September 30, 1997
Annual Report
Calvert New vision Small Cap Fund
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Calvert Group Information
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Address: http://www.calvertgroup.com
Please check the inside back cover for Calvert Group's Family of Funds
This report is intended to provide fund information to shareholders. It is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by a prospectus.
Calvert New vision Small Cap Fund
Special Notice
This audited report replaces the September 30, 1997 semi-annual report. The
next semi-annual you receive will be dated March 31, 1998. The annual report
will now be issued as of September 30 each year.
Calvert Group
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
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Table of Contents
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 4
Schedule of Investments 5
Statement of Assets and Liabilities 8
Statement of Operations 9
Statements of Changes in Net Assets 10
Notes to Financial Statements 11
Financial Highlights 14
Dear Shareholders:
The financial markets have been exceptionally volatile over the past few
weeks. Events began to unfold in mid August, when the Asian currency crisis
bled over to the Far East markets causing those markets to stumble, setting
off a domino-effect that spread to all world markets. Just as market observers
were predicting a repeat of the October 19, 1987 slide, stocks rallied back.
At Calvert Group, we see this recent roller coaster ride as an example of the
ups and downs inevitable in stock market investing. We don't believe the skies
have suddenly darkened over the entire market. Fundamentals are still strong.
There is no evidence of surging inflation, the economy is expanding at a
sustainable pace and money continues to flow into the market.
For investors troubled by the recent volatility, we suggest two time-tested
approaches. First, make investment decisions based on your time horizon and
tolerance for risk. Second, diversifying among different types of asset
classes can help lessen the sting of a sudden fall in stock prices. Your
financial professional can help you decide whether your portfolio is well
balanced.
In closing, I'd like to call your attention to the new format of our
shareholder reports. The changes were intended to put you in closer contact
with the portfolio manager and make the reports more interesting to read. We
welcome your comments.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
November 3, 1997
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Portfolio Statistics
September 30, 1997
Ten Largest Stock Holdings
% of Net Assets
GeoTel Communications 4.5%
CareMatrix Corp. 3.8%
Pacific Gateway Exchange, Inc. 3.4%
USLD Communications Corp. 3.3%
CFM Technologies 3.1%
Linens 'N Things, Inc. 3.0%
Vans, Inc. 3.0%
Healthcare Financial Partners, Inc. 2.9%
NCO Group, Inc. 2.9%
Wild Oats Markets, Inc. 2.8%
Total 32.7%
Investment Performance
6 Months
New Vision Small Cap Fund 30.53%
Russell 2000 Index TR 33.51%
Lipper Small-Cap Funds Index 34.91%
Investment Performance is for Class A shares and does not reflect the
deduction of any front-end sales charge. TR represents total return.
Source: Lipper Analytical Services, Inc.
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A DISCUSSION WITH VICE PRESIDENT OF EQUITIES, JOHN NICHOLS
How have small-cap stocks as a group performed?
After posting disappointing returns for the first half of 1997, small stocks
staged an impressive turnaround in the last quarter covered by the report.
Investors were finally convinced that large-cap stocks had become too
expensive and that small- and mid-cap issues represented better values.
How did the Fund perform relative to its benchmark?
Although the Calvert New Vision Small Cap Fund just began operations on
January 31, 1997, we were generally well positioned to participate in this
recovery. The Fund's growth orientation and significant exposure to some of
the strongest sectors, including technology and retail, were positive for
performance.
Specific stock picks in the technology and health care groups accounted for
much of the margin of underperformance. Going into the rally, we still had a
sizable cash position (20.12% of assets on June 30, 1997). This also held us
back relative to the Index, which is always fully invested.
Calvert Group just announced a change in New Vision Fund management. Would you
explain the reason for the change?
Just after the close of this reporting period, management of New Vision Fund
assets was transferred from Portfolio Advisory Services, Inc. to Awad &
Associates. We made this change in order to give investors the benefit of a
more proven strategy for selecting investments and additional experience
managing small-cap stock portfolios. The change does not in any way affect the
New Vision Fund's investment strategy or objective.
In your view, what's ahead for small-cap investors?
Typically, small-cap stocks lead or lag large-caps for a protracted period,
and we're hopeful we are entering a cycle of sustained overperformance. Still,
we've had now almost three years of very generous stock market returns across
all major market averages. The market's advance is not likely to be as broad
going forward, and strong stock selection will likely be the critical factor.
October 20, 1997
Portfolio Statistics
September 30, 1997
Cumulative Total Returns
Class A Shares
As of 9/30/97
Since inception (1/31/97) -.63%
Class C Shares
As of 9/30/97
Since inception (1/31/97) 4.13%
Performance Comparison
Comparison in change of value of $10,000 investment.
Bar chart here showing comparison from 1/31/97 to 9/30/97
Calvert New Vision Small Cap Fund (A) $9,938
Calvert New Vision Small Cap Fund (C) $10,413
Russell 2000 Index TR $12,412
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the Fund's maximum front-end sales charge of 4.75%.
No sales charge has been applied to the index used for comparison. Past
performance is no guarantee of future results.
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Report of Independent Accountants
To the Board of Trustees of The Calvert Fund and Shareholders of Calvert New
Vision Small Cap Fund:
We have audited the accompanying statement of assets and liabilities of
Calvert New Vision Small Cap Fund, including the schedule of investments, as
of September 30, 1997, and the related statement of operations, statement of
changes in net assets and financial highlights for the period January 31, 1997
(commencement of operations) through September 30, 1997. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of September 30, 1997, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Calvert New Vision Small Cap Fund as of September 30, 1997, and the results of
its operations, changes in its net assets and financial highlights for the
period stated in the first paragraph, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
April 10, 1998
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STATEMENT OF NET ASSETS
SEPTEMBER 30, 1997
Equity Securities - 78.3% Shares Value
Building - 2.3%
Standard Pacific Corp. 7,700 $80,850
80,850
Commercial Services - 3.9%
CKS Group, Inc.* 1,000 37,500
NCO Group, Inc.* 2,800 103,600
141,100
Computer - Integrated Systems - 1.7%
Daou Systems, Inc.* 1,900 59,375
59,375
Computer - Services - 2.0%
Sapient Corp.* 1,400 71,225
71,225
Electronics - Semiconductor Equipment - 2.1%
PRI Automation, Inc.* 1,300 76,050
76,050
Electronics - Semiconductor Manufacturing - 8.1%
CFM Technologies, Inc.* 2,800 109,725
PMC Sierra, Inc.* 3,300 84,150
Sanmina Corp.* 1,100 95,219
289,094
Financial Services - 2.9%
Healthcare Financial Partners, Inc.* 3,400 104,975
104,975
Food - 2.7%
Wild Oats Markets, Inc.* 3,300 98,588
98,588
Human Resources - Services - 2.7%
Corestaff, Inc.* 3,000 97,125
97,125
Medical Products - 2.4%
Bionx Implants, Inc.* 3,900 86,288
86,288
Oil and Gas - Machinery and Equipment - 2.6%
Varco International, Inc.* 1,900 92,150
92,150
Pharmaceuticals - 1.3%
Guilford Pharmaceuticals, Inc.* 1,600 47,200
47,200
Pollution Control - Services - 2.8%
Newpark Resources, Inc.* 2,500 $98,281
98,281
Printing - 1.3%
Consolidated Graphics, Inc.* 900 44,775
44,775
Retail - Apparel and Shoes - 3.0%
Vans, Inc.* 6,700 107,200
107,200
Retail - Bedding - 3.0%
Linens N Things, Inc.* 3,200 107,200
107,200
Retail - Discount - 2.6%
Tuesday Morning Corp.* 4,000 94,250
94,250
Retail - Restaurants - 1.4%
Showbiz Pizza Time, Inc.* 2,100 48,300
48,300
Retirement - Aged Care - 6.3%
CareMatrix Corp.* 5,300 134,487
Curative Health Services, Inc.* 2,900 90,263
224,750
Software - Computer - 7.0%
Rational Software Corp.* 5,000 80,000
Siebel Systems, Inc.* 1,900 80,869
Vantive Corp.* 3,700 88,800
249,669
Telecommunications - 11.1%
GeoTel Communications Corp.* 8,500 160,437
Pacific Gateway Exchange, Inc.* 3,100 121,287
USLD Communications Corp.* 5,800 116,363
398,087
Transportation - Trucking - 2.7%
Swift Transportation Co., Inc.* 3,100 98,037
98,037
Wholesale - Miscellaneous Goods - 2.4%
Action Performance Companies, Inc.* 3,000 87,375
87,375
Total Equity Securities (Cost $2,329,222) 2,801,944
TOTAL INVESTMENTS (Cost $2,329,222) - 78.3% $2,801,944
Other assets in excess of liabilities - 21.7% 776,272
Net Assets - 100% $3,578,216
* Non-income producing
See notes to financial statements.
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SCHEDULE OF OPTIONS WRITTEN
SEPTEMBER 30, 1997
Options Written Contracts Value
PRI Automation, Inc., Call Options
Expiration 11/22/97, Strike Price 60 13 $6,500
Sanmina Corp., Call Options
Expiration 10/18/97, Strike Price 85 11 5,088
TOTAL OPTIONS WRITTEN
(Premium $12,546 ) $11,588
See notes to financial statements.
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STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
Assets
Investments in securities, at value $2,801,944
Cash 727,776
Receivable for securities sold 30,421
Receivable for shares sold 12,701
Receivable from Calvert Asset Management Co., Inc. 1,979
Other assets 20,845
Total assets 3,595,666
Liabilities
Options written, at value (premiums $12,546) 11,588
Payable for Calvert Administrative Services Co. 300
Payable to Calvert Shareholders Services, Inc. 1,116
Payable to Calvert Distributors, Inc. 986
Accrued expenses and other liabilities 3,460
Total liabilities 17,450
Net assets $3,578,216
Net Assets Consist of:
Paid-in capital applicable to the following shares of beneficial interest;
unlimited number of no par shares authorized:
Class A: 208,338 shares outstanding $2,879,597
Class C: 20,368 shares outstanding 245,042
Accumulated net realized gain (loss) on investments (20,103)
Net unrealized appreciation (depreciation) on investments 473,680
Net Assets $3,578,216
Net Asset Value per Share
Class A (based on net assets of $3,259,982) $15.65
Class C (based on net assets of $318,234) $15.62
See notes to financial statements.
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STATEMENT OF OPERATIONS JANUARY 31, 1997 (INCEPTION)
TO SEPTEMBER 30, 1997
Net Investment Income
Investment Income
Interest Income $2,618
Dividend income 330
Total investment income 2,948
Expenses
Investment advisory fee 14,100
Transfer agency fees and expenses 7,424
Distribution Plan expenses:
Class A 3,390
Class C 2,104
Trustee's fees and expenses 732
Administrative fees 1,567
Custodian fees 6,999
Registration fees 37,423
Reports to shareholders 6,906
Professional fees 5,101
Miscellaneous 1,255
Reimbursement from Advisor (65,410)
Total expenses 21,591
Fees paid indirectly (6,999)
Net expenses 14,592
Net Investment Income (Loss) (11,644)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) (8,459)
Change in unrealized appreciation or depreciation 473,680
Net Realized and Unrealized Gain
(Loss) on Investments 465,221
Increase (Decrease) in Net Assets
Resulting From Operations $453,577
See notes to financial statements.
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STATEMENT OF CHANGES IN NET ASSETS
January 31, 1997
(Inception)
to September 30,
Increase (Decrease) in Net Assets 1997
Operations
Net investment income (loss) $(11,644)
Net realized gain (loss) (8,459)
Change in unrealized appreciation or depreciation 473,680
Increase (Decrease) in Net Assets
Resulting From Operations 453,577
Capital share transactions:
Shares sold:
Class A Shares 3,645,490
Class C Shares 542,096
Shares redeemed:
Class A Shares (765,893)
Class C Shares (297,054)
Total capital share transactions 3,124,639
Total Increase (Decrease) in Net Assets 3,578,216
Net Assets
Beginning of period -
End of period $3,578,216
Capital Share Activity
Shares sold:
Class A Shares 262,408
Class C Shares 40,453
Shares redeemed:
Class A Shares (54,070)
Class C Shares (20,085)
Total capital share activity 228,706
See notes to financial statements.
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NOTES TO FINANCIAL STATEMENTS
Note A - Significant Accounting Policies
General: The Calvert New Vision Small Cap Fund (the "Fund"), a series of The
Calvert Fund, is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The operations of each
series are accounted for separately. The Fund, which commenced operations on
January 31, 1997, 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) dividend rates, due
to differences in Distribution Plan expenses and other class specific
expenses, (b) exchange privileges and (c) class specific voting rights.
The Fund originally issued an audited report dated March 31, 1997. The Fund
has since established a year-end dated September 30, 1997. The period covered
under the new annual report is January 31, 1997 through September 30, 1997.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is 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.
Options: The Fund may write or purchase option securities. The option premium
is the basis for recognition of unrealized or realized gain or loss on the
option. The cost of securities acquired or the proceeds from securities sold
through the exercise of the option is adjusted by the amount of the premium.
Risks from writing or purchasing option securities arise from possible
illiquidity of the options market and the movement in the value of the
investment or in interest rates. The risk associated with purchasing options
is limited to the premium originally paid.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Dividend income is recorded on the ex-dividend date.
Interest income, accretion of discount and amortization of premium are
recorded on an accrual basis. Investment income, expenses and realized and
unrealized gains and losses are allocated to separate classes of shares based
upon the relative net assets of each class.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income
tax regulations.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
earnings.
Note B - Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory
services and pays the salaries and fees of officers and affiliated Trustees of
the Fund. For its services, the Advisor receives a monthly fee based on an
annual rate of .90% of the Fund's average daily net assets.
The Advisor voluntarily waived and reimbursed the Fund for advisory fees,
administrative fees, and other operating expenses of $65,410.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee, payable monthly, of
.10% of the average daily net assets of the Fund.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by each
class of shares, allow the Fund to pay the distributor for expenses and
services associated with distribution of shares. The expenses paid may not
exceed .25% and 1.00% annually of average daily net assets of each Class A and
Class C, respectively.
The Distributor received $11,744 as its portion of the commissions charged on
sales of the Fund's shares.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Trustee who is not affiliated with the Advisor receives an annual fee of
$20,500 plus $1,500 for each Board and Committee meeting attended. Trustees
fees are allocated to each of the funds served.
Note C - Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $5,304,465 and $2,966,783, respectively.
The cost of investments owned at September 30, 1997 was substantially the same
for federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated $472,722, of which $514,583 related to appreciated
securities and $41,861 related to depreciated securities.
Securities having an aggregate market value of $171,269 were identified to
cover open options written at September 30, 1997.
Note D - Line of Credit
Effective July 1, 1997, a financing agreement is in place with all Calvert
Group Funds and State Street Bank and Trust Company ("the Bank"). Under the
agreement, the Bank is providing an unsecured line of credit facility, in the
aggregate amount of $50 million ($25 million committed and $25 million
uncommitted), to be accessed by the Funds for temporary or emergency purposes
only. Borrowings under this facility bear interest at the overnight Federal
Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be
incurred on the unused portion of the committed facility which will be
allocated to all participating funds. This fee is paid quarterly in arrears.
The Fund had no loans outstanding pursuant to this line of credit at September
30, 1997.
Note E - Subsequent Events
The shareholders of each class of the Calvert Strategic Growth Fund
("Strategic Growth") approved a merger into the Fund on December 9, 1997. The
acquisition was accomplished by a tax-free exchange of net assets of Strategic
Growth, for respective shares of the Fund.
Effective April 1, 1998, the Fund began to offer Class B shares of beneficial
interest. Class B shares are sold without a front-end sales charge, but may
impose a deferred sales charge at the time of redemption, depending on how
long you have owned the shares. Class B shares have a higher level of expenses
than Class A shares, including higher Distribution Plan expenses.
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FINANCIAL HIGHLIGHTS
Period Ended
September 30,
Class A Shares 1997#
Net asset value, beginning $15.00
Income from investment operations
Net investment income (loss) (.05)
Net realized and unrealized gain (loss) .70
Total from investment operations .65
Distributions from
Net investment income -
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value .65
Net asset value, ending $15.65
Total return* 4.33%
Ratios to average net assets:
Net investment income (loss) (.71%)(a)
Total expenses** 1.36%(a)
Net expenses .90%(a)
Expenses reimbursed 3.36%(a)
Portfolio turnover 196%
Average commission rate paid $.0488
Net assets, ending (in thousands) $3,260
Number of shares outstanding, ending (in thousands) 208
Period Ended
September 30,
Class C Shares 1997#
Net asset value, beginning $15.00
Income from investment operations
Net investment income (loss) (.10)
Net realized and unrealized gain (loss) .72
Total from investment operations .62
Distributions from
Net investment income -
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value .62
Net asset value, ending $15.62
Total return* 4.13%
Ratios to average net assets:
Net investment income (loss) (.95%)(a)
Total expenses** 1.47%(a)
Net expenses 1.15%(a)
Expenses reimbursed 9.44%(a)
Portfolio turnover 196%
Average commission rate paid $.0488
Net assets, ending (in thousands) $318
Number of shares outstanding, ending (in thousands) 20
(a) annualized
* Total return does not reflect deduction of Class A front-end sales charge.
** Ratio reflects total expenses before reduction for fee paid indirectly;
such reductions are included in the ratio of net expenses.
# From January 31, 1997 inception.
N/A Disclosure not applicable to prior periods.
<PAGE>
CALVERT GROUP'S FAMILY OF FUNDS
Tax-Exempt Money Market Funds
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio
Balanced Fund
CSIF Managed Growth Portfolio
Municipal Funds
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Equity Funds
NEW! CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWVF International Equity Fund
New Vision Small Cap Fund
New Africa Fund
