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ROSPECTUS --
January 31, 1996
MONEY MANAGEMENT PLUS
Prime Portfolio
4550 Montgomery Avenue, Bethesda, Maryland 20814
INVESTMENT OBJECTIVE AND POLICIES
MONEY MANAGEMENT PLUS Prime Portfolio (the "Fund") is a money market
fund which seeks to obtain the highest level of current income,
consistent with preservation of capital and liquidity, that is available
through investments in specified money market instruments. The Fund's
assets are invested in certificates of deposit of major banks, prime
commercial paper and high-grade short-term corporate obligations, and
short-term U.S. Government and agency securities. The investments mature
in 13 months year or less, with an average weighted maturity of 90 days
or less. The Fund seeks to maintain a constant net asset value of $1.00
per share for the Fund. An investment in the Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance that the
Fund will be successful in maintaining a constant net asset value of
$1.00 per share.
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Notwithstanding the investment objectives and policies of the Fund, it
is currently invested almost entirely in U.S. Government securities in
order to meet diversification requirements. Further, due to the Fund's
relatively small asset size, its fund operating expenses are relatively
high compared to other money market funds. For this reason, the Fund's
Board of Trustees has concurred with the Advisor's recommendation that
the Fund be liquidated in the next few months.
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TO OPEN AN ACCOUNT
Call your broker, or complete and return the enclosed Account
Application. Minimum investment is $2,000 per Fund.
ABOUT THIS PROSPECTUS
Please read this Prospectus before investing. It is designed to provide
you with information you ought to know before investing and to help you
decide if the Fund's goals match your own. Keep this document for future
reference.
A Statement of Additional Information (dated January 31, 1996) for the
Fund has been filed with the Securities and Exchange Commission and is
incorporated by reference. This free Statement is available upon request
from the Fund: 800-368-2748.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
FEDERAL OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
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FUND EXPENSES
A. Shareholder Transaction Expenses Prime Portfolio
Sales Load on Purchases None
Sales Load on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
B. Annual Fund Operating Expenses (as a
percentage of average net assets)
Management Fees 0.50%
Rule 12b-1 Fees 0.35%
Other Expenses 0.62%
Total Fund Operating Expenses 1.47%
C. Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return;(2) redemption at the end of
each period:
1 Year 3 Years 5 Years 10 Years
$15 $46 $80 $176
The example, which is hypothetical, should not be considered a
representation of past or future expenses. Actual expenses may be higher
or lower than those shown.
Explanation of Table: The purpose of the table is to assist you in
understanding the various costs and expenses that an investor in the
Fund may bear directly (shareholder transaction costs) or indirectly
(annual fund operating expenses).
A. Shareholder Transaction Expenses are charges you pay when you
buy or sell shares of the Funds. If you request a wire redemption of
less than $1,000, you will be charged a $5 wire fee.
B. Annual Fund Operating Expenses are based on the Fund's
historical expenses, although Management Fees have been restated to
reflect expenses anticipated in the current fiscal year. Management Fees
are paid by the Fund to Calvert Asset Management Company, Inc.
("Advisor") for managing its investments and business affairs. The Fund
incurs Other Expenses for maintaining shareholder records, furnishing
shareholder statements and reports, and other services. If Management
had not reimbursed or waived fees, the current Other Expenses and Total
Fund Operating Expenses for would have been 0.56% and 1.41%,
respectively. Management Fees and Other Expenses have already been
reflected in the Fund's yield and are not charged directly to individual
shareholder accounts. Please refer to the section "Management of the
Fund" for further information.
The Fund's Rule 12b-1 fees include an asset-based sales charge.
Thus, long-term shareholders in the Fund could pay more than the
economic equivalent of the maximum front-end sales charge permitted by
rules of the National Association of Securities Dealers, Inc.; however,
this is unlikely because these are money market funds, and have no
front-end sales charge.
FINANCIAL HIGHLIGHTS
The following table provides information about the Fund's financial
history. It expresses the information in terms of a single share
outstanding throughout each period. The table has been audited by those
independent accountants whose reports are included in the respective
Annual Reports to Shareholders. The table should be read in conjunction
with the financial statements and their related notes. The current
Annual Report to Shareholders is incorporated by reference into the
Statement of Additional Information.
Class A Shares
Year Ended
September 30, 1995
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .045
Distributions from
Net investment income (.045)
Net asset value, end of year $1.00
Total return<F4> 4.55%
Ratio to average net assets:
Net investment income 4.53%
Total expenses<F5> 1.41%
Net expenses 1.39%
Expenses reimbursed and/or waived --
Net assets, end of year (in thousands) $26,775
Number of shares outstanding
at end of year (in thousands) 26,821
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1994
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .028
Distributions from
Net investment income (.028)
Net asset value, end of year $1.00
Total return<F4> 2.78%
Ratio to average net assets:
Net investment income 2.75%
Total expenses<F5> --
Net expenses 1.23%
Expenses reimbursed and/or waived --
Net assets, end of year (in thousands) $99,973
Number of shares outstanding
at end of year (in thousands) 100,024
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1993
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .025
Distributions from
Net investment income (.025)
Net asset value, end of year $1.00
Total return<F4> 2.59%
Ratio to average net assets:
Net investment income 2.48%
Total expenses<F5> --
Net expenses .92%
Expenses reimbursed and/or waived --%
Net assets, end of year (in thousands) $102,325
Number of shares outstanding
at end of year (in thousands) 102,370
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1992
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .037
Distributions from
Net investment income (.037)
Net asset value, end of year $1.00
Total return<F4> 3.72%
Ratio to average net assets:
Net investment income 3.69%
Total expenses<F5> --
Net expenses .87%
Expenses reimbursed and/or waived --
Net assets, end of year (in thousands) $106,851
Number of shares outstanding
at end of year (in thousands) 106,897
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1991
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .061
Distributions from
Net investment income (.061)
Net asset value, end of year $1.00
Total return<F4> 6.27%
Ratio to average net assets:
Net investment income 6.09%
Total expenses<F5> --
Net expenses .93%
Expenses reimbursed and/or waived --
Net assets, end of year (in thousands) $119,316
Number of shares outstanding
at end of year (in thousands) 119,362
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1990
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .074
Distributions from
Net investment income (.074)
Net asset value, end of year $1.00
Total return<F4> 7.71%
Ratio to average net assets:
Net investment income 7.45%
Total expenses<F5> --
Net expenses .96%
Expenses reimbursed and/or waived .13%
Net assets, end of year (in thousands) $117,684
Number of shares outstanding
at end of year (in thousands) 117,699
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1989
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .083
Distributions from
Net investment income (.083)
Net asset value, end of year $1.00
Total return<F4> 8.69%
Ratio to average net assets:
Net investment income 8.27%
Total expenses<F5> --
Net expenses .91%
Expenses reimbursed and/or waived .12%
Net assets, end of year (in thousands) $156,777
Number of shares outstanding
at end of year (in thousands) 156,797
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1988
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .067
Distributions from
Net investment income (.067)
Net asset value, end of year $1.00
Total return<F4> 6.99%
Ratio to average net assets:
Net investment income 6.44%
Total expenses<F5> --
Net expenses .86%
Expenses reimbursed and/or waived .25%
Net assets, end of year (in thousands) $91,640
Number of shares outstanding
at end of year (in thousands) 91,660
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1987
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .057
Distributions from
Net investment income (.057)
Net asset value, end of year $1.00
Total return<F4> 6.07%
Ratio to average net assets:
Net investment income 5.56%
Total expenses<F5> --
Net expenses .85%
Expenses reimbursed and/or waived .26%
Net assets, end of year (in thousands) $63,134
Number of shares outstanding
at end of year (in thousands) 63,138
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
Class A Shares
Year Ended
September 30, 1986
Net asset value, beginning of year $1.00
Income from investment operations
Net investment income .067
Distributions from
Net investment income (.067)
Net asset value, end of year $1.00
Total return<F4> 6.16%
Ratio to average net assets:
Net investment income 6.47%
Total expenses<F5> --
Net expenses .85%
Expenses reimbursed and/or waived .51%
Net assets, end of year (in thousands) $52,807
Number of shares outstanding
at end of year (in thousands) 52,807
<F4>Total return prior to 1994 is not audited.
<F5>Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously such reductions
were included in the ratio.
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective: The Fund seeks to earn the highest level of
current income, consistent with preservation of capital and liquidity.
Money Management Plus Prime Portfolio is a diversified money market
fund. Its objective is to earn the highest level of current income,
consistent with preservation of capital and liquidity, that is available
through investment in specified money market instruments. The Fund's
assets are invested in securities maturing in 13 months or less, and it
maintains an average weighted maturity of 90 days or less.
Prime Portfolio invests primarily in CDs, prime commercial paper, and
U.S. Government Obligations.
Prime Portfolio invests in certificates of deposit and other obligations
of banks having total assets of at least $1 billion, prime commercial
paper and high grade (Aaa or Aa rated or equivalent quality) short-term
corporate obligations, including participation interests in loans
extended to issuers of such obligations, and obligations of the U.S.
Government, its agencies and instrumentalities. Such securities may be
purchased subject to repurchase agreements with recognized securities
dealers and banks. The Fund may invest more than 25% of its assets in
obligations of banks. See the Statement of Additional Information,
"Appendix, Commercial Paper and Bond Ratings." Also, the Fund may invest
in high-quality, U.S. dollar-denominated international money market
instruments, and up to 5% of its assets in reverse repurchase agreements.
U.S. Government Obligations
Obligations issued by the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds, are supported by the full faith and credit of the U.S.
Government.
Certain obligations issued or guaranteed by a U.S. Government agency or
instrumentality are supported by the full faith and credit of the U.S.
Government. These include obligations issued by the Export-Import Bank,
Farmers Home Administration, Government National Mortgage Association,
Postal Service, Merchant Marine, and Washington Metropolitan Area
Transit Authority.
The Fund may also invest in other U.S. Government agency or
instrumentality obligations which are supported only by the credit of
the agency or instrumentality and may be further supported by the right
of the issuer to borrow from the U.S. Treasury.
Repurchase Agreements
The Fund may enter into repurchase agreements. In a repurchase
agreement, the Fund buys a security subject to the right and obligation
to sell it back at a higher price. These transactions must be fully
secured at all times, but they involve some credit risk to the Fund if
the other party defaults on its obligation and the Fund is delayed or
prevented from liquidating the collateral.
Reverse Repurchase Agreements
The Fund may engage in reverse repurchase agreements. In a reverse
repurchase agreement, the Fund sells a security subject to the right and
obligation to buy it back at a higher price. The Fund then invests the
proceeds from the transaction in another obligation in which it is
authorized to invest. In order to minimize any risk involved, the Fund
maintains in a segregated account liquid assets equal in value to the
repurchase price, and currently intends to limit its borrowing due to
reverse repurchase agreements to only 5% of total assets.
Bank CDs
The Fund may also invest in certificates of deposit and other debt
obligations of commercial banks, savings banks, and savings and loan
associations having assets of less than $1 billion, provided that the
principal amount of such certificate is insured in full by the Federal
Deposit Insurance Corporation ("FDIC"). The FDIC presently insures
accounts up to $100,000; interest earned above $100,000 is not insured
by the FDIC.
When-Issued Purchases
Purchasing obligations for future delivery or on a "when-issued" basis
may increase the Fund's overall investment exposure and involves a risk
of loss if the value of the securities declines prior to the settlement
date. The transactions are fully secured at all times.
Variable Rate Obligations
The Fund may invest in variable and floating rate obligations. Variable
rate obligations have a yield which is adjusted periodically based upon
changes in the level of prevailing interest rates. Floating rate
obligations have an interest rate fixed to a known lending rate, such as
the prime rate, and are automatically adjusted when that rate changes.
Variable and floating rate obligations lessen the capital fluctuations
usually inherent in fixed income investments, to diminish the risk of
capital depreciation of Fund investments and Fund shares; but this also
means that should interest rates decline, the yield of the Fund will
decline and the Fund would not have as many opportunities for capital
appreciation of Fund investments.
Demand Notes and Temporary Investments
The Fund may invest in floating rate and variable rate demand notes.
Demand notes provide that the holder may demand payment of the note at
its par value plus accrued interest by giving notice to the issuer. To
ensure the ability of the issuer to make payment upon such demand, the
note may be supported by an unconditional bank letter of credit.
The Fund may invest in structured money market instruments. In all
cases, the Fund may invest in structured money market instruments. In
all cases, it invests only in high-quality instruments (rated in one of
the two highest rating categories, or if unrated, of comparable credit
quality) that meet the requirements of SEC Rule 2a-7 regarding credit
quality and maturity. See the Statement of Additional Information.
Other Policies
The Fund has adopted certain fundamental investment restrictions which
are discussed in detail in the Statement of Additional Information.
Unless specifically noted otherwise, the investment objective, policies
and restrictions of the Fund are fundamental and may not be changed
without shareholder approval. There can be no assurance that the Fund
will be successful in meeting its investment objective.
YIELD
Yield refers to income generated by an investment over a period of time.
From time to time, the Fund may advertise "yield" and "effective yield."
Yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" refers to the actual income
generated by an investment in the Fund over a particular base period,
stated in the advertisement. If the base period is less than one year,
the yield will be "annualized." That is, the amount of income generated
by the investment during the base period is assumed to be generated over
a one-year period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly, but, when annualized, the
income earned by an investment in the Fund is assumed to be reinvested.
The "effective yield" will be slightly higher than the "yield" because
of the compounding effect of this assumed reinvestment.
MANAGEMENT OF THE FUND
The Board of Trustees supervises the activities and reviews its
contracts with companies that provide the Fund with services.
The Fund is the only series of Calvert Cash Reserves, a Massachusetts
business trust organized on March 16, 1982, now doing business as Money
Management Plus. In October, 1992, Prime Portfolio began offering a
second class of shares, the CCR Prime Shares, which was discontinued
during 1994.
The Fund is an open-end diversified management investment company. The
Fund is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing Trustees,
changing fundamental policies, or approving a management contract. As a
shareholder, you receive one vote for each share you own.
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of the Funds' investment advisor, transfer
agent, and distributor, is a subsidiary of Acacia Mutual Life Insurance
Company of Washington, D.C. Calvert Group is one of the largest
investment management firms in the Washington, D.C. area. Calvert Group,
Ltd. and its subsidiaries are located at 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814. As of December 31, 1995, Calvert Group
managed and administered assets in excess of $4.8 billion and more than
200,000 shareholder and depositor accounts.
Calvert Asset Management serves as Advisor to the Funds.
Calvert Asset Management Company, Inc. (the "Advisor") is the Fund's
investment advisor. The Advisor provides the Fund with investment
supervision and management; administrative services and office space;
furnishes executive and other personnel to the Fund; and pays the
salaries and fees of all Trustees who are affiliated persons of the
Advisor. The Advisor may also assume and pay certain advertising and
promotional expenses of the Fund and reserves the right to compensate
broker-dealers in return for their promotional or administrative
services. The Advisor has agreed to limit the Fund's expenses to the
most restrictive state limitation in effect.
The Advisor receives a fee based on a percentage of the Fund's assets.
Pursuant to the Investment Advisory Agreement, the Advisor is entitled
to, and did receive for fiscal 1995, an annual advisory fee of 0.50% of
the Fund's respective average daily net assets.
Calvert Distributors, Inc. serves as underwriter to market the Fund's
shares.
Calvert Distributors, Inc. ("CDI") is the Funds' principal underwriter
and distributor. Under the terms of its underwriting agreement with the
Funds, CDI markets and distributes the Fund's shares and is responsible
for payment of compensation and service fees to broker-dealers, banks,
and financial services firms, preparation of advertising and sales
literature, and printing and mailing of prospectuses to prospective
investors.
The Fund may pay distribution and servicing expenses pursuant to their
Distribution Plan.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the
Fund has adopted a Distribution Plan which permits it to pay certain
expenses associated with the distribution of its shares. Amounts paid by
the Fund to the Distributor under the Distribution Plan are used to pay
dealers and other selling firms dealer-paid quarterly compensation at an
annual rate of up to 0.40% of the average daily net assets of accounts
the respective firms maintain in the Fund. They are also used to pay
dealers and others, including the Distributor's salespersons who service
accounts, service fees at an annual rate of up to 0.25% of such assets,
and to pay CDI for its marketing and distribution expenses, preparation
of advertising and sales literature, printing and mailing of
prospectuses to prospective investors. The Distribution Plan expenses
may not annually exceed 0.35% of the average daily net assets of any
Fund. For fiscal year 1995, the Fund paid Distribution Plan expenses of
0.35 of average daily net assets.
CDI may also pay additional concessions, including non-cash promotional
incentives, such as merchandise or trips, to dealers employing
registered representatives who sell a minimum dollar amount of shares of
the Fund and/or shares of other Funds underwritten by CDI. CDI may make
expense reimbursements for special training of a dealer's registered
representatives, advertising or equipment, or to defray the expenses of
sales contests. CDI may receive reimbursement of eligible marketing and
distribution expenses from the Fund's Rule 12b-1 Distribution Plan.
The Distribution Plan may be terminated at any time by vote of the
Independent Trustees or by vote of a majority of the outstanding voting
shares of the respective Fund.
The transfer agent keeps your account records.
Calvert Shareholder Services, Inc. is the Fund's transfer, dividend
disbursing and shareholder servicing agent.
SHAREHOLDER GUIDE
Opening An Account
You can buy shares of the Fund in several ways which are described here
and in the chart on page 22.
An account application accompanies this prospectus. A completed and
signed application is required for each new account you open, regardless
of the method you choose for making your initial investment. Additional
forms may be required from corporations, associations, and certain
fiduciaries. If you have any questions or need extra applications, call
your broker, or Calvert Group at 800-368-2748.
To invest in any of Calvert's tax-deferred retirement plans, please call
Calvert Group at 800-368-2748 to receive information and the required
separate application.
Share Price
The Fund's shares are sold without a sales charge.
The price of one share is its "net asset value," or NAV. NAV is computed
by adding the value of a Fund's investments plus cash and other assets,
deducting liabilities and then dividing the result by the number of
shares outstanding. The NAV is calculated at the close of the Fund's
business day, which coincides with the closing of the regular session of
the New York Stock Exchange (normally 4:00 p.m. Eastern time). The Fund
is open for business each day the New York Stock Exchange is open. The
Fund's securities are valued according to the "amortized cost" method,
which is intended to stabilize the NAV at $1.00 per share.
All purchases of Fund shares will be confirmed and credited to your
account in full and fractional shares (rounded to the nearest 1/100 of a
share). The Fund may send monthly statements in lieu of immediate
confirmations of purchases and redemptions.
HOW TO BUY SHARES
Method New Accounts Additional
Investments
By Mail $2,000 minimum $250 minimum
Please make your check Please make your check payable
payable to the Fund and to the Fund and mail it with
mail it with your your investment slip to:
application to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas City, MO Kansas City, MO
64179-6542 64105-6739
By Registered, Certified, or Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Through Your Broker$2,000 minimum $250 minimum
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR BROKER, OR CALVERT GROUP AT
800-368-2745
By Exchange $2,000 minimum $250 minimum
(From your account in another Calvert Group Fund)
When opening an account by exchange, your new account must be
established with the same name(s), address and taxpayer identification
number as your existing Calvert account.
By Bank Wire $2,000 minimum $250 minimum
By Calvert Money Not Available for $50 minimum
Controller* Initial Investment
*Please allow sufficient time for Calvert Group to process your initial
request for this service, normally 10 business days. The maximum
transaction amount is $300,000, and your purchase request must be
received by 4:00 p.m. Eastern time.
WHEN YOUR ACCOUNT WILL BE CREDITED
Before you buy shares, please read the following information to make
sure your investment is accepted and credited properly.
Your purchase will be processed at the net asset value calculated after
your order is received and accepted. Except in the case of telephone
orders, investors whose payments are received in or converted into
federal funds by 12:30 p.m. Eastern time by the custodian will receive
the dividend declared that day. If your wire purchase is received after
12:30 p.m. Eastern time, your account will begin earning dividends on
the next business day. A telephone order placed to Calvert Institutional
Marketing Services by 12:30 p.m. Eastern time will become effective at
the price determined at 5 p.m. Eastern time and the shares purchased
will receive the dividend on Fund shares declared that day if federal
funds are received by the custodian by 5 p.m. Eastern time. Exchanges
begin earning dividends the next business day after the exchange request
is received by mail or telephone. If the purchase is by check and is
received by 4:00 p.m. Eastern time, it will begin earning dividends the
next business day.
All of your purchases must be made in U.S. dollars and checks must be
drawn on U.S. banks. No cash will be accepted. The Fund reserves the
right to suspend the offering of shares for a period of time or to
reject any specific purchase order. If your check does not clear, your
purchase will be cancelled and you will be charged a $10 fee plus costs
incurred by the Fund. When you purchase by check or with Calvert Money
Controller, those funds will be on hold for up to 10 business days from
the date of receipt. During that period, redemptions against those funds
(including drafts) will not be honored. To avoid this collection period,
you can wire federal funds from your bank, which may charge you a fee.
EXCHANGES
You may exchange shares of the Fund for shares of other Calvert Group
Funds.
If your investment goals change, the Calvert Group Family of Funds has a
variety of investment alternatives that includes common stock funds,
tax-exempt and corporate bond funds, and money market funds. The
exchange privilege is a convenient way to buy shares in other Calvert
Group Funds in order to respond to changes in your goals or in market
conditions. Before you make an exchange from a Fund or Portfolio, please
note the following:
Call your broker or a Calvert representative for information
and a prospectus for any of Calvert's other Funds registered in your
state. Read the prospectus of the Fund or Portfolio into which you want
to exchange for relevant information, including class offerings.
Each exchange represents the sale of shares of one Fund and the purchase
of shares of another.
Complete and sign an application for an account in that Fund or
Fund, taking care to register your new account in the same name and
taxpayer identification number as your existing Calvert account(s).
Exchange instructions may then be given by telephone if telephone
redemptions have been authorized and the shares are not in certificate
form.
Shares on which you have already paid a sales charge at Calvert
Group may be exchanged into another Fund at no additional charge. Shares
acquired by reinvestment of dividends or distributions may be exchanged
into another Fund at no additional charge. Except for money market
funds, if you make a purchase at NAV, you may exchange that amount to
another fund at no additional sales charge.
The Fund reserves the right to terminate or modify the exchange
privilege with 60 days' written notice.
OTHER CALVERT GROUP SERVICES
Calvert Information Network
24 hour performance and prices
Calvert Group has a round-the-clock telephone service that lets existing
customers use a push button phone to obtain prices, performance
information, and account balances. Complete instructions for this
service may be found on the back of each statement.
Calvert Money Controller
Calvert Money Controller eliminates the delay of mailing a check or the
expense of wiring funds. You can request this free service on your
application.
This service allows you to authorize electronic transfers of money to
purchase or sell shares. You use Calvert Money Controller like an
"electronic check" to move money ($50 to $300,000) between your bank
account and your Calvert Group account with one phone call. Allow one or
two business days after the call for the transfer to take place; for
money recently invested, allow normal check clearing time (up to 10
business days) before redemption proceeds are sent to your bank.
You may also arrange systematic monthly or quarterly investments
(minimum $50) into your Calvert Group account. After you give us proper
authorization, your bank account will be debited to purchase Fund
shares. A debit entry will appear on your bank statement. If you would
like to make arrangements for systematic monthly or quarterly
redemptions from your Calvert Group account, call your broker or Calvert
for a Money Controller Application.
Telephone Transactions
Calvert may record all telephone calls.
If you have telephone transaction privileges, you may purchase, redeem,
or exchange shares, wire funds and use Calvert Money Controller by
telephone. You automatically have telephone privileges unless you elect
otherwise. The Fund, the transfer agent and their affiliates are not
liable for acting in good faith on telephone instructions relating to
your account, so long as they follow reasonable procedures to determine
that the telephone instructions are genuine. Such procedures may include
recording the telephone calls and requiring some form of personal
identification. You should verify the accuracy of telephone transactions
immediately upon receipt of your confirmation statement.
Complete the account application for the easiest way to establish
services.
The easiest way to establish optional services on your Calvert Group
account is to select the options you desire when you complete your
account application. If you wish to add other options later, you may
have to provide us with additional information and a signature
guarantee. Please call your broker or Calvert Investor Relations at
800-368-2745 for further assistance. For our mutual protection, we may
require a signature guarantee on certain written transaction requests. A
signature guarantee verifies the authenticity of your signature, and may
be obtained from any bank, savings and loan association, credit union,
trust company, broker-dealer firm or member of a domestic stock
exchange. A signature guarantee cannot be provided by a notary public.
Householding of General Mailings
Householding reduces Fund expenses and saves paper and trees for the
environment.
If you have multiple accounts with Calvert, you may receive combined
mailings of some shareholder information, such as semi-annual and annual
reports. Please contact Calvert Investor Relations at 800-368-2745 to
receive additional copies of information.
Special Services and Charges
The Fund pays for shareholder services but not for special services that
are required by a few shareholders, such as a request for a historical
transcript of an account. You may be required to pay a research fee for
these special services.
If you are purchasing shares of the Fund through a program of services
offered by a securities dealer or financial institution, you should read
the program materials in conjunction with this Prospectus. Certain
features of the Fund may be modified in these programs, and
administrative charges may be imposed by the broker-dealer for the
services rendered.
Tax-Saving Retirement Plans
Contact Calvert Group for complete information kits discussing the
plans, and their benefits, provisions and fees.
Calvert Group can set up your new account under one of several
tax-deferred plans. These plans let you invest for retirement and
shelter your investment income from current taxes. Minimums may differ
from those listed in the chart on page 22.
Individual retirement accounts (IRAs): available to anyone who
has earned income. You may also be able to make investments in the name
of your spouse, if your spouse has no earned income.
Qualified Profit-Sharing and Money-Purchase Plans (including
401(k) Plans): available to self-employed people and their partners, or
to corporations and their employees.
Simplified Employee Pension Plan (SEP-IRA): available to
self-employed people and their partners, or to corporations. Salary
reduction pension plans (SAR-SEP IRAs) are also available to employers
with 25 or fewer employees.
403(b)(7) Custodial Accounts: available to employees of most
non-profit organizations and public schools and universities.
Consolidated Asset Account ("CAA")
Certain brokerage firms may offer their customers CAA, a special cash
management service linked to one of the Fund's Funds. CAA customers may
have free-credit cash balances at their brokerage firm account
automatically invested in Fund shares on a daily basis. Participating
brokerage firms will charge their customers a fee for the CAA program
and may establish a higher minimum balance. Details of CAA, including
the fee charged, are available from participating brokerage firms. This
prospectus should be read together with such firm's materials regarding
these fees and services.
SELLING YOUR SHARES
You may redeem all or a portion of your shares on any business day. Your
shares will be redeemed at the next net asset value calculated after
your redemption request is received and accepted. See the chart below
for specific requirements necessary to make sure your redemption request
is acceptable. Remember that the Fund may hold payment on the redemption
of your shares until it is reasonably satisfied that investments made by
check or by Calvert Money Controller have been collected (normally up to
10 business days).
Redemption Requirements To Remember
To ensure acceptance of your redemption
request, please follow the procedures described here and below.
Once your shares are redeemed, the proceeds will normally be sent to you
on the next business day, but if making immediate payment could
adversely affect the Fund, it may take up to seven (7) days. Calvert
Money Controller redemptions generally will be credited to your bank
account on the second business day after your phone call. When the New
York Stock Exchange is closed (or when trading is restricted) for any
reason other than its customary weekend or holiday closings, or under
any emergency circumstances as determined by the Securities and Exchange
Commission, redemptions may be suspended or payment dates postponed.
If you sell shares by telephone or written request, you will receive
dividends through the date the request is received and processed. If you
write a draft to sell shares, the shares will earn dividends until the
draft is presented to the Fund to be paid.
Minimum account balance is $1,000
Please maintain a balance in your account of at least $1,000. If, due to
redemptions, the account falls below $1,000, or you fail to invest at
least $1,000, it may be closed and the proceeds mailed to you at the
address of record. You will be given notice that your account will be
closed after 30 days unless you make an additional investment to
increase your account balance to the $1,000 minimum.
HOW TO SELL YOUR SHARES
Draftwriting
You may redeem shares in your account by writing a draft for at least
$250. If you complete and return the signature card for Draftwriting,
the Fund will mail bank drafts to you, printed with your name and
address. Generally, there is no charge to you for the maintenance of
this service or the clearance of drafts, but the Fund reserves the right
to charge a service fee for drafts returned for uncollected or
insufficient funds. The Fund will charge $25 for any stop payments on
drafts. As a service to shareholders, the Fund may automatically
transfer the dollar amount necessary to cover drafts you have written on
the Fund to your Fund account from any other of your identically
registered accounts in Calvert money market funds or Calvert Insured
Plus. The Fund may charge a fee for this service.
By Mail To:
Calvert Group
P.O. Box 419544
Kansas City, MO
64179-6542
You may redeem available shares from your account at any time by sending
a letter of instruction, including your name, account and Fund number,
the number of shares or dollar amount, and where you want the money to
be sent. Additional requirements, below, may apply to your account. The
letter of instruction must be signed by all required authorized signers.
If you want the money to be wired to a bank not previously authorized,
then a voided bank check must be enclosed with your letter. If you do
not have a voided check or if you would like funds sent to a different
address or another person, your letter must be signature guaranteed.
Type of Registration Requirements
Corporations, Associations Letter of instruction and a corporate
resolution, signed by person(s)
authorized to act on the account,
accompanied by signature guarantee(s).
Trusts Letter of instruction signed by the
Trustee(s) (as Trustee), with
a signature guarantee. (If the Trustee's
name is not registered on your account,
provide a copy of the trust
document, certified within the last
60 days.)
By Telephone
Please call 800-368-2745. You may redeem shares from your account by
telephone and have your money mailed to your address of record or wired
to an address or bank you have previously authorized. A charge of $5 is
imposed on wire transfers of less than $1,000. See "Telephone
Transactions" on page 24.
Calvert Money Controller
Please allow sufficient time for Calvert Group to process your initial
request for this service (normally 10 business days). You may also
authorize automatic fixed amount redemptions by Calvert Money
Controller. All requests must be received by 4:00 p.m. Eastern time.
Accounts cannot be closed by this service.
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other Calvert
Group Fund or Fund. You can only exchange between accounts with
identical names, addresses and taxpayer identification number, unless
previously authorized with a signature-guaranteed letter.
Systematic Check Redemptions
If you maintain an account with a balance of $10,000 or more, you may
have up to two (2) regular redemption checks for a fixed amount sent to
you on the 15th of each month, simply by sending a letter with all
information, including your account number, and the dollar amount ($100
minimum). If you would like a regular check mailed to another person or
place, your letter must be signature guaranteed.
Through your Broker
If your account is held in your broker's name ("street name"), you
should contact your broker directly to transfer, exchange or redeem
shares.
DIVIDENDS AND TAXES
Each year, the Fund distributes substantially all of its net investment
income to shareholders.
Dividends from the Fund's net investment income are declared daily and
paid monthly. Net investment income consists of interest income, net
short-term capital gains, if any, and dividends declared and paid on
investments, less expenses.
Dividend payment options
Dividends and any distributions are automatically reinvested in
additional shares of the same Fund, unless you elect to have the
dividends of $10 or more paid in cash (by check or by Calvert Money
Controller). Dividends and distributions from the Funds may be invested
in shares of any other Calvert Group Fund or Fund with no additional
sales charge. You must notify the Fund in writing to change your payment
options. If you elect to have dividends and/or distributions paid in
cash, and the U.S. Postal Service cannot deliver the check, or if it
remains uncashed for six months, it, as well as future dividends and
distributions, will be reinvested in additional shares.
Federal Taxes
In January, the Fund will mail you Form 1099-DIV indicating the federal
tax status of dividends and any capital gain distributions paid to you
by the Fund during the past year. Dividends and distributions are
taxable to you regardless of whether they are taken in cash or
reinvested. Dividends, including short-term capital gains, are taxable
as ordinary income. Distributions from long-term capital gains are
taxable as long-term capital gains, regardless of how long you have
owned Fund shares. A portion of the Fund's dividends may qualify for the
dividends received deduction for corporations.
Other Tax Information
In addition to federal taxes, you may be subject to state or local taxes
on your investment, depending on the laws in your area. You will be
notified to the extent, if any, that dividends reflect interest received
from U.S. government securities. Such dividends may be exempt from
certain state income taxes.
Taxpayer Identification Number
If we do not have your correct Social Security or Taxpayer
Identification Number ("TIN") and a signed certified application or Form
W-9, Federal law requires the Fund to withhold 31% of your dividends. In
addition, you may be subject to a fine. You will also be prohibited from
opening another account by exchange. If this TIN information is not
received within 60 days after your account is established, your account
may be redeemed at the current NAV on the date of redemption. The Fund
reserves the right to reject any new account or any purchase order for
failure to supply a certified TIN.
To Open an Account: Prospectus
800-368-2748 January 31, 1996
Performance and Prices:
Calvert Information Network MONEY MANAGEMENT PLUS
24 hours, 7 days a week Prime Portfolio
800-368-2745
Service for Existing Account:
Shareholders 800-368-2745
Brokers 800-368-2746
TDD for Hearing Impaired:
800-541-1524
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Table of Contents
Fund Expenses
Financial Highlights
Investment Objective and Policies
Yield
Management of the Fund
SHAREHOLDER GUIDE:
How to Buy Shares
When Your Account Will Be Credited
Exchanges
Other Calvert Group Services
Selling Your Shares
How to Sell Your Shares
Dividends and Taxes
<PAGE>
Money Management Plus
Prime Portfolio
Statement of Additional Information
January 31, 1996
INVESTMENT ADVISOR TRANSFER AGENT
Calvert Asset Management Company, Inc. Calvert Shareholder Services, Inc.
4550 Montgomery Avenue 4550 Montgomery Avenue
Suite 1000N Suite 1000N
Bethesda, Maryland 20814 Bethesda, Maryland 20814
INDEPENDENT ACCOUNTANTS PRINCIPAL UNDERWRITER
Coopers & Lybrand, L.L.P. Calvert Distributors, Inc.
217 Redwood Street 4550 Montgomery Avenue
Baltimore, Maryland 21202-3316 Suite 1000N
Bethesda, Maryland 20814
TABLE OF CONTENTS
Investment Objective and Policies 1
Investment Restrictions 5
Purchase and Redemption of Shares 7
Dividends and Taxes 8
Valuation of Shares 10
Calculation of Yield 11
Advertising 12
Trustees and Officers 12
Investment Advisor 14
Transfer and Shareholder
Servicing Agent 15
Independent Accountants and
Custodians 15
Method of Distribution 15
Portfolio Transactions 16
General Information 17
Financial Statements 17
Appendix 17
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-January 31, 1996
MONEY MANAGEMENT PLUS
Prime Portfolio
4550 Montgomery Avenue, Bethesda, Maryland 20814
==========================================================================
New Account (800) 368-2748 Shareholder (800) 368-2745
Information:(301) 951-4820 Services: (301) 951-4810
==========================================================================
Broker (800) 368-2746 TDD for the Hearing-
==========================================================================
==========================================================================
Services: (301) 951-4850 Impaired: (800) 541-1524
==========================================================================
This Statement of Additional Information is not a prospectus.
Investors should read the Statement of Additional Information in
conjunction with the Fund's Prospectus dated January 31,1996, which may
be obtained free of charge by writing or calling the Fund.
==========================================================================
INVESTMENT OBJECTIVE AND POLICIES
==========================================================================
Money Management Plus Prime Portfolio (the "Fund") is a money
market fund which seeks to obtain the highest level of current income,
consistent with safety, preservation of capital and liquidity, that is
available through investment in specified money market instruments.
Currently, the Fund's assets are invested in securities maturing in 13
months or less and the Fund maintains an average weighted maturity of 90
days or less. Fund investments are valued at amortized cost. The Fund
intends to maintain a constant net asset value of $1.00 per share. The
Fund invests exclusively in short-term money market instruments.
Prime Portfolio: The Portfolio will be invested exclusively in:
(1) U.S. dollar-denominated certificates of deposit, bankers'
acceptances and other debt obligations of U.S. banks and their branches
located outside of the U.S. and of U.S. branches of foreign banks,
provided that the bank has total assets of at least $1 billion (or the
equivalent in other currencies) or, if its total assets are less than $1
billion, the principal amount of such obligation is insured in full by
the Federal Deposit Insurance Corporation;
(2) commercial paper of both domestic and foreign issuers which
at the date of investment is rated A-1 by Standard & Poor's Corporation
or Prime-1 by Moody's Investors Service, Inc., or, if unrated, is of
comparable quality as determined by the Advisor under the supervision of
the Board of Trustees;
(3) short-term (one year or less) corporate obligations of both
domestic and foreign issuers which at the date of investment are rated
AAA or AA by Standard & Poor's or Aaa or Aa by Moody's or, if unrated,
are of comparable quality as determined by the Advisor under the
supervision of the Board of Trustees;
(4) obligations issued or guaranteed as to principal and
interest by the U.S. Government, its agencies and instrumentalities, or
by foreign governments, their agencies and instrumentalities, or by
international agencies and instrumentalities; and
(5) such obligations subject to repurchase agreements with
recognized securities dealers and banks.
While the Fund invests only in high-grade, short-term money
market instruments, there can be, of course, no assurance that the Fund
will be successful in meeting its investment objective or in maintaining
a constant net asset value of $1.00 per share because there are inherent
risks in the ownership of any investment. An increase in interest rates
will generally reduce the value of Fund investments, and a decline in
interest rates will generally increase the value of Fund investments.
Investments in obligations not guaranteed by the full faith and credit
of the U.S. Government are subject to the ability of the issuer to make
payment at maturity. Dividends paid by the Fund will fluctuate as
interest rates and net investment income fluctuate. The Fund will
attempt, through careful management and diversification, to reduce these
risks and enhance the opportunities for higher income and greater price
stability.
Repurchase Agreements
The Fund engages in repurchase agreements in order to earn a
higher rate of return than it could earn simply by investing in the
obligation which is the subject of the repurchase agreement. Repurchase
agreements are not, however, without risk.
In the event of the bankruptcy of a seller during the term of a
repurchase agreement, a legal question exists as to whether the Fund
would be deemed the owner of the underlying security or would be deemed
only to have a security interest in and lien upon such security. The
Fund will only engage in repurchase agreements with recognized
securities dealers and banks determined to present minimal credit risk
by the Advisor under the direction and supervision of the Fund's Board
of Trustees. Repurchase agreements are always for periods of less than
one year and no more than 10% of a Fund's assets may be invested in
repurchase agreements not terminable within seven days.
In addition, the Fund will only engage in repurchase agreements
reasonably designed to secure fully during the term of the agreement the
seller's obligation to repurchase the underlying security and will
monitor the market value of the underlying security during the term of
the agreement. If the value of the underlying security declines and is
not at least equal to the repurchase price due the Fund pursuant to the
agreement, the Fund will require the seller to pledge additional
securities or cash to secure the seller's obligations pursuant to the
agreement. If the seller defaults on its obligation to repurchase and
the value of the underlying security declines, the Fund may incur a loss
and may incur expenses in selling the underlying security.
Reverse Repurchase Agreements
The Fund may also engage in reverse repurchase agreements.
Under a reverse repurchase agreement, the Fund sells its securities to a
bank or securities dealer and agrees to repurchase those securities from
such party at an agreed upon date and price reflecting a market rate of
interest. The Fund invests the proceeds from each reverse repurchase
agreement in obligations in which it is authorized to invest. The Fund
intends to enter into a reverse repurchase agreement only when the
interest income provided for in the obligation in which the Fund invests
the proceeds is expected to exceed the amount the Fund will pay in
interest to the other party to the agreement, plus all costs associated
with the transactions. The Fund does not intend to borrow for leverage
purposes. The Fund will only be permitted to pledge assets to the extent
necessary to secure borrowings and reverse repurchase agreements.
During the time a reverse repurchase agreement is outstanding,
the Fund will maintain in a segregated custodial account an amount of
cash, U.S. Government securities or other liquid, high-quality debt
securities equal in value to the repurchase price. The Fund will mark to
market the value of assets held in the segregated account, and will
place additional assets in the account whenever the total value of the
account falls below the amount required under applicable regulations.
The Fund's use of reverse repurchase agreements involves the
risk that the other party to the agreements could become subject to
bankruptcy or liquidation proceedings during the period the agreements
are outstanding. In such event, the Fund may not be able to repurchase
the securities it has sold to that other party. Under those
circumstances, if at the expiration of the agreement such securities are
of greater value than the proceeds obtained by the Fund under the
agreements, the Fund may have been better off had it not entered into
the agreement. However, the Fund will enter into reverse repurchase
agreements only with banks and dealers which the Advisor believes
present minimal credit risks under guidelines adopted by the Fund's
Board of Trustees. In addition, the Fund bears the risk that the market
value of the securities sold by the Fund may decline below the
agreed-upon repurchase price, in which case the dealer may request the
Fund to post additional collateral.
International Money Market Instruments
The Fund may invest in U.S. dollar-denominated obligations of
foreign branches of U.S. banks and U.S. branches of foreign banks ("bank
obligations."). Such bank obligations may be subject to risks not
associated with domestically insured bank obligations. For example,
foreign and domestic bank reserve requirements may differ.
The Fund may also invest in commercial paper, short-term
corporate obligations, and obligations issued or guaranteed by foreign
governments, their agencies and instrumentalities, or by international
agencies and instrumentalities, so long as such instruments are U.S.
dollar-denominated and meet the same credit, liquidity, and
concentration requirements as domestic obligations.
The bank obligations and other money market instruments of
foreign issuers described above are subject to certain additional risks.
Payment of interest and principal upon these obligations and the
marketability and liquidity of such obligations in the secondary market
may also be adversely affected by governmental action in the country of
domicile of the branch (generally referred to as "sovereign risk").
Examples of governmental actions would be the imposition of exchange or
currency controls, interest limitations or withholding taxes on interest
income, seizure of assets, or the declaration of a moratorium on the
payment of principal or interest. In addition, evidences of ownership of
Fund securities may be held outside of the U.S., and the Fund may be
subject to the risks associated with the holding of such property
overseas.
These instruments are not subject to currency fluctuations,
since they are denominated in U.S. dollars. The Advisor will consider
the political and economic conditions in a country, the location of
custody, and the liquidity in selecting such instruments for the Fund.
Also, as an operating policy, it will only invest in bank obligations of
foreign branches of U.S. banks if the parent banks guarantees the
obligation, and where the parent bank either has assets of at least $1
billion (or equivalent in other currencies), or is insured in full by
the Federal Deposit Insurance Corporation.
Obligations with Puts Attached
The Fund has authority to purchase securities at a price which
would result in a yield to maturity lower than that generally offered by
the seller at the time of purchase when it can acquire at the same time
the right to sell the securities back to the seller at an agreed upon
price at any time during a stated period or on a certain date. Such a
right is generally denoted as a "put."
A Fund may not acquire obligations subject to puts if
immediately thereafter, with respect to 75% of the total amortized cost
value of its assets, that Fund would have more than 5% of its assets
invested in securities underlying puts from the same institution. A Fund
may, however, invest up to 10% of its assets in securities underlying
unconditional puts from the same institution. Unconditional puts are
readily exercisable in the event of a default in payment of principal or
interest on the underlying securities. The Fund must limit its Fund
investments, including puts, to instruments of high quality as
determined by a nationally recognized statistical rating organization.
When-Issued Purchases
Securities purchased on a when-issued basis and the securities
held in the Fund are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in
the level of interest rates (which will generally result in both
changing in value in the same way, i.e., both experiencing appreciation
when interest rates decline and depreciation when interest rates rise).
Therefore, if in order to achieve higher interest income, the Fund
remains substantially fully invested at the same time that it has
purchased securities on a when-issued basis, there will be a greater
possibility that the market value of the Fund's assets may vary. No new
when-issued commitments will be made by a Fund if more than 50% of that
Fund's net assets would become so committed.
When the time comes to pay for when-issued securities, the Fund
will meet its obligations from then available cash flow, sale of
securities or, although it would not normally expect to do so, from sale
of the when-issued securities themselves (which may have a market value
greater or less than the Fund's payment obligation). Sale of securities
to meet such obligations carries with it a greater potential for the
realization of capital losses and capital gains which are not exempt
from federal income tax.
==========================================================================
INVESTMENT RESTRICTIONS
==========================================================================
Fundamental
The foregoing investment objective and policies and the
following investment restrictions and fundamental policies may not be
changed without the consent of the holders of a majority of the Fund's
outstanding shares, including a majority of the shares of the Fund.
Shares have equal rights as to voting, except that only shares of a Fund
are entitled to vote on matters affecting only that Fund (such as
changes in investment objective, policies or restrictions). A majority
of the shares means the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares are represented
or (ii) more than 50% of the outstanding shares. No Fund of the Fund may:
(1) Purchase common stocks, preferred stocks,
warrants, or other equity securities;
(2) Sell securities short, purchase securities
on margin, or write put or call options. The Fund
reserves the right, without percentage limitation, to
purchase securities with puts attached. See
"Obligations with Puts Attached";
(3) Issue senior securities, borrow money,
except from banks for temporary or emergency purposes
and then only in an amount up to 10% of the value of
that Fund's total assets, and, for The Fund only,
except by engaging in reverse repurchase agreements;
provided, however, that The Fund may engage in reverse
repurchase agreements so long as, at the time it enters
into a reverse repurchase agreement, the aggregate
proceeds from outstanding reverse repurchase
agreements, when added to other outstanding borrowings
permitted by this section, do not exceed 33 1/3% of the
Fund's total assets. In order to secure any permitted
borrowings and, for The Fund only, reverse repurchase
agreements under this section, the Fund may pledge,
mortgage or hypothecate its assets.
(4) Underwrite the securities of other
issuers, except to the extent that either the sale of
restricted securities or the purchase of municipal
obligations in accordance with the Fund's investment
objective and policies, either directly from the
issuer, or from an underwriter for an issuer, may be
deemed an underwriting;
(5) Purchase or sell real estate, real estate
investment trust securities, commodities or commodity
contracts, or oil and gas interests, but this shall not
prevent the Tax-Free Fund from investing in municipal
obligations secured by real estate or interests therein
or prevent The Fund from investing (a) in securities
which are secured by real estate or real estate
mortgages, or (b) in the securities of issuers which
invest or deal in commodities, commodity futures, oil,
gas, or other mineral exploration or development
programs, real estate, or real estate mortgages;
(6) Purchase or retain securities of an issuer
if those trustees of the Fund, each of whom owns more
than 1/2 of 1% of the outstanding securities of such
issuer, together own more than 5% of such outstanding
securities;
(7) Make loans to others, except in accordance
with the Fund's investment objective and policies, such
as the purchase of an issue of debt securities in which
the Fund is authorized to invest, or pursuant to
contracts providing for the compensation of service
providers by compensating balances;
(8) Invest in companies for the purpose of
exercising control; or invest in securities of other
investment companies, except as they may be acquired as
part of a merger, consolidation or acquisition of
assets, or in connection with a director's/trustee's
deferred compensation plan, as long as there is no
duplicaton of advisory fees;
(9) Invest more than 25% of its assets in any
particular industry or industries, except that the Fund
may invest more than 25% of its assets in obligations
issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Industrial development
bonds, where the payment of principal and interest is
the responsibility of companies within the same
industry, are grouped together as an "industry";
(10) Invest more than 5% of the value of its
total assets in securities where the payment of
principal and interest is the responsibility of a
company or companies with less than three years'
operating history.
(11) Purchase securities of any issuer (other
than obligations of, or guaranteed by, the United
States Government, its agencies or instrumentalities, a
State, its political subdivisions or municipalities or
agencies thereof) if, as a result, (a) more than 5% of
the value of its total assets would be invested in the
securities of that issuer, or (b) more than 25% of the
value of its total assets would be invested in the
securities of issuers in the same industry. For
purposes of this restriction regarding The Fund only,
an investment in U.S. banks or U.S. branches of foreign
banks is not considered an industry;
Non-Fundamental
(12) No more than 10% of the Fund's net
assets may be invested in illiquid securities;
(13) For purposes of investment
restriction number 3 above, the Fund has no current
intention to allow its borrowings due to reverse
repurchase agreements to exceed 5% of total assets.
==========================================================================
PURCHASE AND REDEMPTION OF SHARES
==========================================================================
The Fund requires a minimum initial investment of $2,000 and an
average account balance of $1,000. Shares will be held in book entry
form at the Fund's transfer agent. No share certificates will be issued.
Shareholders wishing to use the draft writing service should
complete the signature card enclosed with the Investment Application.
This draft writing service will be subject to the customary rules and
regulations governing checking accounts, and the Fund reserves the right
to change or suspend the service. Generally, there is no charge to you
for the maintenance of this service or for the clearance of drafts, but
the Fund reserves the right to charge a service fee for drafts returned
for uncollected or insufficient funds. As a service to shareholders, the
Fund may automatically transfer the dollar amount necessary to cover
drafts you have written on the Fund to your account from any other of
your identically registered accounts in Calvert money market funds or
Calvert Insured Plus. The Fund may charge a fee for this service.
When a payable through draft is presented to the Custodian for
payment, a sufficient number of full and fractional shares from the
shareholder's account to cover the amount of the draft will be redeemed
at the net asset value next determined. If there are insufficient shares
in the shareholder's account, the draft may be returned. Drafts
presented for payment which would require the redemption of shares
purchased by check or electronic funds transfer within the previous 10
business days will not be honored. This draft writing procedure for
redemption enables shareholders to receive the daily dividends declared
on the shares to be redeemed until such time as the draft is presented
for payment.
Amounts redeemed by check redemption may be mailed to the
investor without charge. Amounts of more than $50 and less than $300,000
may be transferred electronically at no charge to the investor. Amounts
of $1,000 or more will be transmitted by wire without charge by the Fund
to the investor's account at a domestic commercial bank that is a member
of the Federal Reserve System or to a correspondent bank. A charge of $5
is imposed on wire transfers of less than $1,000. If the investor's bank
is not a Federal Reserve System member, failure of immediate
notification to that bank by the correspondent bank could result in a
delay in crediting the funds to the investor's bank account.
Telephone redemption requests which would require the
redemption of shares purchased by check or electronic funds transfer
within the previous 10 business days may not be honored. The Fund
reserves the right to modify the telephone redemption privilege.
Existing shareholders who at any time desire to change
instructions already given must send a notice either to the broker
through which shares were purchased or to the Fund with a voided check
from the bank account to receive the redemption proceeds. New wiring
instructions may be accompanied by a voided check in lieu of a signature
guarantee. If a voided check does not accompany the request, then the
request must be signature guaranteed by a commercial bank, savings and
loan association, trust company, member firm of any national securities
exchange, or credit union. Further documentation may be required from
corporations, fiduciaries, pension plans, and institutional investors.
The Fund's redemption check normally will be mailed to the
investor on the next business day following the date of receipt by the
Fund of the written or telephone redemption request. If the investor so
instructs in the redemption request, the check will be mailed or the
redemption proceeds wired to a predesignated account at the investor's
bank. Redemption proceeds are normally paid in cash. However, at the
sole discretion of the Fund, the Fund has the right to redeem shares in
assets other than cash for redemption amounts exceeding, in any 90-day
period, $250,000 or 1% of the net asset value of the Fund, whichever is
less, or as allowed by law.
The right of redemption may be suspended or the date of payment
postponed for any period during which the New York Stock Exchange is
closed (other than customary weekend and holiday closings), when trading
on the New York Stock Exchange is restricted, or an emergency exists, as
determined by the SEC, or if the Commission has ordered such a
suspension for the protection of shareholders. Redemption proceeds are
normally mailed or wired the next business day after a proper redemption
request has been received, unless redemptions have been suspended or
postponed as described above.
==========================================================================
DIVIDENDS AND TAXES
==========================================================================
The Fund declares dividends daily and pays them monthly, based
on its net investment income. Net investment income consists of the
interest income earned on investments (adjusted for amortization of
original issue or market discount or premium), less expenses. Realized
and unrealized gains and losses are not included in net investment
income. Net short-term capital gains will be distributed once each year,
although the Fund may distribute them more frequently if necessary in
order to maintain net asset value at $1.00 per share. Distributions of
net capital gains, if any, are normally declared and paid by the Fund
once a year; however, the Fund does not intend to make any such
distributions from securities profits unless available loss carryovers,
if any, have been used or have expired.
Purchasers of Fund shares begin receiving dividends from the
date federal funds are received by the Fund. Purchases by bank wire
received by the Fund's custodian prior to 12:30 p.m. Eastern time or by
electronic funds transfer represent immediately available federal funds.
Purchases by domestic check may take up to two days to convert into
federal funds. Shareholders redeeming shares by telephone, electronic
funds transfer or written request will receive dividends through the
date that the redemption request is received; shareholders redeeming
shares by draft will receive dividends up to the date such draft is
presented to the Fund for payment.
In 1995 the Fund did qualify and in 1996 the Fund intends to
qualify as a "regulated investment company" under Subchapter M of the
Internal Revenue Code as amended. By so qualifying, the Fund will not be
subject to federal income taxes, nor to the federal excise tax imposed
by the Tax Reform Act of 1986, to the extent that it distributes its net
investment income and realized capital gains.
Dividends and distributions are automatically reinvested at net
asset value in additional shares. Shareholders may elect to have their
dividends and distributions paid out monthly or quarterly in cash. The
Tax-Free Fund's dividends of net investment income constitute
exempt-interest dividends on which shareholders are not generally subject
to federal income tax; however, under the Act, dividends attributable to
interest on certain private activity bonds must be included in federal
alternative minimum taxable income for the purpose of determining
liability (if any) for individuals and for corporations. In the case of
corporations, alternative minimum taxable income will also include an
item of tax preference consisting of one-half of the excess of pre-tax
book income over the corporation's other federal alternative minimum
taxable income, and for this purpose all exempt-interest dividends will
be required to be taken into account as book income. The Fund's
dividends of net investment income and dividends of net short-term
capital gains, whether taken in cash or reinvested in additional shares,
are taxable to shareholders as ordinary income and do not qualify for
the dividends received deduction for corporations. Net long-term capital
gain distributions, if any, will generally be includable as long-term
capital gain in the gross income of shareholders who are citizens or
residents of the United States. Whether such realized securities gains
and losses are long- or short-term depends on the period the securities
are held by the Fund, not the period for which the shareholder holds
shares of the Fund.
A shareholder may also be subject to state and local taxes on
dividends and distributions from the Fund. The Fund will notify
shareholders annually about the tax status of dividend and distributions
paid by the Fund and the amount of dividends withheld, if any, during
the previous year. Many states do not tax the portion of a Fund's
dividends which is derived from interest on U.S. Government obligations.
State law varies considerably concerning the tax status of dividends
derived from U.S. Government obligations. Accordingly, shareholders
should consult their tax advisors about the tax status of dividends and
distributions from the Fund in their respective jurisdictions.
The Internal Revenue Code provides that interest on
indebtedness incurred or continued in order to purchase or carry shares
of a regulated investment company which distributes exempt-interest
dividends during the year is not deductible.
The Fund is required to withhold 31% of any dividends and any
long-term capital gain dividends, paid by the Prime or Government Fund
if: (a) the shareholder's social security number or other taxpayer
identification number ("TIN") is not provided or an obviously incorrect
TIN is provided: (b) the shareholder does not certify under penalties of
perjury that the TIN provided is the shareholder's correct TIN and that
the shareholder is not subject to backup withholding under section
3406(a)(1)(C) of the Internal Revenue Code because of underreporting; or
(c) the Fund is notified by the Internal Revenue Service that the TIN
provided by the shareholder is incorrect or that there has been
underreporting of interest or dividends by the shareholder. Affected
shareholders will receive statements at least annually specifying the
amount of dividends withheld. Shareholders exempt from backup
withholding include: corporations; financial institutions; tax exempt
organizations; individual retirement plans; the U.S., a state, the
District of Columbia, a U.S. possession, a foreign government, an
international organization, or any political subdivision, agency or
instrumentality of any of the foregoing; U.S. registered commodities or
securities dealers; real estate investment trusts; registered investment
companies; bank common trust funds; certain charitable trusts; and
foreign central banks of issue. Non-resident aliens also are generally
not subject to backup withholding but, along with certain foreign
partnerships and foreign corporations, may instead be subject to
withholding under section 1441 of the Internal Revenue Code.
Shareholders claiming exemption from backup withholding should call or
write the Fund for further information.
==========================================================================
VALUATION OF SHARES
==========================================================================
The net asset value per share, the price at which shares are
continuously issued and redeemed, is computed by dividing the value of
the Fund's total assets, less its liabilities, by the total number of
shares outstanding. The Fund's net asset value is determined every
business day at the close of the New York Stock Exchange (generally,
4:00 p.m., Eastern time), and at such other times as may be appropriate
or necessary. The Funds do not determine net asset value on certain
national holidays or other days on which the New York Stock Exchange is
closed: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
The Fund's assets, including commitments to purchase securities
on a when-issued basis, are valued at their amortized cost which does
not take into account unrealized capital gains or losses. This involves
valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the
instrument. While this method provides certainty in valuation, it may
result in periods during which value, as determined by amortized cost,
is higher or lower than the price that would be received upon sale of
the instrument. During periods of declining interest rates, the daily
yield on shares of a Fund may tend to be higher than a like computation
made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for
all of its Fund instruments. Thus, if the use of amortized cost by a
Fund resulted in a lower aggregate Fund value on a particular day, a
prospective investor in the Fund would be able to obtain a somewhat
higher yield than would result from investment in a fund utilizing
solely market values, and existing investors in the Fund would receive
less investment income. The converse would apply in a period of rising
interest rates.
Rule 2a-7 under the Investment Company Act of 1940 permits the
Fund to value its assets at amortized cost if the Fund maintains a
dollar-weighted average maturity of 90 days or less and only purchases
obligations having remaining maturities of 13 months or less. Rule 2a-7
requires, as a condition of its use, that the Fund invest only in
obligations determined by the Trustees to be of high quality with
minimal credit risks and further requires the Trustees to establish
procedures designed to stabilize, to the extent reasonably possible, the
Fund's price per share as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the Fund's
investment holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the Fund's net asset value calculated
by using available market quotations or equivalents deviates from $1.00
per share. If such deviation exceeds 1/2 of 1%, the Trustees will
promptly consider what action, if any, will be initiated. In the event
the Trustees determine that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, the Trustees will take such corrective action as they
regard as necessary and appropriate, including: the sale of Fund
instruments prior to maturity to realize capital gains or losses or to
shorten average Fund maturity; the withholding of dividends or payment
of distributions from capital or capital gains; redemptions of shares in
kind; or the establishment of a net asset value per share based upon
available market quotations.
==========================================================================
CALCULATION OF YIELD
==========================================================================
From time to time, the Fund advertises "yield" and "effective
yield." Both yield figures are based on historical earnings and are not
intended to indicate future performance. The "yield" refers to the
actual income generated by an investment in the Fund over a particular
base period of time. The length and closing date of the base periods
will be stated in the advertisement. If the base period is less than one
year, the yield is then "annualized." That is, the net change, exclusive
of capital changes, in the value of a share during the base period is
divided by the net asset value per share at the beginning of the period,
and the result is multiplied by 365 and divided by the number of days in
the base period. Capital changes excluded from the calculation of yield
are: (1) realized gains and losses from the sale of securities, and (2)
unrealized appreciation and depreciation. A Fund's "effective yield" for
a seven-day period is its annualized compounded average yield during the
period, calculated according to the following formula:
Effective yield = [(base period return) + 1]365/7 - 1
From time to time, the Fund may provide, for a given period,
quotations of dividend yield to shareholders or prospective investors.
For the seven-day period ended September 30, 1995, the yield and
effective yield were:
Effective
Yield Yield
Prime Portfolio 3.78% 3.85%
==========================================================================
ADVERTISING
==========================================================================
The Fund or its affiliates may provide information such as, but
not limited to, the economy, investment climate, investment principles,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the
investor in determining whether the Fund is compatible with the
investor's goals. The Fund may list Fund holdings or give examples or
securities that may have been considered for inclusion in the Fund,
whether held or not.
The Fund or its affiliates may supply comparative performance
data and rankings from independent sources such as Donoghue's Money Fund
Report, Bank Rate Monitor, Money, Forbes, Lipper Analytical Services,
Inc., CDA Investment Technologies, Inc., Wiesenberger Investment
Companies Service, Mutual Fund Values Morningstar Ratings, Mutual Fund
Forecaster, Barron's, and The Wall Street Journal. The Fund may also
cite to any source, whether in print or on-line, such as Bloomberg, in
order to acknowledge origin of information. The Fund may compare itself
or its Fund holdings to other investments, whether or not issued or
regulated by the securities industry, including, but not limited to,
certificates of deposit and Treasury notes. The Fund, its Advisor, and
its affiliates reserve the right to update performance rankings as new
rankings become available.
==========================================================================
TRUSTEES AND OFFICERS
==========================================================================
RICHARD L. BAIRD, JR., Trustee. Mr. Baird is Director of
Finance for the Family Health Council, Inc. in Pittsburgh, Pennsylvania,
a non-profit corporation which provides family planning services,
nutrition, maternal/child health care, and various health screening
services. Mr. Baird is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Acacia Capital
Corporation, Calvert New World Fund and Calvert World Values Fund.
Address: 211 Overlook Drive, Pittsburgh, Pennsylvania 15216.
FRANK H. BLATZ, JR., Esq., Trustee. Mr. Blatz is a partner in
the law firm of Abrams, Blatz, Gran, Hendricks & Reina, P.A. Address:
900 Oak Tree Road, South Plainfield, New Jersey 07080.
FREDERICK T. BORTS, M.D., Trustee. Dr. Borts is a radiologist
with Kaiser Permanente. Prior to that, he was a radiologist at Bethlehem
Medical Imaging in Allentown, Pennsylvania. Address: 2040 Nuuanu Avenue
#1805, Honolulu, Hawaii, 96817.
<F1> CHARLES E. DIEHL, Trustee. Mr. Diehl is Vice President and
Treasurer Emeritus of the George Washington University, and has retired
from University Support Services, Inc. of Herndon, Virginia. He is also
a Director of Acacia Mutual Life Insurance Company. Address: 1658 Quail
Hollow Court, McLean, Virginia 22101.
DOUGLAS E. FELDMAN, M.D., Trustee. Dr. Feldman practices head
and neck reconstructive surgery in the Washington, D.C., metropolitan
area. Address: 7536 Pepperell Drive, Bethesda, Maryland 20817.
PETER W. GAVIAN, CFA, Trustee. Mr. Gavian is a principal of
Gavian De Vaux Associates, an investment banking firm. He was formerly
President of Corporate Finance of Washington, Inc. Address: 1953 Gallows
Road, Suite 130, Vienna, Virginia 22201.
JOHN G. GUFFEY, JR., Trustee. Mr. Guffey is chairman of the
Calvert Social Investment Foundation, organizing director of the
Community Capital Bank in Brooklyn, New York, and a financial consultant
to various organizations. In addition, he is a Director of the Community
Bankers Mutual Fund of Denver, Colorado, and the Treasurer and Director
of Silby, Guffey, and Co., Inc., a venture capital firm. Mr. Guffey is a
trustee/director of each of the other investment companies in the
Calvert Group of Funds, except for Acacia Capital Corporation and
Calvert New World Fund. Address: 7205 Pomander Lane, Chevy Chase,
Maryland 20815.
ARTHUR J. PUGH, Trustee. Mr. Pugh serves as a Director of
Acacia Federal Savings Bank. Address: 4823 Prestwick Drive, Fairfax,
Virginia 22030.
<F1> DAVID R. ROCHAT, Senior Vice President and Trustee. Mr.
Rochat is Executive Vice President of Calvert Asset Management Company,
Inc., Director and Secretary of Grady, Berwald and Co., Inc., and
Director and President of Chelsea Securities, Inc. Address: Box 93,
Chelsea, Vermont 05038.
<F1> D. WAYNE SILBY, Esq., Trustee. Mr. Silby is a
trustee/director of each of the investment companies in the Calvert
Group of Funds, except for Acacia Capital Corporation and Calvert New
World Fund. Mr. Silby is an officer, director and shareholder of Silby,
Guffey & Company, Inc., which serves as general partner of Calvert
Social Venture Partners ("CSVP"). CSVP is a venture capital firm
investing in socially responsible small companies. He is also a Director
of Acacia Mutual Life Insurance Company. Address: 1715 18th Street,
N.W., Washington, D.C. 20009.
<F1> CLIFTON S. SORRELL, JR., President and Trustee. Mr. Sorrell
serves as President, Chief Executive Officer and Vice Chairman of
Calvert Group, Ltd. and as an officer and director of each of its
affiliated companies. He is a director of Calvert-Sloan Advisers,
L.L.C., and a trustee/director of each of the investment companies in
the Calvert Group of Funds.
<F1> RENO J. MARTINI, Senior Vice President. Mr. Martini is Senior
Vice President of Calvert Group, Ltd., and Senior Vice President and
Chief Investment Officer of Calvert Asset Management Company, Inc. Mr.
Martini is also a director and President of Calvert-Sloan Advisers,
L.L.C., and a director and officer of Calvert New World Fund.
<F1> ROBERT L. BENNETT, Vice President. Mr. Bennett is a Director
of Calvert Group, Ltd. and its subsidiaries, President of Calvert
Shareholder Services, Inc., and Executive Vice President of Calvert
Group, Ltd. He is an officer of each of the investment companies in the
Calvert Group of Funds, except for Calvert New World Fund.
<F1> RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is
Senior Vice President and Controller of Calvert Group, Ltd. and its
subsidiaries and an officer of each of the other investment companies in
the Calvert Group of Funds. Mr. Wolfsheimer is Vice President and
Treasurer of Calvert-Sloan Advisers, L.L.C., and a director of Calvert
Distributors, Inc.
<F1> WILLIAM M. TARTIKOFF, Esq., Vice President and Secretary. Mr.
Tartikoff is an officer of each of the investment companies in the
Calvert Group of Funds, and is Senior Vice President, Secretary, and
General Counsel of Calvert Group, Ltd., and each of its subsidiaries.
Mr. Tartikoff is Vice President and Secretary of Calvert-Sloan Advisers,
L.L.C., and is an officer of Acacia National Life Insurance Company.
<F1>EVELYNE S. STEWARD, Vice President. Ms. Steward is Senior
Vice President of Calvert Group, Ltd., and a director of Calvert-Sloan
Advisers, L.L.C.
<F1> DANIEL K. HAYES, Vice President. Mr. Hayes is Vice President
of Calvert Asset Management Company, Inc., and is an officer of each of
the other investment companies in the Calvert Group of Funds, except for
Calvert New World Fund.
<F1> SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group, Ltd. and an officer of each
of its subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an
officer of each of the other investment companies in the Calvert Group
of Funds.
<F1> BETH-ANN ROTH, Esq., Assistant Secretary. Ms. Roth is
Associate General Counsel of Calvert Group, Ltd. and an officer of each
of its subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an
officer of each of the other investment companies in the Calvert Group
of Funds.
<F1>Officers and trustees deemed to be "interested persons" of the Fund
under the Investment Company Act of 1940, by virtue of of their
affiliation with the Fund's Advisor.
Each of the above directors/trustees and officers is a
director/trustee or officer of each of the investment companies in the
Calvert Group of Funds with the exception of Calvert Social Investment
Fund, of which only Messrs. Baird, Guffey, Silby and Sorrell are among
the trustees, Acacia Capital Corporation, of which only Messrs. Blatz,
Diehl, Pugh and Sorrell are among the directors, Calvert World Values
Fund, Inc., of which only Messrs. Guffey, Silby and Sorrell are among
the directors, and Calvert New World Fund, Inc., of which only Messrs.
Sorrell and Martini are among the directors. The address of directors
and officers, unless otherwise noted, is 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814. Trustees and officers of the Fund as a
group own less than 1% of the Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird,
Blatz, Feldman, Guffey and Pugh. The Board's Investment Policy Committee
is composed of Messrs. Borts, Diehl, Gavian, Rochat, Silby and Sorrell.
During fiscal 1995, trustees of the Fund not affiliated with
the Fund's Advisor were paid $8,619. Trustees of the Fund not affiliated
with the Advisor presently receive an annual fee of $20,250 for service
as a member of the Board of Trustees of the Calvert Group of Funds, and
a fee of $750 to $1200 for each regular Board or Committee meeting
attended; such fees are allocated among the respective Funds on the
basis of net assets.
Trustees of the Fund not affiliated with the Fund's Advisor may
elect to defer receipt of all or a percentage of their fees and invest
them in any fund in the Calvert Family of Funds through the Trustees
Deferred Compensation Plan (shown as "Pension or Retirement Benefits
Accrued as part of Fund Expenses," below). Deferral of the fees is
designed to maintain the parties in the same position as if the fees
were paid on a current basis. Management believes this will have a
negligible effect on the Fund's assets, liabilities, net assets, and net
income per share, and will ensure that there is no duplication of
advisory fees.
Trustee Compensation Table
Fiscal Year 1995 Aggregate Pension or Total Compensation
(unaudited Compensation Retirement from Registrant and
numbers) from Registrant Benefits Accrued Fund Complex paid to
for service as as part of Trustees<F3>
Trustee Registrant
Name of Trustee Expenses<F2>
..........................................................................
Richard L. Baird, Jr. $885 $0 $33,450
Frank H. Blatz, Jr. $913 $913 $36,801
Frederick T. Borts $671 $0 $25,050
Charles E. Diehl $903 $903 $35,101
Douglas E. Feldman $855 $0 $30,600
Peter W. Gavian $601 $258 $31,051
John G. Guffey, Jr. $859 $0 $40,450
Arthur J. Pugh $912 $0 $36,801
D. Wayne Silby $849 $0 $47,965
<F2> Messrs. Blatz, Diehl, Gavian, and Pugh have chosen to defer a portion
of their compensation. As of September 30, 1995, total deferred
compensation, including dividends and capital appreciation, was
$389,972, $320,855, $85,937, and $145,282, for each trustee,
respectively.
<F3> As of December 31, 1995. The Fund Complex consists of eight (8)
registered investment companies.
==========================================================================
INVESTMENT ADVISOR
==========================================================================
The Fund's Investment Advisor is Calvert Asset Management
Company, Inc., 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814, a subsidiary of Calvert Group, Ltd., which is a subsidiary of
Acacia Mutual Life Insurance Company of Washington, D.C. ("Acacia
Mutual").
The Advisory Contract between the Fund and the Advisor will
remain in effect until January 3, 1997, and from year to year
thereafter, provided continuance is approved at least annually by the
vote of the holders of a majority of the outstanding shares of the Fund,
or by the Trustees of the Fund; and further provided that such
continuance is also approved annually by the vote of a majority of the
Trustees of the Fund who are not parties to the Contract or interested
persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval. The Contract may be terminated
without penalty by either party on 60 days' prior written notice; it
automatically terminates in the event of its assignment.
Under the Contract, the Advisor manages the investment and
reinvestment of the Fund's assets, subject to the direction and control
of the Fund's Board of Trustees. For its services, the Advisor receives
an annual fee, payable monthly, of 0.50% of the first $500 million of
the Fund's average daily net assets, 0.475% of the next $500 million of
such assets, 0.45% of the next $500 million of such assets, 0.425% of
the next $500 million of such assets, and 0.40% of all such assets over
$2 billion. Until September 30, 1993, the Advisor voluntarily waived
half of its advisory fee for the Fund, and charged only 0.25% of the
Fund's average daily net assets.
The Advisor provides the Fund with investment supervision and
management, administrative services, office space, furnishes executive
and other personnel to the Fund, and pays the salaries and fees of all
Trustees who are affiliated persons of the Advisor. The Advisor may
assume and pay certain Fund advertising and promotional expenses and
reserves the right to compensate broker-dealers in consideration of
their promotional or administrative services.
The Fund pays all other expenses including: custodial fees;
shareholder servicing, dividend disbursing and transfer agency fees;
federal and state securities registration fees; Distribution Plan
expenses; insurance premiums; trade association dues; interest, taxes
and other business fees; legal and audit fees; and brokerage commissions
and other costs associated with the purchase and sale of Fund securities.
The Advisor has agreed to reimburse the Fund for the Fund's
operating expenses (excluding brokerage, taxes, interest, Distribution
Plan expenses and extraordinary items) exceeding, on a pro rata basis,
the most restrictive state expense limitation in those states where the
Funds' shares are registered.
The advisory fees paid for the 1993, 1994,and 1995 fiscal years
were $296,175, $516,334, and $378,388, respectively. The advisor did not
reimburse the Fund during the 1993 or 1994 fiscal years. During 1995,
the Advisor voluntarily waived fees or assumed expenses of $71,798 which
were not charged to the Fund.
==========================================================================
TRANSFER AND SHAREHOLDER SERVICING AGENT
==========================================================================
Calvert Shareholder Services, Inc., a wholly owned subsidiary
of Calvert Group, Ltd., and Acacia Mutual Life Insurance Company, has
been retained by the Fund to act as transfer agent, dividend disbursing
agent and shareholder servicing agent. These responsibilities include:
responding to shareholder inquiries and instructions concerning their
accounts; crediting and debiting shareholder accounts for purchases and
redemptions of Fund shares and confirming such transactions; daily
updating of shareholder accounts to reflect declaration and payment of
dividends; and preparing and distributing quarterly statements to
shareholders regarding their accounts. For such services, Calvert
Shareholder Services, Inc. receives compensation based on the number of
shareholder accounts and the number of transactions. The service fees
paid to Calvert Shareholder Services, Inc., for the 1993, 1994, and 1995
fiscal years were $177,074, $140,423, and $144,412, respectively.
==========================================================================
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
==========================================================================
Coopers & Lybrand, L.L.P. has been selected by the Board of
Trustees to serve as independent auditors for fiscal year 1996. State
Street Bank & Trust Company, N.A., 225 Franklin Street, Boston, MA
02110, serves as custodian of the Fund's investments. First National
Bank of Maryland, 25 South Charles Street, Baltimore, Maryland 21203
also serves as custodian of certain of the Fund's cash assets. The
custodian has no part in deciding the Fund's investment policies or the
choice of securities that are to be purchased or sold for the Fund's
Funds.
==========================================================================
METHOD OF DISTRIBUTION
==========================================================================
The Fund has entered into an agreement with Calvert
Distributors, Inc. ("CDI") whereby CDI, acting as principal underwriter
for the Fund, makes a continuous offering of the Fund's securities on a
"best efforts" basis. Under the terms of the agreements, CDI is entitled
to receive, pursuant to the Fund's Distribution Plan, a distribution
service fee from the Fund of 0.35% of its average daily net assets.
Salespersons may receive varying compensation depending on the class of
shares they sell.
Pursuant to Rule 12b-1 under the Investment Company Act of
1940, the Fund has adopted a Distribution Plan (the "Plan") which
permits it to pay certain expenses associated with the distribution of
shares. Such expenses may not exceed, on an annual basis, 0.35% of the
Fund's average daily net assets. The Distribution Plan was approved by
shareholders of the Fund and by the Board of Trustees, including the
Trustees who are not "interested persons" of the Fund (as that term is
defined in the Investment Company Act of 1940) and who have no direct or
indirect financial interest in the operation of the Plan or in any
agreements related to the Plan. The selection and nomination of the
Trustees who are not interested persons of the Fund is committed to the
discretion of such disinterested Trustees. In establishing the Plan, the
Trustees considered various factors including the amount of the
distribution fee (a maximum of 0.35% annually of the Fund's average net
assets). The Trustees determined that there is a reasonable likelihood
that the Plan will benefit the Fund and its shareholders.
The Plan may be terminated by vote of a majority of the
non-interested Trustees who have no direct or indirect financial interest
in the Plan, or by vote of a majority of the outstanding shares of the
Fund. Any change in the Plan that would materially increase the
distribution cost to the Fund requires shareholder approval; otherwise,
the Plan may be amended by the Trustees, including a majority of the
non-interested Trustees as described above.
The Plan will continue in effect until January 3, 1997, if not
sooner terminated in accordance with its terms. Thereafter, the Plan
will continue in effect for successive one year periods provided that
such continuance is specifically approved by (i) the vote of a majority
of the Trustees who are not parties to the Plan or interested persons of
any such party and who have no direct or indirect financial interest in
the Plan, and (ii) the vote of a majority of the entire Board of
Trustees.
For the 1993, 1994, and 1995 fiscal years, the Fund paid
Distribution Plan expenses of $236,748, $351,119, and $315,130,
respectively. Fiscal year 1995 Distribution Plan expenses were used
entirely to compensate dealers distributing shares. Apart from the Plan,
the Advisor and the principal underwriter, at their own expense, may
incur costs and pay expenses associated with the distribution of shares
of the Fund.
==========================================================================
PORTFOLIO TRANSACTIONS
==========================================================================
Transactions are allocated to various underwriters and
broker-dealers by the Fund's Advisor. Newly issued securities are
purchased from underwriters acting as principals at prices which include
underwriting fees. Purchases of securities in the secondary market and
all sales are placed with broker-dealers who may be acting as agents or
principals. Broker-dealers who execute Fund transactions on behalf of
the Fund are selected primarily on the basis of their execution
capability and secondarily on the value and quality of their services.
The Advisor may place orders for the purchase or sale of Fund securities
with qualified broker-dealers who provide it with statistical, research,
or other information and services. Such broker-dealers may receive
compensation for executing Fund transactions that is in excess of the
compensation another broker-dealer would have received for executing
such transactions if the Advisor determines in good faith that such
compensation is reasonable in relation to the value of the information
or services that have been provided. No brokerage commissions were paid
by the Fund in the past three fiscal years.
The Advisor may also execute Fund transactions with or through
broker-dealers who have sold shares of the Fund. However, such sales
will not be a qualifying or disqualifying factor in a broker-dealer's
selection nor will the selection of any broker-dealer be based on the
volume of Fund shares sold.
==========================================================================
GENERAL INFORMATION
==========================================================================
The Fund is the only series of a Massachusetts business trust
organized on March 16, 1982, under the name Calvert Cash Reserves, now
doing business as Money Management Plus. The Fund's Declaration of Trust
contains an express disclaimer of shareholder liability for acts or
obligations of the Fund. The shareholders of a Massachusetts business
trust might, however, under certain circumstances, be held personally
liable as partners for its obligations. The Declaration of Trust
provides for indemnification and reimbursement of expenses out of Fund
assets for any shareholder held personally liable for obligations of the
Fund. The Declaration of Trust provides that the Fund shall, upon
request, assume the defense of any claim made against any shareholder
for any act or obligation of the Fund and satisfy any judgment thereon.
The Declaration of Trust further provides that the Fund may maintain
appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Fund, its shareholders,
Trustees, officers, employees, and agents to cover possible tort and
other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in
which both inadequate insurance exists and the Fund itself is unable to
meet its obligations.
The Fund will send its shareholders unaudited semi-annual and
audited annual reports that will include the Fund's net asset value per
share, Fund securities, income and expenses, and other financial
information.
This Statement of Additional Information does not contain all
the information in the Fund's registration statement. The registration
statement is on file with the Securities and Exchange Commission and is
available to the public.
==========================================================================
FINANCIAL STATEMENTS
==========================================================================
The audited financial statements included in the Annual Report
to Shareholders dated September 30, 1995, are expressly incorporated by
reference and made a part of this Statement of Additional Information.
Copies of this Report may be obtained free of charge by writing or
calling the Fund.
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APPENDIX
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Commercial Paper Ratings
Commercial paper rated A-1 by Standard & Poor's Corporation has
the following characteristics: liquidity ratios are adequate to meet
cash requirements; long-term senior debt is rated "A" or better; the
issuer has access to at least two additional channels of borrowing;
basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances; typically, the issuer's industry is well
established and the issuer has a strong position within the industry;
and the reliability and quality of management are unquestioned. The
relative strength or weakness of the above factors determines whether an
issuer's commercial paper is rated Al, A2, or A3.
The rating Prime-1 is the highest commercial paper rating
assigned by Moody's Investors Service, Inc. Among the factors considered
by Moody's in assigning rating are the following: evaluation of the
management of the issuer; economic evaluation of the issuer's industry
or industries and an appraisal of speculative-type risks which may be
inherent in certain areas; evaluation of the issuer's products in
relation to competition and customer acceptance; liquidity; amount and
quality of long-term debt; trend of earnings over a period of ten years;
financial strength of a parent company and the relationships which exist
with the issuer; and recognition by the management of obligations which
may be present or may arise as a result of public interest question and
preparations to meet such obligations.
