CALVERT INCOME FUND
Supplement to January 31, 1997 Prospectus
Date of Supplement: June 6, 1997
INSERT THE FOLLOWING AT THE BOTTOM OF PAGE 7 OF THE PROSPECTUS:
Hedging strategies:
The Fund may also use short sales of U.S. Treasury securities for the
limited purpose of hedging the Fund's duration (duration is a measure of the
interest rate-sensitivity of the Fund.) Any short sales will be "covered" with
an equivalent amount of high quality, liquid securities in a segregated account
at the Fund's custodian. This hedging technique is intended to lower the Fund's
interest rate risk. However, as with other hedging strategies, the Fund takes
the risk that the strategy may not correlate well with the risk it is intended
to hedge against, or that the Advisor has judged market conditions incorrectly.
Portfolio turnover
The Fund's investment strategy causes it to have a relatively high
portfolio turnover compared to other funds. For the six-months ended March 31,
1997, the portfolio turnover was 971%. All else being equal, a Fund with high
turnover may incur higher transactions costs such as custodian and settlement
fees, etc. Also, Funds with higher turnover may subject to taxation until a
shareholder sells the fund shares. See "Dividends, Capital Gains and Taxes"
in the prospectus.
