March 31, 1999
semi-annual
report
Calvert Income Fund
<PAGE>
Calvert
Income Fund
To Open an Account
800-368-2748
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800-368-2745
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Shareholders: 800-368-2745
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Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS
330 West 9th Street
Kansas City, MO 64105
Web Site
http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
This report is intended to provide fund information to shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by a prospectus.
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 Balanced 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
CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
printed on recycled paper
using soy-based inks
<PAGE>
Table
of
Contents
President's Letter
1
Portfolio
Manager Remarks
2
Schedule
of Investments
4
Statement
of Assets and Liabilities
6
Statement
of Operations
7
Statements
of Changes in
Net Assets
8
Notes to
Financial Statements
9
Financial Highlights
12
Shareholder Meeting Update
14
Y2K Update
15
[photo of Barbara Krumsiek, no caption]
Dear Shareholders:
The stock market appears to be on its way to a fifth straight year of 20%
plus returns. The pundits are running out of superlatives. The Dow Jones
Industrial Average produced a total return of 25.86%, closing in on a
record-breaking 10,000 level near the end of the March quarter. The NASDAQ
Composite index, supercharged by the technology sector, generated a total
return of 45.57% over the same six-month period.
The current economic environment for investors is exceedingly positive.
Interest rates and inflationary expectations are low and the US economy
remains in an expansion mode. The world's largest economy is now in its
fifth year of GDP growth in excess of 4%.
Among stocks, the top performers were tightly consolidated by capitalization
range and industry group. Large-capitalization companies and technology
plays fueled most of the advance. In the bond market, long-term US Treasury
securities outperformed other categories substantially.
While investors may be tempted to chase the current trend setters, that
approach comes with increased risk now, given the stock market's high levels
and increased volatility. We encourage investors to make decisions based on
their financial objectives and tolerance for risk. At this point, it would
be a good idea to reevaluate your asset allocation to be sure you are
positioned at a comfortable risk level. If you think change is in order,
your financial professional can suggest strategies that keep you on track to
meet long-term financial objectives without exposing you to undue levels of
risk.
We appreciate your investment in Calvert Group funds and look forward to
providing competitive returns in the months ahead.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
April 28, 1999
<PAGE>
Greg Habeeb
of Calvert Asset Management Company
What were the driving forces in the credit markets?
The credit markets rallied significantly over the last six months as the
one-year bear market in the spread between non-government bonds and Treasury
bonds came to a screeching halt. When market participants became comfortable
with the idea that the Russian debacle was not necessarily going to be
repeated in other parts of the world, they started to purchase
non-government bonds. The flight to quality reversed itself as Treasury
yields rose significantly.
Institutions followed suit by issuing large amounts of bonds, including a
record number of billion dollar plus deals. Right through the end of the
first quarter of 1999, these deals have been extremely well received.
What was your strategy?
When spreads widened significantly, we purchased some of the more
out-of-favor names and/or structures (step-up bonds, trust preferreds,
Japanese banks, etc.) aggressively at semi-distressed levels. We were also
extremely active in the new issue market since most such bond offerings came
with generous concessions to the marketplace. Combined with our normal style
of relative value trading, our activity increased dramatically and our
turnover rose. It is our belief that single A bonds are, as a class,
rich(overvalued) relative to both higher and lower rated bonds. For that
reason, we have sold many of our single A holdings and purchased higher and
lower rated bonds.
How did the Fund perform relative to its peer group?
Our active management style paid off handsomely as the Income Fund
performance trounced both the Lipper corporate debt funds BBB Average and the
Lehman Aggregate Bond Index. Over the last six months, the Income Fund
outperformed the Lipper BBB average by over 600 basis points and the Lehman
Aggregate by over 700 basis points.
What should investors expect in the coming months?
Currently the Treasury market has entered a trading range with Federal
Reserve policy in neutral. Continued low inflation eliminates the need for a
tighter policy and an economy that seems to be expanding eliminates the need
for any stimulating rate cuts. In this environment, the credit markets
appear stable.
With the ongoing paydown of Treasury securities, there has been a hearty
appetite for all spread product. We would expect this trend to continue as
long as there are no negative fundamental developments in the troubled
economies of Asia and Latin America. However, we continue to be somewhat
defensive in our portfolio management style because of global risks.
April 28, 1999
Calvert Income Fund Portfolio Statistics
March 31, 1999
Investment Performance
6 Months 12 Months
ended ended
3/31/99 3/31/99
Class A 7.14% 11.43%
Class I N/A N/A
Lehman Aggregate
Bond Index TR (0.16)% 6.49%
Lipper Corporate
Debt Funds
BBB Rated Average 0.44% 4.07%
Maturity Schedule
Weighted Average
3/31/99 9/30/98
11 years 15 years
SEC Yields
30 days ended
3/31/99 9/30/98
Class A 5.52% 7.51%
Class I 6.59% N/A
Portfolio Quality Structure
AAA 17%
AA 8%
A 16%
BBB 45%
BB 6%
B 4%
NR 4%
Cash & Cash Equivalents --
100%
Investment performance does not reflect the
deduction of any front-end sales charge.
TR represents total return.
Source: Lipper Analytical Services, Inc.
NR: Obligation is not rated by a commercial credit rating service, such as
Moody's Investors Services, Inc., or Standard & Poor's Corporation;
obligation has been determined to be of appropriate quality for the
Portfolio by Calvert Asset Management Company, Inc., the Investment Advisor.
Portfolio Statistics
March 31, 1999
Average Annual Total Returns
Class A
As of 3/31/99
One year 7.27%
Five year 7.87%
Ten year 8.91%
Since inception 9.86%
(10/12/82)
Class I
As of 3/31/99
Since inception N/A
(3/1/99)
Performance Comparison
Comparison of change in value of $10,000
investment. (Source: Lipper Analytical Services, Inc.)
[LINE GRAPH HERE]
Calvert Income Fund $23,644
Lehman Aggregate Bond Index $23,848
Lipper Corporate Debt Funds BBB Rated Index $23,171
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's Class A maximum front-end sales charge of 3.75%. No sales charge
has been applied to the index used for comparison. The value of an
investment in Class A shares is plotted in the line graph. The value of an
investment in another Class of shares would be different. Past performance
is no guarantee of future results.
<PAGE>
Schedule of Investments
March 31, 1999
Principal
Debt Securities - 105.0% Amount Value
Corporate Bonds - 83.0%
Atlantic Mutual Insurance Co, 8.15%,
2/15/28 $500,000 $430,710
Colonial Bank, 8.00%, 3/15/09 1,000,000 981,200
Computer Association International, Inc.,
6.25%, 4/15/03 2,500,000 2,460,400
Conseco Financial Trust III, 8.796%,
4/1/27 1,750,000 1,587,565
Conseco, Inc. Medium Term Notes, 6.40%,
6/15/01 1,500,000 1,473,810
Conseco, Inc. 6.80%, 6/15/05 1,000,000 957,580
Dillards Inc., 6.39%, 8/1/03 500,000 500,375
Dime Capital Trust I, 9.33%, 5/6/27 1,500,000 1,586,970
Federated Department Stores Inc, 6.30%,
4/1/09 1,000,000 986,570
Florida Windstorm Underwritting, 7.125%,
12/25/19 1,500,000 1,504,065
Fuji JGB Investment LLC, 9.87%, 12/31/49 1,500,000 1,342,500
General Motors Acceptance Corp, 6.15%,
4/5/07 3,000,000 2,999,958
Hospitality Properties Trust, 7.00%, 3/1/08 1,000,000 922,350
Interpool CapitalTrust, 9.875%, 2/15/27 2,000,000 1,756,020
Interpool Inc, 7.20%, 8/1/07 1,500,000 1,266,465
Lehman Brothers Holdings Inc, 6.375%,
3/15/01 2,000,000 1,996,280
Mark IV Industries Inc, 7.50%, 9/1/07 750,000 709,237
Merita Bank Ltd., 7.15%, 12/29/49 1,700,000 1,690,191
News America Inc., 6.70%, 5/21/04 1,000,000 1,016,449
North American Mortgage, 7.315%, 8/25/03 1,500,000 1,521,150
Onbank Capital Trust I, 9.25%, 2/1/27 2,000,000 2,199,960
Orion Capital Trust II, 7.70%, 4/15/28 1,000,000 847,240
Pacific Bell, 6.25%, 3/1/05 1,000,000 1,016,350
Pepco Energy Transition Trust, 6.13%, 3/1/09 1,000,000 990,000
Skandinaviska Enskilda Bank, 6.50%, 12/29/49 1,000,000 969,175
Sovereign Bancorp, Inc., 6.75%, 9/1/00 2,150,000 2,148,431
Swedbank Sparbank Svenge, 7.50%, 9/27/49 1,000,000 971,906
Union Bank Norway, 7.35%, 12/31/49 2,000,000 2,020,700
Xerox Capital Trust, 8.00%, 2/1/27 2,210,000 2,254,443
Zurich Capital Trust, 8.376%, 6/1/37 1,500,000 1,591,095
Total Corporate Bonds (Cost $42,994,075) 42,699,145
Mortgage Securities - 0.0%
Government National Mortgage Association, Pool 137518,
11.00%, 10/15/15 1,087 1,222
Total Mortgage Securities (Cost $1,127) 1,222
Municipal Bonds - 4.3%
Chickasaw Nation Oklahoma Certificate of Participation,
10.00%, 8/1/03* 856,219 770,597
Dauphin County Pennsylvania Health Center General Authority
Revenue Bonds, 6.90%, 9/1/10 1,435,000 1,435,330
Total Municipal Bonds (Cost $2,291,219) 2,205,927
US Treasury - 2.0%
US Treasury Bonds, 5.25%, 11/15/28 1,100,000 1,026,542
Total US Treasury (Cost $1,024,554) 1,026,542
<PAGE>
Principal
Debt Securities - (Cont'd) Amount Value
Repurchase Agreements - 15.7%
State Street Bank: 4.89%, dated 3/31/99, due
4/1/99 (Collateral: $8,570,000, FHLMC,
5.125%, 10/15/08) $8,100,000 $8,100,000
Total Repurchase Agreements (Cost $8,100,000) 8,100,000
Total Debt Securities (Cost $54,410,975) 54,032,836
Equity Securities - 1.7% Shares
Preferred Stocks - 1.7%
Highwood Properties, Inc., Series A, Preferred,
8.625% 1,000 $865,580
Total Equity Securities (Cost $1,039,520) 865,580
TOTAL INVESTMENTS (Cost $55,450,495)
- 106.7% 54,898,416
Other assets and liabilities, net - (6.7%) (3,453,234)
Net Assets - 100% $51,445,182
* This security was valued by the Board of Trustees. See Note A.
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
Assets Value
Investments in securities, at value $54,898,416
Cash 1,040,577
Receivable for securities sold 9,914,856
Receivable for shares sold 378,943
Interest and dividends receivable 671,429
Other assets 17,290
Total assets 66,921,511
Liabilities
Payable for securities purchased 15,241,152
Payable for shares redeemed 146,763
Payable to Calvert Asset Management Co., Inc. 37,577
Payable to Calvert Administrative Services Company 12,317
Payable to Calvert Shareholders Services, Inc. 1,766
Payable to Calvert Distributors, Inc. 6,104
Accrued expenses and other liabilities 30,650
Total liabilities 15,476,329
Net assets $51,445,182
Net Assets Consist of:
Paid in capital applicable to the following shares of beneficial interest,
unlimited number of no par shares authorized:
Class A: 2,945,715 shares outstanding $49,506,456
Class I: 76,430 shares outstanding 1,278,596
Undistributed net investment income 26,540
Accumulated net realized gain (loss) on investments 1,185,669
Net unrealized appreciation (depreciation) on investments (552,079)
Net Assets $51,445,182
Net Asset Value Per Share
Class A (based on net assets $50,145,126) $17.02
Class I (based on net assets $1,300,056) $17.01
See notes to financial statements.
<PAGE>
Statement of Operations
Six Months ended March 31, 1999
Net Investment Income
Investment Income
Interest income $1,577,000
Dividend income 43,125
Total investment income 1,620,125
Expenses
Investment advisory fee 143,428
Administrative fees 12,317
Transfer agency fees and expenses 33,086
Distribution plan expenses:
Class A 33,257
Trustees' fees and expenses 2,874
Custodian fees 19,477
Registration fees 11,367
Reports to shareholders 9,336
Professional fees 9,746
Interest expense 41,199
Accounting fees 2,030
Miscellaneous3,529
Total expenses 321,646
Reimbursement from Advisor:
Class A --
Class I (674)
Fees paid indirectly (5,311)
Net expenses 315,661
Net Investment Income 1,304,464
Realized and Unrealized Gain (Loss) on Investments
Net realized gain 2,471,843
Change in unrealized appreciation or (depreciation) (655,750)
Net Realized and Unrealized Gain
(Loss) on Investments 1,816,093
Increase (Decrease) in Net Assets
Resulting From Operations $3,120,557
See notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
Six Months Ended Year Ended
March 31, September 30,
Increase (Decrease) in Net Assets 1999 1998
Operations
Net investment income $1,304,464 $2,368,880
Net realized gain (loss) 2,471,843 1,246,860
Change in unrealized appreciation
or (depreciation) (655,750) 155,171
Increase (Decrease) in Net Assets
Resulting From Operations 3,120,557 3,770,911
Distributions to shareholders from
Net investment income:
Class A Shares (1,306,236) (2,333,878)
Class I Shares (6,690) --
Net realized gain:
Class A Shares (2,096,000) (1,457,042)
Class I Shares -- --
Total distributions (3,408,926) (3,790,920)
Capital share transactions:
Shares sold:
Class A Shares 10,723,277 6,352,284
Class I Shares 1,279,124 --
Reinvestment of distributions:
Class A Shares 2,864,448 3,189,636
Class I Shares 6,690 --
Shares redeemed:
Class A Shares (4,740,004) (7,216,787)
Class I Shares (7,218) --
Total capital share transactions 10,126,317 2,325,133
Total Increase (Decrease) in Net Assets 9,837,948 2,305,124
Net Assets
Beginning of period 41,607,234 39,302,110
End of period (including undistributed net
investment income of $26,540 and
$35,002, respectively.) $51,445,182 $41,607,234
Capital Share Activity
Shares sold:
Class A Shares 632,123 369,441
Class I Shares 76,459 --
Reinvestment of distributions:
Class A Shares 171,135 187,050
Class I Shares 394 --
Shares redeemed:
Class A Shares (280,233) (419,266)
Class I Shares (423) --
Total capital share activity 599,455 137,225
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A -- Significant Accounting Policies
General: The Calvert Income Fund (the "Fund"), a series of The Calvert Fund,
is registered under the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. The operations of each series are
accounted for separately. The Fund offers two classes of shares of
beneficial interest. Class A shares are sold with a maximum front-end sales
charge of 3.75%. Effective March 1, 1999 the Fund began to offer Class I
shares of beneficial interest. Class I shares require a minimum account
balance of $1,000,000. Class I shares have no front-end sales charge and
have a lower expense ratio than Class A shares.
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 not available are valued
at the most recent bid price or based on a yield equivalent obtained from
the securities' market maker. Municipal securities are valued utilizing the
average of bid prices or at bid prices based on a matrix system (which
considers such factors as security prices, yields, maturities and ratings)
furnished by dealers through an independent pricing service. 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.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts
depend on future developments inherent in long-term investments. Further,
because of the inherent uncertainty of valuation, those estimated values may
differ significantly form the values that would have been used had a ready
market of the investments existed, and the differences could be material.
At March 31, 1999, $770,597, or 1.5% of net assets, were valued by the Board
of Trustees.
Repurchase Agreements: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value
and a possible loss of income or value if the counterparty fails to perform
in accordance with the terms of the agreement.
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.
<PAGE>
Futures Contracts: The Fund may enter into futures contracts agreeing to buy
or sell a financial instrument for a set price at a future date. The Fund
maintains securities with a value equal to its obligation under each
contract. Initial margin deposits of either cash or securities are made upon
entering in futures contracts; thereafter, variation margin payments are
made or received daily reflecting the change in market value. Unrealized or
realized gains and losses are recognized based on the change in market
value. Risks of futures contracts arise from the possible illiquidity of the
futures markets and the movement in the value of the investment or in
interest rates.
Short Sales: The Fund may use short sales of U.S. Treasury securities for
the limited purpose of hedging the Fund's duration. Any short sales will be
covered with an equivalent amount of high quality, liquid securities in a
segregated account at the Fund's custodian.
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
or, in the case of dividends on certain foreign securities, as soon as the
Fund is informed of the ex-dividend date. Interest income, accretion of
discount and amortization of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are paid
monthly. 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 the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount 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 reported period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's and transfer agent's fees may be 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 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
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by
Ameritas Acacia Mutual Holding 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 .70% of the Fund's average daily net assets.
Effective March 1, 1999, the fees paid to the advisor changed to an annual
rate of .40% of the Fund's average daily net assets.
<PAGE>
Calvert Administrative Services Company, Inc., an affiliate of the advisor,
provides administrative services to the Fund for an annual fee, payable
monthly. The administrative service fee was initiated on March 1, 1999.
Class A shares pay an annual rate of .30% and Class I shares pay an annual
rate of .10%, based on their average daily net assets.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. The Distribution Plan allows the
Fund to pay the distributor for expenses and services associated with
distribution of shares. The expenses paid may not exceed .50% annually of
the Fund's average daily net assets of Class A. Class I does not have
Distribution plan expenses.
The Distributor received $17,016 as its portion of the commissions charged
on sales of the Fund's shares.
Calvert Shareholder Services, Inc. (CSSI), an affiliate of the Advisor, is
the shareholder servicing agent for the Fund. For its services, CSSI
received a fee of $9,161 for the six months ended March 31, 1999. National
Financial Data Services, Inc., is the transfer and dividend disbursing agent.
Each Trustee who is not affiliated with the Advisor receives an annual fee
of $20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's 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 $880,944,952 and $878,820,164, respectively.
The cost of investments owned at March 31,1999 was substantially the same
for federal income tax and financial reporting purposes. Net unrealized
depreciation aggregated $552,079, of which $329,571 related to appreciated
securities and $881,650 related to depreciated securities.
Note D -- Line of Credit
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. The Fund had no loans outstanding pursuant to this line
of credit at March 31, 1999.
<PAGE>
Financial Highlights
Periods Ended
March 31, September 30, September 30,
Class A Shares 1999 1998 1997
Net asset value, beginning $17.17 $17.20 $16.47
Income from investment operations
Net investment income .49 1.02 1.02
Net realized and unrealized
gain (loss) .69 .61 .74
Total from investment
operations 1.18 1.63 1.76
Distributions from
Net investment income (.50) (1.01) (1.02)
Net realized gain (.83) (.65) (.01)
Total distributions (1.33) (1.66) (1.03)
Total increase (decrease) in net
asset value (.15) (.03) .73
Net asset value, ending $17.02 $17.17 $17.20
Total return* 7.14% 9.92% 11.03%
Ratios to average net assets:
Net investment income 5.85% (a) 5.96% 6.04%
Total expenses+ 1.44% (a) 1.43% 1.33%
Net expenses 1.42% (a) 1.36% 1.26%
Portfolio turnover 2,163% 3,461% 2,961%
Net assets, ending
(in thousands) $50,145 $41,607 $39,302
Number of shares outstanding,
ending (in thousands) 2,946 2,423 2,285
Years Ended
September 30, September 30, September 30,
Class A Shares 1996 1995 1994
Net asset value, beginning $16.82 $15.68 $18.41
Income from investment operations
Net investment income 1.01 1.11 1.16
Net realized and unrealized
gain (loss) (.32) 1.14 (2.42)
Total from investment
operations .69 2.25 (1.26)
Distributions from
Net investment income (1.01) (1.11) (1.16)
In excess of net realized gain(.03) -- --
Net realized gain -- -- (.31)
Total distributions (1.04) (1.11) (1.47)
Total increase (decrease) in
net asset value (.35) 1.14 (2.73)
Net asset value, ending $16.47 $16.82 $15.68
Total return* 4.21% 14.90% (6.94%)
Ratios to average net assets:
Net investment income 6.02% 6.89% 6.86%
Total expenses+ 1.26% 1.26% N/A
Net expenses 1.23% 1.23% 1.07%
Portfolio turnover 153% 135% 34%
Net assets, ending
(in thousands) $44,431 $42,637 $45,936
Number of shares outstanding,
ending (in thousands) 2,698 2,535 2,929
<PAGE>
Financial Highlights
Period Ended
March 31,
Class I Shares 1999 ^
Net asset value, beginning $16.73
Income from investment operations
Net investment income .09
Net realized and unrealized gain (loss) .28
Total from investment operations .37
Distributions from
Net investment income (.09)
Total distributions (.09)
Total increase (decrease) in net asset value .28
Net asset value, ending $17.01
Total return* 2.20%
Ratios to average net assets:
Net investment income 6.06% (a)
Total expenses+ .74% (a)
Net expenses .72% (a)
Expenses reimbursed .61% (a)
Portfolio turnover 2,163%
Net assets, ending (in thousands) $1,300
Number of shares outstanding, ending (in thousands) 76
(a) Annualized
* Total return is not annualized and does not reflect deduction of any
front-end sales charge.
+ 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. Total expenses are presented net
of expense waivers and reimbursements.
^ From March 1, 1999 inception.
N/A Disclosure not applicable to prior periods.
<PAGE>
A special meeting of shareholders was scheduled for February 24, 1999. There
were several proposals voted upon at the meeting. A brief description of
each proposal and the number of votes received for, against, and votes to
abstain is shown below. All proposals were passed.
Proposal 1 - To elect the Board of Trustees.
Nominees For Against
Richard L. Baird, Jr. 1,341,685 90,913
Frank H. Blatz, Jr. 1,347,054 85,544
Frederick T. Borts 1,344,541 88,057
Charles E. Diehl 1,351,079 81,519
Douglas E. Feldman 1,349,722 82,876
Peter W. Gavian 1,349,288 83,310
John G. Guffey, Jr. 1,313,357 119,241
Barbara J. Krumsiek 1,335,376 97,222
M. Charito Kruvant 1,344,442 88,156
Arthur J. Pugh 1,345,972 86,626
David R. Rochat 1,346,387 86,211
D. Wayne Silby 1,345,598 97,000
Proposal 2 - To approve amended fundamental investment restrictions to: (a)
delete restrictions that are no longer required to be fundamental due to
changes in state laws or which otherwise need not be fundamental; and (b) to
revise the language of those restrictions that are still required to be
fundamental.
For Against Abstain Broker Non-Vote
1,160,016 29,192 80,359 163,031
Proposal 3 - To approve a new investment advisory agreement with the
investment advisor, Calvert Asset Management Company, Inc. ("CAMCO").
For Against Abstain
1,340,711 25,931 65,955
Proposal 4 was for another fund in the proxy.
Proposal 5 - To ratify the Board's selection of auditors,
PricewaterhouseCoopers LLP.
For Against Abstain
1,371,802 8,235 52,560
<PAGE>
Calvert Group and the Year 2000
Plans and Progress
We are now less than a year away from the year 2000, a problematic date for
computer systems coded for two-character year format. Entered as "00," the
year 2000 would be processed as 1900, a mistake that could foul a variety of
date-sensitive transactions.
As your mutual fund sponsor, our goal is make sure there is no interruption
in the level of service you receive. In the summary below, we've outlined
the steps Calvert Group is taking to ensure our systems perform reliably.
Step One-Assess Systems and Software. Develop an Action Plan
In 1997, we identified all systems, operating platforms and software
potentially affected by the millennium bug. These included:
Calvert Group systems-portfolio trading, sales contact and
reporting and internal management reporting
transfer agency systems-shareholder record-keeping and transaction
processing
subadvisor systems--investment accounting
other third-party data and service systems.
We also formed a Y2K task force, led by Calvert's vice president of
technology. This group has identified and prioritized our efforts to achieve
year 2000
compliance.
Step Two-Test for Compliance. Repair Systems as Necessary.
Internal systems have been tested. We've made repairs and moved modified
code into production. These systems are now fully compliant. Transfer agency
systems were re-engineered for compliance in 1989. Recent tests indicate
these are, in fact, compliant. The readiness of third-party systems,
including subadvisor systems, has been evaluated. Based on information
received from these groups, we have found no significant obstacles to
compliance.
Step Three-Confirm Compliance. Finalize Contingency Plan.
Testing of transfer agency systems will continue through 1999 to ensure
these remain compliant and continue to interact correctly with external
systems and processes. The transfer agency has established a back-up site,
should main systems fail, and compliance testing of these contingency
measures are also underway. We are developing contingency plans to ensure
that any unforeseen systems failures will not adversely affect our
operations or inconvenience our shareholders.
For more information or to get an update on remediation and testing efforts,
please visit us online at www.calvertgroup.com.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
March 31, 1999
semi-annual
report
Calvert New Vision
Small Cap Fund
<PAGE>
Calvert New Vision
Small Cap Fund
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS
330 West 9th Street
Kansas City, MO 64105
Web Site
http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
This report is intended to provide fund information to shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by a prospectus.
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 Balanced 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
CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
printed on recycled paper
using soy-based inks
<PAGE>
Table
of
Contents
President's Letter
1
Social Update
2
Portfolio
Manager Remarks
3
Statement
of Net Assets
7
Statement
of Operations
10
Statements
of Changes in
Net Assets
11
Notes to
Financial Statements
13
Financial Highlights
17
Shareholder Meeting Results
21
Y2K Update
22
[photo of Barbara Krumsiek, no caption]
Dear Shareholders:
The stock market appears to be on its way to a fifth straight year of 20%
plus returns. The pundits are running out of superlatives. The Dow Jones
Industrial Average produced a total return of 25.86%, closing in on a
record-breaking 10,000 level near the end of the March quarter. The NASDAQ
Composite index, supercharged by the technology sector, generated a total
return of 45.57% over the same six-month period.
The current economic environment for investors is exceedingly positive.
Interest rates and inflationary expectations are low and the US economy
remains in an expansion mode. The world's largest economy is now in its
fifth year of GDP growth in excess of 4%.
Among stocks, the top performers were tightly consolidated by capitalization
range and industry group. Large-capitalization companies and technology
plays fueled most of the advance. In the bond market, long-term US Treasury
securities outperformed other categories substantially.
While investors may be tempted to chase the current trend setters, that
approach comes with increased risk now, given the stock market's high levels
and increased volatility. We encourage investors to make decisions based on
their financial objectives and tolerance for risk. At this point, it would
be a good idea to reevaluate your asset allocation to be sure you are
positioned at a comfortable risk level. If you think change is in order,
your financial professional can suggest strategies that keep you on track to
meet long-term financial objectives without exposing you to undue levels of
risk.
We appreciate your investment in Calvert Group funds and look forward to
providing competitive returns in the months ahead.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
April 28, 1999
<PAGE>
Social
Update
Calvert Redesigns Its Web Site
Calvert Group unveiled its newly redesigned Web site. The redesigned Web
site uses leading edge technology to make information easily accessible to
investment professionals, individual investors and institutional investors.
Some of the key features include information such as performance, profiles,
literature, and audio manager updates. Performance and account information
are updated daily. We have several tools designed to educate the investor,
including our "Know What You Own(r)" service which allows individuals to find
out the stocks held by their mutual funds. We also offer a section
explaining climate change and supplier standards that explains how people
can make an impact on companies through proxy voting and the shareholder
resolution process. Comprehensive information is also available on socially
responsible and tax-free investing. Our mutual fund basics section offers an
array of tools to help individuals make important decisions regarding their
financial future. Please visit us at www.calvertgroup.com and learn more
about how Calvert Group can meet your needs.
High Social Impact Investments
High Social Impact Investments make targeted, direct investments in the
lives of people and their communities. It's helping people like Merlinda. As
a child Merlinda's father told her, "If there's something you want, learn to
make it." So she did. When financial crisis struck, Merlinda took her
grandmother's chili recipe and began cooking. A loan of $500 from ACCION New
Mexico allowed her to can her salsa as well, doubling her sales. Merlinda,
says, "that $500 was worth a million." ACCION helps microentrepreneurs start
and grow their businesses in the United States and Latin America. Calvert
has been supporting ACCION to reach out to new entrepreneurs since 1991.
<PAGE>
[photo of James Awad, no caption]
James
Awad
of
AWAD and associates
How have different types of stocks or investment styles fared in the market
run up to Dow 10,000?
As we entered 1999, we believed we were poised for a potential rally in
small cap stocks. After all, from October 8, 1998 through December 31, 1998,
small cap stocks had rallied more than 36% and had out-performed their big
cap brethren. It appeared that, finally, investors were beginning to
acknowledge the tremendous value inherent in small cap stocks. Technology,
of course, continued to post astronomical daily price increases fueled, like
so many Silicon Valley computer techie-types, by caffeine and sugar. We
anticipated that these stocks, and so many over-valued big caps, would crash
as the sugar and caffeine wore off. Alas, it was not to be!
Instead, it was small caps that crashed during the first quarter, ending
down approximately 5.8% for the quarter. Meanwhile, NASDAQ and the S&P 500
continued their unrelenting march upward. It appeared that no amount of
negative news would prevent these stocks from achieving their destiny.
However, the devil is in the details. Underlying Dow 10,000, was the
disturbing truth that the average stock was actually down for the quarter
and is down for the past twelve months. The Dow, which is comprised of just
30 of the biggest market capitalization stocks, and the S&P 500, which is
cap weighted and was dominated by the top 50 market cap stocks, masked
underlying weakness that spread throughout the U.S. markets. For the past
twelve months, ValueLine is down 17.7%, the S&P Mid Cap is down 1.7%, the
S&P Small Cap Index is down 20.6% and the Russell 2000 is down 18%, while
the Dow is up 10.3%, the S&P 500 is up 16.1% and the NASDAQ Composite is up
33.2%. In the last twelve to eighteen months, we have witnessed the largest
dispersion between growth and value and large and small cap as we have ever
witnessed.
The fuel for this dispersion is the ever-increasing concentration in the
largest market capitalization stocks and the Internet mania. The large
stocks have benefited from the continued emphasis on indexing, from foreign
investment and from closet indexing as large cap active managers buy the
largest cap companies in the index to gain an edge. The Internet mania has
benefited from day trading and the herding instinct. The empirical evidence
demonstrates that valuations get more extreme as the market cap increases.
This is a situation that cannot last in perpetuity. Fortunately, the seeds
of a reversal are, in our opinion, currently being sown.
Given this, what is your outlook for the coming months?
As of March 29, 1999, fully 77% of the companies in the Russell 2000 were
down for the past twelve months by an average of 36.5%. For the quarter, 70%
were down by an average of 19.7%. This would suggest that valuations among
small cap stocks are extraordinarily low. And that is true. It is also true
that as one goes from smallest to largest, valuations become more and more
excessive. Since the Internet stocks don't have any earnings to speak of, it
is necessary to look at price/sales for comparisons. Russell 2000 companies
with market capitalizations below $500 million on average sell for just 1.9
times sales while companies with market capitalizations greater than $1
billion sell for 8.7 times sales. Of course, as you might expect, the
argument continues up the cap range.
The Russell 2000 is a capitalization-weighted index, which means that the
largest companies in the index have a greater say in performance than the
smaller companies in the index. Ordinarily, this is not a significant point
given that the index contains approximately 2,000 companies with market
capitalizations generally under $1.5 billion. However, the investing
public's current fascination with size and technology has created a gross
anomaly. The Internet stocks, particularly the household names, have risen
in value by such a significant amount they have shifted the balance and are
distorting performance. Currently, CMG, Inc., the largest company in the
Russell at $8.8 billion, is up over 1200% in the past twelve months. The top
twenty performing Russell 2000 stocks (18 were internet related) for the
past twelve months ending 3/29/99, were up on average more than 400% and
accounted for approximately 4% of the Russell 2000. Our argument is that
this performance has masked the bear market existent in small cap stocks
today.
The Russell 2000 is re-formulated each June 30th by the Frank Russell
Company. Their methodology is to eliminate all closed end mutual funds,
trusts, limited partnerships, "pink sheet" stocks, stocks selling under
$1.00 and all bulletin board stocks. The result of this screen is
approximately 3,000 companies. These companies are then sorted by market
capitalization. The top 1000 form the Russell 1000 Large Cap Index and the
remainder the Russell 2000 Small Cap Index. At June 30, 1998 the largest
company in the index had a market capitalization of $1.4 billion. Today,
there are 88 companies with market capitalizations greater than $1.4
Billion. The last twelve months is surely an anomaly, as the Internet stock
mania is unprecedented in the twenty-year history of the index. Further, the
index will be re-balanced on June 30, 1999, removing all of these stocks
(barring a tremendous decline). However, their impact has been significant
and detrimental to core or value-oriented managers, by obscuring the fact
that the average stock under $1 billion (true small cap) is down more than
27% over the past twelve months.
When the index is re-balanced, we believe that investors will see a truer
picture of the performance of small cap stocks over the past eighteen months
and will have a truer sense of the tremendous value opportunities this
market presents. Rarely before, if ever, have we seen such strong, healthy,
growing organizations selling for less than private market valuations.
Rarely before, have we seen so many fundamentally sound, high quality
companies selling for less than hard book value.
We continue to believe that we have assembled a portfolio of high quality,
under-valued small-capitalization stocks that will benefit as the markets
regain a sense of reason in the coming months. As market generals such as
Coke and Gillette continue to disappoint, investors will come to the
realization that the stratospheric price/earnings ratios assigned to these
"generals" are unwarranted. It is our belief that this realization will lead
investors to seek out growth opportunities at more appropriate valuations.
This search will lead investors to the small cap arena. In the meantime, we
will continue to hold true to our discipline and seek out well-run companies
with outstanding management whose stock is selling at a discount to our
calculated fair value. We will continue to invest in these companies and
will remain patient as we expect the market to eventually comes back to
these quality companies.
April 28, 1999
Calvert New Vision Small Cap Fund Portfolio Statistics
March 31, 1999
Investment Performance
6 Months 12 Months
ended ended
3/31/99 3/31/99
Class A (2.99%) (27.81%)
Class B (3.66%) (28.49%)
Class C (3.43%) (28.37%)
Class I N/A N/A
Russell 2000
Index TR 10.00% (16.26%)
Lipper Small-Cap
Funds Average 12.53% (15.48%)
Ten Largest Stock Holdings
% of Net Assets
Shared Medical Systems Corp. 4.65%
Comdisco, Inc. 4.42%
CMP Media, Inc. 4.11%
National Data Corp. 4.07%
Houghton Mifflin Co. 3.76%
Eclipsys Corp. 3.69%
Doral Financial Corp. 3.65%
New Horizons Worldwide 3.44%
American Tower Corp. 3.28%
Wiley, John & Sons, Inc. 3.14%
Total 38.21%
Asset Allocation
Stocks 85%
Bonds 7%
Cash & Cash Equivalents 8%
100%
Investment performance does not reflect the deduction of any front-end or
deferred sales charge.
TR represents total return.
Source: Lipper Analytical Services, Inc.
New subadvisor assumed management of the Fund effective October 1997.
Portfolio Statistics
March 31, 1999
Average Annual Total Returns
Class A Shares
One year (31.25%)
Since inception (12.79%)
(1/31/97)
Class B Shares
One year (32.07%)
Since inception (32.07%)
(4/1/98)
Class C Shares
One year (28.37%)
Since inception (11.31%)
(1/31/97)
Class I Shares
Since inception N/A
(3/1/99)
Performance Comparison
Comparison of change in value of $10,000
investment. (Source: Lipper Analytical Services, Inc.)
[LINE GRAPH HERE]
Calvert New Vision Small Cap Fund (A) $7,787
Calvert New Vision Small Cap Fund (C) $7,693
Lipper Small Cap Index $10,623
Russell 2000 Index TR $11,057
Total returns assume reinvestment of dividends and reflect the deduction of
the Fund's maximum front-end or deferred sales charge. No sales charge has
been applied to the indices used for comparison. The value of an investment
in Class A & C shares is plotted in the line graph. The value of an
investment in another class of shares would be different.
Past performance is no guarantee of future results.
Portfolio Statistics
March 31, 1999
Top Five Economic Sectors
% of Equity Holdings
Business Equipment and Services 24.8%
Health Care 17.6%
Consumer Services 16.9%
Financial Services 15.3%
Consumer Non-durables 8.0%
Portfolio Statistics
March 31, 1999
Portfolio Characteristics
New Vision Russell
Small Cap 2000
Fund Index
Number of Stocks 40 1,887
Median Market
Capitalization ($bil) 0.57 0.73
(by portfolio weight)
Price/Earnings
Ratio 21.60 33.11
Earnings Per Share
Growth 18.55% 25.62%
Yield 0.85% 1.47%
(return on capital investment)
Volatility Measures
Capital Russell
Accumulation 2000
Fund Index
Beta1 1.06 1.04
R-Squared2 0.76 0.84
1 Measure of volatility compared to the S&P 500 Stock Index (S&P 500) beta
of 1. The higher the beta, the higher the risk and potential reward.
2 Measure of correlation between the fund's returns and the overall market's
(S&P 500) returns. An R-Squared of 0 would mean no correlation, an R-Squared
of 1 would mean total correlation.
Source: Vestek
<PAGE>
Statement of Net Assets
March 31, 1999
Equity Securities - 85.8% Shares Value
Aerospace / Defense - 2.4%
Kellstrom Industries, Inc. * 91,500 $1,452,562
Banks - 7.9%
Doral Financial Corp. 119,000 2,186,625
Hamilton Bancorp, Inc. * 25,000 646,875
Investors Financial Services Corp. 65,200 1,874,500
4,708,000
Biotechnology - 2.3%
Aviron * 67,500 1,366,875
Communications - 1.8%
Periphonics Corp. * . 173,750 1,096,797
Computer Technology - 0.1%
Transact Technologies, Inc. * 20,000 57,500
Consulting Services - 4.4%
Comdisco, Inc. 148,000 2,645,500
Data Processing - 4.1%
National Data Corp. 58,000 2,436,000
Entertainment - 1.6%
Gaylord Entertainment Co. 39,200 950,600
Food - 4.9%
Corn Products International, Inc. 67,000 1,603,812
Smucker (J.M.) Co., Class B 75,300 1,336,575
2,940,387
Health Care Facilities - 0.0%
LTC Healthcare, Inc. * 6,400 13,200
Health Care Management Services - 3.7%
American Retirement Corp. * 68,000 977,500
Health Management Systems, Inc. * 261,500 1,242,125
2,219,625
Health Care Information Technology - 3.7%
Eclipsys Corp. * 104,575 2,209,147
Hotel / Motel - 0.0%
Lodgian, Inc. * 4,500 19,969
Insurance - 2.7%
Presidential Life Corp. * 90,000 1,614,375
<PAGE>
Equity Securities - (Cont'd) Shares Value
Machinery and Engineering - 0.3%
Somanetics Corp. * 111,500 $202,094
Tokheim Corp. * 100 788
202,882
Medical Information Systems - 4.7%
Shared Medical Systems Corp. 50,000 2,784,375
Medical Products - 2.6%
ATS Medical, Inc. * 205,000 1,537,500
Multi-Sector Companies - 4.6%
Annuity and Life Re Holdings, Ltd. 68,000 1,555,500
Cunningham Graphics International, Inc.* 85,500 1,122,188
Excel Legacy Corp. * 25,000 85,938
2,763,626
Printers - 4.5%
Printronix, Inc. * 77,800 865,525
Zebra Technologies Corp., Class A * 76,750 1,822,812
2,688,337
Publishing - 11.0%
CMP Media, Inc., Class A * 80,000 2,460,000
Houghton Mifflin Co. 48,000 2,250,000
Wiley (John) & Sons, Inc., Class A 44,700 1,877,400
6,587,400
Railroads - 2.2%
Genesee & Wyoming, Inc., Class A * 123,000 1,314,562
Real Estate Investment Trusts - 2.1%
LTC Properties, Inc. 104,000 1,274,000
Retail - 0.8%
U.S. Vision, Inc. * 117,500 499,375
Service Organizations - 6.0%
Lanvision Systems, Inc. * 216,700 446,944
New Horizons Worldwide, Inc. * 103,500 2,057,062
StarTek, Inc. * 103,550 1,093,747
3,597,753
Telecommunications - 0.2%
Nextlink Communications, Inc., Class A * 2,000 112,000
Vitamins and Nutritional Products - 3.9%
NBTY, Inc. * 243,000 1,184,625
Twinlab Corp. * 121,000 1,134,375
2,319,000
Wireless Equipment - 3.3%
American Tower Corp., Class A * 80,000 1,960,000
Total Equity Securities (Cost $56,883,909) 51,371,347
<PAGE>
Principal
Corporate obligations - 3.9% Amount Value
American Retirement Corp., 5.75%,
10/1/02 $1,000,000 $835,000
Angeion Corp., 7.50%, 4/15/03 1,000,000 800,000
Assisted Living Concepts, 6.00%,
11/1/02 1,000,000 650,000
Crystal Dynamics, Inc., 7.125%, 5/1/99 50,002 50,002
Total Corporate Obligations (Cost $3,072,041) 2,335,002
Community Loan Notes - 2.7%
Cascadia Revolving Loan Fund, 4.50%,
4/30/99 + 75,000 74,645
Dorchester Bay Economic Development
Corp., 4.50%, 6/30/00 + 100,000 98,756
Illinois Facilities Fd., 4.00%, 9/30/99 + 250,000 243,100
Mercy Loan Fund, 4.50%, 1/13/01 + 200,000 191,112
Minnesota Non Profits Assistance Fund,
4.00%, 4/30/01 + 200,000 199,004
Northeast South Dakota Energy Conservation Corp.,
4.00%, 4/30/99 + 75,000 74,615
Ohio Community Development Finance
Fund, 5.00%, 5/31/99 + 500,000 495,815
Unitarian Universalist Affordable Housing
Corp., 4.50%, 6/28/99 + 80,000 78,961
Washington Area Community Investment
Fund, 4.50%, 6/28/99 + 100,000 98,701
Working Capital Management, 4.00%,
9/30/02 + 50,000 48,620
Total Community Loan Notes (Cost $1,630,000) 1,603,329
Repurchase Agreements - 7.0%
State Street Bank: 4.89%, dated 3/31/99,
due 4/1/99 (Collateral: $4,434,628, FHLMC,
5.125%, 10/15/08) 4,200,000 4,200,000
Total Repurchase Agreements (Cost $4,200,000) 4,200,000
TOTAL INVESTMENTS
(Cost $65,785,950) - 99.4% 59,509,678
Other assets in excess of liabilities - 0.6% 334,973
Net Assets $59,844,651
Net Assets Consist of:
Paid-in capital applicable to the following shares of
beneficial interest; unlimited number of no
par shares authorized:
Class A: 4,375,309 shares outstanding $67,675,732
Class B: 93,387 shares outstanding 1,274,632
Class C: 554,764 shares outstanding 8,408,039
Class I: 107,230 shares outstanding 1,309,316
Undistributed net investment income (loss) (93,737)
Accumulated net realized gain (loss)
on investments (12,453,059)
Net unrealized appreciation (depreciation)
on investments (6,276,272)
Net Assets $59,844,651
Net Asset Value Per Share
Class A (based on net assets of $51,110,596) $11.68
Class B (based on net assets of $1,080,329) $11.57
Class C (based on net assets of $6,399,862) $11.54
Class I (based on net assets of $1,253,864) $11.69
+ Restricted securities represents 2.7% of net assets.
* Non-income producing.
See notes to financial statements.
<PAGE>
Statement of Operations
Six Months ended March 31, 1999
Net Investment Income
Investment Income
Interest Income $172,735
Dividend income (net of foreign taxes of $1,458) 323,523
Total investment income 496,258
Expenses
Investment advisory fee 304,451
Transfer agency fees and expenses 144,802
Distribution Plan expenses:
Class A 76,301
Class B 4,695
Class C 36,064
Trustee's fees and expenses 4,746
Administrative fees 42,359
Accounting fees 3,378
Custodian fees 16,760
Registration fees 24,358
Reports to shareholders 23,002
Professional fees 10,438
Miscellaneous 11,815
Total expenses 703,169
Reimbursement from Advisor:
Class A (1,809)
Class B (5,288)
Class C (222)
Class I (861)
Fees paid indirectly (104,994)
Net expenses 589,995
Net Investment Income (Loss) (93,737)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) (8,812,029)
Change in unrealized appreciation or (depreciation) 7,322,900
Net Realized and Unrealized Gain
(Loss) on Investments (1,489,129)
Increase (Decrease) in Net Assets
Resulting From Operations $(1,582,866)
See notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
Periods Ended
March 31, Sept. 30,
Increase (Decrease) in Net Assets 1999 1998
Operations
Net investment income (loss) $(93,737) $(202,192)
Net realized gain (loss) (8,812,029) (3,401,229)
Change in unrealized appreciation
or (depreciation) 7,322,900 (11,074,307)
Increase (Decrease) in Net Assets
Resulting From Operations (1,582,866) (14,677,728)
Distributions to shareholders from
Net investment income:
Class A Shares - (23,622)
Net realized gain:
Class A Shares - (204,302)
Class C Shares - (27,040)
Total distributions - (254,964)
Capital share transactions:
Shares sold:
Class A Shares 6,436,575 14,788,873
Class B Shares 778,249 676,583
Class C Shares 879,056 2,286,844
Class I Shares 1,346,572
Shares issued from merger:
Class A Shares - 79,719,091
Class C Shares - 10,469,904
Reinvestment of distributions:
Class A Shares - 207,755
Class C Shares - 26,430
Shares redeemed:
Class A Shares (16,105,440) (22,901,575)
Class B Shares (154,203) (25,997)
Class C Shares (1,101,131) (4,508,337)
Class I Shares (37,256) -
Total capital share transactions (7,957,578) 80,739,571
Total Increase (Decrease) in
Net Assets (9,540,444) 65,806,879
Net Assets
Beginning of period 69,385,095 3,578,216
End of period (including undistributed net
investment income (loss) of ($93,737)
and 0, respectively) $59,844,651 $69,385,095
See notes to financial statements.
<PAGE>
Periods Ended
March 31, Sept. 30,
Capital Share Activity 1999 1998
Shares sold:
Class A Shares 541,314 985,936
Class B Shares 62,121 45,527
Class C Shares 71,385 152,487
Class I Shares 110,406 -
Shares issued from merger:
Class A Shares - 5,456,474
Class C Shares - 718,100
Reinvestment of distributions:
Class A Shares - 14,127
Class C Shares - 1,810
Shares redeemed:
Class A Shares (1,295,378) (1,535,502)
Class B Shares (12,269) (1,992)
Class C Shares (110,703) (298,683)
Class I Shares (3,176) -
Total capital share activity (636,300) 5,538,284
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
Calvert Fund, is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. The operation of
each series are accounted for separately. The Fund offers four classes of
shares of beneficial interest. Class A shares are sold with a maximum
front-end sales charge of 4.75%. Class B shares are sold without a front-end
sales charge. With certain exceptions, the Fund will impose a deferred sales
charge at the time of redemption, depending on how long you have owned the
shares. Class C shares are sold without a front-end sales charge. With
certain exceptions, the Fund will impose a deferred sales charge on shares
sold within one year. Class B and Class C shares have higher level of
expenses than Class A shares. Effective March 1, 1999, the Fund began to
offer Class I shares of beneficial interest. Class I shares require a
minimum account balance of $1,000,000. Class I shares have no front-end or
deferred sales charge. Each class has different: (a) dividend rates, due to
difference in Distribution Plan expenses and other class specific expenses,
(b) exchange privileges and (c) class specific voting rights.
On December 12, 1997, the net assets of Calvert Strategic Growth Fund were
merged into the Fund. The acquisition was accomplished by a tax-free
exchange of 6,174,574 shares of the Fund (valued at $90,188,995) for the
5,697,864 shares of the Calvert Strategic Growth Fund outstanding at
December 12, 1997. The Calvert Strategic Growth Fund's net assets at that
date, including $2,998,545 of unrealized depreciation and $899,711 of
undistributed net losses were combined with those of the Fund. The aggregate
net assets of the Fund and Calvert Strategic Growth Fund immediately before
the acquisition were $4,817,712 and $90,188,995, respectively.
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. The Fund may invest in securities whose resale is
subject to restrictions. Investments for which market quotations are not
available or deemed inappropriate are valued in good faith under the
direction of the Board of Trustees.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts
depend on future developments inherent in long-term investments. Further,
because of the inherent uncertainty of valuation, those estimated values may
differ significantly from the values that would have been used had a ready
market of the investments existed, and the differences could be material.
At March 31, 1999, $1,603,329, or 2.7% of net assets, were valued by the
Board of Trustees.
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Repurchase Agreements: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value
and a possible loss of income or value if the counterparty fails to perform
in accordance with the terms of the agreement.
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 and transfer agent's fees may be 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
Ameritas Acacia Mutual Holding 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
<PAGE>
receives a monthly fee based on an annual rate of .90% through February 28,
1999, and .75% effective March 1, 1999, based on the Fund's average daily
net assets. Under the terms of the agreement, $70,385 was payable at period
end.
The Advisor voluntarily waived and reimbursed the Fund for advisory fees,
administrative fees, and other operating expenses of $8,180.
Calvert Administrative Services Company, Inc., 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 through
February 28, 1999. Effective March 1, 1999, Class A, Class B, and Class C
shares pay an annual rate of .25% and Class I shares pay an annual rate of
.10%, based on their average daily net assets. Under the terms of the
agreement, $12,918 was payable at period end.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by Class
A, Class B and Class C shares, allow the Fund to pay the distributor for
expenses and services associated with distribution of shares. The expenses
paid may not exceed .25%, 1.00% and 1.00% annually of average daily net
assets of each Class A, Class B and Class C, respectively. Class I does not
have Distribution Plan expenses. Under the terms of the agreement, $17,711
was payable at period end.
The Distributor received $21,201 as its portion of the commissions charged
on sales of the Fund's shares.
Calvert Shareholder Services, Inc. (CSSI), an affiliate of the Advisor, is
the shareholder servicing agent for the Fund. For its services, CSSI
received fees of $42,107 for the six months ended March 31, 1999. Under the
terms of the agreement, $6,497 was payable at period end. National Financial
Data Services, Inc., is the transfer and dividend disbursing agent.
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 $22,755,347 and $27,828,909, respectively.
The cost of investments owned at March 31, 1999 was substantially the same
for federal income tax and financial reporting purposes. Net unrealized
depreciation aggregated $6,276,272, of which $5,473,542 related to
appreciated securities and $11,749,814 related to depreciated securities.
<PAGE>
Note D - Line of Credit
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. The Fund had no loans outstanding pursuant to this line
of credit at March 31, 1999.
<PAGE>
Financial Highlights
Periods Ended
March 31, Sept. 30,
Class A Shares 1999 1998
Net asset value, beginning $12.04 $15.65
Income from investment operations
Net investment income (loss) - (.02)
Net realized and unrealized gain (loss) (.36) (3.55)
Total from investment operations (.36) (3.57)
Distributions from
Net investment income - -
Net realized gain - (.04)
Total distributions - (.04)
Total increase (decrease) in net asset value (.36) (3.61)
Net asset value, ending $11.68 $12.04
Total return* (2.99%) (22.86%)
Ratios to average net assets:
Net investment income (loss) (.16%) (a) (.17%)
Total expenses+ 1.89% (a) 1.82%
Net expenses 1.59% (a) 1.71%
Expenses reimbursed .01% (a) .06%
Portfolio turnover 38% 68%
Net assets, ending (in thousands) $51,111 $61,765
Number of shares outstanding, ending
(in thousands) 4,375 5,129
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%
Net assets, ending (in thousands) $3,260
Number of shares outstanding, ending (in thousands) 208
<PAGE>
Periods Ended
March 31, Sept. 30,
Class B Shares 1999 1998#
Net asset value, beginning $12.01 $16.18
Income from investment operations
Net investment income (loss) (.05) ( .05)
Net realized and unrealized gain (loss) (.39) (4.12)
Total from investment operations (.44) (4.17)
Distributions from
Net investment income - -
Net realized gain - -
Total distributions - -
Total increase (decrease) in net asset value (.44) (4.17)
Net asset value, ending $11.57 $12.01
Total return* (3.66%) (25.77%)
Ratios to average net assets:
Net investment income (loss) (1.55%) (a) (1.39%)(a)
Total expenses+ 3.51% (a) 3.40%(a)
Net expenses 3.01% (a) 2.99%(a)
Expenses reimbursed 1.13% (a) 4.28%(a)
Portfolio turnover 38% 68%
Net assets, ending (in thousands) $1,080 $523
Number of shares outstanding, ending
(in thousands) 93 44
<PAGE>
Periods Ended
March 31, Sept. 30,
Class C Shares 1999 1998
Net asset value, beginning $11.95 $15.62
Income from investment operations
Net investment income (loss) (.08) (.15)
Net realized and unrealized gain (loss) (.33) (3.48)
Total from investment operations (.41) (3.63)
Distributions from
Net investment income - -
Net realized gain - (.04)
Total distributions - (.04)
Total increase (decrease) in net asset value (.41) (3.67)
Net asset value, ending $11.54 $11.95
Total return* (3.43%) (23.31%)
Ratios to average net assets:
Net investment income (loss) (1.06%) (a) (1.15%)
Total expenses+ 2.82% (a) 2.78%
Net expenses 2.49% (a) 2.64%
Expenses reimbursed .01% (a) .16%
Portfolio turnover 38% 68%
Net assets, ending (in thousands) $6,400 $7,097
Number of shares outstanding, ending
(in thousands) 555 594
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%
Net assets, ending (in thousands) $318
Number of shares outstanding, ending (in thousands) 20
<PAGE>
Period Ended
March 31,
Class I Shares 1999^^
Net asset value, beginning $12.20
Income from investment operations
Net investment income (loss) .01
Net realized and unrealized gain (loss) (.52)
Total from investment operations (.51)
Distributions from
Net investment income -
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value (.51)
Net asset value, ending $11.69
Total return* (4.18%)
Ratios to average net assets:
Net investment income (loss) .94%(a)
Total expenses+ .87%(a)
Net expenses .82%(a)
Expenses reimbursed .79%(a)
Portfolio turnover 38%
Net assets, ending (in thousands) $1,254
Number of shares outstanding, ending (in thousands) 107
(a) Annualized
+ Ratio reflects total expenses before reduction for fees paid indirectly;
such reductions are included in the ratio of net expenses. Total expenses
are presented net of expense waivers and reimbursements.
* Total return does not reflect deduction of any front-end or deferred sales
charge.
^ From January 31, 1997 inception.
# From April 1, 1998 inception.
^^ From March 1, 1999 inception.
<PAGE>
A special meeting of shareholders was scheduled for February 24, 1999. There
were several proposals voted upon at the meeting. A brief description of
each proposal and the number of votes received for, against, and votes to
abstain is shown below. All proposals were passed.
Proposal 1 - To elect the Board of Trustees.
Nominees For Against
Richard L. Baird, Jr. 2,442,362 597,485
Frank H. Blatz, Jr. 2,458,354 581,493
Frederick T. Borts 2,458,842 581,005
Charles E. Diehl 2,460,956 578,891
Douglas E. Feldman 2,460,421 579,426
Peter W. Gavian 2,457,191 582,656
John G. Guffey, Jr. 2,428,812 611,035
Barbara J. Krumsiek 2,462,115 577,732
M. Charito Kruvant 2,463,005 576,842
Arthur J. Pugh 2,459,433 580,414
David R. Rochat 2,461,667 578,180
D. Wayne Silby 2,460,873 578,974
Proposal 2 was for another fund in the proxy.
Proposal 3 - To approve a new investment advisory agreement with the
investment advisor, Calvert Asset Management Company, Inc. ("CAMCO").
For Against Abstain
2,647,046 54,222 338,575
Proposal 4 - To authorize TCF and/or CAMCO to enter into a new and/or
materially amend an existing investment subadvisory agreement with a
subadvisor in the future without having to first obtain shareholder approval.
For Against Abstain Broker Non-Vote
2,070,722 166,741 314,561 487,823
Proposal 5 -To ratify each Board's selection of auditors,
PricewaterhouseCoopers LLP.
For Against Abstain
2,736,621 20,287 282,938
<PAGE>
Calvert Group and the Year 2000
Plans and Progress
We are now less than a year away from the year 2000, a problematic date for
computer systems coded for two-character year format. Entered as "00," the
year 2000 would be processed as 1900, a mistake that could foul a variety of
date-sensitive transactions.
As your mutual fund sponsor, our goal is make sure there is no interruption
in the level of service you receive. In the summary below, we've outlined
the steps Calvert Group is taking to ensure our systems perform reliably.
Step One - Assess Systems and Software. Develop an Action Plan
In 1997, we identified all systems, operating platforms and software
potentially affected by the millennium bug. These included:
Calvert Group systems - portfolio trading, sales contact and
reporting and internal management reporting
transfer agency systems - shareholder record-keeping and
transaction processing
subadvisor systems - investment accounting
other third-party data and service systems.
We also formed a Y2K task force, led by Calvert's vice president of
technology. This group has identified and prioritized our efforts to achieve
year 2000
compliance.
Step Two - Test for Compliance. Repair Systems as Necessary.
Internal systems have been tested. We've made repairs and moved modified
code into production. These systems are now fully compliant. Transfer agency
systems were re-engineered for compliance in 1989. Recent tests indicate
these are, in fact, compliant. The readiness of third-party systems,
including subadvisor systems, has been evaluated. Based on information
received from these groups, we have found no significant obstacles to
compliance.
Step Three - Confirm Compliance. Finalize Contingency Plan.
Testing of transfer agency systems will continue through 1999 to ensure
these remain compliant and continue to interact correctly with external
systems and processes. The transfer agency has established a back-up site,
should main systems fail, and compliance testing of these contingency
measures are also underway. We are developing contingency plans to ensure
that any unforeseen systems failures will not adversely affect our
operations or inconvenience our shareholders.
For more information or to get an update on remediation and testing efforts,
please visit us online at www.calvertgroup.com.
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