Dear Shareholders:
The financial markets have been exceptionally volatile over the
past few weeks. Events began to unfold in mid August, when the
Asian currency crisis bled over to the Far East markets causing
those markets to stumble, setting off a domino-effect that
spread to all world markets. Just as market observers were
predicting a repeat of the October 19, 1987 slide, stocks
rallied back.
At Calvert Group, we see this recent roller coaster ride as an
example of the ups and downs inevitable in stock market
investing. We don't believe the skies have suddenly darkened
over the entire market. Fundamentals are still strong. There is
no evidence of surging inflation, the economy is expanding at a
sustainable pace and money continues to flow into the market.
For investors troubled by the recent volatility, we suggest two
time-tested approaches. First, make investment decisions based
on your time horizon and tolerance for risk. Second,
diversifying among different types of asset classes can help
lessen the sting of a sudden fall in stock prices. Your
financial professional can help you decide whether your
portfolio is well balanced.
In closing, I'd like to call your attention to the new format of
our shareholder reports. The changes were intended to put you in
closer contact with the portfolio manager and make the reports
more interesting to read. We welcome your comments.
Sincerely,
Barbara J. Krumsiek
President and CEO
November 3, 1997
<PAGE>
A DISCUSSION WITH PORTFOLIO MANAGER, ANDREW PRESTON
How did the major world stock markets perform over the past 12
months?
For the first three quarters of this reporting period, the
investment climate was very positive with economies experiencing
moderate growth, low inflation and stable interest rates. There
was also a strong flow of funds into equities. Markets in Europe
were particularly strong.
Progress was interrupted late in the year by the deterioration
of the economies and markets in the Far East. The fear,
generated by the collapse of the South East Asian markets,
spread to other markets around the globe in a general correction
in August. The situation was not helped by reports from Japan
that the economy had stalled in the middle of the year as a
result of the higher sales tax imposed in April.
By the end of the period, markets in the US and Europe had
bounced back with a little help from the US Federal Reserve and
the German Central Bank, which decided not to raise interest
rates. The South East Asian markets remained in a downward
spiral.
Which countries did the Fund favor?
Early in the year, our analysis highlighted that Europe was an
attractive area for investment on the basis of falling interest
rates and positive earnings surprises. We increased exposure to
Germany and Switzerland and maintained our double weighting in
Italy and Spain. We also added a position in Finland, with the
purchase of telephone equipment maker, Nokia.
We remained underweighted in Japan throughout the year and
aggressively trimmed exposure to other Far East markets during
the second half of the year. We eliminated Malaysian investments
altogether and concentrated remaining investments within Hong
Kong and Singapore. We remained overweighted in Australia and
New Zealand.
We adjusted our exposure to Latin America, slightly trimming
investments in Mexico, adding to holdings in Argentina and
introducing a position in Chile through an investment in the
telephone company, CTC.
As investors will remember, the Fund revised its investment
strategy in May of 1996, reducing the percentage of assets that
could be invested in the US from 15% to 5%, so this market is
not a major investment arena for us.
The Fund posted strong returns and outstripped its benchmark for
both the six- and 12-month periods. Can you explain the Fund's
better relative performance?
We're very pleased with the Fund's performance this year. We
were well ahead of the Morgan Stanley Capital International
Europe, Australia and Far East (MSCIEAFE) Index for both
periods, and our 12-month return put us in the second quartile
of all international funds tracked by Lipper Analytical
Services, Inc., number 133 of 397.
Better performance was primarily due to our focus on Europe,
where our top-down allocation process led us into the markets
which proved to be the strongest and this was complemented by
good stock selection. In Italy, for example, the portfolio
posted a return of 75.3% versus a return of 34.8% for the Index.
In Switzerland, the portfolio generated a gain of 63.8%,
compared to 31.9% for the Index.
On the other hand, the Fund was either underweighted or
withdrawing from those markets where performance was weak. We
were half as exposed to the Japanese market as the Index and our
holdings held up much better, down just 3.9%, compared to a loss
of 15.7% for the Index. In Southeast Asia, we also generated a
return considerably above the Index at 14.2% versus -1.9%,
mainly on the strength of our holdings in Hong Kong, Australia
and New Zealand. We were hurt by our exposure to Malaysia early
in the year, but by reducing it and then eliminating it
altogether, we avoided the total collapse of that market. Our
holdings in Singapore also suffered, but we believe the
fundamentals here are the strongest in Southeast Asia, and
therefore we expect stocks will recover.
Another key factor for performance was Latin America, where
markets reflected countries' better economic conditions. This
was especially true in Mexico, where we saw a return of 85.8%
compared to 53.4% for the Index.
The Fund also screens stocks based on companies' social and
environmental impacts. Is that consistent with trying to
identify the most financially promising stocks?
Yes. First Bus, Nokia and Standard Bank all represent
forward-thinking companies and favorable investment
opportunities. First Bus, one of UK's biggest bus companies, has
introduced a hybrid electric/diesel bus that reduces tail pipe
emissions. Nokia published a detailed environmental policy
statement in 1994 and manufactures equipment using Environmental
Management Systems which include European Union Standards.
Standard Bank, headquartered in South Africa, considers loan
applications from individuals whose payment records were
adversely affected by the previous apartheid regime. The bank
has a special division that focuses on serving low-income
customers. The bank also aims to advance black South Africans to
senior management positions.
<PAGE>
Portfolio Statistics
September 30, 1997
Ten Largest Stock Holdings
% of Net Assets
Telecom Italia 3.1%
National Australia Bank 3.0%
Nokia (Preferred) 2.8%
Zurich Versicherungs 2.6%
Allied Irish Banks, Plc. 2.4%
Telefonica de Espana 2.4%
Brambles Industries 2.2%
SGS Thomson Microelectronics 2.2%
Fortis 2.1%
Telecom de Argentina (ADR) 2.1%
Total 24.9%
Investment Performance
6 Months 12 Months
International
Equity Fund 15.08% 21.44%
MSCIEAFE
Index GD 12.33% 12.49%
Lipper International
Funds Index 13.29% 22.17%
Investment performance is for Class A shares and does not
reflect the deduction of any front-end sales charge. GD
represents gross dividends.
Source: Lipper Analytical Services, Inc.
<PAGE>
PORTFOLIO STATISTICS
September 30, 1997
Average Annual Total Returns
Class A Shares
as of 9/30/97
One year 15.68%
Five year 11.20%
Since inception 9.66%
(7/02/92)
Class C Shares
as of 9/30/97
One year 20.22%
Since inception 7.50%
(3/01/94)
Performance Comparison
Comparison of change in value of $10,000 investment.
Line chart here showing comparison from 7/2/92 to 9/97:
Calvert World Values Int'l Equity Fund - $16,228
MSCI EAFE Index GD - $18,440
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.
<PAGE>
Portfolio Statistics
September 30, 1997
Country Allocation
% of Equity Securities
9/30/97 3/31/97
Argentina 4.1% 2.3%
Australia 6.6% 6.3%
Belgium 2.2% 2.3%
Chile 2.1% -
Costa Rica .1% .1%
Finland 2.9% -
France 7.2% 7.6%
Germany 5.2% 8.7%
Hong Kong 5.5% 6.4%
Ireland 2.8% 2.5%
Italy 8.7% 5.8%
Japan 16.8% 17.5%
Malaysia - 5.0%
Mexico 3.6% 2.6%
Netherlands 2.9% 4.5%
New Zealand 2.5% 2.6%
Singapore 2.3% 5.8%
South Africa 2.2% .2%
Spain 4.1% 2.4%
Switzerland 2.7% 4.6%
Thailand - .1%
UK 15.2% 12.4%US .3% .3%
100% 100%
<PAGE>
What's your outlook for the world's markets, and how do you plan
to allocate assets in the months ahead?
The coming six months will likely prove to be more challenging
than the past. Interest rates are on the point of turning higher
in the US, UK and continental Europe, although within Europe the
increases we've seen lately have as much to do with preparations
for the single currency as with fighting inflation. Since signs
of inflation appear modest, our belief is that adjustments made
to interest rates will be similarly modest.
Thus corporate earnings will likely hold the key to market
performance for the remainder of 1997 and 1998. In the US, the
leading stocks appear to be losing their earnings momentum, but
for companies in Europe, in particular, earnings are still
rising. We expect that trend will hold as rationalization, a
general streamlining of corporate operations, continues.
In Japan, government finances are in a desperate state and
interest rates cannot be pushed any lower. We'll be watching for
signs of a change in fiscal policy and success in stimulating
the domestic economy. In Southeast Asia, the markets simply will
not go down forever and at some point value will begin to
appear. We'll be trying to determine when reinvestment is
appropriate.
Overall then, our strategy will be to retain our current
exposure to continental Europe, to increase investment in the
UK, to remain underweighted in the Far East, but to keep
monitoring those markets with a view to rebuilding exposure, and
to maintain our weighting in Latin America.
October 20, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Calvert World Values Fund Inc. and
Shareholders of International Equity Fund:
We have audited the accompanying statement of net assets of
International Equity Fund (one of the portfolios comprising Calvert
World Values Fund, Inc.), as of September 30, 1997, and the related
statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then
ended and financial highlights for each of the five years in the
period then ended. 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, 1997, 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 International Equity Fund as of September 30,
1997, and the results of its operations, the changes in its net
assets and 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 7, 1997
<PAGE>
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1997
Equity Securities - 98.3% Shares Value
Argentina - 4.0%
Banco Frances del Rio la Plat (ADR) 97,750 $3,195,203
Telecom de Argentina Stet - France (ADR) 160,000 4,870,000
Transportadora de Gas del Sur (ADR) 125,000 1,406,250
9,471,453
Australia - 6.5%
Brambles Industries 250,000 5,217,767
Commonwealth Bank of Australia 250,000 3,092,548
National Australia Bank 450,000 6,932,098
15,242,413
Belgium - 2.1%
Fortis 25,000 5,004,113
5,004,113
Chile - 2.1%
Compania de Telecomunicaciones
de Chile (ADR) 150,000 4,856,250
4,856,250
Costa Rica - 0.1%
Pro Fund International*+ 1,518 1,518
Pro Fund International (Preferred)*+ 150,240 150,240
151,758
Finland - 2.8%
Nokia (Preferred) 69,780 6,633,845
6,633,845
France - 7.1%
Banque National de Paris 83,680 4,215,983
Havas 15,120 1,026,324
Pinault-Printemps 7,400 3,471,332
Sita 10,830 2,154,080
SGS Thomson Microelectronics* 54,000 5,088,114
Suez Lyonnaise des Eaux 5,312 592,744
16,548,577
Germany - 5.1%
Allianz 14,830 3,577,933
Deutsche Telekom* 140,000 2,709,754
Douglas Holdings 69,750 2,735,604
Linde 4,320 3,012,106
12,035,397
Hong Kong - 5.4%
Cheung Kong Holdings 400,000 4,497,286
Hong Kong Land Holding 1,000,000 3,400,000
<PAGE>
Equity Securities (Cont'd) Shares Value
Hong Kong (Cont'd)
Hysan Development 1,000,000 $2,991,729
Hysan Development (warrants)* 90,000 25,297
Sun Hung Kai Properties 150,000 1,764,022
12,678,334
Ireland - 2.7%
Allied Irish Banks 646,791 5,704,940
Bank of Ireland 56,070 698,892
6,403,832
Italy - 8.6%
IMI 378,600 4,062,029
Parmalat Finanziaria 2,520,000 4,321,293
Telecom Italia 1,075,900 7,167,888
Telecom Italia Mobile 1,149,960 4,563,465
20,114,675
Japan - 16.5%
Canon Sales 158,800 3,132,046
Eisai 130,000 2,327,008
Fuji Machine Manufacturing 98,000 3,557,139
Fuji Photo Film 84,000 3,466,645
Keyence 23,400 3,277,202
Murata Manufacturing 75,000 3,244,386
Nitto Denko 180,000 3,371,178
Ricoh 240,000 3,599,901
Shiseido 189,000 3,038,535
Sumitomo Bank 182,000 2,745,007
Sumitomo Electric Industries 185,000 2,652,275
Takasago Thermal Engineering 140,000 1,751,885
Yamaha Motor 276,000 2,378,719
38,541,926
Mexico - 3.5%
Banpais (ADR)* 100,000 0
Cifra (ADR) 1,646,000 3,861,187
Grupo Industrial Durango (ADR)* 177,000 3,097,500
Telefonos de Mexico (ADR) 25,000 1,293,750
8,252,437
Netherlands - 2.9%
ING Groep 32,240 1,480,549
Vendex International 29,580 1,753,726
VNU 152,050 3,529,473
6,763,748
New Zealand - 2.4%
Independent Newspapers 600,000 3,459,509
Wilson & Horton 300,000 2,198,710
5,658,219
<PAGE>
Equity Securities (Cont'd) Shares Value
Singapore - 2.3%
City Developments 500,000 $3,236,352
Raffles Medical Group* 1,000,000 725,727
Wing Tai Holdings 625,000 1,291,272
5,253,351
South Africa - 2.2%
Community Growth Fund+ 739,067 345,337
Standard Bank Investment* 105,000 4,674,928
5,020,265
Spain - 4.1%
Prosegur Compania Securidad 318,960 3,921,026
Telefonica de Espana 176,690 5,551,525
9,472,551
Switzerland - 2.6%
Zurich Versicherungs 14,190 6,175,928
6,175,928
United Kingdom - 15.0%
Anglian Group 236,700 889,312
Anglian Water 147,600 1,948,071
Azlan Group 83,000 73,611
Barclays* 72,400 1,948,007
Beazer Group 282,000 827,600
Bellway 143,600 872,962
Cadbury Schweppes 186,900 1,799,216
Carlton Communications 235,700 1,950,500
Firstbus 264,700 896,340
Halifax* 178,825 2,113,356
Johnson Matthey 171,100 1,866,455
Kingfisher 161,700 2,204,306
Lloyds TSB Group 253,200 3,398,973
Low & Bonar 129,500 599,310
Mayflower 309,200 952,297
Millennium and Copthorne Hotels 154,400 1,075,550
Misys 33,300 834,977
Norwich Union* 295,400 1,600,477
Powerscreen International 80,000 958,470
Quadrant Healthcare*+ 200,000 306,375
Safeway 262,600 1,700,122
SIG 173,000 848,046
Smith & Nephew 534,500 1,624,646
Somerfield 243,200 792,163
Vitec Group 101,500 1,018,838
Wolseley 239,600 1,966,547
35,066,527
United States - 0.3%
Calypte Biomedical Series E, Preferred+ 50,000 350,000
Soluz, Inc.+ 4,000 0
Zero Emissions Tech, Inc. (Preferred)+ 90,909 250,000
600,000
Total Equity Securities (Cost $183,559,213) 229,945,599
<PAGE>
Principal
Corporate Notes - 1.4% Amount Value
Bolivia - 0.1%
Banco Solidario $332,810 $330,783
330,783
United States - 1.3%
Accion International 100,000 95,237
Cascadia Revolving Loan Fund 125,000 120,980
Catholic Relief Services 200,000 189,502
Community Equity Investments 200,000 196,546
Delaware Valley Community
Reinvestment Fund 75,000 71,677
Ecumenical Development
Corporation USA 150,000 147,036
Enterprise Loan Fund 50,000 49,137
Ethiopian Community
Development Council 50,000 47,698
Federation of Appalachian Housing
Enterprises Corp. 200,000 196,546
Foundation For International
Community Assistance 150,000 144,951
Freedom From Hunger 100,000 95,903
Greater New Haven
Community Loan Fund 75,000 71,063
Mayer Laboratories, Inc. 150,000 150,000
Mcauley Institute 85,000 83,532
Mennonite Economic
Development Association 200,000 188,628
Minnesota Non-Profit Assistance Fund 100,000 96,634
New Mexico Community Loan Fund 100,000 95,903
Program for Appropriate
Technology and Health 150,000 145,000
Self Help Credit Union 100,000 99,581
Shared Interest 100,000 94,819
Societe D'Investissement et de
Developpement International 250,000 238,925
Soluz Dominicana, Inc. 150,000 150,000
South Shore Bank 200,000 199,108
2,968,406
Total Corporate Notes (Cost $3,392,810)+ 3,299,189
Time Deposits - 4.1%
Capital Markets, London,
6.00%, 10/1/97 9,556,399 9,556,399
Total Time Deposits (Cost $9,556,399) 9,556,399
TOTAL INVESTMENTS
(Cost $196,508,422) - 103.8% 242,801,187
Other assets and liabilities, net - (3.8)% (8,833,916)
Net Assets - 100% $233,967,271
<PAGE>
Net Assets Consist of : Value
Paid-in capital applicable to the following
shares of common stock with
250,000,000 shares of $0.01
par value share authorized for
Class A and C combined:
Class A: 10,206,565 shares outstanding $171,199,214
Class C: 411,440 shares outstanding7,319,134
Undistributed net investment income 536,630
Accumulated net realized gain (loss)
on investments
and foreign currencies 8,622,030
Net unrealized appreciation (depreciation)
on investments
and assets and liabilities in foreign currencies 46,290,263
Net Assets $233,967,271
Net Asset Value per Share
Class A (based on net assets of $225,168,509) $22.06
Class C (based on net assets of $8,798,762) $21.39
+ Restricted securities representing 2.0% of net assets of
the Fund were valued by the Board of Directors. See Note A.
* Non-income producing.
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1997
Net Investment Income
Investment Income
Dividend income
(net of foreign taxes of $457,990) $4,180,954
Interest income 680,746
Total investment income 4,861,700
Expenses
Investment advisory fee 2,134,708
Transfer agency fees and expenses 454,203
Distribution Plan expenses:
Class A 514,711
Class C 75,866
Directors' fees and expenses 81,321
Administrative fees 213,471
Custodian fees 309,374
Registration fees 46,029
Reports to shareholders 166,369
Professional fees 27,667
Miscellaneous 123,823
Total expenses 4,147,542
Fees paid indirectly (309,374)
Net expenses 3,838,168
Net Investment Income 1,023,532
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on:
Securities 8,674,110
Foreign currencies (471,143)
8,202,967
Change in unrealized appreciation or depreciation on:
Securities 32,539,278
Assets and liabilities in foreign currencies (4,102)
32,535,176
Net Realized and Unrealized Gain
(Loss) on Investments 40,738,143
Increase (Decrease) in Net Assets
Resulting From Operations $41,761,675
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
Increase (Decrease) in Net Assets 1997 1996
Operations
Net investment income $1,023,532 $373,607
Net realized gain (loss) 8,202,967 5,639,276
Change in unrealized
appreciation or depreciation 32,535,176 11,325,374
Increase (Decrease)
in Net Assets
Resulting From Operations 41,761,675 17,338,257
Distributions to shareholders from
Net investment income:
Class A Shares (524,960) (1,473,251)
Class C Shares (5) (93)
Net realized gain:
Class A Shares (4,308,311) (4,675,910)
Class C Shares (158,527) (152,211)
Total distributions (4,991,803) (6,301,465)
Capital share transactions:
Shares sold:
Class A Shares 32,021,552 29,276,964
Class C Shares 1,999,316 1,834,205
Reinvestment of distributions:
Class A Shares 4,436,444 5,618,030
Class C Shares 150,494 146,275
Shares redeemed:
Class A Shares (40,829,241) (43,143,186)
Class C Shares (1,391,705) (1,605,586)
Total capital share transactions (3,613,140) (7,873,298)
Total Increase (Decrease)
in Net Assets 33,156,732 3,163,494
Net Assets
Beginning of year 200,810,539 197,647,045
End of year (including undistributed
net investment income of $536,630 and
$523,742, respectively) $233,967,271 $200,810,539
Capital Share Activity
Shares sold:
Class A Shares 1,591,043 1,639,291
Class C Shares 102,735 104,679
Reinvestment of distributions:
Class A Shares 236,367 326,453
Class C Shares 8,215 8,717
Shares redeemed:
Class A Shares (2,042,418) (2,419,896)
Class C Shares (72,077) (91,537)
Total capital share activity (176,135) (432,293)
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A -Significant Accounting Policies
General: The Calvert World Values International Equity Fund
(the "Fund"), a series of Calvert World Values Fund, Inc., 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 Fund
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) dividend rates due to differences in Distribution
Plan expenses and other class specific expenses, (b) exchange
privileges and (c) class specific voting rights.
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. Foreign security prices, furnished by
quotation services in the security's local currency, are
translated using the current U.S. dollar exchange rate. The Fund
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.
In determining fair value, the Board considers all relevant
qualitative and quantitative information available. These
factors are subject to change over time and are reviewed
periodically. The values assigned to fair value investments are
based on available information and do not necessarily represent
amounts that might ultimately be realized, since such amounts
depend on future developments inherent in long-term investments.
However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly form the values that
would have been used had a ready market of the investments
existed, and the differences could be material.
At September 30, 1997, $4,702,659 or 2.0% of net assets, were
valued by 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 Fund is
informed of the ex-dividend date. Interest income, accretion of discount and
amortization of premium are recorded on an accrual basis. Investment income,
expenses and realized and unrealized gains and losses are allocated to separate
classes of shares based upon the relative net assets of each class.
Foreign Currency Transactions: The Fund'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 securities is included in the net realized and
unrealized gain or loss on securities.
Distributions to Shareholders: Distributions to shareholders
are recorded by the Fund 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
Fund's capital accounts to reflect income and gains available for
distribution under income tax regulations.
Estimates: The preparation of the 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 reported period. Actual results could differ
from those estimates.
Expense Offset Arrangement: The Fund has an arrangement with
its custodian bank whereby the custodian's fees are paid
indirectly by credits earned on the Fund'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 Fund intends to continue to qualify as
a regulated investment company under the Internal Revenue Code
and to distribute substantially all of its earnings.
Note B -Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is
wholly-owned by Calvert Group, Ltd. ("Calvert"), which is
indirectly wholly-owned by Acacia Mutual Life Insurance Company.
The Advisor provides investment advisory services and pays the
salaries and fees of officers and affiliated Directors of the
Fund. For its services, the Advisor receives a monthly fee based
on the following annual rates of average daily net assets: 1.0 %
on the first $250 million, .975% on the next $250 million and
.925% on the excess of $500 million.
Calvert Distributors, Inc., an affiliate of the Advisor, is the
distributor and principal underwriter for the Fund. Distribution
Plans, adopted by each class of shares, allow the Fund 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 $141,844 as its portion of commissions
charged on sales of the Fund's shares.
Calvert Shareholder Services, Inc., an affiliate of the Advisor,
acts as transfer, dividend disbursing and shareholder servicing
agent for the Fund.
Calvert Administrative Services Company, an affiliate of the
Advisor, provides administrative services to the Fund for an
annual fee, payable monthly, of the greater of $40,000 or .10%
of the average daily net assets of the Fund.
Each Director who is not affiliated with the Advisor receives an
annual fee of $4,000 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$137,153,413 and $116,278,528,
respectively.
The cost of investments owned at September 30, 1997 was
substantially the same for federal income tax and financial
reporting purposes. Net unrealized appreciation aggregated
$46,292,765, of which $52,832,227 related to appreciated
securities and $6,539,462 related to depreciated securities.
Note D -Line of Credit
Effective July 1, 1997, a financing agreement is in place with
all Calvert Group Funds and State Street Bank and Trust Company
("the Bank"). Under the agreement, the Bank is providing an
unsecured line of credit facility, in the aggregate amount of
$50 million ($25 million committed and $25 million uncommitted),
to be accessed by the Funds for temporary or emergency purposes
only. Borrowings under this facility bear interest at the
overnight Federal Funds Rate plus .50% per annum. a commitment
fee of .10% per annum will be incurred on the unused portion of
the committed facility which will be allocated to all
participating funds. This fee is paid quarterly in arrears. The
Fund had $230,630 outstanding borrowings at an interest rate of
6.875% at September 30, 1997.
Note E -Income Tax Information
The Fund paid foreign taxes of $457,990 and recognized gross
foreign source income of $4,058,770 during the taxable year
ended September 30, 1997. Pursuant to IRC Section 853, The Fund
hereby designates $.043 per share of foreign taxes and $.382 per
share of gross foreign source income as having been paid in the
taxable year ended September 30,1997. The Fund also designates
$2,580,764 as capital gain dividends paid during the taxable
year ended September 30, 1997.
<PAGE>
FINANCIAL HIGHLIGHTS
Years Ended
September 30, September 30,
Class A Shares 1997 1996
Net asset value, beginning $18.62 $17.62
Income from investment operations
Net investment income .10 .04
Net realized and
unrealized gain (loss) 3.81 1.53
Total from investment operations 3.91 1.57
Distributions from
Net investment income (.05) (.13)
Excess of net investment income - -
Net realized gain (.42) (.44)
Total distributions (.47) (.57)
Total increase (decrease) in
net asset value 3.44 1.00
Net asset value, ending $22.06 $18.62
Total return* 21.44% 9.22%
Ratios to average net assets:
Net investment income (loss) .51% .23%
Total expenses+ 1.91% 1.95%
Net expenses 1.76% 1.81%
Expenses reimbursed - -
Portfolio turnover 58% 96%
Average commission rate paid $.0222 $.0339
Net assets, ending (in thousands) $225,169 $194,032
Number of shares outstanding,
ending (in thousands) 10,207 10,422
<PAGE>
FINANCIAL HIGHLIGHTS
(Cont'd)
Class A Shares
Sept. 30,
1995
Net asset value, beginning $17.99
Income from investment operations
Net investment income .11
Net realized and
unrealized gain (loss) .38
Total from investment operations .49
Distributions from
Net investment income -
Excess of net investment income -
Net realized gain (.86)
Total distributions (.86)
Total increase (decrease) in
net asset value (.37)
Net asset value, ending $17.62
Total return* 3.19%
Ratios to average net assets:
Net investment income (loss) .68%
Total expenses+ 1.93%
Net expenses 1.79%
Expenses reimbursed -
Portfolio turnover 73%
Average commission rate paid N/A
Net assets, ending (in thousands) $191,586
Number of shares outstanding,
ending (in thousands) 10,876
September 30, September 30,
Class A Shares 1994 1993
Net asset value, beginning $16.35 $14.31
Income from investment operations
Net investment income - .08
Net realized and unrealized
gain (loss) 2.14 2.04
Total from investment operations. 2.14 2.12
Distributions from
Net investment income (.03) (.05)
Excess of net investment income (.04) -
Net realized gains (.43) (.03)
Total distributions (.50) (.08)
Total increase (decrease)
in net asset value 1.64 2.04
Net asset value, ending $17.99 $16.35
Total return* 13.44% 14.95%
Ratios to average net assets:
Net investment income (loss) (.04%) .80%
Total expenses+ N/A N/A
Net expenses 1.96% 1.50%
Expenses reimbursed .04% .20%
Portfolio turnover 78% 35%
Average commission rate paid N/A N/A
Net assets, ending (in thousands) $175,543 $54,280
Number of shares outstanding,
ending (in thousands) 9,755 3,319
<PAGE>
FINANCIAL HIGHLIGHTS
Years Ended
September 30, September 30,
Class C Shares 1997 1996
Net asset value, beginning $18.20 $17.28
Income from investment operations
Net investment income (.07) (.15)
Net realized and unrealized
gain (loss) 3.68 1.51
Total from investment operations 3.61 1.36
Distributions from
Net realized gain (.42) (.44)
Total distributions (.42) (.44)
Total increase (decrease) in
net asset value 3.19 .92
Net asset value, ending $21.39 $18.20
Total return* 20.22% 8.07%
Ratios to average net assets:
Net investment income (loss) (.47%) (.88%)
Total expenses+ 2.91% 3.08%
Net expenses 2.76% 2.93%
Expenses reimbursed - -
Portfolio turnover 58% 96%
Average commission rate paid $.0222 $.0339
Net assets, ending (in thousands). $8,799 $6,779
Number of shares outstanding,
ending (in thousands) 411 373
Periods Ended
September 30, September 30,
Class C Shares 1995 1994**
Net asset value, beginning $17.86 $18.24
Income from investment operations
Net investment income (.05) (.06)
Net realized and
unrealized gain (loss) .32 (.32)
Total from investment operations .27 (.38)
Distributions from
Net realized gains (.85) -
Total distributions (.85) -
Total increase (decrease)
in net asset value (.58) (.38)
Net asset value, ending $17.28 $17.86
Total return* 1.95% (1.27%)
Ratios to average net assets:
Net investment income (loss) (.47%) (1.16%)(a)
Total expenses+ 3.12% N/A
Net expenses 2.99% 3.32%(a)
Expenses reimbursed .13% .50%(a)
Portfolio turnover 73% 78%
Average commission rate paid N/A N/A
Net assets, ending (in thousands). $6,061 $3,620
Number of shares outstanding,
ending (in thousands) 351 203
(a) Annualized
* Total return is not annualized for periods less than one
year and does not reflect deduction of Class A front-end sales
charge.
+ Effective September 30, 1995, this ratio reflects total
expenses before reduction for fees paid indirectly; such
reductions are included in the ratio of net expenses.
** From March 1, 1994 inception.
N/A Disclosure not applicable to prior periods.
<PAGE>
Calvert Group's
Family of Funds
Tax-Exempt
Money Market Funds
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
Taxable
Money Market Funds
First Government Money Market Fund
CSIF Money Market Portfolio
Balanced Fund
CSIF Managed Growth Portfolio
Municipal Funds
CTFRLimited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
Arizona Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Florida Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Michigan Muni. Intermediate Portfolio
New York Muni. Intermediate Portfolio
Pennsylvania Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Equity Funds
CSIFEquity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
Strategic Growth Fund
New Africa Fund
<PAGE>
Calvert Group
INformation
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDDfor Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
Registered, Certified
or Overnight Mail
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Web Site
http://www.calvertgroup.com
Please check the inside back cover for
Calvert Group's Family of Funds.
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.
<PAGE>
<PAGE>
