A Special Notice To All
Acacia Capital Corporation
Calvert Responsibly Invested Contract Holders
We're pleased to announce that on April 21, 1997, Barbara Krumsiek
joined Calvert Group as president and chief executive officer. Ms.
Krumsiek comes to Calvert Group from Alliance Capital Management,
where she served as senior vice president and managing director of
their mutual funds division. She has 20 years experience in mutual
fund management and marketing.
Ms. Krumsiek replaces former Calvert Group president, Clifton S.
Sorrell, who stepped down earlier this year after nearly 10 years in
the top post.
We look forward to Ms. Krumsiek leading the company into the next
century and bringing Calvert Group mutual funds to a growing number
of new investors. We welcome her to the Calvert Group family.
<PAGE>
Calvert Responsibly Invested
Money Market Portfolio
Managed by Calvert Asset Management Company, Inc.
Dear Investor:
The yield on the Money Market Portfolio moved higher during
the six-month period ended June 30, 1997.
Review of the Economy and Markets
The economy expanded at a robust pace for the first quarter
then appeared to moderate in the second quarter. In an attempt to
defuse inflationary pressures, the Federal Reserve adopted a slightly
more restrictive monetary policy. The Fed nudged its target for key
short-term rates higher in March, but left rates unchanged during the
second quarter.
In general, money market and bond yields moved higher during
the first part of the year then backed down toward the close of this
reporting period as investors revised their forecast for the next Fed
move-first thinking the Fed would take steps to raise rates then
expecting no change. Most measures of the stock market's performance
advanced, with the Standard & Poor's 500 Stock Index returning 20.6%
for the six months.
Portfolio Strategy
Expecting generally rising rates, we kept the Portfolio's
maturity near the short end of its target range so that we would have
the opportunity to reinvest the proceeds of maturing securities in
higher yielding issues. This strategy worked to our advantage through
March and again late in the second quarter.
Outlook
Investors, market pundits and the Federal Reserve are
struggling to evaluate a mixed bag of economic indicators. The
Consumer Price Index (up 2.2% year-over-year) does not point to
surging inflation, but a number of other factors, including an
increase in housing starts and rising wages, can be used to make a
case for a strengthening economy. In addition, Congress' plan to
reduce the deficit while also pushing through a package of tax-cuts
is also being evaluated.
In light of the economy's perceived strength and the
possibility of a more stimulative fiscal policy, we expect the
Federal Reserve will take further steps to raise rates during 1997.
The resulting rise in rates would be good news for money market
investors, but likely would not be as well received by the stock and
bond markets.
Thank you for choosing the Calvert Responsibly Invested
Money Market Portfolio.
Sincerely,
Barbara Krumsiek
President
July 21, 1997
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
U.S. Government Agencies and
Instrumentalities - 22.3%
<TABLE>
<S> <C> <C>
Principle Value
Amount
Federal Home Loan Mortgage Corp., 5.44%, 7/11/97
$150,000 $149,774
Federal Home Loan Mortgage Corp., 5.43%, 8/1/97 300,000 298,597
Federal Home Loan Mortgage Corp., 5.47%, 8/4/97 200,000 198,967
Federal National Mortgage Assn., 5.44%, 7/14/97 150,000 149,705
Federal National Mortgage Assn., 5.44%, 8/5/97 120,000 119,365
Federal National Mortgage Assn., 5.42%, 8/18/97 250,000 248,194
Federal National Mortgage Assn., 5.37%, 9/26/97 300,000 296,063
</TABLE>
Total U.S. Government Agencies and Instrumentalities
(Cost $1,460,665) 1,460,665
Corporate Obligations - 64.5%
Alabama State Industrial Development Authority VRDN,
5.80%, 12/1/19, LOC: First Bank * 240,000 240,000
Arbor Properties, Inc. VRDN,
5.70%, 11/1/21, LOC: Amsouth Bank * 250,000 250,000
Aspen Institute, Inc. VRDN, 5.88%, 12/1/04,
LOC: First National Bank of Maryland * 140,000 140,000
Chapel Oaks, Inc. VRDN, 5.75%, 10/1/26,
LOC: Allied Irish Bank * 250,000 250,000
Colorado Health Facilities Authority Revenue VRDN,
5.75%, 2/1/25, LOC: Kredietbank * 200,000 200,000
Fed One Dayton VRDN, 6.65%, 8/1/09, LOC: Bank One Ohio * 140,000 140,000
Health Midwest Ventures Group VRDN, 5.75%, 8/1/19,
LOC: Bank of America * 250,000 250,000
Healthtrack Sports and Wellness VRDN, 5.75%, 2/15/27,
LOC: American National Bank & Trust * 250,000 250,000
IPC Industries, Inc. VRDN, 5.80%, 10/1/11,
LOC: National Bank of Canada * 150,000 150,000
La Miranda, California Industrial Development Authority VRDN,
5.75%, 12/1/26, LOC: First National Bank of Chicago * 250,000 250,000
Lexington Financial Services, LLC. VRDN, 5.75%, 3/1/27,
LOC: LaSalle Bank * 200,000 200,000
Mahoning County, Ohio VRDN, 6.12%, 11/1/98,
LOC: PNC Bank * 135,000 135,000
Montgomery County, Kentucky Industrial Development Revenue
VRDN, 5.80%, 8/1/06, LOC: Fleet Bank * 240,000 240,000
Montgomery County, Pennsylvania Industrial Development Revenue
VRDN, 5.80%, 3/1/10, LOC: Corestates * 250,000 250,000
Pennsylvania Economic Development Authority VRDN,
5.75%, 7/1/16, LOC: Mellon Bank * 200,000 200,000
PRD Finance, LLC. VRDN, 5.69%, 4/1/27,
LOC: First America Bank * 275,000 275,000
St. Joseph County Economic Development VRDN, 5.76%, 6/1/27,
LOC: FHLB - Indianapolis * 150,000 150,000
Corporate Obligations (Cont'd) Principal
Amount Value
TLC Holdings, LLC. VRDN, 5.80%, 6/1/26,
LOC: Columbus Bank & Trust *
$250,000 $250,000
W.L. Petrey Wholesale, Inc. Industrial Development Bond
VRDN, 5.80%, 3/1/11, LOC: Southtrust Bank * 145,000 145,000
Westminster Asset Corp. VRDN, 5.77%, 4/1/22,
LOC: Wells Fargo Bank * 250,000 250,000
Total Corporate Obligations (Cost $4,215,000) 4,215,000
Municipal Obligations - 11.2%
Gardena, California Certificates of Participation VRDN, 5.95%,
7/1/25,
Letter of Credit: Sumitomo Trust & Banking, Confirming LOC:
Dai-Ichi Kango Bank * 230,000 230,000
City of Mt. Vernon Industrial Solid Waste Disposal VRDN, 5.95%,
11/1/11, LOC: Citizens National Bank, Confirming
LOC: Suntrust Bank * 100,000 100,000
Village of Schaumberg, Illinois VRDN, 5.75%,
12/1/20, BPA: Credit Suisse * 250,000 250,000
Virginia State Housing Development Authority
VRDN, 5.60%, 1/1/34 * 150,000 150,000
Total Municipal Obligations (Cost $730,000) 730,000
TOTAL INVESTMENTS (Cost $6,405,665) -98.0% 6,405,665
Other assets and liabilities, net - 2.0% 130,847
Net Assets - 100% $6,536,512
*Optional tender features give these securities a shorter
maturity date.
Explanation of Guarantees:
BPA: Bond Purchase Agreement
LOC: Letter of Credit
Abbreviations:
VDRN: Variable Rate Demand Notes
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
Assets
Investments in securities, at value $6,405,665
Cash 44,370
Receivable for securities sold 100,000
Interest receivable 23,227
Other assets 829
Total assets 6,574,091
Liabilities
Payable for shares redeemed 32,281
Payable to Calvert Asset Management Company, Inc. 2,682
Payable to Calvert Shareholder Services, Inc. 157
Accrued expenses and other liabilities 2,459
Total liabilities 37,579
Net assets $6,536,512
Net Assets Consist of:
Par value and paid-in capital applicable to 6,540,266
shares of common stock outstanding; $1 par value,
10,000,000 shares authorized $6,535,690
Undistributed net investment income 487
Accumulated net realized gains (losses) on investments 335
Net Assets $6,536,512
Net Asset Value per Share $1.00
See notes to financial statements.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
Net Investment Income
Investment Income
Interest income $169,418
Total investment income 169,418
Expenses
Investment advisory fee 15,020
Transfer agency fees and expenses 529
Directors' fees and expenses 250
Custodian fees 3,425
Reports to shareholders 1,404
Professional fees 471
Miscellaneous 187
Total expenses 21,286
Fees paid indirectly (3,425)
Net expenses 17,861
Net Investment Income 151,557
Realized Gain (Loss) on Investments
Net realized gain (loss) -
Increase (Decrease) in Net Assets
Resulting From Operations $151,557
See notes to financial statements.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C>
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
Increase (Decrease) in Net Assets
Operations
Net investment income $151,557 $234,641
Net realized gain (loss) - 205
Increase (Decrease) in Net Assets
Resulting From Operations 151,557 234,846
Distributions to shareholders from
Net investment income (151,077) (235,033)
Capital share transactions
Shares sold 9,517,537 13,882,018
Reinvestment of distributions 150,119 235,032
Shares redeemed (7,509,853)(14,867,168)
Total capital share transactions 2,157,803 (750,118)
Total Increase (Decrease)
in Net Assets 2,158,283 (750,305)
Net Assets
Beginning of period 4,378,229 5,128,534
End of period (including undistributed net investment
income of $487 and $7, respectively)
$6,536,512 $4,378,229
Capital Share Activity
Shares sold 9,517,537 13,882,018
Reinvestment of distributions 150,119 235,032
Shares redeemed (7,509,853) (14,867,168)
Total capital share activity 2,157,803 (750,118)
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Money Market Portfolio (the "Portfolio"), a series of
Acacia Capital Corporation's Calvert Responsibly Invested (CRI)
Portfolios, is registered under the Investment Company Act of 1940 as
a diversified, open-end management investment company. The operations
of each series are accounted for separately. The shares of the
Portfolio are sold to affiliated and unaffiliated insurance companies
for allocation to certain of their variable separate accounts.
Security Valuation: All securities are valued at amortized cost,
which approximates market.
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 Portfolio on ex-dividend date. Dividends are accrued
daily and paid monthly. Distributions from net realized capital
gains, if any, are paid at least annually. Distributions are
determined in accordance with income tax regulations which may differ
from generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Portfolio'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 Portfolio has an arrangement with
its custodian bank whereby the custodian's fees are paid indirectly
by credits earned on the Portfolio's cash on deposit with the bank.
Such deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax
is required since the Portfolio intends to continue to qualify as a
regulated investment company under the Internal Revenue Code and to
distribute substantially all of its earnings.
<PAGE>
Note B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is
wholly-owned by Calvert Group, Ltd. ("Calvert"), which is indirectly
wholly-owned by Acacia Mutual Life Insurance Company. The Advisor
provides investment advisory services and pays the salaries and fees
of officers and affiliated Directors of the Portfolio. For its
services, the Advisor receives a monthly fee based on an annual rate
of .50% of the Portfolio's average daily net assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts
as transfer, dividend disbursing and shareholder servicing agent for
the Portfolio.
Each Director who is not affiliated with the Advisor received a fee
of $750 for each Board meeting attended plus an annual fee of $3,000
for Directors not serving on other Calvert Fund Boards. Director's
fees are allocated to each of the portfolios served.
Note C-Investment Activity
The cost of investments owned at June 30, 1997 was substantially the
same for federal income tax and financial reporting purposes.
As a cash management practice, the Portfolio may sell or purchase
short-term variable rate notes from other Portfolios managed by the
Advisor. All transactions are executed at independently derived
prices.
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
<TABLE>
<S> <C> <C> <C>
June 30, December 31, December 31,
1997 1996 1995
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .025 .048 .055
Net realized gain (loss) - - -
Total from investment operations .025 .048 .055
Distributions from
Net investment income (.025) (.048) (.055)
Total increase (decrease) in
net asset value - - -
Net asset value, ending $1.00 $1.00 $1.00
Total return 2.50% 4.95% 5.37%
Ratios to average net assets:
Net investment income 5.05%(a) 4.82% 5.23%
Total expenses + .71%(a) .75% .66%
Net expenses .59%(a) .62% .59%
Expenses reimbursed - - -
Net assets, ending (in thousands) $6,537 $4,378 $5,129
Number of shares outstanding,
ending (in thousands) 6,540 4,382 5,133
<PAGE>
PERIODS ENDED DECEMBER 31,
1994 1993 1992**
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .039 .031 .009
Net realized gain (loss) - - -
Total from investment operations .039 .031 .009
Distributions from
Net investment income (.039) (.031) (.009)
Total increase (decrease) in net asset value - - -
Net asset value, ending $1.00 $1.00 $1.00
Total return 3.96% 3.09% 2.11%
Ratios to average net assets:
Net investment income 3.91% 3.07% 3.02%(a)
Total expenses + - - -
Net expenses .45% - -
Expenses reimbursed .36% .11% .85%(a)
Net assets, ending (in thousands) $6,479 $4,032 $1,795
Number of shares outstanding,
ending (in thousands) 6,484 4,032 1,795
</TABLE>
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio
of net expenses.
** From June 30, 1992, inception.
<PAGE>
Calvert Responsibly Invested
Strategic Growth Portfolio
Managed by Portfolio Advisory Services, Inc.
Dear Investor:
After generating a very strong 34.33% return for the
previous year, the Strategic Growth Portfolio closed the six-month
period ending June 30, 1997 down 15.29%. The bulk of the loss
occurred during the first quarter, as the types of stocks the
Portfolio concentrates on, smaller companies and growth stocks, fell
sharply. Performance was positive for the second quarter.
Review of
the Economy
The economy expanded at a robust pace for the first quarter
then appeared to moderate in the second quarter. A number of other
indicators, including an increase in housing starts and rising wages,
also pointed to a strengthening economy.
In an attempt to defuse inflationary pressures, the Federal
Reserve adopted a slightly more restrictive monetary policy. The Fed
nudged its target for key short-term rates higher in March, but left
rates unchanged during the second quarter.
CALVERT RESPONSIBLY INVESTED
STRATEGIC GROWTH PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 4/15/95 to 6/30/97
CRI Strategic Growth Ending balance $12,487
S&P 500 Reinv Ending balance $18,584
Russell 2000 Ending balance $15,764
Average Annual Total Return
(period ending 6/30/97)
One Year 11.89%
Life of Fund (3/95) 10.15%
Performance information is for the Portfolio only and
does not reflect charges and expenses of the variable annuity.
Indices performance is shown from 3/31/95.
Past performance does not indicate future results.
Market Conditions
The stock market hit a first quarter high in February then
plummeted, sending both large- and small-cap stocks into negative
territory. Historically, stocks of small companies have led those of
large companies in the first quarter of a new year, but this trend
did not hold in 1997. In fact, by the end of April, the S&P 500
(dominated by larger companies) had outperformed the Russell 2000
(comprised mainly of smaller companies) by 25% for the trailing 12
months, the largest spread ever recorded. The market bounced back in
late April, and smaller company stocks reemerged as market leaders
for May and June.
<PAGE>
Another important aspect of the market's behavior was the
continued underperformance of growth stocks relative to value stocks.
When analyzing the components of the 10.2% return on the Russell
2000, value stocks returned 14.8% and growth stocks returned only
5.2%. The widest disparity occurred during the first quarter.
Portfolio Strategy
At the beginning of the year, 90% of Portfolio assets were
invested in the stock market. Early in March, our risk assessment
model, the Five Market Principles, generated an intermediate-term
sell-signal and we began reducing our equity exposure and increasing
our cash position. The percent of assets invested reached a low of
52% on March 20. Our market indicators improved in late April, and we
began redeploying
cash to the market. By the end of the second quarter, we were again
nearly 90% invested. This "round-trip" helped to offset the effects
of a declining market on the Portfolio's
share price.
Outlook
The Portfolio's recent returns have been disappointing, but
we remain confident in our investment strategy's potential to
generate strong gains over the long-term.
The strong returns for growth and small company stocks in
the last two months of this reporting period are encouraging signs
that these companies are beginning to reassert their leadership
positions. Typically, small companies tend to lag or lead large
companies in fairly lengthy cycles, so this could indicate the
beginning of a protracted and very welcome period of overperformance.
Thank you for your investment and continued confidence.
Sincerely,
Cedd Moses Barbara Krumsiek
Portfolio Manager President
July 21, 1997
<PAGE>
STRATEGIC GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
Equity Securities - 89.0% Shares Value
Commercial Services - Advertising - 2.5%
CKS Group, Inc. * 2,500 $84,375
84,375
Commercial Services - Miscellaneous - 2.7%
NCO Group, Inc. * 3,100 91,062
91,062
Computer - Services - 11.4%
Harbinger Corp. * 4,200 117,600
Sapient Corp. * 3,650 180,675
Technology Solutions Co. * 2,200 86,900
385,175
Electronics - Laser Systems and Components - 2.7%
Cymer, Inc. * 1,900 92,625
92,625
Electronics - Semiconductor Equipment - 5.1%
PRI Automation, Inc. * 4,500 170,719
170,719
Electronics - Semiconductor Manufacturing - 10.3%
PMC Sierra, Inc. * 7,200 189,000
Sanmina Corp. * 2,500 158,750
347,750
Financial Services - 2.4%
Healthcare Financial Partners, Inc. * 4,000 81,500
81,500
Medical - Biomedics and Genetics - 2.5%
Bionx Implants, Inc. * 4,900 83,300
83,300
Medical - Ethical Drugs - 3.0%
Jones Medical Industries, Inc. 2,100 99,750
99,750
Medical - Information Technology - 2.6%
HCIA, Inc. * 2,600 87,100
87,100
Medical - Outpatient and Home Care - 2.4%
Curative Health Services, Inc. * 2,800 80,500
80,500
Equity Securities (Cont'd) Shares Value
Oil and Gas - Machinery and Equipment - 5.4%
Varco International, Inc. * 5,600 $180,600
180,600
Pollution Control - Services - 3.2%
Newpark Resources, Inc. * 3,200 108,000
108,000
Retail - Apparel and Shoes - 8.0%
Pacific Sunwear of California * 2,600 83,850
Vans, Inc. * 12,300 186,038
269,888
Retail - Restaurants - 2.7%
Showbiz Pizza Time, Inc. * 3,500 92,312
92,312
Software - Applications - 8.2%
Siebel Systems, Inc. * 3,100 99,975
Vantive Corp. * 6,400 180,800
280,775
Software - Education and Entertainment - 2.6%
CBT Group Publishing Ltd., ADR * 1,400 88,375
88,375
Software - Systems - 3.6%
Iona Technologies, ADR * 6,200 122,450
122,450
Telecommunications - Equipment - 0.2%
Sourcecom Corp., Series B, Preferred + 1,500 6,450
6,450
Telecommunications - Services - 2.7%
U.S. Long Distance Corp. * 5,300 91,425
91,425
Transportation - Truck - 4.8%
Swift Transportation, Inc. * 2,600 76,700
U.S. Xpress Enterprises, Inc., Class A * 4,300 84,925
161,625
Total Equity Securities (Cost $2,559,709) 3,005,756
TOTAL INVESTMENTS (Cost $2,559,709) - 89.0% 3,005,756
Other assets and liabilities, net - 11.0% 370,012
Net Assets - 100% $3,375,768
+ Restricted securities.
*Non-income producing.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
Assets
Investments in securities, at value $3,005,756
Cash 312,255
Receivable for securities sold 149,084
Dividends receivable 52
Other assets 209
Total assets 3,467,356
Liabilities
Payable for securities purchased 86,368
Payable to Calvert Asset Management Company, Inc. 3,911
Payable to Calvert Shareholder Services, Inc. 79
Accrued expenses and other liabilities 1,230
Total liabilities 91,588
Net assets $3,375,768
Net Assets Consist of:
Par value and paid-in capital applicable to 271,913 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $3,256,879
Undistributed net investment income (loss) (21,227)
Accumulated net realized gain (loss) on investments (305,931)
Net unrealized appreciation (depreciation) on investments 446,047
Net Assets $3,375,768
Net Asset Value per Share $12.41
See notes to financial statements.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
Net Investment Income
Investment Income
Interest income $2,368
Dividend income 52
Total investment income 2,420
Expenses
Investment advisory fee 21,359
Transfer agent fees and expenses 218
Directors' fees and expenses 123
Administrative fees 2,916
Custodian fees 4,532
Reports to shareholders 1,552
Professional fees 234
Miscellaneous 161
Reimbursement from Advisor (2,916)
Total expenses 28,179
Fees paid indirectly (4,532)
Net expenses 23,647
Net Investment Income (Loss) (21,227)
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) (299,021)
Change in unrealized appreciation or depreciation (147,306)
Net Realized and Unrealized Gain (Loss)
on Investments (446,327)
Increase (Decrease) in Net Assets
Resulting From Operations $(467,554)
See notes to financial statements.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $(21,227) $(30,374)
Net realized gain (loss) (299,021) 43,628
Change in unrealized appreciation or depreciation (147,306) 486,428
Increase (Decrease) in Net Assets
Resulting From Operations (467,554) 499,682
Distributions to shareholders from
Net investment income - (533)
Net realized gain on investments - (9,000)
Total distributions - (9,533)
Capital share transactions
Shares sold 1,165,964 1,765,749
Reinvestment of distributions - 9,532
Shares redeemed (353,284) (444,228)
Total capital share transactions 812,680 1,331,053
Total Increase (Decrease)
in Net Assets 345,126 1,821,202
Net Assets
Beginning of period 3,030,642 1,209,440
End of period (including undistributed net investment
income (loss) of $(21,227) and $0, respectively) $3,375,768 $3,030,642
Capital Share Activity
Shares sold 95,175 128,377
Reinvestment of distributions - 651
Shares redeemed (30,102) (32,774)
Total capital share activity 65,073 96,254
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Strategic Growth Portfolio (the "Portfolio"), a series
of Acacia Capital Corporation's Calvert Responsibly Invested (CRI)
Portfolios, is registered under the Investment Company Act of 1940 as
a nondiversified, open-end management investment company. The
operations of each series are accounted for separately. The shares of
the Portfolio, which were first offered on March 1, 1995, are sold to
affiliated and unaffiliated insurance companies for allocation to
certain of their variable separate accounts.
Security Valuation: Securities listed or traded on a national
securities exchange are valued at the last reported sales price.
Unlisted securities and listed securities for which the last sale
price is not available are valued at the most recent bid price or
based on a yield equivalent obtained from the securities' market
maker. Other securities and assets for which market quotations are
not available or deemed inappropriate are valued in good faith under
the direction of the Board of Directors.
Options: The Portfolio may write or purchase option securities. The
option premium is the basis for recognition of unrealized or realized
gain or loss on the option. The cost of securities acquired or the
proceeds from securities sold through the exercise of the option is
adjusted by the amount of the premium.
Securities Sold Short: The Portfolio may sell securities that it
does not own in anticipation of a decline in their market price.
Gains or losses represent the difference between the sale proceeds
and the current market value of the security.
Deposits with Brokers: The Portfolio maintains liquid assets,
including equivalent securities, sufficient to cover, on a daily
basis, the current values of written options and securities sold
short.
Security Transactions and Investment Income: Security transactions
are accounted for on trade date. Realized gains and losses are
recorded on an identified cost basis. Dividend income is recorded on
the ex-dividend date. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis. Dividends
declared on securities sold short are reported as an expense.
Distributions to Shareholders: Distributions to shareholders are
recorded by the Portfolio on ex-dividend date. Dividends from net
investment income and distributions from net realized capital gains,
if any, are paid at least annually. Distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Portfolio'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.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with
its custodian bank whereby the custodian's fees are paid indirectly
by credits earned on the Portfolio's cash on deposit with the bank.
Such deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax
is required since the Portfolio 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 Acacia Mutual Life Insurance Company. The Advisor
provides investment advisory services and pays the salaries and fees
of officers and affiliated Directors of the Portfolio. For its
services, the Advisor receives a monthly fee based on an annual rate
of 1.5% of the Portfolio's average daily net assets. Effective April,
1996, the Portfolio began paying a monthly performance fee of plus or
minus up to .15%, on an annual basis, of average daily net assets of
the performance period depending on the Portfolio's performance
compared to the Russell 2000 Index.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Portfolio for an annual fee,
payable monthly, of .20% of the Portfolio's annual average daily net
assets. The Advisor voluntarily reimbursed the Portfolio for
administrative fees.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts
as transfer, dividend disbursing and shareholder servicing agent for
the Portfolio.
Each Director who is not affiliated with the Advisor received a fee
of $750 for each Board meeting attended plus an annual fee of $3,000
for Directors not serving on other Calvert Fund Boards. Director's
fees are allocated to each of the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than
short-term securities, were $3,926,672 and $3,162,430, respectively.
The cost of investments owned at June 30, 1997 was substantially the
same for federal income tax and financial reporting purposes. Net
unrealized appreciation aggregated $446,047, of which $451,625
related to appreciated securities and $5,578 related to depreciated
securities.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995**
Net asset value, beginning $14.65 $10.94 $10.00
Income from investment operations
Net investment income (.08) (.15) .25
Net realized and unrealized gain (loss) (2.16 3.90 .93
Total from investment operations (2.24) 3.75 1.18
Distributions from
Net investment income - (.00) (.24)
Net realized gains - (.04) -
Total distributions - (.04) (.24)
Total increase (decrease) in net asset value (2.24) 3.71 .94
Net asset value, ending $12.41 $14.65 $10.94
Total return (15.29%) 34.33% 9.65%
Ratios to average net assets:
Net investment income (1.45%)(a) (1.60%) .43%(a)
Total expenses + 1.93%(a) 2.27% 2.17%(a)
Net expenses 1.62%(a) 1.81% 1.64%(a)
Expenses reimbursed .20%(a) .20% .20%(a)
Portfolio turnover 134% 120% 223%
Average commission rate paid $.0486 $.0499 -
Net assets, ending (in thousands) $3,376 $3,031 $1,209
Number of shares outstanding,
ending (in thousands) 272 207 111
(a) Annualized
+ This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio of net expenses.
** From March 1, 1995, inception.
<PAGE>
CALVERT RESPONSIBLY INVESTED
CAPITAL ACCUMULATION PORTFOLIO
Managed by Brown Capital Management, Inc.
Dear Investor:
The Capital Accumulation Portfolio returned 10.10% for the
six months ended June 30, 1997, a return a bit below the 13.04%
advance for the Standard & Poor's 400 Stock Index. The market's
advance in the first six months comes on the heels of the Standard &
Poor's 500 Stock Index's 23.0% return for 1996 and 37.6% return for
1995. This chain of extraordinary returns has been fueled by low
inflation, low interest rates and a slow but steadily growing
economy.
Performance
and Strategy
In general, returns for the mid-sized companies your
Portfolio invests in have lagged those for larger companies, as many
investors have attempted to minimize their stock market risk by
investing in the well-known corporate giants. This trend explains why
the Portfolio's performance has not been as strong as that of the S&P
500, which is comprised mainly of the larger companies.
Within the mid-cap universe, our focus has been on companies
that manufacture products designed to enhance productivity and those
that provide goods and services to an aging population. Accordingly
we have maintained strong exposure to the technology, financial services and
health care industries.
<PAGE>
CALVERT RESPONSIBLY INVESTED
CAPITAL ACCUMULATION PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/92 to 6/30/97
CRI Capital Accumulation Ending balance $19,552
S&P 500 Reinv Ending balance $27,932
Russell 2000 Ending balance $26,681
S&P 400 Midcap Reinv $26,069
Average Annual Total Return
(period ending 6/30/97)
One Year 8.79%
Five Year 12.95%
Life of Fund (7/91) 11.90%
*New subadvisors assumed management of the Portfolio
effecive December 1994.
Performance information is for the Portfolio only and
does not reflect charges and expenses of the variable annuity.
Indices performance is shown from 6/30/91. Past performance
does not indicate future results.
In our opinion, one of the strongest forces behind the
economy's ability to generate steady growth without triggering higher
inflation is companies' need and recently demonstrated ability to
improve productivity, which enhances profitability. Products and
services that save corporations and consumers time, money and
headaches have been in big demand. This is one of the reasons why
technology companies have been strong contributors to recent
investment performance and why they comprise such a large portion of
our holdings.
<PAGE>
In selecting stocks, we seek companies that are reasonably
priced and have the potential to generate strong earnings growth. We
look specifically at the level and durability of a company's revenue
growth, its ability to create and defend market presence and the
strength of its financial structure and management team.
Recent additions to the Portfolio's technology exposure
include Acxiom, BMC Software and Network General, whose products and
services provide a range of data processing and information
integration activities. In the consumer products sector, we added
Illinois Tool Works and Fastenal, companies who address the tool and
tool component needs of worldwide retail, commercial and industrial
markets.
Outlook
Based on our earnings estimates, stocks are at fairly high
but not exuberant valuations. We are still finding a number of
promising opportunities. One factor we are monitoring very closely is
the interaction of productivity and wages, as excessive wage
expansion can put pressure on profit margins and earnings growth.
In selecting investments, we continue to utilize an
old-fashioned, bottom-up approach that we don't believe has lost any
of its merit in the current stock market environment.
Thank you for your investment and continued confidence.
Sincerely,
Ed Brown Barbara Krumsiek
Portfolio Manager President
July 21, 1997
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
Equity Securities - 96.2% Shares Value
Biotechnology - 3.0%
Amgen, Inc. 11,400 $662,625
662,625
Business Equipment and Services - 5.7%
Acxiom Corp. * 4,400 90,200
Equifax, Inc. 12,500 464,844
Hewlett Packard Co. 12,400 694,400
1,249,444
Capital Goods - 2.4%
Illinois Tool Works, Inc. 10,400 519,350
519,350
Computer - Memory Devices - 1.9%
EMC Corp. * 10,889 424,671
424,671
Computer - Networks - 3.8%
Cisco Systems, Inc. * 11,250 755,156
Network General Corp. * 5,300 78,838
833,994
Computer - Software - 5.5%
BMC Software, Inc. * 5,900 326,712
Microsoft Corp. * 3,500 442,312
Sterling Software, Inc. * 13,900 434,375
1,203,399
Computer - Systems - 2.4%
Oracle Corp. * 10,337 520,726
520,726
Consumer Products and Services - 3.1%
Newell Co. 17,100 677,588
677,588
Electrical Equipment and Services - 5.0%
Belden, Inc. 15,800 538,188
Sterling Commerce, Inc. * 17,000 558,875
1,097,063
Electronics - Components - 3.3%
Vishay Intertechnology, Inc. * 25,290 731,829
731,829
Equity Securities (Cont'd) Shares Value
Electronics - Semiconductors - 4.5%
Intel Corp. 3,000 $425,437
Solectron Corp. * 8,000 560,000
985,437
Financial Services - 9.9%
Chase Manhattan Corp. 7,952 771,841
Green Tree Financial Corp. 20,550 732,094
T. Rowe Price Associates, Inc. 13,100 676,287
2,180,222
Health Care - 11.5%
Cardinal Health, Inc. 11,000 629,750
Health Care & Retirement Corp. * 16,050 535,669
Johnson & Johnson 7,600 489,250
Pall Corp. 15,700 365,025
United Healthcare Corp. 9,800 509,600
2,529,294
Insurance - 1.4%
AFLAC, Inc. 6,650 314,212
314,212
Leisure - 3.0%
Carnival Corp., Class A 15,900 655,875
655,875
Medical - 4.8%
ALZA Corp. * 19,200 556,800
Scherer (R.P.) Corp. * 9,800 505,925
1,062,725
Oil and Gas - 2.7%
MCN Energy Group, Inc. 19,200 588,000
588,000
Property Management - 2.1%
Rouse Co. 15,700 463,150
463,150
Real Estate - 2.4%
Post Properties, Inc. 13,100 531,369
531,369
Restaurants - 1.3%
Cheesecake Factory, Inc. * 13,300 279,300
279,300
Retail - Department Stores - 2.4%
Nordstrom, Inc. 10,700 524,969
524,969
Equity Securities (Cont'd) Shares Value
Retail - Discount and Variety - 5.1%
Caseys General Stores, Inc. 22,100 $475,841
Dollar General Corp. 17,081 640,538
1,116,379
Retail - Special Line - 9.0%
Autozone, Inc. * 29,200 688,025
Fastenal Co. 9,600 470,400
Home Depot, Inc. 11,700 806,569
1,964,994
Total Equity Securities (Cost $18,446,814) 21,116,615
TOTAL INVESTMENTS (Cost $18,446,814) - 96.2% 21,116,615
Other assets and liabilities, net - 3.8% 838,275
Net Assets - 100% $21,954,890
*Non-income producing.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30,1 997
Assets
Investments in securities, at value $21,116,615
Cash 1,651,163
Receivable for securities sold 5,025
Interest and dividends receivable 13,336
Other assets 1,985
Total assets 22,788,124
Liabilities
Payable for securities purchased 809,899
Payable for shares redeemed 3,535
Payable to Calvert Asset Management Company, Inc. 14,657
Payable to Calvert Administrative Services Company 1,825
Payable to Calvert Shareholder Services, Inc. 548
Accrued expenses and other liabilities 2,770
Total liabilities 833,234
Net assets $21,954,890
Net Assets Consist of:
Par value and paid-in capital applicable to 829,236 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $17,030,227
Undistributed net investment income (loss) (15,367)
Accumulated net realized gains (losses) on investments 2,270,229
Net unrealized appreciation (depreciation) on investments 2,669,801
Net Assets $21,954,890
Net Asset Value per Share $26.48
See notes to financial statements.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
Net Investment Income
Investment Income
Interest income $9,537
Dividend income 72,490
Total investment income 82,027
Expenses
Investment advisory fee 80,813
Transfer agency fees and expenses 1,546
Directors' fees and expenses 876
Administrative fees 10,140
Custodian fees 12,634
Reports to shareholders 1,698
Professional fees 1,625
Miscellaneous 696
Total expenses 110,028
Fees paid indirectly (12,634)
Net expenses 97,394
Net Investment Income (Loss) (15,367)
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) 2,274,875
Change in unrealized appreciation or depreciation (242,708)
Net Realized and Unrealized Gain (Loss)
on Investments 2,032,167
Increase (Decrease) in Net Assets
Resulting From Operations $2,016,800
See notes to financial statements.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $(15,367) $(95,533)
Net realized gain (loss) 2,274,875 7,603
Change in unrealized appreciation or depreciation (242,708) 1,182,679
Increase (Decrease) in Net Assets
Resulting From Operations 2,016,800 1,094,749
Distributions to shareholders from
Net investment income - -
Net realized gain on investments - (32,307)
Total distributions - (32,307)
Capital share transactions
Shares sold 5,151,296 14,697,452
Shares issued from merger (Note A) - 4,728,068
Reinvestment of distributions - 32,310
Shares redeemed (5,117,529) (9,551,228)
Total capital share transactions 33,767 9,906,602
Total Increase (Decrease)
in Net Assets 2,050,567 10,969,044
Net Assets
Beginning of period 19,904,323 8,935,279
End of period (including undistributed
net investment income (loss) of $(15,367)
and $0,respectively) $21,954,890 $19,904,323
Capital Share Activity
Shares sold 209,406 618,839
Shares issued from merger (Note A) - 207,827
Reinvestment of distributions - 1,343
Shares redeemed (207,853) (398,789)
Total capital share activity 1,553 429,220
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Capital Accumulation Portfolio (the "Portfolio"), a
series of Acacia Capital Corporation's Calvert Responsibly Invested
(CRI) Portfolios, is registered under the Investment Company Act of
1940 as a non-diversified, open-end management investment company.
The operations of each series are accounted for separately. The
shares of the Portfolio are sold to affiliated and unaffiliated
insurance companies for allocation to certain of their variable
separate accounts.
On February 23, 1996, the net assets of CRIEquity Portfolio were
merged into the Portfolio. The acquisition was accomplished by a tax
free exchange of 207,827 shares of the Portfolio (valued at
$4,728,068) for the 259,797 shares of CRIEquity Portfolio outstanding
at February 23, 1996. CRIEquity Portfolio's net assets at that date,
including $249,296 of unrealized appreciation, were combined with
those of the Portfolio. The aggregate net assets of the Portfolio and
CRIEquity Portfolio immediately before the acquisition were
$9,742,153 and $4,727,159, respectively.
Security Valuation: Securities listed or traded on a national
securities exchange are valued at the last reported sale price.
Unlisted securities and listed securities for which the last sale
price is not available are valued at the most recent bid price or
based on a yield equivalent obtained from the securities' market
maker. Other securities and assets for which market quotations are
not available or deemed inappropriate are valued in good faith under
the direction of the Board of Directors.
Security Transactions and Investment Income: Security transactions
are accounted for on trade date. Realized gains and losses are
recorded on an identified cost basis. Dividend income is recorded on
the ex-dividend date. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are
recorded by the Portfolio on ex-dividend date. Dividends from net
investment income and distributions from net realized capital gains,
if any, are paid at least annually. Distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Portfolio'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.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with
its custodian bank whereby the custodian's fees are paid indirectly
by credits earned on the Portfolio's cash on deposit with the bank.
Such deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax
is required since the Portfolio 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 Acacia Mutual Life Insurance Company. The Advisor
provides investment advisory services and pays the salaries and fees
of officers and affiliated Directors of the Portfolio. For its
services, the Advisor receives a monthly fee based on an annual rate
of .80% of the Portfolio's average daily net assets. Effective
January, 1997, the Portfolio began paying a monthly performance fee
of plus or minus up to .05%, on an annual basis, of average daily net
assets of the performance period depending on the Portfolio's
performance compared to the S&P Mid-Cap 400 Index.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Portfolio for an annual fee,
payable monthly, of .10% of the Portfolio's annual average daily net
assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts
as transfer, dividend disbursing and shareholder servicing agent for
the Portfolio.
Each Director who is not affiliated with the Advisor received a fee
of $750 for each Board meeting attended plus an annual fee of $3,000
for Directors not serving on other Calvert Fund Boards. Director's
fees are allocated to each of the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than
short-term securities, were $16,664,446 and $16,601,621,
respectively.
The cost of investments owned at June 30, 1997 was substantially the
same for federal income tax and financial reporting purposes. Net
unrealized appreciation aggregated $2,669,801, of which $2,770,509
related to appreciated securities and $100,708 related to depreciated
securities.
Net realized capital loss carryforward, for federal income tax
purposes, of $1,598 at June 30, 1997 may be utilized to offset
current or future capital gains until expiration in 2004.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995
Net asset value, beginning $24.05 $22.42 $16.97
Income from investment operations
Net investment income (.02) (.12) (.15)
Net realized and unrealized gain (loss) 2.45 1.79 6.85
Total from investment operations 2.43 1.67 6.70
Distributions from
Net investment income - - (.01)
Net realized gains - (.04) (1.24)
Total distributions - (.04) (1.25)
Total increase (decrease) in net asset value 2.43 1.63 5.45
Net asset value, ending $26.48 $24.05 $22.42
Total return 10.10% 7.44% 39.46%
Ratios to average net assets:
Net investment income (.15%)(a) (.60%) (.84%)
Total expenses + 1.09%(a) 1.33% 1.56%
Net expenses .96%(a) 1.00% 1.25%
Expenses reimbursed - - .10%
Portfolio turnover** 89% 124% 135%
Average commission rate paid $.0518 $.0563 -
Net assets, ending (in thousands) $21,955 $19,904 $8,935
Number of shares outstanding,
ending (in thousands) 829 828 398
<PAGE>
YEARS ENDED DECEMBER 31,
1994 1993 1992
Net asset value, beginning $18.95 $17.87 $15.82
Income from investment operations
Net investment income .10 .08 .09
Net realized and unrealized gain (loss) (1.98) 1.27 2.09
Total from investment operations (1.88) 1.35 2.18
Distributions from
Net investment income (.10) (.08) (.09)
Net realized gains - (.19) (.04)
Total distributions (.10) (.27) (.13)
Total increase (decrease) in net asset value (1.98) 1.08 2.05
Net asset value, ending $16.97 $18.95 $17.87
Total return (9.92%) 7.56% 13.73%
Ratios to average net assets:
Net investment income .68% .66% 1.19%
Total expenses + - - -
Net expenses .79% .80% .39%
Expenses reimbursed - - .87%
Portfolio turnover 79% 26% 2%
Net assets, ending (in thousands) $5,689 $4,986 $870
Number of shares outstanding,
ending (in thousands) 335 263 49
(a) Annualized
+ This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio of net expenses.
** Portfolio turnover excludes transactions in
connection with the February 1996 merger of CRI
Equity Portfolio.
<PAGE>
Calvert Responsibly Invested
Global Equity Portfolio
Managed by Murray Johnstone International, Ltd.
Dear Investor:
The Global Equity Portfolio returned 14.09% for the six
months ended June 30, 1997, which is a bit above the 12.50% return
for the average of 39 global funds tracked by Lipper Analytical
Services. The key development across all economies, but particularly
in the US, was growth accompanied by low inflation.
Global Market Performance
The US market, benefiting from continued low interest rates,
returned 21.2% during the period. While our holdings of US stocks
contributed good gains, the Portfolio was underweighted in the US
market relative to the Morgan Stanley Capital International World
Index, which was negative for performance.
CALVERT RESPONSIBLY INVESTED
GLOBAL EQUITY PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/92 to 6/30/97
CRI Global Equity Ending balance $18,025
MSCI World Index Ending balance $18,969
Average Annual Total Return
(period ending 6/30/97)
One Year 21.61%
Five Year 12.51%
Life of Fund (6/92) 12.49%
Performance information is for the Portfolio and does
not reflect charges and expenses of the variable annuity.
Past performance does not indicate future results.
Performance for most European markets was also strong, with
the following three themes doing the most to drive stock prices
higher: corporate restructuring, low inflation and interest rates and
progress toward monetary union. Among the strongest performers were
the Netherlands (up 20.4%), Spain (up 21.1%) and Switzerland (up
31.6%). The UK market underperformed as investors waited to see the
policies of the new Labour Government. The Portfolio's holdings
outperformed the European market in general, with a return of 23.0%
versus 14.4%.
The Japanese market saw a return of 9.2%. The increase in
stock prices was driven initially by companies benefiting from
increased exports as a result of the weak yen. Then, with the
seasonal flow of money into the market from domestic pension fund
allocation, stocks across a broad range of sectors moved higher. A
better-than-expected economic report issued by The Bank of Japan also
helped to encourage investors. The Portfolio's stocks outperformed
the market with a return of 14.5%.
In the Far East, markets were dominated by Hong Kong and
investors' changing expectations for the region after its reversion
to Chinese rule on July 1. Hong Kong ended the period up 9.7%, but
much of the strength was in the Chinese shares, not the property
stocks that comprise most of the market. Our Hong Kong shares
underperformed with a return of -5.8%.
<PAGE>
The converse of the attention focused on Hong Kong was the
diminishing trading volumes and decline in share prices in other
markets in the region. Although the economic cycle has begun to
recover, markets in Singapore and Malaysia were lackluster (down 7.5%
and 11.8%). Australia and New Zealand enjoyed relatively better
performance (up 6.7% and 6.2%).
The emerging markets represented in the Portfolio, which are
primarily in Latin America, saw solid returns. Governments are now
achieving a steady path to development combined with moderate
inflation, and stock markets have demonstrated the ability to move
independently from the US market and respond to domestic or regional
events. Our holdings in Mexico appreciated 62.7%, well ahead of the
18.9% return for the index. Our investments in Argentina rose 9.3%,
which was behind the 14.2% return for that market.
Investment Strategy and Outlook
The investment strategy for the period focused on Europe,
where we were overweighted in Spain, Germany, the Netherlands and
Switzerland. In response to improving fundamentals, we made a new
investment in Finland and added to our holdings in Italy.
Exposure to emerging markets was increased with the addition
of Chile and South Africa to the portfolio. Interest rates are
falling in Chile and with good economic fundamentals and accelerating
corporate earnings growth, the outlook for the market is positive.
South Africa should benefit from an improving domestic economy with
interest rates likely to fall as the currency stabilizes. Elsewhere,
Malaysia was reduced as monetary tightening undermined investor
sentiment.
Our low exposure to the US market was negative for
performance. However, we continue to believe better opportunities
exist in countries whose business cycles are not as mature.
Going forward, we expect the strength of the European
markets to slow as valuations become stretched. This may cause us to
reduce our investments in the region. Regarding the Japanese market,
valuations are improving and we will monitor development with an eye
toward increasing exposure.
We are optimistic about the future for Hong Kong and expect
to maintain our exposure. The region should be able to prosper under
the "one government, two systems" process China has agreed to, and
the appointment of senior officials from the previous government to
the new administration should help to maintain continuity.
The emerging markets should also continue their progress in
the second half of the year. Accordingly, we plan to maintain the
current level of investment in these areas.
We appreciate your investment in the Portfolio.
Sincerely,
Andrew Preston Barbara Krumsiek
Portfolio Manager President
July 21, 1997
*Unless otherwise stated, performance figures
quoted refer to the MSCI country index for the
relevant market, in U.S. dollars.
<PAGE>
GLOBAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
Equity Securities - 93.8% Shares Value
Argentina - 1.9%
Banco Frances Del Rio La Plata, ADR 4,600 $149,500
Transportadora de Gas, ADR 12,000 150,000
299,500
Australia - 5.5%
Australian & New Zealand Bank Group 30,000 224,458
Brambles Industries, Ltd. 10,000 197,939
Commonwealth Bank 10,000 120,920
National Australia Bank 23,000 329,741
873,058
Belgium - 2.2%
Fortis 1,700 351,056
351,056
Chile - 2.1%
Compania de Telecom de Chile, ADR 10,000 330,000
330,000
Finland - 2.1%
Nokia 4,360 325,693
325,693
France - 5.4%
CIE Bancaire 1,000 127,623
Pinault Printemps 800 384,433
SGS Thomas Micro * 4,300 339,510
851,566
Germany - 5.8%
Deutsche Telekom 7,950 191,445
Douglas Holdings 6,790 270,572
Linde 210 160,742
Volkswagen 370 283,636
906,395
Hong Kong - 5.1%
Cheung Kong Holdings 20,000 197,488
Hong Kong Land Holdings 100,000 266,000
Hysan Development 55,000 162,218
Hysan Development (warrants) * 2,750 1,065
Sun Hung Kai Properties 15,000 180,547
807,318
Equity Securities (Cont'd) Shares Value
Ireland - 2.1%
Allied Irish Banks 32,334 $246,614
Bank of Ireland 7,270 79,905
326,519
Italy - 7.4%
IMI 32,000 288,073
Parmalat Finanziaria 84,000 118,865
STET 64,560 376,062
Telecom Italia Mobile 118,710 384,159
1,167,159
Japan - 12.7%
Canon Sales Co., Inc. 7,800 181,696
Eisai Co. 9,000 170,389
Fuji Machine Manufacturing 6,000 217,240
Keyence Corp. 1,100 163,148
Murata Manufacturing Co. 4,000 159,135
Namco 5,000 192,811
Nitto Denko Corp. 12,000 233,467
Sanwa Bank 3,000 44,495
Shiseido Co. 9,000 148,403
Sumitomo Bank 7,000 114,814
Sumitomo Electric Industries 11,000 184,261
Yamaha Motor Co. 19,000 188,972
1,998,831
Malaysia - 1.6%
AMMB Holdings Berhad (warrants) * 3,000 4,041
Malayan Bank Berhad 24,000 251,981
256,022
Mexico - 2.8%
Banpais, S.A., ADR * 10,000 0
Cifra, S.A. de C.V., ADR 153,000 280,801
Grupo Industrial Durango, S.A., ADR * 11,000 167,750
448,551
Netherlands - 2.4%
ING Groep 680 31,352
Vendex International 1,960 107,341
Ver Ned Uitgevers 10,550 233,262
371,955
New Zealand - 1.7%
Independent News 30,000 157,926
Wilson & Horton 15,000 118,190
276,116
Equity Securities (Cont'd) Shares Value
Singapore - 3.8%
City Developments 20,000 $195,845
Keppel Corp. 17,000 75,505
Keppel Corp., A Shares * 4,250 18,430
Keppel Land Ltd. 50,000 132,895
Wing Tai Holdings 60,000 172,903
595,578
South Africa - 1.6%
Standard Bank Investment 5,000 245,757
245,757
Spain - 2.4%
Prosegur Seguridad 12,545 153,247
Telefonica de Espana 7,530 217,698
370,945
Sweden - 0.4%
Scania AB, Series A 930 28,253
Scania AB, Series B 930 28,373
56,626
Switzerland - 6.6%
Winterthur 580 510,877
Zurich Versicherun 1,313 522,502
1,033,379
United Kingdom - 8.8%
Anglian Group 7,800 31,824
Anglian Water 6,900 75,263
Azlan Group 5,000 46,212
Bellway 6,300 35,146
Cadbury Schweppes 8,700 77,656
Carlton Communications 9,100 77,059
Commercial Union 5,600 58,892
Firstbus 8,400 29,376
Halifax * 7,650 98,477
Johnson Matthey 8,400 80,574
Kingfisher 7,100 80,637
Lloyds TSB Group 10,800 110,969
Low & Bonar 4,400 21,982
Mayflower Corp. 11,600 28,204
Millennium and Copthne 7,000 43,714
Misys 2,000 44,997
National Westminster Bank 8,000 107,579
Norwich Union * 6,200 32,833
Safeway 10,100 58,448
SIG 5,600 29,842
Smith & Nephew 25,700 71,473
Equity Securities (Cont'd) Shares Value
United Kingdom (Cont'd)
Somerfield 14,700 $44,309
Vitec Group 3,200 30,375
Wolseley 9,400 73,338
1,389,179
United States - 9.4%
Bellsouth Corp. 3,400 157,675
Brady, (W.H.) Co., Class A 4,900 142,100
Cardinal Health, Inc. 2,580 147,705
CUC International, Inc. * 6,600 170,363
Fiserv, Inc. * 3,650 162,881
Hewlett Packard Co. 2,900 162,400
Interim Services, Inc. * 2,600 115,700
La Quinta Inns, Inc. 6,500 142,188
Molex, Inc., Class A 4,000 139,500
Quorum Health Group, Inc. * 4,000 143,000
1,483,512
Total Equity Securities (Cost $11,954,530) 14,764,715
Principal
Time Deposit - 5.6% Amount
State Street Bank, London, 6.00%, 7/1/97 $879,996 879,996
Total Time Deposit (Cost $879,996) 879,996
Corporate Obligations - 0.1%
Malaysia - 0.1%
AMMB Holdings, 5.00%, 5/13/02 30,000 10,162
Total Corporate Obligations (Cost $12,135) 10,162
TOTAL INVESTMENTS (Cost $12,846,661) - 99.5% 15,654,873
Other assets and liabilities, net 0.5% 74,370
Net Assets - 100% $15,729,243
*Non-income producing.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
Assets
Investments in securities, at value $15,654,873
Cash 48,570
Interest and dividends receivable 61,602
Other assets 1,778
Total assets 15,766,823
Liabilities
Payable for securities purchased 16,925
Payable for shares redeemed 123
Payable to Calvert Asset Management Company, Inc. 11,503
Payable to Calvert Administrative Services Company 2,508
Payable to Calvert Shareholder Services, Inc. 382
Accrued expenses and other liabilities 6,139
Total liabilities 37,580
Net assets $15,729,243
Net Assets Consist of:
Par value and paid-in capital applicable to 735,632 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $12,594,686
Undistributed net investment income 130,120
Accumulated net realized gain (loss) on investments
and foreign currencies 196,470
Net unrealized appreciation (depreciation) on investments and assets
and liabilities
in foreign currencies 2,807,967
Net Assets $15,729,243
Net Asset Value per Share $21.38
See notes to financial statements.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
Net Investment Income
Investment Income
Interest income (net of foreign taxes of $10) $28,004
Dividend income (net of foreign taxes of $19,626) 169,261
Total investment income 197,265
Expenses
Investment advisory fee 69,896
Transfer agency fees and expenses 1,069
Directors' fees and expenses 631
Administrative fees 20,000
Custodian fees 29,425
Reports to shareholders 1,493
Professional fees 1,118
Miscellaneous 288
Reimbursement from Advisor (13,010)
Total expenses 110,910
Fees paid indirectly (29,425)
Net expenses 81,485
Net Investment Income (Loss) 115,780
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Securities 117,065
Foreign currencies (13,400)
103,665
Change in unrealized appreciation or depreciation on:
Securities 1,663,950
Assets and liabilities in foreign currencies (311)
1,663,639
Net Realized and Unrealized Gain (Loss)
on Investments 1,767,304
Increase (Decrease) in Net Assets
Resulting From Operations $1,883,084
See notes to financial statements.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
Increase (Decrease) in Net Assets
Operations
Net investment income $115,780 $125,031
Net realized gain (loss) 103,665 643,380
Change in unrealized appreciation or depreciation 1,663,639 896,590
Increase (Decrease) in Net Assets
Resulting From Operations 1,883,084 1,665,001
Distributions to shareholders from
Net investment income - (100,000)
Net realized gain on investments - (597,000)
Total distributions - (697,000)
Capital share transactions
Shares sold 1,826,296 4,709,791
Reinvestment of distributions - 697,005
Shares redeemed (2,006,954) (2,178,927)
Total capital share transactions (180,658) 3,227,869
Total Increase (Decrease)
in Net Assets 1,702,426 4,195,870
Net Assets
Beginning of period 14,026,817 9,830,947
End of period (including undistributed net
investment income of $130,120 and $14,340,
respectively) $15,729,243 $14,026,817
Capital Share Activity
Shares sold 93,556 258,532
Reinvestment of distributions - 37,193
Shares redeemed (106,369) (120,463)
Total capital share activity (12,813) 175,262
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Global Equity Portfolio (the "Portfolio"), a series of
Acacia Capital Corporation's Calvert Responsibly Invested (CRI)
Portfolios, is registered under the Investment Company Act of 1940 as
a diversified, open-end management investment company. The operations
of each series are accounted for separately. The shares of the
Portfolio are sold to affiliated and unaffiliated insurance companies
for allocation to certain of their variable separate accounts.
Security Valuation: Securities listed or traded on a national
securities exchange are valued at the last reported sales price.
Foreign security prices, furnished by quotation services in the
security's local currency, are translated using the current U. S.
dollar exchange rate. Unlisted securities and listed securities for
which the last sale price is not available are valued at the most
recent bid price or based on a yield equivalent obtained from the
securities' market maker. Other securities and assets for which
market quotations are not available or deemed inappropriate are
valued in good faith under the direction of the Board of Directors.
Security Transactions and Investment Income: Security transactions
are accounted for on trade date. Realized gains and losses are
recorded on an identified cost basis. Dividend income is recorded on
the ex-dividend date or, in the case of dividends on certain foreign
securities, as soon as the Portfolio is informed of the ex-dividend
date. Interest income, accretion of discount and amortization of
premium are recorded on an accrual basis.
Foreign Currency Transactions: The Portfolio's accounting records
are maintained in U. S. dollars. For valuation of assets and
liabilities on each date of net asset value determination, foreign
denominations are translated into U. S. dollars using the current
exchange rate. Security transactions, income and expenses are
converted at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on foreign
denominated securities is included with the net realized and
unrealized gain or loss on securities. Other foreign currency gains
or losses are reported separately.
Distributions to Shareholders: Distributions to shareholders are
recorded by the Portfolio on ex-dividend date. Dividends from net
investment income and distributions from net realized capital gains,
if any, are paid at least annually. Distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Portfolio'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.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with
its custodian bank whereby the custodian's fees are paid indirectly
by credits earned on the Portfolio's cash on deposit with the bank.
Such deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax
is required since the Portfolio 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 Acacia Mutual Life Insurance Company. The Advisor
provides investment advisory services and pays the salaries and fees
of officers and affiliated Directors of the Portfolio. For its
services, the Advisor receives a monthly fee based on an annual rate
of 1% of the Portfolio's average daily net assets.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Portfolio for an annual fee,
payable monthly, of the greater of $40,000 or .10% of the Portfolio's
annual average daily net assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts
as transfer, dividend disbursing and shareholder servicing agent for
the Portfolio.
Each Director who is not affiliated with the Advisor received a fee
of $750 for each Board meeting attended plus an annual fee of $3,000
for Directors not serving on other Calvert Fund Boards. Director's
fees are allocated to each of the portfolios served.
NOTE C-Investment Activity
During the period, purchases and sales of investments, other than
short-term securities, were $4,660,916 and $4,989,437, respectively.
The cost of investments owned at June 30, 1997 was substantially the
same for federal income tax and financial reporting purposes. Net
unrealized appreciation aggregated $2,808,212, of which $3,128,221
related to appreciated securities and $320,009 related to depreciated
securities.
<PAGE>
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995
Net asset value, beginning $18.74 $17.15 $15.89
Income from investment operations
Net investment income .16 .17 .27
Net realized and unrealized gain (loss) 2.48 2.40 1.69
Total from investment operations 2.64 2.57 1.96
Distributions from
Net investment income - (.14) (.25)
Net realized gains - (.84) (.45)
Total distributions - (.98) (.70)
Total increase (decrease) in net asset value 2.64 1.59 1.26
Net asset value, ending $21.38 $18.74 $17.15
Total return 14.09% 14.99% 12.35%
Ratios to average net assets:
Net investment income 1.66%(a) 1.02% 1.48%
Total expenses + 1.59%(a) 1.59% 1.51%
Net expenses 1.17%(a) 1.18% 1.12%
Expenses reimbursed .19%(a) .23% .39%
Portfolio turnover 35% 85% 90%
Average commission rate paid $.0334 $.0352 -
Net assets, ending (in thousands) $15,729 $14,027 $9,831
Number of shares outstanding,
ending (in thousands) 736 748 573
<PAGE>
PERIODS ENDED DECEMBER 31,
1994 1993 1992**
Net asset value, beginning $17.72 $14.57 $15.00
Income from investment operations
Net investment income .11 .11 (.02)
Net realized and unrealized gain (loss) (.49) 4.07 (.41)
Total from investment operations (.38) 4.18 (.43)
Distributions from
Net investment income (.13) (.08) -
Net realized gains (1.32) (.95) -
Total distributions (1.45) (1.03) -
Total increase (decrease) in net asset value (1.83) 3.15 (.43)
Net asset value, ending $15.89 $17.72 $14.57
Total return (2.13%) 29.72% (3.27%)
Ratios to average net assets:
Net investment income .59% 1.00%( .98%)(a)
Total expenses + - - -
Net expenses 1.24% .94% .98%(a)
Expenses reimbursed .29% .10% 1.07%(a)
Portfolio turnover 84% 64% -
Net assets, ending (in thousands) $7,765 $4,529 $236
Number of shares outstanding,
ending (in thousands) 489 256 16
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio
of net expenses.
**From June 30, 1992, inception.
<PAGE>
Calvert Responsibly Invested
Balanced Portfolio
Managed by Calvert Asset Management Company, Inc. and NCM Capital
Management, Inc.
Dear Investor:
The Balanced Portfolio generated a return of 10.48% for the
six months ended June 30, 1997, which compares favorably to the 10.19%
average return for the 39 balanced funds tracked by Lipper Analytical
Services.
Review of the Economy and Markets
The economy expanded at a robust pace for the first quarter
then appeared to moderate in the second quarter. In an attempt to
defuse inflationary pressures, the Federal Reserve adopted a slightly
more restrictive monetary policy. The Fed nudged its target for key
short-term rates higher in March, but left rates unchanged during the
second quarter.
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/88 to 6/30/97
CRI Balanced Portfolio Ending balance $26,975
S&P 500 Reinv Ending balance $39,174
Lehman Aggregate BD Ending balance $23,283
90-Day T-Bill Ending balance $17,177
Average Annual Total Return
(period ending 6/30/97)
One Year 20.67%
Five Year 12.92%
Ten Year 10.43%
Life of Fund (9/86)* 10.90%
*New subadvisors assumed management of the
Portfolio effective February 1995.
Performance information is for the Portfolio and does
not reflect charges and expenses of the variable annuity.
Past performance does not indicate future results.
In general, bond yields moved higher during the first part
of the year then backed down toward the close of this reporting
period as investors revised their expectations for the next Fed
move-first thinking the Fed would take steps to raise rates then
expecting no change. Most measures of the broad stock market
advanced, with the Standard & Poor's 500 Stock Index returning 20.6%
for the six months.
Performance and Strategy
We maintained the Portfolio's target asset mix of roughly
60% stocks and 40% bonds and benefited from positive returns from
both asset classes.
Equity Investments-NCM Capital Management, Inc.
The Portfolio's strongest returns came from sectors where we
have the largest exposure: technology, financial services and
consumer products.
Technology stocks bounced back after a dismal first quarter.
We took profits in this area on strength, but remain slightly
overweighted relative to our peers. Financial stocks benefited from
the Federal Reserve's decision to leave key short-term rates
unchanged in the second quarter. Lower interest rates improves the
profit outlook for banks and other financial services companies.
Consumer staples companies were favorites because of their ability to
maintain stable earnings growth.
Strong stock selection was also a key factor. Good gains
came from US Robotics, Cisco Systems, Compaq Computer, Avon, Fort
Howard, Bank America and Aflac.
Fixed-Income Investments-Calvert Asset Management Company, Inc.
Bond yields began to trend higher going into 1997 but
retraced most of their advance in a late second quarter rally. In
anticipation of generally higher rates, we kept
the Portfolio's weighted average maturity near the short end of its
target range. (It was approximately 13 years at the close of this
reporting period). This helped to offset the negative effect of
rising rates during the first part of the year, but meant we did not
participate as fully in the late-stage rally as our more aggressive
peers.
Since the beginning of the calendar year, we have
implemented a more active management strategy. We expect this
strategy to improve the Fund's total return over time. Higher
portfolio trading activity will result in a higher turnover ratio due
to the Fund's current asset size. For the six months ended June 30,
1997, the turnover ratio
was 590%.
Outlook
The stock market has rewarded investors with spectacular
total returns for the past two and a half years. While our long-term
outlook is positive, we could experience a correction as stocks
settle back in to a more typical return range, which has historically
been about 10% annually.
The bond market is also likely to continue to exhibit a high
degree of volatility. At some point during the next six months, we
expect interest rates will trend a bit higher. Accordingly, we will
maintain our defensive strategy.
Thank you for your investment in the Balanced Portfolio.
Sincerely,
Barbara Krumsiek
President
July 21, 1997
<PAGE>
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
Equity Securities - 59.3% Shares Value
Airlines - 0.3%
AMR Corp. * 5,600 $518,000
518,000
Biotechnology - 0.6%
Amgen, Inc. 20,200 1,174,125
1,174,125
Business Equipment and Services - 0.9%
Sun Microsystems, Inc. * 46,340 1,724,717
1,724,717
Capital Goods - 0.6%
Illinois Tool Works, Inc. 23,800 1,188,512
1,188,512
Computer - Hardware - 0.9%
Compaq Computer Corp. * 16,700 1,657,475
1,657,475
Computer - Networks - 3.2%
3Com Corp. * 71,950 3,237,750
Cisco Systems, Inc. * 41,800 2,805,825
6,043,575
Computer - Software - 3.9%
BMC Software, Inc. * 27,500 1,522,812
Computer Associates International, Inc. 40,577 2,259,632
Microsoft Corp. * 8,820 1,114,628
Oracle Corp. * 51,357 2,587,109
7,484,181
Consumer Products and Services - 6.3%
Avon Products, Inc. 37,100 2,617,869
Colgate Palmolive Co. 37,000 2,414,250
CUC International, Inc. * 58,050 1,498,416
Dial Corp. 68,200 1,065,625
Fort Howard Corp. * 25,200 1,275,750
Gillette Co. 33,800 3,202,550
12,074,460
Electronics - 1.7%
EMC Corp. * 40,450 1,577,550
Intel Corp. 12,300 1,744,294
3,321,844
Equity Securities (Cont'd) Shares Value
Entertainment - 1.1%
Disney (Walt) Co. 26,205 $2,102,951
2,102,951
Financial Services - 7.8%
Banc One Corp. 45,800 2,218,438
BankAmerica Corp. 36,800 2,375,900
BankBoston Corp. 20,315 1,463,950
Chase Manhattan Corp. 20,100 1,950,956
Federal National Mortgage Assn. 44,900 1,958,762
Green Tree Financial Corp. 50,942 1,814,809
Umbono Investment Corp., Ltd. * 1,154,900 3,054,617
14,837,432
Food Products - 4.4%
CPC International, Inc. 29,500 2,723,219
Heinz (H.J.) Co. 49,700 2,292,412
Hershey Foods Corp. 38,000 2,101,875
Interstate Bakeries Corp. 20,900 1,239,631
8,357,137
Health Care - 2.1%
Cardinal Health, Inc. 16,100 921,725
Johnson & Johnson 48,237 3,105,257
4,026,982
Industrial Products - 1.0%
Praxair, Inc. 32,700 1,831,200
1,831,200
Insurance - 4.1%
AFLAC, Inc. 40,550 1,915,988
American International Group, Inc. 15,950 2,382,531
MGIC Investment Corp. 32,700 1,567,556
SunAmerica, Inc. 41,300 2,013,375
7,879,450
Manufacturing - 1.0%
Dover Corp. 31,145 1,915,418
1,915,418
Medical - 2.9%
Boston Scientific Corp. * 36,085 2,216,972
Guidant Corp. 14,700 1,249,500
Medtronic, Inc. 25,100 2,033,100
5,499,572
Office Equipment and Supplies - 0.8%
Viking Office Products, Inc. * 79,300 1,506,700
1,506,700
Equity Securities (Cont'd) Shares Value
Oil and Gas - 1.9%
Baker Hughes, Inc. 54,300 $2,100,731
Seitel, Inc. * 38,000 1,444,000
3,544,731
Paper and Packaging - 2.0%
Avery Dennison Corp. 61,900 2,483,738
Sealed Air Corp. * 26,100 1,239,750
3,723,488
Pharmaceutical - 2.7%
Merck & Co., Inc. 29,500 3,053,250
Schering Plough Corp. 45,500 2,178,312
5,231,562
Retail - 4.6%
Autozone, Inc. * 49,300 1,161,631
Barnes and Noble, Inc. * 30 1,290
Consolidated Stores Corp. * 42,515 1,477,396
Jones Apparel Group, Inc. * 32,200 1,537,550
Kroger Co. * 62,300 1,806,700
Penney (J.C.), Inc. 54,800 2,859,875
8,844,442
Telecommunications - 4.5%
Ameritech Corp. 31,395 2,132,898
Century Telephone Enterprises, Inc. 49,665 1,673,090
Ericsson (L. M.) Telephone, Co., Class B, ADR 63,205 2,488,697
SBC Communications, Inc. 37,800 2,338,875
8,633,560
Total Equity Securities (Cost $86,454,343) 113,121,514
Principal
Corporate Obligations - 30.5% Amount
Advanta Corp., 6.785%, 7/27/98 $1,000,000 996,790
Advanta National Bank, 6.45%, 10/30/00 1,000,000 965,930
AFC Capital Trust I, 8.207%, 2/3/27 500,000 509,030
Alco Capital Resource, Inc., 6.58%, 3/29/99 2,000,000 2,005,300
American General Institutional Capital A,
7.57%, 12/1/45 1,500,000 1,408,005
AMR Corp., 9.82%, 3/7/01 25,000 27,134
Banc One Auto, 6.40%, 11/20/03 6,000,000 5,977,790
Banc One Corp., 8.00%, 4/29/27 4,500,000 4,642,605
BankBoston Capital Trust III, 6.5625%, 6/15/27 3,000,000 2,961,804
Comerica Bank, 7.25%, 6/15/07 1,500,000 1,505,715
Conseco, Inc., 10.50%, 12/15/04 1,000,000 1,174,120
Continental Valorem Corp. VRDN, 6.05%,
6/1/13, LOC: Tokai Bank Ltd. 700,000 700,000
Countrywide Capital III, 8.05%, 6/15/27 1,000,000 1,008,420
Dayton Hudson Corp., 6.80%, 10/1/01 1,000,000 996,110
Principal
Corporate Obligations (Cont'd) Amount Value
First USA Bank, 5.75%, 1/15/99 $1,725,000 $1,709,147
Goldman Sachs Group LP, 6.20%, 12/15/00 2,000,000 1,970,500
Goldman Sachs Group LP, 6.75%, 2/15/06 1,000,000 970,124
Household Finance Corp., 6.63%, 5/28/99 1,000,000 1,003,380
Household Finance Corp., 7.65%, 5/15/07 1,500,000 1,545,405
International Lease Finance Corp., 6.64%, 2/1/00 1,000,000 1,002,190
Life Re Capital Trust I, 8.72%, 6/15/27 3,000,000 3,023,340
McKesson Corp., 6.875%, 3/1/02 3,000,000 3,007,980
National City Bank, 7.25%, 7/15/10 1,870,000 1,861,473
Penney (J.C.), Inc., 7.625%, 3/1/97 2,000,000 1,968,620
Pitney Bowes Credit Corp., 6.305%, 9/23/98 1,000,000 1,003,430
PDR Finance LLC., VRDN, 5.53%, 4/1/27,
LOC: First America Bank 900,000 900,000
Security Benefit Life Co., 8.75%, 5/15/16 2,000,000 2,102,374
St. George Bank, Ltd., 7.15%, 6/18/07 1,500,000 1,480,665
Suntrust Capital I, 6.4825%, 5/15/27 2,000,000 1,980,962
Summit Capital Trust I, 8.40%, 3/15/27 1,000,000 1,015,740
Toronto Dominion Bank, 6.50%, 1/15/07 3,000,000 2,962,548
Transamerica Corp., 9.375%, 3/1/08 2,000,000 2,310,840
Xerox Capital Trust I, 8.00%, 2/1/27 1,500,000 1,499,842
Total Corporate Obligations (Cost $58,129,287) 58,197,313
Repurchase Agreements - 2.1%
State Street Bank: 5.25%, dated 6/30/97, due 7/1/97
(Collateral: $4,154,909, FHLMC, 6.25%, 11/12/99
4,000,000 4,000,000
Total Repurchase Agreements (Cost $4,000,000) 4,000,000
Municipal Obligations - 2.0%
Maryland State Economic Development Corp.,
8.00%, 10/1/05 1,000,000 1,006,030
Maryland State Economic Development Corp.,
8.625%, 10/1/19 750,000 775,335
New Jersey Economic Development Authority,
7.425%, 2/15/29 1,500,000 1,495,275
Texas State, College Student Loan, 7.35%, 12/1/21 600,000 573,810
Total Municipal Obligations (Cost $3,846,540) 3,850,450
U.S. Treasury - 1.0%
U.S. Treasury Notes, 6.625%, 5/15/07 2,000,000 2,017,220
Total U.S. Treasury (Cost $2,033,655) 2,017,220
U.S. Government and Principal
Instrumentalities - 0.4% Amount Value
WNH Ltd. Partnership, 9.40%, 10/1/99 $705,000 $738,255
Total U.S. Government Agencies and
Instrumentalities (Cost $725,588) 738,255
Other Debt - 0.3%
Chickasaw Nation, Oklahoma, 10.00%, 8/1/03 #
1,000,000 600,000
Total Other Debt (Cost $1,000,000) 600,000
TOTAL INVESTMENTS (Cost $156,189,413) - 95.6% 182,524,752
Other assets and liabilities, net - 4.4%8,327,842
Net Assets - 100% $190,852,594
+ Optional tender features give these securities
a shorter effective maturity date.
* Non-income producing.
# this security is in default.
Explanation of Guarantees:
LOC: Letter of credit
Abbreviations:
VDRN: Variable Rate Demand Notes
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
Assets
Investments in securities, at value $182,524,752
Cash 382,866
Receivable for securities sold 10,086,241
Interest and dividends receivable 971,063
Other assets 18,905
Total assets 193,983,827
Liabilities
Payable for securities purchased 2,999,690
Payable to Calvert Asset Management Company, Inc. 109,631
Payable to Calvert Shareholder Services, Inc. 4,642
Accrued expenses and other liabilities 17,270
Total liabilities 3,131,233
Net assets $190,852,594
Net Assets Consist of:
Par value and paid-in capital applicable to 97,358,335
shares of common stock outstanding; $1 par value,
300,000,000 shares authorized $156,634,851
Undistributed net investment income (loss) 2,847,502
Accumulated net realized gains (losses)
on investments and foreign currencies 5,034,902
Net unrealized appreciation (depreciation)
on investments and assets and liabilities
in foreign currencies 26,335,339
Net Assets $190,852,594
Net Asset Value per Share $1.960
See notes to financial statements.
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
Net Investment Income
Investment Income
Interest income $2,588,726
Dividend income (net of foreign taxes of $1,481) 508,689
Total investment income 3,097,415
Expenses
Investment advisory fee 581,598
Transfer agency fees and expenses 13,322
Directors' fees and expenses 7,457
Custodian fees 27,851
Reports to shareholders 6,252
Professional fees 16,055
Miscellaneous 5,422
Total expenses 657,957
Fees paid indirectly (27,851)
Net expenses 630,106
Net Investment Income 2,467,309
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Securities 3,649,177
Foreign currencies 60
3,649,237
Change in unrealized appreciation or depreciation on:
Securities 11,723,422
Assets and liabilities in foreign currencies
- -
11,723,422
Net Realized and Unrealized Gain (Loss)
on Investments 15,372,659
Increase (Decrease) in Net Assets
Resulting From Operations $17,839,968
See notes to financial statements.
<PAGE>
BALANCED PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
Increase (Decrease) in Net Assets
Operations
Net investment income $2,467,309 $3,649,653
Net realized gain (loss) 3,649,237 9,057,850
Change in unrealized appreciation or depreciation 11,723,422 3,628,677
Increase (Decrease) in Net Assets
Resulting From Operations 17,839,968 16,336,180
Distributions to shareholders from
Net investment income - (3,502,338)
Net realized gain on investments - (8,620,000)
Total distributions - ( 12,122,338)
Capital share transactions
Shares sold 17,926,798 38,725,037
Shares issued from merger (Note A) - 3,670,827
Reinvestment of distributions - 12,122,338
Shares redeemed (6,387,166) (7,496,263)
Total capital share transactions 11,539,632 47,021,939
Total Increase (Decrease)
in Net Assets 29,379,600 51,235,781
Net Assets
Beginning of period 161,472,994 110,237,213
End of period (including undistributed
net investment income of $2,847,502 and
$380,193, respectively) $190,852,594 $161,472,994
Capital Share Activity
Shares sold 9,820,971 21,664,978
Shares issued from merger (Note A) - 2,061,104
Reinvestment of distributions - 6,833,336
Shares redeemed (3,508,117) (4,241,957)
Total capital share activity 6,312,854 26,317,461
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Balanced Portfolio (the "Portfolio"), a series of
Acacia Capital Corporation's Calvert Responsibly Invested (CRI)
Portfolios, is registered under the Investment Company Act of 1940 as
a non-diversified, open-end management investment company. The
operations of each series are accounted for separately. The shares of
the Portfolio are sold to affiliated and unaffiliated insurance
companies for allocation to certain of their variable separate
accounts.
On February 23, 1996, the net assets of CRI Bond Portfolio were
merged into the Portfolio. The acquisition was accomplished by a tax
free exchange of 2,061,104 shares of the Portfolio (valued at
$3,670,827) for the 230,738 shares of CRIBond Portfolio outstanding
at February 23, 1996. CRIBond Portfolio's net assets at that date,
including $1,419 of unrealized appreciation, were combined with those
of the Portfolio. The aggregate net assets of the Portfolio and
CRIBond Portfolio immediately before the acquisition were
$121,161,865 and $3,670,445, respectively.
Security Valuation: Securities listed or traded on a national
securities exchange are valued at the last reported sale price.
Foreign security prices, furnished by quotation services in the
security's local currency, are translated using the current
U.S. dollar exchange rate. Unlisted securities and listed securities
for which the last sale price is not available are valued at the most
recent bid price or based on a yield equivalent obtained from the
securities' market maker. Municipal securities are valued utilizing
the average of bid prices or at bid prices based on a matrix system
(which considers such factors as security prices, yields, maturities
and ratings) furnished by dealers through an independent pricing
service. Other securities and assets for which market quotations are
not available or deemed inappropriate are valued in good faith under
the direction of the Board of Directors.
Repurchase Agreements: The Portfolio 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.
Security Transactions and Investment Income: Security transactions
are accounted for on trade date. Realized gains and losses are
recorded on an identified cost basis. Dividend income is recorded on
the ex-dividend date or, in the case of dividends on certain foreign
securities, as soon as the Portfolio is informed of the ex-dividend
date. Interest income, accretion of discount and amortization of
premium are recorded on an accrual basis.
Foreign Currency Transactions: The Portfolio's accounting records
are maintained in U. S. dollars. For valuation of assets and
liabilities on each date of net asset value determination, foreign
denominations are translated into U. S. dollars using the current
exchange rate. Security transactions, income and expenses are
converted at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on foreign
denominated securities is included with the net realized and
unrealized gain or loss on securities. Other foreign currency gains
or losses are reported separately.
Distributions to Shareholders: Distributions to shareholders are
recorded by the Portfolio on ex-dividend date. Dividends from net
investment income and distributions from net realized capital gains,
if any, are paid at least annually. Distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Portfolio'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 Portfolio has an arrangement with
its custodian bank whereby the custodian's fees are paid indirectly
by credits earned on the Portfolio's cash on deposit with the bank.
Such deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax
is required since the Portfolio 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 Acacia Mutual Life Insurance Company. The Advisor
provides investment advisory services and pays the salaries and fees
of officers and affiliated Directors of the Portfolio. For its
services, the Advisor receives a monthly fee based on an annual rate
of .70% of the Portfolio's average daily net assets. Effective July,
1996, the Portfolio began paying a monthly performance fee of plus or
minus up to .15%, on an annual basis, of average daily net assets of
the performance period depending on the Portfolio's performance
compared to the Lipper Balanced Funds Index.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts
as transfer, dividend disbursing and shareholder servicing agent for
the Portfolio.
Each Director who is not affiliated with the Advisor received a fee
of $750 for each Board meeting attended plus an annual fee of $3,000
for Directors not serving on other Calvert Fund Boards. Director's
fees are allocated to each of the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than
short-term securities, were $327,850,850 and $280,812,538,
respectively. U.S. government security purchases were $596,160,485
and sales were $633,654,124.
The cost of investments owned at June 30, 1997 was substantially the
same for federal income tax purposes and financial reporting
purposes. Net unrealized appreciation aggregated $26,335,339, of
which $27,640,020 related to appreciated securities and $1,304,681
related to depreciated securities.
As a cash management practice, the Portfolio may sell or purchase
short-term variable rate notes from other Portfolios managed by the
Advisor. All transactions are executed at independently derived
prices.
<PAGE>
BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
June 30, December 31, December 31,
1997 1996 1995
Net asset value, beginning $1.774 $1.703 $1.440
Income from investment operations
Net investment income .025 .040 .050
Net realized and unrealized gain (loss) .161 .175 .380
Total from investment operati .186 .215 .430
Distributions from
Net investment income - (.042) (.040)
Net realized gains - (.102) (.127)
Total distributions - (.144) (.167)
Total increase (decrease) in net asset value .186 .071 .263
Net asset value, ending $1.960 $1.774 $1.703
Total return 10.48% 12.62% 29.87%
Ratios to average net assets:
Net investment income 2.89%(a) 2.71% 3.08%
Total expenses + .77%(a) .81% .83%
Net expenses .74%(a) .78% .81%
Portfolio turnover 590% 99% 163%
Average commission rate paid $.0500 $.0481 -
Net assets, ending (in thousands) $190,853 $161,473 $110,237
Number of shares outstanding,
ending (in thousands) 97,358 91,045 64,728
<PAGE>
YEARS ENDED DECEMBER 31,
1994 1993 1992
Net asset value, beginning $1.537 $1.465 $1.403
Income from investment operations
Net investment income .046 .045 .044
Net realized and unrealized gain (loss) (.097) .072 .062
Total from investment operations (.051) .117 .106
Distributions from
Net investment income (.046) (.045) (.044)
Net realized gains - - -
Total distributions (.046) (.045) (.044)
Total increase (decrease) in net asset value (.097) .072 .062
Net asset value, ending $1.440 $1.537 $1.465
Total return (3.30%) 8.00% 7.61%
Ratios to average net assets:
Net investment income 3.39% 3.69% 4.05%
Total expenses + - - -
Net expenses .80% .81% .85%
Portfolio turnover 43% 14% 15%
Net assets, ending (in thousands) $66,593 $54,000 $28,471
Number of shares outstanding,
ending (in thousands) 46,244 35,142 19,433
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid indirectly;
such reductions are included in the ratio of net expenses.
<PAGE>
Acacia Capital Corporation
Calvert Responsibly Invested
Balanced Portfolio
Prospectus dated April 30, 1997
Date of Supplement: July 18, 1997
Effective July 18, 1997, Wendell Mackey is no longer the portfolio
manager for the equity portion of the Balanced Portfolio. Please
replace the paragraph regarding Mr. Mackey under the section The Fund
and Its Management with the following:
The equity portion of the Balanced Portfolio, which is managed by the
subadvisor, NCM Capital Management Group Inc., will be managed by a
committee of the subadvisor, headed by its president, Maceo Sloan.
