March 31, 1999
Semi-annual
Report
Calvert Cash
Reserves Institutional Prime Fund
<PAGE>
Calvert
Cash
Reserves
Institutional
Prime
Fund
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Calvert Group
Information
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS
330 West 9th Street
Kansas City, MO 64105
Web Site
http://www.calvertgroup.com
This report is intended to provide fund
information to shareholders. It is not authorized
for distribution to prospective investors unless
preceded or accompanied by a prospectus.
<PAGE>
Table
of
Contents
Shareholder
Letter
1
Statement
of Net Assets
2
Statement
of Operations
5
Statements
of Changes in
Net Assets
6
Notes to
Financial Statements
7
Financial Highlights
8
Shareholder Meeting Results
9
Y2K Update
10
Dear Shareholder:
Since our last report, the world economic crisis, which sparked three
sequential 25 basis point easings of the federal funds rate, has abated.
Although concerns over troubled world economies still exist, the market
panic that sparked global liquidity problems last fall has all but
disappeared from the market radar screens. However, in our
never-a-dull-moment world, we now are contending with the conflict in Kosovo
and concerns over escalation of that war will be one factor which will
likely influence the market in the days ahead.
In addition to world events, market technicals such as the continuing pay
down of US treasury bills have continued to support bill prices and
consequently to apply downward pressure on yields. Combining this with the
Fed funds easings which happened after the close of our last report, has
created an environment in which money market yields are significantly lower
than those of last September.
STRATEGY
Because we did anticipate a continuation of the lowering of the Fed funds
rate, we continued to extend our average days to maturity throughout the
final months of 1998, to lock in higher rates wherever possible. On March
31, 1999, our average days to maturity was 44 days, versus 36 days on
September 30, 1998.
PERFORMANCE
For the six month period ending March 31, 1999, the Fund's return of 2.56%
outperformed the Lipper Money Market Funds average of 2.42%.
OUTLOOK
It appears the Federal Reserve Board has retreated to the sidelines for the
moment and has returned to looking at inflationary trends rather than world
liquidity as the primary determinant of the direction of future interest
rates. While the Fed has been neutral over the past few meetings, many
participants in the market place think it likely that the Fed's next move
may be to hike the rate up by 25 basis points sometime later this year.
Inflation in certain areas, such as crude oil prices, has been notable over
the past few months, although areas such as the consumer price Index remain
stable. We will continue to monitor these developments and adjust investment
strategy as needed over the coming six months.
We appreciate your investment in Calvert Group funds and look forward to
providing competitive returns in the months ahead.
Sincerely,
/s/ /s/
Beth Bunnell Hunter Barbara J. Krumsiek
Portfolio Manager President and CEO
April 28, 1999
Quality Structure of Portfolio
It is the operating policy of the Fund to invest only in tier-one securities
as defined by Rule 2a-7 of the Investment Policy Act of 1940. It is a
further operating policy of the Fund that it will invest only in issues
rated A-1 or P-1 rated issues. See the Statement of Additional Information,
"Appendix, Commercial Paper and Bond Ratings."
<PAGE>
STATEMENT OF NET ASSETS
March 31, 1999
Principal
Corporate Obligations - 65.6% Amount Value
Aegis Assisted Living Prop., LLC. VRDN, 5.55%,
2/1/28, LOC: Banque Paribas * $6,970,000 $6,970,000
Arbor Station IV, LLC. VRDN, 4.95%,
2/1/04, LOC: Regions Bank * 5,000,000 5,000,000
Arkansas State Development Finance Authority VRDN
5.05%, 8/1/30, LOC: Credit Suisse * 1,600,000 1,600,000
Barton Healthcare, LLC. VRDN, 5.00%, 2/15/25,
LOC: American National Bank and Trust*1,900,0001,900,000
Bel Air, LLC. VRDN, 5.05%, 12/1/15,
LOC: Amsouth Bank * 5,980,000 5,980,000
Berks County, Pennsylvania Industrial Development Authority
VRDN, 5.05%, 7/1/16, LOC: Corestates *3,000,0003,000,000
Betters Group, LP. VRDN, 5.05%, 2/1/12,
LOC: Century National Bank and Trust,
Confirming LOC: Mellon Bank * 50,000 50,000
Bexar County, Texas Health Facilities Development
VRDN, 5.09%, 2/1/22, LOC: Kredietbank *3,340,0003,340,000
Blount/Strange Realty Holdings, LLC. VRDN, 5.05%,
7/1/16, LOC: Regions Bank * 4,760,000 4,760,000
Boone County, Kentucky Industrial Building
Revenue VRDN, 5.09%, 11/1/08,
LOC: Bank of America * 3,920,000 3,920,000
Botsford General Hospital VRDN, 5.00%, 2/15/27,
LOC: Michigan National* 12,850,000 12,850,000
California Pollution Control VRDN, 5.05%,
7/1/06, LOC: Wells Fargo Bank * 1,700,000 1,700,000
California Statewide Community Development VRDN,
5.45%, 5/1/27, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 495,000 495,000
California Statewide Community Development VRDN,
5.45%, 5/1/27, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 455,000 455,000
California Statewide Community Development VRDN,
5.40%, 7/1/27, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 525,000 525,000
Capreit Carmel Financial, LP. VRDN, 5.19%,
2/1/01, LOC: Credit Suisse * 10,500,000 10,500,000
CIT Group Holdings, Inc., 6.13%, 11/15/99 9,000,000 9,064,849
Colorado Health Facilities Authority Revenue VRDN,
5.09%, 2/1/13, LOC: Kredietbank * 3,685,000 3,685,000
Colorado Health Facilities Authority Revenue VRDN,
5.15%, 2/1/25, LOC: Kredietbank * 2,260,000 2,260,000
Colorado Health Facilities Authority Revenue VRDN,
5.09%, 2/1/25, LOC: Kredietbank * 5,315,000 5,315,000
Colorado Health Facilities Authority Revenue VRDN,
4.85%, 11/1/26, LOC: Kredietbank * 5,850,000 5,850,000
Columbus, Georgia Development Authority Industrial Revenue
VRDN, 5.00%, 1/1/05, LOC: Fleet Bank *750,000 750,000
Dutchess County, New York VRDN, 5.93%,
11/15/99, BPA: Landesbank Hessen-Thuringen,
INSUR: MBIA * 3,000,000 3,013,848
1800 Harrison Foundation, Series 1999A, 5.05%, 1/1/29,
BPA: Citibank, INSUR: AMBAC * 4,000,000 4,000,000
1800 Harrison Foundation, Series 1999B, 5.05%, 1/1/29,
BPA: Citibank, INSUR: AMBAC * 10,000,000 10,000,000
550 West 14th Place, Revenue Bond VRDN, 5.05%,
2/1/29, LOC: Harris Trust * 4,000,000 4,000,000
Florida Housing Finance Agency VRDN, 5.75%, 7/1/23,
LOC: Heller Financial,
Confirming LOC: Commerze Bank * 750,000 750,000
Glacier 600 Revenue Bond VRDN, 5.15%, 11/1/16,
LOC: US Bank - National Assoc. * 3,025,000 3,025,000
Health Insurance Plan Greater New York, Series B VRDN, 4.95%,
7/1/16, LOC: Morgan Trust * 3,200,000 3,200,000
Healthrack Sports and Wellness VRDN, 5.00%, 2/15/27,
LOC: American National Bank and Trust *5,550,0005,550,000
Idaho Associates, LLC. VRDN, 5.00%, 4/1/27,
LOC: LaSalle Bank * 4,150,000 4,150,000
Kit Carson County, Colorado VRDN, 5.15%,
6/1/27, LOC: Norwest Bank * 2,000,000 2,000,000
La Mirada, California Industrial Development Authority VRDN,
5.00%, 12/1/26, LOC: FNB Chicago * 4,000,000 4,000,000
Massachusetts Nursing Homes VRDN, 5.00%, 11/15/13, LOC:
American National Bank and Trust * 1,280,000 1,280,000
Maricopa County, Az Industrial Development Authority
VRDN, 5.00%, 2/1/29,
LOC: Banque National de Paris * 2,300,000 2,300,000
Meriter Hospital, Inc., VRDN, 5.05%, 12/1/16,
LOC: Firstar Bank * 8,125,000 8,125,000
Meriter Management Services, Inc., VRDN,
5.00%, 12/1/16, LOC: Firstar Bank * 4,745,000 4,745,000
Mississippi Business Finance Authority VRDN, 5.25%, 11/1/06,
LOC: Marshall & Ilsley Bank * 4,750,000 4,750,000
Mississippi Business Finance Authority VRDN, 5.05%, 6/1/10,
LOC: National Bank of Detroit * 4,000,000 4,000,000
Mississippi Business Finance Authority VRDN, 5.05%, 12/1/13,
LOC: FNB Boston* 2,500,000 2,500,000
Mississippi Business Finance Authority VRDN, 5.00%,
2/1/19, GA: Sara Lee * 2,000,000 2,000,000
Montgomery Cancer Center, LLC. VRDN, 5.05%, 10/1/12,
LOC: Southtrust Bank, AL * 4,020,000 4,020,000
Montgomery County, New York VRDN, 5.05%, 5/1/25,
LOC: FHLB New York * 3,660,000 3,660,000
Nevada Multi-Family Housing Revenue VRDN, 4.94%, 10/1/30,
LOC: US Bank - National Assoc. * 2,050,000 2,050,000
North Greenbush, NY Industrial Development Authority VRDN,
5.20%, 11/1/08, LOC: Abn Amro Bank *4,400,0004,400,000
<PAGE>
Principal
Corporate Obligations - (Cont'd) Amount Value
Norwest Financial, Inc., 6.05%, 11/19/99 $4,000,000 $4,025,661
Physicians Plus Medical Group VRDN, 5.00%,
8/1/16, LOC: LaSalle Bank * 12,100,000 12,100,000
Pleasant Hill, California Redevelopment Agency VRDN, 5.55%,
8/1/26, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 1,380,000 1,380,000
Richmond, Virginia Redevelopment and Housing Authority
VRDN, 5.00%, 12/1/25,
LOC: Wachovia Bank and Trust * 4,235,000 4,235,000
Roosevelt Paper Co., VRDN, 5.05%, 6/1/12,
LOC: Corestates * 6,610,000 6,610,000
Salts III Cayman Island Corp., 5.44%, 6/18/99,
GA: Bankers Trust 10,000,000 10,000,000
Salts III Cayman Island Corp., 5.32%, 7/23/99,
GA: Bankers Trust 10,000,000 10,000,000
San Leandro, California Multi Family Housing
VRDN, 5.40%, 10/1/27, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 2,255,000 2,255,000
Shawnee, Kansas VRDN, 5.10%, 12/1/12,
LOC: Chase Manhattan * 6,700,000 6,700,000
South Central Communications Corp. VRDN,
5.10%, 6/1/13, LOC: Citizens National Bank,
Confirming LOC: Suntrust Bank * 9,075,000 9,075,000
St. Josephs County, Id., Econ Development VRDN,
5.09%, 6/1/27, LOC: FHLB Indianapolis *905,000905,000
St. Paul, Minnesota Housing and Redevelopment
Authority VRDN, 5.15%, 6/1/15,
LOC: Credit Local de France * 2,500,000 2,500,000
St. Paul, Minnesota Housing and Redevelopment
Authority VRDN, 5.15%, 3/1/18,
LOC: Credit Local de France * 1,220,000 1,220,000
Suffolk County, New York Industrial Development
Agency VRDN, 4.94%, 12/15/07,
LOC: Chase Manhattan * 3,750,000 3,750,000
Sussex County, Delaware VRDN, 5.04%, 11/1/27,
LOC: Wilmington Trust Co. * 3,000,000 3,000,000
TLC Holdings, LLC. VRDN, 5.05%, 6/1/26,
LOC: Columbus Bk. & Trust * 4,515,000 4,515,000
Triangle Funding, Ltd. VRDN, 5.17%, 10/15/99,
US Government Collateral * 7,000,000 7,000,000
United Healthcare Corp., 5.65%, 12/1/99 5,500,000 5,500,000
Vermont Economic VRDN, Series A, 5.10%, 6/2/99,
LOC: National Westminster Bank * 2,550,000 2,550,000
Washington State Housing Finance, 5.05%, 2/1/28,
LOC: US Bank - National Assoc. * 1,840,000 1,840,000
Washington State Housing Finance, 5.05%, 2/1/28,
LOC: US Bank - National Assoc. * 1,185,000 1,185,000
Washington State Housing Finance, 5.05%, 7/1/29,
LOC: Bank One, AZ * 2,760,000 2,760,525
Waukesha Health Systems, Inc., VRDN, 5.00%, 8/15/26,
LOC: Bank of America * 2,150,000 2,150,000
Wenatchee VY Clinic VRDN, 5.15%, 11/23/24,
LOC: US Bank - National Assoc. * 23,500,000 23,500,000
Westminster Asset Corp., VRDN, 5.03%, 4/1/22,
LOC: Wells Fargo Bank * 11,360,000 11,360,000
Total Corporate Obligations (Cost $317,604,883) 317,604,883
Commercial Paper - 23.0%
Banco Del Istmo, 4.85%, 4/5/99,
LOC: Barclays Bank 10,000,000 9,994,611
BankAmerica Corp., 4.82%, 9/8/99 5,000,000 4,892,889
Duke University, 4.85%, 5/5/99 4,000,000 3,981,678
Duke University, 4.82%, 6/30/99 4,000,000 3,951,800
Garanti Funding Corp., 5.39%, 4/30/99,
LOC: Bayer Vereinsbk 11,000,000 10,952,239
ING America Ins. Holdings., 4.81%, 8/2/99,
GA: International Neder Verz 7,000,000 6,884,961
Island Finance, 4.85%, 4/19/99, Capital
Maintenance Agmt: Norwest Bank 10,000,000 9,975,750
Kitty Hawk Funding Corp., 4.85%, 9/20/99 6,000,000 5,860,967
Nebraska Public Power, 5.02%, 4/1/99,
LOC: Bank of America, Commerze Bank,
Bank of Nova Scotia, Toronto Dominion16,000,00016,000,000
Nebraska Public Power, 5.04%, 4/13/99,
LOC: Bank of America, Commerze Bank,
Bank of Nova Scotia, Toronto Dominion5,000,0005,000,000
Nebraska Public Power, 5.06%, 5/11/99,
LOC: Bank of America, Commerze Bank,
Bank of Nova Scotia, Toronto Dominion5,000,0005,000,000
Princeton University, 4.88%, 5/28/99 3,500,000 3,472,957
Oakland, California, Alameda County, Series A,
5.05%, 5/6/99, LOC: Canadian Imperial 10,800,000 10,800,000
Receivables Cap Corp., 4.86%, 4/7/99 5,000,000 4,995,950
<PAGE>
Commercial Paper - Cont'd Principal
Amount Value
Southern Electric Generating Co., 5.00%,
5/11/99 $10,000,000 $9,944,444
Total Commercial Paper (Cost $111,708,246) 111,708,246
Municipal Obligations - 6.7%
Chicago, IL General Obligation VRDN, 4.99%, 2/1/19,
BPA: LaSalle Bank, INSUR: FGIC * 6,170,000 6,170,000
Illinois Housing Development Authority VRDN, 5.07%, 12/1/21,
INSUR: AMBAC, TOA: Citibank * 3,905,000 3,905,000
Illinois Housing Development Authority VRDN, 5.01%, 6/1/22,
INSUR: AMBAC, TOA: Citibank * 1,590,000 1,590,000
Ohio State VRDN, 4.96%, 10/1/21,
LOC: INSUR: AMBAC, TOA: Citibank *6,500,000 6,500,000
Texas State VRDN, 4.96%, 12/1/27,
TOA: Citibank * 1,384,000 1,384,000
Village of Schaumberg, Illinois VRDN, 5.05%, 12/1/13,
BPA: First National Bank Chicago * 2,800,000 2,800,000
Village of Schaumberg, Illinois VRDN, 5.05%, 12/1/20,
BPA: First National Bank Chicago * 3,600,000 3,600,000
Virginia State Housing Development Authority VRDN, 4.99%,
7/1/07, BPA: Bayer Hypobank * 3,620,000 3,620,000
Virginia State Housing Development Authority VRDN,
5.07%, 11/1/11, BPA: Citibank * 2,900,000 2,900,000
Total Municipal Obligations (Cost $32,469,000) 32,469,000
Certificates of Deposit - 2.8%
Commerzebank, 5.085%, 2/16/00 5,000,000 4,998,516
Deutsche Bank, 5.71%, 4/16/99 4,000,000 3,999,889
Royal Bank of Canada, 5.12%, 3/22/00 4,500,000 4,498,736
Total Certificates of Deposit (Cost $13,497,141) 13,497,141
Repurchase Agreements - 3.1%
Donaldson, Lufkin & Jenrette: 5.00%, dated 3/31/99,
due 4/1/99 (Collateral: $15,327,398,
FHLB, 6.27%, 9/23/04) 15,000,000 15,000,000
Total Repurchase Agreements (Cost $15,000,000)15,000,000
Total Investments (Cost $490,279,270) - 101.2% $490,279,270
Other assets and liabilities, net - (1.2%) (5,902,611)
Net Assets - 100% $484,376,659
Net Assets Consist of:
Paid-in capital applicable to 484,363,658 shares of beneficial interest,
unlimited number of no par shares authorized $484,365,473
Undistributed net investment income (loss) 5,332
Accumulated net realized gain (loss) on investments 5,854
Net Assets $484,376,659
Net Asset Value Per Share $1.00
Explanation of Guarantees:
BPA: Bond-Purchase Agreement
LOC: Letter of Credit
GA: Guarantee Agreement
TOA: Tender Option Agreement
INSUR: Insurance
Abbreviations: VRDN: Variable Rate Demand Notes
* Optional tender features give these securities a shorter effective
maturity date.
See notes to financial statements.
<PAGE>
Statement of Operations
Six Months Ended March 31, 1999
Net Investment Income
Investment Income
Interest income $14,294,958
Expenses
Investment advisory fee 680,510
Transfer agency fees and expenses 4,873
Trustees' fees and expenses 33,975
Administrative fees 136,102
Custodian fees 56,270
Accounting fees 7,387
Registration fees 21,186
Reports to shareholders 14,116
Professional fees 10,833
Miscellaneous 19,606
Total expenses 984,858
Reimbursement from Advisor (424,452)
Fees paid indirectly (28,663)
Net expenses 531,743
Net Investment Income 13,763,215
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investments 3,937
Increase (Decrease) in Net Assets
Resulting From Operations $13,767,152
See notes to financial statements.
<PAGE>
Statements of Changes in Net Assets
Six Months Ended Year Ended
March 31, September 30,
Increase (Decrease) in Net Assets 1999 1998
Operations
Net investment income $13,763,215 $28,076,890
Net realized gain (loss) on investments 3,937 6,285
Increase (Decrease) in Net Assets
Resulting From Operations 13,767,152 28,083,175
Distributions to shareholders from:
Net investment income: (13,759,696) (28,075,575)
Total distributions (13,759,696) (28,075,575)
Capital share transactions in dollars and shares:
Shares sold 2,892,613,833 5,373,384,976
Reinvestment of distributions 9,858,054 19,818,423
Shares redeemed (2,854,787,939) (5,331,876,473)
Total capital share transactions 47,683,948 61,326,926
Total Increase (Decrease) in Net Assets 47,691,404 61,334,526
Net Assets
Beginning of period 436,685,255 375,350,729
End of period (including undistributed net
investment income of $5,332 and
$1,813 respectively) $484,376,659 $436,685,255
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A -- Significant Accounting Policies
General: Calvert Institutional Prime Fund (the "Fund"), the sole series of
Calvert Cash Reserves, is registered under the Investment Company Act of
1940 as a diversified, open-end management investment company. The Fund
offers shares of beneficial interest to the public with no sales charge.
Security Valuation: Securities are valued at amortized cost which
approximates market.
Repurchase Agreements: The Fund may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value
and a possible loss of income or value if the counterparty fails to perform
in accordance with the terms of the agreement.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are
accrued daily and paid monthly. Distributions from net realized capital
gains, if any, are paid annually. Distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles; accordingly, periodic reclassifications are made
within the Fund's capital accounts to reflect income and gains available for
distribution under income tax regulations.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those
estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's and transfer agent's fees may be paid
indirectly by credits earned on the Fund's cash on deposit with the bank.
Such a deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to continue to qualify as a regulated
investment company under the Internal Revenue Code and to distribute
substantially all of its earnings.
Note B -- Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by
Ameritas Acacia Mutual Holding Company. The Advisor provides investment
advisory services and pays the salaries and fees of officers and affiliated
Trustees of the Fund. For its services, the Advisor receives a monthly fee
based on an annual rate of .25% of average daily net assets. Under the terms
of the agreement, $85,219 was payable at period end.
Calvert Administrative Services Company, Inc., an affiliate of the Advisor,
provides administrative services to the Fund for an annual fee, payable
monthly, of .05% of the average daily net assets of the Fund. Under the
terms of the agreement, $23,423 was payable at period end.
The Advisor voluntarily reimbursed the Fund for advisory fees,
administrative fees, and other operating expenses of $424,452.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund.
Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is
the shareholder servicing agent for the Fund. For its services, CSSI
received a fee of $2,324 for the period ended March 31, 1999. Under the
terms of the agreement, $494 was payable at year end. National Financial
Data Services, Inc., is the transfer and dividend disbursing agent.
Each Trustee who is not affiliated with the Advisor receives an annual fee
of $20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
Note C -- Investment Activity
The cost of investments owned at March 31, 1999 was substantially the same
for federal income tax and financial reporting purposes.
As a cash management practice, the Fund may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of
$50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings
under this facility bear interest at the overnight Federal Funds Rate plus
.50% per annum. A commitment fee of .10% per annum will be incurred on the
unused portion of the committed facility which will be allocated to all
participating funds. The Fund had $9,504,503 outstanding borrowings at an
interest rate of 5.625% at March 31, 1999.
<PAGE>
Financial Highlights
Periods Ended
March 31, September 30, September 30,
1999 1998 1997
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .025 .056 .055
Distributions from
Net investment income (.025) (.056) (.055)
Net asset value, ending $1.00 $1.00 $1.00
Total return 2.56% 5.74%
5.55%
Ratios to average net assets:
Net investment income 5.06% (a) 5.59% 5.55%
Total expenses+ .21% (a) .14% .07%
Net expenses .20% (a) .13%
.06%
Expenses reimbursed .16% (a) .21% .31%
Net assets, ending (in thousands) $484,377 $436,685 $375,351
Number of shares outstanding,
ending (in thousands) 484,364 436,680 375,353
Years Ended
September 30, September 30, September 30,
1996 1995 1994
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .040 .045 .028
Distributions from
Net investment income (.040) (.045) (.028)
Net asset value, ending $1.00 $1.00 $1.00
Total return 3.99% 4.55%
2.78%
Ratios to average net assets:
Net investment income 4.80% 4.53% 2.75%
Total expenses+ .73% 1.41% N/A
Net expenses .69% 1.39%
1.23%
Expenses reimbursed .47% -- --
Net assets, ending (in thousands) $131,218 $26,775 $99,973
Number of shares outstanding,
ending (in thousands) 131,217 26,821 100,024
(a) Annualized
+ Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; such reductions are included in the
ratio of net expenses. Total expenses are presented net of expense waivers
and reimbursements.
N/A Disclosure not applicable to prior periods.
<PAGE>
A special meeting of shareholders was scheduled for February 24, 1999. There
were several proposals voted upon at the meeting. A brief description of
each proposal and the number of votes received for, against, and votes to
abstain is shown below. All proposals were passed.
Proposal 1 - To elect the Board of Trustees.
Nominees For Against Abstain
Richard L. Baird, Jr. 317,337,384 0 31,061,025
Frank H. Blatz, Jr. 317,337,384 0 31,061,025
Frederick T. Borts 317,337,384 0 31,061,025
Charles E. Diehl 317,337,384 0 31,061,025
Douglas E. Feldman 317,337,384 0 31,061,025
Peter W. Gavian 317,337,384 0 31,061,025
John G. Guffey, Jr. 284,910,513 32,436,872 31,061,025
Barbara J. Krumsiek 317,337,384 0 31,061,025
M. Charito Kruvant 317,337,384 0 31,061,025
Arthur J. Pugh 317,337,384 0 31,061,025
David R. Rochat 317,337,384 0 31,061,025
D. Wayne Silby 317,337,384 0 31,061,025
Proposal 2 - To approve amended fundamental investment restrictions to (a)
delete restrictions that are no longer required to be fundamental due to
changes in state laws or which otherwise need not be fundamental; and (b) to
revise the language of those restrictions that are still required to be
fundamental.
For Against Abstain
301,117,694 16,219,691 31,067,025
Proposal 3 - To approve a new investment advisory agreement with the
investment advisor, Calvert Asset Management Company, Inc.
For Against Abstain
317,337,385 0 31,067,025
Proposal 4 - To ratify the Board's selection of auditors,
PricewaterhouseCoopers LLP
For Against Abstain
304,269,234 13,068,151 31,067,025
<PAGE>
Calvert Group and the Year 2000
Plans and Progress
We are now less than a year away from the year 2000, a problematic date for
computer systems coded for two-character year format. Entered as "00," the
year 2000 would be processed as 1900, a mistake that could foul a variety of
date-sensitive transactions.
As your mutual fund sponsor, our goal is make sure there is no interruption
in the level of service you receive. In the summary below, we've outlined
the steps Calvert Group is taking to ensure our systems perform reliably.
Step One--Assess Systems and Software. Develop an Action Plan
In 1997, we identified all systems, operating platforms and software
potentially affected by the millennium bug.
These included:
Calvert Group systems--portfolio trading, sales contact and reporting
and internal management reporting
transfer agency systems--shareholder record-keeping and transaction
processing
subadvisor systems--investment accounting
other third-party data and service systems.
We also formed a Y2K task force, led by Calvert's vice president of
technology. This group has identified and prioritized our efforts to achieve
year 2000 compliance.
Step Two--Test for Compliance. Repair Systems as Necessary.
Internal systems have been tested. We've made repairs and moved modified
code into production. These systems are now fully compliant. Transfer agency
systems were re-engineered for compliance in 1989. Recent tests indicate
these are, in fact, compliant. The readiness of third-party systems,
including subadvisor systems, has been evaluated. Based on information
received from these groups, we have found no significant obstacles to
compliance.
Step Three--Confirm Compliance. Finalize Contingency Plan.
Testing of transfer agency systems will continue through 1999 to ensure
these remain compliant and continue to interact correctly with external
systems and processes. The transfer agency has established a back-up site,
should main systems fail, and compliance testing of these contingency
measures are also underway. We are developing contingency plans to ensure
that any unforeseen systems failures will not adversely affect our
operations or inconvenience our shareholders.
For more information or to get an update on remediation and testing efforts,
please visit us online at www.calvertgroup.com.
