<PAGE>
[LOGO OF PROVIDIAN]
Post Office Box 32830
400 West Market Street
Louisville, Kentucky 40232
August 1997
Dear Valued Customer:
Enclosed are semi-annual reports for the portfolios available in your Providian
Life and Health variable annuity contract.
Please take some time to review these reports, and if you have any questions,
call one of our customer service representatives at 1-800-866-6007, 9 a.m. to 5
p.m. Eastern time, Monday through Friday.
Providian Life and Health is proud to have you as our customer.
Sincerely,
/s/ William L. Bussler
William Bussler
President, Financial Markets Division
Providian Life and Health Insurance Company provides the variable annuity.
Securities are offered through Providian Securities Corporation, 400 West Market
Street, Louisville, KY 40202. Both are subsidiaries of Providian Corporation.
<PAGE>
A Special Notice To All
Acacia Capital Corporation
Calvert Responsibly Invested Contract Holders
We're pleased to announce that on April 21, 1997, Barbara Krumsiek
joined Calvert Group as president and chief executive officer. Ms.
Krumsiek comes to Calvert Group from Alliance Capital Management,
where she served as senior vice president and managing director of
their mutual funds division. She has 20 years experience in mutual
fund management and marketing.
Ms. Krumsiek replaces former Calvert Group president, Clifton S.
Sorrell, who stepped down earlier this year after nearly 10 years in
the top post.
We look forward to Ms. Krumsiek leading the company into the next
century and bringing Calvert Group mutual funds to a growing number
of new investors. We welcome her to the Calvert Group family.
<PAGE>
Calvert Responsibly Invested
Money Market Portfolio
Managed by Calvert Asset Management Company, Inc.
Dear Investor:
The yield on the Money Market Portfolio moved higher during
the six-month period ended June 30, 1997.
Review of the Economy and Markets
The economy expanded at a robust pace for the first quarter
then appeared to moderate in the second quarter. In an attempt to
defuse inflationary pressures, the Federal Reserve adopted a slightly
more restrictive monetary policy. The Fed nudged its target for key
short-term rates higher in March, but left rates unchanged during the
second quarter.
In general, money market and bond yields moved higher during
the first part of the year then backed down toward the close of this
reporting period as investors revised their forecast for the next Fed
move-first thinking the Fed would take steps to raise rates then
expecting no change. Most measures of the stock market's performance
advanced, with the Standard & Poor's 500 Stock Index returning 20.6%
for the six months.
Portfolio Strategy
Expecting generally rising rates, we kept the Portfolio's
maturity near the short end of its target range so that we would have
the opportunity to reinvest the proceeds of maturing securities in
higher yielding issues. This strategy worked to our advantage through
March and again late in the second quarter.
Outlook
Investors, market pundits and the Federal Reserve are
struggling to evaluate a mixed bag of economic indicators. The
Consumer Price Index (up 2.2% year-over-year) does not point to
surging inflation, but a number of other factors, including an
increase in housing starts and rising wages, can be used to make a
case for a strengthening economy. In addition, Congress' plan to
reduce the deficit while also pushing through a package of tax-cuts
is also being evaluated.
In light of the economy's perceived strength and the
possibility of a more stimulative fiscal policy, we expect the
Federal Reserve will take further steps to raise rates during 1997.
The resulting rise in rates would be good news for money market
investors, but likely would not be as well received by the stock and
bond markets.
Thank you for choosing the Calvert Responsibly Invested
Money Market Portfolio.
Sincerely,
Barbara Krumsiek
President
July 21, 1997
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
U.S. Government Agencies and
Instrumentalities - 22.3%
Principal Value
Amount
<S> <C> <C>
Federal Home Loan Mortgage Corp., 5.44%, 7/11/97
$150,000 $ 149,774
Federal Home Loan Mortgage Corp., 5.43%, 8/1/97 300,000 298,597
Federal Home Loan Mortgage Corp., 5.47%, 8/4/97 200,000 198,967
Federal National Mortgage Assn., 5.44%, 7/14/97 150,000 149,705
Federal National Mortgage Assn., 5.44%, 8/5/97 120,000 119,365
Federal National Mortgage Assn., 5.42%, 8/18/97 250,000 248,194
Federal National Mortgage Assn., 5.37%, 9/26/97 300,000 296,063
Total U.S. Government Agencies and Instrumentalities
(Cost $1,460,665) 1,460,665
Corporate Obligations - 64.5%
Alabama State Industrial Development Authority VRDN,
5.80%, 12/1/19, LOC: First Bank * 240,000 240,000
Arbor Properties, Inc. VRDN,
5.70%, 11/1/21, LOC: Amsouth Bank * 250,000 250,000
Aspen Institute, Inc. VRDN, 5.88%, 12/1/04,
LOC: First National Bank of Maryland * 140,000 140,000
Chapel Oaks, Inc. VRDN, 5.75%, 10/1/26,
LOC: Allied Irish Bank * 250,000 250,000
Colorado Health Facilities Authority Revenue VRDN,
5.75%, 2/1/25, LOC: Kredietbank * 200,000 200,000
Fed One Dayton VRDN, 6.65%, 8/1/09, LOC: Bank One Ohio * 140,000 140,000
Health Midwest Ventures Group VRDN, 5.75%, 8/1/19,
LOC: Bank of America * 250,000 250,000
Healthtrack Sports and Wellness VRDN, 5.75%, 2/15/27,
LOC: American National Bank & Trust * 250,000 250,000
IPC Industries, Inc. VRDN, 5.80%, 10/1/11,
LOC: National Bank of Canada * 150,000 150,000
La Miranda, California Industrial Development Authority VRDN,
5.75%, 12/1/26, LOC: First National Bank of Chicago * 250,000 250,000
Lexington Financial Services, LLC. VRDN, 5.75%, 3/1/27,
LOC: LaSalle Bank * 200,000 200,000
Mahoning County, Ohio VRDN, 6.12%, 11/1/98,
LOC: PNC Bank * 135,000 135,000
Montgomery County, Kentucky Industrial Development Revenue
VRDN, 5.80%, 8/1/06, LOC: Fleet Bank * 240,000 240,000
Montgomery County, Pennsylvania Industrial Development Revenue
VRDN, 5.80%, 3/1/10, LOC: Corestates * 250,000 250,000
Pennsylvania Economic Development Authority VRDN,
5.75%, 7/1/16, LOC: Mellon Bank * 200,000 200,000
PRD Finance, LLC. VRDN, 5.69%, 4/1/27,
LOC: First America Bank * 275,000 275,000
St. Joseph County Economic Development VRDN, 5.76%, 6/1/27,
LOC: FHLB - Indianapolis * 150,000 150,000
TLC Holdings, LLC. VRDN, 5.80%, 6/1/26,
LOC: Columbus Bank & Trust * 250,000 250,000
W.L. Petrey Wholesale, Inc. Industrial Development Bond
VRDN, 5.80%, 3/1/11, LOC: Southtrust Bank * 145,000 145,000
Westminster Asset Corp. VRDN, 5.77%, 4/1/22,
LOC: Wells Fargo Bank * 250,000 250,000
Total Corporate Obligations (Cost $4,215,000) 4,215,000
Municipal Obligations - 11.2%
Gardena, California Certificates of Participation VRDN, 5.95%,
7/1/25,
Letter of Credit: Sumitomo Trust & Banking, Confirming LOC:
Dai-Ichi Kango Bank * 230,000 230,000
City of Mt. Vernon Industrial Solid Waste Disposal VRDN, 5.95%,
11/1/11, LOC: Citizens National Bank, Confirming
LOC: Suntrust Bank * 100,000 100,000
Village of Schaumberg, Illinois VRDN, 5.75%,
12/1/20, BPA: Credit Suisse * 250,000 250,000
Virginia State Housing Development Authority
VRDN, 5.60%, 1/1/34 * 150,000 150,000
Total Municipal Obligations (Cost $730,000) 730,000
</TABLE>
<PAGE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS (Cost $6,405,665) -98.0% 6,405,665
Other assets and liabilities, net - 2.0% 130,847
Net Assets - 100% $6,536,512
</TABLE>
*Optional tender features give these securities a shorter
maturity date.
Explanation of Guarantees:
BPA: Bond Purchase Agreement
LOC: Letter of Credit
Abbreviations:
VDRN: Variable Rate Demand Notes
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<S> <C>
Assets
Investments in securities, at value $6,405,665
Cash 44,370
Receivable for securities sold 100,000
Interest receivable 23,227
Other assets 829
Total assets 6,574,091
Liabilities
Payable for shares redeemed 32,281
Payable to Calvert Asset Management Company, Inc. 2,682
Payable to Calvert Shareholder Services, Inc. 157
Accrued expenses and other liabilities 2,459
Total liabilities 37,579
Net assets $6,536,512
Net Assets Consist of:
Par value and paid-in capital applicable to 6,540,266
shares of common stock outstanding; $1 par value,
10,000,000 shares authorized $6,535,690
Undistributed net investment income 487
Accumulated net realized gains (losses) on investments 335
Net Assets $6,536,512
Net Asset Value per Share $1.00
</TABLE>
See notes to financial statements.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<S> <C>
Net Investment Income
Investment Income
Interest income $169,418
Total investment income 169,418
Expenses
Investment advisory fee 15,020
Transfer agency fees and expenses 529
Directors' fees and expenses 250
Custodian fees 3,425
Reports to shareholders 1,404
Professional fees 471
Miscellaneous 187
Total expenses 21,286
Fees paid indirectly (3,425)
Net expenses 17,861
Net Investment Income 151,557
Realized Gain (Loss) on Investments
Net realized gain (loss) -
Increase (Decrease) in Net Assets
Resulting From Operations $151,557
</TABLE>
See notes to financial statements.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 151,557 $ 234,641
Net realized gain (loss) - 205
Increase (Decrease) in Net Assets
Resulting From Operations 151,557 234,846
Distributions to shareholders from
Net investment income (151,077) (235,033)
Capital share transactions
Shares sold 9,517,537 13,882,018
Reinvestment of distributions 150,119 235,032
Shares redeemed (7,509,853) (14,867,168)
Total capital share transactions 2,157,803 (750,118)
Total Increase (Decrease)
in Net Assets 2,158,283 (750,305)
Net Assets
Beginning of period 4,378,229 5,128,534
End of period (including undistributed net investment
income of $487 and $7, respectively)
$6,536,512 $ 4,378,229
Capital Share Activity
Shares sold 9,517,537 13,882,018
Reinvestment of distributions 150,119 235,032
Shares redeemed (7,509,853) (14,867,168)
Total capital share activity 2,157,803 (750,118)
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Money Market Portfolio (the "Portfolio"), a series of Acacia
Capital Corporation's Calvert Responsibly Invested (CRI) Portfolios, is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The operations of each series are accounted for
separately. The shares of the Portfolio are sold to affiliated and unaffiliated
insurance companies for allocation to certain of their variable separate
accounts.
Security Valuation: All securities are valued at amortized cost, which
approximates market.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Interest income, accretion of discount and amortization of premium are
recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Portfolio on ex-dividend date. Dividends are accrued daily and paid monthly.
Distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles, accordingly,
periodic reclassifications are made within the Portfolio's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Portfolio's cash on deposit with the bank. Such deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
<PAGE>
Note B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of .50% of the Portfolio's average daily net assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Director who is not affiliated with the Advisor received a fee of $750 for
each Board meeting attended plus an annual fee of $3,000 for Directors not
serving on other Calvert Fund Boards. Director's fees are allocated to each of
the portfolios served.
Note C-Investment Activity
The cost of investments owned at June 30, 1997 was substantially the same for
federal income tax and financial reporting purposes.
As a cash management practice, the Portfolio may sell or purchase short-term
variable rate notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDED
June 30, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Net asset value, beginning $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income .025 .048 .055
Net realized gain (loss) - - -
Total from investment operations .025 .048 .055
Distributions from
Net investment income (.025) (.048) (.055)
Total increase (decrease) in
net asset value - - -
Net asset value, ending $ 1.00 $ 1.00 $ 1.00
Total return 2.50% 4.95% 5.37%
Ratios to average net assets:
Net investment income 5.05%(a) 4.82% 5.23%
Total expenses + .71%(a) .75% .66%
Net expenses .59%(a) .62% .59%
Expenses reimbursed - - -
Net assets, ending (in thousands) $6,537 $4,378 $5,129
Number of shares outstanding,
ending (in thousands) 6,540 4,382 5,133
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,
<S> <C> <C> <C>
1994 1993 1992**
Net asset value, beginning $1.00 $1.00 $1.00
Income from investment operations
Net investment income .039 .031 .009
Net realized gain (loss) - - -
Total from investment operations .039 .031 .009
Distributions from
Net investment income (.039) (.031) (.009)
Total increase (decrease) in net asset value - - -
Net asset value, ending $1.00 $1.00 $1.00
Total return 3.96% 3.09% 2.11%
Ratios to average net assets:
Net investment income 3.91% 3.07% 3.02%(a)
Total expenses + - - -
Net expenses .45% - -
Expenses reimbursed .36% .11% .85%(a)
Net assets, ending (in thousands) $6,479 $4,032 $1,795
Number of shares outstanding,
ending (in thousands) 6,484 4,032 1,795
</TABLE>
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio
of net expenses.
** From June 30, 1992, inception.
<PAGE>
Calvert Responsibly Invested
Strategic Growth Portfolio
Managed by Portfolio Advisory Services, Inc.
Dear Investor:
After generating a very strong 34.33% return for the previous year, the
Strategic Growth Portfolio closed the six-month period ending June 30, 1997 down
15.29%. The bulk of the loss occurred during the first quarter, as the types of
stocks the Portfolio concentrates on, smaller companies and growth stocks, fell
sharply. Performance was positive for the second quarter.
Review of the Economy
The economy expanded at a robust pace for the first quarter then appeared
to moderate in the second quarter. A number of other indicators, including an
increase in housing starts and rising wages, also pointed to a strengthening
economy.
In an attempt to defuse inflationary pressures, the Federal Reserve adopted
a slightly more restrictive monetary policy. The Fed nudged its target for key
short-term rates higher in March, but left rates unchanged during the second
quarter.
CALVERT RESPONSIBLY INVESTED
STRATEGIC GROWTH PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 4/15/95 to 6/30/97
CRI Strategic Growth Ending balance $12,487
S&P 500 Reinv Ending balance $18,584
Russell 2000 Ending balance $15,764
Average Annual Total Return
(period ending 6/30/97)
One Year 11.89%
Life of Fund (3/95) 10.15%
Performance information is for the Portfolio only and
does not reflect charges and expenses of the variable annuity.
Indices performance is shown from 3/31/95.
Past performance does not indicate future results.
Market Conditions
The stock market hit a first quarter high in February then plummeted,
sending both large- and small-cap stocks into negative territory. Historically,
stocks of small companies have led those of large companies in the first quarter
of a new year, but this trend did not hold in 1997. In fact, by the end of
April, the S&P 500 (dominated by larger companies) had outperformed the Russell
2000 (comprised mainly of smaller companies) by 25% for the trailing 12 months,
the largest spread ever recorded. The market bounced back in late April, and
smaller company stocks reemerged as market leaders for May and June.
<PAGE>
Another important aspect of the market's behavior was the continued
underperformance of growth stocks relative to value stocks. When analyzing the
components of the 10.2% return on the Russell 2000, value stocks returned 14.8%
and growth stocks returned only 5.2%. The widest disparity occurred during the
first quarter.
Portfolio Strategy
At the beginning of the year, 90% of Portfolio assets were invested in the
stock market. Early in March, our risk assessment model, the Five Market
Principles, generated an intermediate-term sell-signal and we began reducing our
equity exposure and increasing our cash position. The percent of assets invested
reached a low of 52% on March 20. Our market indicators improved in late April,
and we began redeploying cash to the market. By the end of the second quarter,
we were again nearly 90% invested. This "round-trip" helped to offset the
effects of a declining market on the Portfolio's share price.
Outlook
The Portfolio's recent returns have been disappointing, but we remain
confident in our investment strategy's potential to generate strong gains over
the long-term. The strong returns for growth and small company stocks in the
last two months of this reporting period are encouraging signs that these
companies are beginning to reassert their leadership positions. Typically, small
companies tend to lag or lead large companies in fairly lengthy cycles, so this
could indicate the beginning of a protracted and very welcome period of
overperformance.
Thank you for your investment and continued confidence.
Sincerely,
Cedd Moses Barbara Krumsiek
Portfolio Manager President
July 21, 1997
<PAGE>
STRATEGIC GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
Equity Securities - 89.0% Shares Value
<S> <C> <C>
Commercial Services - Advertising - 2.5%
CKS Group, Inc. * 2,500 $84,375
84,375
Commercial Services - Miscellaneous - 2.7%
NCO Group, Inc. * 3,100 91,062
91,062
Computer - Services - 11.4%
Harbinger Corp. * 4,200 117,600
Sapient Corp. * 3,650 180,675
Technology Solutions Co. * 2,200 86,900
385,175
Electronics - Laser Systems and Components - 2.7%
Cymer, Inc. * 1,900 92,625
92,625
Electronics - Semiconductor Equipment - 5.1%
PRI Automation, Inc. * 4,500 170,719
170,719
Electronics - Semiconductor Manufacturing - 10.3%
PMC Sierra, Inc. * 7,200 189,000
Sanmina Corp. * 2,500 158,750
347,750
Financial Services - 2.4%
Healthcare Financial Partners, Inc. * 4,000 81,500
81,500
Medical - Biomedics and Genetics - 2.5%
Bionx Implants, Inc. * 4,900 83,300
83,300
Medical - Ethical Drugs - 3.0%
Jones Medical Industries, Inc. 2,100 99,750
99,750
Medical - Information Technology - 2.6%
HCIA, Inc. * 2,600 87,100
87,100
Medical - Outpatient and Home Care - 2.4%
Curative Health Services, Inc. * 2,800 80,500
80,500
Oil and Gas - Machinery and Equipment - 5.4%
Varco International, Inc. * 5,600 $180,600
180,600
Pollution Control - Services - 3.2%
Newpark Resources, Inc. * 3,200 108,000
108,000
Retail - Apparel and Shoes - 8.0%
Pacific Sunwear of California * 2,600 83,850
Vans, Inc. * 12,300 186,038
269,888
Retail - Restaurants - 2.7%
Showbiz Pizza Time, Inc. * 3,500 92,312
92,312
Software - Applications - 8.2%
Siebel Systems, Inc. * 3,100 99,975
Vantive Corp. * 6,400 180,800
280,775
Software - Education and Entertainment - 2.6%
CBT Group Publishing Ltd., ADR * 1,400 88,375
88,375
Software - Systems - 3.6%
Iona Technologies, ADR * 6,200 122,450
122,450
Telecommunications - Equipment - 0.2%
Sourcecom Corp., Series B, Preferred + 1,500 6,450
6,450
Telecommunications - Services - 2.7%
U.S. Long Distance Corp. * 5,300 91,425
91,425
Transportation - Truck - 4.8%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Swift Transportation, Inc. * 2,600 $ 76,700
U.S. Xpress Enterprises, Inc., Class A * 4,300 84,925
161,625
Total Equity Securities (Cost $2,559,709) 3,005,756
TOTAL INVESTMENTS (Cost $2,559,709) - 89.0% 3,005,756
Other assets and liabilities, net - 11.0% 370,012
Net Assets - 100% $3,375,768
</TABLE>
+ Restricted securities.
*Non-income producing.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments in securities, at value $3,005,756
Cash 312,255
Receivable for securities sold 149,084
Dividends receivable 52
Other assets 209
Total assets 3,467,356
Liabilities
Payable for securities purchased 86,368
Payable to Calvert Asset Management Company, Inc. 3,911
Payable to Calvert Shareholder Services, Inc. 79
Accrued expenses and other liabilities 1,230
Total liabilities 91,588
Net assets $3,375,768
Net Assets Consist of:
Par value and paid-in capital applicable to 271,913 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $3,256,879
Undistributed net investment income (loss) (21,227)
Accumulated net realized gain (loss) on investments (305,931)
Net unrealized appreciation (depreciation) on investments 446,047
Net Assets $3,375,768
Net Asset Value per Share $12.41
See notes to financial statements.
</TABLE>
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Net Investment Income
Investment Income
Interest income $2,368
Dividend income 52
Total investment income 2,420
Expenses
Investment advisory fee 21,359
Transfer agent fees and expenses 218
Directors' fees and expenses 123
Administrative fees 2,916
Custodian fees 4,532
Reports to shareholders 1,552
Professional fees 234
Miscellaneous 161
Reimbursement from Advisor (2,916)
Total expenses 28,179
Fees paid indirectly (4,532)
Net expenses 23,647
Net Investment Income (Loss) (21,227)
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) (299,021)
Change in unrealized appreciation or depreciation (147,306)
Net Realized and Unrealized Gain (Loss)
on Investments (446,327)
Increase (Decrease) in Net Assets
Resulting From Operations $(467,554)
See notes to financial statements.
</TABLE>
<PAGE>
STRATEGIC GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ (21,227) $ (30,374)
Net realized gain (loss) (299,021) 43,628
Change in unrealized appreciation or depreciation (147,306) 486,428
Increase (Decrease) in Net Assets
Resulting From Operations (467,554) 499,682
Distributions to shareholders from
Net investment income - (533)
Net realized gain on investments - (9,000)
Total distributions - (9,533)
Capital share transactions
Shares sold 1,165,964 1,765,749
Reinvestment of distributions - 9,532
Shares redeemed (353,284) (444,228)
Total capital share transactions 812,680 1,331,053
Total Increase (Decrease)
in Net Assets 345,126 1,821,202
Net Assets
Beginning of period 3,030,642 1,209,440
End of period (including undistributed net investment
income (loss) of $(21,227) and $0, respectively) $3,375,768 $3,030,642
Capital Share Activity
Shares sold 95,175 128,377
Reinvestment of distributions - 651
Shares redeemed (30,102) (32,774)
Total capital share activity 65,073 96,254
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Strategic Growth Portfolio (the "Portfolio"), a series of Acacia
Capital Corporation's Calvert Responsibly Invested (CRI) Portfolios, is
registered under the Investment Company Act of 1940 as a nondiversified, open-
end management investment company. The operations of each series are accounted
for separately. The shares of the Portfolio, which were first offered on March
1, 1995, are sold to affiliated and unaffiliated insurance companies for
allocation to certain of their variable separate accounts.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sales price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Other securities and assets for which market
quotations are not available or deemed inappropriate are valued in good faith
under the direction of the Board of Directors.
Options: The Portfolio may write or purchase option securities. The option
premium is the basis for recognition of unrealized or realized gain or loss on
the option. The cost of securities acquired or the proceeds from securities sold
through the exercise of the option is adjusted by the amount of the premium.
Securities Sold Short: The Portfolio may sell securities that it does not own in
anticipation of a decline in their market price. Gains or losses represent the
difference between the sale proceeds and the current market value of the
security.
Deposits with Brokers: The Portfolio maintains liquid assets, including
equivalent securities, sufficient to cover, on a daily basis, the current values
of written options and securities sold short.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date. Interest income,
accretion of discount and amortization of premium are recorded on an accrual
basis. Dividends declared on securities sold short are reported as an expense.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Portfolio on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles, accordingly,
periodic reclassifications are made within the Portfolio's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Portfolio's cash on deposit with the bank. Such deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
Note B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of 1.5% of the Portfolio's average daily net assets. Effective
April, 1996, the Portfolio began paying a monthly performance fee of plus or
minus up to .15%, on an annual basis, of average daily net assets of the
performance period depending on the Portfolio's performance compared to the
Russell 2000 Index.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Portfolio for an annual fee, payable monthly, of
.20% of the Portfolio's annual average daily net assets. The Advisor voluntarily
reimbursed the Portfolio for administrative fees.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Director who is not affiliated with the Advisor received a fee of $750 for
each Board meeting attended plus an annual fee of $3,000 for Directors not
serving on other Calvert Fund Boards. Director's fees are allocated to each of
the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $3,926,672 and $3,162,430, respectively.
The cost of investments owned at June 30, 1997 was substantially the same for
federal income tax and financial reporting purposes. Net unrealized appreciation
aggregated $446,047, of which $451,625 related to appreciated securities and
$5,578 related to depreciated securities.
<PAGE>
STRATEGIC GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995**
<S> <C> <C> <C>
Net asset value, beginning $ 14.65 $10.94 $10.00
Income from investment operations
Net investment income (.08) (.15) .25
Net realized and unrealized gain (loss) (2.16) 3.90 .93
Total from investment operations (2.24) 3.75 1.18
Distributions from
Net investment income - (.00) (.24)
Net realized gains - (.04) -
Total distributions - (.04) (.24)
Total increase (decrease) in net asset value (2.24) 3.71 .94
Net asset value, ending $ 12.41 $14.65 $10.94
Total return (15.29%) 34.33% 9.65%
Ratios to average net assets:
Net investment income (1.45%)(a) (1.60%) .43%(a)
Total expenses + 1.93%(a) 2.27% 2.17%(a)
Net expenses 1.62%(a) 1.81% 1.64%(a)
Expenses reimbursed .20%(a) .20% .20%(a)
Portfolio turnover 134% 120% 223%
Average commission rate paid $ .0486 $.0499 -
Net assets, ending (in thousands) $ 3,376 $3,031 $1,209
Number of shares outstanding,
ending (in thousands) 272 207 111
</TABLE>
(a) Annualized
+ This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio of net expenses.
** From March 1, 1995, inception.
<PAGE>
CALVERT RESPONSIBLY INVESTED
CAPITAL ACCUMULATION PORTFOLIO
Managed by Brown Capital Management, Inc.
Dear Investor:
The Capital Accumulation Portfolio returned 10.10% for the six months ended
June 30, 1997, a return a bit below the 13.04% advance for the Standard & Poor's
400 Stock Index. The market's advance in the first six months comes on the heels
of the Standard & Poor's 500 Stock Index's 23.0% return for 1996 and 37.6%
return for 1995. This chain of extraordinary returns has been fueled by low
inflation, low interest rates and a slow but steadily growing economy.
Performance and Strategy
In general, returns for the mid-sized companies your Portfolio invests in
have lagged those for larger companies, as many investors have attempted to
minimize their stock market risk by investing in the well-known corporate
giants. This trend explains why the Portfolio's performance has not been as
strong as that of the S&P 500, which is comprised mainly of the larger
companies.
Within the mid-cap universe, our focus has been on companies that
manufacture products designed to enhance productivity and those that provide
goods and services to an aging population. Accordingly we have maintained strong
exposure to the technology, financial services and health care industries.
<PAGE>
CALVERT RESPONSIBLY INVESTED
CAPITAL ACCUMULATION PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/92 to 6/30/97
CRI Capital Accumulation Ending balance $19,552
S&P 500 Reinv Ending balance $27,932
Russell 2000 Ending balance $26,681
S&P 400 Midcap Reinv $26,069
Average Annual Total Return
(period ending 6/30/97)
One Year 8.79%
Five Year 12.95%
Life of Fund (7/91) 11.90%
*New subadvisors assumed management of the Portfolio
effective December 1994.
Performance information is for the Portfolio only and
does not reflect charges and expenses of the variable annuity.
Indices performance is shown from 6/30/91. Past performance
does not indicate future results.
In our opinion, one of the strongest forces behind the economy's ability to
generate steady growth without triggering higher inflation is companies' need
and recently demonstrated ability to improve productivity, which enhances
profitability. Products and services that save corporations and consumers time,
money and headaches have been in big demand. This is one of the reasons why
technology companies have been strong contributors to recent investment
performance and why they comprise such a large portion of our holdings.
<PAGE>
In selecting stocks, we seek companies that are reasonably priced and have
the potential to generate strong earnings growth. We look specifically at the
level and durability of a company's revenue growth, its ability to create and
defend market presence and the strength of its financial structure and
management team.
Recent additions to the Portfolio's technology exposure include Acxiom, BMC
Software and Network General, whose products and services provide a range of
data processing and information integration activities. In the consumer products
sector, we added Illinois Tool Works and Fastenal, companies who address the
tool and tool component needs of worldwide retail, commercial and industrial
markets.
Outlook
Based on our earnings estimates, stocks are at fairly high but not
exuberant valuations. We are still finding a number of promising opportunities.
One factor we are monitoring very closely is the interaction of productivity and
wages, as excessive wage expansion can put pressure on profit margins and
earnings growth.
In selecting investments, we continue to utilize an old-fashioned, bottom-
up approach that we don't believe has lost any of its merit in the current stock
market environment.
Thank you for your investment and continued confidence.
Sincerely,
Ed Brown Barbara Krumsiek
Portfolio Manager President
July 21, 1997
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Equity Securities - 96.2% Shares Value
Biotechnology - 3.0%
Amgen, Inc. 11,400 $ 662,625
662,625
Business Equipment and Services - 5.7%
Acxiom Corp. * 4,400 90,200
Equifax, Inc. 12,500 464,844
Hewlett Packard Co. 12,400 694,400
1,249,444
Capital Goods - 2.4%
Illinois Tool Works, Inc. 10,400 519,350
519,350
Computer - Memory Devices - 1.9%
EMC Corp. * 10,889 424,671
424,671
Computer - Networks - 3.8%
Cisco Systems, Inc. * 11,250 755,156
Network General Corp. * 5,300 78,838
833,994
Computer - Software - 5.5%
BMC Software, Inc. * 5,900 326,712
Microsoft Corp. * 3,500 442,312
Sterling Software, Inc. * 13,900 434,375
1,203,399
Computer - Systems - 2.4%
Oracle Corp. * 10,337 520,726
520,726
Consumer Products and Services - 3.1%
Newell Co. 17,100 677,588
677,588
Electrical Equipment and Services - 5.0%
Belden, Inc. 15,800 538,188
Sterling Commerce, Inc. * 17,000 558,875
1,097,063
Electronics - Components - 3.3%
Vishay Intertechnology, Inc. * 25,290 731,829
731,829
Electronics - Semiconductors - 4.5%
Intel Corp. 3,000 $ 425,437
Solectron Corp. * 8,000 560,000
985,437
Financial Services - 9.9%
Chase Manhattan Corp. 7,952 771,841
Green Tree Financial Corp. 20,550 732,094
T. Rowe Price Associates, Inc. 13,100 676,287
2,180,222
Health Care - 11.5%
Cardinal Health, Inc. 11,000 629,750
Health Care & Retirement Corp. * 16,050 535,669
Johnson & Johnson 7,600 489,250
Pall Corp. 15,700 365,025
United Healthcare Corp. 9,800 509,600
2,529,294
Insurance - 1.4%
AFLAC, Inc. 6,650 314,212
314,212
Leisure - 3.0%
Carnival Corp., Class A 15,900 655,875
655,875
Medical - 4.8%
ALZA Corp. * 19,200 556,800
Scherer (R.P.) Corp. * 9,800 505,925
1,062,725
Oil and Gas - 2.7%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MCN Energy Group, Inc. 19,200 588,000
588,000
Property Management - 2.1%
Rouse Co. 15,700 463,150
463,150
Real Estate - 2.4%
Post Properties, Inc. 13,100 531,369
531,369
Restaurants - 1.3%
Cheesecake Factory, Inc. * 13,300 279,300
279,300
Retail - Department Stores - 2.4%
Nordstrom, Inc. 10,700 524,969
524,969
Retail - Discount and Variety - 5.1%
Caseys General Stores, Inc. 22,100 $475,841
Dollar General Corp. 17,081 640,538
1,116,379
Retail - Special Line - 9.0%
Autozone, Inc. * 29,200 688,025
Fastenal Co. 9,600 470,400
Home Depot, Inc. 11,700 806,569
1,964,994
Total Equity Securities (Cost $18,446,814) 21,116,615
TOTAL INVESTMENTS (Cost $18,446,814) - 96.2% 21,116,615
Other assets and liabilities, net - 3.8% 838,275
Net Assets - 100% $21,954,890
</TABLE>
*Non-income producing.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<S> <C>
Assets
Investments in securities, at value $21,116,615
Cash 1,651,163
Receivable for securities sold 5,025
Interest and dividends receivable 13,336
Other assets 1,985
Total assets 22,788,124
Liabilities
Payable for securities purchased 809,899
Payable for shares redeemed 3,535
Payable to Calvert Asset Management Company, Inc. 14,657
Payable to Calvert Administrative Services Company 1,825
Payable to Calvert Shareholder Services, Inc. 548
Accrued expenses and other liabilities 2,770
Total liabilities 833,234
Net assets $21,954,890
Net Assets Consist of:
Par value and paid-in capital applicable to 829,236 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $17,030,227
Undistributed net investment income (loss) (15,367)
Accumulated net realized gains (losses) on investments 2,270,229
Net unrealized appreciation (depreciation) on investments 2,669,801
Net Assets $21,954,890
Net Asset Value per Share $26.48
</TABLE>
See notes to financial statements.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<S> <C>
Net Investment Income
Investment Income
Interest income $9,537
Dividend income 72,490
Total investment income 82,027
Expenses
Investment advisory fee 80,813
Transfer agency fees and expenses 1,546
Directors' fees and expenses 876
Administrative fees 10,140
Custodian fees 12,634
Reports to shareholders 1,698
Professional fees 1,625
Miscellaneous 696
Total expenses 110,028
Fees paid indirectly (12,634)
Net expenses 97,394
Net Investment Income (Loss) (15,367)
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) 2,274,875
Change in unrealized appreciation or depreciation (242,708)
Net Realized and Unrealized Gain (Loss)
on Investments 2,032,167
Increase (Decrease) in Net Assets
Resulting From Operations $2,016,800
</TABLE>
See notes to financial statements.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $(15,367) $(95,533)
Net realized gain (loss) 2,274,875 7,603
Change in unrealized appreciation or depreciation (242,708) 1,182,679
Increase (Decrease) in Net Assets
Resulting From Operations 2,016,800 1,094,749
Distributions to shareholders from
Net investment income - -
Net realized gain on investments - (32,307)
Total distributions - (32,307)
Capital share transactions
Shares sold 5,151,296 14,697,452
Shares issued from merger (Note A) - 4,728,068
Reinvestment of distributions - 32,310
Shares redeemed (5,117,529) (9,551,228)
Total capital share transactions 33,767 9,906,602
Total Increase (Decrease)
in Net Assets 2,050,567 10,969,044
Net Assets
Beginning of period 19,904,323 8,935,279
End of period (including undistributed
net investment income (loss) of $(15,367)
and $0,respectively) $21,954,890 $19,904,323
Capital Share Activity
Shares sold 209,406 618,839
Shares issued from merger (Note A) - 207,827
Reinvestment of distributions - 1,343
Shares redeemed (207,853) (398,789)
Total capital share activity 1,553 429,220
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Capital Accumulation Portfolio (the "Portfolio"), a series of
Acacia Capital Corporation's Calvert Responsibly Invested (CRI) Portfolios, is
registered under the Investment Company Act of 1940 as a non-diversified, open-
end management investment company. The operations of each series are accounted
for separately. The shares of the Portfolio are sold to affiliated and
unaffiliated insurance companies for allocation to certain of their variable
separate accounts.
On February 23, 1996, the net assets of CRIEquity Portfolio were merged into the
Portfolio. The acquisition was accomplished by a tax free exchange of 207,827
shares of the Portfolio (valued at $4,728,068) for the 259,797 shares of
CRIEquity Portfolio outstanding at February 23, 1996. CRIEquity Portfolio's net
assets at that date, including $249,296 of unrealized appreciation, were
combined with those of the Portfolio. The aggregate net assets of the Portfolio
and CRIEquity Portfolio immediately before the acquisition were $9,742,153 and
$4,727,159, respectively.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Unlisted securities and
listed securities for which the last sale price is not available are valued at
the most recent bid price or based on a yield equivalent obtained from the
securities' market maker. Other securities and assets for which market
quotations are not available or deemed inappropriate are valued in good faith
under the direction of the Board of Directors.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date. Interest income,
accretion of discount and amortization of premium are recorded on an accrual
basis.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Portfolio on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles, accordingly,
periodic reclassifications are made within the Portfolio's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Portfolio's cash on deposit with the bank. Such deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
Note B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of .80% of the Portfolio's average daily net assets. Effective
January, 1997, the Portfolio began paying a monthly performance fee of plus or
minus up to .05%, on an annual basis, of average daily net assets of the
performance period depending on the Portfolio's performance compared to the S&P
Mid-Cap 400 Index.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Portfolio for an annual fee, payable monthly, of
.10% of the Portfolio's annual average daily net assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Director who is not affiliated with the Advisor received a fee of $750 for
each Board meeting attended plus an annual fee of $3,000 for Directors not
serving on other Calvert Fund Boards. Director's fees are allocated to each of
the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $16,664,446 and $16,601,621, respectively.
The cost of investments owned at June 30, 1997 was substantially the same for
federal income tax and financial reporting purposes. Net unrealized appreciation
aggregated $2,669,801, of which $2,770,509 related to appreciated securities and
$100,708 related to depreciated securities.
Net realized capital loss carryforward, for federal income tax purposes, of
$1,598 at June 30, 1997 may be utilized to offset current or future capital
gains until expiration in 2004.
<PAGE>
CAPITAL ACCUMULATION PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Net asset value, beginning $24.05 $22.42 $16.97
Income from investment operations
Net investment income (.02) (.12) (.15)
Net realized and unrealized gain (loss) 2.45 1.79 6.85
Total from investment operations 2.43 1.67 6.70
Distributions from
Net investment income - - (.01)
Net realized gains - (.04) (1.24)
Total distributions - (.04) (1.25)
Total increase (decrease) in net asset value 2.43 1.63 5.45
Net asset value, ending $26.48 $24.05 $22.42
Total return 10.10% 7.44% 39.46%
Ratios to average net assets:
Net investment income (.15%)(a) (.60%) (.84%)
Total expenses + 1.09%(a) 1.33% 1.56%
Net expenses .96%(a) 1.00% 1.25%
Expenses reimbursed - - .10%
Portfolio turnover** 89% 124% 135%
Average commission rate paid $.0518 $.0563 -
Net assets, ending (in thousands) $21,955 $19,904 $8,935
Number of shares outstanding,
ending (in thousands) 829 828 398
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1994 1993 1992
<S> <C> <C> <C>
Net asset value, beginning $18.95 $17.87 $15.82
Income from investment operations
Net investment income .10 .08 .09
Net realized and unrealized gain (loss) (1.98) 1.27 2.09
Total from investment operations (1.88) 1.35 2.18
Distributions from
Net investment income (.10) (.08) (.09)
Net realized gains - (.19) (.04)
Total distributions (.10) (.27) (.13)
Total increase (decrease) in net asset value (1.98) 1.08 2.05
Net asset value, ending $16.97 $18.95 $17.87
Total return (9.92%) 7.56% 13.73%
Ratios to average net assets:
Net investment income .68% .66% 1.19%
Total expenses + - - -
Net expenses .79% .80% .39%
Expenses reimbursed - - .87%
Portfolio turnover 79% 26% 2%
Net assets, ending (in thousands) $5,689 $4,986 $870
Number of shares outstanding,
ending (in thousands) 335 263 49
</TABLE>
(a) Annualized
+ This ratio reflects total expenses before
reduction for fees paid indirectly; such reductions
are included in the ratio of net expenses.
** Portfolio turnover excludes transactions in
connection with the February 1996 merger of CRI
Equity Portfolio.
<PAGE>
Calvert Responsibly Invested
Global Equity Portfolio
Managed by Murray Johnstone International, Ltd.
Dear Investor:
The Global Equity Portfolio returned 14.09% for the six months ended June
30, 1997, which is a bit above the 12.50% return for the average of 39 global
funds tracked by Lipper Analytical Services. The key development across all
economies, but particularly in the US, was growth accompanied by low inflation.
Global Market Performance
The US market, benefiting from continued low interest rates, returned 21.2%
during the period. While our holdings of US stocks contributed good gains, the
Portfolio was underweighted in the US market relative to the Morgan Stanley
Capital International World Index, which was negative for performance.
CALVERT RESPONSIBLY INVESTED
GLOBAL EQUITY PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/92 to 6/30/97
CRI Global Equity Ending balance $18,025
MSCI World Index Ending balance $18,969
Average Annual Total Return
(period ending 6/30/97)
One Year 21.61%
Five Year 12.51%
Life of Fund (6/92) 12.49%
Performance information is for the Portfolio and does
not reflect charges and expenses of the variable annuity.
Past performance does not indicate future results.
Performance for most European markets was also strong, with the following
three themes doing the most to drive stock prices higher: corporate
restructuring, low inflation and interest rates and progress toward monetary
union. Among the strongest performers were the Netherlands (up 20.4%), Spain (up
21.1%) and Switzerland (up 31.6%). The UK market underperformed as investors
waited to see the policies of the new Labour Government. The Portfolio's
holdings outperformed the European market in general, with a return of 23.0%
versus 14.4%.
The Japanese market saw a return of 9.2%. The increase in stock prices was
driven initially by companies benefiting from increased exports as a result of
the weak yen. Then, with the seasonal flow of money into the market from
domestic pension fund allocation, stocks across a broad range of sectors moved
higher. A better-than-expected economic report issued by The Bank of Japan also
helped to encourage investors. The Portfolio's stocks outperformed the market
with a return of 14.5%.
In the Far East, markets were dominated by Hong Kong and investors'
changing expectations for the region after its reversion to Chinese rule on
July 1. Hong Kong ended the period up 9.7%, but much of the strength was in the
Chinese shares, not the property stocks that comprise most of the market. Our
Hong Kong shares underperformed with a return of -5.8%.
<PAGE>
The converse of the attention focused on Hong Kong was the diminishing
trading volumes and decline in share prices in other markets in the region.
Although the economic cycle has begun to recover, markets in Singapore and
Malaysia were lackluster (down 7.5% and 11.8%). Australia and New Zealand
enjoyed relatively better performance (up 6.7% and 6.2%).
The emerging markets represented in the Portfolio, which are primarily in
Latin America, saw solid returns. Governments are now achieving a steady path to
development combined with moderate inflation, and stock markets have
demonstrated the ability to move independently from the US market and respond to
domestic or regional events. Our holdings in Mexico appreciated 62.7%, well
ahead of the 18.9% return for the index. Our investments in Argentina rose 9.3%,
which was behind the 14.2% return for that market.
Investment Strategy and Outlook
The investment strategy for the period focused on Europe, where we were
overweighted in Spain, Germany, the Netherlands and Switzerland. In response to
improving fundamentals, we made a new investment in Finland and added to our
holdings in Italy.
Exposure to emerging markets was increased with the addition of Chile and
South Africa to the portfolio. Interest rates are falling in Chile and with good
economic fundamentals and accelerating corporate earnings growth, the outlook
for the market is positive. South Africa should benefit from an improving
domestic economy with interest rates likely to fall as the currency stabilizes.
Elsewhere, Malaysia was reduced as monetary tightening undermined investor
sentiment.
Our low exposure to the US market was negative for performance. However, we
continue to believe better opportunities exist in countries whose business
cycles are not as mature.
Going forward, we expect the strength of the European markets to slow as
valuations become stretched. This may cause us to reduce our investments in the
region. Regarding the Japanese market, valuations are improving and we will
monitor development with an eye toward increasing exposure.
We are optimistic about the future for Hong Kong and expect to maintain our
exposure. The region should be able to prosper under the "one government, two
systems" process China has agreed to, and the appointment of senior officials
from the previous government to the new administration should help to maintain
continuity.
The emerging markets should also continue their progress in the second half
of the year. Accordingly, we plan to maintain the current level of investment in
these areas.
We appreciate your investment in the Portfolio.
Sincerely,
/s/ Andrew Preston /s/ Barbara Krumsiek
Andrew Preston Barbara Krumsiek
Portfolio Manager President
July 21, 1997
*Unless otherwise stated, performance figures quoted refer to the MSCI country
index for the relevant market, in U.S. dollars.
<PAGE>
<TABLE>
<CAPTION>
GLOBAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
<S> <C> <C>
Equity Securities - 93.8% Shares Value
Argentina - 1.9%
Banco Frances Del Rio La Plata, ADR 4,600 $149,500
Transportadora de Gas, ADR 12,000 150,000
299,500
Australia - 5.5%
Australian & New Zealand Bank Group 30,000 224,458
Brambles Industries, Ltd. 10,000 197,939
Commonwealth Bank 10,000 120,920
National Australia Bank 23,000 329,741
873,058
Belgium - 2.2%
Fortis 1,700 351,056
351,056
Chile - 2.1%
Compania de Telecom de Chile, ADR 10,000 330,000
330,000
Finland - 2.1%
Nokia 4,360 325,693
325,693
France - 5.4%
CIE Bancaire 1,000 127,623
Pinault Printemps 800 384,433
SGS Thomas Micro * 4,300 339,510
851,566
Germany - 5.8%
Deutsche Telekom 7,950 191,445
Douglas Holdings 6,790 270,572
Linde 210 160,742
Volkswagen 370 283,636
906,395
Hong Kong - 5.1%
Cheung Kong Holdings 20,000 197,488
Hong Kong Land Holdings 100,000 266,000
Hysan Development 55,000 162,218
Hysan Development (warrants) * 2,750 1,065
Sun Hung Kai Properties 15,000 180,547
807,318
Ireland - 2.1%
Allied Irish Banks 32,334 246,614
Bank of Ireland 7,270 79,905
326,519
Italy - 7.4%
IMI 32,000 288,073
Parmalat Finanziaria 84,000 118,865
STET 64,560 376,062
Telecom Italia Mobile 118,710 384,159
1,167,159
Japan - 12.7%
Canon Sales Co., Inc. 7,800 181,696
Eisai Co. 9,000 170,389
Fuji Machine Manufacturing 6,000 217,240
Keyence Corp. 1,100 163,148
Murata Manufacturing Co. 4,000 159,135
Namco 5,000 192,811
Nitto Denko Corp. 12,000 233,467
Sanwa Bank 3,000 44,495
Shiseido Co. 9,000 148,403
Sumitomo Bank 7,000 114,814
Sumitomo Electric Industries 11,000 184,261
Yamaha Motor Co. 19,000 188,972
1,998,831
Malaysia - 1.6%
AMMB Holdings Berhad (warrants) * 3,000 4,041
Malayan Bank Berhad 24,000 251,981
256,022
Mexico - 2.8%
Banpais, S.A., ADR * 10,000 0
Cifra, S.A. de C.V., ADR 153,000 280,801
Grupo Industrial Durango, S.A., ADR * 11,000 167,750
448,551
Netherlands - 2.4%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Equity Securities (Cont'd) Shares Value
ING Group 680 $ 31,352
Vendex International 1,960 107,341
Ver Ned Uitgevers 10,550 233,262
371,955
New Zealand - 1.7%
Independent News 30,000 157,926
Wilson & Horton 15,000 118,190
276,116
Singapore - 3.8%
City Developments 20,000 195,845
Keppel Corp. 17,000 75,505
Keppel Corp., A Shares * 4,250 18,430
Keppel Land Ltd. 50,000 132,895
Wing Tai Holdings 60,000 172,903
595,578
South Africa - 1.6%
Standard Bank Investment 5,000 245,757
245,757
Spain - 2.4%
Prosegur Seguridad 12,545 153,247
Telefonica de Espana 7,530 217,698
370,945
Sweden - 0.4%
Scania AB, Series A 930 28,253
Scania AB, Series B 930 28,373
56,626
Switzerland - 6.6%
Winterthur 580 510,877
Zurich Versicherun 1,313 522,502
1,033,379
United Kingdom - 8.8%
Anglian Group 7,800 31,824
Anglian Water 6,900 75,263
Azlan Group 5,000 46,212
Bellway 6,300 35,146
Cadbury Schweppes 8,700 77,656
Carlton Communications 9,100 77,059
Commercial Union 5,600 58,892
Firstbus 8,400 29,376
Halifax * 7,650 98,477
Johnson Matthey 8,400 80,574
Kingfisher 7,100 80,637
Lloyds TSB Group 10,800 110,969
Low & Bonar 4,400 21,982
Mayflower Corp. 11,600 28,204
Millennium and Copthne 7,000 43,714
Misys 2,000 44,997
National Westminster Bank 8,000 107,579
Norwich Union * 6,200 32,833
Safeway 10,100 58,448
SIG 5,600 29,842
Smith & Nephew 25,700 71,473
Somerfield 14,700 44,309
Vitec Group 3,200 30,375
Wolseley 9,400 73,338
1,389,179
United States - 9.4%
Bellsouth Corp. 3,400 157,675
Brady, (W.H.) Co., Class A 4,900 142,100
Cardinal Health, Inc. 2,580 147,705
CUC International, Inc. * 6,600 170,363
Fiserv, Inc. * 3,650 162,881
Hewlett Packard Co. 2,900 162,400
Interim Services, Inc. * 2,600 115,700
La Quinta Inns, Inc. 6,500 142,188
Molex, Inc., Class A 4,000 139,500
Quorum Health Group, Inc. * 4,000 143,000
1,483,512
Total Equity Securities (Cost $11,954,530) 14,764,715
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Time Deposit - 5.6% Amount
<S> <C> <C>
State Street Bank, London, 6.00%, 7/1/97 $879,996 879,996
Total Time Deposit (Cost $879,996) 879,996
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Corporate Obligations - 0.1%
Malaysia - 0.1%
AMMB Holdings, 5.00%, 5/13/02 30,000 10,162
Total Corporate Obligations (Cost $12,135) 10,162
TOTAL INVESTMENTS (Cost $12,846,661) - 99.5% 15,654,873
Other assets and liabilities, net 0.5% 74,370
Net Assets - 100% $15,729,243
</TABLE>
*Non-income producing.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<S> <C>
Assets
Investments in securities, at value $15,654,873
Cash 48,570
Interest and dividends receivable 61,602
Other assets 1,778
Total assets 15,766,823
Liabilities
Payable for securities purchased 16,925
Payable for shares redeemed 123
Payable to Calvert Asset Management Company, Inc. 11,503
Payable to Calvert Administrative Services Company 2,508
Payable to Calvert Shareholder Services, Inc. 382
Accrued expenses and other liabilities 6,139
Total liabilities 37,580
Net assets $15,729,243
Net Assets Consist of:
Par value and paid-in capital applicable to 735,632 shares
of common stock outstanding; $1 par value, 5,000,000
shares authorized $12,594,686
Undistributed net investment income 130,120
Accumulated net realized gain (loss) on investments
and foreign currencies 196,470
Net unrealized appreciation (depreciation) on investments and
assets and liabilities in foreign currencies 2,807,967
Net Assets $15,729,243
Net Asset Value per Share $21.38
</TABLE>
See notes to financial statements.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<S> <C>
Net Investment Income
Investment Income
Interest income (net of foreign taxes of $10) $ 28,004
Dividend income (net of foreign taxes of $19,626) 169,261
Total investment income 197,265
Expenses
Investment advisory fee 69,896
Transfer agency fees and expenses 1,069
Directors' fees and expenses 631
Administrative fees 20,000
Custodian fees 29,425
Reports to shareholders 1,493
Professional fees 1,118
Miscellaneous 288
Reimbursement from Advisor (13,010)
Total expenses 110,910
Fees paid indirectly (29,425)
Net expenses 81,485
Net Investment Income (Loss) 115,780
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Securities 117,065
Foreign currencies (13,400)
103,665
Change in unrealized appreciation or depreciation on:
Securities 1,663,950
Assets and liabilities in foreign currencies (311)
1,663,639
Net Realized and Unrealized Gain (Loss)
on Investments 1,767,304
Increase (Decrease) in Net Assets
Resulting From Operations $1,883,084
</TABLE>
See notes to financial statements.
<PAGE>
GLOBAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1996
1997
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 115,780 $ 125,031
Net realized gain (loss) 103,665 643,380
Change in unrealized appreciation or depreciation 1,663,639 896,590
Increase (Decrease) in Net Assets
Resulting From Operations 1,883,084 1,665,001
Distributions to shareholders from
Net investment income - (100,000)
Net realized gain on investments - (597,000)
Total distributions - (697,000)
Capital share transactions
Shares sold 1,826,296 4,709,791
Reinvestment of distributions - 697,005
Shares redeemed (2,006,954) (2,178,927)
Total capital share transactions (180,658) 3,227,869
Total Increase (Decrease)
in Net Assets 1,702,426 4,195,870
Net Assets
Beginning of period 14,026,817 9,830,947
End of period (including undistributed net
investment income of $130,120 and $14,340,
respectively) $15,729,243 $14,026,817
Capital Share Activity
Shares sold 93,556 258,532
Reinvestment of distributions - 37,193
Shares redeemed (106,369) (120,463)
Total capital share activity (12,813) 175,262
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Global Equity Portfolio (the "Portfolio"), a series of Acacia
Capital Corporation's Calvert Responsibly Invested (CRI) Portfolios, is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The operations of each series are accounted for
separately. The shares of the Portfolio are sold to affiliated and unaffiliated
insurance companies for allocation to certain of their variable separate
accounts.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sales price. Foreign security prices,
furnished by quotation services in the security's local currency, are translated
using the current U. S. dollar exchange rate. Unlisted securities and listed
securities for which the last sale price is not available are valued at the most
recent bid price or based on a yield equivalent obtained from the securities'
market maker. Other securities and assets for which market quotations are not
available or deemed inappropriate are valued in good faith under the direction
of the Board of Directors.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date or, in the case of
dividends on certain foreign securities, as soon as the Portfolio is informed of
the ex-dividend date. Interest income, accretion of discount and amortization of
premium are recorded on an accrual basis.
Foreign Currency Transactions: The Portfolio's accounting records are maintained
in U. S. dollars. For valuation of assets and liabilities on each date of net
asset value determination, foreign denominations are translated into U. S.
dollars using the current exchange rate. Security transactions, income and
expenses are converted at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on foreign denominated
securities is included with the net realized and unrealized gain or loss on
securities. Other foreign currency gains or losses are reported separately.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Portfolio on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles, accordingly,
periodic reclassifications are made within the Portfolio's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
Expense Offset Arrangements: The Portfolio has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Portfolio's cash on deposit with the bank. Such deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
Note B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of 1% of the Portfolio's average daily net assets.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Portfolio for an annual fee, payable monthly, of
the greater of $40,000 or .10% of the Portfolio's annual average daily net
assets.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Director who is not affiliated with the Advisor received a fee of $750 for
each Board meeting attended plus an annual fee of $3,000 for Directors not
serving on other Calvert Fund Boards. Director's fees are allocated to each of
the portfolios served.
NOTE C-Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $4,660,916 and $4,989,437, respectively.
The cost of investments owned at June 30, 1997 was substantially the same for
federal income tax and financial reporting purposes. Net unrealized appreciation
aggregated $2,808,212, of which $3,128,221 related to appreciated securities and
$320,009 related to depreciated securities.
<PAGE>
GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDING
June 30, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Net asset value, beginning $ 18.74 $ 17.15 $15.89
Income from investment operations
Net investment income .16 .17 .27
Net realized and unrealized gain (loss) 2.48 2.40 1.69
Total from investment operations 2.64 2.57 1.96
Distributions from
Net investment income - (.14) (.25)
Net realized gains - (.84) (.45)
Total distributions - (.98) (.70)
Total increase (decrease) in net asset value 2.64 1.59 1.26
Net asset value, ending $ 21.38 $18.74 $17.15
Total return 14.09% 14.99% 12.35%
Ratios to average net assets:
Net investment income 1.66%(a) 1.02% 1.48%
Total expenses + 1.59%(a) 1.59% 1.51%
Net expenses 1.17%(a) 1.18% 1.12%
Expenses reimbursed .19%(a) .23% .39%
Portfolio turnover 35% 85% 90%
Average commission rate paid $.0334 $.0352 $ -
Net assets, ending (in thousands) $15,729 $14,027 $9,831
Number of shares outstanding,
ending (in thousands) 736 748 573
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31,
1994 1993 1992**
<S> <C> <C> <C>
Net asset value, beginning $17.72 $14.57 $ 15.00
Income from investment operations
Net investment income .11 .11 (.02)
Net realized and unrealized gain (loss) (.49) 4.07 (.41)
Total from investment operations (.38) 4.18 (.43)
Distributions from
Net investment income (.13) (.08) -
Net realized gains (1.32) (.95) -
Total distributions (1.45) (1.03) -
Total increase (decrease) in net asset value (1.83) 3.15 (.43)
Net asset value, ending $15.89 $17.72 $ 14.57
Total return (2.13%) 29.72% (3.27%)
Ratios to average net assets:
Net investment income .59% 1.00% (.98%)(a)
Total expenses + - - -
Net expenses 1.24% .94% .98%(a)
Expenses reimbursed .29% .10% 1.07%(a)
Portfolio turnover 84% 64% -
Net assets, ending (in thousands) $7,765 $4,529 $ 236
Number of shares outstanding,
ending (in thousands) 489 256 16
</TABLE>
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid
indirectly; such reductions are included in the ratio
of net expenses.
**From June 30, 1992, inception.
<PAGE>
Calvert Responsibly Invested
Balanced Portfolio
Managed by Calvert Asset Management Company, Inc. and NCM Capital Management,
Inc.
Dear Investor:
The Balanced Portfolio generated a return of 10.48% for the six months
ended June 30, 1997, which compares favorably to the 10.19% average return for
the 39 balanced funds tracked by Lipper Analytical Services.
Review of the Economy and Markets
The economy expanded at a robust pace for the first quarter then appeared
to moderate in the second quarter. In an attempt to defuse inflationary
pressures, the Federal Reserve adopted a slightly more restrictive monetary
policy. The Fed nudged its target for key short-term rates higher in March, but
left rates unchanged during the second quarter.
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO
Comparison of change in value
of a hypothetical $10,000 investment.
[GRAPH APPEARS HERE]
Period between 6/01/88 to 6/30/97
CRI Balanced Portfolio Ending balance $26,975
S&P 500 Reinv Ending balance $39,174
Lehman Aggregate BD Ending balance $23,283
90-Day T-Bill Ending balance $17,177
Average Annual Total Return
(period ending 6/30/97)
One Year 20.67%
Five Year 12.92%
Ten Year 10.43%
Life of Fund (9/86)* 10.90%
*New subadvisors assumed management of the
Portfolio effective February 1995.
Performance information is for the Portfolio and does
not reflect charges and expenses of the variable annuity.
Past performance does not indicate future results.
In general, bond yields moved higher during the first part of the year then
backed down toward the close of this reporting period as investors revised their
expectations for the next Fed move-first thinking the Fed would take steps to
raise rates then expecting no change. Most measures of the broad stock market
advanced, with the Standard & Poor's 500 Stock Index returning 20.6% for the six
months.
Performance and Strategy
We maintained the Portfolio's target asset mix of roughly 60% stocks and
40% bonds and benefited from positive returns from both asset classes.
Equity Investments-NCM Capital Management, Inc.
The Portfolio's strongest returns came from sectors where we have the
largest exposure: technology, financial services and consumer products.
Technology stocks bounced back after a dismal first quarter. We took
profits in this area on strength, but remain slightly overweighted relative to
our peers. Financial stocks benefited from the Federal Reserve's decision to
leave key short-term rates unchanged in the second quarter. Lower interest rates
improves the profit outlook for banks and other financial services companies.
Consumer staples companies were favorites because of their ability to maintain
stable earnings growth.
Strong stock selection was also a key factor. Good gains came from US
Robotics, Cisco Systems, Compaq Computer, Avon, Fort Howard, Bank America and
Aflac.
Fixed-Income Investments-Calvert Asset Management Company, Inc.
Bond yields began to trend higher going into 1997 but retraced most of
their advance in a late second quarter rally. In anticipation of generally
higher rates, we kept the Portfolio's weighted average maturity near the short
end of its target range. (It was approximately 13 years at the close of this
reporting period). This helped to offset the negative effect of rising rates
during the first part of the year, but meant we did not participate as fully in
the late-stage rally as our more aggressive peers.
<PAGE>
Since the beginning of the calendar year, we have implemented a more active
management strategy. We expect this strategy to improve the Fund's total return
over time. Higher portfolio trading activity will result in a higher turnover
ratio due to the Fund's current asset size. For the six months ended June 30,
1997, the turnover ratio was 590%.
Outlook
The stock market has rewarded investors with spectacular total returns for
the past two and a half years. While our long-term outlook is positive, we could
experience a correction as stocks settle back in to a more typical return range,
which has historically been about 10% annually.
The bond market is also likely to continue to exhibit a high degree of
volatility. At some point during the next six months, we expect interest rates
will trend a bit higher. Accordingly, we will maintain our defensive strategy.
Thank you for your investment in the Balanced Portfolio.
Sincerely,
/s/ Barbara Krumsiek
Barbara Krumsiek
President
July 21, 1997
<PAGE>
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Equity Securities - 59.3% Shares Value
Airlines - 0.3%
AMR Corp. * 5,600 $ 518,000
518,000
Biotechnology - 0.6%
Amgen, Inc. 20,200 1,174,125
1,174,125
Business Equipment and Services - 0.9%
Sun Microsystems, Inc. * 46,340 1,724,717
1,724,717
Capital Goods - 0.6%
Illinois Tool Works, Inc. 23,800 1,188,512
1,188,512
Computer - Hardware - 0.9%
Compaq Computer Corp. * 16,700 1,657,475
1,657,475
Computer - Networks - 3.2%
3Com Corp. * 71,950 3,237,750
Cisco Systems, Inc. * 41,800 2,805,825
6,043,575
Computer - Software - 3.9%
BMC Software, Inc. * 27,500 1,522,812
Computer Associates International, Inc. 40,577 2,259,632
Microsoft Corp. * 8,820 1,114,628
Oracle Corp. * 51,357 2,587,109
7,484,181
Consumer Products and Services - 6.3%
Avon Products, Inc. 37,100 2,617,869
Colgate Palmolive Co. 37,000 2,414,250
CUC International, Inc. * 58,050 1,498,416
Dial Corp. 68,200 1,065,625
Fort Howard Corp. * 25,200 1,275,750
Gillette Co. 33,800 3,202,550
12,074,460
Electronics - 1.7%
EMC Corp. * 40,450 1,577,550
Intel Corp. 12,300 1,744,294
3,321,844
Entertainment - 1.1%
Disney (Walt) Co. 26,205 2,102,951
2,102,951
Financial Services - 7.8%
Banc One Corp. 45,800 2,218,438
BankAmerica Corp. 36,800 2,375,900
BankBoston Corp. 20,315 1,463,950
Chase Manhattan Corp. 20,100 1,950,956
Federal National Mortgage Assn. 44,900 1,958,762
Green Tree Financial Corp. 50,942 1,814,809
Umbono Investment Corp., Ltd. * 1,154,900 3,054,617
14,837,432
Food Products - 4.4%
CPC International, Inc. 29,500 2,723,219
Heinz (H.J.) Co. 49,700 2,292,412
Hershey Foods Corp. 38,000 2,101,875
Interstate Bakeries Corp. 20,900 1,239,631
8,357,137
Health Care - 2.1%
Cardinal Health, Inc. 16,100 921,725
Johnson & Johnson 48,237 3,105,257
4,026,982
Industrial Products - 1.0%
Praxair, Inc. 32,700 1,831,200
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
1,831,200
Insurance - 4.1%
AFLAC, Inc. 40,550 1,915,988
American International Group, Inc. 15,950 2,382,531
MGIC Investment Corp. 32,700 1,567,556
SunAmerica, Inc. 41,300 2,013,375
7,879,450
Manufacturing - 1.0%
Dover Corp. 31,145 1,915,418
1,915,418
Medical - 2.9%
Boston Scientific Corp. * 36,085 2,216,972
Guidant Corp. 14,700 1,249,500
Medtronic, Inc. 25,100 2,033,100
5,499,572
Office Equipment and Supplies - 0.8%
Viking Office Products, Inc. * 79,300 1,506,700
1,506,700
Equity Securities (Cont'd) Shares Value
Oil and Gas - 1.9%
Baker Hughes, Inc. 54,300 $2,100,731
Seitel, Inc. * 38,000 1,444,000
3,544,731
Paper and Packaging - 2.0%
Avery Dennison Corp. 61,900 2,483,738
Sealed Air Corp. * 26,100 1,239,750
3,723,488
Pharmaceutical - 2.7%
Merck & Co., Inc. 29,500 3,053,250
Schering Plough Corp. 45,500 2,178,312
5,231,562
Retail - 4.6%
Autozone, Inc. * 49,300 1,161,631
Barnes and Noble, Inc. * 30 1,290
Consolidated Stores Corp. * 42,515 1,477,396
Jones Apparel Group, Inc. * 32,200 1,537,550
Kroger Co. * 62,300 1,806,700
Penney (J.C.), Inc. 54,800 2,859,875
8,844,442
Telecommunications - 4.5%
Ameritech Corp. 31,395 2,132,898
Century Telephone Enterprises, Inc. 49,665 1,673,090
Ericsson (L. M.) Telephone, Co., Class B, ADR 63,205 2,488,697
SBC Communications, Inc. 37,800 2,338,875
8,633,560
Total Equity Securities (Cost $86,454,343) 113,121,514
Principal
Corporate Obligations - 30.5% Amount
Advanta Corp., 6.785%, 7/27/98 $1,000,000 996,790
Advanta National Bank, 6.45%, 10/30/00 1,000,000 965,930
AFC Capital Trust I, 8.207%, 2/3/27 500,000 509,030
Alco Capital Resource, Inc., 6.58%, 3/29/99 2,000,000 2,005,300
American General Institutional Capital A,
7.57%, 12/1/45 1,500,000 1,408,005
AMR Corp., 9.82%, 3/7/01 25,000 27,134
Banc One Auto, 6.40%, 11/20/03 6,000,000 5,977,790
Banc One Corp., 8.00%, 4/29/27 4,500,000 4,642,605
BankBoston Capital Trust III, 6.5625%, 6/15/27 3,000,000 2,961,804
Comerica Bank, 7.25%, 6/15/07 1,500,000 1,505,715
Conseco, Inc., 10.50%, 12/15/04 1,000,000 1,174,120
Continental Valorem Corp. VRDN, 6.05%,
6/1/13, LOC: Tokai Bank Ltd. 700,000 700,000
Countrywide Capital III, 8.05%, 6/15/27 1,000,000 1,008,420
Dayton Hudson Corp., 6.80%, 10/1/01 1,000,000 996,110
Principal
Corporate Obligations (Cont'd) Amount Value
First USA Bank, 5.75%, 1/15/99 $1,725,000 $1,709,147
Goldman Sachs Group LP, 6.20%, 12/15/00 2,000,000 1,970,500
Goldman Sachs Group LP, 6.75%, 2/15/06 1,000,000 970,124
Household Finance Corp., 6.63%, 5/28/99 1,000,000 1,003,380
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Household Finance Corp., 7.65%, 5/15/07 1,500,000 1,545,405
International Lease Finance Corp., 6.64%, 2/1/00 1,000,000 1,002,190
Life Re Capital Trust I, 8.72%, 6/15/27 3,000,000 3,023,340
McKesson Corp., 6.875%, 3/1/02 3,000,000 3,007,980
National City Bank, 7.25%, 7/15/10 1,870,000 1,861,473
Penney (J.C.), Inc., 7.625%, 3/1/97 2,000,000 1,968,620
Pitney Bowes Credit Corp., 6.305%, 9/23/98 1,000,000 1,003,430
PDR Finance LLC., VRDN, 5.53%, 4/1/27,
LOC: First America Bank 900,000 900,000
Security Benefit Life Co., 8.75%, 5/15/16 2,000,000 2,102,374
St. George Bank, Ltd., 7.15%, 6/18/07 1,500,000 1,480,665
Suntrust Capital I, 6.4825%, 5/15/27 2,000,000 1,980,962
Summit Capital Trust I, 8.40%, 3/15/27 1,000,000 1,015,740
Toronto Dominion Bank, 6.50%, 1/15/07 3,000,000 2,962,548
Transamerica Corp., 9.375%, 3/1/08 2,000,000 2,310,840
Xerox Capital Trust I, 8.00%, 2/1/27 1,500,000 1,499,842
Total Corporate Obligations (Cost $58,129,287) 58,197,313
Repurchase Agreements - 2.1%
State Street Bank: 5.25%, dated 6/30/97, due 7/1/97
(Collateral: $4,154,909, FHLMC, 6.25%, 11/12/99
4,000,000 4,000,000
Total Repurchase Agreements (Cost $4,000,000) 4,000,000
Municipal Obligations - 2.0%
Maryland State Economic Development Corp.,
8.00%, 10/1/05 1,000,000 1,006,030
Maryland State Economic Development Corp.,
8.625%, 10/1/19 750,000 775,335
New Jersey Economic Development Authority,
7.425%, 2/15/29 1,500,000 1,495,275
Texas State, College Student Loan, 7.35%, 12/1/21 600,000 573,810
Total Municipal Obligations (Cost $3,846,540) 3,850,450
U.S. Treasury - 1.0%
U.S. Treasury Notes, 6.625%, 5/15/07 2,000,000 2,017,220
Total U.S. Treasury (Cost $2,033,655) 2,017,220
U.S. Government and Principal
Instrumentalities - 0.4% Amount Value
WNH Ltd. Partnership, 9.40%, 10/1/99 $705,000 $738,255
Total U.S. Government Agencies and
Instrumentalities (Cost $725,588) 738,255
Other Debt - 0.3%
Chickasaw Nation, Oklahoma, 10.00%, 8/1/03 #
1,000,000 600,000
Total Other Debt (Cost $1,000,000) 600,000
TOTAL INVESTMENTS (Cost $156,189,413) - 95.6% 182,524,752
Other assets and liabilities, net - 4.4% 8,327,842
Net Assets - 100% $190,852,594
</TABLE>
+ Optional tender features give these securities
a shorter effective maturity date.
* Non-income producing.
# this security is in default.
Explanation of Guarantees:
LOC: Letter of credit
Abbreviations:
VDRN: Variable Rate Demand Notes
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Assets
Investments in securities, at value $182,524,752
Cash 382,866
Receivable for securities sold 10,086,241
Interest and dividends receivable 971,063
Other assets 18,905
Total assets 193,983,827
Liabilities
Payable for securities purchased 2,999,690
Payable to Calvert Asset Management Company, Inc. 109,631
Payable to Calvert Shareholder Services, Inc. 4,642
Accrued expenses and other liabilities 17,270
Total liabilities 3,131,233
Net assets $190,852,594
Net Assets Consist of:
Par value and paid-in capital applicable to 97,358,335
shares of common stock outstanding; $1 par value,
300,000,000 shares authorized $156,634,851
Undistributed net investment income (loss) 2,847,502
Accumulated net realized gains (losses)
on investments and foreign currencies 5,034,902
Net unrealized appreciation (depreciation)
on investments and assets and liabilities
in foreign currencies 26,335,339
Net Assets $190,852,594
Net Asset Value per Share $1.960
</TABLE>
See notes to financial statements.
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Net Investment Income
Investment Income
Interest income $2,588,726
Dividend income (net of foreign taxes of $1,481) 508,689
Total investment income 3,097,415
Expenses
Investment advisory fee 581,598
Transfer agency fees and expenses 13,322
Directors' fees and expenses 7,457
Custodian fees 27,851
Reports to shareholders 6,252
Professional fees 16,055
Miscellaneous 5,422
Total expenses 657,957
Fees paid indirectly (27,851)
Net expenses 630,106
Net Investment Income 2,467,309
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) on:
Securities 3,649,177
Foreign currencies 60
3,649,237
Change in unrealized appreciation or depreciation on:
Securities 11,723,422
Assets and liabilities in foreign currencies
- -
11,723,422
Net Realized and Unrealized Gain (Loss)
on Investments 15,372,659
Increase (Decrease) in Net Assets
Resulting From Operations $17,839,968
</TABLE>
See notes to financial statements.
<PAGE>
BALANCED PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
1997 1996
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 2,467,309 $ 3,649,653
Net realized gain (loss) 3,649,237 9,057,850
Change in unrealized appreciation or depreciation 11,723,422 3,628,677
Increase (Decrease) in Net Assets
Resulting From Operations 17,839,968 16,336,180
Distributions to shareholders from
Net investment income - (3,502,338)
Net realized gain on investments - (8,620,000)
Total distributions - (12,122,338)
Capital share transactions
Shares sold 17,926,798 38,725,037
Shares issued from merger (Note A) - 3,670,827
Reinvestment of distributions - 12,122,338
Shares redeemed (6,387,166) (7,496,263)
Total capital share transactions 11,539,632 47,021,939
Total Increase (Decrease)
in Net Assets 29,379,600 51,235,781
Net Assets
Beginning of period 161,472,994 110,237,213
End of period (including undistributed
net investment income of $2,847,502 and
$380,193, respectively) $190,852,594 $161,472,994
Capital Share Activity
Shares sold 9,820,971 21,664,978
Shares issued from merger (Note A) - 2,061,104
Reinvestment of distributions - 6,833,336
Shares redeemed (3,508,117) (4,241,957)
Total capital share activity 6,312,854 26,317,461
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A-Significant Accounting Policies
General: The Balanced Portfolio (the "Portfolio"), a series of Acacia Capital
Corporation's Calvert Responsibly Invested (CRI) Portfolios, is registered under
the Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The operations of each series are accounted for separately.
The shares of the Portfolio are sold to affiliated and unaffiliated insurance
companies for allocation to certain of their variable separate accounts.
On February 23, 1996, the net assets of CRI Bond Portfolio were merged into the
Portfolio. The acquisition was accomplished by a tax free exchange of 2,061,104
shares of the Portfolio (valued at $3,670,827) for the 230,738 shares of CRIBond
Portfolio outstanding at February 23, 1996. CRIBond Portfolio's net assets at
that date, including $1,419 of unrealized appreciation, were combined with those
of the Portfolio. The aggregate net assets of the Portfolio and CRIBond
Portfolio immediately before the acquisition were $121,161,865 and $3,670,445,
respectively.
Security Valuation: Securities listed or traded on a national securities
exchange are valued at the last reported sale price. Foreign security prices,
furnished by quotation services in the security's local currency, are translated
using the current U.S. dollar exchange rate. Unlisted securities and listed
securities for which the last sale price is not available are valued at the most
recent bid price or based on a yield equivalent obtained from the securities'
market maker. Municipal securities are valued utilizing the average of bid
prices or at bid prices based on a matrix system (which considers such factors
as security prices, yields, maturities and ratings) furnished by dealers through
an independent pricing service. Other securities and assets for which market
quotations are not available or deemed inappropriate are valued in good faith
under the direction of the Board of Directors.
Repurchase Agreements: The Portfolio may enter into repurchase agreements with
recognized financial institutions or registered broker/dealers and, in all
instances, holds underlying securities with a value exceeding the total
repurchase price, including accrued interest.
Security Transactions and Investment Income: Security transactions are accounted
for on trade date. Realized gains and losses are recorded on an identified cost
basis. Dividend income is recorded on the ex-dividend date or, in the case of
dividends on certain foreign securities, as soon as the Portfolio is informed of
the ex-dividend date. Interest income, accretion of discount and amortization of
premium are recorded on an accrual basis.
Foreign Currency Transactions: The Portfolio's accounting records are maintained
in U. S. dollars. For valuation of assets and liabilities on each date of net
asset value determination, foreign denominations are translated into U. S.
dollars using the current exchange rate. Security transactions, income and
expenses are converted at the prevailing rate of exchange on the date of the
event. The effect of changes in foreign exchange rates on foreign denominated
securities is included with the net realized and unrealized gain or loss on
securities. Other foreign currency gains or losses are reported separately.
Distributions to Shareholders: Distributions to shareholders are recorded by the
Portfolio on ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains, if any, are paid at least
annually. Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles, accordingly,
periodic reclassifications are made within the Portfolio's capital accounts to
reflect income and gains available for distribution under income tax
regulations.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Portfolio has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Portfolio's cash on deposit with the bank. Such deposit arrangement is an
alternative to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
Note B-Related Party Transactions
<PAGE>
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of .70% of the Portfolio's average daily net assets. Effective July,
1996, the Portfolio began paying a monthly performance fee of plus or minus up
to .15%, on an annual basis, of average daily net assets of the performance
period depending on the Portfolio's performance compared to the Lipper Balanced
Funds Index.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Director who is not affiliated with the Advisor received a fee of $750 for
each Board meeting attended plus an annual fee of $3,000 for Directors not
serving on other Calvert Fund Boards. Director's fees are allocated to each of
the portfolios served.
Note C-Investment Activity
During the period, purchases and sales of investments, other than short-term
securities, were $327,850,850 and $280,812,538, respectively. U.S. government
security purchases were $596,160,485 and sales were $633,654,124.
The cost of investments owned at June 30, 1997 was substantially the same for
federal income tax purposes and financial reporting purposes. Net unrealized
appreciation aggregated $26,335,339, of which $27,640,020 related to appreciated
securities and $1,304,681 related to depreciated securities.
As a cash management practice, the Portfolio may sell or purchase short-term
variable rate notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
<PAGE>
BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDED
June 30, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Net asset value, beginning $ 1.774 $ 1.703 $ 1.440
Income from investment operations
Net investment income .025 .040 .050
Net realized and unrealized gain (loss) .161 .175 .380
Total from investment operati .186 .215 .430
Distributions from
Net investment income - (.042) (.040)
Net realized gains - (.102) (.127)
Total distributions - (.144) (.167)
Total increase (decrease) in net asset value .186 .071 .263
Net asset value, ending $ 1.960 $ 1.774 $ 1.703
Total return 10.48% 12.62% 29.87%
Ratios to average net assets:
Net investment income 2.89%(a) 2.71% 3.08%
Total expenses + .77%(a) .81% .83%
Net expenses .74%(a) .78% .81%
Portfolio turnover 590% 99% 163%
Average commission rate paid $ .0500 $ .0481 -
Net assets, ending (in thousands) $190,853 $161,473 $110,237
Number of shares outstanding,
ending (in thousands) 97,358 91,045 64,728
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1994 1993 1992
<S> <C> <C> <C>
Net asset value, beginning $ 1.537 $1.465 $1.403
Income from investment operations
Net investment income .046 .045 .044
Net realized and unrealized gain (loss) (.097) .072 .062
Total from investment operations (.051) .117 .106
Distributions from
Net investment income (.046) (.045) (.044)
Net realized gains - - -
Total distributions (.046) (.045) (.044)
Total increase (decrease) in net asset value (.097) .072 .062
Net asset value, ending $ 1.440 $1.537 $1.465
Total return (3.30%) 8.00% 7.61%
Ratios to average net assets:
Net investment income 3.39% 3.69% 4.05%
Total expenses + - - -
Net expenses .80% .81% .85%
Portfolio turnover 43% 14% 15%
Net assets, ending (in thousands) $66,593 $54,000 $28,471
Number of shares outstanding,
ending (in thousands) 46,244 35,142 19,433
</TABLE>
(a) Annualized
+ Effective December 31, 1995, this ratio reflects
total expenses before reduction for fees paid indirectly;
such reductions are included in the ratio of net expenses.
<PAGE>
Acacia Capital Corporation
Calvert Responsibly Invested
Balanced Portfolio
Prospectus dated April 30, 1997
Date of Supplement: July 18, 1997
Effective July 18, 1997, Wendell Mackey is no longer the portfolio manager for
the equity portion of the Balanced Portfolio. Please replace the paragraph
regarding Mr. Mackey under the section The Fund and Its Management with the
following:
The equity portion of the Balanced Portfolio, which is managed by the
subadvisor, NCM Capital Management Group Inc., will be managed by a committee of
the subadvisor, headed by its president, Maceo Sloan.
<PAGE>
Dreyfus
Socially Responsible Growth Fund, Inc.
Semi-Annual
Report
June 30, 1997
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this semi-annual report for The Dreyfus
Socially Responsible Growth Fund, Inc. for the six-month reporting period ended
June 30, 1997. Over this period, your Fund produced a total return of 16.33%,*
which compares with a total return of 20.60% for the Standard & Poor's 500
Composite Stock Price Index (S&P 500).**
ECONOMIC REVIEW
Will they or won't they? This year's cliffhanger, repeated each time the
Federal Reserve Board (the Fed) Open Market Committee meets, reflects differing
views on the need for monetary tightening between (1) those who point to a
fundamentally strong economy operating with little slack, and (2) those who
point to the absence of rising inflation. At issue is the business cycle, now in
its seventh year of expansion, which on one view may be vulnerable to renewed
inflation. The alternative theory is that the business and inflation cycles have
been eliminated by global capacity and the technology era. The benign economic
environment has kept market interest rates within their range of the past 18
months, swaying with the fluctuations of short-term economic evidence.
When the Fed tightened the Federal Funds rate 25 basis points in March, it
was primarily because real Gross Domestic Product (GDP) in the first calendar
quarter of 1997 was growing at a 5.8% annualized pace on the heels of 3.8%
growth in the fourth quarter of 1996. However, by the Fed's May meeting,
economic evidence indicated a slowing economy in March and April, allowing the
Fed to stand pat. Furthermore, the Fed took no action at its July meeting. Could
this be the long awaited slowdown? Evidence for the second quarter continues to
portray a slower economy, although the pace of manufacturing activity seems to
be quickening again.
Faster economic growth since last fall has been accompanied by slower price
inflation. Domestically, a stronger dollar this year is keeping down prices of
many import-competing products. Additionally though, rising hourly wages are not
yet translating into significant wage inflation. Rather, they are frequently
ascribed to well-earned productivity rewards, while employee benefit costs
continue to be contained.
The risk for corporate profits is probably more clear-cut. The combination
of weak pricing power and a tightening labor market would likely hurt profits in
a sustained economic slowdown. Through the second quarter, however, profits
continued to surprise on the upside, and we currently expect overall profits to
post modest gains in 1997.
MARKET OVERVIEW
Over the past 12 months the market has changed personalities several times as
investors have been keeping one eye on the economy and the Fed, and the other on
valuation and earnings of stocks. While pundits were alleging that the market
had crossed over the irrational level in its valuation of large-cap stocks,
economists were slugging it out over "slow to moderate growth" versus
"reacceleration" of economic growth. Confusion resulted, and that, combined with
fears of a vigilant Fed, led to a sharp correction last July, when the various
averages plunged anywhere from 6% on the S&P 500 to 10% on the Nasdaq. Since
then the market has been on a sometimes turbulent but persistent uptrend, with a
group of big-cap stocks leading the way. Alan Greenspan's implied threat of
raising rates to counter what he calls "irrational exuberance" has not deterred
the strong engine of money flow that continues to fuel the market. With economic
growth healthy but moderate, inflation all but absent from the economy, and
earnings growth weighing in at respectable levels for this time in the cycle,
most naysayers are capitulating and trying to look back in history to figure out
when the market has been so strong for so long.
<PAGE>
Nineteen ninety-seven got off to a good start as the market was fueled by
typical annual asset allocation shifts by investors, payment of 1996 bonuses,
and households continuing to invest for the future. Portfolio managers looked to
1996 laggards and stocks with cheap relative valuations, which were primarily in
the cyclical area. Early in 1997, the economy was beginning to show prospective
signs of strength. This resulted in the market focusing on economically
sensitive stocks, realizing that perhaps these companies' chances for profit had
been declared dead too soon. Consumer growth companies also continued their
reign as the market decided that large, liquid, stable, growing companies were
still the best hedge against an uncertain economy. But what really influenced
the market in the face of Mr. Greenspan's "irrational exuberance" comment was
the fact that the economy (along with the financial markets) was showing some
unnerving signs of strength. Housing data, labor market tightening, stronger
business spending than expected, retail sales, and increasing consumer
confidence levels due to low unemployment and strong financial market
performance all led to the Fed increasing interest rates in March as a
precautionary measure. This brought about a market setback in late March and
early April which proved short-lived.
Since then the market has come to realize that the corporate profit picture,
albeit in a slower growth mode, is still intact. And the economy, at least for
now, does not appear to be in any imminent danger of inflation. June marked the
sixth straight month of wholesale price index (PPI) decreases while retail sales
turned up after declining for three months.
PORTFOLIO FOCUS
The Fund's strongest return contributions came from the financial services,
consumer staples and technology sectors. We continue to favor these areas on the
secular themes of savings and investment, globalization and productivity. The
Fund's performance during the period benefited from its holdings in Allstate,
AFLAC, SunAmerica, Colgate-Palmolive, Gillette, Coca-Cola, Microsoft, BMC
Software, and US Robotics. Each of these companies not only outperformed the
market, but also outperformed their corresponding sectors. Each delivered robust
earnings gains during the past 12 months and convinced Wall Street that the
future was indeed bright for these companies.
After a dismal performance in the first quarter of 1997, technology regained
investors' attention and performed well during the second quarter of 1997. We
currently intend to take profits in this area on strength but will remain
slightly overweighted, as we continue to like the long-term picture for
technology. Consumer staple stocks continue to attract interest because of the
stability of their earnings, although many, we believe, are reaching full
valuation. The financial stocks benefited from a rebound in the bond market as
investors correctly concluded that the Fed will leave rates unchanged as it did
at its July meeting. We currently remain overweighted in this group as we
believe that company-specific fundamentals remain intact and also that the
long-term direction of interest rates is lower.
The transportation and industrial sectors performed well during the period.
However, our underweighting in these two sectors hurt performance. The portfolio
was also hurt by the poor performance of stocks in the consumer cyclical sector,
including OfficeMax and Viking Office Products.
SOCIAL GOALS
Social screening is part of the Fund's fundamental investment objective, and
Fund management is continually involved in ensuring that portfolio holdings
exhibit evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America based on the Fund's social
criteria. The Fund's strong performance relative to its Lipper peer group
reveals, in the opinion of Fund management, that solid social
<PAGE>
screening and attractive financial returns are not incompatible. For example, we
believe that companies with solid environmental policies and practices can
exhibit more stable returns over the long run as they benefit from increased
efficiencies and avoid potential costly liability settlements. In addition,
companies that take their environmental responsibilities seriously realize that
by reducing in-house waste and packaging costs, minimizing toxic releases, and
increasing the use of recycling, they can generate substantial cost savings, and
are able to foster better relations not only with the communities they operate
in but with the public at large.
We have positive news to report on a number of the Fund's core holdings. Sun
Microsystems recently received the EPA's "Energy Star Office Equipment Partner
of the Year Award" for promoting the importance of energy conservation
throughout the company. BankAmerica, one of the Fund's largest holdings for some
time, has signed the Coalition for Environmentally Responsible Economies (CERES)
principles. On the diversity front, two of the companies currently held in the
Fund's portfolio, Avon Products and Allstate, won 1997 Catalyst Awards for
initiatives that underscore their commitment to the promotion and advancement of
women.
OUTLOOK
Currently, the outlook for the stock market appears to be positive. Lower
interest rates, modest economic growth, no evident threat of inflation, and
continued money flows into equity mutual funds bode well for the market.
However, somewhat pricey valuations and whispers of potential reaccelerating
economic growth temper our enthusiasm in the short term. Yet, the overall
fundamentals appear to be strong.
Sincerely,
Maceo K. Sloan Eric Steedman
Portfolio Manager Portfolio Manager
NCM Capital Management Group, Inc. The Dreyfus Corporation
July 21, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
<PAGE>
<TABLE>
<CAPTION>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------------
Statement of Investments June 30, 1997 (Unaudited)
Common Stocks--91.4% Shares Value
- -------------------------------------------------------------------------------------- ------- -----------
<S> <C> <C> <C>
Consumer Non-Durables--13.8% Avon Products.......................................... 40,000 $ 2,822,500
CPC International...................................... 30,000 2,769,375
Clorox................................................. 28,500 3,762,000
Coca-Cola.............................................. 55,400 3,739,500
Colgate-Palmolive...................................... 65,800 4,293,450
Gillette............................................... 48,200 4,566,950
Interstate Bakeries.................................... 32,600 1,933,587
Jones Apparel Group.................................(a) 38,500 1,838,375
McCormick & Co......................................... 27,900 704,475
-----------
26,430,212
-----------
Consumer Services--5.6% BET Holdings, Cl. A.................................(a) 15,200 497,800
CUC International...................................(a) 106,700 2,754,193
Disney (Walt).......................................... 49,300 3,956,325
Service Corp. International............................ 110,200 3,622,825
-----------
10,831,143
-----------
Electronic Technology--10.9% Cisco Systems.......................................(a) 65,900 4,423,537
EMC.................................................(a) 77,500 3,022,500
Intel.................................................. 21,300 3,020,606
Linear Technology...................................(a) 45,800 2,370,150
Seagate Technology..................................(a) 37,200 1,308,975
Sun Microsystems....................................(a) 68,200 2,538,318
3COM................................................(a) 92,600 4,167,000
-----------
20,851,086
-----------
Finance--21.8% AFLAC.................................................. 43,200 2,041,200
Allstate............................................... 33,000 2,409,000
American International Group........................... 22,300 3,331,062
BANKBOSTON............................................. 64,700 4,662,443
BankAmerica............................................ 63,600 4,106,175
Chase Manhattan........................................ 32,100 3,115,706
Citicorp............................................... 37,300 4,496,981
Fannie Mae............................................. 128,600 5,610,175
Green Tree Financial................................... 107,100 3,815,437
PNC Bank............................................... 59,700 2,485,012
Summit Bancorp......................................... 39,100 1,959,887
SunAmerica............................................. 78,300 3,817,125
-----------
41,850,203
-----------
Health Technology--14.9% Amgen...............................................(a) 58,900 3,423,562
Boston Scientific...................................(a) 25,000 1,535,937
Bristol-Myers Squibb................................... 61,200 4,957,200
Guidant................................................ 41,900 3,561,500
Johnson & Johnson...................................... 72,400 4,660,750
Medtronic.............................................. 63,000 5,103,000
Merck & Co............................................. 52,100 5,392,350
-----------
28,634,299
-----------
</TABLE>
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments (continued) June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Common Stocks (continued) Shares Value
- ---------------------------------------------------------------------------- -------- ------------
<S> <C> <C>
Industrial Services--3.3% Global Marine.........................(a) 40,000 $ 930,000
Schlumberger............................. 34,600 4,325,000
Seitel................................(a) 28,800 1,094,400
------------
6,349,400
------------
Process Industries--3.7% Avery Dennison........................... 54,500 2,186,812
Bemis.................................... 83,000 3,589,750
Fort Howard...........................(a) 24,100 1,220,062
------------
6,996,624
------------
Producer Manufacturing--2.4% Dover.................................... 74,500 4,581,750
------------
Retail Trade--4.6% Consolidated Stores...................(a) 78,250 2,719,187
OfficeMax.............................(a) 127,100 1,835,006
Sears, Roebuck & Co...................... 65,700 3,531,375
Viking Office Products................(a) 39,100 742,900
------------
8,828,468
------------
Technology Services--7.7% BMC Software..........................(a) 84,800 4,695,800
Computer Associates International........ 46,100 2,567,193
Microsoft.............................(a) 28,800 3,639,600
Oracle................................(a) 75,200 3,788,210
------------
14,690,803
------------
Transportation--.9% Federal Express.......................(a) 29,900 1,726,725
------------
Utilities--1.8% WorldCom..............................(a) 107,700 3,446,400
------------
TOTAL COMMON STOCKS
(cost $142,773,586).................... $175,217,113
============
Principal
Short-Term Investments--8.7% Amount
- ---------------------------------------------------------------------------- ----------
U.S. Treasury Bills: 4.92%, 7/31/1997......................... $ 141,000 $ 140,412
5.22%, 8/7/1997.......................... 1,664,000 1,655,414
5.24%, 8/14/1997......................... 50,000 49,691
4.96%, 8/21/1997......................... 8,726,000 8,663,347
4.90%, 9/4/1997.......................... 334,000 330,937
4.91%, 9/18/1997......................... 5,881,000 5,815,486
---------- ------------
TOTAL SHORT-TERM INVESTMENTS
(cost $16,658,501)..................... $ 16,655,287
============
TOTAL INVESTMENTS (cost $159,432,087)....................................... 100.1% $191,872,400
===== ============
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (.1%) $ (98,362)
===== ============
NET ASSETS.................................................................. 100.0% $191,774,038
===== ============
<FN>
Notes to Statement of Investments:
- ----------------------------------------------------------------------------
(a) Non-income producing.
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<C> <S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $159,432,087 $191,872,400
Cash................................................... 198,205
Dividends and interest receivable...................... 78,043
Prepaid expenses....................................... 18,410
------------
192,167,058
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.......... 118,675
Payable for investment securities purchased............ 220,300
Accrued expenses....................................... 54,045
------------
393,020
------------
NET ASSETS................................................................... $191,774,038
============
REPRESENTED BY: Paid-in capital........................................ $155,882,895
Accumulated undistributed investment income--net....... 467,860
Accumulated net realized gain (loss) on investments.... 2,982,970
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4............................... 32,440,313
------------
NET ASSETS................................................................... $191,774,038
============
SHARES OUTSTANDING
(150 million shares of $.001 par value Common Stock authorized).............. 8,204,554
NET ASSET VALUE, offering and redemption price per share..................... $23.37
======
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations Six Months Ended June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
<C> <S> <C> <C>
INVESTMENT INCOME
INCOME: Cash dividends................................... $ 680,316
Interest..........................,,,,,,,,,,,,,,, 378,811
-----------
Total Income................................ $ 1,059,127
EXPENSES: Investment advisory fee--Note 3(a)............... 571,913
Professional fees................................ 24,780
Registration fees................................ 16,072
Custodian fees--Note 3(b)........................ 7,853
Directors' fees and expenses--Note 3(c).......... 5,342
Loan commitment fees--Note 2..................... 781
Shareholders' reports............................ 721
Miscellaneous.................................... 6,237
-----------
Total Expenses............................. 633,699
-----------
INVESTMENT INCOME--NET................................................... 425,428
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments.......... $ 2,760,156
Net unrealized appreciation (depreciation)
on investments................................. 20,996,913
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 23,757,069
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $24,182,497
===========
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
----------------- -----------------
OPERATIONS:
<S> <C> <C>
Investment income--net......................................................... $ 425,428 $ 292,261
Net realized gain (loss) on investments........................................ 2,760,156 4,325,349
Net unrealized appreciation (depreciation) on investments...................... 20,996,913 7,720,782
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations............... 24,182,497 12,338,392
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net......................................................... -- (251,529)
Net realized gain on investments............................................... -- (4,505,355)
------------ ------------
Total Dividends............................................................... -- (4,756,884)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold................................................... 100,505,494 136,594,495
Dividends reinvested........................................................... -- 4,756,884
Cost of shares redeemed........................................................ (47,483,946) (66,020,126)
------------ ------------
Increase (Decrease) in Net Assets from Capital Stock Transactions............. 53,021,548 75,331,253
------------ ------------
Total Increase (Decrease) in Net Assets...................................... 77,204,045 82,912,761
NET ASSETS:
Beginning of Period............................................................ 114,569,993 31,657,232
------------ ------------
End of Period.................................................................. $191,774,038 $114,569,993
============ ============
Undistributed investment income--net............................................. $ 467,860 $ 42,432
------------ ------------
Shares Shares
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................................... 4,688,984 7,039,912
Shares issued for dividends reinvested......................................... -- 233,664
Shares redeemed................................................................ (2,188,621) (3,398,612)
------------ ------------
Net Increase (Decrease) in Shares Outstanding................................. 2,500,363 3,874,964
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 --------------------------------------
PER SHARE DATA: (Unaudited) 1996 1995 1994 1993(1)
---------------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......................... $ 20.09 $ 17.31 $ 13.23 $ 13.38 $12.50
-------- -------- ------- ------- ------
Investment Operations:
Investment income--net........................................ .05 .05 .08 .35 .04
Net realized and unrealized gain (loss)
on investments............................................... 3.23 3.63 4.49 (.15) .88
-------- -------- ------- ------- ------
Total from Investment Operations.............................. 3.28 3.68 4.57 .20 .92
-------- -------- ------- ------- ------
Distributions:
Dividends from investment income--net......................... -- (.05) (.08) (.35) (.04)
Dividends from net realized gain
on investments............................................... -- (.85) (.41) -- --
-------- -------- ------- ------- ------
Total Distributions........................................... -- (.90) (.49) (.35) (.04)
-------- -------- ------- ------- ------
Net asset value, end of period................................ $ 23.37 $ 20.09 $ 17.31 $ 13.23 $13.38
======== ======== ======= ======= ======
TOTAL INVESTMENT RETURN........................................ 16.33% 21.23% 34.56% 1.49% 7.35%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets .41%(2) .95% 1.27% .25% .06%(2)
Ratio of interest expense to average net assets -- .01% -- -- --
Ratio of net investment income to
average net assets........................................... .28%(2) .42% .70% 4.58% .64%(2)
Decrease reflected in above expense ratios
due to undertakings by Dreyfus and
sub-investment adviser....................................... -- .03% .06% 2.60% 6.19%(2)
Portfolio Turnover Rate....................................... 18.91%(2) 126.41% 88.52% 373.68% --
Average commission rate paid (3).............................. $ .0587 $ .0578 -- -- --
Net Assets, end of period (000's Omitted)..................... $191,774 $114,570 $31,657 $10,406 $1,372
</TABLE>
- ------------------------------
(1) From October 7, 1993 (commencement of operations) to December 31, 1993.
(2) Not annualized.
(3) For fiscal years beginning January 1, 1996, the Fund is required to disclose
its average commission rate paid per share for purchases and sales of
investment securities.
See notes to financial statements.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Socially Responsible Growth Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
capital growth through equity investments in companies that not only meet
traditional investment standards but which also show evidence that they conduct
their business in a manner that contributes to the enhancement of the quality of
life in America. The Fund is intended to be a funding vehicle for variable
annuity contracts and variable life insurance policies to be offered by the
separate accounts of life insurance companies. The Dreyfus Corporation
("Dreyfus") serves as the Fund's investment adviser. Dreyfus is a direct
subsidiary of Mellon Bank, N.A. ("Mellon"). NCM Capital Management Group, Inc.
("NCM") serves as the Fund's sub-investment adviser. Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares, which are sold without a
sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market. Securities
not listed on an exchange or the national securities market, or securities for
which there were no transactions, are valued at the average of the most recent
bid and asked prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
sufficient to relieve it from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended June 30,
1997, the Fund did not borrow under the Facility.
<PAGE>
The Dreyfus Socially Responsible Growth Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the
investment advisory fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly.
Pursuant to a Sub-Investment Advisory Agreement with NCM, the sub-
investment advisory fees are payable monthly by Dreyfus, and are based upon the
value of the Fund's average daily net assets, computed at the following annual
rates:
<TABLE>
<CAPTION>
Average Net Assets
------------------
<S> <C>
0 to $32 million.......................................... .10 of 1%
In excess of $32 million to $150 million.................. .15 of 1%
In excess of $150 million to $300 million................. .20 of 1%
In excess of $300 million................................. .25 of 1%
</TABLE>
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of Dreyfus, an amount not to
exceed an annual rate of .25 of 1% of the value of the Fund's average daily net
assets for certain allocated expenses with respect to servicing and/or
maintaining shareholder accounts. During the period ended June 30, 1997, the
Fund was charged an aggregate of $5,774 pursuant to the Shareholder Services
Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund.
The Fund compensates Mellon under a custody agreement to provide custodial
services for the Fund. During the period ended June 30, 1997, $7,853 was charged
by Mellon pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended June 30, 1997, amounted
to $71,350,843 and $25,931,923, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was 32,440,313, consisting of $32,944,882 gross unrealized appreciation and
$504,569 gross unrealized depreciation.
At June 30, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
<PAGE>
The Dreyfus Socially Responsible
Growth Fund, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
NCM Capital Management Group, Inc.
103 West Main Street
Durham, NC 27705
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 111SA976
