Small Cap
Class A $64 $99 $137 $242
Class C $25 $76 $130 $277
</TABLE>
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
Funds may bear directly (shareholder transaction costs) or indirectly
(annual fund operating expenses).
A. Shareholder Transaction Costs are charges you pay when you
buy or sell shares of a Fund.
B. Annual Fund Operating Expenses are based on the Funds'
historical expenses. Management Fees are paid by the Funds to the
Advisor for managing the Funds' investments and business affairs.
Management fees include the subadvisory fees paid by the Advisor, to
the Sub-advisor and the administrative service fee paid to Calvert
Administrative Services Company. The Management fees for the
Strategic Growth Fund are subject to a performance adjustment which
could cause the fee to be as high as 1.85% or as low as 1.55%,
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' share price and are not
charged directly to individual shareholder accounts. 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 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 Funds.
Under the terms of their Distribution Plans, the Funds are permitted
to pay annually a percentage of their average daily net assets for
certain expenses associated with the distribution of their shares.
The maximum percentage allowed by contract is 0.25% and 1.00% for
Class A and C Shares of both the Small Cap and Strategic Growth
Funds. Amounts paid by the Funds to the underwriter/distributor,
Calvert Distributors, Inc. ("CDI"), under the Class A Distribution
Plan are used to pay to 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 Strategic Growth Fund were
0.25% and were waived for the Small Cap Fund. Amounts paid by the
Funds under the Class C Distribution Plan are currently used by CDI
to pay dealers and other selling firms dealer-paid 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. For the fiscal year ended March 31, 1997, Class C
Distribution Plan expenses were 1.00% for the Strategic Growth Fund,
and were waived for the Small Cap Fund.
FINANCIAL HIGHLIGHTS
The following tables provide information about the financial history
of each Fund's Class A and C shares. They express the information in
terms of a single share outstanding for the respective Fund
throughout each period. The tables have been audited by those
independent accountants whose reports are included in the respective
Annual Reports to Shareholders of the Funds. The tables should be
read in conjunction with the financial statements and their related
notes. The current Annual Reports to Shareholders are incorporated by
reference into the Statement of Additional Information.
<PAGE>
<TABLE>
<S> <C> <C>
Class A Shares Class C Shares
From Inception (1/31/97) From Inception
to March 31, 1997 (1/31/97)
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<F3> (20.07%) (20.07%)
Ratio to average net assets:
Net investment Income
(loss) - -
Total expenses<F4> 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>
<F3> Total return is not annualized and does not reflect deduction of Class
A front-end sales charges.
<F4> 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>
<S> <C> <C> <C>
Class A Shares For the periods ending March 31,
STRATEGIC GROWTH FUND 1997 1996 1995<F5>
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 gains (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, ending $13.92 $18.64 $16.96
Total return<F6> (21.17%) 12.56% 16.08%
Ratio to average net assets:
Net investment Income (loss)
(.73%) .90% 1.47%(a)
Total expenses<F7> 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, ending (in
thousands) $94,625 125,606 107,004
Number of shares outstanding,
ending (in thousands) 6,798 6,740 6,310
<FN>
<F5> From May, 5, 1994, inception.
<F6> Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
<F7> 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.
(a) annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Class C Shares
For the periods ending March 31,
STRATEGIC GROWTH FUND 1997 1996 1995<F5>
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 - (.21) (.41)
Total Distributions (1.03) (.31) (.44)
Total increase (decrease) in net asset
value (4.79) 1.61 1.86
Net asset value, ending $13.68 $18.47 $16.86
Total return<F6> (21.75%) 11.57% 15.32%
Ratio to average net assets:
Net investment Income (loss) (2.00%) .02% .83%(a)
Total expenses<F7> 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, ending (in thousands)
$16,524 $25,490 $19,778
Number of shares outstanding, ending
(in thousands) 1,208 1,380 1,173
<FN>
<F5> From May, 5, 1994, inception.
<F6> Total return is not annualized and does not reflect deduction of Class A
front-end sales charges.
<F7> 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.
(a) Annualized
</FN>
</TABLE>
<PAGE>
Comparative Performance Information. Total return for the Funds'
shares for the periods indicated are as follows:
Average Annual Total Returns
For Periods Ended March 31, 1997
Small Cap Fund
Class A Shares Class A Shares Class C Shares
without with Total Return
Maximum Sales Maximum Sales Load
Load
From Inception (1/31/97) -20.07% 23.87% -20.07%
Strategic Growth Fund
Class A Shares Class a Shares Class C Shares
without Maximum Average Annual Return without Maximum Sales
Sales Load with Maximum Sales Load
Load
One Year -21.17% -24.92% 21.75%
From Inception
(5/5/94 1.02% -0.66% 0.23%
The total return figures shown above include the effect of the
maximum sales charge of 4.75% for Class A Shares, changes in share
price, and reinvestment of dividends and distributions. Total return
is based on historical earnings and asset value fluctuations and is
not intended to indicate future performance. No adjustments are made
to reflect any income taxes payable by shareholders.
The Annual Report for the Calvert Strategic Growth Fund covered the
12-month period ended March 31, 1997. The market's advance continued
into the second quarter of 1996, the first period covered by this
report. In June, signs of stronger economic growth increased fears of
higher interest rates, which caused stocks to stumble. The market
rallied back during the fourth quarter of 1996 and first quarter of
1997 as measured by the most widely covered market averages, the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average, but many stock market groups did not participate in the
advance.
<PAGE>
Our strategy throughout the fiscal year was to participate in the
market's upside potential while also paying close attention to the
moderately high level of risk signaled by the Five Market Principles
model. We began with roughly 70% of assets committed to equity
securities and a 28% cash position. When some of our market
indicators deteriorated in mid-year, we raised the Fund's cash level
to approximately 40%. This defensive strategy buoyed the Fund's
performance relative to the benchmark indexes when the market
suffered a setback at the end of June into July.
Anticipating that small- to mid-cap companies would rally back, we
took advantage of this opportunity and added to positions in
promising companies. However, the market's advance in the second half
of 1996 into the first quarter of 1997 was led by large-cap
companies. Our large commitment to technology stocks, which were hit
hard during the first quarter of 1997, and put options on the
Standard & Poor's 500 Stock Index also worked against us. In
mid-March, the Five Market Principles model signaled an
intermediate-term sell signal, and we again raised our cash position.
This defensive strategy has helped us to outperform our benchmark
indexes from March 17 through April 25.
Purchases. Class A Shares of both Strategic Growth Fund and Small Cap
Fund are sold on a continuous basis at net asset value plus the
appropriate sales charge which is subject to reduction by right of
accumulation, group purchase, and letter of intent. Employee
purchases and certain plans qualified under the Internal Revenue Code
may purchase shares with no sales charge, and all Fund shareholders
may reinvest dividends without paying a sales charge. Class A Shares
issued in the reorganization will not be assessed any sales charge.
Class C Shares do not have a front-end sales charge.
Sales Charge Table - Class A Shares
Small Cap and Strategic Grow h Funds
<TABLE>
<S> <C> <C> <C>
Concession to
As a % of As a % of Net Dealers as a % of
Amount of Investment Offering Amount Invested Amount Invested
Price
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than $100,000 3.75% 3.90% 3.00%
$100,000 but less than $250,000 2.75% 2.83% 2.25%
$250,000 but less than $500,000 1.75% 1.78% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.25%*
</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 form the
Fund within twelve months of the time of purchase.
The minimum initial investment in each fund is $2,000 and the minimum
subsequent investment is $250 (except in the case of certain
retirement plans).
Exchange Privileges. Shareholders of both Strategic Growth Fund and
Small Cap Fund may exchange fund shares for shares of a variety of
other Calvert Group funds. Each such exchange represents a sale of
fund shares, which may produce a gain or loss for tax purposes.
Shares are exchanged into the same class. There is no additional
charge for exchanges. Calvert Group discourages frequent exchanges
and may prohibit additional purchases of shares by persons who have
previously been advised that their frequent use of the exchange
privilege is inconsistent with the orderly management of the
investment portfolio. Strategic Growth Fund and Small Cap Fund
reserve the right to modify or eliminate this exchange privilege with
60 days' written notice.
Distribution Procedures. Both Strategic Growth Fund and Small Cap
Fund distribute dividends monthly and pay out their net realized
capital gains (if any) once each year. Shareholders of both Funds may
reinvest distributions. Your existing election in Strategic Growth
Fund with respect to dividends and/or capital gains will be continued
with respect to the shares of Small Cap Fund you acquire in
connection with the reorganization unless you notify the Fund of a
new election.
Redemption Procedures. At any time and in any amount, shares of
Strategic Growth Fund and Small Cap Fund may be redeemed 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. This letter of instruction must be signed by all
required authorized signers. Further documentation may be required
from corporations, fiduciaries, pension plans and institutional
investors.
Shares may also be redeemed by telephone or through brokers. Both
Funds impose a charge of $5 for wire transfers of less than $1,000.
Strategic Growth Fund and Small Cap Fund may, after 30 days' notice,
close accounts if, due to redemptions, the account falls below $1,000
and the balance is not brought up to the required minimum amount.
COMPARISON OF INVESTMENT POLICIES
As noted in the "Summary" above, the investment policies of the two
funds are different. While both Funds seek capital appreciation, the
Small Cap Fund invests only in equity securities of companies that
have small market capitalizations of approximately less than $1
billion at the time of the fund's initial investment.
Strategic Growth Fund may and does use options and futures contracts
to increase or decrease its exposure to changing security prices,
interest rates, or other factors that affect security values. Small
Cap Fund may use options and futures only in extraordinary
circumstances.
Strategic Growth 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;
whereas Small Cap Fund may not establish such short positions.
Strategic Growth Fund does not presently invest in foreign
securities, although it may do so in the future; whereas Small Cap
Fund may not invest in foreign securities. Further, Strategic Growth
Fund may invest in precious metals in which the Small Cap Fund may
not invest.
The investment restrictions of Small Cap Fund and Strategic Growth
Fund are identical, except that Small Cap Fund, with respect to 75%
of its total assets, may not 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; whereas this restriction applies to only 50% of Strategic
Growth Fund's total assets. Small Cap Fund may not, with respect to
75% of its total assets, invest 10% or more of its assets in the
voting securities of any one issuer; whereas this restriction applies
to 100% of Strategic Growth Fund's total assets. Small Cap Fund is
not restricted in its investment 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; whereas Strategic
Growth Fund may invest no more than 5% of its net assets in such
securities.
Small Cap Fund is diversified whereas Strategic Growth Fund is a
nondiversified fund. There may be risks associated with
nondiversification. Specifically, since a relatively high percentage
of the assets may be invested in the obligations of a limited number
of issuers, the value of the shares may be more susceptible to any
single economic, political, or regulatory event than the shares of a
diversified fund.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The proposed Agreement and Plan of
Reorganization (the "Agreement" or "Plan") provides that Small Cap
Fund will acquire all the assets and liabilities of Strategic Growth
Fund in exchange for shares of Small Cap Fund on the Closing Date (as
defined in Section 2(b) of the Plan). A copy of the Plan is attached
as Exhibit A to this Proxy Statement. The number of full and
fractional Small Cap Fund shares to be issued to shareholders of
Strategic Growth Fund will equal the value of the shares of Strategic
Growth Fund outstanding immediately prior to the reorganization.
Portfolio securities of Strategic Growth Fund and Small Cap Fund will
be valued in accordance with the valuation practices of Small Cap
Fund which are described on page 22 of the Small Cap Fund prospectus
and on page 6 of its Statement of Additional Information. At the time
of the reorganization, Small Cap Fund will assume and pay all of the
Strategic Growth Fund's then current obligations and liabilities. The
reorganization will be accounted for by the method of accounting for
tax-free reorganizations of investment companies, sometimes referred
to as the "pooling without restatement" method. [Any reimbursement
due from the Advisor to Strategic Growth Fund under the expense
limitation provision will be paid at, or prior to, the closing.]
As soon as practicable after the Closing Date, Strategic Growth Fund
will liquidate and distribute pro rata to its shareholders of record
as of the close of business on the Closing Date the full and
fractional shares of Small Cap Fund at an aggregate net asset value
equal to the value of the shareholder's investment in Strategic
Growth Fund next determined after the effective time of the
transaction. This method of valuation is also consistent with
interpretations of Rule 22c-1 under the Investment Company Act of
1940 by the Securities and Exchange Commission's Division of
Investment Management. Such liquidation and distribution will be
accomplished by the establishment of accounts on the share records of
Small Cap Fund in the name of such Strategic Growth Fund
shareholders, each representing the respective pro rata number of
full and fractional shares of Small Cap Fund due the shareholder.
Certificates representing shares of Strategic Growth Fund at the
Closing Date will represent the shares of Small Cap Fund distributed
to the recordholder thereof as a result of the liquidation of
Strategic Growth Fund. New certificates for Small Cap Fund shares
will be issued only upon written request, and only upon tender of
Strategic Growth Fund certificates.
The consummation of the Plan is subject to the conditions set forth
therein. The Plan may be terminated and the reorganization abandoned
at any time before or after approval by Strategic Growth Fund
shareholders, prior to the Closing Date by mutual consent of
Strategic Growth Fund and Small Cap Fund, or by either if any
condition set forth in the Plan has not been fulfilled or is waived
by the party entitled to its benefits. In accordance with the Plan,
Strategic Growth Fund and Small Cap Fund will each be responsible for
payment of expenses incurred in connection with the reorganization.
Description of Small Cap Fund Shares. Full and fractional shares of
Small Cap Fund will be issued to Strategic Growth Fund shareholders
per class in accordance with the procedures under the Plan as
described above. Each share will be fully paid and nonassessable when
issued and transferable without restrictions and will have no
preemptive or conversion rights.
Federal Income Tax Consequences. The Plan is a tax-free
reorganization pursuant to Section 368(a)(1)(C) of the Internal
Revenue Code. The Plan is conditioned upon the issuance of an opinion
by outside counsel to the Fund, to the effect that, on the basis of
the existing provisions of the Internal Revenue Code of 1986, current
administrative rules and court decisions, for federal income tax
purposes: (1) No gain or loss will be recognized by Strategic Growth
Fund or Small Cap Fund upon the transfer of Strategic Growth Fund
assets to, and the assumption of its liabilities by, Small Cap Fund
in exchange for Small Cap Fund shares (Section 1032(a)); (2) no gain
or loss will be recognized by shareholders of Strategic Growth Fund
upon the exchange of Strategic Growth Fund shares for Small Cap Fund
shares (Section 361(a)); (3) the basis and holding period immediately
after the reorganization for Small Cap Fund shares received by each
Strategic Growth Fund shareholder pursuant to the reorganization will
be the same as the basis and holding period of Strategic Growth Fund
shares held immediately prior to the exchange (Section 354, 356); and
(4) the basis and holding period immediately after the reorganization
of Strategic Growth Fund assets acquired by Small Cap Fund will be
the same as the basis and holding period of such assets of Strategic
Growth Fund immediately prior to the reorganization (Section 362(b),
1223(2)).
Opinions of counsel are not binding on the Internal Revenue Service
or the courts. If the reorganization is consummated but does not
qualify as a tax-free reorganization under the Internal Revenue Code,
the consequences described above would not be applicable.
Shareholders of Strategic Growth Fund should consult their tax
advisors regarding the effect, if any, of the proposed reorganization
in light of their individual circumstances. Since the foregoing
discussion relates only to the federal income tax consequences of the
reorganization, shareholders of the Strategic Growth Fund should also
consult their tax advisors as to the state and local tax
consequences, if any, of the reorganization.
Effect of the Reorganization on Capital Loss Carryforwards. The
following tables provide comparative information regarding realized
capital gains and losses and net unrealized appreciation or
depreciation of portfolio securities of Small Cap Fund and Strategic
Growth Fund as of March 31, 1997, and the capital loss carryforwards
of each at the end of its last fiscal year.
Small Cap Fund
Capital Loss Carryforward at 3/31/97 $ 149,194
Realized gains (losses) 1/31/97 - 3/31/97 $(168,665)
Net unrealized appreciation at 3/31/97 $(110,265)
Strategic Growth Fund
Capital Loss Carryforward at 3/31/97 $ 1,727,755
Realized gains (losses)3/1/96 - 3/31/97 $(15,768,991)
Net unrealized appreciation at 3/31/97 $ (4,184,766)
If the reorganization does not occur, Strategic Growth Fund's capital
loss carryforwards should be available to offset any net realized
capital gains of Strategic Growth Fund through 2005. It is
anticipated that no distributions of net realized capital gains would
be made by Strategic Growth Fund until the capital loss carryforwards
expire or are offset by net realized capital gains.
If the reorganization is consummated, Small Cap Fund will be
constrained in the extent to which it can use the capital loss
carryforwards of Strategic Growth Fund because of limitations imposed
by the Internal Revenue Code on the occurrence of an ownership
change. Small Cap Fund should be able to use in each year a capital
loss carryforward in an amount equal to the value of Strategic Growth
Fund on the date of the reorganization multiplied by a long-term
tax-exempt rate calculated by the Internal Revenue Service. If the
amount of such a loss is not used in one year, it may be added to the
amount available for use in the next year. For 1997, the amount of
capital loss carryforward that may be used under the formula will be
further reduced to reflect the number of days remaining in the year
following the date of the reorganization.
The Advisor believes that the anticipated benefits outweigh the
uncertain potential detriment resulting from the partial loss of
capital loss carryforwards, and the differing consequences of federal
and various other income taxation on a distribution received by each
shareholder whose tax liabilities (if any) are determined by the net
effect of a multitude of considerations that are individual to the
shareholder. Strategic Growth Fund shareholders who need information
as to state and local tax consequences, if any, should consult their
tax advisors.
Capitalization. The following table shows the capitalization of
Strategic Growth Fund and Small Cap Fund as of [DATE], and on a pro
forma basis as of that date of the proposed acquisition of assets at
net asset value:
Strategic Small Cap Pro Forma
Growth Combined*
Net Assets
Net Asset Value Per Share,
Class A
Net Asset Value Per Share,
Class C
Shares Outstanding, Class A
Shares Outstanding, Class C
*The Pro Forma combined net assets does not reflect adjustments with
respect to distributions prior to the reorganization. Total Small Cap
Fund Class A shares issued pro forma to Strategic Growth Fund
shareholders would be [#] and [#] for Class C. For each Class A share
of Strategic Growth Fund shares owned, shareholders of Strategic
Growth Fund would receive pro forma approximately [#] Class A shares
of Small Cap Fund. For each Class C share of Strategic Growth Fund
shares owned, shareholders of Strategic Growth Fund would receive pro
forma approximately [#] Class C shares of Small Cap Fund. The actual
exchange ratio will be determined based on the relative net asset
value per share on the acquisition date.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
Both Funds are series of the same open-end management investment
company that is organized as a Massachusetts business trust, and as
such share a common Declaration of Trust and Bylaws. After the
merger, the operations of the surviving fund will continue to be
governed by the Declaration of Trust and Bylaws of Calvert as it now
exists.
INFORMATION ABOUT THE FUNDS
Information about Small Cap Fund is included in its combined
prospectus, dated July 31, 1997. Information about Strategic Growth
Fund is included in a separate prospectus dated July 31, 1997. Copies
of the Prospectuses are included with this proxy statement and
incorporated by reference into it. Additional information about Small
Cap Fund and Strategic Growth Fund is included in separate Statements
of Additional Information, both dated July 31, 1997, which have been
filed with the Securities and Exchange Commission and are
incorporated by reference in this proxy statement. The audited Annual
Reports to Shareholders of each fund are also incorporated by
reference into this proxy statement. Copies of the Statements of
Additional Information and Annual Reports may be obtained without
charge by writing to either Fund at 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814 or by calling (800) 368-2748. The
Small Cap Fund and Strategic Growth Fund are subject to the
informational requirements of the Securities Exchange Act of 1934, as
amended, and the Investment Company Act of 1940, as amended (the
"1940 Act"), and in accordance therewith, file proxy material, reports
and other information with the Securities and Exchange Commission.
These reports may be inspected and copied at the Public Reference
facilities maintained by the Securities and Exchange Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. Copies of the
material may also be obtained from the Office of Consumer Affairs and
Information Services of the Securities and Exchange Commission at
prescribed rates. In addition, the Securities and Exchange Commission
maintains a Web site (http://www.sec.gov) that contains reports,
other information and proxy statements filed by Calvert on behalf of
the Small Cap Fund and the Strategic Growth Fund, each of which files
such information electronically with Securities and Exchange
Commission.
OTHER BUSINESS
The Trustees of the Strategic Growth Fund do not intend to present
any other business at the meeting. If, however, any other matters are
properly brought before the meeting, the persons named in the
accompanying form of proxy will vote thereon in accordance with their
judgment.
VOTING INFORMATION
Proxies from the shareholders of Strategic Growth Fund are being
solicited by the Trustees of Calvert for the Special Meeting of
Shareholders to be held in the Tenth Floor Conference Room of Calvert
Group Ltd., Air Rights North Tower, 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland at 10:00 a.m. on [DAY, DATE], or at such
later time or date made necessary by adjournment. A proxy may be
revoked at any time before the meeting or during the meeting by oral
or written notice to William M. Tartikoff, Esq., Secretary, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Unless
revoked, all valid proxies will be voted in accordance with the
specification thereon or, in the absence of specification, for
approval of the Plan. Approval of the Plan will require the
affirmative vote of the holders of at least a majority of the
outstanding shares of Strategic Growth Fund entitled to vote at the
meeting. Abstentions do not count as votes "FOR" a proposal and are
treated as votes "AGAINST." Broker non-votes are shares held in
street name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to
vote and the broker does not have discretionary voting authority.
Abstentions and broker non-votes will be counted as Shares present
for purposes of determining whether a quorum is present but will not
be voted for or against any adjournment or proposal. Abstentions and
broker non-votes will not be counted, however they will be counted as
votes cast for purposes of determining whether sufficient votes have
been received to approve a proposal. Accordingly, abstentions and
broker non-votes effectively will be a vote against adjournment or
against any proposal where the required vote is a percentage of the
shares present.
Proxies are solicited by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means,
or by personal contact by officers or employees of Calvert Group and
its affiliates or by proxy soliciting firms retained for this
purpose. Strategic Growth Fund will bear solicitation costs.
Shareholders of Strategic Growth Fund of record at the close of
business on [DATE] ("record date") are entitled to notice of and to
vote at the Special Meeting or any adjournment thereof. The holders
of a majority of the shares of Strategic Growth Fund outstanding at
the close of business on the record date present in person or
represented by proxy will constitute a quorum for the meeting;
however, as noted above, the affirmative vote of the holders of at
least a majority of the shares outstanding at the close of business
on the record date is required to approve the reorganization.
Shareholders are entitled to one vote for each share held. As of
[DATE], as shown on the books of Strategic Growth Fund, there were
issued and outstanding [#] shares of Strategic Growth Fund. The votes
of the shareholders of Small Cap Fund are not being solicited since
their approval or consent is not necessary for this transaction.
As of [DATE], the officers and Trustees of Strategic Growth Fund as a
group beneficially owned less than 1% of the outstanding shares of
Strategic Growth Fund.
To the knowledge of the Fund, no shareholders owned beneficially more
than 5% of the outstanding shares of the Strategic Growth Fund on that
date.
ADJOURNMENT
In the event that sufficient votes in favor of the proposals set
forth in the Notice of Meeting and Proxy Statement are not received
by the time scheduled for the meeting, the persons named as proxies
may move one or more adjournments of the meeting to permit further
solicitation of proxies with respect to any such proposals. Any such
adjournment will require the affirmative vote of a majority of the
shares present at the meeting. The persons named as proxies will vote
in favor of such adjournment those shares that they are entitled to
vote which have voted in favor of such proposals. They will vote
against any such adjournment those proxies that have voted against
any such proposals.
By Order of the Board of Trustees
William M. Tartikoff, Esq.
Secretary
The Trustees of The Calvert Fund, including the Independent Trustees,
recommend a Vote FOR Approval of the Plan.
<PAGE>
<PAGE>
THE CALVERT FUND:
CALVERT STRATEGIC GROWTH FUND
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) William
M. Tartikoff, Esq. and Barbara J. Krumsiek, attorneys, with full
power of substitution, to vote all shares of Calvert Strategic Growth
Fund that the undersigned is entitled to vote at the Special Meeting
of Shareholders to be held in the Tenth Floor Conference Room of
Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland 20814 on [DAY, DATE] at 10:00 a.m. and at any adjournment
thereof. All powers may be exercised by a majority of the proxy
holders or substitutes voting or acting or, if only one votes and
acts, then by that one. This Proxy shall be voted on the proposal
described in the Proxy Statement. Receipt of the Notice of the
Meeting and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign
exactly as your
name appears on
this Proxy. When
signing in a
fiduciary capacity,
such as executor,
administrator,
trustee, guardian,
etc., please so
indicate. Corporate
and partnership
proxies should be
signed by an
authorized person
indicating the
person's title.
Date: ________________________, 1997
__________________________________
__________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND
RETURN
PROMPTLY IN ENCLOSED
ENVELOPE
- --------------------------------------------------------------------------
Please refer to the Proxy Statement discussion on this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To act upon a proposal to approve an Agreement and Plan of
Reorganization authorizing the exchange of shares of the Calvert
Strategic Growth Fund for shares of the Calvert New Vision Small
Cap Fund.
[ ] For [ ] Against [ ] Abstain
<PAGE>
The Calvert Fund
STATEMENT OF ADDITIONAL INFORMATION
July 31, 1997
Acquisition of the Assets of
Calvert Strategic Growth Fund
(a series of The Calvert Fund)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
By and In Exchange for Shares of
Calvert New Vision Small Cap Fund
(a series of The Calvert Fund)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
This Statement of Additional Information, relating
specifically to the proposed transfer of all or substantially all of
the assets of Calvert Strategic Growth Fund ("Strategic Growth") in
exchange for shares of Calvert New Vision Small Cap Fund ("Small
Cap"), consists of this cover page, the Pro Forma Financial
Information, and the Statement of Additional Information of The
Calvert Fund, dated July 31, 1997, attached hereto and incorporated
by reference.
This Statement of Additional Information is not a
prospectus. A Prospectus/Proxy Statement dated [DATE], relating to
the above-referenced matter may be obtained from Calvert Group, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. This
Statement of Additional Information relates to, and should be read in
conjunction with, such Prospectus/Proxy Statement.
The date of this Statement of Additional Information is July
31, 1997, as revised [DATE].
<PAGE>
PROFORMA STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
Calvert New Vision Small Cap Fund
Calvert Strategic Growth Fund
March 31, 1997
Calvert
New Vision
Small Cap
Fund
--------------
ASSETS
- --------------------------------------------------------------------
Investments in securities, at value - $549,775
(Cost $660,040, $94,441,474
and $95,101,514, respectively).
Repurchase Agreements -
Cash 812,452
Receivable for securities sold 24,123
Receivable for shares sold 19,004
Receivable from Calvert Asset Management Co., Inc. 9,562
Interest and dividends receivable -
Deposits with brokers -
Other assets 41,288
--------------
Total assets 1,456,204
--------------
Calvert
Strategic
Growth
Fund
-----------------
ASSETS
- -----------------------------------------------------------------------
Investments in securities, at value - $90,051,321
(Cost $660,040, $113,441,474
and $114,101,514, respectively).
Repurchase Agreements 19,000,000
Cash 295,202
Receivable for securities sold 2,354,435
Receivable for shares sold 277,319
Receivable from Calvert Asset Management Co., Inc. -
Interest and dividends receivable 149,577
Deposits with brokers 11,134,403
Other assets 25,681
-----------------
Total assets 123,287,938
-----------------
Calvert
Proforma Proforma
Adjustments Combined
-------------- -----------
ASSETS
- -------------------------------------------------------------------------------
Investments in securities, at value - - $90,601,096
(Cost $660,040, $113,441,474
and $114,101,514, respectively).
Repurchase Agreements - 19,000,000
Cash - 1,107,654
Receivable for securities sold - 2,378,558
Receivable for shares sold - 296,323
Receivable from Calvert Asset Management Co., Inc. - 9,562
Interest and dividends receivable - 149,577
Deposits with brokers - 11,134,403
Other assets - 66,969
-------------- ----------------
Total assets - 124,744,142
-------------- ----------------
Calvert
New Vision
Small Cap
Fund
LIABILITIES
- ------------------------------------------------------------------------
Payable for securities purchased 31,811
Payable for shares redeemed -
Securities sold short, at value (proceeds -
$3,507,356)
Payable to Calvert Asset Management Co., Inc. -
Payable to Calvert Administrative Services Co. 114
Payable to Calvert Shareholder Services, Inc. 778
Payable to Calvert Distributors, Inc. 397
Accrued expenses and other liabilities 8,119
--------------
Total liabilities 41,219
--------------
Net assets $1,414,985
==============
Calvert
Strategic
Growth Proforma
Fund Adjustments
-----------
LIABILITIES
- -------------------------------------------------------------------------------
Payable for securities purchased 8,062,330 -
Payable for shares redeemed 479,873 -
Securities sold short, at value (proceeds 3,301,969 -
$3,507,356)
Payable to Calvert Asset Management Co., Inc. 154,580 -
Payable to Calvert Administrative Services Co. 20,107 -
Payable to Calvert Shareholder Services, Inc. 30,080 -
Payable to Calvert Distributors, Inc. 36,313 -
Accrued expenses and other liabilities 54,121 -
--------- --------------
Total liabilities 12,139,373 -
-------- --------------
Net assets $111,148,565 -
================= ==============
Proforma
Combined
LIABILITIES
- -------------------------------------------------------------------------------
Payable for securities purchased 8,094,141
Payable for shares redeemed 479,873
Securities sold short, at value (proceeds 3,301,969
$3,507,356)
Payable to Calvert Asset Management Co., Inc. 154,580
Payable to Calvert Administrative Services Co. 20,221
Payable to Calvert Shareholder Services, Inc. 30,858
Payable to Calvert Distributors, Inc. 36,710
Accrued expenses and other liabilities 62,240
----------------
Total liabilities 12,180,592
----------------
Net assets $112,563,550
================
Calvert Calvert
New Vision Strategic
Small Cap Growth
Fund Fund
NET ASSETS
- -------------------------------------------------------------------------------
Each class of shares of beneficial interest in each
Portfolio has an unlimited number of no par shares issued.
Paid-in capital:
Class A:
New Vision Fund, 101,347 shares outstanding and
Strategic Growth Fund, 6,798,190 shares $1,458,093 $111,527,830
outstanding
Class C:
New Vision Fund, 16,690 shares
outstanding and
Strategic Growth Fund, 1,207,832 shares 235,822 19,574,492
outstanding
Accumulated realized gains (losses) on investments (168,665) (15,768,991
Net unrealized appreciation (depreciation) on (110,265) (4,184,766)
investments
-------------- -----------------
Net assets $1,414,985 $111,148,565
============== ==============
Proforma Proforma
Adjustments Combined
Class A:
New Vision Fund, 101,347 shares outstanding and
Strategic Growth Fund, 6,798,190 shares $112,985,923
outstanding
Class C:
New Vision Fund, 16,690 shares
outstanding and
Strategic Growth Fund, 1,207,832 share 19,810,314
outstanding
Accumulated realized gains (losses) on investment - (15,937,656)
Net unrealized appreciation (depreciation) on - (4,295,031)
investments
-------------- ---------------
Net assets $112,563,550
============== ==============
NET ASSETS - CLASS A $1,214,896 $94,624,910
============== =================
SHARES OUTSTANDING - CLASS A 101,347 6,798,190
============== =================
NET ASSET VALUE - CLASS A $11.99 $13.92
============== =================
MAXIMUM SALES CHARGE - CLASS A 0.60 0.69
============== =================
OFFERING PRICE - CLASS A $12.59 $14.61
============== =================
NET ASSETS - CLASS C $200,089 $16,523,655
============== =================
SHARES OUTSTANDING - CLASS C 16,690 1,207,832
============== =================
NET ASSET VALUE - CLASS C $11.99 $13.68
============== =================
Proforma
Combined
NET ASSETS - CLASS A $95,839,806
================
SHARES OUTSTANDING - CLASS A 7,993,824 (1)
================
NET ASSET VALUE - CLASS A $11.99
================
MAXIMUM SALES CHARGE - CLASS A 0.60 (2)
================
OFFERING PRICE - CLASS A $12.59
================
NET ASSETS - CLASS C $16,723,744
================
SHARES OUTSTANDING - CLASS C 1,394,767 (3)
================
NET ASSET VALUE - CLASS C $11.99
================
(1) The proforma combined shares outstanding consists of 101,347
A shares of Calvert New Vision Small Cap Fund and 7,892,477
A shares of Calvert Strategic Growth Fund.
(2) The maximum sales charge for the Calvert New Vision Small Cap
Fund and the Calvert Strategic Growth Fund is 4.75%.
(3) The proforma combined shares outstanding consists of 16,690 C
shares of Calvert New Vision Small Cap Fund and 1,378,077 C shares
of Calvert Strategic Growth Fund.
See Notes to Proforma Financial Statements.
<PAGE>
CALVERT STRATEGIC GROWTH FUND
CALVERT NEW VISION SMALL CAP FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
net assets 112,563,550
EQUITY SECURITIES - 47.1% SHARES VALUE
- --------------------------------------------------------------
Airline - 2.1%
Delta Air Lines, Inc. 27,900 $2,347,087
--------------------
2,347,087 2.085%
--------------------
Commercial Services - 0.0%
NCO Group, Inc. * 2,500 54,687
--------------------
54,687 0.049%
--------------------
Computer Services - 6.9%
Harbinger Corp. * 128,450 2,825,900
Sapient Corp. * 93,500 2,992,000
Technology Solutions Co. * 71,890 1,985,962
7,803,862 6.933%
------------------
Electronics - Laser
Systems/Components - 0.0%
Cymer, Inc. * 1,000 35,875
------------
35,875
0.032%
-------------------
Electronics - Semiconductor
Equipment - 0.8%
PRI Automation, Inc. * 19,500 931,125
-------------------
931,125 0.827%
-------------------
Electronics - Semiconductor
Manufacturing - 5.7%
Applied Materials, Inc. * 36,100 1,674,137
Sanmina Corp. * 63,500 2,841,625
Vitesse Semiconductor Corp. * 69,150 1,910,269
-------------
6,426,031 5.709%
-------------
Health Care - 2.0%
Oxford Health Plans, Inc. * 37,600 2,204,300
-------------
2,204,300 1.958%
-------------
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * 62,600 2,237,950
-------------
2,237,950 1.988%
--- ---------
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * 28,200 1,286,625
Varco International, Inc. * 43,900 1,097,500
-------------
2,384,125 2.118%
-------------
Oil and Gas - Field
Services - 0.4%
Trico Marine Services, Inc. * 8,500 403,750
-------------
403,750 0.359%
Retail - Apparel 4.9%
Gucci Group, N.V. 44,900 3,238,413
TJX Companies, Inc. 52,400 2,240,100
-------------
5,478,513 4.867%
-
Retail - Discount
and Variety - 2.7%
Dollar Tree Stores, Inc. 82,000 3,034,000
3,034,000 2.695%
EQUITY SECURITIES (CONT'D) SHARES VALUE
- --------------------------------------------------------------------------------
Software - Applications - 11.4%
Clarify, Inc.* 163,200 $3,937,200
Documentum, Inc. * 34,700 641,950
Parametric Technology Corp. * 26,800 1,209,350
Pegasystems, Inc. * 14,900 299,863
Siebel Systems, Inc. * 131,500 2,202,625
Vantive Corp. * 220,300 4,516,150
-------------------
12,807,138
11.378%
-------------------
Software - Database/Development Tools - 0.0%
Rational Software Corp. * 1,200 24,750
-------------------
24,750
0.022%
-------------------
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * 13,334 62,403
-------------------
62,403
0.055%
-------------------
Telecommunications - 6.1%
Advanced Fibre Communications * 62,700 2,022,075
Ciena Corp. * 200 5,687
DSC Communications Corp. * 97,200 2,035,125
Qualcomm, Inc. * 41,600 2,345,200
Sourcecom Corp., Series B, Preferred t * 100,000 430,000
-------------------
6,838,087
6.075%
-------------------
Total Equity Securities (Cost $58,419,606) 53,073,683
47.150%
-------------------
PRINCIPAL
CORPORATE OBLIGATIONS - 21.5% AMOUNT
- -------------------------------------------------------------------------------
Baldwin Park, California Redevelopment
Agency, VRDN, 5.66%, $14,500,000 14,500,000
8/1/23, LOC: Wells Fargo Bank, Confirming
LOC: Sumitomo Bank
Ltd. **
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC:
First American 9,725,000 9,725,000
Bank, MI **
Total Corporate Obligations (Cost $24,225,000) 24,225,000
21.5%
REPURCHASE AGREEMENTS - 16.9%
- --------------------------------------------------------------------------------
State Street Bank: 5.75%, dated 3/31/97,
due 4/1/97
(Collateral: $20,071,946, FFCB, 6.44%,
11/5/99) $19,000,000 19,000,000
Total Repurchase Agreements (Cost $19,000,000) 19,000,000
16.9%
U.S. TREASURY - 3.5%
- -------------------------------------------------------------------------------
U.S. Treasury Notes, 5.00%, 2/15/99 4,000,000 3,901,800
Total U.S.Treasury (Cost $3,946,890) 3,901,800
3.5%
MUNICIPAL OBLIGATIONS - 3.1%
- -------------------------------------------------------------------------------
Gardena, California Certificates of
Participation, VRDN, 3,475,000 3,475,000
6.35%, 7/1/25, LOC: Sumitomo Trust &
Banking, Confirming LOC:
Dai-Ichi Kangyo **
Total Municipal Obligations (Cost $3,475,000) 3,475,000
3.1%
<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>
Exhibit A, Part A
Exhibit 4, Part C
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION, dated as of September 9,
1997, is between Calvert Strategic Growth Fund ("Strategic Growth
Fund") and Calvert New Vision Small Cap Fund ("Small Cap Fund").
Strategic Growth Fund and Small Cap Fund are both series of The
Calvert Fund ("Calvert").
In consideration of the mutual promises contained in this Agreement,
the parties agree as follows:
1. SHAREHOLDER APPROVAL
Approval by Shareholders. A meeting of the shareholders of Strategic
Growth Fund shall be called and held for the purpose of acting on and
authorizing the transactions contemplated in this Agreement and Plan
of Reorganization (the "Agreement" or "Plan"). Small Cap Fund shall
furnish to Strategic Growth Fund such data and information as shall
be reasonably requested by Strategic Growth Fund for inclusion in the
information to be furnished to its shareholders in connection with
the meeting.
2. REORGANIZATION
(a) Plan of Reorganization. Strategic Growth Fund will convey,
transfer, and deliver to Small Cap Fund all of the then-existing
assets of Strategic Growth Fund at the closing provided for in
Section 2(b) of this Agreement (the "Closing"). In consideration
thereof, Small Cap Fund agrees at the Closing:
(i) to assume and pay, to the extent that they exist on or
after the Effective Time of the Reorganization (as defined
in Section 2(b)), all of Strategic Growth Fund's obligations
and liabilities, whether absolute, accrued, contingent, or
otherwise; and
(ii) to deliver to Strategic Growth Fund in exchange
for the assets the number of full and fractional shares of
common stock of Small Cap Fund ("Small Cap Fund Shares") to
be determined as follows: In accordance with Section 3 of
this Agreement, the number of shares shall be determined by
dividing the per share net asset value of Strategic Growth
Fund Shares (rounded to the nearest million) by the net
asset value per share of Small Cap Fund (rounded to the
nearest million) and multiplying the quotient by the number
of outstanding shares of Strategic Growth Fund as of the
close of business on the closing date. It is expressly
agreed that there will be no sales charge to Strategic
Growth Fund, or to any of the shareholders of Strategic
Growth Fund upon distribution of Small Cap Fund Shares to
them.
(b) Closing and Effective Time of the Reorganization. The Closing
shall occur at the Effective Time of the Reorganization, which
shall be either:
(i) the later of receipt of all necessary regulatory approvals
and the final adjournment of the meeting of shareholders of
Strategic Growth Fund at which the Plan will be considered,
or
(ii) such later date as the parties may mutually agree.
3. VALUATION OF NET ASSETS
(a) The value of Strategic Growth Fund's net assets to be
transferred to Small Cap Fund under this Agreement shall be
computed as of the close of business on the business day
immediately preceding the Closing Date (hereinafter the
"Valuation Date") using the valuation procedures as set forth in
Small Cap Fund's prospectus.
(b) The net asset value per share of Small Cap Fund Shares for
purposes of Section 2 of this Agreement shall be determined as
of the close of business on the Valuation Date by Small Cap
Fund's Controller using the same valuation procedures as set
forth in Small Cap Fund's prospectus.
(c) A copy of the computation showing in reasonable detail the
valuation of Strategic Growth Fund's net assets to be
transferred to Small Cap Fund pursuant to paragraph 2 of this
Agreement, certified by the Controller of Strategic Growth
Fund, shall be furnished by Strategic Growth Fund to Small Cap
Fund at the Closing. A copy of the computation showing in
reasonable detail the determination of the net asset value per
share of Small Cap Fund Shares pursuant to paragraph 2 of this
Agreement, certified by the Controller of Small Cap Fund, shall
be furnished by Small Cap Fund to Strategic Growth Fund at the
Closing.
4. LIQUIDATION AND DISSOLUTION
(a) As soon as practicable after the Closing Date, Strategic Growth
Fund will distribute pro rata to the Strategic Growth Fund
shareholders of record as of the close of business on the
Closing Date the shares of Small Cap Fund received by Strategic
Growth Fund pursuant to this Section. Such liquidation and
distribution will be accompanied by the establishment of
shareholder accounts on the share records of Small Cap Fund in
the names of each such shareholder of Strategic Growth Fund,
representing the respective pro rata number of full shares and
fractional interests in shares of Small Cap Fund due to each. No
such shareholder accounts shall be established by Small Cap Fund
or its transfer agent for Small Cap Fund except pursuant to
written instructions from Strategic Growth Fund, and Strategic
Growth Fund agrees to provide on the Closing Date instructions
to transfer to a shareholder account for each former Strategic
Growth Fund shareholder a pro rata share of the number of shares
of Small Cap Fund received pursuant to Section 2(a) of this
Agreement.
(b) Promptly after the distribution described in Section 4(a)
above, appropriate notification will be mailed by Small Cap Fund
or its transfer agent to each shareholder of Strategic Growth
Fund receiving such distribution of shares of Small Cap Fund
informing such shareholder of the number of such shares
distributed to such shareholder and confirming the registration
thereof in such shareholder's name.
(c) Following the Closing Date and until surrendered, each
outstanding share certificate representing shares of Strategic
Growth Fund shall be deemed for all purposes to evidence
ownership of shares of Small Cap Fund that the holder is
entitled to receive in exchange for the certificate. The shares
of Small Cap Fund that the holder is entitled to receive with
respect to Strategic Growth Fund's share certificates not yet
surrendered will be held by Small Cap Fund's transfer agent on
behalf of the shareholder, but may not be transferred or
redeemed until surrender of Strategic Growth Fund's share
certificates in proper form for transfer to Small Cap Fund's
transfer agent or, in lieu thereof, the posting of a lost
certificate bond or other surety instrument deemed acceptable to
Small Cap Fund's transfer agent. All of Small Cap Fund's
distributions attributable to the shares represented by the
share certificates of Strategic Growth Fund retained by
shareholders will be paid to the shareholder in cash or invested
in additional shares of Small Cap Fund at the net asset value in
effect on the respective payment dates in accordance with
instructions previously given by the shareholder to Strategic
Growth Fund's transfer agent.
Share certificates representing holdings of shares of Small Cap
Fund shall not be issued unless requested by the shareholder
and, if such a request is made, share certificates of Small Cap
Fund will be issued only for full shares of Small Cap Fund and
any fractional interests in shares shall be credited in the
shareholder's account with Small Cap Fund.
(d) As promptly as is practicable after the liquidation of
Strategic Growth Fund, and in no event later than 12 months from
the date of this Agreement, Strategic Growth Fund shall be
terminated pursuant to the provisions of the Plan and Calvert's
Declaration of Trust.
(e) Immediately after the Closing Date, the share transfer books of
Strategic Growth Fund shall be closed and no transfer of shares
shall thereafter be made on those books.
5. TRUST AND BY-LAWS
(a) Declaration of Trust. The Declaration of Trust of Calvert,
which governs its series Small Cap Fund, as in effect
immediately prior to the Effective Time of the Reorganization
shall continue to be the Declaration of Trust until amended as
provided by law.
(b) By-laws. The By-laws of Calvert, which govern its series Small
Cap Fund, in effect at the Effective Time of the Reorganization
shall continue to be the By-laws until the same shall thereafter
be altered, amended, or repealed in accordance with the Trust
Indenture or said By-laws.
6. REPRESENTATIONS AND WARRANTIES OF SMALL CAP FUND
(a) Organization, Existence, etc. Small Cap Fund is a duly
organized series of Calvert, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts,
and has the power to carry on its business as it is now being
conducted. Currently, Small Cap Fund is not qualified to do
business as a foreign corporation under the laws of any
jurisdiction. Small Cap Fund has all necessary federal, state
and local authorization to own all of its properties and assets
and to carry on its business as now being conducted.
(b) Registration as Investment Company. Calvert, of which Small Cap
Fund is a series, is registered under the Investment Company Act
of 1940 (the "Act") as an open-end diversified management
investment company. Its registration has not been revoked or
rescinded and is in full force and effect.
(c) Capitalization. Small Cap Fund has an unlimited number of
shares of beneficial interest, no par value, of which as of
August 31, 1997, 207,406 Class A shares and 27,383 Class C shares
were outstanding, and no shares were held in the treasury of
Small Cap Fund. All of the outstanding shares of Small Cap Fund
have been duly authorized and are validly issued, fully paid,
and non-assessable. Since Small Cap Fund is a series of an
open-end investment company engaged in the continuous offering
and redemption of its shares, the number of outstanding shares
may change prior to the Effective Time of the Reorganization.
(d) Financial Statements. The financial statements of Small Cap
Fund for the year ended March 31, 1997 ("Small Cap Fund
Financial Statements"), previously delivered to Strategic Growth
Fund, fairly present the financial position of Small Cap Fund as
of March 31, 1997 and the results of its operations and changes
in its net assets for the year then ended.
(e) Shares to be Issued Upon Reorganization. Small Cap Fund Shares
to be issued in connection with the Reorganization have been
duly authorized and upon consummation of the Reorganization will
be validly issued, fully paid and non-assessable.
(f) Authority Relative to this Agreement. Calvert has the power to
enter into the Plan on behalf of its series Small Cap Fund and
to carry out its obligations under this Agreement. The execution
and delivery of the Plan and the consummation of the
transactions contemplated have been duly authorized by the Board
of Trustees of Calvert and no other proceedings by Calvert are
necessary to authorize its officers to effectuate the Plan and
the transactions contemplated. Small Cap Fund is not a party to
or obligated under any charter, by-law, indenture, or contract
provision or any other commitment or obligation, or subject to
any order or decree which would be violated by its executing and
carrying out the Plan.
(g) Liabilities. There are no liabilities of Calvert on behalf of
its series Small Cap Fund, whether or not determined or
determinable, other than liabilities disclosed or provided for
in Small Cap Fund Financial Statements and liabilities incurred
in the ordinary course of business subsequent to March 31, 1997
or otherwise previously disclosed to Strategic Growth Fund, none
of which has been materially adverse to the business, assets or
results of operations of Small Cap Fund.
(h) Litigation. To the knowledge of Small Cap Fund there are no
claims, actions, suits, or proceedings, pending or threatened,
which would adversely affect Small Cap Fund or its assets or
business, or which would prevent or hinder consummation of the
transactions contemplated by this Agreement.
(i) Contracts. Except for contracts and agreements previously
disclosed to Strategic Growth Fund under which no default
exists, Small Cap Fund is not a party to or subject to any
material contract, debt instrument, plan, lease, franchise,
license, or permit of any kind or nature whatsoever.
(j) Taxes. The federal income tax returns of Small Cap Fund have
been filed for all taxable years to and including March 31,
1997, and all taxes payable pursuant to such returns have been
paid. Small Cap Fund has qualified as a regulated investment
company under the Internal Revenue Code in respect to each
taxable year of Small Cap Fund since commencement of its
operations.
(k) Registration Statement. Small Cap Fund shall have filed with
the Securities and Exchange Commission (the "Commission") a
Registration Statement under the Securities Act of 1933
("Securities Act") relating to the shares of capital stock of
Small Cap Fund issuable under this Agreement. At the time the
Registration Statement becomes effective, the Registration
Statement:
(i) will comply in all material respects with the
provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the
"Regulations"), and
(ii) will not contain an untrue statement of material
fact or omit to state a material act required to be
stated therein or necessary to make the statements
therein not misleading.
Further, at the time the Registration Statement becomes effective, at
the time of the shareholders' meeting referred to in Section 1, and
at the Effective Time of the Reorganization, the Prospectus and
Statement of Additional Information included therein, as amended or
supplemented by any amendments or supplements filed by Small Cap
Fund, will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or
omissions from the Registration Statement or Prospectus and Statement
of Additional Information made in reliance upon and in conformity
with information furnished by Strategic Growth Fund for use in the
Registration Statement or Prospectus and Statement of Additional
Information as provided in Section 7(k).
7. REPRESENTATIONS AND WARRANTIES OF STRATEGIC GROWTH FUND
(a) Organization, Existence, etc. Strategic Growth Fund is a duly
organized series of Calvert, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts,
and has power to carry on its business as it is now being
conducted. Currently, Strategic Growth Fund is not qualified to
do business as a foreign corporation under the laws of any
jurisdiction. Strategic Growth Fund has all necessary federal,
state and local authorization to own all of its properties and
assets and to carry on its business as now being conducted.
(b) Registration as Investment Company. Calvert, of which Strategic
Growth Fund is a series, is registered under the Act as an
open-end nondiversified management investment company. Its
registration has not been revoked or rescinded and is in full
force and effect.
(c) Capitalization. Strategic Growth Fund has an unlimited number
of shares of beneficial interest, no par value, of which as of
August 31, 1997, 5,801,093 Class A shares and 940,251 Class C shares
were outstanding, and no shares were held in the treasury of
Strategic Growth Fund. All of the outstanding shares of
Strategic Growth Fund have been duly authorized and are validly
issued, fully paid, and non-assessable. Since Strategic Growth
Fund is a series of an open-end investment company engaged in
the continuous offering and redemption of its shares, the number
of outstanding shares of Strategic Growth Fund may change prior
to the Effective Date of the Reorganization.
(d) Financial Statements. The financial statements of Strategic
Growth Fund for the year ended March 31, 1997 ("Strategic Growth
Fund Financial Statements"), previously delivered to Small Cap
Fund, fairly present the financial position of Strategic Growth
Fund as of March 31, 1997 and the results of its operations and
changes in its net assets for the year then ended.
(e) Authority Relative to the Plan. Calvert has the power to enter
into the Plan on behalf of Strategic Growth Fund and to carry
out its obligations under this Agreement. The execution and
delivery of the Plan and the consummation of the transactions
contemplated have been duly authorized by the Trustees of
Calvert and, except for approval by the holders of its capital
stock, no other proceedings by Calvert are necessary to
authorize its officers to effectuate the Plan and the
transactions contemplated. Strategic Growth Fund is not a party
to or obligated under any charter, by-law, indenture, or
contract provision or any other commitment or obligation, or
subject to any order or decree, which would be violated by its
executing and carrying out the Plan.
(f) Liabilities. There are no liabilities of Strategic Growth Fund
whether or not determined or determinable, other than
liabilities disclosed or provided for in Strategic Growth Fund
Financial Statements and liabilities incurred in the ordinary
course of business subsequent to March 31, 1997 or otherwise
previously disclosed to Small Cap Fund, none of which has been
materially adverse to the business, assets, or results of
operations of Strategic Growth Fund.
(g) Litigation. To the knowledge of Strategic Growth Fund there are
no claims, actions, suits, or proceedings, pending or
threatened, which would adversely affect Strategic Growth Fund
or its assets or business, or which would prevent or hinder
consummation of the transactions contemplated by this Agreement.
(h) Contracts. Except for contracts and agreements previously
disclosed to Small Cap Fund under which no default exists,
Calvert on behalf of Strategic Growth Fund is not a party to or
subject to any material contract, debt instrument, plan, lease,
franchise, license, or permit of any kind or nature whatsoever.
(i) Taxes. The federal income tax returns of Strategic Growth Fund
have been filed for all taxable years to and including the
taxable year ended March 31, 1997 and all taxes payable pursuant
to such returns have been paid. Strategic Growth Fund has
qualified as a regulated investment company under the Internal
Revenue Code with respect to each past taxable year of Strategic
Growth Fund since commencement of its operations.
(j) Portfolio Securities. All securities to be listed in the
schedule of investments of Strategic Growth Fund as of the
Effective Time of the Reorganization will be owned by Calvert on
behalf of Strategic Growth Fund free and clear of any liens,
claims, charges, options, and encumbrances, except as indicated
in the schedule. Except as so indicated, none of the securities
is, or after the Reorganization as contemplated by this
Agreement will be, subject to any legal or contractual
restrictions on disposition (including restrictions as to the
public offering or sale of the securities under the Securities
Act), and all the securities are or will be readily marketable.
(k) Registration Statement. Strategic Growth Fund will cooperate
with Small Cap Fund in connection with the Registration
Statement referred to in Section 6(k) of this Agreement, and
will furnish to Small Cap Fund the information relating to
Strategic Growth Fund required by the Securities Act and its
Regulations to be set forth in the Registration Statement
(including the Prospectus and Statement of Additional
Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to
Strategic Growth Fund:
(i) will comply in all material respects with the provisions
of the Securities Act and its regulations, and
(ii) will not contain an untrue statement of a material
fact or omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading.
Further, at the time the Registration Statement becomes
effective, at the time of the shareholders' meeting referred to in
Section I and at the Effective Time of the Reorganization, the
Prospectus and Statement of Additional Information, as amended or
supplemented by any amendments or supplements filed by Small Cap
Fund, insofar as it relates to Strategic Growth Fund, will not
contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall apply only to statements in or omissions from the
Registration Statement or Prospectus and Statement of Additional
Information made in reliance upon and in conformity with information
furnished by Strategic Growth Fund for use in the Registration
Statement or Prospectus and Statement of Additional Information as
provided in this Section 7(k).
8. CONDITIONS TO OBLIGATIONS OF STRATEGIC GROWTH FUND
The obligations of Strategic Growth Fund under this Agreement with
respect to the consummation of the Reorganization are subject to the
satisfaction of the following conditions:
(a) Shareholder Approval. The Plan shall have been approved by the
affirmative vote of the holders of a majority of the outstanding
shares of capital stock of Strategic Growth Fund.
(b) Representations, Warranties and, Agreements. As of the
Effective Time of the Reorganization, Small Cap Fund shall have
complied with each of its responsibilities under this Agreement,
each of the representations and warranties contained in this
Agreement shall be true in all material respects, and there
shall have been no material adverse change in the financial
condition, results of operations, business, properties, or
assets of Small Cap Fund since March 31, 1997. As of the
Effective Time of the Reorganization, Strategic Growth Fund
shall have received a certificate from Small Cap Fund
satisfactory in form and substance to Strategic Growth Fund
indicating that it has met the terms stated in this Section.
(c) Regulatory Approval. The Registration Statement referred to in
Section 6(k) shall have been declared effective by the
Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued; all necessary orders
of exemption under the Act with respect to the transactions
contemplated by this Agreement shall have been granted by the
Commission; and all approvals, registrations, and exemptions
under federal and state laws considered to be necessary shall
have been obtained.
(d) Tax Opinion. Strategic Growth Fund shall have received the
opinion of counsel, dated the Effective Time of the
Reorganization, addressed to and in form and substance
satisfactory to Strategic Growth Fund, as to certain of the
federal income tax consequences of the Reorganization under the
Internal Revenue Code to Strategic Growth Fund and its
shareholders. For purposes of rendering its opinion, counsel may
rely exclusively and without independent verification, as to
factual matters, on the statements made in the Plan, the proxy
statement which will be distributed to the shareholders of
Strategic Growth Fund in connection with the Reorganization, and
on such other written representations as Strategic Growth Fund
and Small Cap Fund, respectively, will have verified as of the
Effective Time of the Reorganization. The opinion of counsel
will be to the effect that, based on the facts and assumptions
stated therein, for federal income tax purposes:
(i) neither Strategic Growth Fund nor Small Cap Fund will
recognize any gain or loss upon the transfer of the
assets of Strategic Growth Fund to and the assumption of
its liabilities by Small Cap Fund in exchange for Small
Cap Fund Shares and upon the distribution (whether
actual or constructive) of Small Cap Fund Shares to its
shareholders in exchange for their shares of capital
stock of Strategic Growth Fund;
(ii) the shareholders of Strategic Growth Fund who receive
Small Cap Fund Shares pursuant to the Reorganization
will not recognize any gain or loss upon the exchange
(whether actual or constructive) of their shares of
capital stock of Strategic Growth Fund for Small Cap
Fund Shares (including any fractional share interests
they are deemed to have received) pursuant to the
Reorganization;
(iii) the basis of Small Cap Fund Shares received by
Strategic Growth Fund's shareholders will be the same as
the basis of the shares of capital stock of Strategic
Growth Fund surrendered in the exchange; and
(iv) the basis of Strategic Growth Fund assets acquired by
Small Cap Fund will be the same as the basis of such
assets to Strategic Growth Fund immediately prior to the
Reorganization.
9. CONDITIONS TO OBLIGATIONS OF SMALL CAP FUND
The obligations of Small Cap Fund under this Agreement with respect
to the consummation of the Reorganization are subject to the
satisfaction of the following conditions:
(a) Representations, Warranties, and Agreements. As of the
Effective Time of the Reorganization, Strategic Growth Fund
shall have complied with each of its obligations under this
Agreement, each of the representations and warranties contained
in this Agreement shall be true in all material respects, and
there shall have been no material adverse change in the
financial condition, results of operations, business, properties
or assets of Strategic Growth Fund since March 31, 1997. Small
Cap Fund shall have received a certificate from Strategic Growth
Fund satisfactory in form and substance to Small Cap Fund
indicating that it has met the terms stated in this Section.
(b) Regulatory Approval. All necessary orders of exemption under
the Act with respect to the transactions contemplated by this
Agreement shall have been granted by the Commission, and all
approvals, registrations, and exemptions under state securities
laws considered to be necessary shall have been obtained.
(c) Tax Opinion. Small Cap Fund shall have received the opinion of
counsel, dated the Effective Time of the Reorganization,
addressed to and in form and substance satisfactory to Small Cap
Fund, as to certain of the federal income tax consequences of
the Reorganization under the Internal Revenue Code to Strategic
Growth Fund and the shareholders of Strategic Growth Fund. For
purposes of rendering its opinion, counsel may rely exclusively
and without independent verification, as to factual matters, on
the statements made in the Plan, the proxy statement which will
be distributed to the shareholders of Strategic Growth Fund in
connection with the Reorganization, and on such other written
representations as Strategic Growth Fund and Small Cap Fund,
respectively, will have verified as of the Effective Time of the
Reorganization. The opinion of counsel will be to the effect
that, based on the facts and assumptions stated therein, for
federal income tax purposes:
(i) neither Strategic Growth Fund nor Small Cap Fund will
recognize any gain or loss upon the transfer of the assets
of Strategic Growth Fund to, and the assumption of its
liabilities by, Small Cap Fund in exchange for Small Cap
Fund Shares and upon the distribution (whether actual or
constructive) of Small Cap Fund Shares to its shareholders
in exchange for their shares of beneficial interest of
Strategic Growth Fund;
(ii) the shareholders of Strategic Growth Fund who receive Small
Cap Fund Shares pursuant to the Reorganization will not
recognize any gain or loss upon the exchange (whether actual
or constructive) of their shares of capital stock of
Strategic Growth Fund for Small Cap Fund Shares (including
any fractional share interests they are deemed to have
received) pursuant to the Reorganization;
(iii) the basis of Small Cap Fund Shares received by
Strategic Growth Fund's shareholders will be the same as the
basis of the shares of capital stock of Strategic Growth
Fund surrendered in the exchange; and
(iv) the basis of Strategic Growth Fund assets acquired by Small
Cap Fund will be the same as the basis of such assets to
Strategic Growth Fund immediately prior to the
Reorganization.
10. AMENDMENTS, TERMINATIONS, NON-SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) The parties hereto may, by agreement in writing authorized by
the Board of Trustees of Calvert, amend the Plan at any time
before or after approval of the Plan by shareholders of
Strategic Growth Fund, but after such approval, no amendment
shall be made that substantially changes the terms of this
Agreement.
(b) At any time prior to the Effective Time of the Reorganization,
any of the parties may by written instrument signed by it: (i)
waive any inaccuracies in the representations and warranties
made pursuant to this Agreement, and (ii) waive compliance with
any of the covenants or conditions made for its benefit pursuant
to this Agreement.
(c) Strategic Growth Fund may terminate the Plan at any time prior
to the Effective Time of the Reorganization by notice to Small
Cap Fund if: (i) a material condition to its performance under
this Agreement or a material covenant of Small Cap Fund
contained in this Agreement is not fulfilled on or before the
date specified for the fulfillment thereof, or (ii) a material
default or material breach of the Plan is made by Small Cap
Fund.
(d) Small Cap Fund may terminate the Plan at any time prior to the
Effective Time of the Reorganization by notice to Strategic
Growth Fund if: (i) a material condition to its performance
under this Agreement or a material covenant of Strategic Growth
Fund contained in this Agreement is not fulfilled on or before
the date specified for the fulfillment thereof, or (ii) a
material default or material breach of the Plan is made by
Strategic Growth Fund.
(e) The Plan may be terminated by either party at any time prior to
the Effective Time of the Reorganization upon notice to the
other party, whether before or after approval by the
shareholders of Strategic Growth Fund, without liability on the
part of either party hereto or its respective trustees,
officers, or shareholders, and shall be terminated without
liability as of the close of business on March 31, 1997 if the
Effective Time of the Reorganization is not on or prior to such
date.
(f) No representations, warranties, or covenants in or pursuant to
the Plan shall survive the Reorganization.
11. EXPENSES
Strategic Growth Fund and Small Cap Fund will bear their own expenses
incurred in connection with this Reorganization.
12. GENERAL
This Plan supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement
of the terms of the Plan between the parties and may not be changed
or terminated orally. The Plan may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts
have been executed by each party and delivered to each of the parties
hereto. The headings contained in the Plan are for reference purposes
only and shall not affect in any way the meaning or interpretation of
the Plan. Nothing in the Plan, expressed or implied, is intended to
confer upon any other person any rights or remedies by reason of the
Plan.
IN WITNESS WHEREOF, Strategic Growth Fund and Small Cap Fund have
caused the Plan to be executed on their behalf by their respective
Chairman, President, or a Vice President, and their seals to be
affixed hereto and attested by their respective Secretary or
Assistant Secretary, all as of the day and year first above written,
and to be delivered as required.
(SEAL)
Attest:
By: _________________________ By: _________________________
(SEAL)
By: _________________________ By: _________________________
<PAGE>
PART C. OTHER INFORMATION
Item 15. 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.
Item 16. 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).
3. Inapplicable.
4. Agreement and Plan of Reorganization filed herewith.
5. Specimen Stock Certificate for all series of The Calvert Fund
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28, July 19, 1995).
6. Advisory Contract (incorporated by reference to Registrant's Post-Effective
Amendment No. 3, November 1, 1984).
(a) Sub-Advisory Contract (Portfolio Advisory Services, Inc.)
(incorporated by reference to Registrant's Post-Effective
Amendment No. 30).
(b) Subadvisory Agreement (Calvert Asset Management Company, Inc.
and AWAD Associates) filed herewith.
7. Underwriting and Dealer Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 27, January 31, 1995).
8. Trustees' Deferred Compensation Agreement (incorporated by
reference to Registrant's Post-Effective Amendment No. 20,
January 28, 1992).
9. Custodial Contract (incorporated by reference to Registrant's
Post-Effective Amendment No. 21, January 29, 1993).
10. 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.
11. Opinion and Consent of Counsel as to Legality of Shares Being
Registered filed herewith.
12. Opinion and Consent of Counsel on Tax Matters filed herewith.
13. Transfer Agency Contract (incorporated by reference to
Registrant's Post-Effective Amendment No. 3, November 1, 1984).
14. Consent of Independent Accountants filed herewith.
15. Inapplicable.
16. Copies of Power of Attorney Forms filed herewith.
17. (a) Current Calvert Strategic Growth Fund Prospectus filed
herewith.
(b) Current Calvert New Vision Small Cap Fund Prospectus,
filed herewith.
(c) The Calvert Fund Strategic Growth Fund Statement of
Additional Information filed herewith.
Item 17. Undertakings
(1) Not Applicable
(2) Not Applicable
<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 September 10, 1997.
Signature Title Date
________________________ Trustee and Principal 09/10/97
Barbara Krumsiek. Executive Officer
________________________ Principal Accounting 09/10/97
Ronald M. Wolfsheimer Officer
__________**____________ Trustee 09/10/97
Richard L. Baird, Jr.
__________**____________ Trustee 09/10/97
Frank H. Blatz, Jr., Esq.
__________**____________ Trustee 09/10/97
Frederick T. Borts, M.D.
__________**____________ Trustee 09/10/97
Charles E. Diehl
__________**____________ Trustee 09/10/97
Douglas E. Feldman
__________**____________ Trustee 09/10/97
Peter W. Gavian
__________**____________ Trustee 09/10/97
John G. Guffey, Jr.
________________________ Trustee 09/10/97
M. Charito Kruvant
__________**____________ Trustee 09/10/97
Arthur J. Pugh
__________**____________ Trustee 09/10/97
David R. Rochat
__________**____________ Trustee 09/10/97
D. Wayne Silby
**Signed by Ivy Wafford Duke and Susan Walker Bender, pursuant to
Exhibit 16
<PAGE>
Exhibit Index
Form N-14
Item No.
Exhibit - 23 Form of Opinion and Consent of Counsel
16 (11)
Exhibit - 8 Opinion and Consent of Counsel on Tax
16 (12)
Matters
Exhibit - 10 Investment Subadvisory Agreement
16 (6)
Exhibit - 23 Independent Auditors' Consent
16 (4)
Exhibit - 24 Powers of Attorney
16 (16)
Exhibit - 99 Strategic Growth Fund and New Vision
17 (a) (b) (c) Small Cap Fund Prospectuses, and
Strategic Growth Statement of Additional
Information.
Exhibit - 17(b) 24f-2
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, effective 1st day of
October, 1997, by and between Calvert Asset Management Company, Inc.,
a Delaware corporation registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Adviser"), and AWAD Associates,
a division of Raymond James and Associates, Inc. a Florida
corporation (the "Subadviser").
WHEREAS, the Adviser is the investment adviser to The
Calvert Fund, an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Adviser desires to retain the Subadviser to
furnish it with certain investment advisory services in connection
with the Adviser's investment advisory activities on behalf of The
Calvert Fund and any series of The Calvert Fund, for which Schedules
are attached hereto (each such series referred to individually as the
"Fund"); and
WHEREAS that, subject to approval of the Fund's
shareholders, it is contemplated that the Calvert Strategic Growth
Fund will be merged into the Calvert New Vision Small Cap Fund;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is hereby agreed as follows:
1. Services to be Rendered by the Subadviser to the Fund.
(a) Investment Program. Subject to the
control of The Calvert Fund's Board of Trustees and the
Adviser, the Subadviser at its expense continuously will
furnish to the Fund an investment program for such portion,
if any, of Fund assets designated by the Adviser from time
to time. With respect to such assets, the Subadviser will
make investment decisions, subject to Section 1(g) of this
Agreement, and will place all orders for the purchase and
sale of portfolio securities. The Subadviser is deemed to
be an independent contractor and, except as expressly
provided or authorized by this Agreement, has no authority
to act for or represent the Fund or the Adviser in any way
or otherwise be deemed an agent of the Fund or the Adviser.
In the performance of its duties, the Subadviser will act in
the best interests of the Fund and will comply with (i)
applicable laws and regulations, including, but not limited
to, the 1940 Act and Subchapter M of the Internal Revenue
Code of 1986, as amended, (ii) the terms of this Agreement,
(iii) the Fund's Declaration of Trust, Bylaws and
Registration Statement as from time to time amended, (iv)
relevant undertakings provided to State securities
regulators, (v) the stated investment objective, policies
and restrictions of the Fund, and (vi) such other guidelines
as the Trustees or Adviser may establish. The Adviser is
responsible for providing the Subadviser with current copies
of the materials specified in Subsections (a)(iii), (iv),
(v) and (vi) of this Section 1.
(b) Availability of Personnel.The Subadviser
at its expense will make available to the Trustees and
Adviser at reasonable times its portfolio managers and other
appropriate personnel, either in person or, at the mutual
convenience of the Adviser and the Subadviser, by telephone,
in order to review the Fund's investment policies and to
consult with the Trustees and Adviser regarding the Fund's
investment affairs, including economic, statistical and
investment matters relevant to the Subadviser's duties
hereunder, and will provide periodic reports to the Adviser
relating to the investment strategies it employs.
(c) Expenses, Salaries and Facilities. The
Subadviser will pay all expenses incurred by it in
connection with its activities under this Agreement (other
than the cost of securities and other investments, including
any brokerage commissions) including, but not limited to,
all salaries of personnel and facilities required for it to
execute its duties under this Agreement.
(d) Compliance Reports. The Subadviser at its
expense will provide the Adviser with such compliance
reports relating to its duties under this Agreement as may
be agreed on by such parties from time to time.
(e) Valuation. The Subadviser will assist the
Fund and its agents in determining whether prices obtained
for valuation purposes accurately reflect market price
information relating to the assets of the Fund for which the
Subadviser has responsibility on a daily basis (unless
otherwise agreed on by the parties hereto) and at such other
times as the Adviser shall reasonably request.
(f) Executing Portfolio Transactions.
(i) Brokerage. In selecting brokers and
dealers to execute purchases and sales of
investments for the Fund, the Subadviser
will use its best efforts to obtain the
most favorable price and execution
available in accordance with this
paragraph. The Subadviser agrees to
provide the Adviser and the Fund with
copies of its policy with respect to
allocation of brokerage on trades for the
Fund. Subject to review by the Trustees
of appropriate policies and procedures,
the Subadviser may cause the Fund to pay a
broker a commission for effecting a
portfolio transaction, in excess of the
commission another broker would have
charged for effecting the same
transaction. If the first broker provided
brokerage and/or research services,
including statistical data, to the
Subadviser, the Subadviser shall not be
deemed to have acted unlawfully, or to
have breached any duty created by this
Agreement, or otherwise, solely by reason
of acting according to such authorization.
(ii) Aggregate Transactions. In executing
portfolio transactions for the Fund, the
Subadviser may, but will not be obligated
to, aggregate the securities to be sold or
purchased with those of its other clients
where such aggregation is not inconsistent
with the policies of the Fund, to the
extent permitted by applicable laws and
regulations. If the Subadviser chooses to
aggregate sales or purchases, it will
allocate the securities as well as the
expenses incurred in the transaction in
the manner it considers to be the most
equitable and consistent with its
fiduciary obligations to the Fund and its
other clients involved in the
transaction. The Adviser may direct the
Subadviser in writing to use a particular
broker or dealer for one or more trades
if, in the sole opinion of the Adviser, it
is in the best interest of the Fund to do
so.
(g) Social Screening. The Adviser is
responsible for screening those investments of the Fund
subject to social screening ("Securities") to determine that
the Securities investments meet the Fund's social investment
criteria, as may be amended from time to time by the
Trustees. The Subadviser will buy only those Securities
which the Adviser determines pass the Fund's social screens.
(h) Voting Proxies. The Subadviser agrees to
take appropriate action (which includes voting) on all
proxies for the Fund's portfolio investments in a timely
manner. Such action is subject to the direction of the
Trustees and Adviser and will be consistent with the social
screens and criteria governing investment selection for the
Fund.
(i) Furnishing Information for the Fund's
Proxies and Other Required Mailings. The Subadviser agrees
to provide the Adviser in a timely manner with all
information necessary, including the Subadviser's certified
balance sheet and information concerning the Subadviser's
controlling persons, for preparation of the Fund's proxy
statements or other required mailings, as may be needed from
time to time.
<PAGE>
2. Books and Records.
(a) In connection with the purchase and sale
of the Fund's portfolio securities, the Subadviser shall
arrange for the transmission to the Fund's custodian, and/or
the Adviser on a daily basis, of such confirmations, trade
tickets or other documentation as may be necessary to enable
the Adviser to perform its accounting and administrative
responsibilities with respect to the management of the
Fund.
(b) Pursuant to Rule 31a-3 under the 1940 Act,
Rule 204-2 under the Investment Advisers Act of 1940, and
any other laws, rules or regulations regarding
recordkeeping, the Subadviser agrees that: (i) all records
it maintains for the Fund are the property of the Fund; (ii)
it will surrender promptly to the Fund or Adviser any such
records upon the Fund's or Adviser's request; (iii) it will
maintain for the Fund the records that the Fund is required
to maintain under Rule 31a-1(b) or any other applicable rule
insofar as such records relate to the investment affairs of
the Fund for which the Subadviser has responsibility under
this Agreement; and (iv) it will preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records it
maintains for the Fund.
(c) The Subadviser represents that it has
adopted and will maintain at all times a suitable Code of
Ethics that covers its activities with respect to its
services to the Fund.
(d) The Subadviser shall supply to the Fund
Board its policies on "soft dollars," trade allocations and
brokerage allocation procedures. The Subadviser shall
maintain appropriate fidelity bond and errors and omission
insurance policies.
3. Exclusivity. Each party and its affiliates may
have advisory, management service or other agreements with other
organizations and persons, and may have other interests and
businesses; provided, however, that during the term of the Agreement,
the Subadviser will not provide investment advisory services
("Services") to any other investment company registered under the 1940
Act except to the extent that, as of September 1, 1997, the
Subadviser has entered into a written agreement(s) to provide such
Services.
4. Compensation. The Adviser will pay to the
Subadviser as compensation for the Subadviser's services rendered
pursuant to this Agreement an annual Subadvisory fee as specified in
one or more Schedules attached hereto and made part of this
Agreement. Such fees shall be paid by the Adviser (and not by the
Fund). Such fees shall be payable for each month within 15 business
days after the end of such month. If the Subadviser shall serve for
less than the whole of a month, the compensation as specified shall
be prorated based on the portion of the month for which services were
provided. The Schedules may be amended from time to time, provided
that amendments are made in conformity with applicable laws and
regulations and the Declaration of Trust and Bylaws of the Fund. Any
change in the Schedule pertaining to any new or existing series of
the Fund shall not be deemed to affect the interest of any other
series of the Fund and shall not require the approval of shareholders
of any other series of the Fund.
5. Assignment and Amendment of Agreement. This
Agreement automatically shall terminate without the payment of any
penalty in the event of its assignment or if the Investment Advisery
Agreement between the Adviser and the Fund shall terminate for any
reason. This Agreement constitutes the entire agreement between the
parties, and may not be amended except in a writing signed by both
parties. This Agreement shall not be materially amended unless, if
required by Securities and Exchange Commission rules and regulations,
such amendment is approved by the affirmative vote of a majority of
the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of The Calvert Fund who are not interested
persons of the Fund, the Adviser or the Subadviser.
6. Duration and Termination of the Agreement. This
Agreement shall become effective upon its execution; provided,
however, that this Agreement shall not become effective with respect
to any Fund now existing or hereafter created unless it has first
been approved (a) by a vote of the majority of those Trustees of The
Calvert Fund who are not parties to this Agreement or interested
persons of such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by a vote of a majority
of that Fund's outstanding voting securities. This Agreement shall
remain in full force and effect with respect to a Fund continuously
thereafter (unless terminated automatically as set forth in Section
5.) except as follows:
(a) The Calvert Fund may at any time terminate
this Agreement without penalty with respect to any or all
Funds by providing not less than 60 days written notice
delivered or mailed by registered mail, postage prepaid, to
the Adviser and the Subadviser. Such termination can be
authorized by the affirmative vote of a majority of the (i)
Trustees of The Calvert Fund or (ii) outstanding voting
securities of the applicable Fund.
(b) This Agreement will terminate
automatically with respect to a fund unless, by January 1,
1998, and at least annually thereafter, the continuance of
the Agreement is specifically approved by (i) the Trustees
of The Calvert Fund or the shareholders of such Fund by the
affirmative vote of a majority of the outstanding shares of
such Fund, and (ii) a majority of the Trustees of The
Calvert Fund who are not interested persons of the Fund,
Adviser or Subadviser, by vote cast in person at a meeting
called for the purpose of voting on such approval. If the
continuance of this Agreement is submitted to the
shareholders of any series for their approval and such
shareholders fail to approve such continuance as provided
herein, the Subadviser may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and
regulations thereunder.
(c) The Adviser may at any time terminate this
Agreement with respect to any or all Funds by not less than
60 days written notice delivered or mailed by registered
mail, postage prepaid, to the Subadviser, and the Subadviser
may at any time terminate this Agreement with respect to any
or all Funds by not less than 90 days written notice
delivered or mailed by registered mail, postage prepaid, to
the Adviser, unless otherwise mutually agreed in writing.
(d) The Adviser may terminate this Agreement
with respect to any or all Funds immediately by written
notice if the Confidentiality and Non-Use Agreement referred
to in Section of this Agreement is, in the sole opinion of
the Adviser, is violated.
Upon termination of this Agreement with respect to any Fund,
the duties of the Adviser delegated to the Subadviser under this
Agreement with respect to such Fund automatically shall revert to the
Adviser.
Notwithstanding any other provision, the Agreement, as it
relates to the Calvert Strategic Growth Fund will terminate
immediately upon the merger of the Calvert Strategic Growth Fund into
the Calvert New Vision Small Cap Fund.
7. Notification to the Adviser. The Subadviser
promptly shall notify the Adviser in writing of the occurrence of any
of the following events:
(a) the Subadviser shall fail to be registered as
an investment Adviser under the Investment Advisers Act of
1940, as amended, and under the laws of any jurisdiction in
which the Subadviser is required to be registered as an
investment Adviser in order to perform its obligations under
this Agreement;
(b) the Subadviser shall have been served or
otherwise have notice of any action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by
any court, public board or body, involving the affairs of
the Fund;
(c) the Subadviser violates its Code of Ethics as
relates to trading by the Fund. The Subadviser will notify
the Adviser (i) when it discovers a violation has occurred;
and (ii) when action has been taken to rectify the
violation; or
(d) any other event, including but not limited to,
a change in personnel or the addition or loss of major
clients of the Subadviser that might affect the ability of
the Subadviser to provide the Services provided for under
this Agreement.
8. Definitions. For the purposes of this Agreement,
the terms "vote of a majority of the outstanding Shares," "affiliated
person," "control," "interested person" and "assignment" shall have
their respective meanings as defined in the 1940 Act and the rules
and regulations thereunder subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission under said
Act; and the term "specifically approve at least annually" shall be
construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
9. Indemnification. The Subadviser shall indemnify
and hold harmless the Adviser, the Fund and their respective
trustees, directors, officers and shareholders from any and all
claims, losses, expenses, obligations and liabilities (including
reasonable attorneys fees) arising or resulting from the Subadviser's
willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties hereunder.
The Adviser shall indemnify and hold harmless the
Subadviser, the Fund and their respective Trustees, directors,
officers and shareholders from any and all claims, losses, expenses,
obligations and liabilities (including reasonable attorneys fees)
arising or resulting from the Adviser's willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties hereunder
or under its Investment Advisery Agreement with the Fund.
10. Applicable Law and Jurisdiction. This Agreement
shall be governed by Maryland law, and any dispute arising from this
Agreement or the services rendered hereunder shall be resolved
through legal proceedings, whether state, federal, or otherwise,
conducted in the state of Maryland or in such other manner or
jurisdiction as shall be mutually agreed upon by the parties hereto.
11. Confidentiality. This Agreement is not binding on
the Adviser unless the Subadviser has signed and is subject to a
confidentiality and non-use agreement ("Non-Use Agreement") not
materially different than the one attached hereto as Exhibit 1. For
a period of two (2) years from the date of termination of this
Agreement, the Subadviser shall not attempt to develop, market or
sell any product which uses or employs any Confidential Information,
as that term is defined in the Non-Use Agreement.
12. Miscellaneous. Notices of any kind to be given to
a party hereunder shall be in writing and shall be duly given if
mailed, delivered or communicated by answer back facsimile
transmission to such party at the address set forth below, attention
President, or at such other address or to such other person as a
party may from time to time specify.
Subadviser agrees that for a period of two (2) years from
the date of termination of this Agreement, it shall not directly or
indirectly, hire, employ or engage, or attempt to hire, employ or
engage any employee of the Adviser without the prior written
permission of the Adviser.
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes
hereof. The captions in this Agreement are included for convenience
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of the day and year first written
above.
Witness:
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
BY:_______________________ BY:______________________________
Attest: AWAD Associates, a division of Raymond
James and Associates, Inc.
By:________________________ By:_______________________________
<PAGE>
Fee Schedule to the Investment Subadvisory Agreement
between Calvert Asset Management Company, Inc.
and AWAD Associates
As compensation pursuant to Section 4 of the Investment
Subadvisory Agreement between Calvert Asset Management Company, Inc.
(the "Adviser") and AWAD Associates (the "Subadviser"), the Adviser
shall pay the Subadviser an annual subadvisory fee computed daily and
payable monthly, at an annual rate equal to:
(1) 0.40% of the average daily net assets of Calvert
Strategic Growth Fund, and
(2) 0.40% of the average daily net assets of Calvert New
Vision Small Cap Fund.
Exhibit 12
September 10, 1997
Calvert Strategic Growth Fund
Calvert New Vision Small Cap Fund
4550 Montgomery Avenue
Bethesda, Maryland 20814
Re: Acquisition of Assets of Calvert Strategic Growth Fund
Ladies and Gentlemen:
You have asked for our opinion as to certain tax consequences of the
proposed acquisition of assets of Calvert Strategic Growth Fund
("Selling Fund"), a series of The Calvert Fund, a Massachusetts
business trust (the "Trust"), by Calvert New Vision Small Cap Fund
("Acquiring Fund"), also a series of the Trust, in exchange for
voting shares of the Acquiring Fund (the "Reorganization").
In rendering our opinion, we have reviewed and relied upon the draft
Prospectus/Proxy Statement dated September 10, 1997 and the Agreement
and Plan of Reorganization (the "Agreement") dated as of September 9,
1997. We have relied, without independent verification, upon the
factual statements made therein, and assume that there will be no
change in material facts disclosed therein between the date of this
letter and the date of closing of the Reorganization. We further
assume that the Reorganization will be carried out in accordance with
the Agreement. We have also relied upon the following
representations, each of which has been made to us by officers of the
Trust on behalf of Acquiring Fund or of Selling Fund:
The Reorganization will be consummated substantially as described in
the Agreement.
Acquiring Fund will acquire from Selling Fund at least 90% of the
fair market value of the net assets and at least 70% of the fair
market value of the gross assets held by Selling Fund immediately
prior to the Reorganization. For purposes of this representation,
assets of Selling Fund used to pay reorganization expenses, cash
retained to pay liabilities, and redemptions and distributions
(except for regular and normal distributions) made by Selling Fund
immediately preceding the transfer which are part of the plan of
reorganization, will be considered as assets held by Selling Fund
immediately prior to the transfer.
To the best of the knowledge of management of Selling Fund, there is
no plan or intention on the part of the shareholders of Selling Fund
to sell, exchange, or otherwise dispose of a number of Acquiring Fund
shares received in the Reorganization that would reduce the former
Selling Fund shareholders' ownership of Acquiring Fund shares to a
number of shares having a value, as of the date of the Reorganization
(the "Closing Date"), of less than 50 percent of the value of all of
the formerly outstanding shares of Selling Fund as of the same date.
For purposes of this representation, Selling Fund shares exchanged
for cash or other property will be treated as outstanding Selling
Fund shares on the Closing Date. There are no dissenters' rights in
the Reorganization, and no cash will be exchanged for Selling Fund
shares in lieu of fractional shares of Acquiring Fund. Moreover,
shares of Selling Fund and shares of Acquiring Fund held by Selling
Fund shareholders and otherwise sold, redeemed, or disposed of prior
or subsequent to the Reorganization will be considered in making this
representation, except for shares of Selling Fund or Acquiring Fund
redeemed in the ordinary course of business of Selling Fund or
Acquiring Fund in accordance with the requirements of section 22(e)
of the Investment Company Act of 1940.
Selling Fund has not redeemed and will not redeem the shares of any
of its shareholders in connection with the Reorganization except to
the extent necessary to comply with its legal obligation to redeem
its shares.
The management of Acquiring Fund has no plan or intention to redeem
or reacquire any of the Acquiring Fund shares to be received by
Selling Fund shareholders in connection with the Reorganization,
except to the extent necessary to comply with its legal obligation to
redeem its shares.
The management of Acquiring Fund has no plan or intention to sell or
dispose of any of the assets of Selling Fund which will be acquired
by Acquiring Fund in the Reorganization, except for dispositions made
in the ordinary course of business, and to the extent necessary to
enable Acquiring Fund to comply with its legal obligation to redeem
its shares.
Following the Reorganization, Acquiring Fund will continue the
historic business of Selling Fund in a substantially unchanged manner
as part of the regulated investment company business of Acquiring
Fund, or will use a significant portion of Selling Fund's historic
business assets in a business.
There is no intercorporate indebtedness between Acquiring Fund and
Selling Fund.
Acquiring Fund does not own, directly or indirectly, and has not
owned in the last five years, directly or indirectly, any shares of
Selling Fund. Acquiring Fund will not acquire any shares of Selling
Fund prior to the Closing Date.
Acquiring Fund will not make any payment of cash or of property other
than shares to Selling Fund or to any shareholder of Selling Fund in
connection with the Reorganization.
Pursuant to the Agreement, the shareholders of Selling Fund will
receive solely Acquiring Fund voting shares in exchange for their
voting shares of Selling Fund.
The fair market value of the Acquiring Fund shares to be received by
the Selling Fund shareholders will be approximately equal to the
fair market value of the Selling Fund shares surrendered in exchange
therefor.
Subsequent to the transfer of Selling Fund's assets to Acquiring Fund
pursuant to the Agreement, Selling Fund will distribute the shares of
Acquiring Fund, together with other assets it may have, in final
liquidation as expeditiously as possible.
Selling Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
Selling Fund is treated as a corporation for federal income tax
purposes and at all times in its existence has qualified as a
regulated investment company, as defined in Section 851 of the Code.
Acquiring Fund is treated as a corporation for federal income tax
purposes and at all times in its existence has qualified as a
regulated investment company, as defined in Section 851 of the Code.
The sum of the liabilities of Selling Fund to be assumed by Acquiring
Fund and the expenses of the Reorganization does not exceed twenty
percent of the fair market value of the assets of Selling Fund or the
tax basis of the assets of Selling Fund.
The foregoing representations are true on the date of this letter and
will be true on the date of closing of the Reorganization.
Based on and subject to the foregoing, and our examination of the
legal authority we have deemed to be relevant, it is our opinion that
for federal income tax purposes:
The acquisition by Acquiring Fund of substantially all of the assets
of Selling Fund solely in exchange for voting shares of Acquiring
Fund followed by the distribution by Selling Fund of said Acquiring
Fund shares to the shareholders of Selling Fund in exchange for their
Selling Fund shares will constitute a reorganization within the
meaning of Section 368(a)(1)(D) of the Code, and Acquiring Fund and
Selling Fund will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code.
No gain or loss will be recognized by Selling Fund upon the transfer
of substantially all of its assets to Acquiring Fund solely in
exchange for Acquiring Fund voting shares and assumption by Acquiring
Fund of certain identified liabilities of Selling Fund, or upon the
distribution of such Acquiring Fund voting shares to the shareholders
of Selling Fund in exchange for all of their Selling Fund shares.
No gain or loss will be recognized by Acquiring Fund upon the receipt
of the assets of Selling Fund (including any cash retained initially
by Selling Fund to pay liabilities but later transferred) solely in
exchange for Acquiring Fund voting shares and assumption by Acquiring
Fund of certain identified liabilities of Selling Fund.
The basis of the assets of Selling Fund acquired by Acquiring Fund
will be the same as the basis of those assets in the hands of Selling
Fund immediately prior to the transfer, and the holding period of the
assets of Selling Fund in the hands of Acquiring Fund will include
the period during which those assets were held by Selling Fund.
The shareholders of Selling Fund will recognize no gain or loss upon
the exchange of all of their Selling Fund shares solely for Acquiring
Fund voting shares. Gain, if any, will be realized by Selling Fund
shareholders who in exchange for their Selling Fund shares receive
other property or money in addition to Acquiring Fund shares, and
will be recognized, but not in excess of the amount of cash and the
value of such other property received. If the exchange has the effect
of the distribution of a dividend, then the amount of gain recognized
that is not in excess of the ratable share of undistributed earnings
and profits of Selling Fund will be treated as a dividend.
The basis of the Acquiring Fund voting shares to be received by the
Selling Fund shareholders will be the same as the basis of the
Selling Fund shares surrendered in exchange therefor.
The holding period of the Acquiring Fund voting shares to be received
by the Selling Fund shareholders will include the period during which
the Selling Fund shares surrendered in exchange therefor were held,
provided the Selling Fund shares were held as a capital asset on the
date of the exchange.
This opinion letter is delivered to you in satisfaction of the
requirements of sections 8.D. and 9.D. of the Agreement. We hereby
consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-14 and to use of our name and any
reference to our firm in the Registration Statement or in the
Prospectus/Proxy Statement constituting a part thereof. In giving
such consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
SULLIVAN & WORCESTER, LLP
<PAGE>
Exhibit 14
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
The Calvert Fund
We consent to the following with respect to the Registration
Statement of The Calvert Fund (the "Trust") on Form N-14 under the
Securities Act of 1933, relative to the transfer of all the assets and
liabilities of Calvert Strategic Growth Fund to Calvert New Vision
Small Cap Fund in exchange for shares of Calvert New Vision Small Cap Fund:
1. The incorporation by reference of our report dated May 9, 1997, on
our audit of the financial statements and financial highlights of
Calvert Strategic Growth Fund, which report is included in the
Annual Report to Shareholders for the year ended March 31, 1997, in the
statement of additional information of Calvert Strategic Growth Fund dated
July 31, 1997.
2. The incorporation by reference of our report dated May 9, 1997,
on our audit of the financial statements and financial
highlights of Calvert New Vision Small Cap Fund, which
report is included in the Annual Report to Shareholders for the
period ended March 31, 1997, in the Statement of Additional
Information of Calvert New Vision Small Cap Fund, dated July
31, 1997.
3. The reference to our Firm under the headings "Independent
Accountants" in the Statements of Additional Information of Calvert
Strategic Growth Fund and Calvert New Vision Small Cap Fund, both
dated July 31, 1997.
COOPERS & LYBRAND, L.L.P.
Baltimore, Maryland
September 10, 1997
Exhibit 16
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.
May 7, 1997 Richard L. Baird, Jr.
Date Signature
Arthur J. Pugh
Witness Richard L. Baird, Jr.
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.
May 7, 1997 Frank H. Blatz, Jr.
Date Signature
Charles E. Diehl Frank H. Blatz, Jr.
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.
May 7, 1997 Charles E. Diehl
Date Signature
Frank H. Blatz, Jr. Charles E. Diehl
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.
May 7, 1997 John G. Guffey, Jr.
Date Signature
M. Charito Kruvant John G. Guffey, Jr.
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.
May 7, 1997 Barbara Krumsiek
Date Signature
Edith Lillie 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, 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.
May 7, 1997 Arthur J. Pugh
Date Signature
Charles E. Diehl Arthur J. Pugh
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 Frederick T. Borts
Date Signature
John G. Guffey, Jr. Frederick T. Borts
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 Douglas E. Feldman
Date Signature
Richard L. Baird, Jr. Douglas E. Feldman
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 Peter W. Gavian
Date Signature
Reno Martini Peter W. Gavian
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 David R. Rochat
Date Signature
David R. Rochat
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 D. Wayne Silby
Date Signature
Frederick T. Borts D. Wayne Silby
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 Ronald M. Wolfsheimer
Date Signature
Katherine Stoner Ronald M. Wolfsheimer
Witness Name of Officer
Exhibit 17(a)
EX-99.17
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
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.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 24F-2
Annual Notice of Securities Sold
Pursuant to Rule 24f-2
Read instructions at end of Form before preparing Form.
Please print or type.
1. Name and address of issuer:
The Calvert Fund
Strategic Growth
New Vision Small Cap
4550 Montgomery Ave., Ste. 1000N
Bethesda, MD 20814
2. Name of each series or class of funds for which the notice is filed:
Strategic Growth
New Vision Small Cap
3. Investment Company Act File Number: 811-3416
Securities Act File Number: 2-76510
4. Last day of fiscal year for which this notice is filed:
March 31, 1997
5. Check box if this notice is being filed more than 180 days after the
close of the issure's fiscal year for purposes of reporting securities sold
after the close of the fiscal year but before termination of the issuer's
24f-2 declaration: N/A
[ ]
6. Date of termination of issuer's declaration under rule 24f-2(a)(1), if
applicable (see Instruction A.6): N/A
7. Number and amount of securities of the same class or series which had
been registered under the Securities Act of 1933 other than pursuant to rule
24f-2 in a prior fiscal year, but which remained unsold at the beginning of the
fiscal year: None
8. Number and amount of securities registered during the fiscal year
other than pursuant to rule 24f-2: None
9. Number and aggregate sale price of securities sold during the
fiscal year: $66,080,004
10. Number and aggregate sale price of securities sold during the
fiscal year in reliance upon registration pursuant to rule 24f-2: $66,080,004
11. Number and aggregate sale price of securities issued during the fiscal
year in connection with dividend reinvestment plans, if applicale (see
instruction B.7): $7,685,210
12. Calculation of registration fee:
(i) Aggregate sale price of securities sold during
the fiscal year in reliance on rule 24f-2
(from Item 10): $ 66,080,004
(ii) Aggregate price of shares issued in connection
with dividend reinvestment plans
(from Item 11, if applicable): + 7,685,210
(iii) Aggregate price of shares redeemed or
repurchased during the fiscal year
(if applicable): - 71,394,003
(iv) Aggregate price of shares redeemed or
repurchased and previously applied as a
reduction to filing fees pursuant to rule 24e-2
(if applicable): + 0
(v) Net aggregate price of securities sold
and issued during the fiscal year in reliance
on rule 24f-2 [line (I), plus line (ii),
less line (iii), plus line (iv)]
(if applicable): 2,371,211
(vi) Multiplier prescribed by Section 6(b) of the
Securities Act of 1933 or other applicable law
or regulation (see Instruction C.6): x .0003030
(vii) Fee due [line (I) or line (v) multiplied by
line (vi)]: $ 718.48
Instruction: Issuers should complete lines (ii), (iii), (iv), and (v)
only if the form is being filed within 60 days after the close of the
issuer's fiscal year. See Instruction C.3.
13. Check box if fees are being remitted to the Commission's lockbox
depository as described in section 3a of the Commission's Rules of Informal
and Other Procedures (17CFR 202.3a).
[X]
Date of mailing or wire transfer of filing fees to the Commission's
lockbox depository:
May 29, 1997
SIGNATURES
This report has been signed below by the following persons on behalf
of the issuer and in the capacities and on the dates indicated.
By (Signature and Title)* William M. Tartikoff
General Counsel
Date: May 29, 1997
*Please print the name and title of the signing officer below the
signature.
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 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,
1996 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
Barbara Krumsiek $0 $0 $0
<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.
Exhibit 11
September 10, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 11, Form N-14
The Calvert Fund
2-76510 and 811-3416
Re: Exhibit 11, Form N-14
The Calvert Fund
Ladies and Gentlemen:
As 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 Registration Statement
on Form N-14 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 this Registration
Statement.
Sincerely,
Ivy Wafford Duke Susan Walker Bender
Assistant Counsel Associate General Counsel
