Calvert World Values Global Equity Fund
Annual Report
September 30, 1995
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Investing with Vision (TM)
Calvert Group (R)
A member of the American Group (R)
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Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Principal
Underwriter:
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
This report is intended to provide fund information to shareholders.
It is not authorized for distribution to prospective investors unless
preceded or accompanied by a prospectus.
Annual Report-September 30, 1995
Calvert World Values
Global Equity Fund
Dear Shareholder:
In a turbulent period for world markets, the 12-month period ending
September 30, 1995 saw the Fund return 3.19%. Over the same period, the
return on the Morgan Stanley Capital International (MSCI) World Index in
U.S. dollars rose by 14.97%, but the average return for the Lipper universe
of global funds was 9.38%.
Economic and Market Review
Investment Performance
Period Ended 9/30/95 6 Months 12 Months
Global Equity 8.77% 3.19%
MSCI World Index 10.36% 14.97%
Investment performance is for Class A shares and does not reflect the
deduction of any front-end sales charges.
Over the year, global markets experienced widely differing fortunes.
During the first few months the impact of rising U.S. rates provided a
negative backdrop for international fixed-income markets and rising bond
yields undermined equity market performance. From mid-November 1994,
however, bond yield expectations underwent a dramatic shift. As a result,
bond yields fell through 1995, and equity markets generally benefited from
the improved bond market tone. Overall, though, performance was dominated
by the level of exposure to the two largest markets, the U.S. and Japan.
The U.S. market, as measured by the S&P 500(R) Index, advanced 29.71%
for the 12-month period ending September 30, 1995, due to healthy corporate
profits, particularly in the technology sector, and a high level of merger
activity. By contrast, the Japanese market struggled under the pressure of
the strong yen which sapped the profitability of exports and depressed the
domestic economy. The situation was exacerbated by the earthquake in Kobe
in January 1995, which halted production in the region and rekindled the
fear of similar events in other parts of the country. In practice, this
leads to a rise in the savings rate and a further weakening of consumption.
Although intervention in the foreign exchange markets in July caused a
sharp revival of sentiment towards Japanese equities, by the end of the
period the market had contracted 5.30%. During the year, the Fund's
underweighting in Japan positively impacted returns. But its underweighting
in the U.S. detracted from returns, as the U.S. was stronger than normally
would have been expected at the end of the business cycle.
The other major feature of the year was that the collapse of the
Mexican currency and equity market caused ripple effects through other
smaller markets in both Latin America and the Far East. The Fund's
investment in Mexico during 1994 was based on the country's rapid growth
and sound economic management. The one flaw in the economic master plan was
the heavy reliance on short-term foreign currency debt and, in December
1994, the newly-elected government found itself in difficulties when
seasonal withdrawals put pressure on the peso. What was seen as a panic
devaluation quickly led to the collapse of the currency and later the
equity market, as foreign investors tried to sell in order to limit their
losses. While our decision to hold investments in Mexico proved to be a
drag on returns in early 1995, the market began to bounce when the
government announced its economic stabilization package. Although
investments in Mexico were still showing losses by the end of September,
the market had risen some 86% from its low point. The markets of the Far
East also bounced back from their lows. The Hong Kong market, for example,
rose 15.34% in February alone.
The beneficiaries of the Mexican crisis were initially the hard
currencies, the yen, deutsche mark, Swiss Franc, Dutch Guilder and,
subsequently, the core European equity markets. The Fund was well-placed to
benefit from these developments with an overweight exposure to Europe,
especially to the Netherlands. Inevitably, however, strong currencies lead
to the loss of competitiveness in world markets. By early 1995, the impact
was beginning to be felt in Germany, in spite of the vigorous growth in the
east of the country, and in the Netherlands and Switzerland. Accordingly,
investments in each of these markets were reduced and the focus of the Fund
was switched to the softer currency markets of peripheral Europe where
prospects had improved as a result of their de-facto devaluations. The
Fund's return was enhanced by strong performances in the Spanish, Italian
and Nordic markets.
Investment Strategy
One of the key features of the period was the Fund's underweighting of
the U.S. market. As top-down, value managers, we had become cautious on the
U.S. where the cycle was maturing and valuations were near cyclical peaks.
We were, therefore, unwilling to raise the Fund's exposure, even though the
interest rate environment had improved during the first quarter of 1995.
This stance also influenced our stock selection towards defensive companies
such as Albertson's, Hannaford Bros., Enron and El Paso Natural Gas, rather
than the geared technology companies. Quality cyclical companies in the
Portfolio such as Durion and Illinois Tool Works did perform well later in
the year but could not make up for the contribution of the technology boom.
However, as the market peaks and earnings progression next year cannot meet
the record improvements seen in 1995, the Fund's defensive stance will come
through. There was already evidence of this in early October.
The other costly decision was to have investments in the Mexican
market at the time of the crisis in late 1994 - early 1995. The recovery
from the crisis, while swift in local terms, will take longer for dollar
investors. The third quarter of 1995 was a critical period when the full
impact of the government's austerity program came through to corporate
profits, which were sharply down. Stocks held their prices, but the peso
came under renewed pressure. This period should represent the nadir for the
Mexican market and we look for a steady recovery in the months ahead.
With the outlook for Japanese corporate profits improving, we
increased exposure to the Japanese market through 1995 so that the Fund was
well-placed to benefit from the dramatic surge in August following the
turnaround of the yen/dollar rate. Prior to this move, exposure to Japan
increased to 19% in December 1994 with the inclusion of stocks such as
Itochu, the trading company, Tokyo Style, a clothing retailer and Secom, a
diversified secure delivery company.
Assets were switched to Japan by reducing exposure to both Europe and
the Far East. Sales in Europe included Kredietbank in Belgium, Unilever and
Polygram in the Netherlands and part-sales of the investments in Herlitz,
the paper manufacturer and Douglas Holdings, the retailer, in Germany. Hong
Kong was reduced with the part-sale of Sun Hung Kai, the property company.
Other switches made during the period included the sale of the diversified
Norwegian conglomerate, Norsk Hydro for the smaller, late cycle
manufacturer of imaging equipment, Hafslund Nycomed. Both these investments
contributed positively to the Fund's performance.
By the end of the period the return on the Fund was 3.19%. The MSCI
Index, boosted by the strong performance of the U.S. market, rose 14.97%
while the average return for the Lipper universe of global funds was 9.38%.
Outlook
In a year when the U.S. market was so strong, it was always going to
be difficult for global markets to compete. However, with corporate
earnings peaking in the U.S. and the interest rate environment returning to
neutral at best, the strong run of the U.S. equity market is likely to be
coming to an end. Conversely, there have been signs since the beginning of
1995 that the outlook for the Japanese market is beginning to pick up and
the weakening of the yen will encourage this trend. With this in mind, we
have been increasing the exposure of the Fund to Japan. Recent purchases
have been financed through sales in Europe, but in the future we will look
to raising cash in the U.S. market. Elsewhere, with high growth continuing
in the Far East, the Fund will remain overweighted in the region. It has
been encouraging to see stability returning to the emerging markets and the
Fund's investments in both Mexico and Argentina should benefit from this
trend.
We appreciate your investment in the Fund.
Sincerely,
(Signatures)
Andrew Preston Clifton S. Sorrell
Portfolio Manager President
October 31, 1995
Portfolio Statistics
Ten Largest Stock Holdings
as of September 30, 1995
% of Net Assets
Hysan Development 2.18%
Sun Hung Kai Properties 2.05%
National Australia Bank 2.01%
Secom Company 1.99%
Keppel Corporation 1.95%
Itochu Corporation 1.85%
NEC Corporation 1.69%
Aguas de Barcelona 1.66%
Telecom Corporation of New Zealand 1.64%
Elsevier NV 1.63%
Total 18.65%
Average Annual Total Returns
for periods ended September 30, 1995
Class A Shares
One Year -1.73%
Since Inception (6/92) 6.39%
Class C Shares
One Year 1.95%
Since Inception (3/94) -0.11%
Chart 1: Calvert World Values Global Equity Fund
Comparison of change in value of $10,000 investment
A line graph showing that such an investment in the Calvert World Values
Global Equity Fund would have grown to $12,228, while the MSCI World Index
would have grown to $15,292.
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the Fund's maximum sales charge of 4.75%. No sales
charge has been applied to the index used for comparison. The value of an
investment in Class A shares is plotted in the line graph. The value of an
investment in Class C shares would be different. Past performance is no
guarantee of future results.
Report of Independent Accountants
To the Board of Directors of Calvert World Values Fund Inc., and the
Shareholders of the Global Equity Fund:
We have audited the accompanying statement of assets and liabilities
of Global Equity Fund (one of the portfolios comprising Calvert World
Values Fund, Inc.), including the portfolio of investments, as of September
30, 1995, and the related statement of operations for the year then ended,
and statements of changes in net assets for the two years then ended, and
the financial highlights for the three years then ended and for the period
from July 2, 1992 (commencement of operations) through September 30, 1992.
These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments owned as of September 30, 1995, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Global Equity Fund as of September 30, 1995, and the
results of its operations, the changes in its net assets, and the financial
highlights for each of the respective periods referred to above, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Baltimore, Maryland
November 9, 1995
Calvert World Values Fund, Inc.
Global Equity Fund Portfolio of Investments
September 30, 1995
Equity Securities (96.2%) Shares Value
Australia (2.0%)
National Australia Bank 450,000 $3,978,990
3,978,990
Austria (0.9%)
Mayr Melnhof Karto 27,180 1,728,591
1,728,591
Belgium (0.1%)
Gib (new shares) 454 18,901
18,901
Costa Rica (0.1%)
Pro Fund International S.A. <F3> <F4> 57,133 57,133
57,133
Denmark (1.3%)
Tele Danmark 50,000 2,584,341
2,584,341
France (5.2%)
Ass Gen de France 76,580 2,091,585
Cap Gemini Sogeti <F3> 51,606 1,446,163
Credit Fonc France 43,875 924,810
Lyonnaise des Eaux S.A. 17,200 1,575,226
Pinault Printemps Redoute 11,600 2,459,214
Primagaz (Cie Gaz) 8,316 572,469
Primagaz (Warrants) <F3> 756 4,222
Sita 6,830 1,116,489
10,190,178
Germany (1.5%)
Douglas Holdings, AG 44,850 1,788,978
Herlitz, AG 6,137 1,112,304
2,901,282
Hong Kong (5.1%)
Hang Seng Bank 200,000 1,649,055
Hysan Development 1,800,000 4,318,585
Sun Hung Kai Properties 500,000 4,057,969
10,025,609
Equity Securities (cont'd) Shares Value
Italy (3.6%)
IMI 354,400 $2,125,301
Italcementi 126,050 813,755
Telecom Italia Mobile <F3> 1,121,100 1,870,238
Telecom Italia Mobile (Di Risp) <F3> 2,050,000 2,262,946
7,072,240
Japan (20.2%)
Canon Incorporated 154,000 2,751,805
Itochu Corporation 593,000 3,657,796
Kuraray Company 207,000 2,070,940
Mori Seiki Company 99,000 1,968,906
NEC Corporation 240,000 3,343,597
Nippon Tel & Tel Cp 324 2,790,086
Omron Corporation 127,000 2,948,867
Sanwa Bank 146,000 2,741,507
Secom Company 59,000 3,931,149
Sumitomo Bank 147,000 2,849,326
Takeda Chemical Industries 200,000 2,786,331
TDK Corporation 55,000 2,831,760
Tokyo Style Company 194,000 3,016,102
Tsukishima Kikai 124,000 2,353,440
40,041,612
Mexico (4.6%)
Banpais S.A.-(ADR) <F3> <F4> 100,000 87,500
Cifra S.A. de C.V.-(ADR) 1,500,000 1,871,100
Grupo Durango S.A. -(ADR) <F3> 200,000 1,800,000
Telefonos de Mexico S.A.-(ADR) 70,000 2,222,500
Transportadora de Gas -(ADR) 300,000 3,150,000
9,131,100
Netherlands (2.1%)
Elsevier NV 251,100 3,217,420
VER NED Uitgevers 6,405 848,716
4,066,136
New Zealand (1.6%)
Telecom Corporation 830,000 3,239,797
3,239,797
Norway (0.5%)
Tomra Systems 188,700 1,021,624
1,021,624
Equity Securities (cont'd) Shares Value
Singapore (3.2%)
Keppel Corporation 480,000 $3,844,857
Overseas Chinese Bank 57,000 644,815
United Overseas Limited (Warrants) <F3> 2,305,000 1,813,940
6,303,612
South Africa (0.1%)
Community Growth Fund <F3> 300,000 300,000
300,000
Spain (4.7%)
Aguas de Barcelona 119,884 3,273,002
Centros Com Pryca 152,950 3,049,844
Vallehermoso S.A. 170,440 3,005,656
9,328,502
Switzerland (1.4%)
Roche Holdings, AG 380 2,682,353
2,682,353
United Kingdom (13.3%)
Allied Irish Banks 636,100 3,175,977
Argyll Group 460,000 2,456,628
British Telecom 410,000 2,565,334
Cable & Wireless 315,000 2,065,492
Dalgety 370,000 2,578,132
EMAP 300,000 2,464,844
Glynwed International 125,000 707,927
Hays 220,000 1,202,718
Kingsfisher 340,000 2,707,537
Low and Bonar 330,000 2,612,261
Marks & Spencer 315,000 2,160,057
United Biscuits 400,000 1,738,031
26,434,938
Equity Securities (cont'd) Shares Value
United States (24.7%)
Albertsons Incorporated 65,000 $2,218,125
Bay Apartment Community Incorporated 73,000 1,569,500
Calypte Biomed (Warrants) <F3> 50,000 250,000
Dallas Semiconductor Corporation 90,000 1,845,000
Durion Incorporated 93,000 2,720,250
El Paso Natural Gas Company 90,000 2,475,000
Enron Corporation 85,000 2,847,500
Giddings & Lewis Incorporated 63,000 1,098,563
Grainger W. W. Incorporated 18,000 1,086,750
Hannaford Brothers Company 65,000 1,746,875
Home Depot Incorporated 60,000 2,392,500
Illinois Tool Works Incorporated 40,000 2,355,000
MBNA Corporation 58,000 2,414,250
McGraw Hill Incorporated 34,000 2,779,500
Metalclad Corporation <F3> 500,00 1,718,750
Metrocall Incorporated <F3> 52,000 1,443,000
Molex Incorporated 87,500 2,931,250
New World Power Corporation <F3> 165,000 577,500
Northern Trust Corporation 36,000 1,656,000
Partner RE Holdings 85,000 2,103,750
Quadrant Holdings Cambridge <F3> 200,000 237,004
Quorum Health Group Incorporated <F3> 110,000 2,488,750
Seitel Incorporated <F3> 100,000 2,837,500
Sprint Corporation 70,000 2,450,000
WorldCom Incorporated <F3> 84,687 2,720,570
48,962,887
Total Equity Securities
(Cost $187,598,331) 190,069,826
Principal
Corporate Notes (0.8%) Amount Value
Bolivia (0.1%)
Banco Solidario SA $272,501 $272,501
272,501
United States (0.7%)
Accion International 100,000 94,318
Cascadia Revolving Loan Fund 125,000 120,510
Catholic Relief Services 150,000 149,913
Community Equity Investments 100,000 97,885
Delaware Valley Community Reinvestment Fund 75,000 70,739
Ecumenical Development Corporation USA 150,000 146,736
Enterprise Loan Fund 50,000 50,000
Foundation For International Community Assistance 50,000 48,196
Foundation For International Development 100,000 94,318
Freedom From Hunger 50,000 47,475
Global Partners 60,000 60,000
Program for Appropriate Technology & Health 150,000 144,612
Minnesota Non-Profit Assistance Fund 100,000 96,408
New Mexico Community Loan Fund 25,000 23,750
Nicaraquan Community Loan Fund 25,000 23,738
Societe D'Investissement et de Developpement
International 100,000 94,318
1,362,916
Total Corporate Notes <F4>
(Cost $1,682,501) 1,635,417
Time Deposits (4.5%)
International Bank of Japan,London,6.1875%,10/2/95 5,716,506 5,716,506
State Street Bank, London, 6.00%, 10/2/95 3,102,501 3,102,501
Total Time Deposits (Cost $8,819,007) 8,819,007
TOTAL INVESTMENTS (101.5%) <F2>
(Cost $198,099,840) <F1> $200,524,250
Notes to Portfolio of Investments:
[FN]
<F1> Cost of investments is substantially the same for federal income tax
purposes.
<F2> The percentages shown represent the percentage of the investments to
net assets.
<F3> These securities have not declared dividends in the past twelve
months.
<F4> Restricted securities representing 0.9% of net assets.
[/FN]
Calvert World Values Fund, Inc.
Global Equity Fund
Statement of Assets and Liabilities
September 30, 1995
Assets
Investments in securities, at value - see accompanying
portfolio $200,524,250
Cash and foreign currency 1,105,871
Receivable for securities sold 131,062
Receivable for shares sold 348,125
Dividends and interest receivable 415,426
Dividend reclaim receivable 235,847
Deferred organization expenses 23,798
Total assets 202,784,379
Liabilities
Payable for securities purchased 4,529,870
Payable for shares redeemed 275,534
Payable to Calvert Asset Management Co., Inc. 204,056
Payable to Calvert Administrative Services Corp. 16,169
Payable to Calvert Shareholder Services, Inc. 33,171
Payable to Calvert Distributors, Inc. 44,130
Accrued expenses and other liabilities 34,404
Total liabilities 5,137,334
Net assets $197,647,045
Net Assets
Net assets consist of:
Paid in capital applicable to 10,875,725 outstanding Class A
Shares of common stock, $0.01 par value (250,000,000 shares
authorized for Class A and Class C combined) $183,818,651
Paid in capital applicable to 350,708 outstanding Class C
Shares of common stock, $0.01 par value (250,000,000 shares
authorized for Class A and Class C combined) 6,186,135
Undistributed net investment income 1,474,321
Accumulated realized gains (losses) on investments
and foreign currencies 3,738,225
Net unrealized appreciation (depreciation) on investments
and assets and liabilities in foreign currencies 2,429,713
Net assets $197,647,045
Net Assets Value and Offering Price Per Share
Class A Shares net asset value per share
($191,586,489 divided by 10,875,725 Class A Shares) $17.62
Maximum sales charge (4.75% of Class A offering price) .88
Offering price per Class A Share $18.50
Class C Shares net asset value and offering price per share
($6,060,556 divided by 350,708 Class C Shares) $17.28
See notes to portfolio of investments.
Calvert World Values Fund, Inc.
Global Equity Fund
Statement of Operations
Year Ended September 30, 1995
Net Investment Income
Investment Income
Interest income $534,400
Dividend income (net of foreign taxes withheld of
$437,699) 4,084,117
Total investment income 4,618,517
Expenses
Investment advisory fee 1,871,430
Transfer agency fees and expenses 432,466
Distribution plan expenses:
Class A 454,763
Class C 52,378
Trustees' fees and expenses 29,150
Administrative fees 187,143
Custodian fees 237,389
Registration fees 131,245
Reports to shareholders 184,066
Professional fees 24,587
Miscellaneous 71,945
Reimbursement from Advisor (6,670)
Total expenses 3,669,892
Fees paid indirectly (254,586)
Net expenses 3,415,306
Net Investment Income 1,203,211
Realized and Unrealized Gain (Loss) on
Investments
Net realized gain (loss) on:
Securities (3,130,666)
Foreign currencies 7,138,652
4,007,986
Change in unrealized appreciation or depreciation on:
Securities 1,094,514
Assets and liabilities in foreign currencies 6,573
1,101,087
Net Realized and Unrealized Gain (Loss)
on Investments 5,109,073
Increase (Decrease) in Net Assets
Resulting From Operations $6,312,284
See notes to portfolio of investments.
Calvert World Values Fund, Inc.
Global Equity Fund
Statements of Changes in Net Assets
Year Ended Year Ended
September 30, September 30,
1995 1994
Increase (Decrease)
in Net Assets
Operations
Net investment income (loss) $1,203,211 $(56,829)
Net realized gain (loss) 4,007,986 10,226,928
Change in unrealized appreciation or
depreciation 1,101,087 (1,629,221)
Increase (Decrease) in
Net Assets Resulting
From Operations 6,312,284 8,540,878
Distributions to shareholders
From net investment income
Class A Shares (2,494) (138,654)
In excess of net investment income
Class A Shares _ (198,524)
From net realized gain on investment transactions
Class A Shares (8,976,058) (1,748,701)
Class C Shares (251,801) _
Total distributions (9,230,353) (2,085,879)
Capital share transactions
Class A Shares 18,864,893 114,778,692
Class C Shares 2,536,807 3,649,342
Total capital share transactions 21,401,700 118,428,034
Total Increase (Decrease)
in Net Assets 18,483,631 124,883,033
Net Assets
Beginning of year 179,163,414 54,280,381
End of year (including undistributed net
investmentincome of $1,474,321 and $3,403
for 1995 and 1994, respectively) $197,647,045 $179,163,414
See notes to financial statements.
Notes to Financial Statements
Note A-Significant Accounting Policies
General: The Calvert Global Equity Fund (the "Series"), a series of
Calvert World Values Fund, Inc. (the "Fund"), is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund accounts separately for the operations of each
series. The Series offers Class A and Class C shares of capital stock.
Class A shares are sold with a maximum front-end sales charge of 4.75%.
Class C shares, which have no transaction-based sales charge, have a higher
annual expense rate than Class A. Each class has different: (a)
Distribution Plan expenses, (b) class specific expenses, including transfer
agency fees, registration fees, reports to shareholders, (c) dividend rates
due to (a) and (b) above, (d) exchange privileges and (e) class specific
voting rights.
Security Valuation: Securities for which market quotations are readily
available are valued at the most recent closing price of their primary
exchange, or, if closing prices are unavailable, at the bid prices or based
on a yield equivalent obtained from the securities' market maker. Foreign
security prices, furnished by quotation services in the security's local
currency, are translated using the current U. S. dollar exchange rate.
Short-term securities maturing within 60 days are valued at amortized cost
which approximates market. The Series may invest in securities whose resale
is subject to restrictions. Restricted securities and 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
Series 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 Series' accounting records are
maintained in U. S. dollars. For purposes of valuation of investments,
assets and liabilities on each date of net asset value determination, the
current exchange rate is applied to foreign currencies for translation to
U. S. dollars. 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 securities is included in the net rea-
lized and unrealized gain or loss on securities.
Distributions to Shareholders: Distributions to shareholders are recorded
by the Series on ex-dividend date. Dividends from net investment income are
paid annually. 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
Series' capital accounts to reflect income and gains available for-
distribution under income tax regulations.
Expense Offset Arrangement: The Series has an arrangement with its
custodian bank whereby the custodian's fees are paid indirectly by credits
earned on the Series' 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 Series intends to continue to qualify as a regulated
investment company under the Internal Revenue Code and to distribute
substantially all of its earnings.
Organization Expense: Expenses incurred in the organization of the Series
have been capitalized and are amortized over a five year period.
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 Series. For its services, the Advisor receives a monthly
fee based on the following annual rates of average daily net assets: 1.0 %
on the first $250 million, .975% on the next $250 million and .925% on-
the excess of $500 million.
During the year, operating expenses of the Series were voluntarily
reimbursed by the Advisor.
Calvert Distributors, Inc. (the successor of Calvert Securities Corp.
effective April, 1995), both affiliates of the Advisor, is the distributor
and principal underwriter for the Series. Distribution Plans, adopted by
each class of shares, allow the Series to pay the distributor for expenses
and services associated with distribution of shares. The expenses paid may
not exceed .35% and 1.0% annually of average daily net assets of each Class
A and Class C, respectively.
The Distributor received $163,702 as its portion of commissions charged on
sales of the Series' shares.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the
Series.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Series for an annual fee, payable
monthly, of the greater of $40,000 or .10% of the average daily net assets
of the Series.
Each Director who is not affiliated with the Advisor receives an annual fee
of $3,000 plus $1,000 for each Board and Committee meeting attended.
Additional fees of up to $10,000 annually may be paid to the Chairperson of
special committees of the Board. Director's fees are allocated to each of
the funds served.
Note C-Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were $153,115,471 and $130,078,790, respectively.
The cost of investments owned at September 30, 1995 was substantially the
same for federal income tax and financial reporting purposes. Net
unrealized apppreciation aggregated $2,424,410, of which $17,064,850
related to appreciated securities and $14,640,440 related to depreciated
securities.
Note D-Capital Share Transactions
The change in net assets resulting from capital share transactions for 1995
and 1994 is indicated below:
Class A Shares Class A Shares
Year Ended Year Ended
September 30, September 30,
1995 1994
In dollars:
Shares sold $46,195,309 $126,576,910
Reinvestment of dividends 8,979,242 2,085,888
Shares redeemed (36,309,658) (13,884,106)
$18,864,893 $114,778,692
In shares:
Shares sold 2,695,201 7,099,707
Reinvestment of dividends 545,587 128,635
Shares redeemed (2,120,350) (791,963)
1,120,438 6,436,379
Class C Shares
From Inception
Class C Shares march 1, 1994
Year Ended Through
September 30, September 30,
1995 1994
In dollars:
Shares sold $3,608,598 $3,855,934
Reinvestment of dividends 252,415 __
Shares redeemed (1,324,206) (206,592)
$2,536,807 $3,649,342
In shares:
Shares sold 213,899 214,243
Reinvestment of dividends 15,334 __
Shares redeemed (81,268) (11,500)
147,965 202,743
Financial Highlights
From
Class A Class A Inception
Shares Shares July 2, 1992
Year Ended Year Ended Year Ended Through
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1995 1994 1993 1992
Net asset value,beginning of period $17.99 $16.35 $14.31 $15.00
Income from investment operations
Net investment income .11 _ .08 .02
Net realized and unrealized gain (loss)
on investments .38 2.14 2.04 (.71)
Total from investment operations .49 2.14 2.12 (.69)
Distributions to shareholders
Dividends from net
investment income _ (.03) (.05) _
Distribution in excess of net
investment income _ (.04) _ _
Distribution from net realized gains (.86) (.43) (.03) _
Total distributions (.86) (.50) (.08)
Total increase (decrease) in
net asset value (.37) 1.64 2.04 (.69)
Net asset value, end of period $17.62 $17.99 $16.35 $14.31
Total return<F2> 3.19% 13.44% 14.95% (4.60%)
Ratios to average net assets:
Net investment income (loss) .68% (.04%) .80% 1.23%<F1>
Total expenses <F3> 1.93% _ _ _
Net expenses 1.79% 1.96% 1.50% 1.01%<F1>
Expenses reimbursed
and/or waived _ .04% .20% .60%<F1>
Portfolio turnover 73% 78% 35% _
Net assets, end of period
(in thousands) $191,586 $175,543 $54,280 $8,440
Number of shares outstanding at
end of period (in thousands) 10,876 9,755 3,319 590
[FN]
<F1> Annualized
<F2> Total return is not annualized for periods of less than one year and does
not reflect deduction of Class A front-end sales charge.
<F3> Effective September 30, 1995, this ratio reflects total expenses before
reduction for fees paid indirectly; previously, such reductions were included
in the ratio.
[/FN]
Class C Shares
From Inception
Class C Shares March 1, 1994
Year Ended Through
September 30, September 30,
1995 1994
Net asset value, beginning of period $17.86 $18.24
Income from investment operations
Net investment income (.05) (.06)
Net realized and unrealized gain
(loss) on investments .32 (.32)
Total from investment operations .27 (.38)
Distributions to shareholders
Dividends from net investment income -
Distribution in excess of net investment income _ -
Distribution from net realized gains (.85) _
Total distributions (.85) _
Total increase (decrease) in net asset value (.58) (.38)
Net asset value, end of period $17.28 $17.86
Total return<F2> 1.95% (1.27%)
Ratios to average net assets:
Net investment income (loss) (.47%) (1.16%)<F1>
Total expenses <F3> 3.12% _
Net expenses 2.99% 3.32%<F1>
Expenses reimbursed
and/or waived .13% .50%<F1>
Portfolio turnover 73% 78%
Net assets, end of period (in thousands). $6,061 $3,620
Number of shares outstanding at
end of period (in thousands) 351 203
[FN]
<F1> Annualized
<F2> Total return is not annualized for periods of less than one year.
<F3> Effective September 30, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; previously, such reductions were
included in the ratio.
[/FN]
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Investing with Vision (TM)
Calvert Group (R)
A member of the American Group (R)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
