Page 1 of _____
SEC Registration Nos.
2-76510 and 811-3416
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
__ Pre-Effective Amendment _X_ Post-Effective Amendment
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)
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 December 9, 1997
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of
The Calvert Fund Strategic Growth Fund 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 Tuesday, December 9, 1997 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 October 14, 1997 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
October 22, 1997
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 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. The
same expense structure and fees are in effect for both funds except
for the investment advisory fee which would decrease from 1.50% of
the average daily net assets of the Strategic Growth Fund to 0.90% of
the average daily net assets of the Small Cap Fund, and the
administrative services fee which would decrease from 0.20% of the
average daily net assets of the Strategic Growth fund to 0.10% of
the average daily net assets of the Small Cap Fund.
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 $111.6 million 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 our outside solicitors, D.F. King & Company, 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 Friday, December 12, 1997. 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 STRATEGIC GROWTH 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 Strategic Growth
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 David 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 - October 22, 1997
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
$3,712,504 as of October 14, 1997. 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 $107,896,533 as of October 14, 1997. 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 Subadvisor 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 October 22, 1997
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, revised October 22, 1997 and is incorporated herein by reference. A
Statement of Additional Information dated July 31, 1997, revised October 22,
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 a product that is positioned as a pure "Small Cap" product with
growth orientation and thus to provide the samll cap exposure required by
the standard asset allocation models created by these investment
professionals to identify and select those assets appropriate for a
specific investment portfolio, and also to determine the proportions
of these assets within the portfolio. The Small Cap Fund better 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
would produce a less volatile performance in that it will not utilize
some of the techniques used by the Strategic Growth Fund such as market
timing and hedging.
(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 and
adminstrative services 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."
In reconciling the investment policies of both Funds, the
Advisor and Subadvisor will begin to transition the portfolio holdings from the
Strategic Growth Fund to the Small Cap Fund. Portfolio holdings may also change
to accommodate the style of the new Subadvisor. Prior to October 1, 1997, AWAD
and the Advisor reviewed the holdings of the Strategic Growth Fund to identify
specific issues relating to the tax status of the Strategic Growth Fund through
the expected transition, specific holdings which posed significant or
identifiable extra risk, and liquidity issues. The Advisor then monitored the
daily transactions to ensure that the Strategic Growth Fund was appropriately
managed with respect to its investment philosophy and tax-status. On October 1,
1997, when AWAD took over the day-to-day management of the Strategic Growth
Fund, AWAD began overseeing this transition to ensure it unfolds smoothly,
focusing on reconfiguring the portfolio in a timely manner; closely monitoring
carried-over holdings; protecting the Strategic Growth Fund's tax status; and
minimizing any adverse tax events for shareholders. This transition process is
currently reviewed daily for the impact on sales and the rate at which portfolio
cash is used to make the Strategic Growth Fund more fully invested. The
transition is expected to be completed by the end of the year, upon completion
of the sale of those portfolio holdings that were in the Strategic Growth Fund
prior to September 30, 1997.
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 Subadvisor. 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 AWAD as subadvisor
for the Fund.
AWAD 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 $947 million in assets under management as
of September 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., a full-service
brokerage and New York Stock Exchange member, whose main offices are located at
The Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg,
Florida 33716. AWAD is a subsidiary of Raymond James Financial, Inc., a
diversified financial services holding company whose subsidiaries engage
primarily in 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 four other
mutual funds with similar investment objectives to the Fund, as
follows:
Mutual Fund Assets Under Management Management Fees
Calvert New Vision Small Cap Fund $3.6 milliion 0.40% of net assets
Acacia Capital Corp., Calvert
Responsibly Invested Strategic
Growth Portfolio* $4.1 million 0.40% of net assets
Heritage Small Cap Stock Fund $121.6 million 0.50% of net assets
The Timothy Plan $18 million 0.45% of net assets
* AWAD assumed management effective October 1, 1997 and shareholder approval of
the investment management contract is being solicited via proxy.
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 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 Burnham 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 client'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 Chief Executive Officer, Zephyr
Management, Inc. and past President, Rockefellar & Co.
Investment Subadvisory Agreement. The Investment Subadvisory
Agreement between the Advisor and AWAD contains substantially the
same terms as governed the Advisor's 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.
Administrative Services Agreement. 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. The Administrative
Services Agreement contains substantially the same terms as governed the
previous agreement, except that CASC is paid 0.20% of average daily net assets
of the Strategic Growth Fund whereas CASC is paid 0.10% of the average daily net
assets of the Small Cap Fund.
<PAGE>
FUND EXPENSES: CURRENT AND
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
(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
(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 Subadvisor 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:
Total Returns
For Periods Ended March 31, 1997
Small Cap Fund
Class A Shares Class A Shares Class C Shares
without with
Maximum Maximum
Sales Load Sales 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 with Maximum
Sales Load Sales 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.
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.
<PAGE>
Sales Charge Table - Class A Shares
Small Cap and Strategic Growth 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
will invest at least 65% of its total assets 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 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.
Strategic Growth Fund is a nondiversified fund whereas Small Cap Fund is
diversified.
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.
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.
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 October 14, 1997 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 $93,674,705 $3,337,287 $97,011,992
Net Asset Value Per Share,
Class C $14,221,828 $ 335,217 $14,557,045
Shares Outstanding, Class A $ 5,371,371 $ 214,414 $ 5,585,785
Shares Outstanding, Class C $ 834,207 $ 20,731 $ 854,938
*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
$5,371,371 and $834,207 for Class C. For each Class A share of Strategic Growth
Fund shares owned, shareholders of Strategic Growth Fund would receive pro forma
approximately one Class A shares of Small Cap Fund. Similarly, for each Class C
share of Strategic Growth Fund shares owned, shareholders of Strategic Growth
Fund would receive pro forma approximately one 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, revised October 22, 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, dated
July 31, 1997, for the Strategic Growth Fund and October 22, 1997 for the Small
Cap Fund, 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
Tuesday, December 9, 1997, 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
October 14, 1997 ("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 October 14, 1997 as shown on the books of
Strategic Growth Fund, there were issued and outstanding 6,205,578 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 October 14, the officers and Trustees of Strategic Growth Fund as a
group beneficially owned less than 1% of the outstanding shares of
Strategic Growth Fund.
As of October 14, 1997, no shareholders owned of record 5% or more of the
Strategic Growth Fund.
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 Tuesday, December 9, 1997 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
October 22, 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 October 22, 1997, 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.
<PAGE>
The Calvert Fund:
Calvert Strategic Growth Fund
Statement of Additional Information
July 31, 1997
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
217 E. Redwood Street
Baltimore, Maryland 21202-3316
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 6
Dividends, Distributions and Taxes 7
Net Asset Value 8
Calculation of Total Return 9
Purchase and Redemption of Shares 10
Reduced Sales Charges (Class A) 11
Advertising 11
Trustees and Officers 11
Investment Advisor and Subadvisor 15
Method of Distribution 16
Transfer and Shareholder Servicing Agent 17
Fund Transactions 17
Independent Accountant and Custodians 17
General Information 17
Financial Statements 18
Appendix 18
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-July 31, 1997
THE CALVERT FUND
CALVERT STRATEGIC GROWTH FUND
4550 Montgomery Avenue,
Bethesda, Maryland 20814
New Account (800) 368-2748
Information: (301) 951-4820
Shareholder Services: (800) 368-2745
Broker (800) 368-2746
Services: (301) 951-4850
TDD for the Hearing-Impaired: (800) 541-1524
This Statement of Additional Information is not a prospectus.
Investors should read the Statement of Additional Information in
conjunction with the Fund's Prospectus dated July 31, 1997, which may be
obtained free of charge by writing the Fund at the above address or
calling the Fund.
INVESTMENT OBJECTIVE
Calvert Strategic Growth Fund (the "Fund") is a nondiversified
series of The Calvert Fund, an open-end management investment company.
The Fund seeks maximum long-term growth primarily through investment in
equity securities, consistent with the Fund's Investment Principles as
developed by the Fund's investment subadvisor. Under normal market
conditions, the Fund strives to be fully invested. In a declining
market, the Fund may raise cash, establish short positions, or employ
other defensive strategies in an attempt to protect against the decline
of its investments. To the extent possible, investments are made in
enterprises that make a significant contribution to our society through
their products and services and through the way they do business.
SPECIAL RISKS OF THE FUND'S INVESTMENT STRATEGIES
The Fund may purchase put and call options, and write (sell)
covered put and call options, on equity and debt securities, foreign
currencies and stock or debt indices. The Fund may purchase or write
both exchange-traded and OTC options. These strategies may also be used
with respect to futures.
An option is a legal contract that gives the holder the right
to buy or sell a specified amount of the underlying interest at a fixed
or determinable price (called the exercise or strike price) upon
exercise of the option. A futures contract is an agreement to take
delivery or to make delivery of a standardized quantity and quality of a
certain commodity during a particular month in the future at a specified
price. Successful use of the Fund's investment strategies with respect
to futures, options and short sales depends on the ability to predict
movements of the overall securities, currency and interest rate markets,
which is a different skill than that required to select equity and debt
investments. There can be no assurance that a chosen strategy will
succeed.
There may not be an expected correlation between price
movements of a hedging instrument and price movements of the investment
being hedged, so that the Fund may lose money notwithstanding employment
of the hedging strategy.
While the Fund's investment strategies can reduce risk of loss
by offsetting the negative effect of unfavorable price movements, they
can also reduce the opportunity for gain by offsetting the positive
effect of a favorable price movement. If the variance is great enough, a
decline in the price of an instrument may result in a loss to the Fund.
The Fund may be required to cover its assets in a segregated
account. If an investment cannot be liquidated at the time the
Subadvisor believes it is best for the Fund, the Fund might be required
to keep assets on reserve that it otherwise would not have had to
maintain. Similarly, it might have to sell a security at an inopportune
time in order to maintain the reserves.
FUTURES AND OPTIONS
The Fund is authorized to invest in certain types of futures,
options, warrants and stock rights for the purpose of hedging, that is,
protecting against the risk of market movements that may adversely
affect the value of the Fund's securities or the price of securities
that the Fund is considering purchasing. Although a hedging transaction
may partially protect the Fund from a decline in the value of a
particular security or its portfolio generally, the cost of the
transaction will reduce the potential return on the security or the
portfolio. The Fund may only write call options on securities that it
owns (i.e., that are "covered"). No more than 50% of the Fund's total
assets shall be subject to outstanding options contracts. Management
presently intends to cease writing options in the event that 25% of
total assets are subject to outstanding options contracts. As an
operating policy, the Fund may purchase a call or put option on
securities (including a straddle or spread) only if the value of that
option premium, when aggregated with the premiums of all other options
on securities held by the Fund, does not exceed 5% of the Fund's assets.
Following is a summary of the futures, options, warrants and stock
rights in which the Fund may invest:
In exchange for a premium, a call option on a security,
security index or a foreign currency, gives the holder (buyer) of the
option the right (but not the obligation) to purchase the underlying
security, security index or foreign currency at a specified price (the
exercise price) at any time until a certain date (the expiration date).
The writer (seller) of a call option has the corresponding obligation to
deliver the underlying security or foreign currency in the event the
option is exercised by the holder of the option. A call option on a
securities index is similar to a call option on an individual security
or foreign currency, except that the value of the option depends on the
weighted value of the group of securities comprising the index and all
settlements are to be made in cash. A call option may be terminated by
the writer (seller) by entering into a closing purchase transaction in
which the writer purchases an option of the same series as the option
previously written.
The Fund may purchase put options on a security, security index
or foreign currency. A put option gives the holder (buyer) of the option
the right (but not the obligation) to sell a security at the exercise
price at any time until the expiration date. Upon exercise by the
purchaser, the writer of a put option has the obligation to purchase the
underlying security or foreign currency at the exercise price. A put
option on a securities index is similar to a put option on an individual
security or foreign currency, except that the value of the option
depends on the weighted value of the group of securities comprising the
index and all settlements are made in cash. Purchasing a call or put
option involves the risk that the Fund may lose the premium it paid plus
transactions costs.
With respect to securities and foreign currencies, the Fund may
write (sell) call and put options on an exchange or over-the-counter.
Call options on portfolio securities will be covered since the Fund will
own the underlying securities. Options on foreign currencies will be
covered by securities denominated in that currency. Call options on
securities indices will be written only to hedge in an economically
appropriate way portfolio securities which are not otherwise hedged with
options or financial futures contracts and will be covered by
maintaining sufficient collateral to cover the option.
The Fund may write (sell) call and put options in order to
obtain a return on its investments from the premiums received and will
retain the premiums whether or not the options are exercised. Any
decline in the market value of portfolio securities or foreign
currencies will be offset to the extent of the premiums received (net of
transaction costs). If an option is exercised, the premium received on
the option will effectively increase the exercise price or reduce the
difference between the exercise price and market value. During the
option period, the writer of a call option gives up the opportunity for
appreciation in the market value of the underlying security or currency
above the exercise price. The writer retains the risk of loss should the
price of the underlying security or foreign currency decline.
The Fund may also write a call or put option which it has
previously purchased prior to the purchase (in the case of a call) or
the sale (in the case of a put) of the underlying security or foreign
currency. Any such sale would result in a net gain or loss depending on
whether the amount received on the sale is more or less than the premium
and other transaction costs paid on the call or put which is sold.
The Fund may invest in financial futures contracts including
interest rate futures contracts, foreign currency futures contracts, and
securities index futures contracts which are traded on a recognized
exchange or board of trade and may purchase exchange or board-traded put
and call options on financial futures contracts. An interest rate
futures contract obligates the seller of the contract to deliver, and
the purchaser to take delivery of, the interest rate securities called
for in the contract at a specified future time and at a specified price.
A foreign currency futures contract obligates the seller of the contract
to deliver, and the purchaser to take delivery of, the foreign currency
called for in the contract at a specified future time and at a specified
price. (See "Foreign Currency Transactions.") A securities index assigns
relative values to the securities included in the index, and the index
fluctuates with changes in the market values of the securities so
included. A securities index futures contract is a bilateral agreement
pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference
between the index value at the close of the last trading day of the
contract and the price at which the futures contract is originally
struck. An option on a financial futures contract gives the purchaser
the right to assume a position in the contract (a long position if the
option is a call and a short position if the option is a put) at a
specified exercise price at any time during the period of the option.
The Fund may close out its position in a futures contract or an
option on a futures contract only by entering into an offsetting
transaction on the exchange on which the position was established and
only if there is a liquid secondary market for the futures contract. If
it is not possible to close a futures position entered into by the Fund,
it could be required to make continuing daily cash payments of variation
margin in the event of adverse price movements. In such situations, if
the Fund has insufficient cash, it may have to sell portfolio securities
to meet daily variation margin requirements at a time when it would be
disadvantageous to do so. The inability to close futures or options
positions could have an adverse effect on the Fund. There is also risk
of loss by the Fund of margin deposits in the event of bankruptcy of a
broker with whom the Fund has an open position in a futures contract.
The correlation is imperfect between movements in the prices of futures
or option contracts, and the movements of prices of the securities which
are subject to the hedge. If the Fund used a futures or options contract
to hedge against a decline in the market, and the market later advances
(or vice-versa), the Fund may suffer a greater loss than if it had not
hedged.
Engaging in transactions in financial futures contracts
involves certain risks, such as the possibility of an imperfect
correlation between futures market prices and cash market prices and the
possibility that the Advisor or Subadvisor could be incorrect in its
expectations as to the direction or extent of various interest rate
movements or foreign currency exchange rates, in which case the Fund's
return might have been greater had hedging not taken place. There is
also the risk that a liquid secondary market may not exist. The risk in
purchasing an option on a financial futures contract is that the fund
will lose the premium it paid. Also, there may be circumstances when the
purchase of an option on a financial futures contract would result in a
loss to the Fund while the purchase or sale of the contract would not
have resulted in a loss.
The Fund will not purchase or sell any financial futures
contract or related option if, immediately thereafter, the sum of the
cash or U.S. Treasury bills committed with respect to its existing
futures and related options positions and the premiums paid for related
options would exceed 5% of the market value of its total assets. At the
time of purchase of a futures contract or a call option on a futures
contract, an amount of cash, U.S. Government securities or other
appropriate high-grade debt obligations equal to the market value of the
futures contract minus the Fund's initial margin deposit with respect
thereto, will be deposited in a segregated account with the Fund's
custodian bank to collateralize fully the position and thereby ensure
that it is not leveraged. The extent to which the Fund may enter into
financial futures contracts and related options may also be limited by
the requirements of the Internal Revenue Code of 1986 for qualification
as a regulated investment company.
Warrants and stock rights are almost identical to call options
in their nature, use and effect except that they are issued by the
issuer of the underlying security rather than an option writer, and they
generally have longer expiration dates than call options. The fund may
invest up to 5% of its net assets in warrants and stock rights, but no
more than 2% of its net assets may be invested in warrants and stock
rights not listed on the New York Stock Exchange or the American Stock
Exchange.
NONINVESTMENT GRADE (HIGH YIELD/HIGH RISK - OR JUNK BOND) DEBT SECURITIES
The Fund may invest up to 35% of its assets in lower quality
debt securities (generally those rated BB or lower by S&P or Ba or lower
by Moody s), or in unrated securities determined by the Advisor to be
comparable. These securities have moderate to poor protection of
principal and interest payments and have speculative characteristics.
These securities involve greater risk of default or price declines due
to changes in the issuer's creditworthiness than investment grade debt
securities. Because the market for lower-rated securities may be thinner
and less active than for higher-rated securities, there may be market
price volatility for these securities and limited liquidity in the
resale market. Market prices for these securities may decline
significantly in periods of general economic difficulty or rising
interest rates. Unrated debt securities may fall into the lower quality
category. Unrated securities usually are not attractive to as many
buyers as are rated securities, which may make them less marketable.
The Fund will not purchase any securities rated lower than C.
The quality limitation set forth in the investment policy is determined
immediately after the Fund's acquisition of a security. Accordingly, any
later change in ratings will not be considered when determining whether
an investment complies with the Fund's investment policy.
When purchasing high-yielding securities, rated or unrated, the
Subadvisor prepares its own careful credit analysis to attempt to
identify those issuers whose financial condition is adequate to meet
future obligations or is expected to be adequate in the future. Through
portfolio diversification and credit analysis, investment risk can be
reduced, although there can be no assurance that losses will not occur.
FOREIGN SECURITIES
The Fund does not presently invest in foreign securities, nor
does the Subadvisor intend to become involved in foreign markets in the
near future. However, the Fund may make such investments in the future.
In the event the Fund undertakes investment in foreign securities in the
future, additional costs may be incurred, since foreign brokerage
commissions and the custodial costs associated with maintaining foreign
portfolio securities are generally higher than in the United States. Fee
expense may also be incurred on currency exchanges when the Fund changes
investments from one country to another or converts foreign securities
holdings into U.S. dollars. Foreign companies and foreign investment
practices are not subject to uniform accounting, auditing and financial
reporting standards and practices or regulatory requirements comparable
to those applicable to United States companies. There may be less public
information available about foreign companies.
United States Government policies have at times, in the past,
through imposition of interest equalization taxes and other
restrictions, discouraged United States investors from making certain
investments abroad. While such taxes or restrictions are not presently
in effect, they may be reinstituted from time to time as a means of
fostering a favorable United States balance of payments. In addition,
foreign countries may impose withholding and taxes on dividends and
interest.
FOREIGN CURRENCY TRANSACTIONS
Forward Foreign Currency Exchange Contracts. A forward foreign
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of
days ("Term") from the date of the contract agreed upon by the parties,
at a price set at the time of the contract. These contracts are traded
directly between currency traders (usually large commercial banks) and
their customers.
The Fund will not enter into such forward contracts or maintain
a net exposure in such contracts where it would be obligated to deliver
an amount of foreign currency in excess of the value of its portfolio
securities and other assets denominated in that currency. The Subadvisor
believes that it is important to have the flexibility to enter into such
forward contracts when it determines that to do so is in the Fund's best
interests.
Foreign Currency Options. A foreign currency option provides
the option buyer with the right to buy or sell a stated amount of
foreign currency at the exercise price at a specified date or during the
option period. A call option gives its owner the right, but not the
obligation, to buy the currency, while a put option gives its owner the
right, but not the obligation, to sell the currency. The option seller
(writer) is obligated to fulfill the terms of the option sold if it is
exercised. However, either seller or buyer may close its position during
the option period for such options any time prior to expiration.
A call rises in value if the underlying currency appreciates.
Conversely, a put rises in value if the underlying currency depreciates.
While purchasing a foreign currency option can protect the Fund against
an adverse movement in the value of a foreign currency, it does not
limit the gain which might result from a favorable movement in the value
of such currency. For example, if the Fund was holding securities
denominated in an appreciating foreign currency and had purchased a
foreign currency put to hedge against a decline in the value of the
currency, it would not have to exercise its put. Similarly, if the Fund
had entered into a contract to purchase a security denominated in a
foreign currency and had purchased a foreign currency call to hedge
against a rise in the value of the currency but instead the currency had
depreciated in value between the date of purchase and the settlement
date, it would not have to exercise its call but could acquire in the
spot market the amount of foreign currency needed for settlement.
Foreign Currency Futures Transactions. The Fund may use foreign
currency futures contracts and options on such futures contracts.
Through the purchase or sale of such contracts, it may be able to
achieve many of the same objectives attainable through the use of
foreign currency forward contracts, but more effectively and possibly at
a lower cost.
Unlike forward foreign currency exchange contracts, foreign
currency futures contracts and options on foreign currency futures
contracts are standardized as to amount and delivery period and are
traded on boards of trade and commodities exchanges. It is anticipated
that such contracts may provide greater liquidity and lower cost than
forward foreign currency exchange contracts.
INVESTMENTS IN PRECIOUS METALS
The price of gold and other precious metal mining securities
can face substantial short-term volatility caused by international
monetary and political developments such as currency devaluations or
revaluations, economic and social conditions within a country, or trade
restrictions between countries. Since much of the world's gold reserves
are located in just a few countries, such as South Africa, the United
States, the Commonwealth of Independent States (formerly the Soviet
Union), Australia, Canada and China, the social and economic conditions
in those countries can affect the price of gold and gold-related
companies located elsewhere. The price of gold bullion or coins is more
affected by broad economic and political conditions. Markets in
commodities, such as gold, can be volatile and there may be sharp
fluctuations in prices. Such investments, however, may be beneficial to
the investment performance of the Fund as a hedge against inflation as
well as an investment with possible growth potential.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions
which cannot be changed without the approval of the holders of a
majority of the outstanding shares of the Fund. As defined in the
Investment Company Act of 1940, this means the lesser of the vote of (a)
67% of the shares of the Fund at a meeting where more than 50% of the
outstanding shares are present in person or by proxy or (b) more than
50% of the outstanding shares of the Fund. The Fund may not:
1. With respect to 50% of its assets, purchase
securities of any issuer (other than obligations of, or
guaranteed by, the United States Government, its
agencies or instrumentalities) if, as a result, more
than 5% of the value of its total assets would be
invested in securities of that issuer. (The remaining
50% of its total assets may be invested without
restriction except to the extent other investment
restrictions may be applicable).
2. Concentrate 25% or more of the value of its
assets in any one industry; provided, however, that
there is no limitation with respect to investments in
obligations issued or guaranteed by the United States
Government or its agencies and instrumentalities, and
repurchase agreements secured thereby.
3. Make loans of more than one-third of the
assets of the Fund, or as permitted by law. The
purchase by the Fund of all or a portion of an issue of
publicly or privately distributed debt obligations in
accordance with its investment objective, policies and
restrictions, shall not constitute the making of a loan.
4. Underwrite the securities of other issuers,
except as permitted by the Board of Trustees within
applicable law, and except to the extent that in
connection with the disposition of its portfolio
securities, the Fund may be deemed to be an underwriter.
5. Purchase from or sell to any of the Fund's
officers or trustees, or companies of which any of them
are directors, officers or employees, any securities
(other than shares of beneficial interest of the Fund),
but such persons or firms may act as brokers for the
Fund for customary commissions.
6. Except as required in connection with
permissible options, futures and commodity activities
of the Fund, invest in commodities, commodity futures
contracts, or real estate, although it may invest in
securities which are secured by real estate or real
estate mortgages and securities of issuers which invest
or deal in commodities, commodity futures, real estate
or real estate mortgages and provided that it may
purchase or enter into futures contracts and options on
futures contracts, foreign currency futures, interest
rate futures and options thereon.
Nonfundamental Investment Restrictions
The Fund has adopted the following operating (i.e.,
non-fundamental) investment policies and restrictions which may be
changed by the Board of Trustees without shareholder approval. The Fund
may not:
7. Purchase the securities of any issuer with
less than three years continuous operation if, as a
result, more than 5% of the value of its total assets
would be invested in securities of such issuers.
8. Invest, in the aggregate, more than 15% of its
net assets in illiquid securities. Purchases of
securities outside the U.S. that are not registered
with the SEC or marketable in the U.S. are not per se
illiquid.
9. Invest, in the aggregate, more than 5% of its
net assets in the securities of issuers restricted from
selling to the public without registration under the
Securities Act of 1933, excluding restricted securities
eligible for resale pursuant to Rule 144A under that
statute.
10. Purchase or retain securities of any issuer if
the officers, Trustees of the Fund or its Advisors,
owning beneficially more than 1/2 of 1% of the
securities of such issuer, together own beneficially
more than 5% of such issuer's securities.
11. Invest in warrants if more than 5% of the
value of the Fund's net assets would be invested in
such securities.
12. Invest in interests in oil, gas, or other
mineral exploration or development programs or leases
although it may invest in securities of issuers which
invest in or sponsor such programs.
13. Borrow money in an amount exceeding one-third
of the Fund's total assets, or as permitted by law. In
order to secure any permitted borrowings under this
section, the Fund may pledge, mortgage or hypothecate
its assets.
14. Invest for the purpose of exercising control
or management of another issuer.
15. Invest in the shares of other investment
companies, except as permitted by the 1940 Act or
pursuant to Calvert's nonqualified deferred
compensation plan adopted by the Board of Trustees.
16. Purchase more than 10% of the outstanding
voting securities of any issuer.
For purposes of the Fund's concentration policy contained in
restriction (2), above, the Fund classifies the respective industries
based upon William O Neil's Investor's Business Daily industry
classification.
Any investment restriction which involves a maximum percentage
of securities or assets shall not be considered to be violated unless an
excess over the applicable percentage occurs immediately after an
acquisition of securities or utilization of assets and results therefrom.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund declares and pays dividends from net investment income
on an annual basis. Distributions of realized net capital gains, if any,
are normally paid once a year; however, the Fund does not intend to make
any such distributions unless available capital loss carryovers, if any,
have been used or have expired. Dividends and distributions paid may
differ among the classes.
Generally, dividends (including short-term capital gains) and
distributions are taxable to the shareholder in the year they are paid.
However, any dividends and distributions paid in January but declared
during the prior three months are taxable in the year declared.
Investors should note that the Internal Revenue Code ("Code")
may require investors to exclude the initial sales charge, if any, paid
on the purchase of Fund shares from the tax basis of those shares if the
shares are exchanged for shares of another Calvert Group Fund within 90
days of purchase. This requirement applies only to the extent that the
payment of the original sales charge on the shares of the Fund causes a
reduction in the sales charge otherwise payable on the shares of the
Calvert Group Fund acquired in the exchange, and investors may treat
sales charges excluded from the basis of the original shares as incurred
to acquire the new shares.
The Fund is required to withhold 31% of any long-term capital
gain dividends and 31% of each redemption transaction occurring in the
Fund if; (a) the shareholder's social security number or other taxpayer
identification number ("TIN") is not provided, or an obviously incorrect
TIN is provided; (b) the shareholder does not certify under penalties of
perjury that the TIN provided is the shareholder's correct TIN and that
the shareholder is not subject to backup withholding under section
3406(a)(1)(C) of the Code because of underreporting (however, failure to
provide certification as to the application of section 3406(a)(1)(C)
will result only in backup withholding on capital gain dividends, not on
redemptions); or (c) the Fund is notified by the Internal Revenue
Service that the TIN provided by the shareholder is incorrect or that
there has been underreporting of interest or dividends by the
shareholder. Affected shareholders will receive statements at least
annually specifying the amount withheld.
The Fund is required to report to the Internal Revenue Service
the following information with respect to each redemption transaction:
(a) the shareholder's name, address, account number and taxpayer
identification number; (b) the total dollar value of the redemptions;
and (c) the Fund's identifying CUSIP number.
Certain shareholders are exempt from the backup withholding and
broker reporting requirements. Exempt shareholders include:
corporations; financial institutions; tax-exempt organizations;
individual retirement plans; the U.S., a State, the District of
Columbia, a U.S. possession, a foreign government, an international
organization, or any political subdivision, agency or instrumentality of
any of the foregoing; U.S. registered commodities or securities dealers;
real estate investment trusts; registered investment companies; bank
common trust funds; certain charitable trusts; foreign central banks of
issue. Non-resident aliens, certain foreign partnerships and foreign
corporations are generally not subject to either requirement but may
instead be subject to withholding under Sections 1441 or 1442 of the
Internal Revenue Code. Shareholders claiming exemption from backup
withholding and broker reporting should call or write the Fund for
further information.
Nondiversified Status
The Fund is a "nondiversified" investment company under the
Investment Act of 1940 (the "Act"), which means the Fund is not limited
by the Act in the proportion of its assets that may be invested in the
securities of a single issuer. A nondiversified fund may invest in a
smaller number of issuers than a diversified fund. Thus, an investment
in the Fund may, under certain circumstances, present greater risk of
loss to an investor than an investment in a diversified fund. However,
the Fund intends to conduct its operations so as to qualify to be taxed
as a "regulated investment company" for purposes of the Code, which will
relieve the Fund of any liability for federal income tax to the extent
its earnings are distributed to shareholders. To qualify for this
Subchapter M tax treatment, the Fund will limit its investments to
satisfy the Code diversification requirements so that, at the close of
each quarter of the taxable year, (i) not more than 25% of the fund's
assets will be invested in the securities of a single 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.
<PAGE>
Notes to Proforma Financial Statements
Calvert New Vision Small Cap Fund
Calvert Strategic Growth Fund
March 31, 1997
(Unaudited)
- -
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
- -
General: The pro forma schedule of statements of assets and
liabilities gives the effect of the proposed combination of the
Funds. The combination is accounted for as a tax-free merger of
investment companies. The proforma statement of operations
presents the operations of the Funds on a combined basis and is
presented for information purposes only: however it is not
necessarily representative of what the combined result of the
Funds would have been had the combination occurred at the
beginning of the fiscal year. The combination would be
accomplished by an exchange of shares of Calvert Strategic
Growth Fund for shares of Calvert New Vision Small Cap Fund at
net asset value. Calvert New Vision Small Cap Fund (the
"Series") and Calvert Strategic Growth Fund (the "Series") are
both series of The Calvert Fund (the "Fund"). The Fund is
registered under the Investment Company Act of 1940, as amended
("Act"), as an open-end management investment company. The Fund
accounts separately for the operations of each series. The
Series offers Class A and Class C shares of beneficial
interest. Class A shares are sold with a maximum front-end
sales charge of 4.75%. Class C shares, which have no
transaction-based sales charge, have a higher annual expense
rate than Class A. Each class has different: (a) Distribution
Plan expenses, (b) class specific expenses, including transfer
agency fees, registration fees, reports to shareholders, (c)
dividend rates due to (a) and (b) above, (d) exchange privileges
and (e) class specific voting rights.
Security Valuation: Securities listed or traded on a national
securities exchange are valued at the last reported sales
price. Unlisted securities and listed securities for which the
last sale price is unavailable are valued at the most recent bid
price or based on a yield equivalent obtained from the
securities' market maker. Other securities and assets for which
market quotations are not available or deemed inappropriate are
valued in good faith under the direction of the Board of
Trustees.
Security Transactions and Investment Income: Securities
transactions are accounted for on trade date. Realized gains
and losses are recorded on an identified cost basis. Dividend
income is recorded on the ex-dividend date. Interest income,
accretion of discount and amortization of premium are recorded
on an accrual basis.
Expense Offset Arrangement: The Series has an arrangement with
its custodian bank whereby the custodian's fees are paid
indirectly by credits earned on the Series' cash on deposit with
the bank. Such deposit arrangement is an alternative to
overnight investments.
Federal Income Taxes: No provision for federal income or excise
tax is required since the Series intends to continue to qualify
as a regulated investment company under the Internal Revenue
Code and to distribute substantially all of its earnings.
- -
NOTE B - RELATED PARTY TRANSACTIONS
- -
The combined Fund's Investment Advisor would be Calvert Asset
Management Company, Inc. For information on management fees and
other transactions with affiliates see the Prospectus/Proxy
Statement.
<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
================
<PAGE>
Proforma Adjustments
NET ASSETS - CLASS A
SHARES OUTSTANDING - CLASS A 1,094,287
NET ASSET VALUE - CLASS A
MAXIMUM SALES CHARGE - CLASS A
OFFERING PRICE - CLASS A
NET ASSETS - CLASS C
SHARES OUTSTANDING - CLASS C 170,245
NET ASSET VALUE - CLASS C
(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 issued to Class A shareholders 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 issued
to Class C shareholders of Calvert Strategic Growth Fund.
See Notes to Proforma Financial Statements.
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Calvert New Vision
Small Cap Fund
EQUITY SECURITIES - 47.1% Shares
Airline - 2.1%
Delta Air Lines, Inc. -
Commercial Services - 0.0%
NCO Group, Inc. * -
-
Computer Services - 6.9%
Harbinger Corp. * 3,000
Sapient Corp. * 1,300
Technology Solutions Co. * 900
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * 1,000
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 1,000
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * -
Sanmina Corp. * 700
Vitesse Semiconductor Corp. * 1,200
Health Care - 2.0%
Oxford Health Plans, Inc. * -
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * -
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * -
Varco International, Inc. * 1,500
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 600
Retail - Apparel 4.9%
Gucci Group, N.V. -
TJX Companies, Inc. -
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. -
Software - Applications - 11.4%
Clarify, Inc.* 1,600
Documentum, Inc. * 1,900
Parametric Technology Corp. * -
Pegasystems, Inc. * 1,200
Siebel Systems, Inc. * 1,900
Vantive Corp. * 2,100
Software - Database/Development Tools - 0.0%
Rational Software Corp. * 1,200
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * -
Telecommunications - 6.1%
Advanced Fibre Communications * -
Ciena Corp. * 200
DSC Communications Corp. * -
Qualcomm, Inc. * -
Sourcecom Corp., Series B, Preferred t * -
Total Equity Securities (Cost $58,419,606)
CORPORATE OBLIGATIONS - 21.5%
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** -
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** -
Total Corporate Obligations (Cost $24,225,000)
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) -
Total Repurchase Agreements (Cost $19,000,000)
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 -
Total U.S.Treasury (Cost $3,946,890)
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** -
Total Municipal Obligations (Cost $3,475,000)
OPTIONS PURCHASED - 3.0%
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 -
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 -
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 -
Total Options Purchased (Premium $2,405,018)
COMMUNITY LOAN NOTES - 2.0%
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t -
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t -
Illinois Facilities Fund, 4.00%, 9/30/99 t -
Low Income Housing Fund, 4.00%, 1/12/99 t -
Mercy Loan Fund, 4.00%, 1/13/01 t -
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t -
Northeast South Dakota Energy Conservation Corp.,
4.00%, 4/30/99 t -
Ohio Community Development Finance Fund, 5.00%,
5/31/99 t -
Rural Community Assistance Fund, 4.00%, 6/28/99 t -
Self Help Ventures Fund, 4.00%, 3/31/00 t -
Unitarian Universalist Affordable Housing Corp.,
4.00%, 6/28/99 t -
Washington Area Community Investment Fund, 4.00%,
6/28/99 t -
Working Capital, 4.00%, 9/30/97 t -
Total Community Loan Notes (Cost $2,330,000)
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 -
South Shore Bank, 5.35%, 2/9/98 -
Total Certificates of Deposit (Cost $300,000)
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4%
Other assets and liabilities, net - 2.6%
NET ASSETS 100%
* Non-income producing.
t Restricted securities representing 2.4% of net
assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Calvert New Vision
Small Cap Fund
EQUITY SECURITIES Shares
Gateway 2000, Inc. -
International Flavors and Fragrances -
MBNA Corp. -
Microsoft Corp. -
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356)
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Calvert New Vision
Small Cap Fund
EQUITY SECURITIES - 47.1% Value
Airline - 2.1% -
Delta Air Lines, Inc. -
Commercial Services - 0.0%
NCO Group, Inc. * -
-
Computer Services - 6.9%
Harbinger Corp. * 66,000
Sapient Corp. * 41,600
Technology Solutions Co. * 24,863
132,463
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * 35,875
35,875
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 47,750
47,750
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * -
Sanmina Corp. * 31,325
Vitesse Semiconductor Corp. * 33,150
64,475
Health Care - 2.0% -
Oxford Health Plans, Inc. * -
Medical - Ethical Drugs - 2.0% -
Dura Pharmaceuticals, Inc. * -
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * -
Varco International, Inc. * 37,500
37,500
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 28,500
28,500
Retail - Apparel 4.9%
Gucci Group, N.V. -
TJX Companies, Inc. -
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. -
-
Software - Applications - 11.4%
Clarify, Inc.* 38,600
Documentum, Inc. * 35,150
Parametric Technology Corp. * -
Pegasystems, Inc. * 24,150
Siebel Systems, Inc. * 31,825
Vantive Corp. * 43,050
172,775
Software - Database/Development Tools - 0.0%
Rational Software Corp. * 24,750
24,750
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * -
-
Telecommunications - 6.1%
Advanced Fibre Communications * -
Ciena Corp. * 5,687
DSC Communications Corp. * -
Qualcomm, Inc. * -
Sourcecom Corp., Series B, Preferred t * -
5,687
Total Equity Securities (Cost $58,419,606) 549,775
CORPORATE OBLIGATIONS - 21.5%
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** -
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** -
Total Corporate Obligations (Cost $24,225,000)
- -
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) -
Total Repurchase Agreements (Cost $19,000,000) -
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 -
Total U.S.Treasury (Cost $3,946,890) -
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** -
Total Municipal Obligations (Cost $3,475,000) -
OPTIONS PURCHASED - 3.0%
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 -
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 -
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 -
Total Options Purchased (Premium $2,405,018) -
COMMUNITY LOAN NOTES - 2.0%
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t -
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t -
Illinois Facilities Fund, 4.00%, 9/30/99 t -
Low Income Housing Fund, 4.00%, 1/12/99 t -
Mercy Loan Fund, 4.00%, 1/13/01 t -
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t -
Northeast South Dakota Energy Conservation Corp.,
4.00%, 4/30/99 t -
Ohio Community Development Finance Fund, 5.00%, 5/31/99 t -
Rural Community Assistance Fund, 4.00%, 6/28/99 t -
Self Help Ventures Fund, 4.00%, 3/31/00 t -
Unitarian Universalist Affordable Housing Corp.,
4.00%, 6/28/99 t -
Washington Area Community Investment Fund, 4.00%, 6/28/99 t -
Working Capital, 4.00%, 9/30/97 t -
Total Community Loan Notes (Cost $2,330,000) -
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 -
South Shore Bank, 5.35%, 2/9/98 -
Total Certificates of Deposit (Cost $300,000) -
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4% 549,775
Other assets and liabilities, net - 2.6% 865,210
NET ASSETS 100% $1,414,985
* Non-income producing.
t Restricted securities representing 2.4% of net
assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Calvert New Vision
Small Cap Fund
EQUITY SECURITIES Value
Gateway 2000, Inc. -
International Flavors and Fragrances -
MBNA Corp. -
Microsoft Corp. -
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356) -
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Calvert Strategic
Growth Fund
EQUITY SECURITIES - 47.1% Shares
Airline - 2.1%
Delta Air Lines, Inc. 27,900
Commercial Services - 0.0%
NCO Group, Inc. * 2,500
Computer Services - 6.9%
Harbinger Corp. * 125,450
Sapient Corp. * 92,200
Technology Solutions Co. * 70,990
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * -
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 18,500
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * 36,100
Sanmina Corp. * 62,800
Vitesse Semiconductor Corp. * 67,950
Health Care - 2.0%
Oxford Health Plans, Inc. * 37,600
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * 62,600
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * 28,200
Varco International, Inc. * 42,400
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 7,900
Retail - Apparel 4.9%
Gucci Group, N.V. 44,900
TJX Companies, Inc. 52,400
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. 82,000
Software - Applications - 11.4%
Clarify, Inc.* 161,600
Documentum, Inc. * 32,800
Parametric Technology Corp. * 26,800
Pegasystems, Inc. * 13,700
Siebel Systems, Inc. * 129,600
Vantive Corp. * 218,200
Software - Database/Development Tools - 0.0%
Rational Software Corp. * -
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * 13,334
Telecommunications - 6.1%
Advanced Fibre Communications * 62,700
Ciena Corp. * -
DSC Communications Corp. * 97,200
Qualcomm, Inc. * 41,600
Sourcecom Corp., Series B, Preferred t * 100,000
Total Equity Securities (Cost $58,419,606)
Principal
CORPORATE OBLIGATIONS - 21.5% Amount
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** $14,500,000
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** 9,725,000
Total Corporate Obligations (Cost $24,225,000)
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
Total Repurchase Agreements (Cost $19,000,000)
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 4,000,000
Total U.S.Treasury (Cost $3,946,890)
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** 3,475,000
Total Municipal Obligations (Cost $3,475,000)
OPTIONS PURCHASED - 3.0% Contracts
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 265
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 265
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 330
Total Options Purchased (Premium $2,405,018)
Principal
COMMUNITY LOAN NOTES - 2.0% Amount
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t $75,000
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t 50,000
Illinois Facilities Fund, 4.00%, 9/30/99 t 250,000
Low Income Housing Fund, 4.00%, 1/12/99 t 350,000
Mercy Loan Fund, 4.00%, 1/13/01 t 200,000
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t 200,000
Northeast South Dakota Energy Conservation Corp.,
4.00%, 4/30/99 t 75,000
Ohio Community Development Finance Fund, 5.00%, 5/31/99 t 500,000
Rural Community Assistance Fund, 4.00%, 6/28/99 t 100,000
Self Help Ventures Fund, 4.00%, 3/31/00 t 300,000
Unitarian Universalist Affordable Housing Corp.,
4.00%, 6/28/99 t 80,000
Washington Area Community Investment Fund, 4.00%, 6/28/99 t 100,000
Working Capital, 4.00%, 9/30/97 t 50,000
Total Community Loan Notes (Cost $2,330,000)
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 100,000
South Shore Bank, 5.35%, 2/9/98 200,000
Total Certificates of Deposit (Cost $300,000)
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4%
Other assets and liabilities, net - 2.6%
NET ASSETS 100%
* Non-income producing.
t Restricted securities representing 2.4% of net assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Calvert Strategic
Growth Fund
EQUITY SECURITIES Shares
Gateway 2000, Inc. 21,800
International Flavors and Fragrances 12,600
MBNA Corp. 18,800
Microsoft Corp. 12,100
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356)
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Calvert Strategic
Growth Fund
EQUITY SECURITIES - 47.1% Value
Airline - 2.1%
Delta Air Lines, Inc. $2,347,087
2,347,087
Commercial Services - 0.0%
NCO Group, Inc. * 54,687
54,687
Computer Services - 6.9%
Harbinger Corp. * 2,759,900
Sapient Corp. * 2,950,400
Technology Solutions Co. * 1,961,099
7,671,399
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * -
-
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 883,375
883,375
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * 1,674,137
Sanmina Corp. * 2,810,300
Vitesse Semiconductor Corp. * 1,877,119
6,361,556
Health Care - 2.0%
Oxford Health Plans, Inc. * 2,204,300
2,204,300
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * 2,237,950
2,237,950
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * 1,286,625
Varco International, Inc. * 1,060,000
2,346,625
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 375,250
375,250
Retail - Apparel 4.9%
Gucci Group, N.V. 3,238,413
TJX Companies, Inc. 2,240,100
5,478,513
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. $3,034,000
3,034,000
Software - Applications - 11.4%
Clarify, Inc.* 3,898,600
Documentum, Inc. * 606,800
Parametric Technology Corp * 1,209,350
Pegasystems, Inc. * 275,713
Siebel Systems, Inc. * 2,170,800
Vantive Corp. * 4,473,100
12,634,363
Software - Database/Development Tools - 0.0%
Rational Software Corp. * -
-
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * 62,403
62,403
Telecommunications - 6.1%
Advanced Fibre Communications * 2,022,075
Ciena Corp. * -
DSC Communications Corp. * 2,035,125
Qualcomm, Inc. * 2,345,200
Sourcecom Corp., Series B, Preferred t * 430,000
6,832,400
Total Equity Securities (Cost $58,419,606) 52,523,908
CORPORATE OBLIGATIONS - 21.5%
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** 14,500,000
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** 9,725,000
Total Corporate Obligations (Cost $24,225,000) 24,225,000
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
Total Repurchase Agreements (Cost $19,000,000) 19,000,000
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 3,901,800
Total U.S.Treasury (Cost $3,946,890) 3,901,800
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** $3,475,000
Total Municipal Obligations (Cost $3,475,000) 3,475,000
OPTIONS PURCHASED - 3.0%
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 $993,750
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 1,205,750
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 1,204,500
Total Options Purchased (Premium $2,405,018) 3,404,000
COMMUNITY LOAN NOTES - 2.0%
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t 72,453
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t 47,605
Illinois Facilities Fund, 4.00%, 9/30/99 t 249,955
Low Income Housing Fund, 4.00%, 1/12/99 t 343,231
Mercy Loan Fund, 4.00%, 1/13/01 t 196,166
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t 192,278
Northeast South Dakota Energy Conservation Corp.,
4.00%, 4/30/99 t 72,453
Ohio Community Development Finance Fund, 5.00%, 5/31/99 t 485,360
Rural Community Assistance Fund, 4.00%, 6/28/99 t 95,210
Self Help Ventures Fund, 4.00%, 3/31/00 t 247,654
Unitarian Universalist Affordable Housing Corp.,
4.00%, 6/28/99 t 76,168
Washington Area Community Investment Fund, 4.00%, 6/28/99 t 95,210
Working Capital, 4.00%, 9/30/97 t 49,181
Total Community Loan Notes (Cost $2,330,000) 2,222,924
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 99,581
South Shore Bank, 5.35%, 2/9/98 199,108
Total Certificates of Deposit (Cost $300,000) 298,689
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4% 109,051,321
Other assets and liabilities, net - 2.6% 2,097,244
NET ASSETS 100% $111,148,565
* Non-income producing.
t Restricted securities representing 2.4% of net
assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Calvert Strategic
Growth Fund
EQUITY SECURITIES Value
Gateway 2000, Inc. $1,117,250
International Flavors and Fragrances 551,250
MBNA Corp. 524,050
Microsoft Corp. 1,109,419
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356) $3,301,969
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Proforma
Combined
EQUITY SECURITIES - 47.1% Shares
Airline - 2.1%
Delta Air Lines, Inc. 27,900
Commercial Services - 0.0%
NCO Group, Inc. * 2,500
Computer Services - 6.9%
Harbinger Corp. * 128,450
Sapient Corp. * 93,500
Technology Solutions Co. * 71,890
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * 1,000
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 19,500
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * 36,100
Sanmina Corp. * 63,500
Vitesse Semiconductor Corp. * 69,150
Health Care - 2.0%
Oxford Health Plans, Inc. * 37,600
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * 62,600
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * 28,200
Varco International, Inc. * 43,900
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 8,500
Retail - Apparel 4.9%
Gucci Group, N.V. 44,900
TJX Companies, Inc. 52,400
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. 82,000
Software - Applications - 11.4%
Clarify, Inc.* 163,200
Documentum, Inc. * 34,700
Parametric Technology Corp. * 26,800
Pegasystems, Inc. * 14,900
Siebel Systems, Inc. * 131,500
Vantive Corp. * 220,300
Software - Database/Development Tools - 0.0%
Rational Software Corp. * 1,200
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * 13,334
Telecommunications - 6.1%
Advanced Fibre Communications * 62,700
Ciena Corp. * 200
DSC Communications Corp. * 97,200
Qualcomm, Inc. * 41,600
Sourcecom Corp., Series B, Preferred t * 100,000
Total Equity Securities (Cost $58,419,606)
CORPORATE OBLIGATIONS - 21.5%
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** 14,500,000
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** 9,725,000
Total Corporate Obligations (Cost $24,225,000)
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
Total Repurchase Agreements (Cost $19,000,000)
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 4,000,000
Total U.S.Treasury (Cost $3,946,890)
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** 3,475,000
Total Municipal Obligations (Cost $3,475,000)
OPTIONS PURCHASED - 3.0%
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 265
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 265
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 330
Total Options Purchased (Premium $2,405,018)
COMMUNITY LOAN NOTES - 2.0%
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t 75,000
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t 50,000
Illinois Facilities Fund, 4.00%, 9/30/99 t 250,000
Low Income Housing Fund, 4.00%, 1/12/99 t 350,000
Mercy Loan Fund, 4.00%, 1/13/01 t 200,000
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t 200,000
Northeast South Dakota Energy Conservation Corp., 4.00%, 4/30/99 t 75,000
Ohio Community Development Finance Fund, 5.00%, 5/31/99 t 500,000
Rural Community Assistance Fund, 4.00%, 6/28/99 t 100,000
Self Help Ventures Fund, 4.00%, 3/31/00 t 300,000
Unitarian Universalist Affordable Housing Corp., 4.00%, 6/28/99 t 80,000
Washington Area Community Investment Fund, 4.00%, 6/28/99 t 100,000
Working Capital, 4.00%, 9/30/97 t 50,000
Total Community Loan Notes (Cost $2,330,000)
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 100,000
South Shore Bank, 5.35%, 2/9/98 200,000
Total Certificates of Deposit (Cost $300,000)
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4%
Other assets and liabilities, net - 2.6%
NET ASSETS 100%
* Non-income producing.
t Restricted securities representing 2.4% of net
assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Proforma
Combined
EQUITY SECURITIES Shares
Gateway 2000, Inc. 21,800
International Flavors and Fragrances 12,600
MBNA Corp. 18,800
Microsoft Corp. 12,100
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356)
<PAGE>
PROFORMA PORTFOLIO OF INVESTMENTS
CALVERT NEW VISION SMALL CAP FUND
CALVERT STRATEGIC GROWTH FUND
MARCH 31, 1997 (UNAUDITED)
Proforma
Combined
EQUITY SECURITIES - 47.1% Value
Airline - 2.1%
Delta Air Lines, Inc. $2,347,087
2,347,087
Commercial Services - 0.0%
NCO Group, Inc. * 54,687
54,687
Computer Services - 6.9%
Harbinger Corp. * 2,825,900
Sapient Corp. * 2,992,000
Technology Solutions Co. * 1,985,962
7,803,862
Electronics - Laser Systems/Components - 0.0%
Cymer, Inc. * 35,875
35,875
Electronics - Semiconductor Equipment - 0.8%
PRI Automation, Inc. * 931,125
931,125
Electronics - Semiconductor Manufacturing - 5.7%
Applied Materials, Inc. * 1,674,137
Sanmina Corp. * 2,841,625
Vitesse Semiconductor Corp. * 1,910,269
6,426,031
Health Care - 2.0%
Oxford Health Plans, Inc. * 2,204,300
2,204,300
Medical - Ethical Drugs - 2.0%
Dura Pharmaceuticals, Inc. * 2,237,950
2,237,950
Oil and Gas - Equipment - 2.1%
Smith International, Inc. * 1,286,625
Varco International, Inc. * 1,097,500
2,384,125
Oil and Gas - Field Services - 0.4%
Trico Marine Services, Inc. * 403,750
403,750
Retail - Apparel 4.9%
Gucci Group, N.V. 3,238,413
TJX Companies, Inc. 2,240,100
5,478,513
EQUITY SECURITIES (CONT'D)
Retail - Discount and Variety - 2.7%
Dollar Tree Stores, Inc. $3,034,000
3,034,000
Software - Applications - 11.4%
Clarify, Inc.* 3,937,200
Documentum, Inc. * 641,950
Parametric Technology Corp. * 1,209,350
Pegasystems, Inc. * 299,863
Siebel Systems, Inc. * 2,202,625
Vantive Corp. * 4,516,150
12,807,138
Software - Database/Development Tools - 0.0%
Rational Software Corp. * 24,750
24,750
Software - Education and Entertainment - 0.0%
Crystal Dynamics, Inc., Series D t * 62,403
62,403
Telecommunications - 6.1%
Advanced Fibre Communications * 2,022,075
Ciena Corp. * 5,687
DSC Communications Corp. * 2,035,125
Qualcomm, Inc. * 2,345,200
Sourcecom Corp., Series B, Preferred t * 430,000
6,838,087
Total Equity Securities (Cost $58,419,606) 53,073,683
CORPORATE OBLIGATIONS - 21.5%
Baldwin Park, California Redevelopment Agency,
VRDN, 5.66%, 8/1/23, LOC: Wells Fargo Bank,
Confirming LOC: Sumitomo Bank Ltd. ** 14,500,000
PRD Finance LLC., VRDN, 5.53%, 4/1/27, LOC: First
American Bank, MI ** 9,725,000
Total Corporate Obligations (Cost $24,225,000) 24,225,000
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
Total Repurchase Agreements (Cost $19,000,000) 19,000,000
U.S. TREASURY - 3.5%
U.S. Treasury Notes, 5.00%, 2/15/99 3,901,800
Total U.S.Treasury (Cost $3,946,890) 3,901,800
MUNICIPAL OBLIGATIONS - 3.1%
Gardena, California Certificates of Participation,
VRDN, 6.35%, 7/1/25, LOC: Sumitomo Trust & Banking,
Confirming LOC: Dai-Ichi Kangyo ** $3,475,000
Total Municipal Obligations (Cost $3,475,000) 3,475,000
OPTIONS PURCHASED - 3.0%
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 790 993,750
S&P 500 Index Put Options
Expiration 5/17/97, Strike Price 800 1,205,750
S&P 500 Index Put Options
Expiration 6/21/97, Strike Price 790 1,204,500
Total Options Purchased (Premium $2,405,018) 3,404,000
COMMUNITY LOAN NOTES - 2.0%
Cascadia Revolving Loan Fund, 4.00%, 4/30/99 t 72,453
Dorchester Bay Economic Development Corp., 4.00%, 7/15/97 t 47,605
Illinois Facilities Fund, 4.00%, 9/30/99 t 249,955
Low Income Housing Fund, 4.00%, 1/12/99 t 343,231
Mercy Loan Fund, 4.00%, 1/13/01 t 196,166
Minnesota Non Profits Assistance Fund, 3.00%, 4/30/01 t 192,278
Northeast South Dakota Energy Conservation Corp., 4.00%, 4/30/99 t 72,453
Ohio Community Development Finance Fund, 5.00%, 5/31/99 t 485,360
Rural Community Assistance Fund, 4.00%, 6/28/99 t 95,210
Self Help Ventures Fund, 4.00%, 3/31/00 t 247,654
Unitarian Universalist Affordable Housing Corp., 4.00%, 6/28/99 t 76,168
Washington Area Community Investment Fund, 4.00%, 6/28/99 t 95,210
Working Capital, 4.00%, 9/30/97 t 49,181
Total Community Loan Notes (Cost $2,330,000) 2,222,924
CERTIFICATES OF DEPOSIT - 0.3%
Self Help Credit Union, 5.10%, 2/24/98 99,581
South Shore Bank, 5.35%, 2/9/98 199,108
Total Certificates of Deposit (Cost $300,000) 298,689
TOTAL INVESTMENTS (Cost $114,101,514) - 97.4% 109,601,096
Other assets and liabilities, net - 2.6% 2,962,454
NET ASSETS 100% $112,563,550
* Non-income producing.
t Restricted securities representing 2.4% of net
assets.
** Optional tender features give these securities a
shorter effective maturity date.
Abbreviations
VRDN: Variable Rate Demand Notes
LOC: Letter of Credit
The portfolio holdings of the Calvert Strategic
Growth Fund, listed above, will be sold-off
pursuant to the merger into the
Calvert New Vision Small Cap Fund.
SCHEDULE OF SECURITIES SOLD SHORT
MARCH 31, 1997 (UNAUDITED)
Proforma
Combined
EQUITY SECURITIES Value
Gateway 2000, Inc. $1,117,250
International Flavors and Fragrances 551,250
MBNA Corp. 524,050
Microsoft Corp. 1,109,419
TOTAL EQUITY SECURITIES SOLD SHORT
(Proceeds $3,507,356) $3,301,969
<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 Information 14
Financial Statements 14
Appendix 14
<PAGE>
<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
