Calvert Variable Series, Inc.
Calvert Social Portfolios
Semi-Annual Report
June 30, 1998
<PAGE>
Calvert Variable Series, Inc.
Calvert Social Money Market Portfolio
Managed by Calvert Asset Management Company, Inc.
Dear Investor:
Broader economic trends strongly impacted the money markets over the preceding
six-month period. The domestic economy continued to expand while market
watchers speculated about the potential impact of the Asian financial crisis.
Most areas of the economy-notably the labor markets and housing sector-pointed
to continued strength. A slowdown among agricultural and manufacturing groups
helped to restrain the pace.
In determining its next move, the Federal Reserve will continue to weigh the
strength of the domestic economy against the dampening effects of the meltdown
in Asian currencies and markets. As long as inflation remains tame, the
Federal Reserve will likely remain on the sidelines and assume the financial
Asian crisis is acting as a drag on the domestic economy. If a slowdown fails
to materialize, the Fed may be forced to play catch-up and move quickly to
pre-empt inflation.
Performance and Strategy
Your Portfolio returned 2.55% for the year to date, slightly above the 2.54%
return for the average variable annuity money market fund tracked by Lipper
Analytical Services, Inc.*
When the yield curve is flat, you gain very little additional yield by
extending maturity. Rather than commit assets for a longer time only to win a
marginally higher yield, we're keeping the Portfolio's maturity short and
seeking higher yields from non-traditional money market eligible securities.
These include variable rate demand notes backed by letters of credit from
commercial banks.
Ironically, the robust economy has created a challenging environment for money
market managers. Thanks in part to the strong stock market performance, the US
Treasury has received tax payments exceeding expectations and has consequently
been able to pay down debt on a rolling basis. The Treasury paydown has meant
there have been fewer Treasury securities available for purchase. Level demand
in the face of decreasing supply has put downward pressure on yields. This
combined with the Federal Reserve's current neutral monetary policy has meant
that many short-term money market eligible securities have traded at yields
which are below the current Federal Funds target rate of 5.50%.
Outlook
We anticipate that many of the trends that have affected the market over the
preceding six months will continue to impact the market in the months ahead.
Over the course of the next quarter a clearer consensus on the direction of
the economy is likely to emerge and the credit markets will begin to price in
expectations of the Federal Reserve's next move. In addition, the Treasury has
announced that it will be
*The Portfolio's total return does not reflect the charges and expenses of the
variable annuity product.
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increasing the total dollar amount of certain shorter maturity Treasury bills
being auctioned in the future and this may help to ease the shortage of money
market eligible securities. It remains to be seen whether this will
significantly offset the effect of the overall pay down. Over the near term,
we still anticipate that tight supply will continue to affect money market
rates relative to the Federal Funds rate.
We appreciate your confidence in Calvert Group and look forward to continuing
to help you meet your financial goals.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
July 21, 1998
Calvert Social Money Market Portfolio of Variable Series, Inc., should not be
confused with the Calvert Social Investment Fund Money Market Portfolio.
Performance of the two funds will differ.
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Money Market Portfolio
Portfolio of Investments
June 30, 1998
Principal
Corporate Obligations - 73.0% Amount Value
Alabama State Industrial Development Authority,
Mitchell Grocery, VRDN, 5.70%, 5/1/10, LOC:
Regions Bank* $300,000 $300,000
Alabama State Industrial Development Authority,
Simcala, Inc., VRDN, 5.75%, 12/1/19, LOC:
Nationsbank* 310,000 310,000
Allegheny County, Pennsylvania Industrial
Development Revenue, VRDN, 5.75%, 7/1/27,
LOC: Dresdner Bank * 300,000 300,000
American Baptist Homes Certificate of Participation
VRDN, 6.25%, 10/1/27, LOC: Banque Nat'l de Paris* 400,000 400,000
Aspen Institute, Inc., VRDN, 5.79%, 12/1/04,
LOC: First National Bank of Maryland * 240,000 240,000
Betters Group LP. VRDN, 5.75%, 2/1/12, LOC:
Century National Bank and Trust, Confirming
LOC: Mellon Bank * 400,000 400,000
Botsford General Hospital VRDN, 5.70%, 2/15/27,
LOC: Michigan National * 400,000 400,000
Colorado Health Facilities Authority Revenue VRDN,
5.75%, 2/1/25, LOC: Kredietbank * 250,000 250,000
Episcopal Health Services, Inc., VRDN, 5.65%,
3/1/28, LOC: Banque Paribas * 250,000 250,000
Fed One Dayton VRDN, 6.55%, 8/1/09, LOC:
Bank One Ohio * 70,000 70,000
Health Midwest Ventures Group VRDN, 5.70%,
8/1/19, LOC: Bank of America * 230,000 230,000
IPC Industries, Inc., VRDN, 5.75%, 10/1/11,
LOC: National Bank of Canada * 400,000 400,000
La Mirada, California Industrial Development
Authority, Rykoff Sexton, VRDN, 5.70%, 12/1/26,
LOC: First National Bank of Chicago * 300,000 300,000
Lexington Financial Services, LLC. VRDN,
5.70%, 3/1/27, LOC: LaSalle Bank * 200,000 200,000
Liliha Partners, LP. VRDN, 5.85%, 8/1/24,
LOC: First Hawaiian Bank * 400,000 400,000
Mahoning County, Ohio, International Towers,
VRDN, 6.06%, 11/1/98, LOC: PNC Bank * 230,000 230,000
Massachusetts Nursing Homes LP. VRDN, 5.70%,
11/15/13, LOC: American National Bank and Trust* 250,000 250,000
Meriter Management Services, Inc., VRDN, 5.80%,
12/1/16, LOC: Firstar Bank * 300,000 300,000
Montgomery County, Kentucky Industrial
Development Revenue, Fireblanking, VRDN,
5.75%, 8/1/06, LOC: Fleet Bank * 224,000 224,000
Montgomery County, Pennsylvania Industrial
Development Revenue, Horsham Assoc., VRDN,
5.75%, 3/1/10, LOC: Corestates * 180,000 180,000
Physicians Plus Medical Group VRDN, 5.75%, 8/1/16,
LOC: Marshall and llsley Bank * 400,000 400,000
Pleasant Hill California Redevelopment Agency
VRDN, 5.75%, 8/1/26, LOC: Heller Financial,
Confirming LOC: Commerze Bank * 250,000 250,000
San Jose Financing Authority Revenue VRDN,
6.30%, 12/1/25, LOC: Sumitomo Bank Ltd. * 300,000 300,000
<PAGE>
Principal
Corporate Obligations - (Cont'd) Amount Value
St. Paul, Minnesota Housing and Redevelopment
Authority, VRDN, 5.75%, 6/1/15, LOC: Credit
Local de France * $300,000 $300,000
Sault Ste Marie, Michigan VRDN, 6.13%, 6/1/03,
LOC: First America Bank, MI * 135,000 135,000
TLC Holdings, LLC. VRDN, 5.75%, 6/1/26,
LOC: Columbus Bank and Trust * 250,000 250,000
W.L. Petrey Wholesale, Inc., Industrial Development
Bond VRDN, 5.75%, 3/1/11,
LOC: Southtrust Bank, AL * 145,000 145,000
Virginia State Housing Development Authority,
VRDN, 5.55%, 1/1/47 * 200,000 200,000
Washington State Housing Finance Authority,
Glenbrook Apartments, VRDN, 5.75%, 7/1/29,
LOC: Bank One, AZ * 300,000 300,000
Whetstone Care Center, LLC. VRDN, 5.76%, 1/1/18,
LOC: Fifth Third Bank * 300,000 300,000
Total Corporate Obligations (Cost $8,214,000) 8,214,000
U.S. Government Agencies and
Instrumentalities - 11.3%
Federal Home Loan Mortgage Corp., 5.40%, 8/4/98 500,000 497,450
Federal Home Loan Mortgage Corp., 5.48%, 8/7/98 408,000 405,702
Federal National Mortgage Assn., 5.40%, 7/27/98 100,000 99,610
Federal National Mortgage Assn., 5.40%, 8/7/98 270,000 268,502
Total U.S. Government Agencies and Instrumentalities
(Cost $1,271,264) 1,271,264
Municipal Obligations -7.7%
Gardena, California Certificates of Participation VRDN,
6.45%, 7/1/25, LOC: Sumitomo Trust and Banking,
Confirming LOC: Dai-Ichi Kango Bank * 300,000 300,000
Texas State VRDN, 5.69%, 12/1/27, TOA: Citibank * 266,000 266,000
Village of Schaumberg, Illinois VRDN, 5.75%,
12/1/20, BPA: Credit Suisse * 300,000 300,000
Total Municipal Obligations (Cost $866,000) 866,000
Repurchase Agreements -7.5%
State Street Bank: 5.25%, dated 6/30/98, due 7/1/98
(Collateral: $902,281, FHLBB, 7.18%, 8/14/07) 850,000 850,000
Total Repurchase Agreements (Cost $850,000) 850,000
TOTAL INVESTMENTS (Cost $11,201,264) - 99.5% 11,201,264
Other assets and liabilities, net - 0.5% 56,846
Net Assets - 100% $11,258,110
* Optional tender features give these securities a shorter effective maturity
date.
Explanation of Guarantees:
LOC: Letter of Credit
TOA: Tender Option Agreement
BPA: Bond-Purchase Agreement
Abbreviations:
VRDN: Variable Rate Demand Note
See notes to financial statements.
<PAGE>
Money Market Portfolio
Statement of Assets and Liabilities
June 30, 1998
Assets
Investments in securities, at value $11,201,264
Cash 22,632
Interest receivable 42,137
Other assets 49
Total assets 11,266,082
Liabilities
Payable to Calvert Asset Management Company, Inc. 4,133
Payable to Calvert Shareholder Services, Inc. 269
Accrued expenses and other liabilities 3,570
Total liabilities 7,972
Net assets $11,258,110
Net Assets Consist of:
Par value and paid-in capital applicable to 11,262,142
shares of commonstock outstanding; $1 par value,
35,000,000 shares authorized $11,257,566
Undistributed net investment income (loss) 544
Net Assets $11,258,110
Net Asset Value per Share $1.00
See notes to financial statements.
<PAGE>
Money Market Portfolio
Statement of Operations
Six Months Ended June 30, 1998
Net Investment Income
Investment Income
Interest income $232,219
Total investment income 232,219
Expenses
Investment advisory fee 20,343
Transfer agency fees and expenses 1,221
Directors' fees and expenses 164
Custodian fees 3,393
Registration fees 1,355
Reports to shareholders 465
Professional fees 436
Miscellaneous 73
Total expenses 27,450
Fees paid indirectly (2,475)
Net expenses 24,975
Net Investment Income 207,244
Increase (Decrease) in Net Assets
Resulting From Operations $207,244
See notes to financial statements.
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Money Market Portfolio
Statements of Changes in Net Assets
Six Months Year Ended
Ended June December
Increase (Decrease) in Net Assets 30, 1998 31, 1997
Operations
Net investment income $207,244 $308,873
Increase (Decrease) in Net Assets
Resulting From Operations 207,244 308,873
Distributions to shareholders from
Net investment income (207,115) (308,800)
Capital share transactions
Shares sold 13,722,991 15,330,449
Reinvestment of distributions 205,535 308,800
Shares redeemed (8,912,429) (13,775,667)
Total capital share transactions 5,016,097 1,863,582
Total Increase (Decrease) in Net Assets 5,016,226 1,863,655
Net Assets
Beginning of period 6,241,884 4,378,229
End of period (including undistributed net investment
income of $544 and $415, respectively) 11,258,110 $6,241,884
Capital Share Activity
Shares sold 13,722,991 15,330,449
Reinvestment of distributions 205,535 308,800
Shares redeemed (8,912,429) (13,775,667)
Total capital share activity 5,016,097 1,863,582
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: Calvert Social Money Market Portfolio (formerly, Calvert Responsibly
Invested Money Market Portfolio) (the "Portfolio"), a series of Calvert
Variable Series, Inc. (formerly Acacia Capital Corporation) (the "Fund"), is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The operations of each series are accounted for
separately. The 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.
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. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value and
a possible loss of income or value if the counterparty fails to perform in
accordance with the terms of the agreement.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Portfolio on ex-dividend date. Dividends from net investment income are
accrued daily and paid monthly. Distributions from net realized capital gains,
if any, are paid 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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees may be 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
shareholder servicing agent for the Portfolio. National Financial Data
Services, Inc. is the transfer and dividend disbursing agent.
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, 1998, 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 demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
Note D - Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of $50
million ($25 million committed and $25 million uncommitted), to be accessed by
the Funds for temporary or emergency purposes only. Borrowings under this
facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused
portion of the committed facility which will be allocated to all participating
funds. This fee is paid quarterly in arrears. The Fund had no loans
outstanding pursuant to this line of credit at June 30, 1998.
<PAGE>
Money Market Portfolio
Financial Highlights
Periods Ended
June 30, Dec. 31, Dec. 31,
1998 1997 1996
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .025 .051 .048
Net realized gain (loss) - - -
Total from investment operations .025 .051 .048
Distributions from
Net investment income (.025) (.051) (.048)
Total increase (decrease) in net asset value - - -
Net asset value, ending $1.00 $1.00 $1.00
Total return 2.55% 5.20% 4.95%
Ratios to average net assets:
Net investment income 5.08%(a) 5.10% 4.82%
Total expenses + .67%(a) .69% .75%
Net expenses .61%(a) .59% .62%
Expenses reimbursed - - -
Net assets, ending (in thousands) $11,258 $6,242 $4,378
Number of shares outstanding,
ending (in thousands) 11,262 6,246 4,382
Years Ended
Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .055 .039 .031
Net realized gain (loss) - - -
Total from investment operations .055 .039 .031
Distributions from
Net investment income (.055) (.039) (.031)
Total increase (decrease) in net asset value - - -
Net asset value, ending $1.00 $1.00 $1.00
Total return 5.37% 3.96% 3.09%
Ratios to average net assets:
Net investment income 5.23% 3.91% 3.07%
Total expenses + .66% NA NA
Net expenses .59% .45% -
Expenses reimbursed - .36% .11%
Net assets, ending (in thousands) $5,129 $6,479 $4,032
Number of shares outstanding,
ending (in thousands) 5,133 6,484 4,032
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Calvert Variable Series, Inc.
Calvert Social Small Cap Growth Portfolio
Managed by Awad & Associates
Dear Investor:
Stock market performance breaks neatly in half for the six-month period ending
June 30, 1998. The market surged ahead for the first three months of the year
then fell off for the second three. In both quarters, the performance leaders
were large companies, such as those that comprise the Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average. This was the result of
investors seeking safety in the most widely held and actively traded issues.
Performance and Strategy
Fund manager Awad & Associates continues to select companies with strong
management, healthy balance sheets and growing cash flows whose stocks are
trading at a discount to their intrinsic values. Seeking growing companies
trading at reasonable prices was positive for performance during this period,
as a value strategy led a strict growth approach within the small-cap sector.
The Portfolio also benefited from strong returns on some of its largest
positions. New Horizons Worldwide, a holding company whose subsidiaries
operate computer training centers, saw its share price trend higher after the
company reported strong earnings and announced a recent acquisition.
Telecommunications company Network Long Distance advanced due to a merger with
IXC Communications. Fluke Corp., manufacturers of electronic test tools,
appreciated on news of its recent acquisition by Danaher Corporation.
Investors often react favorably to news of mergers or acquisitions because
these events can open new markets and provide greater economies of scale.
Holdings of EA Industries, a contractual provider of electronic manufacturing
services; the air treatment systems company ITEQ; and medical diagnostic
equipment company Somanetics were a drag on performance. We continue to hold
these positions as Awad & Associates' investment opinion remains favorable.
Line graph here showing comparison of change in value of a hypothetical of
$10,000 investment from 4/1/95 to 6/30/98.
SMALL CAP GROWTH PORTFOLIO
Social Small Cap Growth Portfolio $14,007
Russell 2000 Index TR - $18,365
Average Annual Total Return, period ended 6.30.98
One Year 12.17%
Since Inception 10.76%
*Performance information is for the Portfolio only and does not reflect
charges and expenses of the variable annuity or variable universal life
contract. For comparison purposes, Portfolio and Index performance since
inception is shown from 3.31.95. Past performance does not indicate future
results.
New Subadvisor assumed management of the Portfolio effective October 1997.
<PAGE>
Outlook
While investors have continued to ignore small-cap stocks in favor of the
perceived safety of large caps, the small-cap sector continues to offer better
value. Consider that the price/earnings ratios for the S&P 500 and the Russell
2000 are similar, yet the expected growth rate for the Russell 2000 companies
is nearly double that for the S&P 500 companies. This suggests investors in
large caps are willing to pay considerably more for less growth potential. We
don't think this imbalance can continue for much longer, and the focus will
likely shift to small-cap stocks.
The companies in your Portfolio should continue to benefit from the strong
domestic economy. We are enjoying a period of low inflation with moderate
growth and a budget surplus. Consumer confidence remains high, though not
over-stimulated. U.S. companies in general and small companies in particular
are well positioned to take advantage of these strengths.
The Portfolio is off to a positive start in 1998, and we remain optimistic
about the future. We own excellent companies selling at attractive prices;
thus, we look forward to providing good returns during the second half of the
year.
Thank you for your investment with Calvert Group.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
July 21, 1998
Calvert Social Mid Cap Growth Portfolio of Calvert Variable series, Inc.,
should not be confused with the Calvert Capital Accumulation Fund.
Performance of the two funds will differ.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1998
Equity Securities - 99.3% Shares Value
Aerospace / Defense - 2.2%
Kellstrom Industries, Inc. * 3,000 $86,906
86,906
Auto / Truck - 1.6%
Miller Industries, Inc. * 8,500 65,875
65,875
Banks - 4.3%
Doral Financial Corp. 10,000 175,000
175,000
Communications - 2.2%
Periphonics Corp. * 7,000 87,938
87,938
Computer Services - 2.1%
Scansource, Inc. * 4,500 86,625
86,625
Computer Technology - 2.6%
EA Industries, Inc. * 8,000 24,500
Transact Technologies, Inc. * 9,000 79,875
104,375
Consulting Services - 3.8%
Comdisco, Inc. 8,000 152,000
152,000
Consumer Products - 0.4%
Rubbermaid, Inc. 500 16,594
16,594
Data Processing - 3.8%
National Data Corp. 3,500 153,125
153,125
Drugs and Pharmaceuticals - 3.4%
Dynamic Healthcare Technologies * 11,000 21,312
Elan Corp. PLC, ADR * 1,800 115,763
137,075
Electrical Equipment and
Components - 2.5%
Ametek, Inc. 3,500 102,594
102,594
Electronics - 1.4%
Eltron International, Inc. * 2,000 55,000
55,000
<PAGE>
Equity Securities (Cont'd) Shares Value
Entertainment - 4.4%
Ascent Entertainment Group, Inc. * 5,000 $55,625
Cinar Films, Inc., Class B * 3,000 58,500
Gaylord Entertainment Co. 2,000 64,500
178,625
Food - 4.3%
Corn Products International, Inc. * 3,000 101,625
Smucker (J.M.) Co., Class B 3,000 73,125
174,750
Health Care Facilities - 4.5%
Aviron * 2,500 77,969
Sun Healthcare Group, Inc. * 7,000 102,375
180,344
Health Care Management Services - 4.6%
American Retirement Corp. * 4,000 71,000
Health Management Systems, Inc. * 10,000 112,500
183,500
Hotel / Motel - 1.5%
Servico, Inc. * 4,000 60,000
60,000
Household Furnishing - 0.1%
Heilig Meyers Co. 500 6,156
6,156
Insurance - 0.8%
Gryphon Holdings, Inc. * 2,000 33,000
33,000
Machinery and Engineering - 5.4%
JLG Industries, Inc. 3,000 60,750
Middleby Corp. * 4,000 24,500
Somanetics Corp. * 6,000 20,625
Tokheim Corp. * 5,400 110,700
216,575
Medical and Dental Instruments and
Supplies - 3.1%
Angeion Corp. * 10,000 21,250
ATS Medical, Inc. * 15,000 104,531
125,781
Medical Information Systems - 1.1%
Transitions Systems, Inc. * 4,000 42,500
42,500
Multi-Sector Companies - 3.5%
Annuity and Life Re Holdings * 4,000 88,500
Cunningham Graphics International, Inc. * 2,500 43,125
Excel Legacy Corp. * 2,000 8,750
140,375
<PAGE>
Equity Securities (Cont'd) Shares Value
Photography - 1.8%
Polaroid Corp. 2,000 $71,125
71,125
Production Technology Equipment - 4.5%
Fluke Corp. 5,500 180,812
180,812
Publishing - 6.4%
Houghton Mifflin Co. 2,300 73,025
Wiley (John) & Sons, Inc., Class A 3,050 185,669
258,694
Railroads - 1.7%
Genesee & Wyoming, Inc., Class A * 3,500 66,500
66,500
Real Estate Investment Trusts - 3.4%
LTC Properties, Inc. 4,000 74,500
Mid Atlantic Realty Trust 5,000 61,562
136,062
Retail - 6.6%
Syms Corp. * 10,000 142,500
U.S. Vision, Inc. * 10,000 123,750
266,250
Service Organizations - 8.0%
Iteq, Inc. * 7,500 55,781
Lanvision Systems, Inc. * 4,000 17,750
New Horizons Worldwide, Inc. * 7,000 136,500
Startek, Inc. * 8,850 111,178
321,209
Telecommunications - 3.3%
IXC Communications, Inc. * 2,698 130,863
Sourcecom Corp., Series B, Preferred * + 1,500 0
130,863
Total Equity Securities (Cost $3,856,592) 3,996,228
TOTAL INVESTMENTS
(Cost $3,856,592) - 99.3% 3,996,228
Other assets and liabilities, net - 0.7% 26,891
Net Assets - 100% $4,023,119
+ restricted
* Non-income producing
See notes to financial statements.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
Assets
Investments in securities, at value $3,996,228
Cash 2,801
Receivable for shares purchased 242,739
Dividends receivable 3,585
Other assets 32
Total assets 4,245,385
Liabilities
Payable to Bank 196,251
Payable for securities purchased 21,625
Payable to Calvert Asset Management Company, Inc. 3,289
Payable to Calvert Administrative Services Company 332
Payable to Calvert Shareholder Services, Inc. 99
Accrued expenses and other liabilities 670
Total liabilities 222,266
Net assets $4,023,119
Net Assets Consist of:
Par value and paid-in capital applicable to 317,261
shares of common stock outstanding; $1 par value,
5,000,000 shares authorized $3,843,919
Undistributed net investment income (loss) 11,795
Accumulated net realized gain (loss) on investments 27,769
Net unrealized appreciation (depreciation)
on investments 139,636
Net Assets $4,023,119
Net Asset Value per Share $12.68
See notes to financial statements.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
Six months Ended June 30, 1998
Net Investment Income
Investment Income
Interest income $5,011
Dividend income 31,001
Total investment income 36,012
Expenses
Investment advisory fee 19,527
Transfer agent fees and expenses 651
Directors' fees and expenses 93
Administrative fees 2,170
Resigtration fees 421
Custodian fees 5,134
Reports to shareholders 577
Professional fees 478
Miscellaneous 51
Total expenses 29,102
Fees paid indirectly (4,885)
Net expenses 24,217
Net Investment Income (Loss) 11,795
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) (16,710)
Change in unrealized appreciation or depreciation 235,555
Net Realized and Unrealized Gain
(Loss) on Investments 218,845
Increase (Decrease) in Net Assets
Resulting From Operations $230,640
See notes to financial statements.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
six months ended Year ended
June 30, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income (loss) $11,795 $(41,134)
Net realized gain (loss) (16,710) 464,860
Change in unrealized appreciation
or depreciation 235,555 (689,272)
Increase (Decrease) in Net Assets
Resulting From Operations 230,640 (265,546)
Distributions to shareholders from
Net realized gain on investments - (372,337)
Total distributions - (372,337)
Capital share transactions
Shares sold 633,544 2,108,435
Reinvestment of distributions - 372,337
Shares redeemed (987,484) (727,112)
Total capital share transactions (353,940) 1,753,660
Total Increase (Decrease)
in Net Assets (123,300) 1,115,777
Net Assets
Beginning of period 4,146,419 3,030,642
End of period (including undistributed
net investment income of $11,795 and $0,
respectively) $4,023,119 $4,146,419
Capital Share Activity
Shares sold 50,003 165,387
Reinvestment of distributions - 31,002
Shares redeemed (77,768) (58,203)
Total capital share activity (27,765) 138,186
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: Calvert Social Small Cap Growth Portfolio (formerly, Calvert
Responsibly Invested Strategic Growth Portfolio) (the "Portfolio"), a series
of Calvert Variable Series, Inc. (formerly Acacia Capital Corporation) (the
"Fund"), is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The operations of each
series are accounted for separately. The 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 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. 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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees may be 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 received a monthly fee based
on an annual rate of .90% of the Portfolio's average daily net assets.
<PAGE>
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
shareholder servicing agent for the Portfolio. National Financial Data
Services, Inc. is the transfer and dividend disbursing agent.
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 $1,559,902 and $1,577,706, respectively.
The cost of investments owned at June 30, 1998 was substantially the same for
federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated ~$139,636, of which $524,068 related to appreciated
securities and $384,432 related to depreciated securities.
Note D - Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of $50
million ($25 million committed and $25 million uncommitted), to be accessed by
the Funds for temporary or emergency purposes only. Borrowings under this
facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused
portion of the committed facility which will be allocated to all participating
funds. This fee is paid quarterly in arrears. The Fund had $196,251
outstanding borrowings at an interest rate of 6.875% at June 30, 1998.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
Periods Ended
June 30, December 31,
1998 1997
Net asset value, beginning $12.02 $14.65
Income from investment operations
Net investment income .04 (.12)
Net realized and unrealized
gain (loss) .62 (1.32)
Total from investment operations .66 (1.44)
Distributions from
Net investment income - -
Net realized gains - (1.19)
Total distributions - (1.19)
Total increase (decrease)
in net asset value .66 (2.63)
Net asset value, ending $12.68 $12.02
Total return 5.49% (9.86%)
Ratios to average net assets:
Net investment income .54%(a) (1.19%)
Total expenses + 1.34%(a) 1.92%
Net expenses 1.12%(a) 1.61%
Expenses reimbursed - .18%
Portfolio turnover 39% 292%
Average commission rate paid $.0500 $.0502
Net assets, ending (in thousands) $4,023 $4,146
Number of shares outstanding,
ending (in thousands) 317 345
Years Ended
December 31, December 31,
1996 1995*
Net asset value, beginning $10.94 $10.00
Income from investment operations
Net investment income (.15) .25
Net realized and unrealized
gain (loss) 3.90 .93
Total from investment operations 3.75 1.18
Distributions from
Net investment income - (.24)
Net realized gains (.04) -
Total distributions (.04) (.24)
Total increase (decrease) in
net asset value 3.71 .94
Net asset value, ending $14.65 $10.94
Total return 34.33% 9.65%
Ratios to average net assets:
Net investment income (1.60%) .43%(a)
Total expenses + 2.27% 2.17%(a)
Net expenses 1.81% 1.64%(a)
Expenses reimbursed .20% .20%(a)
Portfolio turnover 120% 223%
Average commission rate paid $.0499 NA
Net assets, ending (in thousands) $3,031 $1,209
Number of shares outstanding,
ending (in thousands) 207 111
(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 March 1, 1995
* NA Disclosure not applicable to prior periods.
<PAGE>
Calvert Variable Series, Inc.
Calvert Social Mid Cap Growth Portfolio
Managed by Brown Capital Management, Inc.
Dear Investor:
For the six-month period ended June 30, 1998, the investment environment for
stocks was generally favorable, supported by a fairly modest level of
inflation, stable interest rates, and reasonable corporate profit growth.
Investor concerns regarding the economic health of various countries in Asia
contributed to increased volatility in the U.S. equity market. The technology
sector, which is heavily populated with companies that both source and sell
goods in Asia, appeared most susceptible to investor concerns. Small-company
stocks generally lagged large-company issues, as investors sought a safe
harbor in the most widely held and actively traded stocks.
Performance and Strategy
Our strong showing was due to Brown Capital Management's bias toward the
largest companies in the mid-cap universe, above-index representation in some
of the top performing industry groups, opportunistic buying and strong stock
selection.
The Portfolio maintained hefty positions in technology and consumer cyclicals,
two of the best performing industry groups. A number of the technology
holdings slumped early in the period due to the Asian financial crisis, then
rebounded sharply. Your Portfolio received the full benefit of the comeback,
as managers had taken advantage of the volatility and added to positions at
attractive prices.
The manager's best stock picks tended to come from the financial services
sector and included ~T. Rowe Price Associates and Green Tree Financial.
Line graph here showing comparison of change in value of hypothetical $10,000
investment from 8/1/91 to 6/30/98.
Social Mid Cap Growth Portfolio - $26,585
S & P Mid Cap 400 Index TR - $31,986
Average Annual Total Return
One Year 35.61%
Five Year 17.72%
Since Inception (7.16.91) 15.03%
*Performance information is for the Portfolio only and does not reflect
charges and expenses of the variable annuity or variable universal life
contract. For comparison purposes, Portfolio and Index performance since
inception is shown from 7.31.91. Past performance does not indicate future
results.
New Subadvisor's assumed management of the Portfolio effective December 1994.
Calvert Social Mid Cap Growth Portfolio of Calvert Variable series, Inc.,
should not be confused with the Calvert Capital Accumulation Fund.
Performance of the two funds will differ.
<PAGE>
Outlook
Brown Capital Management's outlook for the remainder of 1998 calls for a
continuation of benign levels of inflation and fairly stable interest rates.
This interest rate view is supported by the fact that economic weakness in
Asia has to date kept the Fed on the sidelines and reduced the likelihood of a
rate increase. The market appears fairly valued at current levels, so it would
not be surprising to see the broader market trade in a fairly narrow range for
a while. Valuations appear much more compelling for mid-cap and small-cap
companies relative to large-cap companies. Stock market indices should begin
to reflect this disparity.
We appreciate your choosing Calvert Group. Your portfolio managers will work
to bring you continued good returns.
Sincerely,
Barbara J. Krumsiek
President and CEO
July 21, 1998
Calvert Social Mid Cap Growth Portfolio of Calvert Variable series, Inc.,
should not be confused with the Calvert Capital Accumulation Fund.
Performance of the two funds will differ.
<PAGE>
MID CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1998
Equity Securities - 96.3% Shares Value
Communication Equipment - 2.8%
ADC Telecommunications, Inc. 25,400 $927,894
927,894
Computer - Networking - 2.1%
Bay Networking, Inc. 22,200 715,950
715,950
Computer - Peripherals - 2.9%
EMC Corp. 21,978 984,889
984,889
Computer - Hardware - 2.9%
Networks Associates, Inc. 20,414 977,296
977,296
Computer - Software and Services - 16.0%
BMC Software, Inc. 22,400 1,163,400
Microsoft Corp. 6,200 671,925
Oracle Corp. 20,505 503,654
Parametric Technology Corp. 21,400 580,475
Sterling Commerce, Inc. 28,300 1,372,550
Sterling Software, Inc. 37,300 1,102,681
5,394,685
Consumer Finance - 1.0%
Green Tree Financial Corp. 7,850 336,078
336,078
Consumer Staples - Miscellaneous - 1.4%
Quintiles Transnational Corp. 9,700 477,119
477,119
Distributors - Food and Health - 2.5%
Cardinal Health, Inc. 9,000 843,750
843,750
Electrical Equipment - 4.7%
Belden, Inc. 20,700 633,938
Solectron Corp. 22,200 933,788
1,567,726
Electronics - Semiconductors - 1.6%
Altera Corp. 18,500 546,906
546,906
Financial - Diversified - 1.8%
SLM Holding Corp. 12,200 597,800
597,800
<PAGE>
Equity Securities - (Cont'd) Shares Value
Health Care - Diversified - 1.4%
Johnson & Johnson 6,300 $464,625
464,625
Health Care - Hospital Management - 1.8%
Health Management Associates,
Inc., Class A 17,900 598,531
598,531
Health Care - Long Term Care - 1.9%
Health Care & Retirement Corp. 16,050 632,972
632,972
Health Care - Medical Products
and Supplies - 2.0%
Boston Scienctific Corp. 9,600 687,600
687,600
Health Care - Special Services - 2.9%
ALZA Corp. 22,700 981,775
981,775
Home Building - 1.5%
Rouse Co. 15,500 487,281
487,281
Housewares - 1.5%
Newell Co. 10,100 503,106
503,106
Insurance - Life and Health - 1.8%
AFLAC, Inc. 19,900 603,219
603,219
Investment - Banking / Brokerage - 1.6%
Franklin Resources, Inc. 9,786 528,444
528,444
Investment Management - 3.1%
T. Rowe Price Associates, Inc. 28,000 1,051,750
1,051,750
Leisure Time - Products - 2.6%
Harley Davidson, Inc. 22,600 875,750
875,750
Natural Gas - 2.9%
MCN Energy Group, Inc. 39,200 975,100
975,100
Oil and Gas - Equipment - 1.5%
Smith International, Inc. 14,300 497,819
497,819
<PAGE>
Equity Securities - (Cont'd) Shares Value
Restaurants - 2.0%
Cheesecake Factory, Inc. 29,700 $671,962
671,962
Retail - Building Supplies - 3.8%
Fastenal Co. 21,000 975,188
Home Depot, Inc. 3,750 311,484
1,286,672
Retail - Department Stores - 1.6%
Kohls Corp. 10,100 523,938
523,938
Retail - Discounters - 1.4%
Dollar General Corp. 12,251 484,680
484,680
Retail - Specialty - 5.2%
Autozone, Inc. 32,200 1,028,388
Caseys General Stores, Inc. 43,400 718,812
1,747,200
Services - Advertising and Marketing - 4.7%
Acxiom Corp. 34,900 870,319
Catalina Marketing Corp. 13,800 716,738
1,587,057
Services - Commercial and Consumer - 2.6%
G & K Services, Inc., Class A 20,400 889,950
889,950
Services - Data Processing - 6.3%
Equifax, Inc. 22,900 831,556
Fiserv, Inc. 9,800 416,194
Paychex, Inc. 21,900 891,056
2,138,806
Services - Employment - 2.5%
Interim Services, Inc. * 8,900 285,912
Robert Half International, Inc. 9,800 547,575
833,487
Total Equity Securities (Cost $25,661,555) 32,421,817
TOTAL INVESTMENTS (Cost $25,661,555) - 96.3% 32,421,817
Other assets and liabilities, net - 3.7% 1,235,888
Net Assets - 100% $33,657,705
*Non-income producing
See notes to financial statements.
<PAGE>
Mid Cap Growth Portfolio
Statement of Assets and Liabilities
June 30, 1998
Assets
Investments in securities, at value $32,421,817
Cash 1,146,983
Receivable for shares purchased 113,643
Interest and dividends receivable 4,054
Other assets 195
Total assets 33,686,692
Liabilities
Payable to Calvert Asset Management Company, Inc. 21,433
Payable to Calvert Administrative Services Company 2,649
Payable to Calvert Shareholder Services, Inc. 795
Accrued expenses and other liabilities 4,110
Total liabilities 28,987
Net assets $33,657,705
Net Assets Consist of:
Par value and paid-in capital applicable to 1,045,566
shares of common stock outstanding; $1
par value, 5,000,000 shares authorized $23,267,184
Undistributed net investment income (loss) (72,934)
Accumulated net realized gains (losses) on investments 3,703,193
Net unrealized appreciation (depreciation) on investments 6,760,262
Net Assets $33,657,705
Net Asset Value per Share $32.19
See notes to financial statements.
<PAGE>
Mid Cap Growth Portfolio
Statement of Operations
Six months Ended June 30, 1998
Net Investment Income
Investment Income
Interest income $6,998
Dividend income 66,879
Total investment income 73,877
Expenses
Investment advisory fee 117,289
Transfer agency fees and expenses 4,418
Directors' fees and expenses 785
Administrative fees 14,727
Custodian fees 8,040
Registration fees 2,962
Reports to shareholders 4,409
Professional fees 1,931
Miscellaneous 290
Total expenses 154,851
Fees paid indirectly (8,040)
Net expenses 146,811
Net Investment Income (Loss) (72,934)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) 3,416,111
Change in unrealized appreciation or depreciation 2,142,607
Net Realized and Unrealized Gain
(Loss) on Investments 5,558,718
Increase (Decrease) in Net Assets
Resulting From Operations $5,485,784
See notes to financial statements.
<PAGE>
Mid Cap Growth Portfolio
Statements of Changes in Net Assets
six months ended Year ended
June 30, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income (loss) $(72,934) $(37,729)
Net realized gain (loss) 3,416,111 3,036,419
Change in unrealized appreciation
or depreciation 2,142,607 1,705,146
Increase (Decrease) in Net Assets
Resulting From Operations 5,485,784 4,703,836
Distributions to shareholders from
Net realized gain on investments - (2,706,962)
Total distributions - (2,706,962)
Capital share transactions
Shares sold 7,568,738 9,334,843
Reinvestment of distributions - 2,706,962
Shares redeemed (5,513,327) (7,826,492)
Total capital share transactions 2,055,411 4,215,313
Total Increase (Decrease)
in Net Assets 7,541,195 6,212,187
Net Assets
Beginning of period 26,116,510 19,904,323
End of period (including undistributed
net investment income (loss) of $(72,934)
and $0, respectively) $33,657,705 $26,116,510
Capital Share Activity
Shares sold 247,188 353,300
Reinvestment of distributions - 101,575
Shares redeemed (182,506) (301,674)
Total capital share activity 64,682 153,201
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: Calvert Social Mid Cap Growth Portfolio (formerly, Calvert
Responsibly Invested Capital Accumulation Portfolio) (the "Portfolio"), a
series of Calvert Variable Series, Inc. (formerly Acacia Capital Corporation)
(the "Fund"), is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. The operations of
each series are accounted for separately. The 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 sale price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price. 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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees may be 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. The
Portfolio pays 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.
<PAGE>
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
shareholder servicing agent for the Portfolio. National Financial Data
Services, Inc. is the transfer and dividend disbursing agent.
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 $12,370,536 and $11,274,997, respectively.
The cost of investments owned at June 30, 1998, was substantially the same for
federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated $6,760,262, of which $7,590,940 related to appreciated
securities and $830,678 related ~to depreciated securities.
Note D - Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of $50
million ($25 million committed and $25 million uncommitted), to be accessed by
the Funds for temporary or emergency purposes only. Borrowings under this
facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused
portion of the committed facility which will be allocated to all participating
funds. This fee is paid quarterly in arrears. The Fund had no loans
outstanding pursuant to this line of credit at June 30, 1998.
<PAGE>
Mid Cap Growth Portfolio
Financial Highlights
Periods Ended
June 30, Dec. 31, Dec. 31,
1998 1997 1996
Net asset value, beginning $26.63 $24.05 $22.42
Income from investment operations
Net investment income (.07) (.04) (.12)
Net realized and unrealized
gain (loss) 5.63 5.70 1.79
Total from investment operations 5.56 5.66 1.67
Distributions from
Net investment income - - -
Net realized gains - (3.08) (.04)
Total distributions - (3.08) (.04)
Total increase (decrease)
in net asset value 5.56 2.58 1.63
Net asset value, ending $32.19 $26.63 $24.05
Total return 20.88% 23.53% 7.44%
Ratios to average net assets:
Net investment income (.50%)(a) (.17%) (.60%)
Total expenses + 1.05%(a) 1.04% 1.33%
Net expenses 1.00%(a) .96% 1.00%
Expenses reimbursed - - -
Portfolio turnover * 39% 96% 124%
Average commission rate paid $.0506 $.0516 $.0563
Net assets, ending (in thousands) $33,658 $26,117 $19,904
Number of shares outstanding,
ending (in thousands) 1,046 981 828
Years Ended
Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993
Net asset value, beginning $16.97 $18.95 $17.87
Income from investment operations
Net investment income (.15) .10 .08
Net realized and unrealized
gain (loss) 6.85 (1.98) 1.27
Total from investment operations 6.70 (1.88) 1.35
Distributions from
Net investment income (.01) (.10) (.08)
Net realized gains (1.24) - (.19)
Total distributions (1.25) (.10) (.27)
Total increase (decrease)
in net asset value 5.45 (1.98) 1.08
Net asset value, ending $22.42 $16.97 $18.95
Total return 39.46% (9.92%) 7.56%
Ratios to average net assets:
Net investment income (.84%) .68% .66%
Total expenses + 1.56% NA NA
Net expenses 1.25% .79% .80%
Expenses reimbursed .10% - -
Portfolio turnover 135% 79% 26%
Net assets, ending (in thousands) $8,935 $5,689 $4,986
Number of shares outstanding,
ending (in thousands) 398 335 263
(b) 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.
* Portfolio turnover excludes transactions in connection with the February
1996 merger of CRI Equity Portfolio.
NA Disclosure not applicable to prior periods.
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL INTERNATIONAL EQUITY PORTFOLIO
MANAGED BY MURRAY JOHNSTONE INTERNATIONAL, LTD.
Dear Investor:
Events in Asia continued to play a leading role in international stock market
performance. A number of these markets began to recover in the first quarter
only to have gains wiped away in the second quarter when growth estimates were
revised downward, the yen weakened further as the Japanese economy slipped
into recession, protests flared in Indonesia and investors became fearful that
weakness in Japan would trigger further currency devaluation throughout the
region. Economies were more resilient in Europe, with growth picking up in
Germany and France. This reflected optimism over the continued progress of the
European Union.
Inflation remained under control in all areas with the exception of the UK,
where wage increases and retail sales exerted upward pressure on prices.
Elsewhere, pricing pressure is weak or non-existent due to muted demand and/or
competition from imports.
Performance and Strategy
Strongest returns tended to come from selections in Europe. Performance here
was driven by merger and acquisition activity in the financial and other
sectors. The Portfolio realized good gains from Volkswagen, which announced
the acquisition of Rolls Royce in the UK, and Allied Irish Banks. The Dutch
specialty chemicals group UCB was up 57% during the period. Banque Nationale
de Paris was up 53%. The French retailer Pinault Printemps continued the trend
with a 56% rise.
Line graph here showing comparison of change in value of a hypothetical
$10,000 investment from 7/1/92 to 6/30/98.
Social International Equity Portfolio $20,746
MSCI EAFE Index GD $$19,744
Average Annual Return
(period ended 6.30.98)
One Year 15.09%
Five Year 15.41%
Since Inception 12.92%
* Performance information is for the Portfolio only and does not reflect
charges and expenses of the variable annuity or variable universal life
contract.
Past performance does not indicate future results.
Some of the medium-sized companies continued to perform very well, including
the UK's Misys, a software house servicing the financial sector; and
FirstGroup, the bus operator. Both have grown substantially in terms of market
capitalization.
The Portfolio's weakest returns were concentrated in Asia and Latin America,
as the collapse of the Asian markets spilled over to all emerging markets and
stocks were sold without regard to their fundamentals. Positions in South
Africa were also negative for performance. This market suffered from higher
interest rates and speculative bets against the rand that triggered massive
currency depreciation.
<PAGE>
Geographic Diversification
Murray Johnstone International continued its strategy of reducing exposure to
Southeast Asia and favored instead opportunities in Europe. This approach was
positive for performance.
By the end of the period, exposure to the weaker Asian markets was less than
2%, a position comprised entirely of investments in Singapore. Investments in
Hong Kong, Australia and New Zealand were eliminated. The Portfolio began this
reporting period with below-index exposure to Japan, and managers further
reduced holdings during the second quarter, prior to the sell-off. They added
back positions in Japan before a rebound in late June and captured much of the
rise. Relative to the index, the Portfolio remains underexposed to Japan.
Murray Johnstone decided to hold on to positions in Latin America and South
Africa. The stocks in these markets were purchased for their reasonable
valuations and strong growth prospects, and the manager's investment opinion
remains favorable.
Outlook
The current low inflation and low interest rate conditions are likely to
continue. This is a positive background for markets. The recession in Asia and
general price weakness will likely create concerns for corporate profits
further out and this will be the main issue for markets, especially those with
high expectations factored in.
The Portfolio is structured to benefit from the continuing strength in Europe.
Increased exposure to Japan should benefit us later this year, when we expect
stability to return to the region. We are also optimistic about our Latin
American holdings. There were encouraging signs from the Latin American
markets in early July, and the region looks set for better returns in the
second half of the year.
We appreciate your investment and trust in Calvert Group's ability to help you
meet your financial goals.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
July 21, 1998
Calvert Social International Equity Portfolio of Variable Series, Inc.,
should not be confused with the Calvert Social Investment Fund Money
Market Portfolio. Performance of the two funds will differ.
<PAGE>
International Equity Portfolio
Portfolio of Investments
June 30, 1998
Equity Securities - 93.6% Shares Value
Argentina - 1.4%
Banco Frances Del Rio La Plata, ADR 10,000 $229,375
229,375
Belgium - 3.3%
Fortis AG 1,052 268,728
UCB 55285,500
554,228
Brazil - 1.8%
Unibanco Uniao de Barncos 10,000 295,000
295,000
Chile - 1.2%
Compania de Telecom de Chile, ADR 10,000 203,125
Compania de Telecom de Chile,
ADR (rights) * 633 0
203,125
France - 13.7%
AXA-UAP 1,611 181,200
Banque Nationale de Paris 6,537 534,144
Cap Gemini 4,232 665,001
Legrand 889 235,275
Pinault Printemps 462 386,675
ST Microelectronics * 4,300 304,770
2,307,065
Germany - 8.7%
Allianz 930 310,180
Allianz * 278,930
Commerzbank 7,620 290,274
Douglas Holdings 6,790 361,817
Linde 210 144,390
Volkswagen 331 319,905
Winkler Duennebier * 700 31,440
1,466,936
Ireland - 1.4%
Allied Irish Banks 16,685 242,373
242,373
Italy - 4.0%
Credito Italiano 89,034 466,279
Telecom Italia Mobile 32,320 197,731
664,010
<PAGE>
Equity Securities (Cont'd) Shares Value
Japan - 14.7%
Fanuc 5,500 $190,931
Fuji Machine Manufacturing 7,000 186,302
Fuji Photo Film Co. 5,000 174,658
Fujitsu 17,000 179,504
Gunze Limited 63,000 143,614
Marudai Food Co. 82,000 190,960
Matsushita Comm 8,000 211,759
Nippon Tel & Tel 22182,975
Olympus Optical Co. 19,000 165,719
Sony Corp. 2,400 207,420
Sumitomo Bank 22,000 214,797
Sumitomo Electric Industries 21,000 213,083
Yamanouchi Pharmaceutical 10,000 209,011
2,470,733
Mexico - 1.5%
Banpais, S.A., ADR * 10,000 0
Cifra, S.A. de C.V., ADR * 10,582 154,968
Grupo Industrial Durango, S.A., ADR * 11,000 99,000
253,968
Netherlands - 8.3%
Elsevier 3,377 51,002
ING Groep 1,886 123,584
KNP-BT 7,870 203,259
KON KPN 6,506 250,606
TNT Post Groep * 6,506 166,431
Vedior 3,103 87,760
Vendex 3,144 118,320
Ver Ned Uitgevers 10,550 383,542
1,384,504
Norway - 2.2%
Christiania Bank 88,322 369,905
369,905
Singapore - 1.0%
City Developments 23,000 64,427
Singapore Press Holdings 15,000 100,593
165,020
South Africa - 1.3%
Liberty Life Assoc. 2,000 38,988
Standard Bank Investment 43,390 185,121
224,109
Spain - 3.8%
Banco Santander 6,148 157,358
Superdiplo * 2,284 49,448
Telefonica de Espana 9,466 437,652
644,458
<PAGE>
Equity Securities (Cont'd) Shares Value
Switzerland - 8.0%
Credit Suisse Group 1,706 $380,225
Sulzer 328 259,272
Zurich Versicherungs 1,104 705,720
1,345,217
United Kingdom - 16.0%
Anglian Group 22,700 94,755
Anglian Water 9,900 138,852
Arcadia Group 9,687 64,697
Bank of Scotland 12,000 134,444
Barclays 6,900 199,082
Beazer Group 18,800 58,072
Bellway 11,000 56,202
BPB 15,300 92,810
Cadbury Schweppes 11,800 182,740
Devro International 10,300 86,591
FirstGroup 18,500 126,955
Halifax 13,550 176,018
Johnson Matthey 9,600 86,237
Kingfisher 9,100 146,625
London International Group 22,600 79,055
Mayflower Corp. 21,600 71,410
Misys 2,500 142,133
Norwich Union 19,900 144,537
Safeway 18,400 120,586
SIG 12,100 45,659
Smithline Beecham 13,700 167,330
Somerfield 14,700 94,006
Unigate 13,600 150,326
Wolseley 3,452 20,288
2,679,410
United States - 1.3%
Global Telesystems Group, Inc. * 4,500 219,375
219,375
Total Equity Securities (Cost $12,792,045) 15,718,811
Principal
Time Deposits - 3.1% Amount
State Street Bank, London, 5.38%,
7/1/98 $511,945 511,945
Total Time Deposit (Cost $511,945) 511,945
TOTAL INVESTMENTS (Cost $13,303,990) - 96.7%
16,230,756
Other assets and liabilities, net - 3.3% 546,870
Net Assets - 100% $16,777,626
*Non-income producing
See notes to financial statements.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
Assets
Investments in securities, at value $16,230,756
Cash 948,212
Receivable for securities sold 728,889
Interest and dividends receivable 47,914
Other assets 6,479
Total assets 17,962,250
Liabilities
Payable for securities purchased 1,144,782
Payable to Calvert Asset Management
Company, Inc. 25,497
Payable to Calvert Administrative
Services Company 1,387
Payable to Calvert Shareholder Services, Inc. 416
Accrued expenses and other liabilities 12,542
Total liabilities 1,184,624
Net assets $16,777,626
Net Assets Consist of:
Par value and paid-in capital applicable to
757,950 shares of common stock outstanding;
$1 par value, 5,000,000 shares authorized $12,957,356
Undistributed net investment income (loss) 103,471
Accumulated net realized gain (loss) on investments
and foreign currencies 802,405
Net unrealized appreciation (depreciation)
on investments and foreign currencies and
assets and liabilities in foreign currencies 2,914,394
Net Assets $16,777,626
Net Asset Value per Share $22.14
See notes to financial statements.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
Net Investment Income
Investment Income
Interest income $14,265
Dividend income
(net of foreign taxes of $28,334) 199,814
Total investment income 214,079
Expenses
Investment advisory fee 81,358
Transfer agency fees and expenses 2,441
Directors' fees and expenses 399
Administrative fees 20,000
Custodian fees 41,172
Registration fees 1,784
Reports to shareholders 2,506
Professional fees 851
Miscellaneous 183
Reimbursement from Advisor (11,864)
Total expenses 138,830
Fees paid indirectly (8,738)
Net expenses 130,092
Net Investment Income (Loss) 83,987
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Investments 640,236
Foreign currencies (20,653)
619,583
Change in unrealized appreciation or
depreciation on:
Investments and foreign currencies 1,620,935
Assets and liabilities in
foreign currencies (8,170)
1,612,765
Net Realized and Unrealized Gain
(Loss) on Investments 2,232,348
Increase (Decrease) in Net Assets
Resulting From Operations $2,316,335
See notes to financial statements.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended Year ended
June 30, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $83,987 $125,995
Net realized gain (loss) 619,583 1,406,885
Change in unrealized appreciation
or depreciation 1,612,765 157,301
Increase (Decrease) in Net Assets
Resulting From Operations 2,316,335 1,690,181
Distributions to shareholders from
Net investment income - (138,622)
Net realized gain on investments - (1,299,097)
Total distributions - (1,437,719)
Capital share transactions
Shares sold 1,474,215 3,776,933
Reinvestment of distributions - 1,437,719
Shares redeemed (1,463,009) (5,043,846)
Total capital share transactions 11,206 170,806
Total Increase (Decrease)
in Net Assets 2,327,541 423,268
Net Assets
Beginning of period 14,450,085 14,026,817
End of period (including undistributed
net investment income of $103,471
and $19,484, respectively) $16,777,626 $14,450,085
Capital Share Activity
Shares sold 68,564 182,411
Reinvestment of distributions - 75,550
Shares redeemed (67,225) (249,795)
Total capital share activity 1,339 8,166
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: Calvert Social International Equity Portfolio (formerly, Calvert
Responsibly Invested Global Equity Portfolio) (the"Portfolio"), a series of
Calvert Variable Series, Inc. (formerly Acacia Capital Corporation)
(the"Fund"), is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The operations of each
series are accounted for separately. The 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 sale price. Foreign security prices,
furnished by quotation services in the security's local currency, are
translated using the current US 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 ~US dollars. For valuation of assets and liabilities on each
date of net asset value determination, foreign denominations are translated
into US 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 investments and foreign currencies is included with the net
realized and unrealized gain or loss on investments and foreign currencies.
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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees may be paid indirectly by credits
earned on the Portfolio's cash on deposit with the bank. Such deposit
arrangement is an alternative to overnight investments.
<PAGE>
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. The Advisor voluntarily reimbursed the Portfolio $11,864 for
administrative service fees.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
shareholder servicing agent for the Portfolio. National Financial Data
Services, Inc. is the transfer and dividend disbursing agent.
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 $7,501,863 and $8,035,934, respectively.
The cost of investments owned at June 30, 1998, was substantially the same for
federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated ~$2,926,766, of which $3,745,616 related to
appreciated investments and ~$818,850 related to depreciated investments.
Note D - Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of $50
million ($25 million committed and $25 million uncommitted), to be accessed by
the Funds for temporary or emergency purposes only. Borrowings under this
facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused
portion of the committed facility which will be allocated to all participating
funds. This fee is paid quarterly in arrears. The Fund had no loans
outstanding pursuant to this line of credit at June 30, 1998.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
Periods Ended
June 30, Dec. 31, Dec. 31,
1998 1997 1996
Net asset value, beginning $19.10 $18.74 $17.15
Income from investment operations
Net investment income .11 .19 .17
Net realized and unrealized
gain (loss) 2.93 2.28 2.40
Total from investment operations 3.04 2.47 2.57
Distributions from
Net investment income - (.20) (.14)
Net realized gains - (1.91) (.84)
Total distributions - (2.11) (.98)
Total increase (decrease)
in net asset value 3.04 .36 1.59
Net asset value, ending $22.14 $19.10 $18.74
Total return 15.92% 13.23% 14.99%
Ratios to average net assets:
Net investment income 1.03% (a) .85% 1.02%
Total expenses + 1.71%(a) 1.56% 1.59%
Net expenses 1.60%(a) 1.17% 1.18%
Expenses reimbursed .15%(a) .17% .23%
Portfolio turnover 49% 35% 85%
Average commission rate paid $.0273 $.0399 $.0352
Net assets, ending (in thousands) $16,778 $14,450 $14,027
Number of shares outstanding,
ending (in thousands) 758 757 748
Years Ended
Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993
Net asset value, beginning $15.89 $17.72 $14.57
Income from investment operations
Net investment income .27 .11 .11
Net realized and unrealized
gain (loss) 1.69 (.49) 4.07
Total from investment operations 1.96 (.38) 4.18
Distributions from
Net investment income (.25) (.13) (.08)
Net realized gains (.45) (1.32) (.95)
Total distributions (.70) (1.45) (1.03)
Total increase (decrease)
in net asset value 1.26 (1.83) 3.15
Net asset value, ending $17.15 $15.89 $17.72
Total return 12.35% (2.13%) 29.72%
Ratios to average net assets:
Net investment income 1.48% .59% 1.00%
Total expenses + 1.51% NA NA
Net expenses 1.12% 1.24% .94%
Expenses reimbursed .39% .29% .10%
Portfolio turnover 90% 84% 64%
Net assets, ending (in thousands) $9,831 $7,765 $4,529
Number of shares outstanding,
ending (in thousands) 573 489 256
(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.
NA Disclosure not applicable to prior periods.
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL BALANCED PORTFOLIO
Dear Investor:
A background of continued low interest rates and benign levels of inflation
supported a continued stock market advance, although investors had to tolerate
considerably more volatility. In general, US stocks charged ahead in the first
quarter then took a breather in the second quarter. The Standard & Poor's 500
Stock Index posted a year to date return of 17.72%, with 13.94% of the advance
earned in the first quarter.
Bond yields trended lower pushing prices higher. The rally in the bond market
was supported by low inflation and expectations that the Federal Reserve would
maintain its neutral monetary policy and not take steps to raise interest
rates.
Performance and Strategy
Equity Investments - Managed by NCM Capital Management, Inc.
The Asian financial crisis has had an immense impact on certain economic
sectors, including basic materials, capital goods and technology. As a result,
your fund managers took steps to reduce exposure to the basic materials and
capital goods sectors. They continue to maintain fairly aggressive exposure to
technology stocks, but selections tended to be in the computer software and
networking industries, businesses that are not as closely linked as other
technology plays to developments in Asia.
Line graph here showing comparison of change in value of a hypothetical
$10,000 investment from 7/1/88 to 6/30/98.
Social Balanced Portfolio $32,286
S & P 500 Index Monthly Reinvested $54,787
Lehman Aggregate Bond Index TR $23,820
Average Annual Return
(period ended 6.30.98)
One Year 19.70%
Five Year 14.31%
Ten Year 12.43%
Since Inception 11.61%
* Performance information is for the Portfolio only and does not reflect
charges and expenses of the variable annuity or variable universal life
contract. Past performance does not indicate future results.
New subadvisors assumed management of the Portfolio effective February 1995.
Within your portfolio, the communication services and health care sectors led
performance. MCI Communications, Century Telephone, Watson Pharmaceutical,
Twinlab Corp and Schering Plough all contributed strong gains. In general,
energy, basic materials and utilities stocks turned in poor returns.
Fixed-Income Investments - Managed by Calvert Asset Management Company, Inc.
Bond yields declined pushing prices higher, but there was significant
performance disparity among sectors. Treasury securities were the primary
beneficiaries as currency devaluation and market gyrations in Asia sparked
a "flight-to-quality." The very strong demand for Treasuries caused yields
on these securities to fall further than those on corporate bonds.
<PAGE>
An abundant supply of corporate bonds also contributed to Treasuries'
outperformance. Corporations took advantage of the historically low interest
rate environment to issue record levels of debt securities. While not high,
the yields on these issues needed to be attractive enough to lure investors.
Given this environment, we were pleased the fixed-income portion of the
Portfolio only marginally trailed the Lehman Aggregate Index, a benchmark that
invests mainly in government and government-agency issues.
Outlook
We expect volatility in the stock market to intensify as second quarter
profits are released. A number of large multi-national firms have been hurt by
dwindling demand, increased inventories, weak commodity prices and a strong
dollar. Consequently, earnings estimates have been revised downwards to more
realistic levels.
However, the market looks to have a solid foundation. Profitability for
U.S.-based companies should continue to hold up well. Consumer spending
remains strong, and inflation looks to be under control. While there are some
signs of rising wage pressures in the service sector, continued productivity
improvements should help to offset them.
We expect the Federal Reserve will hold tight on the interest rate front. Fed
chairman ~Alan Greenspan is not likely to send world financial markets into a
tailspin by tightening US monetary policy. This bodes well for stocks in the
financial sector and other interest-rate sensitive groups and should
contribute to continued good performance from the bond market.
Thank you for your investment with Calvert Group.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
July 21, 1998
Calvert Social Balanced Portfolio of Calvert Variable Series, Inc., should not
be confused with the Calvert Social Investment Fund Managed Growth Portfolio.
Performance of the two funds will differ.
<PAGE>
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 1998
Equity Securities - 54.5% Shares Value
Air Freight - 0.5%
FDX Corp. * 22,000 $1,380,500
1,380,500
Auto / Truck - Equipment - 0.6%
Lear Corp. * 30,800 1,580,425
1,580,425
Banks - Major Regional - 2.8%
Banc One Corp. 50,380 2,811,834
BankBoston Corp. 64,830 3,606,169
PNC Bank Corp. 24,800 1,334,550
7,752,553
Banks - Money Center - 1.2%
NationsBank Corp. 41,800 3,197,700
3,197,700
Chemicals - 0.5%
Praxair, Inc. 29,900 1,399,694
1,399,694
Communications Equipment - 0.8%
Ericsson (L. M.) Telephone, Co.,
Class B, ADR 73,810 2,112,811
2,112,811
Computer - Hardware - 2.0%
Compaq Computer Corp. 65,500 1,858,562
Gateway 2000, Inc. * 39,100 1,979,438
International Business Machines Corp. 13,800 1,584,412
5,422,412
Computer - Networking - 1.1%
Cisco Systems, Inc. * 34,400 3,166,950
3,166,950
Computer - Software - 6.1%
BMC Software, Inc. * 55,000 2,856,562
HBO & Co. 84,000 2,961,000
Microsoft Corp. * 35,140 3,808,298
Oracle Corp. * 77,035 1,892,172
Parametric Technology Corp. * 106,700 2,894,238
Symantec Corp. * 95,200 2,487,100
16,899,370
Consumer Finance - 2.5%
Countrywide Credit Industries, Inc. 32,300 1,639,225
Umbono Investment Corp. * v 9,212,234 5,204,213
6,843,438
<PAGE>
Equity Securities (Cont'd) Shares Value
Distributors - Food and Health - 1.6%
Cardinal Health, Inc. 26,200 $2,456,250
Sysco Corp. 77,000 1,973,125
4,429,375
Electronic Companies - 0.8%
Cinergy Corp. 65,900 2,306,500
2,306,500
Electronics - Semiconductors - 0.6%
Intel Corp. 22,800 1,690,050
1,690,050
Financial - Diversified - 3.2%
Federal National Mortgage Assn. 44,900 2,727,675
MGIC Investment Corp. 42,500 2,425,156
SunAmerica, Inc. 61,950 3,558,253
8,711,084
Foods - 1.1%
Hershey Foods Corp. 43,100 2,973,900
2,973,900
Health Care - Long Term Care - 1.0%
Healthsouth Corp. * 103,800 2,770,162
2,770,162
Health Care - Medical Products and
Supplies - 0.8%
Guidant Corp. 29,400 2,096,588
2,096,588
Health Care - Pharmaceutical
and Drugs - 4.2%
Merck & Co., Inc. 25,700 3,437,375
Schering Plough Corp. 39,600 3,628,350
Twinlab Corp. * 41,400 1,808,662
Watson Pharmaceuticals, Inc. * 56,400 2,633,175
11,507,562
Household Produces - Non-Durable - 2.5%
Colgate Palmolive Co. 19,100 1,680,800
Dial Corp. 113,200 2,936,125
Fort James Corp. 53,650 2,387,425
7,004,350
Housewares - 0.9%
Newell Co. 49,000 2,440,812
2,440,812
Insurance - Life and Health - 1.0%
Conseco, Inc. 60,700 2,837,725
2,837,725
Insurance - Multi-Line - 0.9%
American International Group, Inc. 17,625 2,573,250
2,573,250
<PAGE>
Equity Securities (Cont'd) Shares Value
Manufacturing - Diversified - 1.3%
Tyco International, Ltd. 56,400 $3,553,200
3,553,200
Motorcycles - 0.7%
Harley Davidson, Inc. 47,400 1,836,750
1,836,750
Natural Gas - 0.5%
MCN Energy Group, Inc. 53,400 1,328,325
1,328,325
Oil and Gas - Drilling and Equipment - 1.1%
Baker Hughes, Inc. 85,700 2,962,006
2,962,006
Personal Care - 1.1%
Gillette Co. 55,400 3,140,488
3,140,488
Power Producers - 0.5%
CalEnergy Co., Inc. * 49,000 1,473,062
1,473,062
Printing - 0.8%
Donnelley (R. R.) & Sons, Co. 49,500 2,264,625
2,264,625
Publishing - Newspapers - 0.7%
New York Times Co., Class A 23,600 1,870,300
1,870,300
Real Estate Investment Trust - 0.6%
Highwoods Properties, Inc.,
Preferred, Series A 1,500 1,587,330
1,587,330
Retail - Building Supplies - 0.8%
Home Depot, Inc. 25,520 2,119,755
2,119,755
Retail - Department Stores - 0.5%
Dayton Hudson Corp. 31,000 1,503,500
1,503,500
Retail - Drug Stores - 0.9%
CVS Corp. 62,400 2,429,700
2,429,700
Retail - Food Chains - 1.2%
Safeway, Inc. * 83,300 3,389,269
3,389,269
Retail - Specialty - 0.9%
OfficeMax, Inc. * 143,000 2,359,500
2,359,500
<PAGE>
Equity Securities (Cont'd) Shares Value
Services - Advertising and
Marketing - 1.6%
Cognizant Corp. 28,000 $1,764,000
Omnicom Group 57,800 2,882,775
4,646,775
Services - Commercial and
Consumer - 0.6%
Block (H & R), Inc. 37,600 1,583,900
1,583,900
Telephone - 3.1%
Century Telephone Enterprises, Inc. 74,497 3,417,550
MCI Communications Corp. 51,000 2,964,375
SBC Communications, Inc. 53,640 2,145,600
8,527,525
Textiles - Apparel - 0.9%
Jones Apparel Group, Inc. * 68,200 2,493,562
2,493,562
Total Equity Securities (Cost $114,553,955) 150,166,783
Principal
Corporate Obligations - 38.2% Amount
Advanta Corp., 6.785%, 7/27/98 $1,000,000 997,780
AGL Capital Trust, 8.17%, 6/1/37 1,000,000 1,067,890
Allmerica Financial Corp., 7.625%,
10/15/25 2,700,000 2,966,517
AMR Corp., 9.82%, 3/7/01 25,000 27,094
Atlantic Mutual Insurance Co.,
8.15%, 2/15/28 1,000,000 1,031,610
Block Financial Corp., 6.75%, 11/1/04 1,500,000 1,532,265
BNP US Funding, LLC, 7.738%,
12/31/49 2,000,000 2,012,782
Capital One Bank, 6.26%, 5/7/01 3,500,000 3,501,365
Chase Credit Card Master Trust,
6.30%, 4/15/06 3,000,000 3,024,690
Chemical Bank New York Trust,
7.25%, 9/15/02 1,000,000 1,042,670
Computer Associates International,
Inc., 6.25%, 4/15/03 4,500,000 4,477,275
Conseco, Inc., 6.40%, 6/15/01 6,000,000 5,998,914
Conseco, Inc., 6.80%, 6/15/05 2,000,000 2,001,172
Continental Valorem Corp.
VRDN, 6.10%, 6/1/13,
LOC: Tokai Bank Ltd. + 700,000 700,000
Den Danske Bank, 6.375%, 6/15/08 3,000,000 3,007,503
Dime Capital Trust I, 9.33%, 5/6/27 3,275,000 3,732,780
Dresdner Bank, 7.25%, 9/15/15 4,000,000 4,250,760
First Data Corp., 6.75%, 7/15/05 1,000,000 1,034,080
Fugi JGB Investment, LLC, 9.87%,
12/31/49 4,000,000 3,515,000
Goldman Sachs Group, 6.625%,
12/1/04 2,000,000 2,038,760
Goldman Sachs Group, 7.875%,
1/15/03 1,000,000 1,062,791
Homeside Lending, Inc., 6.86%, 7/2/01 2,000,000 2,036,120
International Lease Finance Corp.
, 6.64%, 2/1/00 1,000,000 1,011,230
Interpool, Inc., 6.625%, 3/1/03 2,000,000 1,894,660
Mark IV Industries, Inc., 7.50%, 9/1/07 2,000,000 2,014,320
MCI Communications Corp.,
6.125%, 4/15/12 1,500,000 1,496,895
McKesson Corp., 6.30%, 3/1/05 2,500,000 2,505,425
MCN Investment Corp., 6.30%, 4/2/11 2,000,000 2,007,718
MCN Investment Corp., 6.35%, 4/2/12 1,000,000 1,005,148
Medpartners, Inc., 6.875%, 9/1/00 4,000,000 3,752,000
<PAGE>
Principal
Corporate Obligations (Cont'd) Amount Value
Merita Bank Ltd., 7.15%, 12/29/49 $4,500,000 $4,590,189
Meyer Fred, Inc., 7.375%, 3/1/05 3,500,000 3,521,000
Onbank Capital Trust I, 9.25%, 2/1/27 1,500,000 1,743,150
Paine Webber Group, Inc., 6.55%,
4/15/08 2,000,000 2,003,720
Paine Webber Group, Inc., 7.00%,
3/1/00 3,000,000 3,042,060
San Mateo, CA Redevelopment
Agency, 7.125%, 8/1/08 3,585,000 3,680,433
Security Benefit Life Co., 8.75%,
5/15/16 2,000,000 2,337,518
Skandinaviska Enskilda Banken,
8.125%, 9/6/49 2,500,000 2,722,568
Socgen Real Estate Co., LLC, 7.64%,
12/29/49 2,000,000 1,957,500
Sovereign Bancorp, Inc., 6.75%, 9/1/00 1,250,000 1,249,075
Sun Life CDA US Trust l, 8.526%,
5/29/49 4,000,000 4,469,880
Tyco International Group, 6.125%,
6/15/01 2,000,000 2,000,620
United Utilities, 6.45%, 4/1/08 1,000,000 996,850
Xerox Capital Trust I, 8.00%, 2/1/27 2,750,000 2,961,420
Zurich Capital Trust, 8.376%, 6/1/37 1,000,000 1,108,420
Total Corporate Obligations
(Cost $104,945,040) 105,131,617
Repurchase Agreements - 6.0%
State Street Bank: 5.25%, dated 6/30/98,
due 7/1/98
(Collateral: $17,444,100, FHLBB,
7.18%, 8/14/07) 16,500,000 16,500,000
Total Repurchase Agreements
(Cost $16,500,000) 16,500,000
Municipal Obligations - 0.7%
Maryland State Economic Development
Corp., 8.00%, 10/1/05 1,000,000 1,037,230
Maryland State Economic
Development Corp., 8.625%, 10/1/19 750,000 886,395
Total Municipal Obligations (Cost $1,750,000) 1,923,625
U.S. Government Agencies
and Instrumentalites - 0.3%
WNH Ltd. Partnership, 9.40%, 10/1/99 705,000 735,999
Total U.S. Government Agencies and
Instrumentalities (Cost $716,446) 735,999
Other Debt - 0.2%
Chickasaw Nation, Oklahoma,
10.00%, 8/1/03 # 1,000,000 600,000
Total Other Debt (Cost $1,000,000) 600,000
OTAL INVESTMENTS (Cost $239,465,441) - 99.9%
275,058,024
Other assets in excess of liabilities - 0.1%
326,860
Net Assets - 100% $275,384,884
+ Optional tender features give these securities a shorter effective maturity
date.
* Non-income producing.
# This security is in default an was valued by the Board of Directors. See
Note A.
- - See note B.
explanation of Guarantees:
LOC: Letter of Credit
TOA: Tender Option Agreement
BPA: Bond-Purchase Agreement
Abbreviations:
VRDN: Variable Rate Demand Note
See notes to financial statements.
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
Assets
Investments in securities, at value $275,058,024
Cash 449,456
Receivable for securities sold 18,264,965
Interest and dividends receivable 1,799,884
Other assets 1,670
Total assets 295,573,999
Liabilities
Payable for securities purchased 19,921,539
Payable to Calvert Asset Management
Company, Inc. 170,723
Payable to Calvert Shareholder Services, Inc. 6,673
Accrued expenses and other liabilities 90,180
Total liabilities 20,189,115
Net assets $275,384,884
Net Assets Consist of:Par value and paid-
in capital applicable to 126,121,020 shares
of common stock outstanding; $1 par value,
275,000,000 shares authorized $215,966,203
Undistributed net investmen
t income (loss) 3,729,959
Accumulated net realized gains (losses)
on investments and foreign currencies 20,155,013
Net unrealized appreciation (depreciation)
on investments and foreign currencies and
assets and liabilities in foreign currencies 35,533,709
Net Assets $275,384,884
Net Asset Value per Share $2.183
See notes to financial statements.
<PAGE>
Balanced Portfolio
Statement of Operations
six months Ended June 30, 1998
Net Investment Income
Investment Income
Interest income $3,716,003
Dividend income
(net of foreign taxes of $3,086) 627,173
Total investment income 4,343,176
Expenses
Investment advisory fee 877,054
Transfer agency fees and expenses 37,588
Directors' fees and expenses 7,114
Custodian fees 36,028
Registration fees 25,953
Reports to shareholders 139,697
Professional fees 19,348
Miscellaneous 13,103
Total expenses 1,155,885
Fees paid indirectly (27,344)
Net expenses 1,128,541
Net Investment Income 3,214,635
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Investments 19,039,424
Foreign currencies (51)
19,039,373
Change in unrealized appreciation or
depreciation on:
Investments and foreign currencies 1,926,959
Assets and liabilities in foreign currencies (50,505)
1,876,454
Net Realized and Unrealized Gain
(Loss) on Investments 20,915,827
Increase (Decrease) in Net Assets
Resulting From Operations $24,130,462
See notes to financial statements.
<PAGE>
Balanced Portfolio
Statements of Changes in Net Assets
Six months ended Year ended
June 30, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $3,214,635 $5,135,929
Net realized gain (loss) 19,039,373 10,577,885
Change in unrealized
appreciation or depreciation 1,876,454 19,045,338
Increase (Decrease) in Net Assets
Resulting From Operations 24,130,462 34,759,152
Distributions to shareholders from
Net investment income - (5,000,858)
Net realized gain on investments - (10,847,850)
Total distributions - (15,848,708)
Capital share transactions
Shares sold 30,755,637 44,260,144
Reinvestment of distributions - 15,848,708
Shares redeemed (7,335,190) (12,658,315)
Total capital share transactions 23,420,447 47,450,537
Total Increase (Decrease)
in Net Assets 47,550,909 66,360,981
Net Assets
Beginning of period 227,833,975 161,472,994
End of period (including undistributed
net investment income of $3,729,959 and
$515,324, respectively) $275,384,884 $227,833,975
Capital Share Activity
Shares sold 14,632,008 22,441,316
Reinvestment of distributions - 7,996,320
Shares redeemed (3,477,525) (6,516,580)
Total capital share activity 11,154,483 23,921,056
See notes to financial statements.
<PAGE>
Notes to Financial Statements
Note A - Significant Accounting Policies
General: Calvert Social Balanced Portfolio (formerly, Calvert Responsibly
Invested Balanced Portfolio) (the "Portfolio"), a series of Calvert Variable
Series, Inc. (formerly Acacia Capital Corporation) (the "Fund"), is registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The operations of each series are accounted for
separately. The 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 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.
In determining fair value, the Board considers all relevant qualitative and
quantitative information available. These factors are subject to change over
time and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts depend
on future developments inherent in long-term investments. However, because of
the inherent uncertainty of valuation, those estimated values may differ
significantly from the values that would have been used had a ready market of
the investments existed, and the differences could be material.
At June 30, 1998, $600,000 or 0.2% of net assets were valued by 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. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value and
a possible loss of income or value if the counterparty fails to perform in
accordance with the terms of the agreement.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. 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 investments is included with the net realized and unrealized gain
or loss on investments. Other foreign currency gains or losses are reported
separately.
<PAGE>
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 amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees may be 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. The
Portfolio pays 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
shareholder servicing agent for the Portfolio. National Financial Data
Services, Inc. is the transfer and dividend disbursing agent.
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.
Umbono Investment Corp., which is an affiliate because the Portfolio owns over
17% of the voting securities, was purchased at a cost of $2,544,511 for
9,212,234 shares.
Note C - Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $815,740,885 and $790,003,912, respectively. U.S. government
security purchases were $491,765,854 and sales were $491,672,220.
The cost of investments owned at June 30, 1998, was substantially the same for
federal income tax purposes and financial reporting purposes. Net unrealized
appreciation aggregated $35,592,583, of which $39,850,595 related to
appreciated securities and $4,258,012 related to depreciated securities.
As a cash management practice, the Portfolio may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
Note D - Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of $50
million ($25 million committed and $25 million uncommitted), to be accessed by
the Funds for temporary or emergency purposes only. Borrowings under this
facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused
portion of the committed facility which will be allocated to all participating
funds. This fee is paid quarterly in arrears. The Fund had no loans
outstanding pursuant to this line of credit at June 30, 1998.
<PAGE>
BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
Periods Ended
June 30, Dec. 31, Dec. 31,
1998 1997 1996
Net asset value, beginning $1.982 $1.774 $1.703
Income from investment operations
Net investment income .025 .047 .040
Net realized and unrealized
gain (loss) .176 .309 .175
Total from investment operations .201 .356 .215
Distributions from
Net investment income - (.047) (.042)
Net realized gains - (.101) (.102)
Total distributions - (.148) (.144)
Total increase (decrease)
in net asset value .201 .208 .071
Net asset value, ending $2.183 $1.982 $1.774
Total return 10.14% 20.08% 12.62%
Ratios to average net assets:
Net investment income 2.57% 2.66% 2.71%
Total expenses + .92%(a) .80% .81%
Net expenses .90%(a) .77% .78%
Portfolio turnover 335% 905% 99%
Average commission rate paid $.0479 $.0500 $.0481
Net assets, ending (in thousands) $275,385 $227,834 $161,473
Number of shares outstanding,
ending (in thousands) 126,121 114,967 91,045
Years Ended
Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993
Net asset value, beginning $1.440 $1.537 $1.465
Income from investment operations
Net investment income .050 .046 .045
Net realized and unrealized
gain (loss) .380 (.097) .072
Total from investment operations .430 (.051) .117
Distributions from
Net investment income (.040) (.046) (.045)
Net realized gains (.127) - -
Total distributions (.167) (.046) (.045)
Total increase (decrease)
in net asset value .263 (.097) .072
Net asset value, ending $1.703 $1.440 $1.537
Total return 29.87% (3.30%) 8.00%
Ratios to average net assets:
Net investment income 3.08% 3.39% 3.69%
Total expenses + .83% NA NA
Net expenses .81% .80% .81%
Portfolio turnover 163% 43% 14%
Net assets, ending (in thousands) $110,237 $66,593 $54,000
Number of shares outstanding,
ending (in thousands) 64,728 46,244 35,142
(c) 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.
* NA Disclosure not applicable to prior periods.
