March 31, 1998
SEMI-ANNUAL
REPORT
CALVERT WORLD VALUES
INTERNATIONAL EQUITY FUND
Table of Contents
President's Letter 1
Portfolio Manager Remarks 2
Statement of Net Assets 6
Statment of Operations 11
Statement of Changes in Net Assets 12
Notes to Financial Statements 13
Financial Highlights 16
<PAGE>
CALVERT WORLD VALUES
INTERNATIONAL EQUITY FUND
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This report is intended to provide fund information to shareholders. It is not
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accompanied by a prospectus.
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
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Municipal Funds
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
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Income Fund
Equity Funds
NEW! CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWVF International Equity Fund
New Vision Small Cap Fund
New Africa Fund
Dear Shareholders:
At the end of 1997, a financial crisis in the developing nations of Southeast
Asia emerged as a threat to this historic bull market. Market pundits sounded
the warning bell, and fund managers cautioned investors to check their
expectations and confirm their objectives. However, as has been the case of
late, each new precipice turns out to be a launching pad for a new flight
upward.
Virtually every sector of the US equity market turned in double-digit returns
for the first quarter of 1998. Looking beyond the US, most international
markets also posted strong gains, notably the troubled Pacific Rim countries,
which snapped back sharply, and the Western European markets of Germany,
France and Great Britain. We're pleased to note that almost every Calvert
Group fund also reported strong absolute and relative returns.
The strength of the global stock market is due in large part to the
fundamental strength of major economies around the world. Favorable investment
conditions of low inflation and an expanding economy have so far helped the
market work through concerns for the consequences of Southeast Asia's
financial troubles and worries that companies' earnings growth may not be as
robust.
This protracted bull market has shown us time and again that its strength
should not be underestimated. For investors, its ability
to defy prediction reinforces the soundness of a long-term
approach that focuses on investors' goals rather than short-term market
trends.
Thank you for choosing Calvert Group. We appreciate your business and your
confidence in our investment programs.
Sincerely,
Barbara J. Krumsiek
President and CEO
April 24, 1998
<PAGE>
Portfolio Statistics
March 31, 1998
Investment Performance
6 Months 12 Months
ended ended
3/31/98 3/31/98
International
Equity Fund 6.64% 22.71%
MSCIEAFE
Index GD 5.87% 18.93%
Lipper International
Funds Average 5.91% 19.45%
Ten Largest Stock Holdings
% of Net Assets
Zurich Versicherungs 3.2%
Banque Nationale de Paris 2.8%
Fortis 2.7%
Standard Bank Investment 2.4%
Telecom Italia Mobile 2.4%
Telefonica de Espana 2.2%
Pinault-Printemps 2.2%
Credit Suisse Group 2.1%
Christiana Bank 2.0%
VNU 2.0%
Total 24.0%
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>
ANDREW PRESTON
OF MURRAY JOHNSTONE INTERNATIONAL
How would you characterize international stock market performance for the six
months ending March 31, 1998?
We saw global markets tested by the collapse in Asia only to be boosted again
by strength in the European markets. After a roller-coaster ride, the Morgan
Stanley Capital International Europe, Australia and Far East (MSCIEAFE) Index
returned 5.87%. The Fund's return of 6.64% outstripped the Index's.
Tell us which factors were most responsible for the gyrations.
The collapse of Asian currencies and markets in late 1997 was the most
important event for global markets during this reporting period. Although
initially the problems seemed to be specific to Thailand and Korea, the
contagion quickly spread to engulf the whole of Southeast Asia which was
vulnerable to rising currencies (pegged informally to the rising dollar) and
weakening trade accounts. The Asian markets fell as investors reduced
exposure, and currencies collapsed as assets were switched to "hard"
currencies. Japan was dragged into the turmoil due to extensive trade and
investment links with the area. Global markets saw a setback in October when
there was a fear that the Asian collapse would spread worldwide.
The outcome was somewhat different than expected, and markets except for Asia
staged a strong recovery. Whereas the Federal Reserve had warned investors
against "irrational exuberance", the weakness in Asia together with low
inflation in the US economy through 1997 led to an extension of the period of
low rates. This prompted a strong rebound in the US and Europe with the low
rates leading to a re-rating of equities in those markets. Europe was also
benefiting from a widespread restructuring program in the finance and
manufacturing sectors, enhancing shareholder value and returns. The result was
a two tier market globally in which the US and Europe thrived but Asia and the
emerging markets languished.
What was the effect of the Asian currency crisis on the Fund?
The impact on the portfolio was limited. As the troubles in the region began
to bubble up, we reduced exposure, switching assets to Europe. With inflation
under control, this region took on safe-haven status and continued to attract
investment. Within Europe, the financial sector was one of the best performing
as a result of a series of large-scale mergers which led to enhanced earnings
prospects but the restructuring embraced manufacturing as well. The other
theme which drove returns in Europe was the convergence of interest rates, as
a prelude to monetary union. The markets where short rates had farthest to
fall, Ireland, Italy and Spain, all saw excellent returns and the portfolio
was overweight in these areas versus the MSCIEAFE Index. Also, as interest
rates fell, investors switched from bond funds to equities, further enhancing
returns.
Which companies were the leading contributors?
With cash flows being a major feature of market progress during the period,
large, liquid companies such as the French retailer, Pinault Printemps, and
the Spanish utility, Telefonica, tended to be the best performers. However,
smaller companies in strong sectors also generated good returns. Two examples
in the UK were Mysis, the leading software supplier to the financial services
industry which is also benefiting from Year 2000 related business, and
FirstGroup Plc., which has rapidly grown from a regional operator to one of
the main public transport providers in the country.
Falling interest rates encouraged the managers to increase exposure to
financial stocks- banks and insurance companies. This sector produced
excellent returns, especially companies such as Zurich Insurance, Credito
Italiano and Allied Irish Banks. Other sectors also benefited with stocks such
as Cap Gemini, the French software house, Elsevier, the Dutch publisher, and
Vendex, the Dutch retailer, responding to strong growth.
Another key to portfolio performance was the investment in Standard Bank in
South Africa. The reasons for investing in the market, falling inflation and
lower interest rates, came through in 1997 and the market also saw substantial
restructuring of companies during the period. South Africa withstood much of the
pressure on emerging markets in 1997 and outperformed the group again in the
first quarter of 1998. Within the market, the financial sector once again,
generated the best returns.
Companies' social and environmental practices are also monitored. Can you give
us some of the highlights on this front?
As we've mentioned in past reports, we're pleased with South African company
Standard Bank's programs designed to serve lower-income customers and steps
taken to maintain a diverse workplace. FirstGroup Plc., one of the UK's
largest bus operators, has launched an electric and diesel-powered passenger
bus and a natural gas-powered bus, which help to improve air quality. The US
subsidiary of Allied Irish Banks has a community reinvestment program that
makes loans to lower-income persons and provides low-interest loans to home
buyers. Elsevier, the Dutch publishing company, supports educational
opportunities by providing information and research services around the world.
In addition to researching companies, the Fund continues to engage in
shareholder activism. For example, the Fund has taken proactive steps to
engage in dialogue with a number of Hong Kong property companies on their
social practices in Hong Kong and mainland China. For example, Sun Hung Kai
Properties states that it is developing residential properties for
middle-income persons in China. We continue to urge companies to develop
positive social practices for the people of that country.
What's your outlook for the remainder of 1998?
Many of the features which supported markets in 1997 are still in place:
growth is moderate, inflation is low and there is little pressure for rates to
rise. The weakness in Asia persists and this is likely to contribute to
continued low interest rates worldwide. Under this scenario, equities have seen
a re-rating and price/earnings ratios have expanded. Corporate merger activity
remains high and will encourage the continuation of this trend. However, the
smooth progress of markets does not usually persist uninterrupted, and at some
point earnings may be viewed as failing to sustain the higher ratings which are
a general feature of markets today. On the plus side, Asia's devastated
economies will eventually return to growth paths after suffering recession in
1998. Our indicators are pointing to a bright future in Asia although the light
at the end of the tunnel is still dim. In this context Japan has a major role to
play: an expanded Japanese economy will act as a motor to re-invigorate
economies and markets in the region. We are therefore looking to Japan to
reverse some of the fiscal tightening measures imposed in 1997 and encourage its
citizens to spend more and help lift demand. Assuming this is achieved, we see a
natural switch of profits from Europe to the Asian region during 1998 but the
timing of this shift will be crucial. While growth and earnings remain buoyant
in Europe, that time has not yet arrived.
April 24, 1998
<PAGE>
PORTFOLIO STATISTICS
March 31, 1998
Average Annual Total Returns
Class A Shares
as of 3/31/98
One year 16.86%
Five year 11.43%
Since inception 10.01%
(7/02/92)
Class C Shares
as of 3/31/98
One year 21.56%
Since inception 8.12%
(3/01/94)
Performance Comparison
Comparison of change in value of $10,000 investment.
Line Graph here showing comparison of funds from 8/1/92 to 3/31/98
Calvert World Values International Equity Fund $17,584
MSCI EAFE Index GD $20,030
Lipper International Funds Index 20,818
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
March 31, 1998
Country Allocation
% of Equity Securities
3/31/98 9/30/97
Argentina 2.6% 4.1%
Australia 2.0% 6.6%
Belgium 3.8% 2.2%
Chile 1.7% 2.1%
Costa Rica .1% .1%
Finland - 2.9%
France 12.5% 7.2%
Germany 7.9% 5.2%
Hong Kong 1.2% 5.5%
Ireland 2.2% 2.8%
Italy 4.4% 8.7%
Japan 16.1% 16.8%
Malaysia --
Mexico 3.1% 3.6%
Netherlands 6.0% 2.9%
New Zealand - 2.5%
Norway 2.2% -
Singapore 2.0% 2.3%
South Africa 2.8% 2.2%
Spain 5.1% 4.1%
Switzerland 6.8% 2.7%
UK 17.2% 15.2%
US .3% .3%
100% 100%
<PAGE>
STATEMENT OF NET ASSETS
March 31, 1998
Equity Securities - 92.8% Shares Value
Argentina - 2.4%
Banco Frances del Rio la Plat (ADR) 96,300 $2,901,037
Telecom de Argentina Stet - France (ADR) 92,800 3,323,400
6,224,437
Australia - 1.9%
Commonwealth Bank of Australia 175,000 2,078,970
Telstra Corp. * 1,125,000 2,894,232
4,973,202
Belgium - 3.5%
UCB 530 2,216,934
Fortis 25,000 6,949,635
9,166,569
Chile - 1.6%
Compania de Telecomunicaciones de Chile (ADR) 150,000 4,134,375
4,134,375
Costa Rica - 0.1%
Pro Fund International + 1,518 1,518
Pro Fund International (Preferred) + 150,240 150,240
151,758
France - 11.6%
AXA UAP * 48,409 4,983,452
Banque National de Paris * 92,572 7,192,161
Cap Gemini * 25,933 3,046,264
Havas 15,120 1,251,563
Pinault-Printemps 7,400 5,719,403
Sita 10,830 2,390,551
Sita (Com) 2,707 576,125
SGS Thomson Microelectronics * 54,000 4,242,453
Suez Lyonnaise des Eaux 5,312 767,122
30,169,094
Germany - 7.3%
Allianz * 14,830 4,478,146
Allianz (Rights) 436 130,714
Deutsche Telekom 140,000 3,039,118
Douglas Holdings 71,250 2,661,931
Linde 5,450 3,954,421
Volkswagen * 5,968 4,672,306
Volkswagen (Rights, expiration 4/7/98) 5,968 108,418
19,045,054
Hong Kong - 1.1%
Hong Kong & China Gas * 1,000,000 1,677,679
Hong Kong Land Holdings 750,000 1,290,000
2,967,679
<PAGE>
Equity Securities (Cont'd) Shares Value
Ireland - 2.1%
Allied Irish Banks 177,307 $2,187,502
Bank of Ireland 56,070 1,110,377
Global Telesystems Group, Inc. * 46,250 2,162,188
5,460,067
Italy - 4.1%
Credito Italiano 928,086 4,584,429
Telecom Italia Mobile 1,149,960 6,178,748
10,763,177
Japan - 14.9%
Canon Sales 158,800 2,205,141
Ezaki Glico Co. 113,000 644,623
Fanuc * 103,000 3,556,389
Fuji Machine Manufacturing 110,000 2,914,618
Fuji Photo Film 84,000 3,127,341
Fujitsu 250,000 2,608,369
Kuraray Co. 385,000 3,381,122
Namco 110,000 2,427,472
Nippon Hodo Co. 453,000 1,910,948
Nippon Telegraph & Telephone Corp. 376 3,132,745
Nitto Denko 180,000 2,621,130
Ricoh 280,000 2,816,288
Snow Brand Milk 200,000 668,043
Sumitomo Bank 240,000 2,449,991
Sumitomo Electric Industries 93,000 1,200,676
Takeda Chemical Industries 125,000 3,180,709
38,845,605
Mexico - 2.9%
Banpais (ADR) * 100,000 0
Cifra (ADR) 183,767 3,352,664
Grupo Industrial Durango (ADR) * 177,000 2,677,125
Telefonos de Mexico (ADR) 25,000 1,409,375
7,439,164
Netherlands - 5.5%
Elsevier * 111,419 1,832,980
ING Groep 49,122 2,787,181
KNP-BT 83,144 2,185,324
Vendex International 39,075 2,473,872
VNU 152,050 5,199,724
14,479,081
Norway - 2.0%
Christiana Bank * 1,231,318 5,232,367
5,232,367
Singapore - 1.9%
City Developments 400,000 1,969,345
Creative Technology * 10,000 220,468
Raffles Medical Group * 1,000,000 495,433
Singapore Press * 200,000 2,291,376
4,976,622
<PAGE>
Equity Securities (Cont'd) Shares Value
South Africa - 2.6%
Community Growth Fund + 739,067 $317,720
Standard Bank Investment 105,000 6,368,186
6,685,906
Spain - 4.7%
Banco Santander 46,582 2,321,382
Prosegur Compania Securidad 318,960 4,105,908
Telefonica de Espana * 131,822 5,813,205
12,240,495
Switzerland - 6.3%
Credit Suisse Group * 27,978 5,597,435
Sulzer * 3,276 2,561,490
Zurich Versicherungs 14,190 8,237,553
16,396,478
United Kingdom - 16.0%
Anglian Group 293,700 1,160,302
Anglian Water 116,700 1,826,575
Arcadia Group 122,537 945,635
Barclays * 92,700 2,776,165
Beazer Group 282,000 986,621
Bellway 143,600 915,872
Cadbury Schweppes 147,100 2,043,835
Devro 152,400 1,293,445
FirstGroup 342,100 2,061,630
Halifax 186,225 2,869,571
Johnson Matthey 171,100 1,764,355
Kingfisher 161,700 3,034,386
Lloyds TSB Group 195,600 3,045,138
London International Group 343,900 1,047,752
Mayflower 309,200 1,099,901
Misys 41,900 2,086,681
Norwich Union * 246,000 1,917,976
Quadrant Healthcare + 200,000 448,632
Safeway 270,900 1,680,167
SIG 223,400 755,422
Smith Kline Beecham 212,900 2,681,867
Somerfield 258,300 1,529,593
Unigate 161,700 1,962,471
Wolseley 226,300 1,735,023
41,669,015
United States - 0.3%
Calypte Biomedical (Warrants) + 50,000 259,375
Proton Energy Systems 227,273 250,000
Soluz, Inc. + 4,000 40,000
Zero Emissions Tech, Inc. (Preferred) + 90,909 250,000
799,375
Total Equity Securities (Cost $189,907,312) 241,819,520
<PAGE>
Principal
Corporate Notes - 1.3% Amount Value
Bolivia - 0.1%
Banco Solidario $332,810 $330,783
330,783
United States - 1.2%
Accion International 100,000 98,375
Cascadia Revolving Loan Fund 125,000 124,821
Catholic Relief Services 200,000 194,594
Community Equity Investments 150,000 130,000
Delaware Valley Community Reinvestment Fund 75,000 73,862
Ecumenical Development Corporation USA 150,000 142,042
Enterprise Loan Fund 50,000 47,698
Ethiopian Community Development Council 50,000 49,035
Federation of Appalachian Housing Enterprises
Corp. 200,000 191,492
Foundation For International Community
Assistance 150,000 140,535
Freedom From Hunger 100,000 98,589
Greater New Haven Community Loan Fund 75,000 72,973
Mayer Laboratories, Inc. 150,000 150,000
Mcauley Institute 85,000 81,384
Mennonite Economic Development Association 200,000 194,172
Minnesota Non-Profit Assistance Fund 100,000 93,690
New Mexico Community Loan Fund 100,000 98,084
Program for Appropriate Technology and Health 300,000 300,000
Self Help Credit Union 100,000 100,000
Shared Interest 100,000 98,171
Societe D'Investissement et de Developpement
International 250,000 246,205
Soluz Dominicana, Inc. 150,000 110,000
South Shore Bank 200,000 200,000
3,035,722
Total Corporate Notes (Cost $3,452,810) + 3,366,505
Time Deposits - 5.2%
Capital Markets, London, 6.00%, 10/1/97 13,564,811 13,564,811
13,564,811
TOTAL INVESTMENTS (Cost $193,973,695) - 99.3% 258,750,836
Other assets in excess of liabilities - 0.7% 1,761,816
Net Assets - 100% $260,512,652
<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 : 11,498,866 shares outstanding $196,454,077
Class C : 449,181 shares outstanding 8,025,615
Undistributed net investment income (368,891)
Accumulated net realized gain (loss) on investments
and foreign currencies 4,576,673
Net unrealized appreciation (depreciation) on investments
and assets and liabilities in foreign currencies 51,825,179
Net Assets $260,512,653
Net Asset Value Per Share
Class A (based on net assets of $251,048,153) $21.83
Class C (based on net assets of $9,464,500) $21.07
+ Restricted securities representing 1.9% of net assets.
* Non-income producing.
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended March 31, 1998
Net Investment Income
Investment Income
Dividend income (net of foreign taxes of $147,356) $1,268,876
Interest income 313,834
Total investment income 1,582,710
Expenses
Investment advisory fee 1,111,806
Transfer agency fees and expenses 219,582
Distribution Plan expenses:
Class A 267,602
Class C 41,399
Directors' fees and expenses 21,363
Administrative fees 111,181
Custodian fees 187,998
Registration fees 22,926
Reports to shareholders 53,754
Professional fees 14,090
Miscellaneous 66,835
Total expenses 2,118,526
Fees paid indirectly (187,988)
Net expenses 1,930,538
Net Investment Income (347,828)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on:
Securities 10,365,796
Foreign currencies 90,663
10,456,459
Change in unrealized appreciation or depreciation on:
Securities 5,531,797
Assets and liabilities in foreign currencies 3,119
5,534,916
Net Realized and Unrealized Gain
(Loss) on Investments 15,991,375
Increase (Decrease) in Net Assets
Resulting From Operations $15,643,547
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
March 31, September 30,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income ($347,828) $1,023,532
Net realized gain (loss) 10,456,459 8,202,967
Change in unrealized appreciation or
depreciation 5,534,916 32,535,176
Increase (Decrease) in Net Assets
Resulting From Operations 15,643,547 41,761,675
Distributions to shareholders from
Net investment income:
Class A Shares (557,603) (524,960)
Class C Shares (90) (5)
Net realized gain:
Class A Shares (13,935,051) (4,308,311)
Class C Shares (566,765) (158,527)
Total distributions (15,059,509) (4,991,803)
Capital share transactions:
Shares sold:
Class A Shares 35,727,075 32,021,552
Class C Shares 1,043,966 1,999,316
Reinvestment of distributions:
Class A Shares 13,182,114 4,436,444
Class C Shares 536,716 150,494
Shares redeemed:
Class A Shares (23,654,326) (40,829,241)
Class C Shares (874,201) (1,391,705)
Total capital share transactions 25,961,344 (3,613,140)
Total Increase (Decrease) in Net Assets 26,545,382 33,156,732
Net Assets
Beginning of period 233,967,271 200,810,539
End of period (including undistributed net
investment
income (loss) of $(368,891) and $536,630,
respectively) $260,512,653 $233,967,271
Capital Share Activity
Shares sold:
Class A Shares 1,752,395 1,591,043
Class C Shares 52,632 102,735
Reinvestment of distributions:
Class A Shares 712,546 236,367
Class C Shares 29,984 8,215
Shares redeemed:
Class A Shares (1,172,640)(2,042,418)
Class C Shares (44,875) (72,077)
Total capital share activity 1,330,042 (176,135)
See notes to financial statements.
<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 March 31, 1998, $4,833,990 or 1.9% 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. Under the terms of the agreement, $235,829 was payable at period end.
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. Under the terms of the agreement, $59,453 was payable
at period end.
The Distributor received $60,175 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.
Under the terms of the agreement, $13,239 was payable at period end. 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. Under
the terms of the agreement, $21,456 was payable at period end. 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 $89,474,195 and $93,537,898, respectively. The cost of
investments owned at March 31, 1998 was substantially the same for federal
income tax and financial reporting purposes. Net unrealized appreciation
aggregated $51,825,903, of which $61,568,106 related to appreciated securities
and $9,742,203 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 March 31, 1998.
Note E- Subsequent Events
Effective April 1, 1998, the Fund will begin to offer Class B shares of
capital stock. Class B shares are sold without a front-end sales charge. With
certain exceptions, the Fund will impose a deferred sales charge at the time
of redemption, depending on how long you have owned the shares. Class B shares
have a higher level of expenses than Class A shares, including higher
Distribution Plan expenses.
Effective June 1, 1998, the Fund will convert its existing Class C shares to
new Class C shares. Class C shares will be sold without a front-end sales
charge. With certain exceptions, the Fund may impose a deferred sales charge
on shares sold within one year. Class C shares will have a higher level of
expenses than Class A shares, including higher Distribution Plan expenses.
<PAGE>
FINANCIAL HIGHLIGHTS
Periods Ended
March 31, Sept. 30, Sept. 30,
Class A Shares 1998 1997 1996
Net asset value, beginning $22.06 $18.62 $17.62
Income from investment operations
Net investment income (.03) .10 .04
Net realized and unrealized
gain (loss) 1.24 3.81 1.53
Total from investment operations 1.21 3.91 1.57
Distributions from
Net investment income (.06) (.05) (.13)
Excess of net investment income - - -
Net realized gain (loss) (1.38) (.42) (.44)
Total distributions (1.44) (.47) (.57)
Total increase (decrease) in net
asset value (.23) 3.44 1.00
Net asset value, ending $21.83 $22.06 $18.62
Total return* 6.64% 21.44% 9.22%
Ratios to average net assets:
Net investment income (loss) (.28%)(a) .51% .23%
Total expenses+ 1.87%(a) 1.91% 1.95%
Net expenses 1.70%(a) 1.76% 1.81%
Expenses reimbursed - - -
Portfolio turnover 42% 58% 96%
Average commission rate paid $.0214 $.0222 $.0339
Net assets, ending (in thousands) $251,048 $225,169 $194,032
Number of shares outstanding,
ending (in thousands) 11,499 10,207 10,422
Years Ended
Sept. 30, Sept. 30, Sept. 30,
Class A Shares 1995 1994 1993
Net asset value, beginning $17.99 $16.35 $14.31
Income from investment operations
Net investment income .11 - .08
Net realized and unrealized
gain (loss) .38 2.14 2.04
Total from investment operations .49 2.14 2.12
Distributions from
Net investment income - (.03) (.05)
Excess of net investment income - (.04) -
Net realized gains (.86) (.43) (.03)
Total distributions (.86) (.50) (.08)
Total increase (decrease) in net
asset value (.37) 1.64 2.04
Net asset value, ending $17.62 $17.99 $16.35
Total return* 3.19% 13.44% 14.95%
Ratios to average net assets:
Net investment income (loss) .68% (.04%) .80%
Total expenses+ 1.93% N/A N/A
Net expenses 1.79% 1.96% 1.50%
Expenses reimbursed - .04% .20%
Portfolio turnover 73% 78% 35%
Average commission rate paid N/A N/A N/A
Net assets, ending (in thousands) $191,586 $175,543 $54,280
Number of shares outstanding,
ending (in thousands) 10,876 9,755 3,319
<PAGE>
FINANCIAL HIGHLIGHTS
Periods Ended
March 31, Sept. 30, Sept.30,
Class C Shares 1998 1997 1996
Net asset value, beginning $21.39 $18.20 $17.28
Income from investment operations
Net investment income (.09) (.07) (.15)
Net realized and unrealized
gain (loss) 1.15 3.68 1.51
Total from investment operations 1.06 3.61 1.36
Distributions from
Net realized gain (1.38) (.42) (.44)
Total distributions (1.38) (.42) (.44)
Total increase (decrease) in net
asset value (.32) 3.19 .92
Net asset value, ending $21.07 $21.39 $18.20
Total return* 6.10% 20.22% 8.07%
Ratios to average net assets:
Net investment income (loss) (1.28%)(a) (.47%) (.88%)
Total expenses+ 2.86%(a) 2.91% 3.08%
Net expenses 2.69%(a) 2.76% 2.93%
Expenses reimbursed - - -
Portfolio turnover 42% 58% 96%
Average commission rate paid $.0214 $.0222 $.0339
Net assets, ending (in thousands). $9,465 $8,799 $6,779
Number of shares outstanding,
ending (in thousands) 449 411 373
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>
March 31, 1998
SEMI-ANNUAL
REPORT
CALVERT CAPITAL
ACCUMULATION FUND
Table of Contents
President's Letter 1
Portfolio Manager Remarks 2
Statement of Net Assets 4
Schedule of Investments 5
Statement of Operations 8
Statements of Changes in Net Assets 9
Notes to Financial Statements 10
Financial Highlights 13
<PAGE>
CALVERT CAPITAL
ACCUMULATION FUND
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
To Open an Account
800-368-2748
Yields and Prices
Calvert Information Network
(24 hours, 7 days a week)
800-368-2745
Service for Existing Account
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD for Hearing Impaired
800-541-1524
Branch Office
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Registered, Certified or
Overnight Mail
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Calvert Group Web-Site
Address: http://www.calvertgroup.com
This report is intended to provide fund information to shareholders. It is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by a prospectus.
Dear Shareholders:
At the end of 1997, a financial crisis in the developing nations of Southeast
Asia emerged as a threat to this historic bull market. Market pundits sounded
the warning bell, and fund managers cautioned investors to check their
expectations and confirm their objectives. However, as has been the case of
late, each new precipice turns out to be a launching pad for a new flight
upward.
Virtually every sector of the US equity market turned in double-digit returns
for the first quarter of 1998. Looking beyond the US, most international
markets also posted strong gains, notably the troubled Pacific Rim countries,
which snapped back sharply, and the Western European markets of Germany,
France and Great Britain. We're pleased to note that almost every Calvert
Group fund also reported strong absolute and relative returns.
The strength of the global stock market is due in large part to the
fundamental strength of major economies around the world. Favorable investment
conditions of low inflation and an expanding economy have so far helped the
market work through concerns for the consequences of Southeast Asia's
financial troubles and worries that companies' earnings growth may not be as
robust.
This protracted bull market has shown us time and again that its strength
should not be underestimated. For investors, its ability
to defy prediction reinforces the soundness of a long-term
approach that focuses on investors' goals rather than short-term market
trends.
Thank you for choosing Calvert Group. We appreciate your business and your
confidence in our investment programs.
Sincerely,
Barbara J. Krumsiek
President and CEO
April 24, 1998
<PAGE>
Portfolio Statistics
March 31, 1998
Investment Performance
6 Months 12 Months
ended ended
3/31/98 3/31/98
Capital
Accumulation Fund 15.41% 47.50%
S&P Midcap 400
Index TR 11.94% 49.04%
Lipper Mid-Cap
Funds Average 8.41% 43.06%
Ten Largest Stock Holdings
% of Net Assets
Cardinal Health, Inc. 3.69%
Sterling Commerce, Inc. 3.51%
ALZA Corp. 3.12%
Autozone, Inc. 3.02%
Solectron Corp. 3.00%
Sterling Software, Inc. 2.96%
T. Rowe Price Associates, Inc. 2.95%
Scherer (R.P.) Corp. 2.94%
MCN Energy Group, Inc. 2.89%
Green Tree Financial Corp. 2.84%
Total 30.92%
Investment performance is for Class A shares and does not reflect the deduction
of any front-end sales charge. TR represents total return.
Source: Lipper Analytical Services, Inc.
<PAGE>
ED BROWN
OF BROWN CAPITAL MANAGEMENT COMPANY
How would you characterize the investment climate for stocks during the
six-month period ended March 31, 1998?
The market was generally on firm footing, as evidenced by modest inflation,
declining interest rates and sustained corporate profits growth. Uncertainty
in foreign economies, namely Asia, had a disturbing impact on the domestic
market for a brief period. While one would have expected the larger companies
to bear the brunt of investor nervousness due to their global presence, it was
in fact the mid- to small-sized companies that were most negatively affected
as a "flight to quality" ensued.
Ironically, the weakness in Asia and its dampening effect on the domestic
economy helped prevent the Federal Reserve from tightening monetary policy, an
action that would have likely caused stocks to correct more precipitously, at
least in the short run.
How did the Fund's return compare to its peers?
The Fund returned 15.41% for the six months ending March 31, 1998 and
47.50% for the year, results ahead of the 8.41% six-month return and 43.06%
one-year return for our the Lipper Mid-Cap Funds Average. Several industry
groups accounted for the solid performance including long-distance telephone
companies, airlines and computer software businesses. Industry groups that
underperformed the S&P Midcap 400 Index included oil and gas drilling, health
services and computer hardware.
How did events in Asia affect Fund management and performance?
We held our course. The Fund, which is overweighted in the technology sector,
did feel the initial down draft caused by the Asian economic weakness, but in
some instances, we viewed the correction as a time for opportunistic buying.
This has been an unprecedented stock market advance - so far three consecutive
years of double-digit annual returns.
Were you still able to find attractive investment candidates?
Yes. In our opinion, the financial sector warrants further scrutiny as we
believe investors will evaluate the prospects for certain banks, specialty
finance and money management organizations more favorably in the future as a
result of industry consolidation and increasing stabilization of revenues and
profits. Technology is an area where we expect to continue to earn above-market
returns by continuing to identify and invest in companies that enhance the
productivity of their customers.
What are your expectations for the coming months?
Our outlook for the remainder of 1998 assumes that inflation remains contained
and interest rates remain low. We continue to monitor overall corporate
profits growth, which could be in jeopardy if productivity is unable to offset
any rise in labor costs. At current levels, stocks appear fairly valued, so we
would not be surprised to see the market trade sideways for awhile. In this
environment, we believe superior stock selection will result in relative
outperformance. The Fund's active management approach - our efforts to
identify and invest in the most attractively priced issues and avoid
overpriced stocks - should continue to hold us in good stead.
April 24, 1998
<PAGE>
PORTFOLIO STATISTICS
March 31, 1998
Average Annual Total Returns
Class A Shares
as of 3/31/98
One year 40.50%
Since inception 23.40%
(10/31/94)
Class C Shares
as of 3/31/98
One year 45.91%
Since inception 24.16%
(10/31/94)
Performance Comparison
Comparison of change in value of $10,000 investment.
Line graph here showing comparison from 11/1/94 to 3/31/98
Calvert Capital Accumulation Fund (A) $20,524
Calvert Capital Accumulation Fund (B) $20,958
S&P Midcap 400 Index TR - $22,085
Lipper Mid-Cap Funds Index - $19,984
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.
<PAGE>
STATEMENT OF NET ASSETS
March 31, 1998
Equity Securities - 97.2% Shares Value
Banks - Money Center - 0.9%
Chase Manhattan Corp. 5,324 $718,074
718,074
Communications Equipment - 2.1%
ADC Telecommunications, Inc. * 59,100 1,628,944
1,628,944
Computer - Hardware - 1.6%
Hewlett Packard Co. 19,000 1,204,125
1,204,125
Computer - Networking - 2.3%
Bay Networks, Inc. * 38,700 1,049,738
Cisco Systems, Inc. * 9,900 676,912
1,726,650
Computer - Peripherals - 2.4%
EMC Corp. * 48,978 1,851,981
1,851,981
Computer - Software and Services - 16.9%
BMC Software, Inc. * 21,400 1,793,588
Choicepoint, Inc. * 2,830 154,058
Microsoft Corp. * 18,800 1,682,600
Networks Associates, Inc. * 31,702 2,100,258
Oracle Corp. * 46,980 1,482,806
Parametric Technology Corp. * 21,900 729,544
Sterling Commerce, Inc. * 57,631 2,672,638
Sterling Software, Inc. * 39,950 2,257,175
12,872,667
Consumer Finance - 2.8%
Green Tree Financial Corp. 76,100 2,164,094
2,164,094
Distributors - Food and Health - 3.7%
Cardinal Health, Inc. 31,850 2,808,772
2,808,772
Electrical Equipment - 5.4%
Belden, Inc. 43,400 1,817,375
Solectron Corp. * 54,000 2,281,500
4,098,875
Electronics - Semiconductors - 1.9%
Altera Corp. * 38,900 1,468,475
1,468,475
<PAGE>
Equity Securities (Cont'd) Shares Value
Health Care - Diversified - 1.7%
Johnson & Johnson 18,000 $1,319,625
1,319,625
Health Care - Drug Systems - 2.9%
Scherer (R.P.) Corp. * 33,200 2,241,000
2,241,000
Health Care - Hospital Management - 1.5%
Health Management Associates, Inc., Class A * 38,600 1,104,925
1,104,925
Health Care - Long Term Care - 1.8%
Health Care & Retirement Corp. * 31,450 1,350,384
1,350,384
Health Care - Medical Devices - 1.5%
Boston Scientific Corp. * 17,200 1,161,000
1,161,000
Health Care - Special Services - 4.1%
ALZA Corp. * 53,000 2,375,062
Quintiles Transnational Corp. * 15,000 722,812
3,097,874
Home Building - 2.0%
Rouse Co. 48,000 1,512,000
1,512,000
Housewares - 1.4%
Newell Co. 22,600 1,094,688
1,094,688
Insurance - Life and Health - 1.8%
AFLAC, Inc. 21,600 1,366,200
1,366,200
Investment Management - 3.9%
Franklin Resources, Inc. 14,165 750,745
T. Rowe Price Associates, Inc. 31,900 2,244,962
2,995,707
Leisure - 1.0%
Harley Davidson, Inc. (rights) 23,700 782,100
782,100
Manufacturing - Diversified - 2.1%
Illinois Tool Works, Inc. 24,600 1,592,850
1,592,850
Natural Gas - 2.9%
MCN Energy Group, Inc. 59,000 2,205,125
2,205,125
<PAGE>
Equity Securities (Cont'd) Shares Value
Oil and Gas - Equipment - 1.8%
Smith International, Inc. * 24,500 $1,349,031
1,349,031
Restaurants - 2.0%
Cheesecake Factory, Inc. * 46,000 1,532,375
1,532,375
Retail - Building Supplies - 4.5%
Fastenal Co. 47,900 2,077,662
Home Depot, Inc. 19,850 1,338,634
3,416,296
Retail - Department Stores - 1.5%
Kohls Corp. * 13,500 1,103,625
1,103,625
Retail - Discounters - 1.4%
Dollar General Corp. 27,401 1,060,086
1,060,086
Retail - Specialty - 5.2%
Autozone, Inc. * 67,800 2,296,725
Caseys General Stores, Inc. 104,200 1,667,200
3,963,925
Services - Advertising and Marketing - 3.3%
Acxiom Corp. * 68,700 1,760,438
Catalina Marketing Corp. * 13,800 726,225
2,486,663
Services - Commercial and Consumer - 2.2%
G & K Services, Inc., Class A 38,200 1,676,025
1,676,025
Services - Data Processing - 5.2%
Equifax, Inc. 39,300 1,434,450
Fiserv, Inc. * 10,600 671,775
Paychex, Inc. 32,300 1,863,306
3,969,531
Services - Employment - 1.5%
Robert Half International, Inc. * 23,200 1,113,600
1,113,600
Total Equity Securities (Cost $56,944,629) 74,037,292
<PAGE>
Principal
Repurchase Agreements - 3.1% Amount Value
Donaldson, Lufkin & Jenrette: 6.00%,
dated 3/31/98, due 4/1/98
(Collateral: $2,471,981, FNMA, 5.44%,
1/29/01) $2,400,000 $2,400,000
Total Repurchase Agreements (Cost $2,400,000) 2,400,000
Total Investments (Cost $59,344,629) - 100.3% 76,437,292
Other assets and liabilities, net - (0.3%) (268,064)
Net Assets - 100% $76,169,228
Net Assets Consist of:
Paid-in capital applicable to the following shares of
common stock,
250,000,000 shares of $0.01 par value authorized for
Class A
and Class C combined:
Class A: 2,486,027 shares outstanding $51,558,848
Class C: 202,681 shares outstanding 4,304,977
Undistributed net investment income (loss) (357,677)
Accumulated net realized gain (loss) on investments 3,570,417
Net unrealized appreciation (depreciation) on investments 17,092,663
Net Assets $76,169,228
Net Asset Value Per Share
Class A (based on net assets of $70,579,551) $28.39
Class C (based on net assets of $5,589,677) $27.58
*Non-income producing
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Six MonthS Ended March 31, 1998
Net Investment Income
Investment Income
Interest income $22,800
Dividend income 203,260
Total investment income 226,060
Expenses
Investment advisory fee 248,716
Transfer agency fees and expenses 95,706
Distribution Plan expenses:
Class A 101,610
Class C 22,631
Directors' fees and expenses 9,891
Administrative fees 31,295
Custodian fees 8,950
Registration fees 18,701
Reports to shareholders 30,487
Professional fees 4,198
Miscellaneous 20,502
Total expenses 592,687
Fees paid indirectly (8,950)
Net expenses 583,737
Net Investment Income (Loss) (357,677)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) 4,143,955
Change in unrealized appreciation or depreciation 6,094,400
Net Realized and Unrealized Gain
(Loss) on Investments 10,238,355
Increase (Decrease) in Net Assets
Resulting From Operations $9,880,678
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Six Months
Ended Year Ended
March 31, Sept. 30,
Increase (Decrease) in Net Assets 1998 1997
Operations
Net investment income (loss) $(357,677) $(567,674)
Net realized gain (loss) 4,143,955 6,355,994
Change in unrealized appreciation
or depreciation 6,094,400 4,031,882
Increase (Decrease) in Net Assets
Resulting From Operations 9,880,678 9,820,202
Distributions to shareholders from
Net realized gain:
Class A Shares (5,172,525) -
Class C Shares (417,475) -
Total distributions (5,590,000) -
Capital share transactions:
Shares sold:
Class A Shares 12,062,514 25,046,771
Class C Shares 1,102,584 1,469,185
Reinvestment of distributions:
Class A Shares 4,897,197 -
Class C Shares 391,618 -
Shares redeemed:
Class A Shares (5,138,731)(19,310,865)
Class C Shares (371,802) (1,088,191)
Total capital share transactions 12,943,380 6,116,900
Total Increase (Decrease) in Net
Assets 17,234,058 15,937,102
Net Assets
Beginning of period 58,935,170 42,998,068
End of period (including undistributed
net investment
income (loss) of $(357,677) and $0,
respectively) $76,169,228 $58,935,170
Capital Share Activity
Shares sold:
Class A Shares 459,111 1,067,042
Class C Shares 42,691 64,057
Reinvestment of distributions:
Class A Shares 209,013 -
Class C Shares 17,154 -
Shares redeemed:
Class A Shares (194,411) (821,581)
Class C Shares (14,229) (48,629)
Total capital share activity 519,329 260,889
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note A - Significant Accounting Policies
General: The Calvert Capital Accumulation Fund (the "Fund"), a series of
Calvert World Values Fund, Inc., 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 Fund, which
commenced operations on October 31, 1994, 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. The Fund
issued an audited report dated March 31, 1997. The Funds fiscal year-end remains
September 30, and an audited annual report dated September 30, 1997 was issued.
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 unavailable 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.
Repurchase Agreements: The Fund 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. Although risk is mitigated by
the collateral, the Fund could experience a delay in recovering its value and
a possible loss of income or value if the counterparty fails to perform in
accordance with the terms of the agreement.
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. 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.
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 financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments. Federal Income Taxes: No provision for
federal income or excise tax is required since the Fund intends to 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 an annual rate of
.80% of the Fund's average daily net assets. Under the terms of the agreement,
$61,575 was payable at period end. Effective January 1997, the Fund 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 Fund's
performance compared to the S&P Mid-Cap 400 Index. For the period ended March
31, 1998, the performance fee adjustment decreased management fees by $1,641.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee, payable monthly, of .10%
of the average daily net assets of the Fund. Under the terms of the agreement,
$6,216 was payable at period end.
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 1.00% annually of average daily net assets of each Class A and
Class C, respectively. Under the terms of the agreement, $24,724 was payable
at period end.
The Distributor received $50,438 as its portion of the 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.
Under the terms of the agreement, $7,612 was payable at period end.
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. Director's
fees are allocated to each of the funds served.
Note C - Investment Activity
During the period, purchases and sales of investments, other than
short-term securities, were $28,292,793 and $20,394,650, respectively. The cost
of investments owned at March 31, 1998 was substantially the same for federal
income tax and financial reporting purposes. Net unrealized appreciation
aggregated $17,092,663, of which $17,599,288 related to appreciated securities
and $506,625 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
no loans outstanding pursuant to this line of credit at March 31, 1998.
Note E - Subsequent Events
Effective April 1, 1998, the Fund will begin to offer Class B shares of
capital stock. Class B shares are sold without a front-end sales charge. With
certain exceptions, the Fund will impose a deferred sales charge at the time
of redemption, depending on how long you have owned the shares. Class B shares
have a higher level of expenses than Class A shares, including higher
Distribution Plan expenses.
Effective June 1, 1998, the Fund will convert its existing Class C shares to
new Class C shares. Class C shares will be sold without a front-end sales
charge. With certain exceptions, the Fund may impose a deferred sales charge
on shares sold within one year. Class C shares will have a higher level of
expenses than Class A shares, including higher Distribution Plan expenses.
<PAGE>
FINANCIAL HIGHLIGHTS
Periods Ended
March 31, September 30,
Class A Shares 1998 1997
Net asset value, beginning $27.21 $22.55
Income from investment operations
Net investment income (loss) (.13) (.25)
Net realized and unrealized
gain (loss) 3.79 4.91
Total from investment operations 3.66 4.66
Distributions from
Net investment income - -
Net realized gain (2.48) -
Total distributions (2.48) -
Total increase (decrease) in net
asset value 1.18 4.66
Net asset value, ending $28.39 $27.21
Total return* 15.41% 20.67%
Ratios to average net assets:
Net investment income (loss) (1.07%)(a) (1.09%)
Total expenses+ 1.82%(a) 1.91%
Net expenses 1.79%(a) 1.85%
Expenses reimbursed - -
Portfolio turnover 33% 126%
Average commission rate paid $.0510 $.0530
Net assets, ending (in thousands) $70,580 $54,751
Number of shares outstanding ending
(in thousands) 2,486 2,012
Periods Ended
September 30, September 30,
Class A Shares 1996 1995^
Net asset value, beginning $21.48 $15.00
Income from investment operations
Net investment income (loss) (.24) (.11)
Net realized and unrealized
gain (loss) 1.88 6.61
Total from investment operations 1.64 6.50
Distributions from
Net investment income - (.02)
Net realized gain (.57) -
Total distributions (.57) (.02)
Total increase (decrease) in net
asset value 1.07 6.48
Net asset value, ending $22.55 $21.48
Total return* 7.92% 43.40%
Ratios to average net assets:
Net investment income (loss) (1.56%) (1.55%)(a)
Total expenses+ 2.16% 2.35%(a)
Net expenses 1.98% 2.06%(a)
Expenses reimbursed - .05%(a)
Portfolio turnover 114% 95%
Average commission rate paid $.0563 N/A
Net assets, ending (in thousands) $39,834 $16,111
Number of shares outstanding, ending
(in thousands) 1,767 750
<PAGE>
FINANCIAL HIGHLIGHTS
Periods Ended
March 31, September 30,
Class C Shares 1998 1997
Net asset value, beginning $26.64 $22.34
Income from investment operations
Net investment income (loss) (.23) (.47)
Net realized and unrealized
gain (loss) 3.65 4.77
Total from investment operations 3.42 4.30
Distributions from
Net investment income - -
Net realized gain (2.48) -
Total distributions (2.48) -
Total increase (decrease) in net
asset value .94 4.30
Net asset value, ending $27.58 $26.64
Total return* 14.80% 19.25%
Ratios to average net assets:
Net investment income (loss) (2.08%)(a) (2.30%)
Total expenses+ 2.83%(a) 3.11%
Net expenses 2.81%(a) 3.05%
Expenses reimbursed - -
Portfolio turnover 33% 126%
Average commission rate paid $.0510 $.0530
Net assets, ending (in thousands) $5,590 $4,184
Number of shares outstanding, ending
(in thousands) 203 157
Periods Ended
September 30, September 30,
Class C Shares 1996 1995^
Net asset value, beginning $21.55 $15.00
Income from investment operations
Net investment income (loss) (.55) (.15)
Net realized and unrealized
gain (loss) 1.91 6.70
Total from investment operations 1.36 6.55
Distributions from
Net investment income - -
Net realized gain (.57) -
Total distributions (.57) -
Total increase (decrease) in net
asset value .79 6.55
Net asset value, ending $22.34 $21.55
Total return* 6.56% 43.67%
Ratios to average net assets:
Net investment income (loss) (2.82%) (3.13%)(a)
Total expenses+ 3.42% 3.79%(a)
Net expenses 3.24% 3.50%(a)
Expenses reimbursed - 2.79%(a)
Portfolio turnover 114% 95%
Average commission rate paid $.0563 N/A
Net assets, ending (in thousands) $3,164 $1,992
Number of shares outstanding, ending
(in thousands) 142 92
(a) Annualized
+ Ratio reflects total expenses before reduction for fees paid indirectly;
such reductions are included in the ratio of net expenses.
* Total return does not reflect deduction of Class A front-end sales charge.
^ From October 31, 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
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
Taxable Bond Funds
CSIF Bond Portfolio
Income Fund
Equity Funds
NEW! CSIF Managed Index Portfolio
CSIF Equity Portfolio
Capital Accumulation Fund
CWVF International Equity Fund
New Vision Small Cap Fund
New Africa Fund
