DECEMBER 31, 1998
ANNUAL
REPORT
CALVERT MUNICIPAL FUND, INC.
<PAGE>
CONTENTS
President's Letter
1
Portfolio
Manager Remarks
2
Report of Independent
Accountants
6
Statement of
Net Assets
7
Statements
of Operations
16
Statements of
Changes in Net Assets
18
Notes to
Financial Statements
22
Financial Highlights
26
Year 2000 Update
30
[picture of Barbara Krumsiek, no caption]
Dear Shareholders:
Investors' risk tolerance was tested in 1998. Global financial turmoil
contributed to a high level of market volatility. By the end of the third
quarter, most equity investors were looking at negative results for the
year-to-date. The fourth quarter brought fast relief, however, with stock
market indices bouncing back to provide investors with a fourth consecutive
year of double-digit gains. Price appreciation was an integral component of
bond returns, as yields generally declined throughout the year.
Among stocks, the top performers were tightly consolidated by capitalization
range and industry group. Large-capitalization companies and technology
plays fueled most of the advance. In the bond market, long-term U.S.
Treasury securities outperformed other categories substantially.
While investors may be tempted to chase the current trend setters, that
approach comes with increased risk now, given the stock market's high levels
and increased volatility. We encourage investors to make decisions based on
their financial objectives and tolerance for risk. At this point, it would
be a good idea to reevaluate your asset allocation to be sure you are
positioned at a comfortable risk level. If you think change is in order,
your financial professional can suggest strategies that keep you on track to
meet long-term financial objectives without exposing you to undue levels of
risk.
We appreciate your investment in Calvert Group funds and look forward to
providing competitive returns in the year ahead.
Sincerely,
/s/
Barbara J. Krumsiek
President and CEO
January 19, 1999
<PAGE>
[picture of Emmett Long]
Emmett Long is a member of the CAMCO portfolio management team.
National Municipal seeks to earn the highest level of interest income exempt
from federal income taxes, and each state specific fund seeks to earn the
highest level of interest income exempt from federal and specific state
income taxes, as is consistent with prudent investment management,
preservation of capital, and the quality and maturity objectives of each
Fund.
Fund
Information
asset allocation
intermediate
tax-exempt bonds
NASDAQ symbol
National CINMX
California CCIMX
Maryland CMDMX
Virginia CVAAX
CUSIP number
National 131616-20-3
California 131616-10-4
Maryland 131616-30-2
Virginia 131616-60-9
CALVERT MUNICIPAL
INTERMEDIATE FUNDS
Could you describe the investment climate during this period?
Sectors of the U.S. economy showed signs of strength, but, absent clear
signs of inflation, interest rates remained low. Financial troubles in Asia,
Russia and Latin America set off a flight to quality, with investors seeking
the safety of U.S. issued debt securities, primarily Treasuries.
The Federal Reserve maintained its neutral monetary policy until late in
September, when worsening conditions abroad threatened the liquidity of
financial markets worldwide. In three separate moves, the Fed lowered the
federal funds rate, a key overnight bank lending rate, by a total of 75
basis points.
Would you discuss relative performance and strategy for each of the
municipal portfolios?
National Intermediate
The Fund returned 5.46% for the year, a bit above the 5.34% return for the
average intermediate-term municipal debt fund tracked by Lipper. The
positive performance was largely due to the greater number of non-callable
issues in the portfolio. Investors paid a premium for non-callables during
this period, and since we have been accumulating bonds with this structure
for several years, we were rewarded nicely.
In 1999, one of the key factors in our ability to implement our strategy
will be the amount, size and quality of issues coming to market. Issuance
was robust in 1998, but municipals' historically wide spreads relative to
Treasuries still kept a number of issuers out of the market. We'll be
evaluating our holdings as they near maturity and assessing the investment
opportunities presented by new and secondary market issues. At this point,
we expect to keep the Fund's weighted average duration (a measure of the
portfolio's interest rate sensitivity) long, relative to our benchmark.
California Intermediate
The Fund returned 5.51% for the year, in line with the 5.53% return for the
Lipper average.
The performance was the result of the Fund's structure and duration
management. We took profits on some of our lower credit quality holdings,
after these rose in price, and reinvested the proceeds in high-grade issues.
We kept the duration near the long end of our target range. We also
benefited from positions in non-callable bonds. These commanded premium
prices throughout the third quarter.
After a period of muted demand, the California municipal market is thriving
again. Demand was high in 1998 and investors paid a premium for almost every
California issue. As long as the California economy remains strong, demand
for municipal issues should also remain strong.
<PAGE>
If issuance gets way out of line, the premium individuals are willing to pay
could disappear. At this point, we expect to manage the Fund with a longer
than average duration.
Maryland Intermediate
The Fund returned 4.88% for the year, trailing the 5.05% return on the
Lipper Other States Municipal Funds Average. The Fund earned very strong
returns in the third quarter, which almost fully compensated for the weaker
results from the first part of the year.
During the second half, we benefited from a slightly longer than average
core duration and exposure to non-callable bonds in the 12- to 14-year
maturity range. A longer duration indicates greater interest rate
sensitivity; thus, when bond yields moved lower in the third quarter, the
effect on the Fund's net asset value was more favorable.
Maryland municipalities should continue to be successful in bringing new
issues to market, as we expect high-quality issues will continue to be
popular with investors in 1999. At this point, we plan to manage the Fund
with a slightly longer duration, relative to its peer group. We'll also be
evaluating spreads across the spectrum of available issues in an attempt to
identify and profit from undervalued sectors.
Virginia Intermediate
The Fund's total return for the year was 4.88%, which was a bit below the
5.05% return for the average comparable fund tracked by Lipper. The Fund
lagged during the first half of the year and led during the second half.
Unfortunately, our strong performance in the second half could not
completely close the gap.
The Fund was rewarded in the second half for having a slightly longer
duration than that of our peers and for holding a significant number of
non-callable bonds, issues for which investors paid a premium. The longer a
bond's duration, the more its price rises in response to a decline in rates.
We also benefited from the sale of some underperforming housing issues. We
reinvested the proceeds in issues in other sectors.
We'll be monitoring supply and demand conditions carefully in 1999. In
recent years, Virginia debt issuance has been well under the volume cap.
That should not change; however, there are a number of infrastructure
projects in the works that will require significant funding.
PORTFOLIO
STATISTICS
weighted
average maturity
National
12.31.98 10 years
12.31.97 10 years
California
12.31.98 9 years
12.31.97 9 years
Maryland
12.31.98 9 years
12.31.97 9 years
Virginia
12.31.98 10 years
12.31.97 8 years
effective duration
National
12.31.98 6.58 years
12.31.97 6.17 years
California
12.31.98 6.11 years
12.31.97 6.78 years
Maryland
12.31.98 5.98 years
12.31.97 5.51 years
Virginia
12.31.98 6.25 years
12.31.97 5.04 years
What's your outlook?
No one can be sure the troubled Asian or Latin American economies are fully
out of the woods or that another global crisis won't emerge. For this
reason, the financial markets are likely to remain very volatile.
At this point, we think there is a likelihood the Fed will cut rates
<PAGE>
at some point in 1999. At the present time, commodity inflation remains in
check; however, wage inflation is starting to squeeze corporate profits.
This could lead to a slowing of the pace of growth of corporate earnings and
a shift away from the equity markets. We will continue to assess the
strength of the domestic economy and the impact of tumultuous events
occurring in other countries and markets. We'll act quickly to modify our
approach should our forecast change.
We appreciate your investment. Conflicting reports on the strength of the
economy and the meltdown of currencies overseas have created a very
challenging investment environment.
January 19, 1999
Please remember, this discussion reflects the views and opinions of Calvert
Asset Management Company at December 31, 1998, the end of the reporting
period. Our strategy and the Fund's portfolio composition may differ due to
ever-changing market and economic conditions. While historical performance
is no guarantee of future results, it may give you a better and more
thorough understanding of our investment
decisions and management philosophy.
PORTFOLIO
STATISTICS
monthly
dividend yield
National
12.31.98 4.85%
12.31.97 4.47%
California
12.31.98 3.94%
12.31.97 4.27%
Maryland
12.31.98 4.68%
12.31.97 4.13%
Virginia
12.31.98 3.56%
12.31.97 4.23%
30 day SEC yield
National
12.31.98 3.67%
12.31.97 4.00%
California
12.31.98 3.56%
12.31.97 3.87%
Maryland
12.31.98 3.46%
12.31.97 3.76%
Virginia
12.31.98 3.39%
12.31.97 3.70%
COMPARATIVE INVESTMENT PERFORMANCE
AVERAGE ANNUAL RETURN
National Lipper California
Municipal Intermediate Municipal
Intermediate Muni. Debt Intermediate
Fund Funds Avg. Fund
6 month 3.61% 3.23% 3.67%
1 year 5.46% 5.34% 5.51%
3 year 5.63% 5.45% 5.38%
5 year 5.68% 5.17% 4.93%
Lipper Lehman
CA Intermediate Muni. 10
Muni. Debt Year Bond
Funds Avg. Index TR
6 month 3.51% 3.46%
1 year 5.53% 6.11%
3 year 5.58% 6.61%
5 year 5.14% 6.22%
Maryland Lipper Other Virginia
Municipal States Interm. Municipal
Intermediate Muni. Debt Intermediate
Fund Funds Avg. Fund
6 month 3.50% 3.13% 3.72%
1 year 4.88% 5.08% 4.88%
3 year 5.50% 5.07% 5.13%
5 year 5.23% 4.72% 5.22%
Lipper Lehman
VA Intermediate Muni. 10
Muni. Debt Year Bond
Funds Avg. Index TR
6 month 3.21% 3.46%
1 year 5.05% 6.11%
3 year 5.04% 6.61%
5 year 4.61% 6.22%
Investment performance does not reflect the deduction of any front-end sales
charge.
TR represents total return. Source: Lipper Analytical Services, Inc.
credit quality
distribution
as of 12.31.98
National
AAA 45%
AA 23%
A 3%
BBB 11%
cash & equivalents 18%
California
AAA 54%
AA 7%
A 22%
BBB 5%
cash & equivalents 12%
Maryland
AAA 54%
AA 31%
BBB 9%
cash & equivalents 6%
Virginia
AAA 43%
AA 47%
A 5%
BBB 2%
cash & equivalents 3%
<PAGE>
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Total returns assume reinvestment of dividends and reflect the deduction of
Portfolio's maximum front-end sales charge of 2.75%. No sales charge has
been applied to the indices used for comparison. Past performance is no
guarantee of future returns. Source: Lipper Analytical Services, Inc.
National
Three-line graph here showing growth from 9.30.92 to 12.98
Calvert National Municipal Intermediate Fund $14,233
Lehman Municipal 10 Year Bond Index TR $15,641
Lipper Intermediate Municipal Debt Funds Average $14,271
California
Three-line graph here showing growth from 5.31.92 to 12.98
Calvert California Municipal Intermediate Fund $14,192
Lehman Municipal 10 Year Bond Index TR $16,375
Lipper CA Intermediate Municipal Debt Funds Average $14,730
Maryland
Three-line graph here showing growth from 9.30.93 to 12.98
Calvert Maryland Municipal Intermediate Fund $12,787
Lehman Municipal 10 Year Bond Index TR $13,801
Lipper Other States Intermediate Municipal Debt Funds Average $12,563
Virginia
Three-line graph here showing growth from 9.30.93 to 12.98
Calvert Virginia Municipal Intermediate Fund $12,818
Lehman Municipal 10 Year Bond Index TR $13,801
Lipper Virginia Intermediate Municipal Debt Funds Average $12,498
National
average annual
total return
as of 12.31.98
1 year 2.52%
5 year 5.10%
inception 5.80%
(9.30.92)
California
average annual
total return
as of 12.31.98
1 year 2.61%
5 year 4.34%
inception 5.45%
(5.29.92)
Maryland
average annual
total return
as of 12.31.98
1 year 1.94%
5 year 4.65%
inception 4.79%
(9.30.93)
Virginia
average annual
total return
as of 12.31.98
1 year 1.94%
5 year 4.65%
inception 4.84%
(9.30.93)
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Calvert Municipal Fund, Inc:
In our opinion, the accompanying statements of net assets and the related
statements of operations, statements of changes in net assets and financial
highlights present fairly, in all material respects, the financial position
of Calvert National, California, Maryland, and Virginia Municipal
Intermediate Funds (four portfolios comprising Calvert Municipal Fund, Inc.,
hereafter referred to as the "Funds"), at December 31, 1998, the results of
each of their operations, the changes in each of their net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 10, 1999
<PAGE>
NATIONAL PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1998
Principal
Municipal Obligations - 99.4% Amount Value
California - 7.3%
Orange County Local Transportation Authority Sales Tax
Revenue Bonds, 6.00%, 2/15/09 $2,000,000 $2,294,080
Regents of the University of California, Los Angeles Lease
Revenue Bonds, 6.00%, 5/15/02 538,977 570,108
Santa Clara Financing Authority Lease Revenue Bonds, 6.00%,
11/15/12, AMBAC Insured 2,000,000 2,322,940
Colorado - 1.7%
Denver City and County Airport Revenue Bonds, Series A,
7.10%, 11/15/01 1,100,000 1,186,262
Florida - 3.8%
Dade County Education Facilities Authority Revenue Bonds,
University of Miami, 6.00%,
4/1/08, MBIA Insured 1,000,000 1,131,800
Duval County MFH Revenue VRDN, 4.45%, 7/1/25,
LOC: Household Financial Corp. 150,000 150,000
Florida State MFH Revenue Bonds, Cypress Lake, 5.75%, 12/1/07,
LOC: Heller Financial 300,000 312,987
Sunrise Utility System Revenue Bonds, 5.50%, 10/1/12,
AMBAC Insured 1,000,000 1,105,100
Georgia - 1.8%
Georgia GO Bonds, 5.25%, 10/1/14 1,200,000 1,288,308
Illinois - 7.3%
Illinois Development Finance Authority Revenue Bonds,
Provena Health, 5.50%, 5/15/09,
MBIA Insured 2,000,000 2,173,880
Illinois Housing Development Authority VRDN, 5.20%, 2/1/24,
LOC: Sumitomo Bank 3,000,000 3,000,000
Indiana - 1.5%
Purdue University Revenue Bonds,
5.25%, 7/1/15 1,000,000 1,057,340
Kentucky - 2.7%
Glasgow Industrial Building Revenue VRDN, Aek Control Project,
5.425%, 6/1/20, LOC: Bank
Tokyo Mitsubishi 1,900,000 1,900,000
Louisiana - 0.5%
Louisiana Public Facility Authority Student Loan Revenue Bonds,
6.50%, 3/1/02 330,000 346,965
Maryland - 5.6%
Cambridge Economic Development Authority Revenue Bonds,
Dorchester Hospital, 7.25%, 4/1/04 840,000 905,511
Cecil County Health Department COPs,
7.875%, 7/1/14 1,176,000 1,288,625
<PAGE>
Principal
Municipal Obligations - (Cont'd) Amount Value
Maryland - (Cont'd)
Prince Georges County Economic Development Authority Revenue
Bonds, 5.68%, 8/1/11, LOC: First National Bank of Maryland,
(Tender 1/1/01 @100) $1,766,600 $1,810,800
Massachusetts - 1.5%
Massachusetts Special Obligation Revenue Bonds,
5.50%, 6/1/13 1,000,000 1,096,930
Michigan - 5.7%
Detroit Water Supply Revenue Bonds, 6.00%, 7/1/14,
MBIA Insured 1,000,000 1,142,570
Michigan Higher Education Facilities Authority Revenue Bonds:
6.00%, 11/1/03 1,545,000 1,660,025
7.00%, 11/1/05 610,000 705,123
Oakland County Economic Development Corp. Limited Obligation
Revenue Bonds, Cranbrook Educational Community,
6.375%, 11/1/14 (Pre-refunded 11/1/04) 500,000 564,060
New Jersey - 3.4%
New Jersey Transportation Authority Revenue Bonds,
6.50%, 6/15/11, MBIA Insured 2,000,000 2,400,460
New York - 13.7%
Long Island Power Authority Electric System Revenue Bonds,
5.50%, 12/1/13, FSA Insured 1,000,000 1,094,170
New York City Transitional Finance Authority Revenue Bonds,
5.25%, 5/1/14 2,815,000 2,943,842
New York State Environmental Pollution Control Revenue Bonds:
4.375%, 2/15/10 1,170,000 1,172,913
5.70%, 1/15/12 500,000 548,185
New York State Local Government Assistance Corp. Revenue Bonds,
6.00%, 4/1/14 1,000,000 1,148,350
Orange County Industrial Development Agency VRDN,
Barcana Inc. Project, 5.115%, 12/1/05 1,795,000 1,795,000
Oyster Bay GO Bonds, 5.00%, 2/15/10 500,000 531,070
Westchester County Industrial Development Agency Civic Facility
Revenue Bonds, Julia D. Andrus Memorial
Inc., 6.25%, 4/1/05 450,000 475,681
Ohio - 4.5%
Ohio State Water Development Authority Revenue Bonds,
5.25%, 6/1/08, FSA Insured 3,000,000 3,240,870
Pennsylvania - 0.3%
Allegheny County Higher Education Building Authority Revenue
Bonds, Series A, 6.00%, 2/15/08 230,000 252,459
South Dakota - 1.6%
Heartland Consumers Power District Revenue Bonds, 6.00%, 1/1/12,
FSA Insured 1,000,000 1,146,420
<PAGE>
Principal
Municipal Obligations - (Cont'd) Amount Value
Territories - 9.9%
Puerto Rico Highway and Transportation Revenue Bonds,
5.50%, 7/1/12 AMBAC Insured $1,000,000 $1,110,540
5.50%, 7/1/13 AMBAC Insured 2,000,000 2,212,440
Puerto Rico Electric Power Authority Revenue Bonds, 5.25%, 7/1/13,
MBIA Insured 2,000,000 2,103,040
Puerto Rico GO Bonds, 5.50%, 7/1/13 1,500,000 1,637,555
Texas - 8.8%
Brazos River Authority Pollution Control Revenue
Bonds, 4.15%, 6/1/30 (Mandatory Tender
6/18/99) 2,000,000 2,005,520
Harris County GO Bonds, 5.75%, 10/1/14 2,000,000 2,244,060
Harris County Industrial Development Corp. VRDN,
5.45%, 8/1/01, LOC: Sakura Bank 2,000,000 2,000,000
Virginia - 10.2%
Arlington County Community Housing Finance Revenue Bonds,
6.00%, 6/1/09 283,000 300,042
Hampton GO Bonds, 5.00%, 1/15/13 1,500,000 1,547,400
Richmond Metropolitan Authority Expressway Revenue Bonds,
5.25%, 7/15/12, FGIC Insured 1,000,000 1,075,930
Southeastern Public Service Authority Revenue Bonds,
5.00%, 7/1/15 2,000,000 2,055,600
Virginia College Building Authority Revenue Bonds, Twenty First
Century College Project, 5.00%, 8/1/09 1,000,000 1,054,790
West Point IDA Pollution Control Revenue Bonds, Chesapeake
Corp. Project, 6.375%, 5/1/03 1,200,000 1,207,140
Wisconsin - 6.6%
Wisconsin GO Bonds, 5.50%, 11/1/12 2,000,000 2,204,600
Wisconsin GO Bonds, 5.50%, 11/1/13 2,255,000 2,476,937
Other - 1.0%
Fort Mojave Indian Tribe of Arizona, California and Nevada Public
Facilities Combined Limited Obligation and Revenue Bonds
Adjustable Rate and Tender Series of 1993,
11.50%, 12/1/18 455,020 455,020
Morgan Keegan Trust Receipts VRDN, 4.15%, 4/6/99,
TOA: Credit Local D France 200,000 200,000
TOTAL INVESTMENTS (Cost $68,184,625) - 99.4% 70,653,448
Other assets and liabilities, net - 0.6% 411,055
Net Assets - 100% $71,064,503
Net Assets Consist of:
Paid-in capital applicable to 6,570,474 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000
Class A shares authorized $68,229,526
Undistributed net investment income 14,225
Accumulated net realized gain (losses) on investments 351,929
Net unrealized appreciation (depreciation) on investments 2,468,823
Net Assets $71,064,503
Net Asset Value Per Share $10.82
See notes to financial statements.
<PAGE>
CALIFORNIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
Principal
Municipal Obligations - 98.5% Amount Value
California - 91.1%
Anaheim Public Financing Authority Lease Revenue Bonds,
6.00%, 9/1/14, FSA Insured $1,000,000 $1,152,950
Buena Park VRDN, 4.8825%, 12/28/99, GA: Mass Mutual
Life Insurance 200,000 200,000
California Educational Facilities Revenue Bonds, University of
San Francisco, 5.90%, 10/1/02 595,000 642,998
California GO Bonds, 6.25%, 9/1/12 1,000,000 1,180,840
California State Department of Water Resources Revenue Bonds,
6.00%, 12/1/10 1,000,000 1,159,310
California State Public Works Lease Revenue Bonds,
5.625%, 3/1/16, AMBAC Insured 1,000,000 1,074,190
California Statewide Development Authority MFH Revenue Bonds,
8.50%, 11/1/00 785,000 799,954
Los Angeles MFH Revenue Bonds,
5.85%, 12/1/27 3,000,000 3,288,060
Los Angeles School District GO Bonds,
6.00%, 7/1/11, FGIC Insured 2,360,000 2,726,248
Los Angeles Wastewater System Revenue Bonds, Series A,
8.50%, 6/1/02, MBIA Insured 1,000,000 1,153,970
Marin County Housing Authority VRDN, 4.50%, 10/15/29,
LOC: Dai-Ichi Kangyo Bank 1,900,000 1,900,000
Metropolitan Water District GO Bonds,
5.25%, 3/1/13 1,000,000 1,059,940
Orange County Local Transportation Authority Sales Tax Revenue
Bonds, 6.00%, 2/15/09 1,000,000 1,147,040
Port of Oakland Revenue Bonds, Series D, 7.00%, 11/1/02,
MBIA Insured 1,000,000 1,118,760
Regents of UCLA COPs, 6.32%, 3/15/99 133,388 134,218
Riverside MFH VRDN, 5.75%,
6/1/09, LOC: Tokai Bank 1,015,000 1,015,000
Sacramento COPs:
6.75%, 3/1/02 470,102 478,827
6.50%, 1/1/04 1,067,027 1,105,461
Sacramento City Financing Authority Revenue Bonds, Series B,
5.00%, 11/1/14 1,000,000 1,030,010
San Diego County Water Authority COP,
5.75%, 5/1/11 1,000,000 1,138,330
San Francisco Redevelopment MFH VRDN, 5.00%, 12/1/05,
LOC: Industrial Bank of Japan 1,000,000 1,000,000
San Jose Redevelopment Agency Allocation Bonds, 6.00%, 8/1/09,
MBIA Insured 1,000,000 1,154,710
Santa Clara Financing Authority Lease Revenue Bonds, 6.00%,
11/15/12, AMBAC Insured 2,000,000 2,322,940
Southern California Public Power Authority Revenue Bonds, 6.75%,
7/1/13, FSA Insured 1,800,000 2,213,802
Southern California Rapid Transit District Special Assessment Bonds,
5.90%, 9/1/07, AMBAC Insured 1,000,000 1,131,450
Tahoe City Public Utility District COPs,
Series B, 6.25%, 6/1/03 885,000 957,039
Valley Health System COPs, 6.25%, 5/15/99 220,000 221,064
Walnut Valley Unified School District GO Bonds, 6.10%, 8/1/08,
AMBAC Insured 1,000,000 1,158,690
<PAGE>
Principal
Municipal Obligations - (Cont'd) Amount Value
Territories - 7.4%
Guam Government Limited Obligation Revenue Bonds, 5.50%,
11/1/08, AMBAC Insured $1,000,000 $1,109,140
Puerto Rico Commonwealth Highway and Transportation Revenue
Bonds, 5.50%, 7/1/13, AMBAC Insured 1,465,000 1,620,615
TOTAL INVESTMENTS (Cost $34,624,708) - 98.5% 36,395,556
Other assets and liabilities, net - 1.5% 567,844
Net Assets - 100% $36,963,400
Net Assets Consist of:
Paid-in capital applicable to 3,442,156 outstanding Class A shares of
common stock, $0.01 par value with 250,000,000
Class A shares authorized $35,774,783
Undistributed net investment income 19,408
Accumulated net realized gain (losses) on investments (601,639)
Net unrealized appreciation (depreciation) on investments 1,770,848
Net Assets $36,963,400
Net Asset Value Per Share $10.74
See notes to financial statements.
<PAGE>
MARYLAND PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
Principal
Municipal Obligations - 98.0% Amount Value
Maryland - 73.0%
Anne Arundel County GO Bonds,
5.125%, 4/15/0 $500,000 $525,215
Baltimore City GO Bonds:
8.90%, 10/15/99, MBIA Insured 385,000 402,428
6.00%, 10/15/04, AMBAC Insured 500,000 554,565
Cambridge Economic Development Revenue Bonds,
7.25%, 4/1/04 760,000 819,272
Carroll County GO Bonds, 6.25%, 11/1/08
(Prerefunded 11/1/01 @ 102) 400,000 435,744
Cecil County GO Bonds, 5.10%, 12/1/07,
FGIC Insured 500,000 528,965
Cecil County Health Department COPs,
7.875%, 7/1/14 430,000 471,181
Charles County GO Bonds, 5.00%, 3/1/09 615,000 649,630
Harford County GO Bonds, 5.50%, 12/1/07 500,000 552,295
Howard County GO Bonds, 5.25%, 8/15/05 400,000 429,276
Maryland GO Bonds:
4.75%, 3/1/08 700,000 734,818
5.00%, 8/1/11 500,000 524,990
Maryland Health & Higher Education Facilities Authority
Revenue Bonds, 6.00%, 7/1/10 300,000 346,629
Maryland Housing & Community Development Revenue Bonds,
5.05%, 4/1/08 500,000 517,370
Maryland State Economic Development Authority Revenue Bonds,
Series A, 8.625%, 10/1/19 500,000 588,710
Montgomery County GO Bonds, 7.00%, 5/1/03 230,000 259,332
Washington Suburban Sanitary District Revenue
Bonds, 5.00%, 6/1/09 500,000 535,020
Territories - 25.0%
Puerto Rico Aqueduct & Sewer Authority Revenue Bonds,
6.00%, 7/1/09, AMBAC Insured 500,000 580,165
Puerto Rico Commonwealth Highway and Transportation
Revenue Bonds: 5.50%, 7/1/12,
AMBAC Insured 700,000 777,380
6.25%, 7/1/13, MBIA Insured 1,000,000 1,185,500
Puerto Rico Electric Power Authority VRDN, 3.95%, 7/1/22,
BPA: Societe Generale 500,000 500,000
Total Investments (Cost $11,288,057) - 98.0% 11,918,485
Other assets and liabilities, net - 2.0% 246,494
Net Assets - 100% $12,164,979
<PAGE>
Net Assets Consist of: Value
Paid-in capital applicable to 2,335,912 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000
Class A shares authorized $11,669,359
Undistributed net investment income 14,154
Accumulated net realized gain (losses) on investments (148,962)
Net unrealized appreciation (depreciation) on investments 630,428
Net assets $12,164,979
Net Asset Value Per Share $5.21
See notes to financial statements.
<PAGE>
VIRGINIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
Principal
Municipal Obligations - 97.9 Amount Value
Virginia - 84.7%
Arlington County Community Housing Finance Revenue Bonds,
6.00%, 6/1/09 $507,000 $537,531
Arlington County GO Bonds, 6.00%, 6/1/11 1,000,000 1,159,680
Blue Ridge Regional Jail Facility Revenue Bonds, 5.25%, 12/1/08,
MBIA Insured 500,000 539,345
Chesapeake Bay Bridge and Tunnel Revenue Bonds,
5.50%, 7/1/06, FGIC Insured 450,000 490,023
Fairfax County IDA Revenue Bonds, Inova Health Systems Project:
5.50%, 8/15/08 500,000 545,780
4.60%, 8/15/09 460,000 466,412
Hampton City GO Bonds, 5.90%, 1/15/07 400,000 446,684
Hanover County IDA Revenue Bonds, 5.30%, 8/15/07,
MBIA Insured 500,000 539,020
Henrico County IDA Revenue VRDN, 4.35%, 10/1/00,
LOC: Tokai Bank 400,000 400,000
Loudon County GO Bonds, 5.25%, 12/1/13 500,000 532,605
Metropolitan Washington Airport Authority Revenue Bonds,
Series A, MBIA Insured, 5.60%, 10/1/06 300,000 325,398
Northern Virginia Transportation District Revenue Bonds, Series A,
5.125%, 5/15/10 500,000 526,765
Peninsula Ports Health System Health Revenue Bonds,
6.00%, 7/1/01 300,000 316,626
Riverside Regulatory Jail Authority Revenue Bonds, 5.70%, 7/1/08,
MBIA Insured 450,000 494,109
University of Virginia Revenue Bonds,
5.125%, 6/1/12 1,040,000 1,092,728
Virginia Beach GO Bonds, 5.40%, 7/15/08 340,000 371,762
Virginia State GO Bonds, 5.00%, 6/1/07 500,000 533,650
Virginia State Housing Authority Revenue Bonds, Series C,
6.75%, 7/1/11 120,000 127,576
Virginia State MFH Revenue Bonds,
5.85%, 5/1/08 500,000 542,435
Virginia State Public Building Authority Revenue Bonds, Series A,
6.00%, 8/1/03 400,000 425,868
Virginia State Public Building Authority Facilities Revenue Bonds,
5.00%, 8/1/10 600,000 632,028
Virginia State Public School Authority Revenue Bonds, Series A,
6.00%, 8/1/03 200,000 218,342
Washington County IDA Revenue Bonds,
5.625%, 7/1/02 320,000 331,859
West Point IDA Revenue Bonds, Chesapeake Corporation,
6.375%, 5/1/03 300,000 301,785
Winchester IDA Revenue Bonds, Shenandoah University,
6.05%, 10/1/05, Asset Guaranty Insured 300,000 332,733
<PAGE>
Principal
Municipal Obligations - (Cont'd) Amount Value
Other - 13.2%
Puerto Rico Aqueduct & Sewer Authority Revenue Bonds, 6.00%,
7/1/09, AMBAC Insured $500,000 $580,165
Puerto Rico Commonwealth Highway and Transportation Revenue Bonds:
5.50%, 7/1/12, AMBAC Insured 700,000 777,378
5.50%, 7/1/13 500,000 545,853
TOTAL INVESTMENTS (Cost $13,459,380) - 97.9%14,134,140
Other assets and liabilities, net - 2.1% 304,660
Net Assets - 100% $14,438,800
Net Assets Consist of:
Paid-in capital applicable to 2,747,881 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000
Class A shares authorized $13,809,863
Undistributed net investment income 15,678
Accumulated net realized gain (losses) on investments (61,501)
Net unrealized appreciation (depreciation) on investments 674,760
Net Assets $14,438,800
Net Asset Value Per Share $5.25
Abbreviations:
AMBAC: American Municipal Bond Assurance Corp.
COPs : Certificates of Participation
FGIC: Financial Guaranty Insurance Company
FSA: Financial Security Advisor
GO: General Obligation
IDA: Industrial Development Authority
MBIA: Municipal Bond Insurance Association
MFH: Multi-Family Housing
VRDN: Variable Rate Demand Notes
Explanation of Guarantees:
GA: Guaranty Agreement
INSUR: Insurance
LOC: Letter of Credit
TOA: Tender Option Agreement
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
National California
Net Investment Income Portfolio Portfolio
Investment Income
Interest income $3,380,696 $1,746,395
Expenses
Investment advisory fee 396,802 205,130
Transfer agency fees and expenses 49,223 23,467
Directors' fees and expenses 8,377 4,299
Administrative fees 66,134 34,188
Custodian fees 22,587 10,099
Registration fees 34,245 3,243
Reports to shareholders 23,629 10,098
Professional fees 34,185 15,858
Miscellaneous 4,899 2,357
Total expenses 640,081 308,739
Fees paid indirectly (16,276) (8,575)
Net expenses 623,805 300,164
Net Investment Income 2,756,891 1,446,231
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on securities 2,021,149 344,040
Net realized gain (loss) on futures (100,800) (100,800)
1,920,349 243,240
Change in unrealized appreciation
or depreciation (1,011,208) 128,889
Net Realized and Unrealized
Gain (Loss) on Investments 909,141 372,129
Increase (Decrease) in Net Assets
Resulting from Operations $3,666,032 $1,818,360
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
Maryland Virginia
Net Investment Income Portfolio Portfolio
Investment Income
Interest income $627,845 $697,657
Expenses
Investment advisory fee 74,404 84,448
Transfer agency fees and expenses 13,098 14,916
Directors' fees and expenses 1,578 1,796
Administrative fees 12,401 14,075
Custodian fees 6,604 8,554
Registration fees 2,308 980
Reports to shareholders 3,156 3,770
Professional fees 5,831 6,848
Miscellaneous 1,054 1,036
Total expenses 120,434 136,423
Fees paid indirectly (4,534) (5,450)
Net expenses 115,900 130,973
Net Investment Income 511,945 566,684
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on securities 180,123 190,493
Net realized gain (loss) on futures (38,269) (37,331)
141,854 153,162
Change in unrealized appreciation
or depreciation (64,237) (25,744)
Net Realized and Unrealized
Gain (Loss) on Investments 77,617 127,418
Increase (Decrease) in Net Assets
Resulting from Operations $589,562 $694,102
See notes to financial statements.
<PAGE>
NATIONAL PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $2,756,891 $2,235,636
Net realized gain (loss) 1,920,349 (13,620)
Change in unrealized appreciation
or depreciation (1,011,208) 1,075,751
Increase (Decrease) in Net Assets
Resulting from Operations 3,666,032 3,297,767
Distributions to shareholders from
Net investment income (2,804,195) (2,245,285)
Net realized gain (548,194) --
(3,352,389) (2,245,285)
Capital share transactions
Shares sold 14,703,281 13,264,382
Shares issued from mergers (Note A) 24,529,727 --
Reinvestment of distributions 2,734,125 1,846,162
Shares redeemed (20,149,637) (12,841,599)
Total capital share transactions 21,817,496 2,268,945
Total Increase (Decrease) in Net Assets 22,131,139 3,321,427
Net Assets
Beginning of year 48,933,364 45,611,937
End of year (including undistributed net
investment income of $14,225 and
$69,302, respectively) $71,064,503 $48,933,364
Capital Share Activity
Shares sold 1,358,355 1,251,649
Shares issued from mergers (Note A) 2,288,901 --
Reinvestment of distributions 253,141 174,583
Shares redeemed (1,865,402) (1,209,723)
Total capital share activity 2,034,995 216,509
See notes to financial statements.
<PAGE>
CALIFORNIA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $1,446,231 $1,579,273
Net realized gain (loss) 243,240 213,070
Change in unrealized appreciation
or depreciation 128,889 389,342
Increase (Decrease) in Net Assets
Resulting from Operations 1,818,360 2,181,685
Distributions to shareholders from
Net investment income (1,478,531) (1,559,789)
Capital share transactions
Shares sold 8,557,713 6,263,284
Reinvestment of distributions 1,082,093 1,120,614
Shares redeemed (8,101,211) (8,614,248)
Total capital share transactions 1,538,595 (1,230,350)
Total Increase (Decrease) in Net Assets 1,878,424 (608,454)
Net Assets
Beginning of year 35,084,976 35,693,430
End of year (including undistributed net
investment income of $19,408 and
$54,963, respectively) $36,963,400 $35,084,976
Capital Share Activity
Shares sold 798,741 598,006
Reinvestment of distributions 101,599 107,426
Shares redeemed (757,935) (824,559)
Total capital share activity 142,405 (119,127)
See notes to financial statements.
<PAGE>
MARYLAND PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $511,945 $529,691
Net realized gain (loss) 141,854 86,918
Change in unrealized appreciation
or depreciation (64,237) 262,099
Increase (Decrease) in Net Assets
Resulting from Operations 589,562 878,708
Distributions to shareholders from
Net investment income (520,348) (528,089)
Capital share transactions
Shares sold 2,659,203 2,004,752
Reinvestment of distributions 433,569 443,291
Shares redeemed (3,434,067) (2,384,609)
Total capital share transactions (341,295) 63,434
Total Increase (Decrease) in Net Assets (272,081) 414,053
Net Assets
Beginning of year 12,437,060 12,023,007
End of year (including undistributed net
investment income of $14,154 and
$26,285, respectively) $12,164,979 $12,437,060
Capital Share Activity
Shares sold 515,343 397,036
Reinvestment of distributions 83,842 87,700
Shares redeemed (663,691) (472,699)
Total capital share activity (64,506) 12,037
See notes to financial statements.
<PAGE>
VIRGINIA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income $566,684 $581,789
Net realized gain (loss) 153,162 (7,480)
Change in unrealized appreciation
or depreciation (25,744) 291,183
Increase (Decrease) in Net Assets
Resulting from Operations 694,102 865,492
Distributions to shareholders from
Net investment income (564,133) (578,854)
Capital share transactions
Shares sold 2,111,352 2,455,336
Reinvestment of distributions 530,051 533,068
Shares redeemed (1,874,183) (2,351,006)
Total capital share transactions 767,220 637,398
Total Increase (Decrease) in Net Assets 897,189 924,036
Net Assets
Beginning of year 13,541,611 12,617,575
End of year (including undistributed net
investment income of $15,678 and
$19,814, respectively) $14,438,800 $13,541,611
Capital Share Activity
Shares sold 405,658 480,867
Reinvestment of distributions 101,991 104,273
Shares redeemed (361,378) (458,545)
Total capital share activity 146,271 126,595
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A -- Significant Accounting Policies
General: The Calvert Municipal Fund is comprised of four Municipal
Intermediate Portfolios: National, California, Maryland, and Virginia. Each
of the Portfolios, collectively the "Fund," are registered under the
Investment Company Act of 1940 as open-end management investment companies.
The operations of each Portfolio are accounted for separately. Shares of
each Portfolio are sold with a maximum front-end sales charge of 2.75%.
On March 31, 1998, the net assets of First Variable Rate for Government
Income, Florida Intermediate Portfolio and Calvert Municipal Fund's Michigan
Portfolio and New York Intermediate Portfolios merged into Calvert Municipal
Fund National Intermediate Portfolio. The acquisition was accomplished by a
tax-free exchange of 1,625,516 shares of the National Portfolio (valued at
$17,458,044) for 1,308,624 shares of Florida Portfolio, 893,727 shares of
Michigan Portfolio, and 1,233,997 shares of New York Intermediate Portfolios
outstanding at March 31, 1998. The Florida Portfolio's net assets at that
date, including $15,706 of unrealized appreciation and $3,480 of realized
loss, were combined with those of the National Portfolio. The Michigan
Portfolio's net assets at that date, including $202,434 of unrealized
appreciation and $107,674 of realized loss were combined with those of the
National Portfolio. The New York Portfolio's net assets at that date,
including $97,040 of unrealized appreciation and $1,071 of realized loss
were combined with those of the National Portfolio. The aggregate net assets
of the National Portfolio, Florida Portfolio, Michigan Portfolio, and New
York Portfolio immediately before the acquisition were $49,805,260,
$6,582,381, $4,656,320 and $6,219,343, respectively.
On April 24, 1998, the net assets of the Calvert Municipal Fund's Arizona
and Pennsylvania Intermediate Portfolios merged into Calvert Municipal Fund
National Intermediate Portfolio. The acquisition was accomplished by a
tax-free exchange of 663,385 shares of the National Portfolio (valued at
$7,071,683) for 480,634 shares of Arizona Portfolio and 944,242 shares of
Pennsylvania Portfolio outstanding at April 24, 1998. The Arizona
Portfolio's net assets at that date, including $10,493 of unrealized
appreciation and $1,029 of realized loss, were combined with those of the
National Portfolio. The Pennsylvania Portfolio's net assets at that date,
including $21,951 of unrealized appreciation and $2,521 of realized loss
were combined with those of the National Portfolio. The aggregate net assets
of the National Portfolio, Arizona Portfolio and Pennsylvania Portfolio
immediately before the acquisition were $66,384,068, $2,359,913 and
$4,711,770, respectively.
Security Valuation: 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. Securities (including
options) listed or traded on a national securities exchange are valued at
the last reported sale 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/Trustees.
Options: The Fund may write or purchase options. The option premium is the
basis for recognition of unrealized or realized gain or loss on the option.
The cost of securities acquired or the proceeds from securities sold through
the exercise of the option is adjusted by the amount of the premium. Risks
from writing or purchasing option securities arise
<PAGE>
from possible illiquidity of the options market and the movement in the
value of the investment or in interest rates. The risk associated with
purchasing options is limited to the premium originally paid.
Futures Contracts: The Fund may enter into futures contracts agreeing to buy
or sell a financial instrument for a set price at a future date. The Fund
maintains securities with a value equal to its obligation under each
contract. Initial margin deposits of either cash or securities are made upon
entering into futures contracts; thereafter, variation margin payments are
made or received daily reflecting the change in market value. Unrealized or
realized gains and losses are recognized based on the change in market
value. Risks of futures contracts arise from the possible illiquidity of the
futures markets and the movement in the value of the investment or in
interest rates.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are paid
monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income
tax regulations.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those
estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's and transfer agent's fees may be paid
indirectly by credits earned on the Fund's cash on deposit with the bank.
Such a deposit arrangement is an alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to 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 Holding Corporation. The Advisor provides investment advisory
services and pays the salaries and fees of officers and affiliated
Directors/Trustees of the Fund. For its services, the Advisor receives a
monthly fee based on the following annual rates of average daily net assets
of each Portfolio: .60% on the first $500 million, .50% on the next $500
million and .40% on the excess of $1 billion. Under the terms of the
agreement, $43,819, $22,395, $8,062, and $9,167 were payable at year end for
National, California, Maryland and Virginia, respectively.
<PAGE>
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Fund for an annual fee, payable
monthly, of .10% of the average daily net assets of each Portfolio. Under
terms of the agreement, $6,091, $3,147, $1,063, and $1,095 were payable at
year end for National, California, Maryland and Virginia, respectively.
Calvert Distributors, Inc. ("CDI"), an affiliate of the Advisor, is the
distributor and principal underwriter for the Fund. Distribution Plans,
adopted by the Fund, allow the Fund to pay the distributor for expenses and
services associated with distribution of shares. The expenses paid may not
exceed an annual rate of average daily net assets of .25% for National and
California, and .15% for Maryland and Virginia Portfolios. The Distributor
currently does not charge any Distribution Plan expenses. For the year ended
December 31, 1998, CDI received sales charges in excess of the dealer
reallowance of $8,864, $7,762, $6,053, and ($30) for the National,
California, Maryland, and Virginia Portfolios, respectively.
Calvert Shareholder Services, Inc. ("CSSI"), an affiliate of the Advisor, is
the shareholder servicing agent for the Fund. For its services, CSSI
received fees of $7,867, $4,004, $2,400, and $1,594 for the year ended
December 31, 1998 for National, California, Maryland, and Virginia,
respectively. Under the terms of the agreement, $705, $321, $179, and $257
were payable at year end for National, California, Maryland, and Virginia,
respectively. National Financial Data Services, Inc. is the transfer and
dividend disbursing agent.
Each Director/Trustee who is not affiliated with the Advisor received an
annual fee of $20,500 plus up to $1,500 for each Board and Committee meeting
attended. Director's/Trustee's fees are allocated to each of the funds
served.
Note C -- Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were:
National California Maryland Virginia
Purchases: $31,657,269 $3,813,923 $2,743,427 $5,627,921
Sales: 23,680,315 6,924,119 3,686,006 4,738,643
The cost of investments owned at December 31, 1998 was substantially the
same for federal income tax and financial reporting purposes for each
Portfolio. The table below presents the components of net unrealized
appreciation (depreciation) as of December 31, 1998, and the net capital
loss carryforwards as of December 31, 1998 with expiration dates.
Unrealized Unrealized Capital Loss Expiration
Appreciation Depreciation Carryforwards Dates
National $2,482,040 $13,217 --
California 1,770,848 -- $163,067 12/31/02
438,572 12/31/03
Maryland 630,428 -- 148,962 12/31/02
Virginia 674,760 -- 51,397 12/31/02
10,106 12/31/03
Capital loss carryforwards may be utilized to offset current and future
capital gains until
expiration.
As a cash management practice, Portfolios 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.
<PAGE>
Note D -- Line of Credit
A financing agreement is in place with all Calvert Group Funds and State
Street Bank and Trust Company ("the Bank"). Under the agreement, the Bank is
providing an unsecured line of credit facility, in the aggregate amount of
$50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings
under this facility bear interest at the overnight Federal Funds Rate plus
.50% per annum. A commitment fee of .10% per annum will be incurred on the
unused portion of the committed facility which will be allocated to all
participating funds. This fee is paid quarterly in arrears. The Fund had no
loans outstanding pursuant to this line of credit at December 31, 1998.
Note E -- Subsequent Event
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Holding Corporation ("Acacia Mutual"). Effective January 1, 1999,
Acacia Mutual merged with Ameritas Mutual Insurance Holding Company to form
Ameritas Acacia Mutual Holding Company.
Tax Information (unaudited)
The Fund designates $548,194 as capital gain dividends paid for National
Portfolio during the fiscal year ended December 31, 1998.
<PAGE>
NATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $10.79 $10.56 $10.62
Income from investment operations
Net investment income .45 .50 .50
Net realized and unrealized
gain (loss) .13 .23 (.06)
Total from investment operations .58 .73 .44
Distributions from
Net investment income (.46) (.50) (.50)
Net realized gains (.09) -- --
Total distributions (.55) (.50) (.50)
Total increase (decrease) in
net asset value .03 .23 (.06)
Net asset value, ending $10.82 $10.79 $10.56
Total return * 5.46% 7.11% 4.32%
Ratios to average net assets:
Net investment income 4.17% 4.71% 4.83%
Total expenses + .97% .97% 1.04%
Net expenses .94% .94% 1.01%
Portfolio turnover 44% 29% 23%
Net assets, ending
(in thousands) $71,065 $48,933 $45,612
Number of shares outstanding,
ending (in thousands) 6,570 4,535 4,319
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $9.81 $10.42
Income from investment operations
Net investment income .51 .50
Net realized and unrealized gain (loss) .80 (.62)
Total from investment operations 1.31 (.12)
Distributions from
Net investment income (.50) (.49)
Net realized gains -- --
Total distributions (.50) (.49)
Total increase (decrease) in net asset value .81 (.61)
Net asset value, ending $10.62 $9.81
Total return * 13.64% (1.18%)
Ratios to average net assets:
Net investment income 4.97% 4.88%
Total expenses + .96% --
Net expenses .94% .69%
Expenses reimbursed -- .32%
Portfolio turnover 57% 122%
Net assets, ending (in thousands) $40,146 $36,159
Number of shares outstanding,
ending (in thousands) 3,780 3,686
<PAGE>
CALIFORNIA PORTFOLIO
FINANCIAL HIGHLIGHTS
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $10.63 $10.44 $10.51
Income from investment operations
Net investment income .45 .49 .48
Net realized and unrealized
gain (loss) .12 .18 (.07)
Total from investment operations .57 .67 .41
Distributions from
Net investment income (.46) (.48) (.48)
Total increase (decrease) in
net asset value .11 .19 (.07)
Net asset value, ending $10.74 $10.63 $10.44
Total return * 5.51% 6.61% 4.04%
Ratios to average net assets:
Net investment income 4.23% 4.64% 4.59%
Total expenses + .90% .91% .97%
Net expenses .88% .88% .94%
Portfolio turnover 12% 48% 25%
Net assets, ending
(in thousands) $36,963 $35,085 $35,693
Number of shares outstanding,
ending (in thousands) 3,442 3,300 3,419
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $9.81 $10.56
Income from investment operations
Net investment income .47 .48
Net realized and unrealized gain (loss) .69 (.76)
Total from investment operations 1.16 (.28)
Distributions from
Net investment income (.46) (.47)
Net realized gains -- --
Total distributions (.46) (.47)
Total increase (decrease) in net asset value .70 (.75)
Net asset value, ending $10.51 $9.81
Total return * 12.07% (2.57%)
Ratios to average net assets:
Net investment income 4.59% 4.67%
Total expenses + .91% --
Net expenses .89% .76%
Expenses reimbursed -- .13%
Portfolio turnover 47% 68%
Net assets, ending (in thousands) $34,424 $34,111
Number of shares outstanding,
ending (in thousands) 3,276 3,476
<PAGE>
MARYLAND PORTFOLIO
FINANCIAL HIGHLIGHTS
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $5.18 $5.03 $5.06
Income from investment operations
Net investment income .21 .23 .23
Net realized and unrealized
gain (loss) .04 .15 (.04)
Total from investment operations .25 .38 .19
Distributions from
Net investment income (.22) (.23) (.22)
Total increase (decrease) in
net asset value .03 .15 (.03)
Net asset value, ending $5.21 $5.18 $5.03
Total return * 4.88% 7.68% 3.96%
Ratios to average net assets:
Net investment income 4.13% 4.48% 4.59%
Total expenses + .97% .99% 1.00%
Net expenses .93% .92% .94%
Expenses reimbursed -- -- .04%
Portfolio turnover 24% 13% 8%
Net assets, ending
(in thousands) $12,165 $12,437 $12,023
Number of shares outstanding,
ending (in thousands) 2,336 2,400 2,338
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $4.67 $5.05
Income from investment operations
Net investment income .24 .24
Net realized and unrealized gain (loss) .39 (.39)
Total from investment operations .63 (.15)
Distributions from
Net investment income (.24) (.23)
Total increase (decrease) in net asset value .39 (.38)
Net asset value, ending $5.06 $4.67
Total return * 13.66% (2.94%)
Ratios to average net assets:
Net investment income 4.87% 5.01%
Total expenses + .51% --
Net expenses .48% .17%
Expenses reimbursed .43% .86%
Portfolio turnover 11% 77%
Net assets, ending (in thousands) $9,411 $7,429
Number of shares outstanding,
ending (in thousands) 1,860 1,589
<PAGE>
VIRGINIA PORTFOLIO
FINANCIAL HIGHLIGHTS
Periods Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $5.21 $5.10 $5.13
Income from investment operations
Net investment income .21 .22 .22
Net realized and unrealized
gain (loss) .04 .11 (.03)
Total from investment operations .25 .33 .19
Distributions from
Net investment income (.21) (.22) (.22)
Total increase (decrease) in
net asset value .04 .11 (.03)
Net asset value, ending $5.25 $5.21 $5.10
Total return* 4.88% 6.71% 3.82%
Ratios to average net assets:
Net investment income 4.03% 4.38% 4.35%
Total expenses + .97% .96% 1.00%
Net expenses .93% .88% .92%
Expenses reimbursed -- -- .03%
Portfolio turnover 36% 8% 4%
Net assets, ending
(in thousands) $14,439 $13,542 $12,618
Number of shares outstanding,
ending (in thousands) 2,748 2,602 2,475
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $4.74 $5.06
Income from investment operations
Net investment income .24 .23
Net realized and unrealized gain (loss) .39 (.32)
Total from investment operations .63 (.09)
Distributions from
Net investment income (.24) (.23)
Total increase (decrease) in net asset value .39 (.32)
Net asset value, ending $5.13 $4.74
Total return* 13.54% (2.04%)
Ratios to average net assets:
Net investment income 4.86% 4.87%
Total expenses + .54% --
Net expenses .51% .19%
Expenses reimbursed .38% .86%
Portfolio turnover 11% 65%%
Net assets, ending (in thousands) $7,295 $5,866
Number of shares outstanding,
ending (in thousands) 1,423 1,239
* Total return does not reflect deduction of front-end sales charge.
+ 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. Total expenses are presented net of expense
waivers and reimbursements.
<PAGE>
CALVERT GROUP AND THE YEAR 2000
PLANS AND PROGRESS
We are now less than a year away from the year 2000, a problematic date for
computer systems coded for two-character year format. Entered as "00," the
year 2000 would be processed as 1900, a mistake that could foul a variety of
date-sensitive transactions.
As your mutual fund sponsor, our goal is make sure there is no interruption
in the level of service you receive. In the summary below, we've outlined
the steps Calvert Group is taking to ensure our systems perform reliably.
Step One--Assess Systems and Software. Develop an Action Plan.
In 1997, we identified all systems, operating platforms and software
potentially affected by the millennium bug. These included:
Calvert Group systems--portfolio trading, sales contact and
reporting and internal management reporting
transfer agency systems--shareholder record-keeping and transaction
processing
subadvisor systems--investment accounting
other third-party data and service systems.
We also formed a Y2K task force, led by Calvert's vice president of
technology. This group has identified and prioritized our efforts to achieve
year 2000 compliance.
Step Two--Test for Compliance. Repair Systems as Necessary.
Internal systems have been tested. We've made repairs and moved modified
code into production. These systems are now fully compliant. Transfer agency
systems were re-engineered for compliance in 1989. Recent tests indicate
these are, in fact, compliant. The readiness of third-party systems,
including subadvisor systems, has been evaluated. Based on information
received from these groups, we have found no significant obstacles to
compliance.
Step Three--Confirm Compliance. Finalize Contingency Plan.
Testing of transfer agency systems will continue through 1999 to ensure
these remain compliant and continue to interact correctly with external
systems and processes. The transfer agency has established a back-up site,
should main systems fail, and compliance testing of these contingency
measures are also underway. We are developing contingency plans to ensure
that any unforeseen systems failures will not adversely affect our
operations or inconvenience our shareholders.
For more information or to get an update on remediation and testing efforts,
please visit us online at www.calv_Hlt445704416e_Hlt445704416rtgroup.com.
<PAGE>
Calvert
Municipal
Fund, Inc.
This report is intended to provide fund information to shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by a prospectus.
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Web Site
http://www.calvertgroup.com
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Calvert Group's
Family of Funds
Tax-Exempt Money Market Funds
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
Taxable Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio
Balanced Fund
CSIF Balanced Portfolio
Municipal Funds
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Equity Funds
CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
printed on
recycled paper
using soy-
based inks
