DECEMBER 31, 1999
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
STATEMENT OF OPERATIONS
15
STATEMENTS OF CHANGES IN NET ASSETS
17
NOTES TO
FINANCIAL STATEMENTS
21
FINANCIAL HIGHLIGHTS
25
DEAR SHAREHOLDERS:
1999 WAS A VERY CHALLENGING YEAR FOR THE U.S. BOND MARKETS. ALL SEGMENTS FROM
U.S. TREASURIES TO LONG MUNICIPALS SUFFERED IN A PERIOD OF RISING RATES. THE
YIELD CURVE HAS FLATTENED AS SHORT-TERM RATES ROSE FASTER EACH TIME THE
BENCHMARK FEDERAL FUNDS RATE ROSE.
WE HAVE BEEN WATCHFUL OF THE FED AND HAVE ANTICIPATED THE UPWARD TREND AS THEY
HIKED RATES IN JUNE, AUGUST AND NOVEMBER OF 1999. EACH TIME, THE CONSENSUS WAS
THAT THE INCREASES WERE ENOUGH, BUT AS WE NOW KNOW THE FED PROBABLY WILL
CONTINUE TO RAISE RATES INTO EARLY 2000.
THE TREND IN INTEREST RATES CONTINUES TO BE HIGHER AND WE EXPECT TO SEE SEVERAL
TIGHTENING STEPS BEING TAKEN BEFORE COMPLETING THE CURRENT CYCLE. ALTHOUGH THERE
ARE SOME SIGNS OF MODERATION IN VARIOUS SECTORS OF THE ECONOMY, WE BELIEVE THE
ECONOMY WILL NOT COOL DOWN UNTIL FURTHER RATE HIKES TAKE PLACE. SIGNS OF
POTENTIAL INFLATION ARE BEGINNING TO CREEP BACK INTO THE ECONOMIC STATISTICS AND
THESE WILL PLAY AN IMPORTANT ROLE IN THE DIRECTION OF INTEREST RATES.
OVERALL, THE ECONOMIC ENVIRONMENT IS HEALTHY ALTHOUGH MARKED WITH VOLATILITY.
INVESTOR DISCIPLINE AND THE NEED TO MAKE INFORMED DECISIONS IS AS IMPORTANT AS
EVER. AS ALWAYS, WE ENCOURAGE YOU TO MAKE DECISIONS BASED ON YOUR FINANCIAL
OBLIGATIONS AND TOLERANCE FOR RISK. YOUR FINANCIAL PROFESSIONAL CAN SUGGEST
STRATEGIES THAT CAN KEEP YOU ON TRACK TO MEET THESE OBJECTIVES.
WE APPRECIATE YOUR INVESTMENT IN CALVERT GROUP FUNDS AND LOOK FORWARD TO WORKING
WITH YOU TO ACHIEVE YOUR FINANCIAL GOALS.
SINCERELY,
BARBARA J. KRUMSIEK
PRESIDENT AND CEO
JANUARY 20, 2000
<PAGE>
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
HOW WOULD YOU CHARACTERIZE THE INVESTMENT CLIMATE OVER THE YEAR?
AS 1998 CAME TO A CLOSE, INTEREST RATES WERE LOW AND WE EXPECTED THEM TO GO
LOWER, BUT THE FED HAD OTHER PLANS AS THE ECONOMY WAS GROWING AT A TORRID PACE.
AFTER THE FED ADOPTED A TIGHTENING BIAS AND THE LONG TREASURY BOND TRADED AROUND
SIX PERCENT IN THE SECOND QUARTER, THE WHEELS WERE IN MOTION FOR TOUGH TIMES FOR
BOND FUNDS FOR THE REMAINDER OF THE YEAR. IN ONE OF THE WORST YEARS FOR FIXED
INCOME FUNDS IN DECADES, IT PAID TO BE SHORT DURATION.
NATIONAL INTERMEDIATE
WHAT WAS YOUR STRATEGY DURING THIS PERIOD?
THE FUND'S PERFORMANCE SUFFERED IN THE FIRST QUARTER AS OUR EXPECTATION FOR
SLOWER GROWTH NEVER MATERIALIZED, INTEREST RATES CONTINUED TO RISE, AND THE FUND
WAS POSITIONED LONGER THAN THE AVERAGE. THE FED CONTINUED TO RAISE RATES IN THE
FALL, BUT WE WERE FORTUNATE TO HAVE SHORTENED ALL OF OUR FUNDS IN THE LATE
SPRING, ALLOWING US TO BENEFIT FROM CONTINUED DECLINES IN INTEREST RATES.
HOW DID THE FUND PERFORM?
THE FUND RETURNED -2.01% FOR THE YEAR ENDED DECEMBER 31, 1999, TRAILING THE
- -1.65% FOR THE LIPPER AVERAGE OVER THE SAME PERIOD. THE FUND PERFORMED WELL IN
THE SECOND HALF OF 1999, MOVING INTO POSITIVE TERRITORY DUE LARGELY TO OUR
OVER-WEIGHTING IN HIGH-QUALITY SECTORS COUPLED WITH OUR AGGRESSIVE DURATION
SHORTENING. BUT THIS WAS NOT ENOUGH TO OFFSET THE WEAKER THAN AVERAGE
PERFORMANCE OF THE FIRST HALF OF THE YEAR.
WHAT IS YOUR OUTLOOK?
WE WILL BE CAUTIOUS AS WE MOVE IN 2000. LATE IN 1998 WE BELIEVED THAT 1999 WOULD
BRING FURTHER RATE REDUCTIONS, WHICH NEVER MATERIALIZED. THIS YEAR THERE ARE
REASONABLE ECONOMIC SIGNS THAT THE FED WILL RAISE RATES IN THE FIRST QUARTER OF
2000. THERE WERE GREAT REWARDS FROM BEING SHORT IN 1999. IN LIGHT OF
ANTICIPATED ACTION BY THE FED, WE WILL MAINTAIN A SHORTER THAN AVERAGE DEFENSIVE
POSITION IN THE FUND FOR THE NEAR TERM.
CALIFORNIA INTERMEDIATE
WHAT WAS YOUR STRATEGY DURING THIS PERIOD?
AT THE BEGINNING OF 1999, THE FUND WAS LONGER THAN MOST OF ITS PEERS AS WE WERE
ANTICIPATING FURTHER RATE REDUCTIONS FROM THE FED. THEY NEVER MATERIALIZED, AND
BY THE END OF THE FIRST QUARTER WE HAD UNDERPERFORMED BOTH OUR PEERS AND OUR
BENCHMARK. EARLY IN THE SECOND QUARTER WE
<PAGE>
SHORTENED THE FUND AND ADOPTED A MORE DEFENSIVE POSTURE. WE WERE REWARDED FOR
THIS STRATEGY BY THE END OF THE SECOND QUARTER (AND FOR THE REMAINDER OF THE
YEAR) AS THE FUND OUTPERFORMED ITS BENCHMARKS - TO WHICH THE FUND'S HIGHER
COUPON AND GOOD STRUCTURE ALSO CONTRIBUTED. STILL, THE FUND LAGGED SLIGHTLY FOR
ALL OF 1999.
HOW DID THE FUND PERFORM?
FOR THE 12 MONTHS ENDED DECEMBER 31, 1999, THE FUND RETURNED -1.73% VS. THE
- -1.32% REPORTED BY THE LIPPER CA INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE.
WHAT IS YOUR OUTLOOK?
WE EXPECT TO SEE CONTINUED RATE INCREASES BY THE FED IN 2000. WE WILL LOOK FOR
BUYING OPPORTUNITIES AS THEY PRESENT THEMSELVES, BUT WE WILL REMAIN VIGILANT IN
MAINTAINING OUR SHORT DEFENSIVE POSITION IN THE SHORT TERM.
MARYLAND INTERMEDIATE
WHAT WAS YOUR STRATEGY DURING THIS PERIOD?
THE FUND PERFORMED VERY WELL THROUGHOUT THE YEAR, BECAUSE GOING INTO 1999 THE
FUND WAS SLIGHTLY SHORTER THAN ITS PEERS. AS THE YEAR PROGRESSED WE CONTINUED
TO SHORTEN THE FUND SLIGHTLY IN AN ATTEMPT TO STAY AHEAD OF RISING INTEREST
RATES.
HOW DID THE FUND PERFORM?
THE FUND RETURNED -1.82% FOR THE YEAR, A BIT ABOVE THE -2.06% RETURN ON THE
LIPPER OTHER STATES MUNICIPAL FUNDS AVERAGE.
WHAT IS YOUR OUTLOOK?
THE LACK OF MONEY FLOW INTO THE FUND DURING THE YEAR LIMITED THE NEED TO MAKE
SIGNIFICANT CHANGES OTHER THAN SLIGHT ADJUSTMENTS TO DURATION. IF THIS CONTINUES
INTO 2000, WE WILL CONTINUE TO MONITOR OUR DURATION AND SEEK BUYING
OPPORTUNITIES CONSISTENT WITH THIS STRATEGY.
VIRGINIA INTERMEDIATE
WHAT WAS YOUR STRATEGY DURING THIS PERIOD?
ENTERING 1999 THE FUND WAS LONGER THAN ITS PEER GROUP, FOLLOWING A VERY GOOD
SECOND HALF OF 1998. ANTICIPATING FURTHER RATE CUTS, WE FELT WE WOULD BENEFIT
FROM OUR LONGER DURATION. AS THE ECONOMY CONTINUED TO GROW AT A RAPID RATE IT
BECAME CLEAR BY THE SECOND QUARTER THAT WE WERE LOOKING FOR RATE HIKES INSTEAD.
THIS CAUSED US TO UNDERPERFORM OUR PEERS AND BENCHMARK THE FIRST HALF OF THE
YEAR. WE SHORTENED OUR DURATION IN THE SECOND QUARTER, AND WERE ABLE TO SEE THE
RESULT OF THESE MOVES BY END OF YEAR, AS THE FUND FINISHED FIRST IN ITS CATEGORY
FOR THE SECOND HALF OF THE YEAR AND IN THE MIDDLE OF ITS CATEGORY FOR ALL OF
1999.
HOW DID THE FUND PERFORM?
THE FUND RETURNED -1.84% FOR THE YEAR, CLOSE TO THE -1.81% RETURN FOR THE
AVERAGE COMPARABLE FUND TRACKED BY LIPPER.
PORTFOLIO
STATISTICS
WEIGHTED
AVERAGE MATURITY
NATIONAL
12.31.99 7 YEARS
12.31.98 10 YEARS
CALIFORNIA
12.31.99 8 YEARS
12.31.98 9 YEARS
MARYLAND
12.31.99 9 YEARS
12.31.98 9 YEARS
VIRGINIA
12.31.99 8 YEARS
12.31.98 10 YEARS
EFFECTIVE DURATION
NATIONAL
12.31.99 4.89 YEARS
12.31.98 6.58 YEARS
CALIFORNIA
12.31.99 5.51 YEARS
12.31.98 6.11 YEARS
MARYLAND
12.31.99 5.78 YEARS
12.31.98 5.98 YEARS
VIRGINIA
12.31.99 5.19 YEARS
12.31.98 6.25 YEARS
<PAGE>
WHAT IS YOUR OUTLOOK?
WE SAW LIMITED MONEY FLOWS INTO THE FUND THROUGHOUT 1999. IF THIS CONTINUES IN
2000, IT WILL LIMIT OUR NEED TO MAKE SIGNIFICANT CHANGE FROM OUR CURRENT
STRATEGY. WE WILL CONTINUE TO LOOK FOR BUYING OPPORTUNITIES TO ENHANCE THE
PERFORMANCE OF THE FUND GOING FORWARD.
JANUARY 20, 2000
PLEASE REMEMBER, THIS DISCUSSION REFLECTS THE VIEWS AND OPINIONS OF CALVERT
ASSET MANAGEMENT COMPANY AT DECEMBER 31, 1999, 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
12.31.99 4.35%
12.31.98 4.85%
CALIFORNIA
12.31.99 4.05%
12.31.98 3.94%
MARYLAND
12.31.99 4.06%
12.31.98 4.68%
VIRGINIA
12.31.99 3.95%
12.31.98 3.56%
30 DAY SEC YIELD
NATIONAL
12.31.99 4.48%
12.31.98 3.67%
CALIFORNIA
12.31.99 4.24%
12.31.98 3.56%
MARYLAND
12.31.99 4.24%
12.31.98 3.46%
VIRGINIA
12.31.99 3.93%
12.31.98 3.39%
NATIONAL LIPPER CALIFORNIA LIPPER LEHMAN
MUNICIPAL INTERMEDIATE MUNICIPAL CA INTERMEDIATE MUNI. 10
INTERMEDIATE MUNI. DEBT INTERMEDIATE MUNI. DEBT YEAR BOND
FUND FUNDS AVG. FUND FUNDS AVG. INDEX TR
6 MONTH 0.09% (0.38%) (0.04%) (0.24%) 0.49%
1 YEAR (2.01%) (1.65%) (1.73%) (1.32%) (1.25%)
5 YEAR* 5.59% 5.55% 5.18% 5.85% 7.12%
10 YEAR* N/A N/A N/A N/A N/A
MARYLAND LIPPER OTHER VIRGINIA LIPPER LEHMAN
MUNICIPAL STATES INTERM. MUNICIPAL VA INTERMEDIATE MUNI. 10
INTERMEDIATE MUNI. DEBT INTERMEDIATE MUNI. DEBT YEAR BOND
FUND FUNDS AVG. FUND FUNDS AVG. INDEX TR
6 MONTH 0.07% (0.70%) 0.36% (0.46%) 0.49%
1 YEAR (1.82%) (2.06%) (1.84%) (1.81%) (1.25%)
5 YEAR* 5.55% 5.19% 5.35% 5.26% 7.12%
10 YEAR* N/A N/A N/A N/A N/A
INVESTMENT PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ANY FRONT-END
SALES CHARGE.
TR REPRESENTS TOTAL RETURN. SOURCE: LIPPER ANALYTICAL SERVICES, INC.
- - AVERAGE ANNUAL RETURN
CREDIT QUALITY
DISTRIBUTION
AS OF 12.31.99
NATIONAL CALIFORNIA MARYLAND VIRGINIA
[INSERT PIE CHARTS HERE]
NATIONAL
AAA - 46%
BBB - 6%
AA - 13%
A - 7%
cash & equivalents - 28%
CALIFORNIA
AAA - 57%
AA - 6%
A - 21%
BBB - 1%
cash & equivalents - 15%
MARYLAND
NR* - 4%
AAA - 51%
AA - 32%
BBB - 7%
cash & equivalents -6%
VIRGINIA
AAA - 37%
AA - 44%
A - 4%
cash & equivalents - 15%
* NOT RATED BY A RECOGNIZED RATING AGENCY; THE ADVISOR HAS DETERMINED THE
CREDIT QUALITY BASED ON ITS OWN RESEARCH.
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.
[INSERT LINE GRAPHS]
NATIONAL
AVERAGE ANNUAL
TOTAL RETURN
AS OF 12.31.99
1 YEAR (4.74%)
5 YEAR 4.99%
INCEPTION 4.75%
(9.30.92)
CALIFORNIA
AVERAGE ANNUAL
TOTAL RETURN
AS OF 12.31.99
1 YEAR (4.40%)
5 YEAR 4.59%
INCEPTION 4.53%
(5.29.92)
MARYLAND
AVERAGE ANNUAL
TOTAL RETURN
AS OF 12.31.99
1 YEAR (4.57%)
5 YEAR 4.97%
INCEPTION 3.77%
(9.30.93)
VIRGINIA
AVERAGE ANNUAL
TOTAL RETURN
AS OF 12.31.99
1 YEAR (4.56%)
5 YEAR 4.78%
INCEPTION 3.81%
(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 MUNICIPAL INTERMEDIATE PORTFOLIO, CALIFORNIA MUNICIPAL
INTERMEDIATE PORTFOLIO, MARYLAND MUNICIPAL INTERMEDIATE PORTFOLIO, AND VIRGINIA
MUNICIPAL INTERMEDIATE PORTFOLIO (FOUR PORTFOLIOS COMPRISING CALVERT MUNICIPAL
FUND, INC., HEREINAFTER REFERRED TO AS THE "FUNDS"), AT DECEMBER 31, 1999, 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
ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES. THESE FINANCIAL
STATEMENTS AND FINANCIAL HIGHLIGHTS (HEREINAFTER REFERRED TO AS "FINANCIAL
STATEMENTS") ARE THE RESPONSIBILITY OF THE FUNDS' 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 AUDITING
STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES, 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, 1999 BY CORRESPONDENCE WITH THE CUSTODIAN AND BROKERS, PROVIDE A
REASONABLE BASIS FOR THE OPINION EXPRESSED ABOVE.
PRICEWATERHOUSECOOPERS LLP
BALTIMORE, MARYLAND
FEBRUARY 11, 2000
<PAGE>
NATIONAL PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.5% AMOUNT VALUE
ALABAMA - 2.4%
COLBERT COUNTY INDUSTRIAL DEVELOPMENT REVENUE BONDS VRDN,
6.05%, 10/1/11 $1,400,000 $1,400,000
CALIFORNIA - 11.4%
ORANGE COUNTY LOCAL TRANSPORTATION AUTHORITY SALES TAX
REVENUE BONDS, 6.00%, 2/15/09 2,000,000 2,129,720
REGENTS OF THE UNIVERSITY OF CALIFORNIA, LOS ANGELES LEASE
REVENUE BONDS, 6.00%, 5/15/02 372,514 379,492
SANTA CLARA FINANCING AUTHORITY LEASE REVENUE BONDS,
6.00%, 11/15/12, AMBAC INSURED 2,000,000 2,133,140
STATEWIDE COMMUNITY DEVELOPMENT AUTHORITY MFH REVENUE BONDS
VRDN, 5.75%, 3/25/25, BPA: NEWMAN FINANCIAL SERVICES, INC.
2,000,000 1,997,600
FLORIDA - 8.9%
DADE COUNTY EDUCATION FACILITIES AUTHORITY REVENUE BONDS,
6.00%, 4/1/08, MBIA INSURED 1,000,000 1,059,560
DUVAL COUNTY MFH REVENUE BONDS VRDN, 5.85%, 7/1/25,
LOC: HOUSEHOLD FINANCIAL CORP. 2,800,000 2,800,000
STATE MFH REVENUE BONDS, CYPRESS LAKE, 5.75%, 12/1/07,
LOC: HELLER FINANCIAL 300,000 301,740
SUNRISE UTILITY SYSTEM REVENUE BONDS, 5.50%, 10/1/12,
AMBAC INSURED 1,000,000 1,018,280
GEORGIA - 12.4%
GEORGIA GO BONDS, 5.25%, 10/1/14 1,200,000 1,169,844
STATE MUNICIPAL GAS AUTHORITY REVENUE BONDS VRDN:
6.50%, 11/1/07, LOC: BANK OF AMERICA 3,020,000 3,019,789
6.50%, 11/1/07, LOC: MORGAN GUARANTY 1,510,000 1,509,894
6.50%, 11/1/07, LOC: WACHOVIA BANK & TRUST
1,510,000 1,509,894
HAWAII - 0.3%
HAWAII STATE DEPARTMENT OF BUDGET AND FINANCE REVENUE BONDS
VRDN, 5.50%, 12/1/21, LOC: UNION BANK CALIFORNIA
200,000 200,000
INDIANA - 2.1%
ELGIN IDA REVENUE VRDN, 5.67%, 9/1/16, LOC: LASALLE BANK
200,000 200,000
FRANKFORT ECONOMIC DEVELOPMENT REVENUE BONDS VRDN,
7.15%, 1/1/23, LOC: DAI-ICHI KANGYO BANK 1,000,000 1,000,000
KENTUCKY - 2.8%
GLASGOW INDUSTRIAL BUILDING REVENUE BONDS VRDN, 5.78%, 6/1/20,
LOC: BANK TOKYO MITSUBISHI 1,600,000 1,600,000
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS - CONT'D AMOUNT VALUE
LOUISIANA - 0.6%
PUBLIC FACILITY AUTHORITY STUDENT LOAN REVENUE BONDS, 6.50%, 3/1/02
$330,000 $339,042
MARYLAND - 6.3%
CAMBRIDGE ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS,
7.25%, 4/1/04 735,000 749,604
CECIL COUNTY HEALTH DEPARTMENT COP, 7.875%, 7/1/14
1,141,000 1,176,257
PRINCE GEORGES COUNTY ECONOMIC DEVELOPMENT AUTHORITY REVENUE
BONDS, 5.68%, 8/1/11, LOC: ALLFIRST, NA (TENDER 1/1/01 @100)
1,722,600 1,729,559
MASSACHUSETTS - 5.2%
SPECIAL OBLIGATION REVENUE BONDS, 5.50%, 6/1/13
1,000,000 1,004,660
STATE HEALTH AND EDUCATION FACILITIES AUTHORITY REVENUE BONDS
VRDN, 4.85%, 7/1/31, ASSET GUARANTY INSURED
2,000,000 2,000,000
MICHIGAN - 6.6%
DETROIT WATER SUPPLY REVENUE BONDS, 6.00%, 7/1/14, MBIA INSURED
1,000,000 1,042,390
HIGHER EDUCATION FACILITIES AUTHORITY REVENUE BONDS VRDN:
6.00%, 11/1/03 1,545,000 1,578,866
7.00%, 11/1/05 610,000 662,350
OAKLAND COUNTY ECONOMIC DEVELOPMENT CORP. LO REVENUE BONDS,
CRANBROOK EDUCATIONAL COMMUNITY, 6.38%, 11/1/14
500,000 533,795
NEW JERSEY - 3.8%
TRANSPORTATION AUTHORITY REVENUE BONDS, 6.50%, 6/15/11,
MBIA INSURED 2,000,000 2,211,300
NEW YORK - 15.6%
LONG ISLAND POWER AUTHORITY ELECTRIC SYSTEM REVENUE BONDS,
5.50%, 12/1/13, FSA INSURED 1,000,000 1,001,880
NEW YORK CITY TRANSITIONAL FINANCE AUTHORITY REVENUE BONDS,
5.25%, 5/1/14 2,815,000 2,673,321
ORANGE COUNTY IDA VRDN, 5.115%, 12/1/05, LOC: SUMMIT BANK
1,795,000.00 1,795,000
STATE DORMITORY AUTHORITY REVENUE BONDS, 5.25%, 7/1/13
1,705,000 1,633,424
STATE ENVIRONMENTAL POLLUTION CONTROL REVENUE BONDS,
5.70%, 1/15/12 500,000 510,250
STATE LOCAL GOVERNMENT ASSISTANCE CORP. REVENUE BONDS,
6.00%, 4/1/14 1,000,000 1,041,810
WESTCHESTER COUNTY IDA CIVIC FACILITY REVENUE BONDS, 6.25%, 4/1/05
395,000 397,212
PENNSYLVANIA - 0.4%
ALLEGHENY COUNTY HIGHER EDUCATION BUILDING AUTHORITY
REVENUE BONDS, 6.00%, 2/15/08 230,000 235,589
TENNESSEE - 2.5%
KNOXVILLE COUNTY HEALTH EDUCATIONAL AND HOUSING FACILITIES
REVENUE BONDS, 7.25%, 1/7/31, MBIA INSURED
1,250,000 1,427,013
TEXAS - 3.4%
HARRIS COUNTY IDA VRDN, 7.15%, 8/1/01, LOC: SAKURA BANK
2,000,000 2,000,000
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS - CONT'D AMOUNT VALUE
VIRGINIA - 3.6%
ARLINGTON COUNTY COMMUNITY HOUSING FINANCE REVENUE BONDS,
6.00%, 12/1/09 $263,000 $ 263,268
SOUTHEASTERN PUBLIC SERVICE AUTHORITY REVENUE BONDS, 5.00%, 7/1/15.
2,000,000 1,841,700
WASHINGTON - 1.7%
SNOHOMISH COUNTY WASHINGTON SCHOOL DISTRICT 2 GO BONDS,
5.00%, 12/1/07 1,000,000 992,350
OTHER - 8.5%
FORT MOJAVE INDIAN TRIBE OF ARIZONA, CALIFORNIA AND NEVADA PUBLIC
FACILITIES COMBINED LO AND REVENUE BONDS ADJUSTABLE RATE AND
TENDER SERIES OF 1993, 11.50%, 12/1/18 405,020 405,020
PUERTO RICO GO BONDS, 5.50%, 7/1/13 1,500,000 1,497,165
PUERTO RICO COMMONWEALTH HIGHWAY AND TRANSPORTATION
REVENUE BONDS, AMBAC INSURED
5.50%, 7/1/12 1,000,000 1,019,030
5.50%, 7/1/13 2,000,000 2,022,820
TOTAL INVESTMENTS (COST $58,015,772) - 98.5% 57,213,628
OTHER ASSETS AND LIABILITIES, NET - 1.5% 879,501
NET ASSETS - 100% $58,093,129
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 5,738,547 OUTSTANDING CLASS A SHARES OF
COMMON STOCK, $0.01 PAR VALUE WITH 250,000,000 CLASS A SHARES
AUTHORIZED $59,499,589
UNDISTRIBUTED NET INVESTMENT INCOME 2,924
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (607,240)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(802,144)
NET ASSETS $58,093,129
NET ASSET VALUE PER SHARE $10.12
<PAGE>
CALIFORNIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.1% AMOUNT VALUE
CALIFORNIA - 84.7%
ANAHEIM PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS,
6.00%, 9/1/14, FSA INSURED $1,000,000 $1,052,890
FRESNO MFH REVENUE VRDN, 7.35%, 5/1/15, LOC: TOKAI BANK LTD
900,000 900,000
LOS ANGELES MFH REVENUE BONDS VRDN, 5.85%, 12/1/27
3,000,000 3,068,430
LOS ANGELES SCHOOL DISTRICT GO BONDS VRDN, 6.00%, 7/1/11,
FGIC INSURED 2,360,000 2,528,221
MARIN COUNTY HOUSING AUTHORITY VRDN, 4.80%, 10/15/29,
LOC: MORGAN GUARANTY TRUST 500,000 500,000
OCEANSIDE MFH REVENUE VRDN, 5.55%, 8/1/17,
SURBD: CONTINENTAL CASUALTY CO. 500,000 500,000
ORANGE COUNTY LOCAL TRANSPORTATION AUTHORITY SALES TAX
REVENUE BONDS, 6.00%, 2/15/09 1,000,000 1,064,860
PALMDALE SCHOOL DISTRICT VRDN, 5.00%, 12/13/10
1,000,000 1,000,000
PORT OF OAKLAND REVENUE BONDS, SERIES D, 7.00%, 11/1/02,
MBIA INSURED 1,000,000 1,064,630
SACRAMENTO COP:
6.75%, 3/1/02 346,738 351,648
6.50%, 1/1/04 899,863 921,063
SACRAMENTO CITY FINANCING AUTHORITY REVENUE BONDS, SERIES B,
5.00%, 11/1/14 1,000,000 929,520
SAN JOSE REDEVELOPMENT AGENCY ALLOCATION BONDS, 6.00%, 8/1/09,
MBIA INSURED 1,000,000 1,068,600
SANTA CLARA FINANCING AUTHORITY LEASE REVENUE BONDS,
6.00%, 11/15/12, AMBAC INSURED 2,000,000 2,133,140
SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY REVENUE BONDS,
6.75%, 7/1/13, FSA INSURED 1,800,000 2,030,814
SOUTHERN CALIFORNIA RAPID TRANSIT DISTRICT SPECIAL ASSESSMENT BONDS,
5.90%, 9/1/07, AMBAC INSURED 1,000,000 1,064,180
STATE DEPARTMENT OF WATER RESOURCES REVENUE BONDS,
6.00%, 12/1/10 1,000,000 1,078,060
STATE PUBLIC WORKS LEASE REVENUE BONDS, 5.625%, 3/1/16,
AMBAC INSURED 1,000,000 987,900
STATEWIDE DEVELOPMENT AUTHORITY MFH REVENUE BONDS
VRDN, 8.50%, 11/1/00 409,000 410,023
STATEWIDE COMMMUNITY DEVELOPMENT AUTHORITY
MFH REVENUE VRDN, 5.75%, 3/25/25, 2,000,000 1,997,600
WALNUT VALLEY UNIFIED SCHOOL DISTRICT GO BONDS, 6.10%, 8/1/08,
AMBAC INSURED 1,000,000 1,083,940
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS - CONT'D AMOUNT VALUE
OTHER - 13.4%
GUAM GOVERNMENT LO REVENUE BONDS,
5.50%, 11/1/08, AMBAC INSURED $1,000,000 $1,030,450
PITNEY BOWES CORPORATION LEASE TOPS TRUST CERTIFICATES VRDN,
5.91%, 10/10/01, BPA: PITNEY BOWES CREDIT, AMBAC INSURED
1,573,441 1,573,441
PUERTO RICO COMMONWEALTH HIGHWAY AND TRANSPORTATION
REVENUE BONDS, 5.50%, 7/1/13, AMBAC INSURED
1,465,000 1,481,716
TOTAL INVESTMENTS (COST $29,959,468) - 98.1% 29,821,126
OTHER ASSETS AND LIABILITIES, NET - 1.9% 563,898
NET ASSETS - 100% $30,385,024
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 2,998,527 OUTSTANDING CLASS A SHARES OF
COMMON STOCK, $0.01 PAR VALUE WITH 250,000,000 CLASS A
SHARES AUTHORIZED 31,127,946
UNDISTRIBUTED NET INVESTMENT INCOME 16,597
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (621,177)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(138,342)
NET ASSETS $30,385,024
NET ASSET VALUE PER SHARE $10.13
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MARYLAND PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
PRINCIPAL
MUNICIPAL OBLIGATIONS - 97.6% AMOUNT VALUE
MARYLAND - 75.8%
ANNE ARUNDEL COUNTY GO BONDS, 5.125%, 4/15/09 $500,000 $500,260
BALTIMORE CITY GO BONDS, 6.00%, 10/15/04, AMBAC INSURED
500,000 526,665
BALTIMORE MARYLAND INDUSTRIAL DEVELOPMENT AUTHORITY REVENUE BONDS
VRDN, 5.65%, 8/1/16, LOC: BAYERISCHE LANDESBANK
500,000 500,000
CAMBRIDGE ECONOMIC DEVELOPMENT REVENUE BONDS, 7.25%, 4/1/04
665,000 678,214
CARROLL COUNTY GO BONDS, 6.25%, 11/1/08
(PREREFUNDED 11/1/01 @ 102) 400,000 419,600
CECIL COUNTY GO BONDS, 5.10%, 12/1/07, FGIC INSURED
500,000 503,325
CECIL COUNTY HEALTH DEPARTMENT COP, 7.875%, 7/1/14
417,000 429,885
CHARLES COUNTY GO BONDS, 5.00%, 3/1/09 615,000 610,855
HARFORD COUNTY GO BONDS, 5.50%, 12/1/07 500,000 518,205
HOWARD COUNTY GO BONDS, 5.25%, 8/15/05 400,000 408,952
MARYLAND GO BONDS:
4.75%, 3/1/08 700,000 684,075
5.00%, 8/1/11 500,000 488,385
MARYLAND HEALTH & HIGHER EDUCATION FACILITIES AUTHORITY
REVENUE BONDS, 6.00%, 7/1/10 300,000 320,106
MARYLAND HOUSING & COMMUNITY DEVELOPMENT REVENUE BONDS,
5.05%, 4/1/08 500,000 491,690
MARYLAND STATE ECONOMIC DEVELOPMENT AUTHORITY REVENUE BONDS,
SERIES A, 8.625%, 10/1/19 500,000 549,220
WASHINGTON SUBURBAN SANITARY DISTRICT REVENUE BONDS, 5.00%, 6/1/09
500,000 496,865
TERRITORIES - 21.8%
PUERTO RICO AQUEDUCT & SEWER AUTHORITY REVENUE BONDS, 6.00%, 7/1/09,
AMBAC INSURED 500,000 536,080
PUERTO RICO COMMONWEALTH HIGHWAY AND TRANSPORTATION REVENUE BONDS:
5.50%, 7/1/12, AMBAC INSURED 700,000 713,321
6.25%, 7/1/13, MBIA INSURED 1,000,000 1,082,740
TOTAL INVESTMENTS (COST $10,515,729) - 97.6% 10,458,443
OTHER ASSETS AND LIABILITIES, NET - 2.4% 252,265
NET ASSETS - 100% $10,710,708
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 2,181,652 OUTSTANDING CLASS A SHARES OF
COMMON STOCK, $0.01 PAR VALUE WITH 250,000,000 CLASS A
SHARES AUTHORIZED $10,887,903
UNDISTRIBUTED NET INVESTMENT INCOME 15,531
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (135,440)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS (57,286)
NET ASSETS $10,710,708
NET ASSET VALUE PER SHARE $4.91
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
VIRGINIA PORTFOLIO
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.3% AMOUNT VALUE
VIRGINIA - 86.1%
ARLINGTON COUNTY COMMUNITY HOUSING FINANCE REVENUE BONDS,
6.00%, 6/1/09 $472,000 $472,481
ARLINGTON COUNTY GO BONDS, 6.00%, 6/1/11 1,000,000 1,068,180
CHESAPEAKE BAY BRIDGE AND TUNNEL REVENUE BONDS, 5.50%, 7/1/06,
FGIC INSURED 450,000 463,360
FAIRFAX COUNTY REVENUE BONDS, 5.00%, 6/1/06 750,000 755,370
FAIRFAX COUNTY IDA REVENUE BONDS, INOVA HEALTH SYSTEMS PROJECT,
5.50%, 8/15/08 500,000 503,995
FAIRFAX COUNTY ECONOMIC DEVELOPMENT AUTHORITY REVENUE VRDN,
3.95%, 2/1/11, BPA: NATIONAL WESTMINSTER BANK
600,000 599,713
HAMPTON CITY GO BONDS, 5.90%, 1/15/07 400,000 424,316
HANOVER COUNTY IDA REVENUE BONDS, 5.30%, 8/15/07, MBIA INSURED
500,000 506,470
HENRICO COUNTY IDA REVENUE VRDN, 7.30%, 10/1/08,
LOC: TOKAI BANK LTD 800,000 800,000
LOUDON COUNTY GO BONDS, 5.25%, 12/1/13 500,000 490,310
METROPOLITAN WASHINGTON AIRPORT AUTHORITY REVENUE BONDS,
5.60%, 10/1/06, MBIA INSURED 300,000 308,190
NORTHERN VIRGINIA TRANSPORTATION DISTRICT REVENUE BONDS, SERIES A,
5.125%, 5/15/10 500,000 493,720
PENINSULA PORTS HEALTH SYSTEM HEALTH REVENUE BONDS, 6.00%, 7/1/01
300,000 305,238
RIVERSIDE REGULATORY JAIL AUTHORITY REVENUE BONDS, 5.70%, 7/1/08,
MBIA INSURED 450,000 464,953
STATE GO BONDS, 5.00%, 6/1/07 500,000 502,810
STATE MFH REVENUE BONDS, 5.85%, 5/1/08 500,000 514,460
STATE PUBLIC BUILDING AUTHORITY REVENUE BONDS, SERIES A,
6.00%, 8/1/03 400,000 411,976
STATE PUBLIC BUILDING AUTHORITY FACILITIES REVENUE BONDS,
5.00%, 8/1/10 600,000 585,252
STATE PUBLIC SCHOOL AUTHORITY REVENUE BONDS, SERIES A:
6.00%, 8/1/03 200,000 208,662
5.75%, 8/1/08 500,000 523,330
UNIVERSITY OF VIRGINIA REVENUE BONDS, 5.125%, 6/1/12
1,040,000 1,009,008
VIRGINIA BEACH GO BONDS, 5.40%, 7/15/08 340,000 347,667
WASHINGTON COUNTY IDA REVENUE BONDS, 5.625%, 7/1/02
245,000 247,705
WINCHESTER IDA REVENUE BONDS, SHENANDOAH UNIVERSITY:
6.05%, 10/1/05, PREREFUNDED ASSET GUARENTY INSURED
265,000 282,429
6.05%, 10/1/05, UNREFUNDED ASSET GUARENTY INSURED
35,000 36,700
PRINCIPAL
MUNICIPAL OBLIGATIONS - CONT'D AMOUNT VALUE
TERRITORIES - 12.2%
PUERTO RICO AQUEDUCT & SEWER AUTHORITY REVENUE BONDS,
6.00%, 7/1/09, AMBAC INSURED $500,000 $536,080
PUERTO RICO COMMONWEALTH HIGHWAY AND TRANSPORTATION
REVENUE BONDS:
5.50%, 7/1/12, AMBAC INSURED 700,000 713,321
5.50%, 7/1/13 500,000 499,055
TOTAL INVESTMENTS (COST $14,233,689) - 98.3% 14,074,751
OTHER ASSETS AND LIABILITIES, NET - 1.7% 241,905
NET ASSETS - 100% $14,316,656
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 2,888,008 OUTSTANDING CLASS A SHARES OF
COMMON STOCK, $0.01 PAR VALUE WITH 250,000,000 CLASS A
SHARES AUTHORIZED $14,546,538
UNDISTRIBUTED NET INVESTMENT INCOME 17,355
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (88,299)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS
(158,938)
NET ASSETS $14,316,656
NET ASSET VALUE PER SHARE $4.96
ABBREVIATIONS:
COPS: CERTIFICATES OF PARTICIPATION LO: LIMITED OBLIGATION
FGIC: FINANCIAL GUARANTY INSURANCE COMPANY MBIA: MUNICIPAL BOND
INSURANCE ASSOCIATION
FSA: FINANCIAL SECURITY ADVISOR MFH: MULTI-FAMILY HOUSING
GO: GENERAL OBLIGATION VRDN: VARIABLE RATE DEMAND NOTES
IDA: INDUSTRIAL DEVELOPMENT AUTHORITY
EXPLANATION OF GUARANTEES:
BPA: BOND-PURCHASE AGREEMENT SURBD: SURETY BOND
LOC: LETTER OF CREDIT
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
NATIONAL CALIFORNIA
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
INTEREST INCOME $3,240,850 $1,663,844
EXPENSES:
INVESTMENT ADVISORY FEE 387,442 201,388
TRANSFER AGENCY FEES AND EXPENSES 43,683 23,673
ACCOUNTING FEES 18,107 12,535
DIRECTORS' FEES AND EXPENSES 5,703 3,016
ADMINISTRATIVE FEES 62,430 27,667
CUSTODIAN FEES 14,865 10,254
REGISTRATION FEES 21,274 4,468
REPORTS TO SHAREHOLDERS 11,874 4,259
PROFESSIONAL FEES 29,555 15,374
MISCELLANEOUS 6,548 3,190
TOTAL EXPENSES 601,481 305,824
FEES PAID INDIRECTLY (19,595) (7,363)
NET EXPENSES 581,886 298,461
NET INVESTMENT INCOME 2,658,964 1,365,383
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) ON INVESTMENTS (630,843) (20,638)
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(3,270,967) (1,909,190)
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (3,901,810) (1,929,828)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($1,242,846) ($564,445)
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
MARYLAND VIRGINIA
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
INTEREST INCOME $582,093 $719,413
EXPENSES:
INVESTMENT ADVISORY FEE 69,121 88,853
TRANSFER AGENCY FEES AND EXPENSES 14,924 25,654
ACCOUNTING FEES 8,441 9,112
DIRECTORS' FEES AND EXPENSES 1,010 1,332
ADMINISTRATIVE FEES 6,807 9,329
CUSTODIAN FEES 5,513 7,185
REGISTRATION FEES 3,384 1,755
REPORTS TO SHAREHOLDERS 2,612 2,588
PROFESSIONAL FEES 5,264 6,792
MISCELLANEOUS 1,423 1,611
TOTAL EXPENSES 118,499 154,211
FEES PAID INDIRECTLY (6,145) (5,656)
NET EXPENSES 112,354 148,555
NET INVESTMENT INCOME 469,739 570,858
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) ON INVESTMENTS 13,522 (27,737)
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(687,714) (833,698)
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (674,192) (861,435)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($204,453) ($290,577)
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 1999 1998
OPERATIONS:
NET INVESTMENT INCOME $2,658,964 $2,756,891
NET REALIZED GAIN (LOSS) (630,843) 1,920,349
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(3,270,967) (1,011,208)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,242,846) 3,666,032
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (2,648,777) (2,804,195)
NET REALIZED GAIN (351,929) (548,194)
TOTAL DISTRIBUTIONS (3,000,706) (3,352,389)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 9,026,640 14,703,281
SHARES ISSUED FROM MERGERS (NOTE A) - 24,529,727
REINVESTMENT OF DISTRIBUTIONS 2,501,605 2,734,125
SHARES REDEEMED (20,256,067) (20,149,637)
L CAPITAL SHARE TRANSACTIONS (8,727,822) 21,817,496
TOTAL INCREASE (DECREASE) IN NET ASSETS
(12,971,374) 22,131,139
NET ASSETS
BEGINNING OF YEAR 71,064,503 48,933,364
END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $2,924 AND $14,225, RESPECTIVELY)
$58,093,129 $71,064,503
CAPITAL SHARE ACTIVITY
SHARES SOLD 848,808 1,358,355
SHARES ISSUED FROM MERGERS (NOTE A) - 2,288,901
REINVESTMENT OF DISTRIBUTIONS 239,358 253,141
SHARES REDEEMED (1,920,093) (1,865,402)
TOTAL CAPITAL SHARE ACTIVITY (831,927) 2,034,995
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 1999 1998
OPERATIONS:
NET INVESTMENT INCOME $1,365,383 $1,446,231
NET REALIZED GAIN (LOSS) (20,638) 243,240
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(1,909,190) 128,889
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (564,445) 1,818,360
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (1,367,094) (1,478,531)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 2,703,938 8,557,713
REINVESTMENT OF DISTRIBUTIONS 999,938 1,082,093
SHARES REDEEMED (8,350,713) (8,101,211)
TOTAL CAPITAL SHARE TRANSACTIONS (4,646,837) 1,538,595
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,578,376) 1,878,424
NET ASSETS
BEGINNING OF YEAR 36,963,400 35,084,976
END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $16,597 AND $19,408, RESPECTIVELY)
$30,385,024 $36,963,400
CAPITAL SHARE ACTIVITY
SHARES SOLD 258,976 798,741
REINVESTMENT OF DISTRIBUTIONS 95,967 101,599
SHARES REDEEMED (798,572) (757,935)
TOTAL CAPITAL SHARE ACTIVITY (443,629) 142,405
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 1999 1998
OPERATIONS:
NET INVESTMENT INCOME $469,739 $511,945
NET REALIZED GAIN 13,522 141,854
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(687,714) (64,237)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (204,453) 589,562
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (468,362) (520,348)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 992,252 2,659,203
REINVESTMENT OF DISTRIBUTIONS 402,593 433,569
SHARES REDEEMED (2,176,301) (3,434,067)
TOTAL CAPITAL SHARE TRANSACTIONS (781,456) (341,295)
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,454,271) (272,081)
NET ASSETS
BEGINNING OF YEAR 12,164,979 12,437,060
END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $15,531 AND $14,154, RESPECTIVELY)
$10,710,708 $12,164,979
CAPITAL SHARE ACTIVITY
SHARES SOLD 195,388 515,343
REINVESTMENT OF DISTRIBUTIONS 79,828 83,842
SHARES REDEEMED (429,476) (663,691)
TOTAL CAPITAL SHARE ACTIVITY (154,260) (64,506)
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 1999 1998
OPERATIONS:
NET INVESTMENT INCOME $570,858 $566,684
NET REALIZED GAIN (LOSS) (27,737) 153,162
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(833,698) (25,744)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (290,577) 694,102
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (568,597) (564,133)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 3,454,236 2,111,352
REINVESTMENT OF DISTRIBUTIONS 515,649 530,051
SHARES REDEEMED (3,232,855) (1,874,183)
TOTAL CAPITAL SHARE TRANSACTIONS 737,030 767,220
TOTAL INCREASE (DECREASE) IN NET ASSETS (122,144) 897,189
NET ASSETS
BEGINNING OF YEAR 14,438,800 13,541,611
END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $17,355 AND $15,678, RESPECTIVELY)
$14,316,656 $14,438,800
CAPITAL SHARE ACTIVITY
SHARES SOLD 673,904 405,658
REINVESTMENT OF DISTRIBUTIONS 101,412 101,991
SHARES REDEEMED (635,189) (361,378)
TOTAL CAPITAL SHARE ACTIVITY 140,127 146,271
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: THE CALVERT MUNICIPAL FUND, INC. 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 NET
UNREALIZED APPRECIATION AND $3,480 OF NET REALIZED LOSS, WERE COMBINED WITH
THOSE OF THE NATIONAL PORTFOLIO. THE MICHIGAN PORTFOLIO'S NET ASSETS AT THAT
DATE, INCLUDING $202,434 OF NET UNREALIZED APPRECIATION AND $107,674 OF NET
REALIZED LOSS WERE COMBINED WITH THOSE OF THE NATIONAL PORTFOLIO. THE NEW YORK
PORTFOLIO'S NET ASSETS AT THAT DATE, INCLUDING $97,040 OF NET UNREALIZED
APPRECIATION AND $1,071 OF NET 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 NET UNREALIZED APPRECIATION AND $1,029 OF NET REALIZED
LOSS, WERE COMBINED WITH THOSE OF THE NATIONAL PORTFOLIO. THE PENNSYLVANIA
PORTFOLIO'S NET ASSETS AT THAT DATE, INCLUDING $21,951 OF NET UNREALIZED
APPRECIATION AND $2,521 OF NET 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.
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
TAXABLE EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS 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, $37,676, $21,184, $8,169, AND $12,474
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,
$5,048, $1,986, $325, AND $716 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 EACH PORTFOLIO. THE
DISTRIBUTOR CURRENTLY DOES NOT CHARGE ANY DISTRIBUTION PLAN EXPENSES. FOR THE
YEAR ENDED DECEMBER 31, 1999, CDI RECEIVED SALES CHARGES IN EXCESS OF THE DEALER
REALLOWANCE OF $8,092, $9,825, $3,637, AND $3,192 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 $7,496, $4,303, $2,467, AND $1,674 FOR THE YEAR ENDED DECEMBER 31, 1999 FOR
NATIONAL, CALIFORNIA, MARYLAND, AND VIRGINIA, RESPECTIVELY. UNDER THE TERMS OF
THE AGREEMENT, $513, $412, $183, AND $113 WERE PAYABLE AT PERIOD END FOR
NATIONAL, CALIFORNIA, MARYLAND, AND VIRGINIA, RESPECTIVELY. NATIONAL FINANCIAL
DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR 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 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: $18,171,388 $3,069,500 $0 $1,601,857
SALES: 35,584,192 7,962,746 779,464 1,772,857
THE COST OF INVESTMENTS OWNED AT DECEMBER 31, 1999 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, 1999, AND THE NET CAPITAL LOSS CARRYFORWARDS
AS OF DECEMBER 31, 1999 WITH EXPIRATION DATES.
UNREALIZED UNREALIZED CAPITAL LOSS EXPIRATION
APPRECIATION DEPRECIATION CARRYFORWARDS DATES
NATIONAL $316,086 $1,118,230 $607,240 12/31/07
CALIFORNIA 210,095 348,437 136,098 12/31/02
438,572 12/31/03
MARYLAND 144,214 201,500 135,440 12/31/02
VIRGINIA 136,036 294,974 51,397 12/31/02
10,106 12/31/03
26,798 12/31/07
CAPITAL LOSS CARRYFOWARDS MAY BE UTILIZED TO OFFSET CURRENT AND FUTURE CAPITAL
GAINS UNTIL
EXPIRATION.
PORTFOLIOS MAY SELL OR PURCHASE SECURITIES FROM OTHER PORTFOLIOS MANAGED BY THE
ADVISOR, PRIMARILY AS A CASH MANAGEMENT PRACTICE. 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 (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE FUND HAD NO LOANS OUTSTANDING PURSUANT TO THIS
LINE OF CREDIT AT DECEMBER 31, 1999.
TAX INFORMATION (UNAUDITED)
THE FUND DESIGNATES $351,929 AS CAPITAL GAIN DIVIDENDS PAID FOR THE NATIONAL
PORTFOLIO DURING THE FISCAL YEAR ENDED DECEMBER 31, 1999.
<PAGE>
NATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.82 $10.79 $10.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .43 .45 .50
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.64) .13 .23
TOTAL FROM INVESTMENT OPERATIONS
(.21) .58 .73
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.43) (.46) (.50)
NET REALIZED GAINS (.06) (.09) -
TOTAL DISTRIBUTIONS (.49) (.55) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.70) .03 .23
NET ASSET VALUE, ENDING $10.12 $10.82 $10.79
TOTAL RETURN * (2.01%) 5.46% 7.11%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.12% 4.17% 4.71%
TOTAL EXPENSES .93% .97% .97%
EXPENSES BEFORE OFFSETS .93% .97% .97%
NET EXPENSES .90% .94% .94%
PORTFOLIO TURNOVER 38% 44% 29%
NET ASSETS, ENDING (IN THOUSANDS)
$58,093 $71,065 $48,933
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.62 $9.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .50 .51
NET REALIZED AND UNREALIZED GAIN (LOSS) (.06) .80
TOTAL FROM INVESTMENT OPERATIONS .44 1.31
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.50) (.50)
NET REALIZED GAINS - -
TOTAL DISTRIBUTIONS (.50) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.06) .81
NET ASSET VALUE, ENDING $10.56 $10.62
TOTAL RETURN * 4.32% 13.64%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.83% 4.97%
TOTAL EXPENSES 1.04% .96%
EXPENSES BEFORE OFFSETS 1.04% .96%
NET EXPENSES 1.01% .94%
PORTFOLIO TURNOVER 23% 57%
NET ASSETS, ENDING (IN THOUSANDS) $45,612 $40,146
<PAGE>
CALIFORNIA PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.74 $10.63 $10.44
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .43 .45 .49
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.61) .12 .18
TOTAL FROM INVESTMENT OPERATIONS (.18) .57 .67
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.43) (.46) (.48)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.61) .11 .19
NET ASSET VALUE, ENDING $10.13 $10.74 $10.63
TOTAL RETURN * (1.73%) 5.51% 6.61%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.07% 4.23% 4.64%
TOTAL EXPENSES .91% .90% .91%
EXPENSES BEFORE OFFSETS .91% .90% .91%
NET EXPENSES .89% .88% .88%
PORTFOLIO TURNOVER 11% 12% 48%
NET ASSETS, ENDING (IN THOUSANDS)
$30,385 $36,963 $35,085
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.51 $9.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .48 .47
NET REALIZED AND UNREALIZED GAIN (LOSS) (.07) .69
TOTAL FROM INVESTMENT OPERATIONS .41 1.16
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.48) (.46)
NET REALIZED GAINS -- -
TOTAL DISTRIBUTIONS -- (.46)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.07) .70
NET ASSET VALUE, ENDING $10.44 $10.51
TOTAL RETURN * 4.04% 12.07%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.59% 4.59%
TOTAL EXPENSES .97% .91%
EXPENSES BEFORE OFFSETS .97% .91%
NET EXPENSES .94% .89%
PORTFOLIO TURNOVER 25% 47%
NET ASSETS, ENDING (IN THOUSANDS) $35,693 $34,424
<PAGE>
MARYLAND PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $5.21 $5.18 $5.03
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .21 .21 .23
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.30) .04 .15
TOTAL FROM INVESTMENT OPERATIONS (.09) .25 .38
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.21) (.22) (.23)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.30) .03 .15
NET ASSET VALUE, ENDING $4.91 $5.21 $5.18
TOTAL RETURN * (1.82%) 4.88% 7.68%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.08% 4.13% 4.48%
TOTAL EXPENSES 1.03% .97% .99%
EXPENSES BEFORE OFFSETS 1.03% .97% .99%
NET EXPENSES .98% .93% .92%
PORTFOLIO TURNOVER 0% 24% 13%
NET ASSETS, ENDING (IN THOUSANDS)
$10,711 $12,165 $12,437
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $5.06 $4.67
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .23 .24
NET REALIZED AND UNREALIZED GAIN (LOSS) (.04) .39
TOTAL FROM INVESTMENT OPERATIONS .19 .63
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.22) (.24)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.03) .39
NET ASSET VALUE, ENDING $5.03 $5.06
TOTAL RETURN * 3.96% 13.66%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.59% 4.87%
TOTAL EXPENSES 1.04% .94%
EXPENSES BEFORE OFFSETS 1.00% .51%
NET EXPENSES .94% .48%
PORTFOLIO TURNOVER 8% 11%
NET ASSETS, ENDING (IN THOUSANDS) $12,023 $9,411
<PAGE>
VIRGINIA PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $5.25 $5.21 $5.10
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .20 .21 .22
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.29) .04 .11
TOTAL FROM INVESTMENT OPERATIONS (.09) .25 .33
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.20) (.21) (.22)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.29) .04 .11
NET ASSET VALUE, ENDING $4.96 $5.25 $5.21
TOTAL RETURN* (1.84%) 4.88% 6.71%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.85% 4.03% 4.38%
TOTAL EXPENSES 1.04% .97% .96%
EXPENSES BEFORE OFFSETS 1.04% .97% .96%
NET EXPENSES 1.00% .93% .88%
PORTFOLIO TURNOVER 12% 36% 8%
NET ASSETS, ENDING (IN THOUSANDS)
$14,317 $14,439 $13,542
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $5.13 $4.74
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .22 .24
NET REALIZED AND UNREALIZED GAIN (LOSS) (.03) .39
TOTAL FROM INVESTMENT OPERATIONS .19 .63
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.22) (.24)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.03) .39
NET ASSET VALUE, ENDING $5.10 $5.13
TOTAL RETURN* 3.82% 13.54%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.35% 4.86%
TOTAL EXPENSES 1.03% .92%
EXPENSES BEFORE OFFSETS 1.00% .54%
NET EXPENSES .92% .51%
PORTFOLIO TURNOVER 4% 11%
NET ASSETS, ENDING (IN THOUSANDS) $12,618 $7,295
* TOTAL RETURN DOES NOT REFLECT DEDUCTION OF FRONT-END SALES CHARGE.
<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.
PRINTED ON
RECYCLED PAPER
USING SOY-
BASED INKS
<PAGE>
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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
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BALANCED FUND
CSIF BALANCED PORTFOLIO
MUNICIPAL FUNDS
CTFR LIMITED-TERM PORTFOLIO
CTFR LONG-TERM PORTFOLIO
CTFR VERMONT MUNICIPAL PORTFOLIO
NATIONAL MUNI. INTERMEDIATE PORTFOLIO
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